Document:

exv10w38

Exhibit 10.38

GLOBAL — EMPLOYEES

AMENDMENT

TO

CERTAIN ALLIED WASTE INDUSTRIES, INC.

EQUITY AWARD AGREEMENTS

     THIS AMENDMENT (the “Amendment”) is made by and between Allied Waste Industries, Inc.,
a Delaware corporation (the “Company”) and the individual specified below (the
“Grantee”), to those certain Allied Waste Industries, Inc. equity award agreements held by
Grantee and set forth and described on Exhibit A attached hereto and incorporated herein
(collectively referred to herein as the “Agreements”).

WITNESSETH:

     WHEREAS, the Company and the Grantee previously entered into the Agreements set forth on
Exhibit A attached hereto;

     WHEREAS, the equity awards underlying the Agreements were issued pursuant to and under either
the Allied Waste Industries, Inc. 1991 Incentive Stock Plan, as amended from time to time (the
“1991 Plan”) or the Allied Waste Industries, Inc. 2006 Incentive Stock Plan, as amended
from time to time (the “2006 Plan”);

     WHEREAS, outstanding awards under the 1991 Plan and the 2006 Plan are governed under the terms
of the 2006 Plan;

     WHEREAS, on June 22, 2008, the Company 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 the
Company (the “Merger”) and, as a result, the Company will become a wholly owned subsidiary
of Republic as of the Effective Time (as defined in the Merger Agreement);

     WHEREAS, in anticipation of the Merger, and in accordance with the terms and provisions of the
Merger Agreement and the 2006 Plan, the Company and the Grantee now wish to amend the Agreements to
reflect the changes that are required to be made as a result of such Merger; and

     WHEREAS, the Company and the Grantee wish to amend the Agreements for purposes of Section 409A
of the Internal Revenue Code (i) to eliminate the Grantee’s right to defer the delivery of shares
of common stock otherwise deliverable upon the exercise of stock options, and (ii) to provide that
the Agreement shall be interpreted in a manner consistent with the awards satisfying the
requirements of Section 409A.

     NOW, THEREFORE, except as otherwise specifically provided, effective as of the Effective Time
of the Merger, the Agreements shall be amended as follows:

 

 

     1. Definitions. With respect to certain definitions contained in the Agreements, the
following shall apply: (a) any references to “Company” and/or “Allied Waste Industries, Inc.” shall
be to Republic Services, Inc., (b) any references to the “Board” or “Board of Directors” shall be
to the Board of Directors of Republic Services, Inc., (c) any references to the “Committee” shall
be to the Compensation Committee of the Board of Directors of Republic Services, Inc., (d) any
references to the “Allied Waste Industries, Inc. 1991 Incentive Stock Plan, as amended” or the
“Allied Waste Industries, Inc. 2006 Incentive Stock Plan, as amended,” shall be to the Republic
Services, Inc. 2006 Incentive Stock Plan, as amended (f/k/a the Allied Waste Industries, Inc. 2006
Incentive Stock Plan, as amended), (e) any references to “Shares” or “Stock” or “Common Stock”
shall be with respect to shares of the common stock of Republic Services, Inc., as adjusted, in
accordance with the Plan and as described in Section 2 or Section 3 below, as applicable; (f) any
references to “Options” shall be with respect to shares of the common stock of Republic Services,
Inc., as adjusted, in accordance with the Plan and as described in Section 2 below; and (g) any
references to “Restricted Stock”, “Restricted Stock Units” or “RSUs” shall be with respect to
shares of common stock of Republic Services, Inc., as adjusted, in accordance with the Plan and as
described in Section 3 below.

     2. Option Awards. With respect to those Agreements that provide for Options, the
following shall apply: (a) the number of those shares of the common stock of Allied Waste
Industries, Inc. subject to the Agreement that remain outstanding at the Effective Time of the
Merger (the “Allied Shares”) shall be adjusted, effective as of the Effective Time, so
that the number of shares of common stock of Republic Services, Inc. subject to the Agreement on
and after the Effective Time shall equal the number of Allied Shares multiplied by 0.45 (rounded
to the nearest whole share); (b) the exercise price per share provided for in each Agreement shall
be adjusted, effective as of the Effective Time, to equal (i) the exercise price per Allied Share
otherwise purchasable pursuant to the Option, divided by (ii) 0.45 (rounded to the nearest whole
cent); and (c) any unvested portion of an Option that remains outstanding immediately prior to the
Effective Time shall become immediately and fully vested as of the Effective Time.

     3. Restricted Stock and RSU Awards. With respect to those Agreements that provide
for Restricted Stock or Restricted Stock Units, (a) the number of shares of the common stock of
Allied Waste Industries, Inc. subject to the Agreement that remain outstanding at the Effective
Time of the Merger (the “Allied Shares”) shall be adjusted, effective as of the Effective
Time, so that the number of shares of common stock of Republic Services, Inc. subject to the
Agreement on and after the Effective Time shall equal the number of Allied Shares multiplied by
0.45 (rounded to the nearest whole share); and (b) any unvested portion of Restricted Stock or
Restricted Stock Units that remain outstanding immediately prior to the Effective Time shall
become immediately and fully vested as of the Effective Time.

     4. Stock Option Deferral. Any Agreement that contains a provision that allows for a
deferral of the delivery of shares of common stock otherwise deliverable upon exercise of the
Option shall be amended to delete such provision effective as of the earlier of (i) the Effective
Time or (ii) December 31, 2008.

     5. Section 409A. It is intended that the awards granted pursuant to the Agreements
either comply with the requirements of Section 409A of the Code or fall within an exception to

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Section 409A. The provisions of this Amendment and the Agreements shall be interpreted and
construed in a manner consistent with these intentions after the date reflected below.

     6. In all other respects, the Agreements shall remain unchanged by this Amendment.

     IN WITNESS WHEREOF, the Company and the Grantee has caused this instrument to be executed on
the date set forth below.

	 	 	 	 	 
	 	ALLIED WASTE INDUSTRIES, INC., a
 Delaware
corporation

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Its:  	 	 
	 
	 
	 	GRANTEE

 	 
	 
	 	  	

 	 
	 	 	 	 
	 
	 	DATE:
 	 
	 
	 	  	

 	 

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EXHIBIT A

EQUITY AWARD AGREEMENTSexv10w42

Exhibit 10.42

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]

1. Purpose of the Plan

     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.

2. Definitions

     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.

5. Awards

     (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, Inc. A copy of the Plan and agreement is on file in the office of the Secretary of
Republic Services, Inc.

Such legend shall not be removed from the certificate evidencing such shares until such shares vest
pursuant to the terms of this Plan.

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     Each certificate issued pursuant to the above paragraph, together with the stock powers
relating to the shares of Restricted Stock evidenced by such certificate, shall be held by the
Company. The Company shall issue to the Director a receipt evidencing the certificates that are
registered in the name of the Director and held by the Company.

     Reasonably promptly after a share of Restricted Stock vests pursuant to the terms of
Section 5(e), the Company shall cause to be issued and delivered to the Director to whom
such shares were granted a certificate evidencing such shares, free of the legend set forth above.
Delivery of the certificate shall be effected for all purposes when the Company shall have
deposited such certificate in the United States mail, addressed to the Director.

     (b) Issuance of Certificates or Cash Payment Upon Vesting of RSUs. If shares of
Common Stock are to be issued upon vesting of RSUs, then within 60 days after the vesting of such
RSUs the Company shall cause to be issued a stock certificate, registered in the name of the
Director to whom such Units were granted, evidencing the shares, provided that such stock
certificate shall not be required to bear the legend set forth in Section 6(a). Delivery
of the certificate shall be effected for all purposes when the Company shall have deposited such
certificate in the United States mail, addressed to the Director. If, under Section 5(d),
a cash payment is to be made upon vesting of RSUs, then within 60 days after the vesting of such
RSUs the Company shall cause a lump sum payment to be made to the Director.

     (c) Restrictions on Transfer. Prior to vesting, a Director shall be entitled to
assign or transfer a share of Restricted Stock and all of the rights related thereto only to the
extent permitted by this Section 6(c). Any such assignment or transfer must not be for
value and shall be limited to an assignment or transfer to: (i) a child, stepchild, grandchild,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law
or sister-in-law, including adoptive relationships; (ii) any person sharing the Director’s
household (other than a tenant or employee); (iii) a trust in which the Director or any of the
persons described in clause (i) or (ii), above, hold more than 50% of the beneficial interest; or
(iv) a private foundation in which the Director or any of the persons described in clause (i) or
(ii), above, own more than 50% of the voting interests. A transfer to any entity in which more
than 50% of the voting interests are owned by the Director or any of the persons described in
clause (i) or (ii), above, in exchange for an interest in that entity shall not constitute a
transfer for value. Prior to vesting, a Director shall not be entitled to assign or transfer any
interest in any RSUs.

     (d) Voting and Dividend Rights. The holders of shares of Restricted Stock awarded
under this Plan shall have the same voting, dividend, and other rights as the Company’s other
stockholders (except that the transfer of such shares is limited in accordance with Section
6(c) prior to vesting); provided, however, that the Plan Administrator may require in the
agreement granting the shares of Restricted Stock that cash dividends be invested in additional
shares of Restricted Stock, subject to the same conditions and restrictions as the Award with respect to which the
dividends were paid. Holders of RSUs awarded under this Plan shall have no voting, dividend, or
other rights as stockholders of the Company unless and until such RSUs vest and certificates for
shares of Common Stock are issued pursuant to Section 6(b). Notwithstanding the foregoing,
the agreement evidencing RSUs may provide, in the event of a cash dividend paid by the Company to
holders of Common Stock generally, for the crediting of an additional number of RSUs (“Additional

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Restricted Stock Units”) equal to the total number of whole RSUs and any Additional Restricted
Stock Units previously credited multiplied by the dollar amount of the cash dividend paid per share
of Common Stock by the Company, divided by the Fair Market Value of a share of Common Stock. The
agreement also may provide, in the event of a stock dividend paid by the Company to holders of
Common Stock generally, for the crediting of Additional Restricted Stock Units equal to the total
number of whole RSUs and Additional Restricted Stock Units previously credited multiplied by the
share dividend paid per share of Common Stock by the Company. Any Additional Restricted Stock
Units shall be subject to the same terms and restrictions as the RSUs to which they relate.

     (e) Deferral of Issuance of Common Stock Upon Vesting of RSUs. A Director who is
eligible to participate in any Deferred Compensation Plan may elect to defer the dates on which
shares of Common Stock are to be issued pursuant to one or more RSUs, but only in a manner that is
either exempt from or that satisfies the requirements of Section 409A of the Code (“Section 409A”).
The Director’s election shall be made pursuant to the terms of the Deferred Compensation Plan.
When the election occurs, the RSU(s) subject to the election will be transferred into a deferred
compensation account established under the Deferred Compensation Plan and will be subject to the
terms of the Deferred Compensation Plan. Notwithstanding any election to defer the date(s) on
which shares of Common Stock are to be issued pursuant to one or more RSUs, all RSUs will continue
to be subject to the vesting provisions set forth in this Plan and the RSU Award.

     (f) Conversion of Restricted Stock and Restricted Stock Units; Cash-Out for Certain
Directors. At the Effective Time, each share of Restricted Stock, each RSU and each deferred
RSU that is outstanding immediately prior to the Effective Time shall be converted into a
restricted share, restricted stock unit or a deferred restricted stock unit with respect to a
number of shares of Common Stock based upon the Exchange Ratio in accordance with and subject to
the provisions contained in the Merger Agreement. Notwithstanding the foregoing, with respect to
each Director that will no longer be a Director as of the Effective Time, each share of Restricted
Stock, each RSU and each deferred RSU that was granted to such Director and is outstanding
immediately prior to the Effective Time shall, immediately prior to such Effective Time, be
cancelled in exchange for a lump sum cash payment pursuant to terms and conditions set forth by the
Board and consistent with the terms of Section 9 of this Plan, the Award agreement and the Merger
Agreement.

7. Options

     (a) Exercise Price. The exercise price per share of Common Stock of each Option
granted to a Director pursuant to this Plan shall be the Fair Market Value of the Common Stock on
the date of grant.

     (b) Option Agreement. Each Option granted under this Plan shall be evidenced by an
agreement, in a form approved by the Plan Administrator, which shall be subject to the terms and conditions of the Plan. Any agreement may contain such other terms, provisions, and
conditions as may be determined by the Plan Administrator, so long as such terms are not
inconsistent with the Plan.

     (c) Term and Exercise of Options. Each option agreement shall provide that the Option
shall expire ten (10) years from the date of the grant.

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     (d) Procedure for Exercise of Options. An Option shall be exercised by delivering
notice to the Company’s principal office, to the attention of its Secretary, along with the
agreement evidencing the Option and payment for shares of Common Stock to be purchased upon the
exercise of the Option. The notice must specify the number of shares of Common Stock with respect
to which the Option is being exercised and must be signed by the Director (or his or her executor
or administrator). Payment shall be made either (i) in cash, by certified check, bank cashier’s
check or wire transfer, (ii) subject to the approval of the Plan Administrator, in shares of Common
Stock owned by the Director for a period of at least six months prior to the effective date on
which the Option is exercised and valued at their Fair Market Value on the effective date of such
exercise, (iii) subject to the approval of the Plan Administrator, in the form of a “cashless
exercise” (as described in Section 7(e), below), or (iv) subject to the approval of the
Plan Administrator, in any combination of the foregoing. Any payment in shares of Common Stock
shall be effected by the 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 and
evidences as the Secretary of the Company shall require from time to time. The effective date on
which an Option is exercised shall be established by the Secretary of the Company and shall occur
within an administratively reasonable period of time (but no later than five business days) after
the Secretary receives the notice, agreement, and payment referred to above. Prior to the exercise
date, the Director may withdraw the notice, in which case the Option will not be exercised.

     (e) Cashless Exercise. The cashless exercise of an Option shall be pursuant to
procedures whereby the Director, by written notice, irrevocably directs (i) an immediate market
sale or margin loan with respect to all or a portion of the shares of Common Stock to which he or
she is entitled upon exercise pursuant to an extension of credit by a brokerage firm or other party
(provided that the 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 shares of Common Stock 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.

     (f) Termination of Options. Except as may be otherwise expressly provided in this
Plan or otherwise determined by the Plan Administrator, each Option, to the extent it shall not
have been exercised previously, shall terminate on the earliest of the following:

     (i) On the last day of the three-month period commencing on the date on which
the Director ceases to be a member of the Board for any reason, other than the death
of the Director, during which period the Director shall be entitled to exercise all Options held by the Director on the date on which the Director ceased to be a
member of the Board that could have been exercised on such date;

     (ii) On the last day of the six-month period commencing on the Director’s death
while serving as a member of the Board, during which period the executor or
administrator of the Director’s estate or the person or persons to whom the
Director’s Option shall have been transferred by will or the laws of descent or
distribution shall be entitled to exercise all Options in respect of the number of
shares that the Director

9

 

would have been entitled to purchase had the Director exercised such Options on the date of his or her death; or

     (iii) Ten years after the date of grant of such Option.

     Notwithstanding the foregoing, no provision in the Plan or Award and no action by the Plan
Administrator shall cause an Option to be extended, after the initial grant date, beyond a period
of ten years after the initial grant date. For purposes of this Section 7(f), “month” means
31 calendar days beginning with the calendar day on which the relevant event occurs, and “year”
means 365 calendar days beginning with the calendar day on which the relevant event occurs.

     (g) Assignability of Options. Except as set forth in this Section 7(g),
during the lifetime of a Director each Option granted to him or her shall be exercisable only by
him or her or a broker-dealer acting on his or her behalf pursuant to Section 7(e). No
Option shall be assignable or transferable for value. Each Option may be assigned by a Director by
will or by the laws of descent and distribution, or pursuant to a Qualified Domestic Relations
Order. Additionally, each Option may be assigned to: (i) a child, stepchild, grandchild, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, (ii) any person sharing the Director’s household
(other than a tenant or employee), (iii) a trust in which the Director or any of the persons
described in clause (i) or (ii), above, hold more than 50% of the beneficial interest, or (d) a
private foundation in which the Director or any of the persons described in clause (i) or (ii),
above, own more than 50% of the voting interests. A transfer to any entity in which more than 50%
of the voting interests are owned by the Director or any of the persons described in clause (i) or
(ii), above, in exchange for an interest in that entity shall not constitute a transfer for value
for purposes of this Section 7(g).

     (h) No Rights as a Stockholder. No Director shall have any rights as a stockholder
with respect to any shares covered by an Option until the date of the issuance of a stock
certificate or certificates representing such shares. Except as provided in Section 12 of
this Plan, no adjustment for dividends or otherwise shall be made if the record date is prior to
the date of issuance of the certificates representing shares of Common Stock purchased pursuant to
exercise of the Option.

     (i) Conversion of Options. At the Effective Time, each outstanding Option that is
outstanding immediately prior to the Effective Time shall be converted into an Option with respect
to a number of shares of Common Stock based upon the Exchange Ratio with an adjusted exercise price
based upon the Exchange Ratio, in accordance with and subject to the provisions contained in the
Merger Agreement.

8. Election Regarding Cash Fee Awards

     (a) Election to Receive Equity in Lieu of Cash Fee Awards. Each Eligible Director may
elect, on or prior to the date of each annual meeting of the Company’s stockholders, in a writing
delivered to the Company’s principal executive offices, to have all or any portion of his or her
Cash Fee Awards paid to him or her in shares of Common Stock. Such election by a Director shall
remain valid until the date of the annual meeting of stockholders in the following year and, if the
Director does not make another written election with respect to his or her Cash Fee Awards at that
time, his or her Cash Fee Awards for the next year shall be paid in cash. Notwithstanding the
foregoing, (a) if

10

 

there are not sufficient shares of Common Stock available under the Plan to make
payment of the Cash Fee Awards in the form of Common Stock, the Cash Fee Awards will be paid in
cash, and (b) Common Stock shall not be available under this Plan to make payment of the Cash Fee
Awards for service on or after the Effective Time and, therefore, any such Cash Fee Awards will be
paid in cash.

     (b) Determination of Number of Shares Subject to Cash Fee Awards. If an Eligible
Director elects to have his or her Cash Fee Award paid in Common Stock, the number of shares shall
be determined by dividing the dollar amount of the Cash Fee Award to be paid in the form of shares
by the Fair Market Value of one share of Common Stock on the last day of the calendar quarter in
which the Cash Fee Award is earned; provided, however, that the number of shares of Common Stock
shall be rounded downward such that no fractional share shall be issued.

     (c) Vesting. Notwithstanding any contrary provision of this Plan, shares of Common
Stock paid to a Director in lieu of Cash Fee Awards will not be subject to vesting.

9. Extraordinary Corporate Transactions

     If the Company effects a merger, consolidation, acquisition, separation, reorganization,
liquidation or similar transaction, the Company may substitute new Awards for the Awards then
outstanding under the Plan or a corporation other than the Company, including (without limitation)
a parent or subsidiary of the Company, may assume the Company’s duties as to Awards then
outstanding under the Plan. Notwithstanding the foregoing or the provisions of Section 11
of this Plan, in the event such corporation or parent or subsidiary of the Company does not
substitute new and substantially equivalent Awards for, or assume, the Awards then outstanding
under the Plan, all such outstanding Awards shall be cancelled immediately prior to the effective
date of such extraordinary corporation transaction and, in full consideration of such cancellation,
each Director to whom the Awards were granted shall be paid an amount in cash equal to the product
of (a) the number of shares of Restricted Stock held by the Director plus the number shares of
Common Stock issuable upon vesting of RSUs and exercise of Options held by the Director times (b)
the value, as determined by the Plan Administrator in its absolute discretion, of the property
(including cash) received by a holder of one share of Common Stock as a result of such event,
reduced by (c) the aggregate exercise price of all Options held by such Director.

     Except as otherwise expressly provided in this Plan, the issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, for cash or
property, or for labor or services either on direct sale or on the exercise of rights or warrants
to subscribe therefor, or on conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock then subject to outstanding Awards.

     Notwithstanding anything to the contrary in this Section 9, the foregoing shall not be
applicable to an Award if (a) the Award is subject to Section 409A of the Code or the application
of the foregoing would cause the Award to become subject to Section 409A and (b) application of the
foregoing would result in a violation of Section 409A.

10. Investment Representations

11

 

     If the shares issuable upon the vesting of shares of Restricted Stock or RSUs or upon exercise
of an Option are not registered under the Securities Act, the Company may imprint on the
certificate representing such shares the following legend or any other legend that counsel for the
Company considers necessary or advisable to comply with the Securities Act:

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON RECEIPT BY
THE CORPORATION OF AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE
CORPORATION, THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.

The Company may, but shall in no event be obligated to, register any securities under this Plan
pursuant to the Securities Act and, if any shares are so registered, the Company may remove any
legend on certificates representing such shares. The Company shall not be obligated to take any
other affirmative action to cause the vesting of shares of Restricted Stock, the vesting of RSUs,
or the exercise of an Option or the issuance of shares pursuant thereto to comply with any law or
regulation of any governmental authority.

11. Amendment or Termination

     The Board may amend, modify, revise or terminate this Plan at any time and from time to time;
provided, however, that without the degree of stockholder approval required by the Company’s
charter or bylaws, applicable law, or the rules and regulations of any exchange or trading market
on which the Company’s securities are then traded, the Board may not: (a) materially increase the
benefits accruing to Eligible Directors under this Plan; (b) materially increase the number of
shares of Common Stock that may be issued under this Plan; or (c) materially modify the
requirements as to eligibility for participation in this Plan. All Awards granted under this Plan
shall be subject to the terms and provisions of this Plan and any amendment, modification or
revision of this Plan shall be deemed to amend, modify or revise all Awards outstanding under this
Plan at the time of such amendment, modification or revision, provided that no amendment,
modification, or revision of any Award that adversely affects the rights of the holder of such
award shall be effective with respect to such Award without the consent of the holder of such
Award. At the discretion of the Board, all outstanding Awards may be forfeited and terminated if
this Plan is terminated by action of the Board. Notwithstanding the foregoing, any amendment,
modification, revision or termination that relates to an Award that is subject to Section 409A or that would result in an Award becoming subject to
Section 409A may only be made in a manner that complies with the provisions of Section 409A.

12. Changes in the Company’s Capital Structure

     The existence of outstanding Awards shall not affect in any way the right or power of the
Company or its stockholders to make or authorize the dissolution or liquidation of the Company, any
sale or transfer of all or any part of the Company’s assets or business, any reorganization or
other corporate act or proceeding, whether of a similar character or otherwise, any or all
adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure
or its business,

12

 

any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or prior preference stock senior to or affecting the Common Stock or the rights thereof.
Notwithstanding the foregoing, if the outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of shares or the outstanding shares of Common Stock shall be
combined into a smaller number of shares thereof, then:

     (a) The number of shares of Restricted Stock or RSUs then outstanding under the Plan shall be
proportionately adjusted to equal the product obtained by multiplying such number of shares of
Common Stock by a fraction, the numerator of which is that number of outstanding shares of Common
Stock after giving effect to such combination or subdivision and the denominator of which is that
number of outstanding shares of Common Stock prior to such combination or subdivision.

     (b) The exercise price of any Option then outstanding under the Plan shall be proportionately
adjusted to equal the product obtained by multiplying such exercise price by a fraction, the
numerator of which is the number of outstanding shares of Common Stock prior to such combination or
subdivision and the denominator of which is that number of outstanding shares of Common Stock after
giving effect to such combination or subdivision; and

     (c) The number of shares of Common Stock issuable upon the exercise of any Option then
outstanding under the Plan shall be proportionately adjusted to equal the product obtained by
multiplying such number of shares of Common Stock by a fraction, the numerator of which is that
number of outstanding shares of Common Stock after giving effect to such combination or subdivision
and the denominator of which is that number of outstanding shares of Common Stock prior to such
combination or subdivision.

     Notwithstanding the foregoing, any adjustment to shares of Common Stock subject to an Award
must be done in accordance with any applicable requirements of Section 409A.

13. Compliance With Other Laws and Regulations

     The Plan, the grant of Awards, and the obligation of the Company to issue and deliver shares
of Common Stock upon vesting of shares of Restricted Stock or RSUs or upon exercise of Options
shall be subject to all applicable federal and state laws, rules, and regulations and to such
approvals by such governmental or regulatory agency or national securities exchange as may be
required. The Company shall not be required to issue any shares upon vesting of shares of
Restricted Stock or RSUs or upon exercise of any Option if the issuance of such shares shall
constitute a violation by the Director or the Company of any provisions of any law or regulation of any governmental
authority; provided, however, that the shares shall be issued as soon as the Company reasonably
believes that the issuance will not cause a violation to occur. Each Award granted under this Plan
shall be subject to the requirement that, if at any time the Plan Administrator shall determine
that (a) the listing, registration or qualification of the shares subject thereto on any securities
exchange or trading market or under any state or federal law of the United States or of any other
country or governmental subdivision thereof, (b) the consent or approval of any governmental
regulatory body, or (c) the making of investment or other representations are necessary or
desirable in connection with the issue or purchase of shares subject thereto, no shares of Common
Stock may be issued upon grant, vesting, or exercise of any Award Option unless such listing,
registration, qualification, consent, approval or representation shall have been effected or
obtained, free of any conditions not acceptable

13

 

to the Plan Administrator. Any determination in this connection by the Plan Administrator shall be final, binding, and conclusive.

14. Limitation of Liability; Indemnification of Committee and Board of Directors

     No member of the Board, the Allied Board or the Committee shall be liable for any act or
omission of any other member of the Board, Allied Board or the Committee or for any act or omission
on his or her own part, including (without limitation) the exercise of any power or discretion
given to him or her under this Plan, except those resulting from his or her own gross negligence or
willful misconduct. The Company shall, to the fullest extent permitted by law, indemnify, defend,
and hold harmless any person who at any time is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (whether civil, criminal,
administrative or investigative) in any way relating to or arising out of this Plan or any Awards
granted hereunder by reason of the fact that such person is or was at any time a director of the
Company or a member of the Committee against judgments, fines, penalties, settlements, and
reasonable expenses (including attorneys’ fees) actually incurred by such person in connection with
such action, suit or proceeding. This right of indemnification shall inure to the benefit of heirs,
executors, and administrators of each such person and is in addition to all other rights to which
such person may be entitled by virtue of the bylaws of the Company or as a matter of law, contract
or otherwise.

14

 

15. Effective Date; Expiration of the Plan

     This Plan, which provides for grants of shares of Restricted Stock, RSUs, and Options, shall
become effective on the Effective Date. Options previously granted under the Allied Waste
Industries, Inc. 1994 Amended and Restated Non-Employee Director Stock Option Plan shall remain in
full force and effect under the terms of such Options and this Plan. No Awards shall be granted
pursuant to this Plan on or after May 20, 2015 or, if earlier, the Effective Time.

Dated:                     , 2008

	 	 	 	 	 
	 	REPUBLIC SERVICES, INC., a Delaware

corporation

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

15

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