REPUBLIC SERVICES, INC.
2005 NON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PLAN
(f/k/a ALLIED WASTE INDUSTRIES, INC. 2005 NON-EMPLOYEE DIRECTOR
EQUITY
COMPENSATION PLAN)
[Originally Adopted Effective
February 28, 1994;
Most Recent Amendment and Restatement Effective January 1,
2008;
This Amendment and Restatement Effective December 5,
2008]
The Allied Waste
Industries, Inc. 2005 Non-Employee Director Equity Compensation
Plan was adopted, subject to shareholder approval, for the benefit
of Non-Employee Directors of Allied Waste Industries, Inc. The Plan
is intended to advance the interests of Allied Waste Industries,
Inc. by providing the Non-Employee Directors with additional
incentive to serve Allied Waste Industries, Inc. by increasing
their proprietary interest in the success of Allied Waste
Industries, Inc.
On June 22,
2008, Allied Waste Industries, Inc. entered into an Agreement and
Plan of Merger (the “Merger Agreement”) with and among
Republic Services, Inc., a Delaware corporation
(“Republic”), and RS Merger Wedge, Inc., a Delaware
corporation and wholly owned subsidiary of Republic (the
“Merger Sub”), pursuant to which Merger Sub will merge
with and into Allied Waste Industries, Inc. (the
“Merger”) and, as a result, Allied Waste Industries,
Inc. will become a wholly owned subsidiary of Republic as of the
Effective Time (as defined in the Merger
Agreement”).
Effective on and
after the Effective Time, the Plan is to be referred to as the
“Republic Services, Inc. 2005 Non-Employee Director Equity
Compensation Plan (f/k/a the Allied Waste Industries, Inc. 2005
Non-Employee Director Equity Compensation Plan)” and Republic
Services, Inc. is to be the new sponsor of this Plan. In addition,
any references to shares of Common Stock is to shares of the common
stock of Republic Services, Inc. and necessary adjustments have
been made to the number of shares of common stock available for
grant under this Plan, as well as to outstanding Awards, to reflect
the Exchange Ratio (as defined in the Merger Agreement). This
Amendment and Restatement reflects these changes.
In addition, no
new Awards shall be granted under this Plan on or after the
Effective Time.
This Amendment and
Restatement is subject to and conditioned upon the Closing (as
defined in the Merger Agreement) of the Merger. In the event that
the Closing does not occur, then this Amendment and Restatement
shall be void and the prior amendment and restatement of the Plan
shall remain in effect.
As used in the
Plan, the following definitions apply to the terms indicated
below.
(a) “Additional
Restricted Stock Units” has the meaning set forth in
Section 6(d) .
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(b) “Affiliate”
of any person means an individual or entity that directly, or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such
person.
(c) “Annual
Grant” means the annual grant of an Award to an Eligible
Director pursuant to Section 5(b) .
(d) “Award”
means a share of Restricted Stock, Restricted Stock Unit, or Option
granted under this Plan.
(e) “Board”
or “Board of Directors” means the Board of Directors of
the Company.
(f) “Cash
Fee Award” means cash fees paid to eligible Directors from
time to time for their continued service on the Board and/or for
attendance at meetings of the Board or of committees of the
Board.
(g) “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
(h) “Committee”
means a committee duly appointed by the Board, which Committee
shall consist of not less than two members of the Board.
(i) “Common
Stock” means the Company’s common stock, par value $.01
per share.
(j) “Company”
means, on or after the Effective Time, Republic Services, Inc., a
Delaware corporation and its successors. Prior to the Effective
Time, “Company” means Allied Waste Industries, Inc., a
Delaware corporation.
(k) “Deferred
Compensation Plan” means any nonqualified deferred
compensation plan of the Company that is currently in effect or
subsequently adopted by the Company.
(l) “Designee
Director” means a person designated by a Designating Person
to serve as a Non-Employee Director pursuant to Allied Waste
Industries, Inc.’s Certificate of Incorporation or Bylaws, or
an agreement or other arrangement between Allied Waste Industries,
Inc. and the Designating Person.
(m) “Designating
Person” with respect to a Designee Director means an
individual or entity that has the right to designate such Designee
Director to serve as a Director of Allied Waste Industries,
Inc.
(n) “Effective
Date” means, in the case of the original Effective Date of
this Plan, February 28, 1994. The Effective Date with respect to
this Amendment and Restatement means
, 2008.
(o) “Eligible
Director” means, for purposes of an Award, a person who is
elected, appointed, or reelected as a Non-Employee Director on or
after the Effective Date.
(p) “Fair
Market Value” of a share of Common Stock on any date is
(i) the closing sales price of a share of Common Stock on that
date (or if that date is not a business day, on the
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immediately
preceding business day) as reported on the principal securities
exchange on which shares of Common Stock are then listed or
admitted to trading; (ii) if not so reported, the average of
the closing bid and asked prices for a share of Common Stock on
that date (or if that date is not a business day, on the
immediately preceding business day as quoted on the Nasdaq Stock
Market, Inc. (“Nasdaq”) or (iii) if not quoted on
Nasdaq, the average of the closing bid and asked prices for a share
of Common Stock as quoted by the National Quotation Bureau’s
“Pink Sheets” or the National Association of Securities
Dealers’ OTC Bulletin Board System on that date (or if that
date is not a business day, on the immediately preceding business
day). If the price of a share of Common Stock is not so reported,
the Fair Market Value of a share of Common Stock shall be
determined by the Plan Administrator in good faith.
(q) “Initial
Grant” means the initial grant of an Award to an Eligible
Director pursuant to Section 5(a) .
(r) “New
Director”, for purposes of an Award, means a person who
(i) is first elected or appointed as a Non-Employee Director
on or after the Effective Date, or (ii) first becomes a
Non-Employee Director on or after the Effective Date.
(s) “Non-Employee
Director” or “Director” means a director of
Allied Waste Industries, Inc. who, at the time of his or her
service, is not an employee of Allied Waste Industries, Inc. or any
Subsidiary.
(t) “Option”
means an option to purchase shares of Common Stock of the Company
granted pursuant to Section 5(d) .
(u) “Plan”
means, on or after the Effective Time, the Republic Services, Inc.
2005 Non-Employee Director Equity Compensation Plan (f/k/a the
Allied Waste Industries, Inc. 2005 Non-Employee Director Equity
Compensation Plan), as may be amended from time to time. Prior to
the Effective Time, the Plan means the Allied Waste Industries,
Inc. 2005 Non-Employee Director Equity Compensation Plan, as
amended.
(v) “Plan
Administrator” means the Board or the Committee, as the case
may be.
(w) “Restricted
Stock” means shares of Common Stock that are granted pursuant
to the terms of Section 5 and that are subject to the
restrictions set forth in Section 6 for so long as such
restrictions continue to apply to such shares.
(x) “Restricted
Stock Unit” or “RSU” means the Company’s
unfunded promise to pay one share of Common Stock or its cash
equivalent that is granted pursuant to the terms of
Section 5 and that is subject to the restrictions set
forth in Section 6 for so long as such restrictions
continue to apply to such unit.
(y) “Securities
Act” means the Securities Act of 1933, as amended.
(z) “Subsidiary”
or “Subsidiaries” mean any and all corporations or
other entities in which, at the pertinent time, Allied Waste
Industries, Inc. owns, directly or indirectly, stock or other
equity interests vested with more than 50% of the total combined
voting power of all classes of stock
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of such
corporations within the meaning of Section 424(f) of the Internal
Revenue Code of 1986, as amended.
3.
Administration of the Plan
The Plan shall be
administered by the Plan Administrator. If a Committee is the Plan
Administrator, a majority of the members of the Committee shall
constitute a quorum for the transaction of business and the vote of
a majority of those members present at any meeting shall decide any
question brought before that meeting. The Plan Administrator shall
have full authority to administer the Plan, including authority to
interpret and construe any provision of the Plan and the terms of
any Award granted under it and to adopt such rules and regulations
for administering the Plan as it may deem necessary. Decisions of
the Plan Administrator shall be final and binding on all parties.
Notwithstanding the above, the selection of Non-Employee Directors
to whom Awards are to be granted, the number of shares of
Restricted Stock granted or the number of shares subject to any RSU
or Option, the exercise price of any Option, the ten-year maximum
term of any Option, and the vesting period for shares of any Awards
shall be as provided in this Plan and the Plan Administrator shall
have no discretion as to such matters.
4. Stock
Reserved for the Plan
A maximum of
1,237,500 shares of Common Stock (as adjusted in accordance with
the Exchange Ratio in the Merger Agreement) may at any time be
(a) granted as Restricted Stock under the Plan,
(b) subject to outstanding RSUs or Options granted under the
Plan, or (c) issued to Eligible Directors as the result of
conversions of Cash Fee Awards; provided , that the class
and aggregate number of shares granted hereunder shall be subject
to adjustment in accordance with the provisions of
Section 12 of this Plan. The Company shall reserve for
issuance pursuant to this Plan such number of shares of Common
Stock as may from time to time be granted or subject to Awards
hereunder. If any shares of Restricted Stock are forfeited or
cancelled for any reason, such shares shall again be available for
grant under the Plan. If any RSUs are forfeited or cancelled for
any reason, or if any Options expire or are canceled prior to their
exercise in full, the shares of Common Stock subject to such RSUs
or Options shall again be available for grant under the Plan. If
there are not sufficient shares under the Plan to make an Award on
the date the Award is to be made, the Award will not be
made.
No new Awards
shall be granted under this Plan on or after the Effective
Time.
(a)
Initial Grant to New Directors . Beginning on the
initial Effective Date of this Plan and for so long as this Plan is
in effect and shares of Common Stock are available for the grant of
Awards, each New Director shall be granted shares of Restricted
Stock (or, in the discretion of the Plan Administrator, Restricted
Stock Units or Options) having a Fair Market Value of $150,000,
which shares shall be awarded on the later of (i) the date of
the New Director’s initial election to the Board or
(ii) the date upon which the New Director first becomes
eligible to participate in this Plan. Restricted Stock granted
under this Section 5(a) shall be subject to the
provisions of Section 6 ; provided, however ,
that no new awards shall be granted on or after the Effective
Time.
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(b)
Annual Grant . Beginning on the initial Effective
Date and for so long as this Plan is in effect and shares of Common
Stock are available for the grant of Awards, each Eligible Director
shall, on each date on which he or she is elected or reelected to
the Board, be granted shares of Restricted Stock (or, in the
discretion of the Plan Administrator, Restricted Stock Units or
Options) having a Fair Market Value of $55,000, which shares shall
be awarded on the date of reelection. Restricted Stock granted
under this Section 5(b) shall be subject to the
provisions of Section 6 ; provided, however ,
that no new awards shall be granted on or after the Effective
Time.
(c)
Determination of Number of Shares . The number of
shares of Restricted Stock subject to each Award granted pursuant
to Section 5(a) or 5(b) shall be determined by
dividing the dollar amount set forth in Section 5(a) or
5(b) , as the case may be, by the Fair Market Value of one
share of Common Stock on the date of the Award; provided ,
however , that the number of shares of Restricted Stock
shall be rounded downward such that no fractional share shall be
issued.
(d)
Restricted Stock Units or Options in Lieu of Shares of
Restricted Stock . The Plan Administrator, in its
discretion, may determine that one or more Initial Grants or Annual
Grants under this Plan shall be made in the form of RSUs or
Options. If the Plan Administrator determines that RSUs are to be
awarded instead of shares of Restricted Stock, then (i) the
number of shares of Common Stock subject to each award of RSUs
shall be the number of shares of Restricted Stock that otherwise
would have been awarded, (ii)the RSUs will be subject to the terms
and conditions of Section 6 , and (iii) the
agreement evidencing the RSUs shall specify whether payment, upon
vesting, will be made in the form of Common Stock (whereby the
Director will receive one share of Common Stock for each Restricted
Stock Unit) or in cash (whereby the Director will receive a lump
sum cash payment in an amount equal to the Fair Market Value of one
share of Common Stock at the time of vesting times the number of
vested RSUs). If the Plan Administrator determines that Options are
to be awarded instead of shares of Restricted Stock, then
(A) the number of shares of Common Stock subject to each
Option shall be three times the number of shares of Restricted
Stock that otherwise would have been awarded, and (B) the
Options shall be subject to the terms and conditions of
Section 7 .
(e)
Vesting . An Award made under
Section 5(a) above shall be subject to the following
vesting schedule: 0% vested until the last day of the
Director’s first one-year term ending after the date of
grant; 1/3 vested on the last day of the Director’s first
one-year term ending after the date of grant; an additional 1/3
vested on the last day of the Director’s second one-year term
ending after the date of grant; and an additional 1/3 vested on the
last day of the Director’s third one-year term ending after
the date of grant. An Award made under Section 5(b) above
shall be subject to the following vesting schedule: 0% vested until
the last day of the Director’s first one-year term ending
after the date of grant, and 100% vested on the last day of the
Director’s first one-year term ending after the date of
grant. Upon vesting, shares of Restricted Stock and/or RSUs shall
no longer be subject to any restrictions set forth in
Section 6 , and Options may be exercised pursuant to
the terms and conditions set forth in Section 7 . Any
portion of an Award granted under Section 5(a) or
5(b) that remains unvested as of the date a Director ceases
to be a Director for any reason shall be forfeited. Notwithstanding
any contrary provision of this Section 5(e) , an Award
shall be fully vested in the event of the Director’s death or
as otherwise provided in the agreement evidencing the
Director’s Award.
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(f)
Adjustments to Amount of Initial Grants and Annual
Grants . Notwithstanding the foregoing, the Board may, from
time to time and in its sole discretion, (i) adjust (upward or
downward) the nominal dollar value of Initial Grants under
Section 5(a) ; provided, however , that the
Board may not increase the nominal dollar value of Initial Grants
to more than $200,000 in the aggregate during the term of the Plan;
and (b) adjust (upward or downward) the nominal dollar value
of Annual Grants under Section 5(b) ; provided,
however , that the Board may not increase the nominal value of
Annual Grants to more than $80,000 in the aggregate during the term
of the Plan.
(g)
Awards to Designee Directors . A Designee Director
may provide written notice to the Plan Administrator to instruct
the Plan Administrator to issue any Awards that would be issuable
to such Designee Director under the Plan to the Designee
Director’s Designating Person or its Affiliates. Upon receipt
of such notice, the Plan Administrator shall cause all Awards that
would otherwise be issuable to the Designee Director under the Plan
to be issued to the Designee Director’s Designating Person or
its Affiliates, according to the instructions set forth in such
notice.
6.
Restricted Stock and Restricted Stock Units
(a)
Issuance of Certificates for Restricted Stock .
Reasonably promptly after the award of shares of Restricted Stock
under Section 5(a) or 5(b) , the Company shall
cause to be issued a stock certificate, registered in the name of
the Director to whom such shares were granted, evidencing such
shares; provided that the Company shall not cause such stock
certificate to be issued unless it has received a stock power duly
endorsed in blank with respect to such shares. Each such stock
certificate shall bear the following legend:
Prior to the
Effective Time:
The
transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms, and
conditions (including forfeiture and restrictions against transfer)
contained in the Allied Waste Industries, Inc. 2005 Non-Employee
Director Equity Compensation Plan (the “Plan”) and an
agreement entered into between the registered owner of such shares
and Allied Waste Industries, Inc. A copy of the Plan and agreement
is on file in the office of the Secretary of Allied Waste
Industries, Inc.
On or after the
Effective Time:
The
transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms, and
conditions (including forfeiture and restrictions against transfer)
contained in the Republic Services, Inc. 2005 Non-Employee Director
Equity Compensation Plan, f/n/a the Allied Waste Industries, Inc.
2005 Non-Employee Director Equity Compensation Plan (the
“Plan”) and an agreement entered into between the
registered owner of such shares and Republic Services,
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