<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
SYNAGRO TECHNOLOGIES, INC.
-------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:________
(2) Aggregate number of securities to which transaction applies:___________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):____________
(4) Proposed maximum aggregate value of transaction:_______________________
(5) Total fee paid: ________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ________________________
(2) Form, Schedule or Registration Statement No.: ________________________
(3) Filing Party: ________________________
(4) Date Filed: ________________________
Notes:
Reg. (S) 240.14a-101.
<PAGE>
[SYNAGRO LOGO APPEARS HERE]
Synagro Technologies, Inc.
1800 Bering Drive, Suite 1000
HOUSTON, TEXAS 77057
September 27, 2000
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Synagro Technologies, Inc. to be held at 1800 Bering Drive, Suite 1000, Houston,
Texas 77057, at 2:00 p.m., local time, on Tuesday, October 31, 2000.
Matters to be considered and acted upon by the stockholders include the (i)
election of six directors, (ii) the approval and adoption of the 2000 Stock
Option Plan, and (iii) any other matters that may properly come before the
meeting. These matters and the procedures for voting your shares are discussed
in the accompanying Notice of Annual Meeting and Proxy Statement.
We urge each stockholder, whether or not intending to attend the meeting in
person, to execute the enclosed proxy and return it promptly in the enclosed
envelope. Returning a proxy will not prevent a stockholder from voting in
person at the meeting.
Sincerely,
Alvin L. Thomas II
Secretary
<PAGE>
SYNAGRO TECHNOLOGIES, INC.
1800 Bering Drive, Suite 1000
Houston, Texas 77057
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held October 31, 2000
______________________
Notice is hereby given that the annual meeting (the "Annual Meeting") of
the stockholders of Synagro Technologies, Inc. (the "Company") will be held at
the Company's offices at 1800 Bering Drive, Suite 1000, Houston, Texas 77057 on
Tuesday, October 31, 2000, at 2:00 p.m., local time, Houston, Texas, for the
following purposes:
1. To elect a board of six directors to serve until the next annual
meeting of stockholders or until their successors are elected and qualified;
2. To approve and adopt the 2000 Stock Option Plan; and
3. To transact such other business as may properly be presented at the
Annual Meeting.
A record of the stockholders has been taken as of the close of business on
September 14, 2000, and only those stockholders of record on that date will be
entitled to notice of and to vote at the Annual Meeting.
Your participation in the Company's affairs is important. To ensure your
representation, if you do not expect to be present at the Annual Meeting in
person, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY in the
enclosed postage-prepaid envelope which has been provided for your convenience.
By Order of the Board of Directors,
Alvin L. Thomas II
Secretary
Houston, Texas
September 27, 2000
IMPORTANT
---------
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY MAIL THE PROXY CARD IN THE
ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE ANNUAL
MEETING. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED WITHIN THE
UNITED STATES. A STOCKHOLDER MAY, IF SO DESIRED, REVOKE HIS PROXY AND VOTE HIS
SHARES IN PERSON AT THE ANNUAL MEETING.
<PAGE>
SYNAGRO TECHNOLOGIES, INC.
1800 Bering Drive, Suite 1000
Houston, Texas 77057
PROXY STATEMENT
ANNUAL STOCKHOLDERS MEETING
To be held October 31, 2000
This Proxy Statement is being mailed to stockholders commencing on or about
September 27, 2000, in connection with the solicitation by the board of
directors of Synagro Technologies, Inc., a Delaware corporation (the "Company"),
of proxies to be voted at the annual meeting (the "Annual Meeting") of
stockholders to be held in Houston, Texas on October 31, 2000, and upon any
adjournment thereof, for the purposes set forth in the accompanying Notice.
Proxies will be voted in accordance with the directions specified thereon and
otherwise in accordance with the judgment of the persons designated as the
holders of the proxies. Proxies marked as abstaining on any matter to be acted
on by the stockholders will be treated as present at the Annual Meeting for
purposes of determining a quorum but will not be counted as votes cast on such
matters. Any proxy on which no direction is specified will be voted (a) for the
election of each of the nominees for director named herein and (b) for the
approval and adoption of the 2000 Stock Option Plan. A stockholder may revoke a
proxy by: (i) delivering to the Company written notice of revocation, (ii)
delivering to the Company a proxy signed on a later date or (iii) voting in
person at the Annual Meeting.
As of September 14, 2000, the record date for the determination of
stockholders entitled to vote at the Annual Meeting, there were outstanding and
entitled to vote 19,435,780 shares of the Company's common stock, par value
$.002 per share (the "Common Stock") and an aggregate of 69,792.287 shares of
the Company's Series D Preferred Stock and Series E Preferred Stock, par value
$.002 per share (collectively, the "Preferred Stock"). Each share of Common
Stock entitles the holder to one vote on each matter presented to the
stockholders. Each share of Preferred Stock is entitled to one vote for each
share of Common Stock issuable upon conversion of the Preferred Stock as of the
record date. As of the record date, the outstanding Preferred Stock was
convertible into an aggregate of 28,399,221 shares of Common Stock, meaning an
aggregate of 47,835,001 votes may be cast at the Annual Meeting. The Common
Stock and the Preferred Stock vote together as a single class on all matters.
ITEM NO. 1 - ELECTION OF DIRECTORS
At the Annual Meeting, six nominees are to be elected, each director to
hold office until the next annual meeting of stockholders or until his successor
is elected and qualified. The persons named in the accompanying proxy have been
designated by the board of directors and, unless authority is withheld, they
intend to vote for the election of the nominees named below to the board of
directors. If any nominee should become unavailable for election, the proxy may
be voted for a substitute nominee selected by the persons named in the proxy, or
the board may be reduced accordingly; however, the board of directors is not
aware of any circumstances likely to render any nominee unavailable.
<PAGE>
NOMINEES
Certain information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITION AGE SINCE
--------------------------------- -------------------------------------------- --------- ---------------------
<S> <C> <C> <C>
Ross M. Patten Director, Chairman of the Board and 56 1998
Chief Executive Officer
Kenneth Ch'uan-k'ai Leung Director 55 1998
Alfred Tyler, 2nd Director 57 1998
Gene Meredith Director 58 1998
David Donnini Director 35 2000
Vincent J. Hemmer Director 31 2000
</TABLE>
Ross M. Patten was appointed by the board of directors as Chief Executive
Officer in February 1998. He was subsequently appointed to the position of
Chairman of the Board in August 1998. Prior to joining the Company, Mr. Patten
enjoyed a 17-year career at Browning-Ferris Industries, where he last served as
Divisional Vice President - Corporate Development. He also served as Executive
Vice President for Development of Wheelabrator Technologies, a Waste Management,
Inc. subsidiary, and Director and Vice President - Business Development at
Resource NE, Inc., prior to its acquisition by Waste Management, Inc. Mr. Patten
is a founder, principal and managing director of Bedford Capital, an investment
firm specializing in environmental companies, and of Bedford Management, which
provides consulting services to publicly held waste management and environment
related companies in the areas of growth and acquisition strategy, formation and
implementation.
Kenneth Ch'uan-k'ai Leung is a managing director of investment banking at
Sanders Morris Harris and is the Chief Investment Officer of the Environmental
Opportunities Fund, Ltd. Additionally, he is the Editor of Environmental Review.
Previously, Mr. Leung was associated with Smith Barney for 17 years, and before
that with F. Eberstadt & Co. Inc., Chemical Bank and Chase Manhattan Bank. Mr.
Leung serves on the boards of Zahren Alternative Power Corp., Independent
Environmental Services, Inc., Capital Environmental Resources, Inc. and Avista
Resources, Inc.
Alfred Tyler, 2nd has over 20 years experience in the environmental
services industry, most recently as the President and Chief Executive Officer of
Enviro-Gro Technologies, a provider of sludge management services. In late 1992,
Enviro-Gro was sold to Wheelabrator Technologies. Mr. Tyler also heads a private
investment company, is president of a landfill and construction company, and is
a partner and managing director of Bedford Capital Corp., a New York
environmental consulting firm. Mr. Tyler also serves as a director of US
Liquids, Inc.
Gene Meredith served more than 15 years in senior management roles in the
solid waste industry. He was a Regional Vice President at Browning-Ferris
Industries, Inc., and Chairman, President and CEO of Mid-American Waste Systems.
He previously served as a director of USA Waste Services, Envirofil, Inc., and
as a general manager of a waste company in St. Paul, Minnesota. Mr. Meredith
also has a law degree, and spent five years as Senior Partner at Meredith &
Addicks in St. Paul, Minnesota.
2
<PAGE>
David A. Donnini is currently a principal and member with GTCR Golder
Rauner, L.L.C. ("GTCR"). He previously worked as an associate consultant with
Bain & Company. Mr. Donnini earned a BA in Economics, summa cum laude, Phi Beta
Kappa with distinction, from Yale University and an MBA from Stanford University
where he was the Robichek Finance Award recipient and an Arjay Miller Scholar.
Mr. Donnini is a director of various companies including American Sanitary,
Cardinal Logistics Management, FutureNext Consulting, U.S. Aggregates, and U.S.
Fleet Services.
Vincent J. Hemmer is currently a vice president with GTCR. Mr. Hemmer
previously worked as a consultant with The Monitor Company. He earned a BS in
Economics, magna cum laude, and was a Benjamin Franklin Scholar at The Wharton
School of the University of Pennsylvania. Mr. Hemmer received his MBA from
Harvard University. Mr. Hemmer serves as a director of several companies
including Hawkeye Communications and Global Passenger Services.
BOARD ACTIVITY, STRUCTURE AND COMPENSATION
The Company's operations are managed under the broad supervision and
direction of the board of directors, which has the ultimate responsibility for
the establishment and implementation of the Company's general operating
philosophy, objectives, goals and policies. During 1999, the board of directors
met or acted by written consent on eight regularly or specially scheduled
occasions.
The board of directors has audit, compensation, executive and nominating
committees. The audit committee consists of Mr. Meredith and Mr. Tyler, and met
on one occasion in 1999. For information regarding the audit committee, see
"Auditor." The compensation committee consists of Messrs. Meredith, Tyler and
Donnini, and met on one occasion in 1999. The compensation committee administers
the Company's compensation plans and recommends officers' compensation for board
approval. The executive committee consists of Messrs. Patten, Leung and Tyler,
and met on four occasions in 1999. The executive committee acts on behalf of the
full board in between board meetings. The nominating committee consists of Mr.
Patten and Mr. Meredith, and met on one occasion in 1999. Stockholders who may
wish to suggest individuals for possible future consideration for board
positions should direct recommendations to the board of directors at the
Company's principal offices. Each director attended at least 75% of all meetings
of the board and meetings of board committees during 1999.
Each director who is not otherwise compensated by the Company for service as
an officer of the Company is paid for travel expenses, if any. Directors are
compensated $1,000 for attendance at each board committee meeting and $2,000 for
each board meeting. Additionally, upon their initial appointment or election, a
grant of an option to acquire 50,000 shares of common stock, which vests 16,666
upon grant and 16,667 shares on each of the first and second anniversaries of
the date of the grant, can be awarded. Each board member has the right to elect
to receive options in lieu of cash compensation for board and committee meetings
attended, at an exercise price equal to market value of the common stock on the
trading day immediately preceding the date of the meeting. During 1999, the
board granted 25,432 options to Mr. Leung, 25,432 to Mr. Meredith, and 25,432 to
Mr. Tyler.
3
<PAGE>
EXECUTIVE OFFICERS
Executive officers of the Company generally serve at the pleasure of the
board of directors and are subject to annual appointment by the board at its
first meeting following the annual meeting of stockholders. The Company's
executive officers as of September 17, 2000, are:
Randall S. Tuttle, 36, was appointed President and Chief Operating Officer
- Operating Division for Synagro in August 2000. Previously, he served as
President and Chief Operating Officer of Synagro since January 2000. Prior to
joining Synagro, Mr. Tuttle served as President of AMSCO, Inc., the leading
provider of residuals management, recycling and land application services in the
Southeastern United States. Mr. Tuttle joined Synagro in connection with the
acquisition of AMSCO in April 1999 and became a Regional Vice President
responsible for all of Synagro's operations in the Southeast. Mr. Tuttle is a
1985 graduate of Duke University with degrees in Political Science and
Economics.
Mark A. Weidman, 43, was appointed President and Chief Operating Officer -
Processing Division for Synagro in August 2000 after the Bio Gro acquisition.
Mr. Weidman was the President of the Bio Gro Division of Wheelabrator Water
Technologies Inc. Mr. Weidman holds a B.S. in Water Resources Engineering
Technology from Pennsylvania State University. He is a Registered Professional
Engineer in the states of New Hampshire, Pennsylvania and Maryland.
J. Paul Withrow, 34, was appointed Executive Vice President and Chief
Financial Officer during 1999. Mr. Withrow was previously Vice President and
Chief Accounting Officer of Integrated Electrical Services, Inc., which is a
leading national provider of electrical contracting and maintenance services.
Prior to that, Mr. Withrow was a Senior Audit Manager at Arthur Andersen L.L.P.
Mr. Withrow is a Certified Public Accountant and received his Bachelor of
Business Administration in Accounting from the University of Houston.
Alvin L. Thomas II, 34, was appointed Executive Vice President and General
Counsel during 1998. Mr. Thomas practiced law with the national law firm of
Littler Mendelson, P.C. prior to joining the Company. Mr. Thomas also practiced
law with the international law firm of Fulbright & Jaworski, L.L.P. Mr. Thomas
received his law degree from the University of Pittsburgh School of Law and an
LL.M. in Taxation from New York University School of Law. His legal background
is broad-based with emphasis in tax law, employment law, corporate law and
litigation.
Mark A. Rome, 34, was appointed Executive Vice President and Chief
Development Officer during 1998. Mr. Rome, an attorney and CPA, joined the
Company from Sanders Morris Mundy, an investment banking firm specializing in
industry consolidations. He previously practiced tax and corporate law at
Fulbright & Jaworski, L.L.P., an international law firm headquartered in
Houston. Mr. Rome received his law degree from the University of Texas School of
Law and a Master's in Professional Accounting from the University of Texas
Graduate School of Business.
4
<PAGE>
Paul C. Sellew, 42, was appointed Executive Vice President Technical
Services and Product Development in January 2000; Mr. Sellew had acted as
President and Chief Operating Officer for the Company since 1998. Mr. Sellew has
extensive experience in organic materials management. He was the Founder and
former President and Chairman of the Board of Earthgrow, Inc., the second
largest commercial composting company in the country prior to its sale in
February 1998. In addition, Mr. Sellew's business ventures have included
International Process Systems, Inc. a composting technology company, and ALLGro
Inc., a composting marketing company, both of which were sold to Wheelabrator
Technologies, Inc. in 1991.
MANAGEMENT STOCKHOLDINGS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock at September 17, 2000, by (i) all
current directors, (ii) the Named Executives and (iii) all directors and all
executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME OF PERSON OR IDENTITY OF GROUP SHARES(1) OF CLASS
---------------------------------------------- --------------------- ---------------------
<S> <C> <C>
Ross M. Patten............................. 585,050 2.9%
Kenneth Ch'uan-k'ai Leung.................. 1,317,501(2) 6.8%
Gene Meredith.............................. 67,268 *
Alfred Tyler, 2nd.......................... 67,268 *
David A. Donnini........................... 25,497,436(3) 56.7%
Vincent J. Hemmer.......................... -- *
Paul C. Sellew............................. 210,000 1.1%
Mark A. Rome............................... 300,030 1.5%
Alvin L. Thomas II......................... 140,415 *
All directors and executive officers
as a group (12 persons).................... 29,975,746(4) 64.5%
__________________________
* Less than 1% of outstanding shares.
(1) Includes shares underlying stock options, as follows: Mr. Patten--585,050; Mr. Leung--67,501; Mr. Meredith--50,602; Mr. Tyler--
67,268, Mr. Sellew--200,000; Mr. Rome--300,030; Mr. Thomas--140,070; and 133,400 for all other executive officers.
(2) Includes 137,875 shares and 1,112,125 shares owned by Environmental Opportunities Fund (Cayman), L.P. and Environmental
Opportunities Fund, L.P., respectively. Mr. Leung is the chief investment officer of these investment funds.
(3) Includes 25,497,436 shares of Common Stock underlying an aggregate of 62,537.819 shares of Series D and E Convertible Preferred
Stock held by GTCR, of which Mr. Donnini is a principal.
(4) Includes (without duplication) all shares referred to above.
</TABLE>
5
<PAGE>
VOTE REQUIRED FOR ELECTION
The six nominees for election as directors at the Annual Meeting who
receive the greatest number of votes cast for election by the holders of Common
Stock and Preferred Stock of record shall be the duly elected directors upon
completion of the vote tabulation at the Annual Meeting, provided a majority of
the outstanding shares as of the record date are present in person or by proxy
at the meeting. Votes will be tabulated by Georgeson Shareholder Communications,
Inc., and the results will be certified by election inspectors who are required
to resolve impartially any interpretive questions as to the conduct of the vote.
Under applicable provisions of the Company's bylaws, any proxy containing an
abstention from voting for any nominee will be sufficient to represent the
shares at the meeting for purposes of determining whether a quorum is present
but will count neither as a vote for nor against any nominee with respect to
whom the holder has abstained from voting. In tabulating votes, a record will be
made of the number of shares voted for each nominee, the number of shares with
respect to which authority to vote for that nominee has been withheld, and the
number of shares held of record by broker-dealers and present at the Annual
Meeting but not voting.
The board of directors recommends that the stockholders vote FOR the
election of each of the nominees listed on page 2.
ITEM NO. 2 - ADOPTION OF 2000 STOCK OPTION PLAN
The board of directors of the Company has unanimously adopted resolutions
approving and submitting to a vote of the stockholders approval of the Synagro
Technologies, Inc. 2000 Stock Option Plan (the "Plan"). The discussion of the
material terms of the Plan herein is qualified in its entirety by reference to
the Plan set forth as Exhibit A.
SUMMARY OF PROPOSED PLAN
While the Company has been successful in attracting and retaining qualified
personnel, the Company believes that its future success will depend in part on
its continued ability to attract and retain highly qualified personnel. The
Company pays wages and salaries which it believes are competitive, and it has
group health and life insurance plans. The Company also believes that equity
ownership is an important factor in its ability to attract and retain skilled
personnel, and in a unanimous written consent of the Board of Directors dated
August 29, 2000, the board of directors adopted the Plan pursuant to which
awards may be granted to officers, directors, employees, independent
contractors, consultants and other persons providing significant services to the
Company. There shall be reserved for issuance upon the exercise of awards the
greater of (i) 7,200,000 shares of Common Stock and (ii) 15% of the total number
of fully diluted shares of Common Stock on the last day of each calendar quarter
as if all shares of convertible preferred stock of the Company have been
converted. As of September 17, 2000, the number of shares reserved for issuance
would be 7,200,000. If the Plan is approved by the stockholders, (i) the Company
will grant no more options under its 1993 Stock Option Plan, and (ii) options
for an aggregate of 263,659 shares issued outside of the 1993 Stock Option Plan
will be assumed and continued, with modification as necessary, under the Plan.
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The maximum number of shares with respect to which options may be granted
each calendar year to an employee shall be 1,000,000. If an award under the Plan
expires or terminates without having been exercised in full, the unpurchased
shares subject thereto will again be available for purposes of the Plan. The
exercise price and number of shares subject to awards granted under the Plan are
subject to adjustment upon a stock dividend, split-up, consolidation,
recapitalization, reorganization or like event.
The purpose of the Plan is to provide an incentive to officers, directors,
employees, independent contractors, and consultants of the Company to remain in
the employ of, provide services to, and contribute to the success of the
Company. The awards granted under the Plan may be either nonstatutory stock
options, Incentive Stock Options (as that term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code")), or stock appreciation
rights ("SARs"). Each award will be evidenced by a written Incentive Agreement.
The Plan will be administered by a Committee of the board of directors, which
Committee may be the Compensation Committee or any subcommittee of the
Compensation Committee. The Committee must consist of not less than two
directors who fulfill the "non-employee director" requirements of Rule 16b-3 of
the Securities Exchange Act of 1934, as amended, and the "outside director"
requirements of Section 162(m) of the Code. The Committee has the exclusive
power to select the participants in the Plan, to establish the terms of the
options granted to each participant, and to make all determinations necessary or
advisable under the Plan.
Awards granted under the Plan generally are not transferable except by will
or the laws of descent and distribution, or for nonstatutory stock options,
pursuant to a qualified domestic relations order, and are 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 order) and
after death, by his personal representative or by the person entitled thereto
under his will or the laws of intestate succession.
In the event the grantee's employment is terminated upon death or
disability, any vested award will 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; provided, however, that in no case shall an Incentive
Agreement provide for the expiration before six months after the termination of
the grantee's employment. Upon the retirement of any officer, director or
employee, any vested award shall expire on the earlier of (i) the expiration
date set forth in the Incentive Agreement or (ii) the expiration of three months
after the date of retirement. Upon termination of a grantee's employment or
other relationship with the Company for reasons other than death or disability
or retirement, any vested awards will expire 30 days after the date of such
termination. Any non-vested portion of any award granted outstanding on the date
of termination shall immediately terminate and no further vesting shall occur.
Incentive Stock Options shall be granted only to employees of the Company.
The exercise price of Incentive Stock Options granted under the Plan may not be
less than 100% of the fair market value of the Common Stock of the Company on
the date of the grant. With respect to any grantee who owns more than 10% of the
Company's outstanding Common Stock, the exercise price of any Incentive Stock
Option granted must be equal to at least 110% of the
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<PAGE>
fair market value on the date of the grant and the maximum term of the option
may not exceed five years. The aggregate fair market value of the Common Stock
(as determined on the grant date) with respect to which Incentive Stock Options
are exercisable for the first time by a grantee in any calendar year may not
exceed $100,000.
The exercise price of nonstatutory stock options granted under the Plan may
be any price determined by the Committee, but may not be less $0.002 per share.
Independent SARs and Tandem SARs may be granted under the Plan. Upon
exercise of an Independent SAR or a Tandem SAR, the holder will receive for each
share an amount of cash or Common Stock equal to the Spread. The Spread is the
difference between the fair market value of a share on the date of grant and the
fair market value of a share on the date of exercise. The exercise price per
share of Common Stock subject to an Independent SAR shall not be less than 100%
of the fair market value of a share of Common Stock on the date of grant of the
SAR. The option price of a Tandem SAR shall not be less than 100% or 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. 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 share covered by such option shall terminate.
TAX CONSIDERATIONS
The following discussion regarding tax matters should not be relied upon as
tax advice. Recipients under the Plan are advised and expected to consult their
own tax advisors regarding the federal and state income tax consequences in
light of their personal circumstances.
Recipients of Incentive Stock Options granted under the Plan will not
realize taxable gain for federal income tax purposes on the date of grant or the
date of exercise of an option. However, the difference between the fair market
value of the stock acquired (on the date of exercise of the option) and the
option price will be an adjustment for purposes of calculating the alternative
minimum tax of the grantee in the year the option is exercised. Recipients of
Incentive Stock Options will incur taxable gain for federal income tax purposes
on the difference between the sales proceeds received and the option price when
the shares acquired through the exercise of Incentive Stock Options have been
sold. If the grantee does not dispose of the shares so acquired until two years
after the date of the grant and one year after the date or exercise of the
option, the gain from the sale will be taxed as long term capital gain or loss
and the Company will not be entitled to a tax deduction in connection with the
exercise of the option. If the grantee disposes of the shares prior to the end
of this holding period, the grantee generally will recognize compensation income
in the year of the disposition equal to the difference between the fair market
value of the stock (on the date of exercise) and the option price with the
excess of the sales proceeds received upon the disposition over the fair market
value of the stock (on the date of exercise), if any, taxed as long or short-
term capital gain, depending upon the length of the
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<PAGE>
holding period. The Company will receive a compensation deduction in its taxable
year equal to the amount of ordinary income recognized by the grantee in the
year of disposition.
For nonstatutory stock options, the grantee will realize no income at the
time he is granted a nonstatutory stock option. Ordinary income will be realized
by the grantee when the nonstatutory stock option is exercised. The amount of
such income will be equal to the excess of the fair market value on the exercise
date of the shares of Common Stock issued to the grantee over the exercise price
of such shares. The grantee's holding period for federal income tax purposes
with respect to the shares acquired will begin on the date of exercise. The tax
basis of the stock acquired on the exercise of the option will be equal to the
sum of (i) the exercise price of such option and (ii) the amount included in
income with respect to the exercise of such option. Any gain or loss on the
subsequent sale of the stock will be either a long-term or short-term capital
gain or loss depending on the grantee's holding period for the Common Stock
disposed of by the grantee. The Company will receive a compensation deduction
for its taxable year within which the employee recognizes compensation with
respect to the nonstatutory stock option in an amount equal to the difference
between the fair market value of the stock and the exercise price of the option.
A recipient of an SAR will not recognize any income at the time he is
granted an Independent SAR or Tandem SAR. Such grantee will recognize ordinary
income at the time the Independent SAR or Tandem SAR is exercised. The amount of
such ordinary income will equal the Spread. The grantee's tax basis of any
Common Stock received on the exercise of the SAR will equal the amount included
in income with respect to the exercise of such SAR. The Company will receive a
compensation deduction equal to this Spread in its taxable year within which the
grantee recognized ordinary income.
If the Plan is approved by the stockholders, the effective date of the Plan
shall be November 1, 2000. The Plan will terminate upon the earlier of (i) the
10th anniversary of the effective date, (ii) by resolution of the board of
directors or (iii) under certain circumstances, including any reorganization of
the Company in which the Company is not the surviving corporation or upon the
liquidation or dissolution of the Company.
No options have been granted under the Plan at this time, although upon
approval by stockholders, options to acquire an aggregate of 263,659 shares will
be assumed by the Plan. As of September 17, 2000, the per share market value of
the Common Stock was $2.9688. Neither the number nor the value of future option
awards to particular participants or groups of participants is presently
determinable.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the Common Stock
present or represented by proxy and entitled to vote on this proposal is
required for approval of this proposal.
The board of directors recommends that the stockholders vote FOR approval
of the proposed Plan.
9
<PAGE>
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock at September 17, 2000, by each
stockholder who is known by the Company to own beneficially more than 5% of the
outstanding Common Stock. As required by the Commission, the ownership
percentages shown reflect beneficial ownership by a stockholder as if no other
stockholder has converted its Preferred Stock or exercised options.
<TABLE>
<CAPTION>
NAME OF PERSON OR IDENTITY OF GROUP SHARES Number of Shares Percent of Class
----------------------------------------------------- --------------------------- ----------------------
<S> <C> <C>
GTCR Golder Rauner, LLC 25,497,436(3) 56.7%
233 S. Wacker Drive
Chicago, IL 60606
The TCW Group, Inc. 2,901,785(4) 13.0%
865 South Figueroa Street, Suite 1800
Los Angeles, CA 90017
James A. Jalovec 1,814,527(1) 9.2%
2841 South 5th Court
Milwaukee, WI 53207
Randall S. Tuttle 1,657,377 8.5%
1900 Virginia Road
Winston-Salem, NC 27107
GroWest, Inc. 1,416,423 7.3%
114 Business Center Drive
Corona, CA 91720
James Rosendall 1,600,001 8.2%
323 Martindale Street
Sparta, MI 49345
Kenneth Ch'uan-k'ai Leung 1,317,501(1)(2) 6.8%
126 E. 56th Street
New York, NY 10002
Bill E. Tuttle 1,194,668 6.1%
711 East Twain Avenue
Las Vegas, NV 89109
__________________
(1) Includes currently exercisable options.
(2) Includes 137,875 shares and 1,112,125 shares owned by Environmental Opportunities fund (Cayman), L.P., and Environmental
Opportunities Fund, L.P., respectively. Mr. Leung is the chief investment officer of these investment funds.
(3) Represents 62,537.819 total shares of Series D and E Convertible Preferred Stock convertible into 25,497,436 shares of Common
Stock.
(4) Represents 7,254.462 shares of Series E Convertible Preferred Stock convertible into 2,901,785 shares of Common Stock.
</TABLE>
10
<PAGE>
EXECUTIVE COMPENSATION
The following table reflects all forms of compensation for services to the
Company for the periods indicated of each individual who was the chief executive
officer at any time during 1999 and each other executive officer whose total
salary and bonus exceeded $100,000 ("Named Executives"). No other executive
officer of the Company serving as such at the end of the year had total salary
and bonus exceeding $100,000 in 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
--------------------------------------------------- ------------------------------------
Restricted Stock Option
Name and Principal Position Year Salary Bonus Other Stock Awards (Shares)
------------------------------ -------- ------------ ------------- --------- --------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Ross M. Patten 1999 $150,000 --- $9,600 --- 150,000
Chairman of the Board, 1998 $134,038 --- --- --- 485,000
Chief Executive Officer
Paul C. Sellew 1999 $111,250 --- $ 6,000 --- ---
Executive Vice President 1998 $ 7,917 --- --- --- 300,000
Mark A. Rome 1999 $120,000 --- $ 6,000 --- 90,000
Executive Vice President and 1998 $ 89,833 --- --- --- 240,000
Chief Development Officer
Alvin L. Thomas II 1999 $120,000 --- $ 6,000 --- 10,000
Executive Vice President 1998 $ 27,769 --- --- --- 200,000
and General Counsel
</TABLE>
OPTION GRANTS
The following table sets forth certain information with respect to stock
options granted to the Named Executives during 1999.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Individual Grants(2) Appreciation for Option Term(1)
---------------------------------------------------- -----------------------------------
Percent of Total
Options Options Granted to Exercise Expiration
Name Granted Employees in Year Price Date 5% 10%
---------------------- ------------- --------------------- ------------ ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Ross M. Patten 150,000 23.7% $6.31 6/29/09 $595,249 $1,508,477
Paul C. Sellew -- -- -- -- --
Mark A. Rome 90,000 14.3% $6.31 6/29/09 $357,149 $ 905,086
Alvin L. Thomas II 10,000 1.6% $6.31 6/29/09 $ 39,683 $ 100,565
</TABLE>
(1) Potential values stated are the result of using the Commission's method of
calculations of 5% and 10% appreciation in value from the date of grant to
the end of the option term. Such assumed rates of appreciation and
potential realizable values are not necessarily indicative of the
appreciation, if any, which may be realized in future periods.
(2) Options vest 34% upon grant, 33% on each of the first and second
anniversaries of the date of grant. Unvested options will immediately vest
upon a change of control of the Company.
11
<PAGE>
OPTION EXERCISES AND YEAR END VALUES
The following table sets forth information with respect to the exercised
and unexercised options to purchase shares of Common Stock held by each of the
Named Executives at December 31, 1999. Of the Named Executives, none exercised
stock options during 1999.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN-THE-MONEY
DECEMBER 31, 1999 OPTIONS AT DECEMBER 31, 1999(2)
SHARES ------------------------------------- ----------------------------------
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------------- -------------- --------------- --------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Ross M. Patten --- --- 373,445 261,555 $525,679 $262,446
Paul C. Sellew --- --- 200,000 100,000 $395,000 $197,500
Mark A. Rome --- --- 190,000 140,000 $286,667 $143,333
Alvin L. Thomas II --- --- 136,667 73,333 $250,000 $125,000
</TABLE>
___________________
(1) Value of in-the-money options calculated based on the closing price per
share of the common stock on December 31, 1999 ($4.875 per share) as
reported on the Nasdaq Small-Cap Market.
EMPLOYMENT AGREEMENTS
Messrs. Patten,aRome and Thomas are employed by the Company under employment
agreements effective February 19, 1999, and amended January 27, 2000, which
always have a remaining term of twenty-four months until the agreement is
terminated. The annual salary under the respective employment agreements is
$225,000 per year for Mr. Patten and $175,000 per year for Messrs. Rome and
Thomas. Additionally, Messrs. Patten, Rome and Thomas may be entitled to such
bonus awards up to 50% of base salary as may be approved by the Board of
Directors, and are entitled to participate in any applicable profit-sharing,
stock option of similar benefit plan. The agreements contain confidentiality and
non-compete provisions.
Mr. Sellew is employed by the Company under an employment agreement
effective February 19, 1999, for a duration of twenty-four months. The annual
salary under the employment agreement is $120,000. Additionally, Mr. Sellew may
be entitled to such bonus awards as may be approved by the Board or Directors,
and is entitled to participate in any applicable profit-sharing, stock option or
similar benefit plan. The employment agreement automatically renews for
successive twenty-four month periods annually, unless terminated by prior
written notice. If employment is terminated without cause, Mr. Sellew is
entitled to a severance payment equal to 200% of the sum of his annual salary
and bonus for the proceeding year. The agreement contains confidentiality and
non-compete provisions. The employment agreement contains a provision vesting
any unvested stock options upon a Change of Control. The Change of Control
provision has been waived for certain transactions.
On January 27, 2000, the Company and each of Ross M. Patten, Mark A. Rome
and Alvin L. Thomas II entered into an Agreement Concerning Employment Rights
("Employment Rights Agreement"). The Employment Rights Agreements provide that
in the event that (i) Executive's employment is terminated by the Company for
any reason other that Cause (as defined), death or disability, (ii) Executive
terminates his employment with the Company for Good Reason (as defined), or
(iii) a Change in Control occurs, then the Executive shall have the
12
<PAGE>
right to receive an option payment from the Company. In satisfying this
obligation, the Company shall at its option (x) issue options to purchase a
certain number registered shares of the Company's common stock ("Base Option
Amount") at an exercise price of $2.50 per share, which shall be fully vested
and non-transferable, and shall expire 90 days from the date of issue, (y) issue
registered shares of the Company's common stock equal to the result of (A) the
product of the Base Option Amount, multiplied by the fair market value per share
of the Company's common stock less $2.50 ("Stock Value"), divided by (B) the
fair market value per share of the Company's common stock, or (z) a cash payment
equal to the stock less Stock Value. The Base Option Amount for Mr. Patten is
950,000 shares, and the Base Option Amount for Messrs. Rome and Thomas is
450,000 shares. These Executives would be required to forfeit these existing
vested and unvested stock options if this payment has been made by the Company
Messrs. Patten, Rome and Thomas have options to purchase stock totaling 635,000,
330,000 and 210,000 respectively.
COMPENSATION COMMITTEE REPORT
The compensation committee of the board of directors (the "Committee") has
furnished the following report on executive compensation for fiscal 1999:
Under the supervision of the Committee, the Company seeks to relate a
significant portion of potential total executive compensation to the
Company's financial performance. In general, executive financial rewards
may be segregated into the following significant components: base
compensation, bonus and stock-based benefits.
Base compensation and bonuses for the executive officers are intended to be
competitive with that paid in comparably situated companies, with a
reasonable degree of financial security and flexibility to those
individuals who were regarded by the Committee as acceptably discharging
the levels and types of responsibility implicit in the various executive
positions. In the course of considering annual executive salary increases
and bonuses, appropriate consideration is given to the credentials, age and
experience of the individual senior executives, as viewed in the
Committee's collective best judgment, which necessarily involves subjective
as well as objective elements. Using the criteria set forth above, no
general pay increase for executive officers was authorized during fiscal
1999, in as much as their base compensation was covered by employment
agreements.
The Committee is of the view that the periodic grant of stock options to
employees, including executive officers, is calculated to align the
employees' economic interests with those of stockholders and to provide a
direct and continuing focus upon the goal of increasing stockholder value.
The Company granted options to acquire 150,000 shares of the Company's
Common Stock to Mr. Patten, 90,000 shares to Mr. Rome and 10,000 shares to
Mr. Thomas during fiscal 1999 at 100% of the market price for the Common
Stock on the date of grant. The options vest one third upon grant and one
third on each of the following two grant anniversaries. The Compensation
Committee presently
13
<PAGE>
anticipates that such grants to executive officers will be considered
annually.
The Compensation Committee: Kenneth Ch'uan-k'ai Leung
Gene Meredith
Alfred Tyler, 2nd
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee has at any time been an
officer or employee of the Company and none of these directors serves as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as a member of the Company's board or
Compensation Committee.
CERTAIN TRANSACTIONS
The Company has entered into the following transactions with James A.
Jalovec and GroWest, Inc., the prior owners of certain purchased companies or
their affiliates.
The Company issued notes in the amount of $6,454,750 to the prior owners of
the purchased companies as partial consideration of the acquisition price. These
notes had a balance of $2,845,522 at December 31, 1999. The terms of the
outstanding notes include varying principal installments starting August 1998
and continuing through November 2000 and annual interest rates of 7% to be paid
quarterly. The notes have no financial covenants. The note related to the Recyc
acquisition with a balance of approximately $2,212,000 at December 31, 1998, may
be offset if certain postclosing conditions are not met. No adjustments have
been made as of December 31, 1999. Additionally, the Company has notes to prior
owners relating to non-compete agreements; these notes have a balance of
$200,000 at December 31, 1999. The notes are paid in varying installments and
have an annual imputed interest rate of 9%. These notes have no financial
covenants.
Concurrent with certain acquisitions, the Company entered into various
agreements with prior owners to lease land and buildings used in the Company's
operations. The terms of the leases range from three years to thirty years and
provide for certain escalations in rental expense. One such lease, which expires
in 2028, has an option to terminate upon 30-days notice in the event a
conditional use permit (as defined in the agreement) relating to the leased land
expires. Additionally, the Company has a five-year option to purchase such
leased property for $2,250,000, which expires in 2003. Currently, the Company
pays rent in the amount of $36,000 per annum for the first three years and
$192,000 per annum thereafter on the lease. The charges for the lease costs are
being expensed on a straight-line basis. Included in 1999 rent expense was
approximately $326,000 of rent paid to related parties.
Notwithstanding any apparent (or actual) conflict of interest that may have
existed with respect to the above financial arrangements, the board of directors
is of the opinion that these arrangements are as favorable to the Company as any
that could have been negotiated at arm's length with similar situated third
parties under the same circumstances.
14
<PAGE>
COMMON STOCK PERFORMANCE GRAPH
The following graph illustrates the yearly change in the trading price of
the Company's Common Stock against the NASDAQ (U.S. Companies) Stock Index (the
"NASDAQ U.S. Index") and a peer group comprised of eighteen companies in the
industry (the "Peer Group").
Synagro Techlogogies NASDAQ US Index Peer Group
Dec 94 100 100 100
Dec 95 8.88 141.33 101.96
Dec 96 11.1 173.9 112.16
Dec 97 11.38 213.07 142.65
Dec 98 16.65 300.43 159.73
Dec 99 21.64 558.48 65.9
AUDITOR
Arthur Andersen L.L.P. (the "Auditor") is the independent auditor of the
Company. While management anticipates that this relationship will continue to be
maintained with respect to the audit of the Company's financial statements, for
2000 no formal action is proposed to be taken at the Annual Meeting with respect
to the continued employment of the Auditor inasmuch as no such action is legally
required. Representatives of the Auditor plan to attend the Annual Meeting and
will be available to answer appropriate questions. Representatives of the
Auditor will have an opportunity to make a statement at the Annual Meeting if
they so desire, although it is not expected that any statement will be made.
The audit committee, whose members are Messrs. Leung, Meredith, and Tyler,
assists the Board in assuring that the accounting and reporting practices of the
Company are in accordance with all applicable requirements. The committee
reviews with the auditors the scope of proposed audit work and meets with the
auditors to discuss matters pertaining to the audit and any other matters, which
the committee or the auditors may wish to discuss. In addition, the audit
committee would recommend the appointment of new auditors to the board of
directors in the event future circumstances were to indicate that such action is
desirable.
15
<PAGE>
LIMITATION ON INCORPORATION BY REFERENCE
Notwithstanding any reference in prior or future filings of the Company
with the Commission that purports to incorporate this proxy statement by
reference into another filing, such incorporation does not include any material
included herein under the captions "Other Information--Common Stock Performance
Graph."
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who own more than 10% of
a registered class of the Company's equity securities, to file reports of
ownership and changes of ownership with the Commission. With respect to the
year-ended December 31, 1999, the Company believes that all filing requirements
applicable to the Company's executive officers, directors and 10% shareholders
have been met.
STOCKHOLDER PROPOSALS
The Company currently expects to hold its next Annual Meeting on or about
August 16, 2001. Any stockholder who wishes to submit a proposal for action to
be included in the proxy statement and form of proxy relating to such annual
meeting of stockholders is required to submit such proposal to the Company on or
before April 18, 2001.
OTHER MATTERS
The Annual Report to stockholders covering the year ended December 31, 1999
either has been mailed to each stockholder entitled to vote at the Annual
Meeting or accompanies this proxy statement.
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to solicitations by mail, several regular employees of
the Company may, if necessary to assure the presence of a quorum, solicit
proxies in person or by telephone.
The persons designated as proxies to vote shares at the meeting intend to
exercise their judgment in voting such shares on other matters that may properly
come before the meeting. Management does not expect that any matters other than
those referred to in this proxy statement will be presented for action at the
meeting.
By Order of the Board of Directors
Alvin L. Thomas II
Secretary
September 27, 2000
16
<PAGE>
EXHIBIT A
SYNAGRO TECHNOLOGIES, INC.
2000 STOCK OPTION PLAN
The Synagro Technologies, Inc. 2000 Stock Option Plan is a stock option
plan separate and apart from the Synagro Technologies, Inc. 1993 Stock Option
Plan ("1993 Plan"). All outstanding options granted under the 1993 Plan shall
remain thereunder. After the 2000 Stock Option Plan is approved by stockholders,
no further grants will be made under the 1993 Plan. Options exercisable for an
aggregate of 263,659 shares issued outside of the 1993 Plan are assumed and
continued, with modification as necessary, 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. 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 granted, or to be granted, to an
Outside Director or a member of the Committee, the Board shall have all the
powers and responsibilities of the Committee hereunder as to any such
Incentive Award, and any actions as to any 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.
<PAGE>
(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 sole 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) 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 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.
2
<PAGE>
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, (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 Nasdaq National Market or Nasdaq SmallCap
Market ("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 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 of the Plan.
(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) of the Plan.
3
<PAGE>
(r) NONSTATUTORY STOCK OPTION. A Stock Option granted by the
Committee to a Grantee under Section 6(b) of the Plan 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. 2000 Stock Option Plan as
set forth herein and as it may be amended from time to time.
(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) of the Plan or an Independent SAR described in Section
6(c)(1) of the Plan.
(aa) STOCK OPTION OR OPTION. Pursuant to Section 6 of the Plan, (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) of the
Plan, 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
forfeited).
4
<PAGE>
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 (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 the Committee.
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 Grantee 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) 7,200,000
shares of Common Stock and (ii) 15% of the total number of fully diluted shares
of Common Stock on the last day of each calendar quarter as if all shares of
convertible preferred stock of the Company have been converted. Any shares
issued upon exercise of Incentive Awards may be treasury shares. If an
Incentive Award 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 a Grantee who is an
employee of Synagro shall not exceed 1,000,000 shares in any fiscal year during
the term of the Plan.
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6. TERMS OF OPTIONS AND SARS.
(a) INCENTIVE STOCK OPTIONS. It is intended that options granted
pursuant to this Section 6(a) of the Plan 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 of the Plan 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
in the sole discretion of 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 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
approval of the Committee, in whole or in part either (i) in cash;
(ii) by delivery of shares of Common Stock in transferable form, such
shares of Common Stock to be valued for such purpose at their Fair
Market Value on the date on which the Option is exercised; or (iii) by
permission of the Committee, authorizing a third party to sell shares
of Common Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and remit to the Company a sufficient portion
of the sale proceeds to pay the entire Option Price and any tax
withholding resulting from such exercise. 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.
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(4) Limitation on Amount Becoming Exercisable In Any One Calendar
Year. Subject to the overall limitations of Section 5 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; any Stock Options awarded in excess of
this limit shall be considered as Nonstatutory Stock Options for
federal income tax purposes, determined in the order in which the
Stock Options were granted.
(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 the par value of the shares.
(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 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
approval of the Committee, in whole or in part in (i) cash; (ii) by
delivery of shares of Common Stock in transferable form, such shares
of Common Stock to be valued for such purpose at their Fair Market
Value on the date on which the Option is exercised; or (iii) by
permission of the Committee, authorizing a third party to sell shares
of Common Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and remit to the Company a sufficient portion
of the sale proceeds to pay the entire Option Price and any tax
withholding resulting from such exercise. 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.
(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:
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(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. If all or any
portion of the Spread is paid in shares of Common Stock, 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 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. If all or
any portion of the Appreciation is paid in shares of Common Stock, the
number of shares of Common Stock which shall be issuable upon exercise
of a Tandem SAR shall be determined by dividing (A) by (B), where (A)
is the number of shares as to which the Tandem SAR is exercised
multiplied by the Appreciation in such shares and (B) is the Fair
Market Value of a share on the exercise date.
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<PAGE>
(3) Shares Subject to Plan. Upon the exercise of a SAR under
this Section 6, 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. Except as otherwise provided by the Committee, 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 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
<PAGE>
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 5 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 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.
In this respect, prior to the issuance of any shares of Stock under this
Plan, the Company may require a written statement that the recipient is
acquiring the shares for investment and not for the purpose or with the
intention of distributing the shares. The Committee, in its discretion, may
impose such conditions, restrictions and contingencies with respect to shares of
Common Stock acquired pursuant to the exercise of a Stock Option, Tandem SAR or
Independent SAR as the Committee determines to be desirable.
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
10
<PAGE>
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; and
(d) The class of persons eligible to receive Incentive Awards under
the Plan as set forth in Section 4 shall not be changed.
13. EFFECTIVE DATE. The Plan shall be effective upon the date of its
adoption by 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 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.
11
<PAGE>
PROXY
SYNAGRO TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON OCTOBER 31, 2000
The undersigned hereby appoints Ross M. Patten and Alvin L. Thomas II, and
each of them, either one of whom may act without joinder of the other, each
with full power of substitution and ratification, attorneys and proxies of the
undersigned to vote all shares of Synagro Technologies, Inc. which the
undersigned is entitled to vote at the annual meeting of stockholders to be
held at Synagro's offices at 1800 Bering Drive, Suite 1000, Houston, Texas on
Tuesday, October 31, 2000 at 2:00 p.m., local time, and at any adjournment
thereof.
This Proxy will be voted in accordance with the specifications made hereon.
If no contrary specification is made, then this Proxy will be voted FOR the
election of the six director nominees named in Item 1, FOR Item 2 and in the
discretion of the proxies for such other business as may properly come before
the meeting. The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and the Proxy Statement furnished herewith.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY in the enclosed, pre-addressed
stamped envelope.
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE! ANNUAL
MEETING OF STOCKHOLDERS SYNAGRO TECHNOLOGIES, INC. OCTOBER 31, 2000
(To be Signed on Reverse Side)
---------------
SEE REVERSE
SIDE
---------------
X Please mark your
votes as in this
example.
Nominees: Ross M. Patten
1. Election of FOR WITHHOLD Kenneth Ch'uan-k'ai Leung
Directors [ ] [ ] Alfred Tyler 2nd
Gene Meredith
David A. Donnini
Vincent J. Hemmer
To withhold authority to vote
for any individual nominee,
print that nominee's name on
the line below.
--------------------------------
2. Approve and adopt the FOR AGAINST
2000 Stock Option Plan [ ] [ ]
3. In their discretion, upon FOR WITHHOLD
such other matters [ ] [ ]
(including procedural and
other matters relating to
the conduct of the meeting)
which may properly come
before the meeting and any
adjournment thereof.
SIGNATURE(S) _______________________________________ DATE ____________________
NOTE: Please sign exactly as your name appears on your stock certificate. When
signing as executor, administrator, trustee or other representative,
please give your full title. All joint owners should sign.
