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                                                                    EXHIBIT 10.1

                           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.

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            (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.

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            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.

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            (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).

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      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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                  (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. ADJUSTMENT OF SHARES; TERMINATION OF INCENTIVE AWARDS.

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            (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 withholding of
shares of Common Stock otherwise issuable to the Grantee upon the exercise of an
Incentive Award.

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      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.

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