FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
ALLIED WASTE INDUSTRIES,
INC.
NONQUALIFIED STOCK OPTION
AGREEMENT
(UNDER THE 2006 INCENTIVE STOCK PLAN)
THIS
NONQUALIFIED STOCK OPTION AGREEMENT (“Agreement”)
is dated this ___ day of
, 200___ (the “Grant Date”), between ALLIED WASTE
INDUSTRIES, INC., a Delaware corporation (the
“Company”), and
(“Optionee”).
The Company has
adopted the Allied Waste Industries, Inc. 2006 Incentive Stock
Plan, as such plan may subsequently be modified, amended, or
supplemented (the “Plan”), all of the terms and
provisions of which are incorporated herein by reference and made a
part of this Agreement. All capitalized terms used but not defined
in this Agreement have the meanings given to them in the
Plan.
The Management
Development/Compensation Committee of the Board of Directors (the
“Committee”) has determined that it is in the best
interests of the Company and its stockholders to grant the option
provided for herein (the “Option”) to Optionee pursuant
to the Plan and this Agreement, as an inducement to [continue to]
serve as [an employee of][a consultant to] the Company and to
provide Optionee with a proprietary interest in the future of the
Company.
NOW,
THEREFORE , in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as
follows:
1. Grant
of the Option . Subject in all respects to the terms,
conditions, and provisions of this Agreement and the Plan the
Company hereby grants to Optionee the right and option to purchase
all or any part of an aggregate of
shares of the Company’s Common Stock (the “Option
Shares”). This Option is a Nonqualified Stock
Option.
2.
Exercise Price . The Exercise Price of the Option Shares
subject to this Option shall be $
per share (the
“Exercise Price”), being the Fair Market Value of the
Common Stock on the Grant Date.
(a)
Vesting of Option . This Option may be exercised only to the
extent it has become vested and exercisable. The Option Shares
shall vest and become exercisable according to the following
schedule:
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Number of Option
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Vesting Date
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Vested and
Exerciseable
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To the extent
vested, this Option shall remain exercisable, in whole or in part,
at any time and from time to time until the date on which the
Option terminates pursuant to Section 5 .
(b)
Acceleration of Vesting Upon Death, Disability, or Change in
Control . Notwithstanding Section 3(a) and except
as otherwise provided in the Optionee’s written employment
agreement or other written agreement with the Company or any policy
of the Company, if any, this Option shall automatically vest in its
entirety and become fully exercisable upon the death of the
Optionee or if the Optionee’s Service with the Company
terminates as a result of the Optionee’s Disability (as that
term is defined in the Plan). Notwithstanding
Section 3(a) and except as otherwise provided in the
Optionee’s written employment agreement or other written
agreement with the Company or any policy of the Company, if any,
upon the occurrence of a Change in Control of the Company, this
Option shall become fully and immediately vested and exercisable
and shall remain exercisable until its expiration, termination or
cancellation pursuant to the terms of the Plan.
(a)
Notice of Exercise . This Option may be exercised by written
notice of intent to exercise the Option with respect to any or all
of the vested Option Shares covered by the Option, delivered to the
Company at its principal office along with payment of the Exercise
Price, as set forth in Section 4(b) . The notice of
exercise shall be accompanied by this Agreement, shall specify the
number of Option Shares with respect to which this Option is being
exercised, and shall be signed by the Optionee or other person that
has the right to exercise this Option. If this Option is exercised
by any person other than the Optionee, such notice shall be
accompanied by appropriate proof (as determined by the Company) of
the right of such person to exercise the Option.
(b)
Payment of Exercise Price. The notice of exercise shall be
accompanied by payment in full to the Company, at its principal
office, of the Exercise Price for the Option Shares with respect to
which this Option is then being exercised. The payment of the
option price shall be made (i) in cash or by certified check,
bank cashier’s check, wire transfer, or postal or express
money order payable to the order of the Company or, (ii) with
the consent of the Committee, in whole or in part in shares of
Common Stock acquired by the Optionee prior to the effective date
of exercise and valued at its Fair Market Value on the effective
date of exercise, (iii) with the consent of the Committee, in
the form of a “cashless exercise”, as described in
Section 4(c) , or (iv) with the consent of the
Committee, in any combination of the foregoing. In addition, in the
sole discretion of the Committee, the Optionee may be provided with
the election to pay the Exercise Price by having the Company
withhold, from the Option Shares otherwise issuable upon exercise
of this Option, a portion of those Option Shares having an
aggregate Fair
2
Market Value
equal to that portion of the Exercise Price designated by the
Optionee (not to exceed 100 percent of the Exercise Price).
Any payment of the Exercise Price by delivery of shares of Common
Stock shall be effected (A) by delivery of such shares to the
Secretary of the Company, duly endorsed in blank or accompanied by
stock powers duly executed in blank, together with any other
documents or evidence as the Secretary shall require from time to
time, or (B) by attestation pursuant to such documents or
evidence as the Secretary shall require from time to time. The
effective date of exercise will be the date established by the
Secretary, which shall be as soon as administratively possible (but
not later than five business days) after the Secretary receives the
written notice, a copy of this Agreement, and payment from
Optionee.
(c)
Cashless Exercise . This Option may be exercised pursuant to
procedures whereby the Optionee, by written notice, irrevocably
directs (i) an immediate market sale or margin loan with
respect to all or a portion of the Option Shares to which he is
entitled upon exercise pursuant to an extension of credit by a
brokerage firm or other party ( provided that such brokerage
firm or other party is not affiliated with the Company) of the
Exercise Price and any tax withholding obligations resulting from
such exercise, (ii) the delivery of the Option Shares directly
from the Company to such brokerage firm or other party, and
(iii) delivery to the Company from the brokerage firm or other
party, from the proceeds of the sale or the margin loan, of an
amount sufficient to pay the Exercise Price and any tax withholding
obligations resulting from such exercise.
(d)
Issuance of Certificates . Upon the Company’s
determination that this Option has been validly exercised as to any
Option Shares, the Secretary of the Company shall issue or cause to
be issued to the Optionee (or permitted transferee) a certificate
or certificates for the number of Option Shares set forth in the
written notice of exercise. The Company shall cause the
certificates for Option Shares purchased upon the exercise of this
Option to be issued in the name of the Optionee (or permitted
transferee) and delivered to the Optionee (or permitted transferee)
as soon as practicable following the later of (i) the
effective date on which the Option is exercised or (ii) the
date tax withholdings are made by the Company (or an amount
sufficient to satisfy such withholdings are received by the
Company) with respect to the portion of the Option that is
exercised; provided, however, that such delivery shall be
effected for all purposes when the Company’s stock transfer
agent shall have deposited such certificates in the United States
mail, addressed to the Optionee (or permitted transferee). The
Company, however, shall not be liable to the Optionee or permitted
transferee for damages relating to any delays in issuing the
certificate(s) to the Optionee or permitted transferee, any loss of
the certificate(s), or any mistakes or errors in the issuance of
the certificate(s) or in the certificate(s) themselves.
5.
Termination of Option . Except as set forth in the following
sentence, this Option, to the extent not previously exercised,
shall expire on the tenth anniversary of the Grant Date.
Notwithstanding the foregoing and except as otherwise provided in
the Optionee’s written employment agreement or another
written agreement with the Company or any policy of the Company, if
any, this Option shall expire upon the termination of the
Optionee’s Service with the Company, as follows:
(a) If
the Optionee’s Service with the Company is terminated for any
reason other than Cause, or other than as the result of the
Optionee’s death or Disability, (i) this Option shall
remain exercisable with respect to any vested Option Shares until
the later of (A) 90 days
3
after such
termination, or (B) 30 days following the end of any
blackout period to which the Optionee may be subject, on which date
they shall expire, and (ii) this Option shall immediately
expire and be forfeited with respect to any unvested Option Shares
as of the commencement of business on the date of such termination;
or
(b) If
the Optionee’s Service with the Company is terminated for
Cause, this Option shall immediately expire and be forfeited as of
the commencement of business on the date of such termination;
or
(c) If
the Optionee’s Service with the Company is terminated as the
result of the Optionee’s Disability or death, this Option
shall remain exercisable with respect to any vested Option Shares
until the expiration of one year after such termination, on which
date they shall expire.
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