EXHIBIT 10.4
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
     This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is effective as of the 21st
day of February, 2007 (the “Effective Date”), by and between REPUBLIC SERVICES,
INC., a Delaware corporation (the “Company”), and DAVID A. BARCLAY, a Florida
resident (“Employee”).
     Employee and the Company are parties to that Employment Agreement dated as
of October 25, 2000, as amended by Amendment Number One, dated as of January 31,
2003, and Amendment Number Two, dated as of October 10, 2006 (collectively, the
“Existing Employment Agreement”).
     As of the date hereof, Employee continues to be an employee of the Company
and is considered a valued employee that the Company desires to retain in
accordance with the terms of the Existing Employment Agreement.
     For convenience of incorporating the previous amendments and making certain
clarifying changes to the Existing Employment Agreement, including the
incorporation in this Agreement of references to certain provisions of the
Company’s Executive Incentive Plan which otherwise governs certain incentive
bonuses generally available to all participants under such Plan, including
Employee, and in order to memorialize the agreement by Employee to the cessation
of the accrual of a tax gross-up on future deferrals of compensation, Employee
and the Company desire to enter into this Amended and Restated Employment
Agreement (this “Agreement”).
     In consideration of the premises set forth above, the mutual
representations, warranties, covenants and agreements contained in this
Agreement and other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
     1. Employment.
          (a) Retention. The Company agrees to employ and/or continue the
employment of Employee as its Senior Vice President and General Counsel, and
Employee agrees to accept such employment, subject to the terms and conditions
of this Agreement.
          (b) Employment Period. This Agreement shall commence on the Effective
Date and, unless terminated in accordance with the terms of this Agreement shall
continue in effect on a rolling two-year basis, such that at any time during the
term of this Agreement there will be two years remaining (the “Employment
Period”). Notwithstanding the evergreen nature of the Employment Period, the
Company may terminate Employee at any time in accordance with the provisions of
Section 3 of this Agreement.
          (c) Duties and Responsibilities. During the Employment Period,
Employee shall serve as Senior Vice President and General Counsel and shall have
such authority and responsibility

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and perform such duties as may be assigned to him from time to time by the Chief
Executive Officer of the Company, and in the absence of such assignment, such
duties as are customary to Employee’s office and as are necessary or appropriate
to the business and operations of the Company. During the Employment Period,
Employee’s employment shall be full time and Employee shall perform his duties
honestly, diligently, in good faith and in the best interests of the Company and
shall use his best efforts to promote the interests of the Company.
          (d) Other Activities. Except upon the prior written consent of the
Company, Employee, during the Employment Period, will not accept any other
employment. Employee shall be permitted to engage in any non-competitive
businesses, not-for-profit organizations and other ventures, such as passive
real estate investments, serving on charitable and civic boards and
organizations, and similar activities, so long as such activities do not
materially interfere with or detract from the performance of Employee’s duties
or constitute a breach of any of the provisions contained in Section 7 of this
Agreement.
     2. Compensation.
          (a) Base Salary and Adjusted Salary. In consideration for Employee’s
services hereunder and the restrictive covenants contained herein, Employee
shall be paid an annual base salary of $331,500 for the 2007 Fiscal Year,
subject to adjustment pursuant to Section 2(l) hereof (the “Base Salary”),
payable in accordance with the Company’s customary payroll practices.
Notwithstanding the foregoing, Employee’s annual Base Salary may be increased at
anytime and from time to time to levels greater than the levels set forth in the
preceding sentence at the discretion of the Board of Directors of the Company to
reflect merit or other increases. In lieu of cash increases to the Base Salary,
commencing with the 2004 Fiscal Year and continuing for each Fiscal Year
thereafter through 2006, Employee has been awarded shares of restricted stock of
the Company, as follows: (i) 2004 — 1,500 shares; (ii) 2005 — 2,000 shares; and
2006 — 2,500 shares. Similar deferrals in lieu of cash increases in Base Salary
may be made for 2007 and/or future Fiscal Years during the term of this
Agreement, in the discretion of the Compensation Committee of the Board of
Directors. For the purposes of this Agreement, the term “Adjusted Salary” means
(x) with respect to the 2004 Fiscal Year, the Base Salary plus the value
(determined as described below) of the shares of restricted stock initially
granted to Employee in lieu of a cash increase to Base Salary for such year, and
(y) with respect to the 2005 Fiscal Year and each Fiscal Year thereafter during
the term of this Agreement, the greater of (1) the Adjusted Salary for the
immediately preceding Fiscal Year or (2) the sum of the Base Salary plus the
value (determined as described below) of the shares of restricted stock granted
to Employee for such Fiscal Year. For the purposes of this Section, the value of
shares of restricted stock shall be the value, determined at the closing price
of the Company’s shares on the New York Stock Exchange (“NYSE”) as of the date
of grant of the restricted stock award (or if the NYSE is not open for business
on such date of grant, then on the next regular business day on which the NYSE
is open for business). Based on the foregoing formula, Employee’s Adjusted
Salary for 2006 was $429,025, which was determined as reflected on Schedule 2(a)
hereto, which Schedule also sets forth an example of how such Adjusted Salary
amount would be computed for future years. The Base Salary and Adjusted Salary
for each Fiscal Year shall become effective as of January 1 of

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such Fiscal year. Employee’s Base Salary for any Fiscal Year after 2007 shall
remain as set for the 2007 Fiscal Year unless the Board of Directors increases
such Base Salary and the Adjusted Salary shall be determined each Fiscal Year in
the manner described above. The term “Fiscal Year” as used herein shall mean
each period of twelve (12) calendar months commencing on January 1st of each
calendar year during the Employment Period and expiring on December 31st of such
year.
          (b) Annual Awards. In addition to the Base Salary and/or Adjusted
Salary, Employee shall be eligible to receive Annual Awards in an amount equal
to 60 % of the Employee’s Base Salary in effect for the Performance Period with
respect to which such Annual Award is granted, as established pursuant to the
terms of the Company’s Executive Incentive Plan, as amended, restated and
renamed effective as of January 1, 2003 (the “Plan”). The Annual Award shall be
based on the achievement of such Performance Goals as are established by the
Compensation Committee of the Board of Directors pursuant to the Plan. The
achievement of said Performance Goals shall be determined by the Compensation
Committee of the Board of Directors. Except as otherwise provided in Sections
3(d), 3(e) and 22, with respect to any Fiscal Year during which Employee is
employed by the Company for less than the entire Fiscal Year, the Annual Award
shall be prorated for the period during which Employee was so employed. The
Annual Award shall be payable within sixty (60) days after the end of the
Company’s Fiscal Year. To the extent of any conflict between the provisions of
this Agreement and the Plan, the terms of this Agreement shall control.
          (c) Merit and Other Bonuses. Employee shall be entitled to such other
bonuses as may be determined by the Board of Directors of the Company or by a
committee of the Board of Directors as determined by the Board of Directors, in
its sole discretion.
          (d) Existing Stock Options and Shares of Restricted Stock. The Company
has issued to Employee options to purchase shares of the Company’s Common Stock
pursuant to the terms of various Option Agreements and the terms of the
Company’s 1998 Stock Incentive Plan (the “Outstanding Option Grants”). The
Company has also granted to Employee restricted shares of the Company’s Common
Stock pursuant to the terms of various Executive Restricted Stock Agreements and
the terms of the Company’s 1998 Stock Incentive Plan (the “Outstanding
Restricted Stock Grants”). The options issued or to be issued under the
Outstanding Option Grants shall continue to be subject to the terms of the
Option Agreements, except to the extent otherwise provided for in this
Agreement. The shares of restricted stock granted or to be granted under the
Outstanding Restricted Stock Grants shall continue to be subject to the terms of
the Executive Restricted Stock Agreements, except to the extent otherwise
provided for in this Agreement.
          (e) Other Stock Options. Employee shall be entitled to participate and
receive option grants under the 1998 Stock Incentive Plan and such other
incentive or stock option plans as may be in effect from time-to-time, as
determined by the Board of Directors of the Company.
          (f) Other Compensation Programs. Employee shall be entitled to
participate in the Company’s incentive and deferred compensation programs and
such other programs as are

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established and maintained for the benefit of the Company’s employees or
executive officers, subject to the provisions of such plans or programs.
          (g) Health Insurance. The Company shall pay for Employee’s and his
family’s health insurance including without limitation comprehensive major
medical and hospitalization coverage including dental and optical coverage under
all group medical plans from time to time in effect for the benefit of the
Company’s employees or executive officers.
          (h) Life Insurance. The Company shall purchase and maintain in effect
one or more term insurance policies on the life of Employee in an aggregate
amount not less than two times his Base Salary in effect from time to time
during the term of employment. The beneficiary of such policy shall be the
person or persons who Employee designates in writing to the Company.
          (i) Disability Insurance. The Company shall pay for Employee to
participate in the Company’s disability insurance in effect from time to time.
The Company shall pay for the maximum coverage commercially available. To the
extent the Company does not have a disability insurance plan or other retirement
plan, then the Company shall arrange, at its expense, for Employee to
participate in such plan.
          (j) Other Benefits. During the term of this Agreement, Employee shall
also be entitled to participate in any other health insurance programs, life
insurance programs, disability programs, stock option plans, bonus plans,
pension plans and other fringe benefit plans and programs as are from time to
time established and maintained for the benefit of the Company’s employees or
executive officers, subject to the provisions of such plans and programs.
          (k) Expenses. Employee shall be reimbursed for all out-of-pocket
expenses reasonably incurred by him on behalf of or in connection with the
business of the Company, pursuant to the normal standards and guidelines
followed from time to time by the Company.
          (l) Tax and Estate Planning Reimbursement for 2007. Employee’s Base
Salary for Fiscal Year 2007 shall be reduced by that amount of out-of-pocket
expenses for financial, tax and estate planning that was submitted by Employee
and reimbursed by the Company during such year.
          (m) Long Term Awards. On April 26, 2001, the Board of Directors
adopted the Republic Services, Inc. Long Term Incentive Plan, effective
January 1, 2001 to provide for long term incentive cash grants for specific
employees of the Company, including Employee. Effective January 1, 2003, the
Long Term Incentive Plan was amended, restated and renamed to the Executive
Incentive Plan (as previously defined in Section 2, clause (b), the “Plan”) to
provide not only for long term incentive cash grants but also to include the
Annual Awards referred to above. Employee has participated in the Long Term
Incentive Plan and the Plan since inception, and Employee shall be entitled to
continue to participate in the Plan for purposes of receiving Long Term Awards
pursuant to the terms of this Agreement and the Plan.

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     3. Termination.
          (a) For Cause. The Company shall have the right to terminate this
Agreement and to discharge Employee for Cause (as defined below), at any time
during the term of this Agreement. Termination for Cause shall mean, during the
term of this Agreement, (i) Employee’s willful and continued failure to
substantially perform his duties after he has received written notice from the
Company identifying the actions or omissions constituting willful and continued
failure to perform, (ii) Employee’s conduct that would constitute a crime under
federal or state law, (iii) Employee’s actions or omissions that constitute
fraud, dishonesty or gross misconduct, (iv) Employee’s breach of any fiduciary
duty that causes material injury to the Company, (v) Employee’s breach of any
duty causing material injury to the Company, (vi) Employee’s inability to
perform his material duties to the reasonable satisfaction of the Company due to
alcohol or other substance abuse, or (vii) any violation of the Company’s
policies or procedures involving discrimination, harassment, substance abuse or
work place violence. Any termination for Cause pursuant to this Section shall be
given to Employee in writing and shall set forth in detail all acts or omissions
upon which the Company is relying to terminate Employee for Cause.
     Upon any determination by the Company that Cause exists to terminate
Employee, the Company shall cause a special meeting of the Board of Directors to
be called and held at a time mutually convenient to the Board of Directors and
Employee, but in no event later than ten (10) business days after Employee’s
receipt of the notice that the Company intends to terminate Employee for Cause.
Employee shall have the right to appear before such special meeting of the Board
of Directors with legal counsel of his choosing to refute such allegations and
shall have a reasonable period of time to cure any actions or omissions which
provide the Company with a basis to terminate Employee for Cause (provided that
such cure period shall not exceed 30 days). A majority of the members of the
Board of Directors must affirm that Cause exists to terminate Employee. No
finding by the Board of Directors will prevent Employee from contesting such
determination through appropriate legal proceedings provided that Employee’s
sole remedy shall be to sue for damages, not reinstatement, and damages shall be
limited to those that would be paid to Employee if he had been terminated
without Cause. In the event the Company terminates Employee for Cause, the
Company shall only be obligated to continue to pay in the ordinary and normal
course of its business to Employee his Base Salary plus accrued but unused
vacation time through the termination date and the Company shall have no further
obligations to Employee from and after the date of termination.
          (b) Resignation by Employee Without Good Reason. If Employee shall
resign or otherwise terminate his employment with the Company at anytime during
the term of this Agreement, other than for Good Reason (as defined below),
Employee shall only be entitled to receive his accrued and unpaid Base Salary
through the termination date, and the Company shall have no further obligations
under this Agreement from and after the date of resignation.
          (c) Termination by Company Without Cause and by Employee For Good
Reason. At any time during the term of this Agreement, (i) the Company shall
have the right to terminate this Agreement and to discharge Employee without
Cause effective upon delivery of written notice to Employee, and (ii) Employee
shall have the right to terminate this Agreement for Good Reason

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effective upon delivery of written notice to the Company. For purposes of this
Agreement, “Good Reason” shall mean: (i) the Company has materially reduced the
duties and responsibilities of Employee to a level not appropriate for an
officer of a publicly-traded company holding the position provided for in
Section 1(a), (ii) the Company has breached any material provision of this
Agreement and has not cured such breach within 30 days of receipt of written
notice of such breach from Employee, (iii) Company has reduced Employee’s annual
Adjusted Salary by more than 10% from the prior Fiscal Year (nothing in this
clause implies that the Company may reduce Employee’s Adjusted Salary below the
levels provided for in Section 2(a)), (iv) the Company has terminated Employee’s
participation in one or more of the Company’s sponsored benefit or incentive
plans and no other executive officer has had his participation terminated, (v) a
failure by the Company (1) to continue any bonus plan, program or arrangement in
which Employee is entitled to participate (“Bonus Plans”), provided that any
such Bonus Plans may be modified at the Company’s discretion from time to time
but shall be deemed terminated if (x) any such plan does not remain
substantially in the form in effect prior to such modification and (y) if plans
providing Employee with substantially similar benefits are not substituted
therefor (“Substitute Plans”), or (2) to continue Employee as a participant in
the Bonus Plans and Substitute Plans on at least a basis which is substantially
the same as to potential amount of the bonus Employee participated in prior to
any change in such plans or awards, in accordance with the Bonus Plans and the
Substitute Plans (a plan shall be considered to be on a basis substantially the
same as another if the potential amount payable thereunder is at least 90% of
the potential amount payable under the other plan), (vi) Employee’s office is
relocated by the Company to a location which is not located within the Florida
counties of Miami-Dade, Broward or Palm Beach, or (vii) the Company’s
termination without Cause of the continuation of the Employment Period provided
in this Agreement. Upon any such termination by the Company without Cause, or by
Employee for Good Reason, the Company shall pay to Employee all of Employee’s
accrued but unpaid Base Salary through the date of termination, and continue to
pay to or provide for Employee (a) a sum equal to his Adjusted Salary payable in
accordance with Section 2(a) for two (2) years from the date of termination,
when and as Base Salary would have been due and payable hereunder but for such
termination, (b) all health benefits in which Employee was entitled to
participate at any time during the 12-month period prior to the date of
termination, until the earliest to occur of the second anniversary of the date
of termination, Employee’s death, or the date on which Employee becomes covered
by a comparable health benefit plan by a subsequent employer; provided, however,
that in the event that Employee’s continued participation in any health benefit
plan of the Company is prohibited, the Company will arrange to provide Employee
with benefits substantially similar to those which Employee would have been
entitled to receive under such plan for such period on a basis which provides
Employee with no additional after tax cost, (c) all stock option grants or
restricted stock grants, whether or not part of the Outstanding Option Grant or
any options issued during the term of this Agreement, will immediately vest and
any such options will remain exercisable for the lesser of the unexpired term of
the option without regard to the termination of Employee’s employment or two
(2) years from the date of termination of employment, (d) all Annual Awards
shall vest and be paid on a pro-rated basis in an amount equal to the Annual
Awards payment that the Compensation Committee of the Board of Directors
determines would have been paid to Employee pursuant to the Plan had Employee’s
employment continued to the end of the Performance Period, multiplied by a
fraction, the numerator of which is the number of completed months of employment
during such Performance Period and the denominator of which is the total

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number of months in the Performance Period, (e) all Long Term Awards shall vest
and be paid on a pro-rated basis in an amount equal to the maximum Long Term
Awards that would have been paid to Employee pursuant to the Plan had Employee’s
employment continued to the end of the Performance Periods established under the
Plan multiplied by a fraction, the numerator of which is the number of completed
months of employment during such Performance Period and the denominator of which
is the total number of months in the Performance Period, and (f) as of the
termination date Employee shall be paid the balance of all amounts credited or
eligible to be credited to Employee’s deferred compensation account, plus, for
all such amounts credited or eligible to be credited to such account based upon
Company’s performance on or before December 31, 2006 (herein referred to as the
“December 31, 2006 deferral amount”) whether or not such amount is actually
credited to such account prior to or after such date, a gross-up payment to
reimburse Employee for all income and other taxes imposed with respect to the
payment of such amounts and all income and other taxes arising as a result of
said gross-up payment such that the payment of such December 31, 2006 deferral
amount of Employee is made to Employee free of all taxes thereon whatsoever
(collectively, the foregoing consideration payable to Employee shall be referred
to herein as the “Severance Payment”). Other than the Severance Payment, the
Company shall have no further obligation to Employee except for the obligations
set forth in Section 14 of this Agreement after the date of such termination;
provided, however, that Employee shall only be entitled to continuation of the
Severance Payments as long as he is in compliance with the provisions of
Sections 6 and 7 of this Agreement.
          (d) Disability of Employee. This Agreement may be terminated by the
Company upon the Disability of Employee. “Disability” shall mean any mental or
physical illness, condition, disability or incapacity which prevents Employee
from reasonably discharging his duties and responsibilities under this Agreement
for a period of 180 consecutive days. In the event that any disagreement or
dispute shall arise between the Company and Employee as to whether Employee
suffers from any Disability, then, in such event, Employee shall submit to the
physical or mental examination of a physician licensed under the laws of the
State of Florida, who is mutually agreeable to the Company and Employee, and
such physician shall determine whether Employee suffers from any Disability. In
the absence of fraud or bad faith, the determination of such physician shall be
final and binding upon the Company and Employee. The entire cost of such
examination shall be paid for solely by the Company. In the event the Company
has purchased Disability insurance for Employee, Employee shall be deemed
disabled if he is completely (fully) disabled as defined by the terms of the
Disability policy. In the event that at any time during the term of this
Agreement Employee shall suffer a Disability and the Company terminates
Employee’s employment for such Disability, such Disability shall be considered
to be a termination by the Company without Cause or a termination by Employee
for Good Reason and the Severance Payments shall be paid to Employee to the same
extent and in the same manner as provided for in paragraph (c) above, except
that (i) to the extent any Awards have been granted under the Plan, but, as of
the date of such termination, have not been determined to be earned pursuant to
the terms of the Plan, Employee shall be paid, within thirty (30) days following
the date of Employee’s termination due to his Disability, an amount with respect
to each such open Award which is equal to the full target amount that the
Compensation Committee of the Board of Directors was authorized to cause to be
paid to Employee pursuant to the Plan had his or her employment continued
through the end of the Performance Period related to such Award and

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had all Performance Goals been met and (ii) payment of the sum equal to the
Adjusted Salary in accordance with said paragraph shall be mitigated to the
extent payments are made to Employee pursuant to disability insurance programs
maintained by the Company.
          (e) Death of Employee. If during the term of this Agreement Employee
shall die, then the employment of Employee by the Company shall automatically
terminate on the date of Employee’s death. In such event, Employee’s death shall
be considered to be a termination by the Company without Cause or a termination
by Employee for Good Reason and the Severance Payments shall be paid to
Employee’s personal representative or estate to the same extent and in the same
manner as provided for in paragraph (c) above, without mitigation for any
insurance policies or other benefits held by Employee, except that to the extent
any Awards have been granted under the Plan, but, as of the date of such
termination, have not been determined to be earned pursuant to the terms of the
Plan, Employee’s beneficiary or estate shall be paid, within thirty (30) days
following the date of Employee’s death, an amount with respect to each such open
Award which is equal to the full target amount that the Compensation Committee
of the Board of Directors was authorized to cause to be paid to Employee
pursuant to the Plan had his or her employment continued through the end of the
Performance Period related to such Award and had all Performance Goals been met.
Once such payments have been made to Employee’s personal representative,
beneficiary or estate, as the case may be, the Company shall have no further
obligations under this Agreement or otherwise to said personal representative,
beneficiary or estate, or to any heirs of Employee.
     4. Termination of Employment by Employee for Change of Control.
          (a) Termination Rights. Notwithstanding the provisions of Section 2
and Section 3 of this Agreement, in the event that there shall occur a Change of
Control (as defined below) of the Company and within two years after such Change
of Control Employee’s employment hereunder is terminated by the Company without
Cause or by Employee for Good Reason, then the Company shall be required to pay
to Employee (i) the Severance Payment provided in Section 3(c), except that the
continuation of Adjusted Salary under 3(c) shall be for three (3) years from the
date of termination and that the Severance Payment shall be paid in a single
lump sum in full, (ii) the product of three multiplied by the maximum amount of
the Awards, including both Annual Awards and Long Term Awards, that Employee
would have been eligible for under the Plan with respect to the Fiscal Year in
which such termination occurs, in a single lump sum. The foregoing payments
shall be made no later than 10 days after Employee’s termination pursuant to
this Section 4. To the extent that payments are owed by the Company to Employee
pursuant to this Section 4, they shall be made in lieu of payments pursuant to
Section 3, and in no event shall the Company be required to make payments or
provide benefits to Employee under both Section 3 and Section 4.
          (b) Change of Control of the Company Defined. For purposes of this
Section 4, the term “Change of Control of the Company” shall mean any change in
control of the Company of a nature which would be required to be reported (i) in
response to Item 6(e) of Schedule 14A of Regulation 14A, as in effect on the
date of this Agreement, promulgated under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), (ii) in response to Item 1 of the Current
Report on Form 8-K, as in effect on the date of this Agreement, promulgated
under the Exchange

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Act, or (iii) in any filing by the Company with the Securities and Exchange
Commission; provided, however, that without limitation, a Change of Control of
the Company shall be deemed to have occurred if:
               (i) Any “person” (as such term is defined in Sections 13(d)(3)
and Section 14(d)(3) of the Exchange Act), other than the Company, any
majority-owned subsidiary of the Company, or any compensation plan of the
Company or any majority-owned subsidiary of the Company, becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company;
               (ii) During any period of three consecutive years during the term
of this Agreement, the individuals who at the beginning of such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority of such Board of Directors, unless the election
of each director who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of such period; or
               (iii) The shareholders of the Company approve (1) a
reorganization, merger, or consolidation with respect to which persons who were
the shareholders of the Company immediately prior to such reorganization,
merger, or consolidation do not immediately thereafter own more than 50% of the
combined voting power entitled to vote generally in the election of the
directors of the reorganized, merged or consolidated entity; (2) a liquidation
or dissolution of the Company; or (3) the sale of all or substantially all of
the assets of the Company or of a subsidiary of the Company that accounts for
30% of the consolidated revenues of the Company, but not including a
reorganization, merger or consolidation of the Company.
     5. Gross-Up Payment.
          (a) Amount. If any payment or benefit provided to Employee by the
Company (a “Base Payment”) is subject to the tax (the “Excise Tax”) imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or
any other similar tax that may hereafter be imposed), the Company shall pay to
Employee the “Gross-Up Payment” determined as follows. The “Gross-Up Payment”
shall be equal to the sum of (i) the Excise Tax imposed with respect to the Base
Payment, plus (ii) the Excise Tax imposed with respect to the Gross-Up Payment,
plus (iii) all other taxes imposed on Employee with respect to the Gross-Up
Payment, including income taxes and Employee’s share of FICA, FUTA and other
payroll taxes. The Gross-Up Payment shall not include the payment of any tax on
the Base Payment other than the Excise Tax. The Gross-Up Payment is intended to
place Employee in the same economic position Employee would have been in if the
Excise Tax did not apply, and shall be calculated in accordance with such
intent.
          (b) Tax Rates and Assumptions. For purposes of determining the amount
of the Gross-Up Payment, Employee shall be deemed to pay Federal income taxes at
the highest marginal rate of Federal income taxation in the calendar year in
which the Gross-Up Payment is to be made,

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and state and local income taxes at the highest marginal rate of taxation in the
state and locality of Employee’s residence on the date of termination, net of
the maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
          (c) Payment and Calculation Procedures. The Gross-Up Payment
attributable to a Base Payment shall be paid to Employee in cash and at such
times as such Base Payment is paid or provided pursuant to this Agreement.
Simultaneously with or prior to the Company’s payment of a Base Payment, the
Company shall deliver to Employee a written statement specifying the total
amount of the Base Payment and the Excise Tax and Gross-Up Payment relating to
the Base Payment, if any, together with all supporting calculations and
conclusions. If Employee disagrees with the Company’s determination of the
Excise Tax or Gross-Up Payment, Employee shall submit to the Company, no later
than 30 days after receipt of the Company’s written statement, a written notice
advising the Company of the disagreement and setting forth Employee’s
calculation of said amounts. Employee’s failure to submit such notice within
such period shall be conclusively deemed to be an agreement by Employee as to
the amount of the Excise Tax and Gross-Up Payment, if any. If the Company agrees
with Employee’s calculations, it shall pay any shortfall in the Gross-Up Payment
to Employee within 20 days after receipt of such a notice from Employee. If the
Company does not agree with Employee’s calculations, it shall provide Employee
with a written notice within 20 days after the receipt of Employee’s
calculations advising Employee that the disagreement is to be referred to an
independent accounting firm for resolution. Such disagreement shall be referred
to a nationally recognized independent accounting firm which is not the regular
accounting firm of the Company and which is designated by the Company. The
Company shall be required to designate such accounting firm within 10 days after
issuance of the Company’s notice of disagreement. The accounting firm shall
review all information provided to it by the parties and submit a written report
to the parties setting forth its calculation of the Excise Tax and the Gross-Up
Payment within 15 days after submission of the matter to it, and such decision
shall be final and binding on all of the parties. The fees and expenses charged
by said accounting firm shall be paid by the Company. If the amount of the
Gross-Up Payment actually paid by the Company was less than the amount
calculated by the accounting firm, the Company shall pay the shortfall to
Employee within 5 days after the accounting firm submits its written report. If
the amount of the Gross-Up Payment actually paid by the Company was greater than
the amount calculated by the accounting firm, Employee shall pay the excess to
the Company within 5 days after the accounting firm submits its written report.
          (d) Subsequent Recalculation. In the event the Internal Revenue
Service or other applicable governmental authority imposes an Excise Tax with
respect to a Base Payment that is greater than the amount of the Excise Tax
determined pursuant to the immediately preceding paragraph, the Company shall
reimburse Employee for the full amount of such additional Excise Tax plus any
interest and penalties which may be imposed in connection therewith, and pay to
Employee a Gross-up Payment sufficient to make Employee whole and reimburse
Employee for any Excise Tax, income tax and other taxes imposed on the
reimbursement of such additional Excise Tax and interest and penalties, in
accordance with the principles set forth above.

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          (e) Example. The calculation of the Gross-Up Payment is illustrated by
the example set forth in Schedule 5(e), attached to this Agreement and hereby
incorporated by reference. The amounts set forth in such example are for
illustration purposes only and no implication shall be drawn from such example
as to the amounts otherwise payable to Employee by the Company.
     6. Successor To Company. The Company shall require any successor, whether
direct or indirect, to all or substantially all of the business, properties and
assets of the Company whether by purchase, merger, consolidation or otherwise,
prior to or simultaneously with such purchase, merger, consolidation or other
acquisition to execute and to deliver to Employee a written instrument in form
and in substance reasonably satisfactory to Employee pursuant to which any such
successor shall agree to assume and to timely perform or to cause to be timely
performed all of the Company’s covenants, agreements and obligations set forth
in this Agreement (a “Successor Agreement”). The failure of the Company to cause
any such successor to execute and deliver a Successor Agreement to Employee
shall constitute a material breach of the provisions of this Agreement by the
Company.
     7. Restrictive Covenants. In consideration of his employment and the other
benefits arising under this Agreement, Employee agrees that during the term of
this Agreement, and for a period of three (3) years following the termination of
this Agreement, Employee shall not directly or indirectly:
          (a) alone or as a partner, joint venturer, officer, director, member,
employee, consultant, agent, independent contractor or stockholder of, or lender
to, any company or business, (i) engage in the business of solid waste
collection, disposal or recycling (the “Solid Waste Services Business”) in any
market in which the Company or any of its subsidiaries or affiliates does
business, or any other line of business which is entered into by the Company or
any of its subsidiaries or affiliates during the term of this Agreement, or
(ii) compete with the Company or any of its subsidiaries or affiliates in
acquiring or merging with any other business or acquiring the assets of such
other business; or
          (b) for any reason, (i) induce any customer of the Company or any of
its subsidiaries or affiliates to patronize any business directly or indirectly
in competition with the Solid Waste Services Business conducted by the Company
or any of its subsidiaries or affiliates in any market in which the Company or
any of its subsidiaries or affiliates does business; (ii) canvass, solicit or
accept from any customer of the Company or any of its subsidiaries or affiliates
any such competitive business; or (iii) request or advise any customer or vendor
of the Company or any of its subsidiaries or affiliates to withdraw, curtail or
cancel any such customer’s or vendor’s business with the Company or any of its
subsidiaries or affiliates; or
          (c) for any reason, employ, or knowingly permit any company or
business directly or indirectly controlled by him, to employ, any person who was
employed by the Company or any of its subsidiaries or affiliates at or within
the prior six months, or in any manner seek to induce any such person to leave
his or her employment.

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          Notwithstanding the foregoing, the beneficial ownership of less than
five percent (5%) of the shares of stock of any corporation having a class of
equity securities actively traded on a national securities exchange or
over-the-counter market shall not be deemed, in and of itself, to violate the
prohibitions of this Section.
     8. Confidentiality. Employee agrees that at all times during the term of
this Agreement and after the termination of employment for as long as such
information remains non-public information, Employee shall (i) hold in
confidence and refrain from disclosing to any other party all information,
whether written or oral, tangible or intangible, of a private, secret,
proprietary or confidential nature, of or concerning the Company or any of its
subsidiaries or affiliates and their business and operations, and all files,
letters, memoranda, reports, records, computer disks or other computer storage
medium, data, models or any photographic or other tangible materials containing
such information (“Confidential Information”), including without limitation, any
sales, promotional or marketing plans, programs, techniques, practices or
strategies, any expansion plans (including existing and entry into new
geographic and/or product markets), and any customer lists, (ii) use the
Confidential Information solely in connection with his employment with the
Company or any of its subsidiaries or affiliates and for no other purpose,
(iii) take all precautions necessary to ensure that the Confidential Information
shall not be, or be permitted to be, shown, copied or disclosed to third
parties, without the prior written consent of the Company or any of its
subsidiaries or affiliates, and (iv) observe all security policies implemented
by the Company or any of its subsidiaries or affiliates from time to time with
respect to the Confidential Information. In the event that Employee is ordered
to disclose any Confidential Information, whether in a legal or regulatory
proceeding or otherwise, Employee shall provide the Company or any of its
subsidiaries or affiliates with prompt notice of such request or order so that
the Company or any of its subsidiaries or affiliates may seek to prevent
disclosure. In addition to the foregoing Employee shall not at any time libel,
defame, ridicule or otherwise disparage the Company.
     9. Specific Performance; Injunction. The parties agree and acknowledge that
the restrictions contained in Sections 7 and 8 are reasonable in scope and
duration and are necessary to protect the Company or any of its subsidiaries or
affiliates. If any provision of Section 7 or 8 as applied to any party or to any
circumstance is adjudged by a court to be invalid or unenforceable, the same
shall in no way affect any other circumstance or the validity or enforceability
of any other provision of this Agreement. If any such provision, or any part
thereof, is held to be unenforceable because of the duration of such provision
or the area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced. Employee agrees
and acknowledges that the breach of Section 7 or 8 will cause irreparable injury
to the Company or any of its subsidiaries or affiliates and upon breach of any
provision of such Sections, the Company or any of its subsidiaries or affiliates
shall be entitled to injunctive relief, specific performance or other equitable
relief, without being required to post a bond; provided, however, that, this
shall in no way limit any other remedies which the Company or any of its
subsidiaries or affiliates may have (including, without limitation, the right to
seek monetary damages).
     10. Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be deemed given if
delivered by hand delivery, by certified or registered

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mail (first class postage pre-paid), guaranteed overnight delivery or facsimile
transmission if such transmission is confirmed by delivery by certified or
registered mail (first class postage pre-paid) or guaranteed overnight delivery
to, the following addresses and telecopy numbers (or to such other addresses or
telecopy numbers which such party shall designate in writing to the other
parties): (a) if to the Company, at its principal executive offices, addressed
to the President, with a copy to the General Counsel; and (b) if to Employee, at
the address listed on the signature page hereto.
     11. Amendment; Waiver. This Agreement may not be modified, amended, or
supplemented, except by written instrument executed by all parties. No failure
to exercise, and no delay in exercising, any right, power or privilege under
this Agreement shall operate as a waiver, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude the exercise of any
other right, power or privilege. No waiver of any breach of any provision shall
be deemed to be a waiver of any preceding or succeeding breach of the same or
any other provision, nor shall any waiver be implied from any course of dealing
between the parties. No extension of time for performance of any obligations or
other acts hereunder or under any other agreement shall be deemed to be an
extension of the time for performance of any other obligations or any other
acts. The rights and remedies of the parties under this Agreement are in
addition to all other rights and remedies, at law or equity, that they may have
against each other.
     12. Assignment; Third Party Beneficiary. This Agreement, and Employee’s
rights and obligations hereunder, may not be assigned or delegated by him. The
Company may assign its rights, and delegate its obligations, hereunder to any
affiliate of the Company, or any successor to the Company or its Solid Waste
Services Business, specifically including the restrictive covenants set forth in
Section 7 hereof. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon its respective successors and
assigns.
     13. Severability; Survival. In the event that any provision of this
Agreement is found to be void and unenforceable by a court of competent
jurisdiction, then such unenforceable provision shall be deemed modified so as
to be enforceable (or if not subject to modification then eliminated herefrom)
to the extent necessary to permit the remaining provisions to be enforced in
accordance with the parties intention. The provisions of Sections 7 and 8 will
survive the termination for any reason of Employee’s relationship with the
Company.
     14. Indemnification. The Company agrees to indemnify Employee during the
term and after termination of this Agreement in accordance with the provisions
of the Company’s certificate of incorporation and bylaws and the Delaware
General Corporation Law.
     15. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.

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     16. Governing Law. This Agreement shall be construed in accordance with and
governed for all purposes by the laws of the State of Florida applicable to
contracts executed and to be wholly performed within such State.
     17. Entire Agreement. This Agreement contains the entire understanding of
the parties in respect of its subject matter and supersedes all prior agreements
and understandings (oral or written) between or among the parties with respect
to such subject matter. Upon the execution of this Agreement the provisions of
the Existing Employment Agreement shall be superseded and shall be of no further
force and effect except as specifically preserved by the terms of this
Agreement.
     18. Headings. The headings of Paragraphs and Sections are for convenience
of reference and are not part of this Agreement and shall not affect the
interpretation of any of its terms.
     19. Construction. This Agreement shall be construed as a whole according to
its fair meaning and not strictly for or against any party. The parties
acknowledge that each of them has reviewed this Agreement and has had the
opportunity to have it reviewed by their respective attorneys and that any rule
of construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Agreement. Words of
one gender shall be interpreted to mean words of another gender when necessary
to construe this Agreement, and in like manner words in singular may be
interpreted to be in the plural, and vice versa.
     20. Attorneys’ Fees. If at any time following a Change of Control of the
Company, there should arise any dispute as to the validity, interpretation or
application of any term or condition of this Agreement, the Company agrees, upon
written demand by Employee (and Employee shall be entitled upon application to
any court of competent jurisdiction, to the entry of a mandatory injunction,
without the necessity of posting any bond with respect thereto, compelling the
Company) to promptly provide sums sufficient to pay on a current basis (either
directly or by reimbursing Employee) Employee’s costs and reasonable attorneys’
fees (including expenses of investigation and disbursements for the fees and
expenses of experts, etc.) incurred by Employee in connection with any such
dispute or any litigation, provided that Employee shall repay any such amounts
paid or advanced if Employee is not the prevailing party with respect to at
least one material claim or issue in such dispute or litigation. If at any time
when there has not previously been a Change of Control of the Company, there
should arise any dispute or litigation as to the validity, interpretation or
application of any term or condition of the Agreement, the prevailing party in
such dispute or litigation shall be entitled to recover from the non-prevailing
party its costs and reasonable attorneys’ fees (including expenses of
investigation and disbursements for the fees and expenses of experts, etc.)
incurred in such dispute or litigation. The provisions of this Section 20,
without implication as to any other section hereof, shall survive the expiration
or termination of this Agreement and Employee’s employment hereunder.
     21. Withholding. All payments made to Employee shall be made net of any
applicable withholding for income taxes, Excise Tax and Employee’s share of
FICA, FUTA or other taxes. The Company shall withhold such amounts from such
payments to the extent required by applicable law and remit such amounts to the
applicable governmental authorities in accordance with applicable law.

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     22. Retirement Eligibility. Upon Employee’s retirement, the Company shall
pay to Employee all of Employee’s accrued but unpaid Base Salary through the
date of retirement. In addition, for all stock option or restricted stock awards
(“Equity Awards”) and all monetary awards (including Annual Awards and Long Term
Awards pursuant to the Plan and any retirement contributions to the deferred
compensation program) (“Monetary Awards”), in each case granted to Employee
prior to July 26, 2006 (“Prior Awards”), such Employee shall be eligible to
retire for purposes of the Prior Awards, and such Prior Awards shall fully vest
in the event of such retirement, upon attaining either (a) the age of fifty-five
(55) and having completed six (6) years of service with the Company or (b) the
age of sixty-five (65) without regard to years of service with the Company (the
“Original Retirement Policy”). For all Equity Awards and/or Monetary Awards
granted to Employee following July 26, 2006 (“Prospective Awards”), the Original
Retirement Policy shall apply, and such Prospective Awards shall fully vest in
the event of such retirement, provided, and only to the extent that, Employee
shall provide the Company with not less than twelve (12) months prior written
notice of Employee’s intent to retire. Failure by Employee to provide such
written notice shall cause the Revised Retirement Policy (as hereinafter
defined) to apply with respect to the vesting of Prospective Awards, but such
failure shall have no effect whatsoever on the Prior Awards, all of which shall
continue to be subject to the Original Retirement Policy. For purposes of this
Agreement, (i) “Revised Retirement Policy” shall mean Employee has attained the
age of (x) sixty (60) and has completed fifteen (15) years of continuous service
with the Company or (y) sixty-five (65) with five (5) years of continuous
service with the Company, and (ii) the Annual Awards and Long Term Awards
includable within the Monetary Awards to be fully vested as provided above shall
include all such Awards which have been granted to Employee, but which, as of
the date of his retirement, have not been determined to have been earned
pursuant to the Plan and in such instance Employee shall be paid, within thirty
(30) days following the date of Employee’s retirement, an amount with respect to
each such open Award equal to the full target amount that the Compensation
Committee of the Board of Directors was authorized to cause to be paid to
Employee pursuant to the Plan had his or her employment continued through the
end of the Performance Period related to such Award and had all performance
goals been met.
     23. Timing of Severance Payments. Notwithstanding anything in this
Agreement to the contrary, if Employee is deemed to be a “key employee” for
purposes of Internal Revenue Code Section 409A (“Section 409A”), no Severance
Payment or other payments pursuant to, or contemplated by, this Agreement shall
be made to Employee by the Company until the amount of time has elapsed that is
necessary to avoid incurring excise taxes under Section 409A. Should this result
in a delay of payments to Employee, on the first day any such payments may be
made without incurring a penalty pursuant to Section 409A (the “409A Payment
Date”), the Company shall begin to make such payments as described in this
Section 23, provided that any amounts that would have been payable earlier but
for the application of this Section 23 shall be paid in a lump-sum on the 409A
Payment Date.
[SIGNATURES ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.

            REPUBLIC SERVICES, INC., a Delaware

corporation
      By:   /s/ Harris W. Hudson         Harris W. Hudson, Vice Chairman       
        EMPLOYEE:
      /s/ David A. Barclay       David A. Barclay              Address for
Notices:
                                               

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Schedule 2(a)
Adjusted Salary Example
Calculation of 2006 Adjusted Salary

        Adjusted Salary for 2005: $387,000
Base Salary: $331,500
Shares of Company Restricted Stock Granted: 2,500
Closing Price of Company Shares: $39.01 per share (2,500 x $39.01 = $97,525)
Base Salary + Closing Price of Restricted Shares = $331,500 + $97,525 = $429,025
Adjusted Salary for 2006: $429,025 (since greater than the Adjusted Salary for
2005)

Examples of Calculation of Future Adjusted Salary
Example 1:
     Assume the following: (i) Employee’s Base Salary is $350,000.00;
(ii) Employee’s Adjusted Salary for the Fiscal Year immediately preceding the
Fiscal Year for which the computation is to be made was $400,000.00; (iii) for
the Fiscal Year of determination Employee is granted 1,500 shares of Company
restricted stock in lieu of a cash adjustment to Base Salary for such year; and
the closing price of the Company’s shares on the NYSE on the date of grant was
$40.00 per share.
     Based on the foregoing assumptions, the Adjusted Salary for such year would
be determined as follows:
     Adjusted Salary for year of determination = Greater of (1) Adjusted Salary
for immediately preceding Fiscal Year or (2) the sum of the Base Salary plus the
product of (x) the number of shares of restricted stock granted for the year of
determination, multiplied by (y) the closing price per share of the Company’s
stock on the NYSE.
Adjusted Salary = Greater of:

  (i)   $400,000.00; or     (ii)   $350,000.00 + (1,500 x $40.00) =        
$350,000.00 + $60,000 = $410,000.00

Therefore, the Adjusted Salary established for the year of determination under
the foregoing Example 1 is $410,000.00.

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Example 2:
     Assume, with respect to the Fiscal Year immediately following the Fiscal
Year described in Example 1 above, the following: (i) Employee’s Base Salary
remains at $350,000.00; (ii) as indicated above in Example 1, Employee’s
Adjusted Salary for the immediately preceding Fiscal Year immediately was
$410,000.00; (iii) for the Fiscal Year of determination Employee is granted an
additional1,500 shares of Company restricted stock in lieu of a cash adjustment
to Base Salary for such year; and the closing price of the Company’s shares on
the NYSE on the date of grant was $45.00 per share.
     Based on the foregoing assumptions, the Adjusted Salary for such year would
be determined as follows:
     Adjusted Salary for year of determination = Greater of (1) Adjusted Salary
for immediately preceding Fiscal Year or (2) the sum of the Base Salary plus the
product of (x) the number of shares of restricted stock granted for the year of
determination, multiplied by (y) the closing price per share of the Company’s
stock on the NYSE.
Adjusted Salary = Greater of:

  (i)   $410,000.00; or     (ii)   $350,000.00 + (1,500 x $45.00) =        
$350,000.00 + $67,500 = $417,500.00

Therefore, the Adjusted Salary established for the year of determination under
the foregoing Example 2 is $417,500.00.

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Schedule 5(e)
Gross-Up Payment Example
     Assume that the Company makes a Base Payment to Employee of $900,000, and
that $600,000 is subject to an Excise Tax of 20%. Also assume that the maximum
combined effective federal, state and local tax rate, including Employee’s share
of payroll taxes but not including the Excise Tax rate, is 45%. Under these
circumstances, the Gross-Up Payment would be $342,857.14.
     The Gross-Up Payment in this example is equal to the amount of the Base
Payment subject to the Excise Tax ($600,000), multiplied by the Excise Tax rate,
expressed as a decimal (.20), and divided by the remainder of 1 minus the Excise
Tax rate, expressed as a decimal, and minus the effective rate of tax of
Employee exclusive of the Excise Tax, expressed as a decimal (1-.20-.45). Hence,
the Gross-Up Payment is $600,000 x .20 / (1-.20-.45) = $342,857.14.
     The Gross-Up Payment of $342,857.14 represents the sum of the amounts
referred to in clauses (i), (ii) and (iii) of Section 5(a) of this Agreement, as
set forth below.

         
clause (i):
Excise Tax on Base Payment (600,000 x .20)
    120,000.00  
 
       
clause (ii):
Excise Tax on Gross-Up Payment (342,857.14 x .20)
    68,571.43  
 
       
clause (iii):
Other taxes on Gross-Up Payment (342,857.14 x .45)
    154,285.71  
 
       
 
       
Total taxes subject to gross-up
    342,857.14  
 
       

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