Document:

EX-10.15 2007 STOCK INCENTIVE PLAN

 

EXHIBIT 10.15

ARRIS GROUP, INC.

2007 STOCK INCENTIVE PLAN

     1. PURPOSE AND EFFECTIVE DATE. ARRIS Group, Inc. (the “Company”) has established this 2007
Stock Incentive Plan (the “Plan”) to facilitate the retention and continued motivation of key
employees, consultants and directors and to align more closely their interests with those of the
Company and its stockholders. The effective date of the Plan shall be the date it is approved by
the stockholders of the Company (the “Effective Date”). No grants shall be made under this Plan
subsequent to ten (10) years after the Effective Date. This Plan will have no impact on the
Company’s existing stock incentive plans or the awards outstanding thereunder.

     2. ADMINISTRATION. The Plan shall be administered by the Compensation Committee of the
Company’s Board of Directors or such other Board committee consisting solely of independent
directors (as determined by the Board or a committee thereof) as the Board may designate (the
“Committee”). The Committee has the authority and responsibility for the interpretation,
administration and application of the provisions of the Plan, and the Committee’s interpretations
of the Plan, and all actions taken by it and determinations made by it, shall be binding on all
persons. The Committee may authorize one or more officers to approve the awards of options and
other rights to non-officers to the extent permitted by Section 157(c) of the Delaware General
Corporation Law. No Board or Committee member shall be liable for any determination, decision or
action made in good faith with respect to the Plan.

     3. SHARES SUBJECT TO PLAN. A total of 5,000,000 shares of Common Stock of the Company
(“Shares”) may be issued pursuant to the Plan. The Shares may be authorized but unissued Shares or
Shares reacquired by the Company and held in its treasury. Grants of incentive awards under the
Plan will reduce the number of Shares available thereunder by the maximum number of Shares
obtainable under such grants. If all or any portion of the Shares otherwise subject to an incentive
award under the Plan are not delivered or do not vest for any reason including, but not limited to,
the cancellation, expiration or termination of any option right or unit, the settlement of any
award in cash, the forfeiture of any restricted stock, or the repurchase of any Shares by the
Company from a participant for the cost of the participant’s investment in the Shares, such number
of Shares shall be available again for issuance under the Plan. Notwithstanding the foregoing,
Shares tendered (either actually or through attestation) to pay the option exercise price, shares
withheld for the payment of withholding taxes and, shares and other awards repurchased by the
Company from a person using proceeds from the exercise of awards by that person shall not return to
the share reserve, and the determination of the number of Shares used in connection with
stock-settled stock appreciation rights shall be based upon the number of Shares with respect to
which the rights were based and not just the number of Shares delivered upon settlement. Shares
issued in connection with awards that are assumed, converted or substituted pursuant to a merger or
an acquisition shall reduce the share reserve. The number of Shares covered by or specified in the
Plan and the number of Shares and the purchase price for Shares under any outstanding awards, may
be adjusted proportionately by the Committee for any increase or decrease in the number of issued
Shares or any change in the value of the Shares resulting from a subdivision or consolidation of
Shares, reorganization, recapitalization, spin-off, payment of stock dividends on the Shares, any
other increase or decrease in the number of issued Shares made without receipt of consideration by
the Company, or the payment of an extraordinary cash dividend.

     4. ELIGIBILITY. All key employees, active consultants and directors of the Company and its
subsidiaries are eligible to be selected to receive a grant under the Plan by the Committee. The
Committee may condition eligibility under the Plan, and any grant or exercise of an incentive award
under the Plan, on such conditions, limitations or restrictions as the Committee determines to be
appropriate for any reason. No person may be granted in any period of two consecutive calendar
years, awards covering more than 1,500,000 Shares. The maximum amount to be paid to any one person
pursuant to performance units, in any calendar year, shall not exceed $2,000,000.

     5. AWARDS. The Committee may grant awards under the Plan to eligible persons in the form of
stock options (including incentive stock options within the meaning of section 422 of the Code),
stock grants, stock units, restricted stock, stock appreciation rights, performance shares and
units and dividend equivalent rights, and shall

 

 

establish the number of Shares subject to each such grant and the terms thereof, including any
adjustments for reorganizations and dividends, subject to the following:

	 	(a)	 	All awards granted under the Plan shall be evidenced by agreements in
such form and containing such terms and conditions not inconsistent with the Plan
as the Committee shall prescribe.
	 
	 	(b)	 	The exercise price of any option or stock appreciation right shall not
be less than the fair market value of a corresponding number of Shares as of the
date of grant, except options or stock appreciation rights being granted to replace
options or rights not initially granted by the Company or its predecessors may be
granted with exercise prices that in the judgment of the Committee result in
options or rights having comparable value to the options or rights being replaced.
The maximum term on options and stock appreciation rights shall not exceed ten (10)
years.
	 
	 	(c)	 	Options and stock appreciation rights shall vest over a minimum of
three years (and shall vest no more quickly than ratably), and all other awards
shall have a minimum vesting or holding period of three years, provided
that (i) awards that are issued in connection with mergers and acquisitions may
have vesting and holding periods that are the same as any awards that they are
replacing or otherwise as deemed appropriate by the Committee, and (ii) a vesting
or holding period may be reduced as a result of death, disability, retirement, a
merger or sale, termination of employment or other extraordinary event. In the
absence of an extraordinary event, the vesting and holding restrictions applicable
to an award shall not be reduced or otherwise waived.
	 
	 	(d)	 	No more than 2,000,000 of the Shares may be awarded in a form other
than options or stock appreciation rights. The aggregate number of Shares with
respect to which incentive stock options may be issued under the Plan shall not
exceed 4,000,000.
	 
	 	(e)	 	No option may be repriced by amendment, substitution or cancellation
and regrant, unless authorized by the stockholders. Adjustments pursuant to Section
3 above shall not be considered repricing.
	 
	 	(f)	 	When issuing performance shares or units performance criteria may
include: revenue; earnings before interest, taxes, depreciation and amortization
(EBITDA); cash earnings (earnings before amortization of intangibles); operating
income; pre- or after-tax income; earnings per share, net cash flow; net cash flow
per share; net earnings; return on equity; return on total capital; return on
sales, return on net assets employed, return on assets; economic value added (or an
equivalent metric); share price performance; total shareholder return; improvement
in or attainment of expense levels; and improvement in or attainment of working
capital levels. Performance criteria may be related to a specific customer or
group of customers or geographic region. Performance criteria may be measured
solely on a corporate, subsidiary or division basis, or a combination thereof.
Performance criteria may reflect absolute entity performance or a relative
comparison of entity performance to the performance of a peer group of entities or
other external measure of the selected performance criteria. Profit, earnings and
revenues used for any performance goal measurement may exclude any extraordinary or
nonrecurring items.
	 
	 	(g)	 	All awards may be settled in cash, shares or deferred delivery, as
authorized by the Committee.
	 
	 	(h)	 	Shares granted from the plan may be used as form of payment for
compensation, grants or rights earned or due under other Company plans or
arrangements.

     6. AMENDMENT OF THE PLAN. The Board of Directors or the Committee may from time to time
suspend, terminate, revise or amend the Plan or the terms of any grant in any respect whatsoever,
provided that, without the approval of the stockholders of the Company, no such revision or
amendment may increase the number of Shares subject to the Plan, change the provisions of Section 5
above, or expand those eligible for grants under the Plan.

 

 

     7. GENERAL. The laws of the State of Delaware shall apply to the Plan. Nothing herein shall
restrict the Board from exercising the authority granted hereunder to the Committee or otherwise
from exercising its fiduciary duties.EX-10.1 2007 Stock Incentive Plan

 

Exhibit 10.1

REPUBLIC SERVICES, INC.

2007 STOCK INCENTIVE PLAN

1.     ESTABLISHMENT, EFFECTIVE DATE
AND TERM

     
Republic Services, Inc., a Delaware corporation hereby
establishes the “Republic Services, Inc. 2007 Stock
Incentive Plan.” The effective date of the Plan shall be
February 21, 2007; which is the date the Plan was approved
and adopted by the Board; provided, however, no Award may be
granted unless and until the Plan has been approved by the
shareholders of Republic. Unless earlier terminated pursuant to
Section 15(k) hereof, the Plan shall terminate on the tenth
anniversary of the Effective Date.

2.     PURPOSE

     
The purpose of the Plan is to enable the Company to attract,
retain, reward and motivate Eligible Individuals by providing
them with an opportunity to acquire or increase a proprietary
interest in Republic and to incentivize them to expend maximum
effort for the growth and success of the Company, so as to
strengthen the mutuality of the interests between the Eligible
Individuals and the shareholders of Republic.

3.     DEFINITIONS

     
As used in the Plan, the following terms shall have the meanings
set forth below:

		
	 	     
    (a) “Award” means any Common Stock, Option,
    Performance Share, Performance Unit, Restricted Stock, Stock
    Appreciation Right or any other award granted pursuant to the
    Plan.
	 
	 	     
    (b) “Award Agreement” means a written agreement
    entered into by Republic and a Participant setting forth the
    terms and conditions of the grant of an Award to such
    Participant.
	 
	 	     
    (c) “Board” means the board of directors of
    Republic.
	 
	 	     
    (d) “Cause” means, with respect to a termination
    of employment or service with the Company, a termination of
    employment or service due to a Participant’s dishonesty,
    fraud, insubordination, willful misconduct, refusal to perform
    services (for any reason other than illness or incapacity) or
    materially unsatisfactory performance of the Participant’s
    duties for the Company; provided, however, that if the
    Participant and the Company have entered into an employment
    agreement or consulting agreement which defines the term Cause,
    the term Cause shall be defined in accordance with such
    agreement with respect to any Award granted to the Participant
    on or after the effective date of the respective employment or
    consulting agreement. The Committee shall determine in its sole
    and absolute discretion whether Cause exists for purposes of the
    Plan.
	 
	 	     
    (e) “Change in Control” means any change in
    control of Republic of a nature which would be required to be
    reported (a) in response to Item 6(e) of
    Schedule 14A of Regulation 14A, as in effect on the
    date of an Agreement,

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    promulgated under the Securities Exchange Act of 1934, as
    amended (the “Exchange Act”), (b) in response to
    Item 1 of the Current Report on
    Form 8-K, as in
    effect on the date of an Agreement, promulgated under the
    Exchange Act, or (c) 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 Republic
    representing fifty percent (50%) or more of the combined voting
    power of Republic;
	 
	 	     
    (ii) During any period of three consecutive years during
    the term of this Agreement, the directors who at the beginning
    of such period constitute the Board cease for any reason to
    constitute at least a majority of the Board, 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 Republic approve (1) a
    reorganization, merger, or consolidation with respect to which
    persons who were the shareholders of Republic 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 Republic; or
    (3) the sale of all or substantially all of the assets of
    Republic, or of a subsidiary of Republic that accounts for 30%
    of the consolidated revenues of Republic, but not including a
    reorganization, merger or consolidation of Republic.

     
However, to the extent that Section 409A of the Code would
cause an adverse tax consequence to a Participant using the
above definition, the term “Change in Control” shall
have the meaning ascribed to the phrase “Change in the
Ownership or Effective Control of a Corporation or in the
Ownership of a Substantial Portion of the Assets of a
Corporation” under Treasury Department Proposed
Regulation 1.409A-3(g)(5),
as revised from time to time in either subsequent proposed or
final regulations, and in the event that such regulations are
withdrawn or such phrase (or a substantially similar phrase)
ceases to be defined, as determined by the Committee.

     
(f) “Change in Control Price” means the price per
share of Common Stock paid in any transaction related to a
Change in Control of Republic.

     
(g) “Code” means the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder.

     
(h) “Committee” means a committee or
sub-committee of the Board consisting of two or more members of
the Board, none of whom shall be an officer or other salaried
employee of the Company, and each of whom shall qualify in all
respects as a “non-employee director” as defined in
Rule 16b-3 under
the Exchange Act, and as an “outside director” for
purposes of Code Section 162(m). If no Committee exists,
the functions of

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the Committee will be exercised by the Board; provided,
however, that a Committee shall be created prior to the
grant of Awards to a Covered Employee and that grants of Awards
to a Covered Employee shall be made only by such Committee.
Notwithstanding the foregoing, with respect to the grant of
Awards to non-employee directors, the Committee shall be the
Board.

     
(i) “Common Stock” means the common stock,
$.01 par value per share, of Republic.

     
(j) “Company” means Republic and all entities
whose financial statements are required to be consolidated with
the financial statements of Republic pursuant to United States
generally accepted accounting principles and any other entity
determined to be an affiliate as determined by the Committee in
its sole and absolute discretion.

     
(k) “Covered Employee” means “covered
employee” as defined in Code Section 162(m)(3).

     
(l) “Covered Individual” means any current or
former member of the Committee, any current or former officer of
the Company, or any individual designated pursuant to
Section 5(b).

     
(m) “Detrimental Activity” shall mean
(i) the disclosure to anyone outside the Company, or the
use in other than the Company’s business, without written
authorization from the Company, of any confidential information
or proprietary information, relating to the business of the
Company, acquired by a Participant prior to a termination of the
Participant’s employment or service with the Company;
(ii) activity while employed or providing services that
results, or if known could result, in the termination of the
Participant’s employment or service that is classified by
the Company as a termination for Cause; (iii) any attempt,
directly or indirectly, to solicit, induce or hire (or the
identification for solicitation, inducement or hiring of) any
non-clerical employee of the Company to be employed by, or to
perform services for, the Participant or any person or entity
with which the Participant is associated (including, but not
limited to, due to the Participant’s employment by,
consultancy for, equity interest in, or creditor relationship
with such person or entity) or any person or entity from which
the Participant receives direct or indirect compensation or fees
as a result of such solicitation, inducement or hire (or the
identification for solicitation, inducement or hire) without, in
all cases, written authorization from the Company; (iv) any
attempt, directly or indirectly, to solicit in a competitive
manner any current or prospective customer of the Company
without, in all cases, written authorization from the Company;
(v) the Participant’s Disparagement, or inducement of
others to do so, of the Company or their past and present
officers, directors, employees or products; (vi) without
written authorization from the Company, the rendering of
services for any organization, or engaging, directly or
indirectly, in any business, which is competitive with the
Company, or which organization or business, or the rendering of
services to such organization or business, is otherwise
prejudicial to or in conflict with the interests of the Company;
provided, however that competitive activities shall only be
those competitive with any business unit of the Company with
regard to which the Participant performed services at any time
within the two (2) years prior to the termination of the
Participant’s employment or service; or (vii) any
other conduct or act determined by the Committee, in its sole
discretion, to be injurious, detrimental or prejudicial to any
interest of the Company. For purposes of subparagraphs (i),
(iii), (iv) and (vi) above, the Chief Executive Officer and the
General Counsel of the Company shall each have authority to
provide the Participant with written authorization to engage in

3

 

the activities contemplated thereby and no other person shall
have authority to provide the Participant with such
authorization.

     
(n) “Disability” means a “permanent and
total disability” within the meaning of Code
Section 22(e)(3); provided, however, that if a
Participant and the Company have entered into an employment or
consulting agreement which defines the term Disability for
purposes of such agreement, Disability shall be defined pursuant
to the definition in such agreement with respect to any Award
granted to the Participant on or after the effective date of the
respective employment or consulting agreement. The Committee
shall determine in its sole and absolute discretion whether a
Disability exists for purposes of the Plan.

     
(o) “Disparagement” means making any comments or
statements to the press, the Company’s employees or any
individual or entity with whom the company has a business
relationship which would adversely affect in any manner:
(i) the conduct of the business of the Company (including,
without limitation, any products or business plans or
prospects), or (ii) the business reputation of the Company
or any of its products, or its past or present officers,
directors or employees.

     
(p) “Dividend Equivalents” means an amount equal
to the cash dividends paid by the Company upon one share of
Common Stock subject to an Award granted to a Participant under
the Plan.

     
(q) “Effective Date” shall mean February 21,
2007.

     
(r) “Eligible Individual” means any employee,
officer, director (employee or non-employee director) of the
Company and any Prospective Employee to whom Awards are granted
in connection with an offer of future employment with the
Company.

     
(s) “Exchange Act” means the Securities Exchange
Act of 1934, as amended.

     
(t) “Exercise Price” means the purchase price of
each share of Common Stock subject to an Award.

     
(u) “Fair Market Value” means, unless otherwise
required by the Code, as of any date, the last sales price
reported for the Common Stock on such date (i) as reported
by the national securities exchange in the United States on
which it is then traded or (ii) if not traded on any such
national securities exchange, as quoted on an automated
quotation system sponsored by the National Association of
Securities Dealers, Inc., or if the Common Stock shall not have
been reported or quoted on such date, on the first day prior
thereto on which the Common Stock was reported or quoted;
provided, however, that the Committee may modify the
definition of Fair Market Value to reflect any changes in the
trading practices of any exchange or automated system sponsored
by the National Association of Securities Dealers, Inc. on which
the Common Stock is listed or traded. If the Common Stock is not
readily traded on a national securities exchange or any system
sponsored by the National Association of Securities Dealers,
Inc., the Fair Market Value shall be determined in good faith by
the Committee.

     
(v) “Grant Date” means the date on which the
Committee approves the grant of an Award or such later date as
is specified by the Committee and set forth in the applicable
Award Agreement.

     
(w) “Incentive Stock Option” means an
“incentive stock option” within the meaning of Code
Section 422.

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(x) “Non-Employee Director” means a director of
Republic who is not an active employee of the Company.

     
(y) “Non-qualified Stock Option” means an Option
which is not an Incentive Stock Option.

     
(z) “Option” means an option to purchase Common
Stock granted pursuant to Section 7 of the Plan.

     
(aa) “Participant” means any Eligible Individual
who holds an Award under the Plan and any of such
individual’s successors or permitted assigns.

     
(bb) “Performance Goals” means the specified
performance goals which have been established by the Committee
in connection with an Award.

     
(cc) “Performance Period” means the period during
which Performance Goals must be achieved in connection with an
Award granted under the Plan.

     
(dd) “Performance Share” means a right to receive
a fixed number of shares of Common Stock, or the cash
equivalent, which is contingent on the achievement of certain
Performance Goals during a Performance Period.

     
(ee) “Performance Unit” means a right to receive
a designated dollar value, or shares of Common Stock of the
equivalent value, which is contingent on the achievement of
Performance Goals during a Performance Period.

     
(ff) “Person” shall mean any person, corporation,
partnership, limited liability company, joint venture or other
entity or any group (as such term is defined for purposes of
Section 13(d) of the Exchange Act), other than a Parent or
Subsidiary.

     
(gg) “Plan” means this Republic Services, Inc
2007 Stock Incentive Plan.

     
(hh) “Prospective Employee” means any individual
who has committed to become an employee of the Company within
sixty (60) days from the date an Award is granted to such
individual.

     
(ii) “Republic” means Republic Services, Inc., a
Delaware corporation.

     
(jj) “Restricted Stock” means Common Stock
subject to certain restrictions, as determined by the Committee,
and granted pursuant to Section 9 hereunder.

     
(kk) “Restricted Stock Unit” means the right to
receive to receive a fixed number of shares of Common Stock, or
the cash equivalent, granted pursuant to Section 9
hereunder.

     
(ll) “Section 424 Employee” means an
employee of Republic or any “subsidiary corporation”
or “parent corporation” as such terms are defined in
and in accordance with Code Section 424. The term
“Section 424 Employee” also includes employees of
a corporation issuing or assuming any Options in a transaction
to which Code Section 424(a) applies.

     
(mm) “Stock Appreciation Right” means the right
to receive all or some portion of the increase in value of a
fixed number of shares of Common Stock granted pursuant to
Section 8 hereunder.

     
(nn) “Transfer” means, as a noun, any direct or
indirect, voluntary or involuntary, exchange, sale, bequeath,
pledge, mortgage, hypothecation, encumbrance, distribution,

5

 

transfer, gift, assignment or other disposition or attempted
disposition of, and, as a verb, directly or indirectly,
voluntarily or involuntarily, to exchange, sell, bequeath,
pledge, mortgage, hypothecate, encumber, distribute, transfer,
give, assign or in any other manner whatsoever dispose or
attempt to dispose of.

4.     ELIGIBILITY

     
Awards may be granted under the Plan to any Eligible Individual
as determined by the Committee from time to time on the basis of
their importance to the business of the Company pursuant to the
terms of the Plan.

5.     ADMINISTRATION

     
(a) Committee. The Plan shall be administered
by the Committee, which shall have the full power and authority
to take all actions, and to make all determinations not
inconsistent with the specific terms and provisions of the Plan
deemed by the Committee to be necessary or appropriate to the
administration of the Plan, any Award granted or any Award
Agreement entered into hereunder. The Committee shall have
authority to issue Awards upon such terms (not inconsistent with
the provisions of this Plan) as the Committee may consider
appropriate. The terms of an Award may include (in addition to
those contained in this Plan) such conditions and limitations as
the Committee may consider appropriate in its sole discretion
for the protection of the interests of the Company and its
shareholders, including, without limitation, restrictions on
exercisability, vesting or transferability, forfeiture
provisions, and requirements for the disgorgement of gain. The
Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award
Agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect as it may determine in
its sole discretion. The decisions by the Committee shall be
final, conclusive and binding with respect to the interpretation
and administration of the Plan, any Award or any Award Agreement
entered into under the Plan.

     
(b) Advisors to Committee. The Committee may
designate employees of the Company and professional advisors to
assist the Committee in the administration of the Plan. The
Committee may grant authority to the Chief Executive Officer of
the Company or any other employee of the Company to execute
agreements or other documents on behalf of the Committee in
connection with the grant of an Award or the administration of
the Plan. The Committee may employ such legal counsel,
consultants, and agents as it may deem desirable for the
administration of the Plan and may rely upon any advice and any
computation received from any such counsel, consultant, or
agent. The Company shall pay all expenses and costs incurred by
the Committee for the engagement of any such counsel,
consultant, or agent.

     
(c) Participants Outside the U.S. In order to
conform with the provisions of local laws and regulations in
foreign countries in which the Company may operate, the
Committee shall have the sole discretion to (i) modify the
terms and conditions of the Awards granted under the Plan to
Eligible Individuals located outside the United States;
(ii) establish subplans with such modifications as may be
necessary or advisable under the circumstances presented by
local laws and regulations; and (iii) take any action which
it deems advisable to comply with or otherwise reflect any
necessary governmental regulatory procedures, or to obtain any
exemptions or approvals necessary with respect to the Plan or
any subplan established hereunder.

6

 

     
(d) Liability and Indemnification. No Covered
Individual shall be liable for any action or determination made
in good faith with respect to the Plan, any Award granted or any
Award Agreement entered into hereunder. The Company shall, to
the maximum extent permitted by applicable law and the Articles
of Incorporation and Bylaws of Republic, indemnify and hold
harmless each Covered Individual against any cost or expense
(including reasonable attorney fees reasonably acceptable to the
Company) or liability (including any amount paid in settlement
of a claim with the approval of the Company), and amounts
advanced to such Covered Individual necessary to pay the
foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in
connection with the Plan, any Award granted hereunder or any
Award Agreement entered into hereunder. Such indemnification
shall be in addition to any rights of indemnification such
individuals may have under applicable law or under the Articles
of Incorporation or Bylaws of Republic. Notwithstanding anything
else herein, this indemnification will not apply to the actions
or determinations made by a Covered Individual with regard to
Awards granted to such Covered Individual under the Plan or
arising out of such Covered Individual’s own fraud or bad
faith.

6.     COMMON STOCK

     
(a) Shares Available for Awards. The Common
Stock that may be issued pursuant to Awards granted under the
Plan shall be treasury shares or authorized but unissued shares
of the Common Stock. The total number of shares of Common Stock
that may be issued pursuant to Awards granted under the Plan
shall be Ten Million Five Hundred Thousand (10,500,000) shares
plus any shares of Common Stock that were subject to an award
granted pursuant to the Republic Services, Inc. 1998 Stock
Incentive Plan in which the award is cancelled, forfeited or
terminated for any reason after the Effective Date.

		
	 	     
    (i) With respect to the shares of Common Stock reserved
    pursuant to this Section, a maximum of Ten Million Five Hundred
    Thousand (10,500,000) of such shares may be subject to grants of
    Incentive Stock Options.
	 
	 	     
    (ii) With respect to the shares of Common Stock reserved
    pursuant to this Section, a maximum of Two Million Five Hundred
    Thousand (2,500,000) of such shares may be subject to grants of
    Options or Stock Appreciation Rights to any one Eligible
    Individual during any one fiscal year.
	 
	 	     
    (iii) With respect to the shares of Common Stock reserved
    pursuant to this Section, a maximum of One Million Two Hundred
    Fifty Thousand (1,250,000) of such shares may be subject to
    grants of Performance Shares, Restricted Stock and Awards of
    Common Stock to any one Eligible Individual during any one
    fiscal year.
	 
	 	     
    (iv) The maximum value at Grant Date of grants of
    Performance Units which may be granted to any one Eligible
    Individual during any one fiscal year shall be four million
    dollars ($4,000,000).

     
(b) Reduction of Shares Available for Awards.
Upon the granting of an Award, the number of shares of Common
Stock available under this Section hereof for the granting of
further Awards shall be reduced as follows:

		
	 	     
    (i) In connection with the granting of an Award that is
    settled in Common Stock, the number of shares of Common Stock
    shall be reduced by the number of shares of Common Stock subject
    to the Option or Stock Appreciation Right.

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    (ii) Awards settled in cash shall not count against the
    total number of shares of Common Stock available to be granted
    pursuant to the Plan.

     
(c) Cancelled, Forfeited, or Surrendered
Awards. Notwithstanding anything to the contrary in this
Plan, if any Award is cancelled, forfeited or terminated for any
reason prior to exercise or becoming vested in full, the shares
of Common Stock that were subject to such Award shall to the
extent cancelled, forfeited or terminated, immediately be
available for future Awards granted under the Plan as if said
Award had never been granted; provided, however, that any shares
of Common Stock subject to an Award, other than a Stock
Appreciation Right, which is cancelled, forfeited or terminated
in order to pay the Exercise Price, purchase price or any taxes
or tax withholdings on an Award shall not be available for
future Awards granted under the Plan. Any Common Stock subject
to a Stock Appreciation Right which is not issued upon settling
such Stock Appreciation Right shall be available for future
Awards granted under the Plan.

     
(d) Recapitalization. If the outstanding
shares of Common Stock are increased or decreased or changed
into or exchanged for a different number or kind of shares or
other securities of Republic by reason of any recapitalization,
reclassification, reorganization, stock split, reverse split,
combination of shares, exchange of shares, stock dividend or
other distribution payable in capital stock of Republic or other
increase or decrease in such shares effected without receipt of
consideration by Republic occurring after the Effective Date, an
appropriate and proportionate adjustment shall be made by the
Committee to (i) the aggregate number and kind of shares of
Common Stock available under the Plan; (ii) the aggregate
limit of the number of shares of Common Stock that may be
granted pursuant to an Incentive Stock Option, (iii) the
limits on the number of shares of Common Stock that may be
granted to an Eligible Employee in any one fiscal year;
(iv) the calculation of the reduction of shares of Common
Stock available under the Plan; (v) the number and kind of
shares of Common Stock issuable upon exercise (or vesting) of
outstanding Awards granted under the Plan; (vi) the
Exercise Price of outstanding Options granted under the Plan
and/or (vii) number of shares of Common Stock subject to
Awards granted to Non-Employee Directors under Section 11.
No fractional shares of Common Stock or units of other
securities shall be issued pursuant to any such adjustment under
this Section 6(d), and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share or unit. Any adjustments
made under this Section 6(d) with respect to any Incentive
Stock Options must be made in accordance with Code
Section 424.

7.     OPTIONS

     
(a) Grant of Options. Subject to the terms
and conditions of the Plan, the Committee may grant to such
Eligible Individuals as the Committee may determine, Options to
purchase such number of shares of Common Stock and on such terms
and conditions as the Committee shall determine in its sole and
absolute discretion. Each grant of an Option shall satisfy the
requirements set forth in this Section.

     
(b) Type of Options. Each Option granted
under the Plan may be designated by the Committee, in its sole
discretion, as either (i) an Incentive Stock Option, or
(ii) a Non-Qualified Stock Option. Options designated as
Incentive Stock Options that fail to continue to meet the
requirements of Code Section 422 shall be re-designated as
Non-Qualified Stock Options automatically on the date of such
failure to continue to meet such

8

 

requirements without further action by the Committee. In the
absence of any designation, Options granted under the Plan will
be deemed to be Non-Qualified Stock Options.

     
(c) Exercise Price. Subject to the
limitations set forth in the Plan relating to Incentive Stock
Options, the Exercise Price of an Option shall be fixed by the
Committee and stated in the respective Award Agreement, provided
that the Exercise Price of the shares of Common Stock subject to
such Option may not be less than Fair Market Value of such
Common Stock on the Grant Date, or if greater, the par value of
the Common Stock.

     
(d) Limitation on Repricing. Unless such
action is approved by the shareholders of Republic in accordance
with applicable law: (i) no outstanding Option granted
under the Plan may be amended to provide an Exercise Price per
share that is lower than the then-current Exercise Price of such
outstanding Option (other than adjustments to the Exercise Price
pursuant to Sections 6(d) and 12); (ii) the Committee
may not cancel any outstanding Option and grant in substitution
therefore new Awards under the Plan covering the same or a
different number of shares of Common Stock and having an
Exercise Price lower than the then-current Exercise Price of the
cancelled Option (other than adjustments to the Exercise Price
pursuant to Sections 6(d) and 12); and (iii) the
Committee may not authorize the repurchase of an outstanding
Option which has an Exercise Price that is higher than the
then-current Fair Market Value of the Common Stock (other than
adjustments to the Exercise Price pursuant to Sections 6(d)
and 12).

     
(e) Limitation on Option Period. Subject to
the limitations set forth in the Plan relating to Incentive
Stock Options, Options granted under the Plan and all rights to
purchase Common Stock thereunder shall terminate no later than
the seventh anniversary of the Grant Date of such Options, or on
such earlier date as may be stated in the Award Agreement
relating to such Option. In the case of Options expiring prior
to the seventh anniversary of the Grant Date, the Committee may
in its discretion, at any time prior to the expiration or
termination of said Options, extend the term of any such Options
for such additional period as it may determine, but in no event
beyond the seventh anniversary of the Grant Date thereof.

     
(f) No Reload of Stock Options. The Plan
shall not permit an additional automatic grant of an Option to a
Participant who exercises an Option by surrendering other shares
of Common Stock (“reload stock option”).

     
(g) Limitations on Incentive Stock Options.
Notwithstanding any other provisions of the Plan, the following
provisions shall apply with respect to Incentive Stock Options
granted pursuant to the Plan.

		
	 	     
    (i) Limitation on Grants. Incentive Stock
    Options may only be granted to Section 424 Employees. The
    aggregate Fair Market Value (determined at the time such
    Incentive Stock Option is granted) of the shares of Common Stock
    for which any individual may have Incentive Stock Options which
    first become vested and exercisable in any calendar year (under
    all incentive stock option plans of the Company) shall not
    exceed $100,000. Options granted to such individual in excess of
    the $100,000 limitation, and any Options issued subsequently
    which first become vested and exercisable in the same calendar
    year, shall automatically be treated as Non-qualified Stock
    Options.

9

 

		
	 	     
    (ii) Minimum Exercise Price. In no event may
    the Exercise Price of a share of Common Stock subject to an
    Incentive Stock Option be less than 100% the Fair Market Value
    of such share of Common Stock as of the Grant Date.
	 
	 	     
    (iii) Ten Percent Shareholder.
    Notwithstanding any other provision of the Plan to the contrary,
    in the case of Incentive Stock Options granted to a
    Section 424 Employee who, at the time the Option is
    granted, owns (after application of the rules set forth in Code
    Section 424(d)) stock possessing more than ten percent of
    the total combined voting power of all classes of stock of
    Republic, such Incentive Stock Options (i) must have an
    Exercise Price per share of Common Stock that is at least 110%
    of the Fair Market Value as of the Grant Date of a share of
    Common Stock, and (ii) must not be exercisable after the
    fifth anniversary of the Grant Date.

     
(h) Vesting Schedule and Conditions. No
Options may be exercised prior to the satisfaction of the
conditions and vesting schedule provided for in the Award
Agreement relating thereto. Except as otherwise provided in
Sections 11, 12 and 13 of the Plan, Options subject solely
to a future service requirement shall have a vesting period of
not less than one year from the Grant Date.

     
(i) Exercise. When the conditions to the
exercise of an Option have been satisfied, the Participant may
exercise the Option only in accordance with the following
provisions. The Participant shall deliver to Republic Services a
written notice stating that the Participant is exercising the
Option and specifying the number of shares of Common Stock which
are to be purchased pursuant to the Option, and such notice
shall be accompanied by payment in full of the Exercise Price of
the shares for which the Option is being exercised, by one or
more of the methods provided for in the Plan. Said notice must
be delivered to Republic at its principal office and addressed
to the attention of Stock Option Administrator, Republic
Services, Inc., 110 S.E. 6th Street, Suite 2800,
Ft. Lauderdale, FL 33301. The minimum number of shares of
Common Stock with respect to which an Option may be exercised,
in whole or in part, at any time shall be the lesser of one
hundred (100) shares or the maximum number of shares
available for purchase under the Option at the time of exercise.
An attempt to exercise any Option granted hereunder other than
as set forth in the Plan shall be invalid and of no force and
effect.

     
(j) Payment. Payment of the Exercise Price
for the shares of Common Stock purchased pursuant to the
exercise of an Option shall be made by one of the following
methods:

		
	 	     
    (i) by cash, certified or cashier’s check, bank draft
    or money order; or
	 
	 	     
    (ii) through the delivery to Republic of shares of Common
    Stock which have been previously owned by the Participant for
    the requisite period necessary to avoid a charge to
    Republic’s earnings for financial reporting purposes; such
    shares shall be valued, for purposes of determining the extent
    to which the Exercise Price has been paid thereby, at their Fair
    Market Value on the date of exercise; without limiting the
    foregoing, the Committee may require the Participant to furnish
    an opinion of counsel acceptable to the Committee to the effect
    that such delivery would not result in Republic incurring any
    liability under Section 16(b) of the Exchange Act; or
	 
	 	     
    (iii) by any other method which the Committee in its sole
    and absolute discretion and to the extent permitted by
    applicable law, may permit including but not limited to a
    “cashless exercise sale and remittance procedure”
    pursuant to which the Participant shall concurrently provide
    irrevocable instructions (A) to a brokerage firm

10

 

		
	 	
    approved by the Committee to effect the immediate sale of the
    purchased shares and remit to Republic, out of the sale proceeds
    available on the settlement date, sufficient funds to cover the
    aggregate Exercise Price payable for the purchased shares plus
    all applicable federal, state and local income, employment,
    excise, foreign and other taxes required to be withheld by the
    Company by reason of such exercise and (B) to Republic to
    deliver the certificates for the purchased shares directly to
    such brokerage firm in order to complete the sale.

     
(k) Termination of Employment, Disability or
Death. Unless otherwise provided in an Award Agreement,
upon the termination of the employment or other service of a
Participant with Company for any reason, all of the
Participant’s outstanding Options (whether vested or
unvested) shall be subject to the rules of this paragraph. Upon
such termination, the Participant’s unvested Options shall
expire. Notwithstanding anything in this Plan to the contrary,
the Committee may provide, in its sole and absolute discretion,
that following the termination of employment or other service of
a Participant with the Company for any reason (i) any
unvested Options held by the Participant that vest solely upon a
future service requirement shall vest in whole or in part, at
any time subsequent to such termination of employment or other
service, and or (ii) a Participant or the
Participant’s estate, devisee or heir at law (whichever is
applicable), may exercise an Option, in whole or in part, at any
time subsequent to such termination of employment or other
service and prior to the termination of the Option pursuant to
its terms. Unless otherwise determined by the Committee,
temporary absence from employment because of illness, vacation,
approved leaves of absence or military service shall not
constitute a termination of employment or other service.

		
	 	     
    (i) Termination for Reason Other Than Cause,
    Disability or Death. If a Participant’s termination
    of employment or other service is for any reason other than
    death, Disability, Cause, or a voluntary termination within
    ninety (90) days after occurrence of an event which would
    be grounds for termination of employment or other service by the
    Company for Cause, any Option held by such Participant, may be
    exercised, to the extent exercisable at termination, by the
    Participant at any time within a period not to exceed ninety
    (90) days from the date of such termination, but in no
    event after the termination of the Option pursuant to its terms.
	 
	 	     
    (ii) Disability. If a Participant’s
    termination of employment or other service with the Company is
    by reason of a Disability of such Participant, the Participant
    shall have the right at any time within a period not to exceed
    one (1) year after such termination, but in no event after
    the termination of the Option pursuant to its terms, to
    exercise, in whole or in part, any vested portion of the Option
    held by such Participant at the date of such termination;
    provided, however, that if the Participant dies within
    such period, any vested Option held by such Participant upon
    death shall be exercisable by the Participant’s estate,
    devisee or heir at law (whichever is applicable) for a period
    not to exceed one (1) year after the Participant’s
    death, but in no event after the termination of the Option
    pursuant to its terms.
	 
	 	     
    (iii) Death. If a Participant dies while in
    the employment or other service of the Company, the
    Participant’s estate or the devisee named in the
    Participant’s valid last will and testament or the
    Participant’s heir at law who inherits the Option has the
    right, at any time within a period not to exceed one
    (1) year after the date of such Participant’s death,
    but in no event after the termination of the Option pursuant to
    its terms, to exercise, in whole or in part, any portion of the
    vested Option held by such Participant at the date of such
    Participant’s death.

11

 

		
	 	     
    (iv) Termination for Cause. In the event the
    termination is for Cause or is a voluntary termination within
    ninety (90) days after occurrence of an event which would
    be grounds for termination of employment or other service by the
    Company for Cause (without regard to any notice or cure period
    requirement), any Option held by the Participant at the time of
    such termination shall be deemed to have terminated and expired
    upon the date of such termination.

8.     STOCK APPRECIATION RIGHTS

     
(a) Grant of Stock Appreciation Rights.
Subject to the terms and conditions of the Plan, the Committee
may grant to such Eligible Individuals as the Committee may
determine, Stock Appreciation Rights, in such amounts, and on
such terms and conditions as the Committee shall determine in
its sole and absolute discretion. Each grant of a Stock
Appreciation Right shall satisfy the requirements as set forth
in this Section.

     
(b) Terms and Conditions of Stock Appreciation
Rights. Unless otherwise provided in an Award Agreement,
the terms and conditions (including, without limitation, the
limitations on the Exercise Price, exercise period, repricing
and termination) of the Stock Appreciation Right shall be
substantially identical (to the extent possible taking into
account the differences related to the character of the Stock
Appreciation Right) to the terms and conditions that would have
been applicable under Section 7 above were the grant of the
Stock Appreciation Rights a grant of an Option.

     
(c) Exercise of Stock Appreciation Rights.
Stock Appreciation Rights shall be exercised by a Participant
only by written notice delivered to Republic Services,
specifying the number of shares of Common Stock with respect to
which the Stock Appreciation Right is being exercised.

     
(d) Payment of Stock Appreciation Right.
Unless otherwise provided in an Award Agreement, upon exercise
of a Stock Appreciation Right, the Participant or
Participant’s estate, devisee or heir at law (whichever is
applicable) shall be entitled to receive payment, in cash, in
shares of Common Stock, or in a combination thereof, as
determined by the Committee in its sole and absolute discretion.
The amount of such payment shall be determined by multiplying
the excess, if any, of the Fair Market Value of a share of
Common Stock on the date of exercise over the Fair Market Value
of a share of Common Stock on the Grant Date, by the number of
shares of Common Stock with respect to which the Stock
Appreciation Rights are then being exercised. Notwithstanding
the foregoing, the Committee may limit in any manner the amount
payable with respect to a Stock Appreciation Right by including
such limitation in the Award Agreement.

9.     RESTRICTED STOCK

     
(a) Grant of Restricted Stock. Subject to the
terms and conditions of the Plan, the Committee may grant to
such Eligible Individuals as the Committee may determine,
Restricted Stock, in such amounts and on such terms and
conditions as the Committee shall determine in its sole and
absolute discretion. Each grant of Restricted Stock shall
satisfy the requirements as set forth in this Section.

     
(b) Restrictions. The Committee shall impose
such restrictions on any Restricted Stock granted pursuant to
the Plan as it may deem advisable including, without limitation;
time based vesting restrictions, or the attainment of
Performance Goals. Except as otherwise provided by the Committee
in an Award Agreement in its sole and absolute

12

 

discretion, subject to Sections 12 and 13 of the Plan,
Restricted Stock covered by any Award under this Plan that are
subject solely to a future service requirement Restricted Stock
shall not vest prior to the first (1st) anniversary of the Grant
Date. Shares of Restricted Stock subject to the attainment of
Performance Goals will be released from restrictions only after
the attainment of such Performance Goals has been certified by
the Committee in accordance with Section 10(c).

     
(c) Certificates and Certificate Legend. With
respect to a grant of Restricted Stock, the Company may issue a
certificate evidencing such Restricted Stock to the Participant
or issue and hold such shares of Restricted Stock for the
benefit of the Participant until the applicable restrictions
expire. The Company may legend the certificate representing
Restricted Stock to give appropriate notice of such
restrictions. In addition to any such legends, each certificate
representing shares of Restricted Stock granted pursuant to the
Plan shall bear the following legend:

		
	 	     
    “The sale or other transfer of the shares of stock
    represented by this certificate, whether voluntary, involuntary,
    or by operation of law, are subject to certain terms,
    conditions, and restrictions on transfer as set forth in the
    Republic Services, Inc. 2007 Stock Incentive Plan (the
    “Plan”), and in an Agreement entered into by and
    between the registered owner of such shares and Republic
    Services, Inc. (the “Company”),
    dated                      (the
    “Award Agreement”). A copy of the Plan and the Award
    Agreement may be obtained from the Secretary of the
    Company.”

     
(d) Removal of Restrictions. Except as
otherwise provided in the Plan, shares of Restricted Stock shall
become freely transferable by the Participant upon the lapse of
the applicable restrictions. Once the shares of Restricted Stock
are released from the restrictions, the Participant shall be
entitled to have the legend required by paragraph (c) above
removed from the share certificate evidencing such Restricted
Stock and the Company shall pay or distribute to the Participant
all dividends and distributions held in escrow by the Company
with respect to such Restricted Stock.

     
(e) Shareholder Rights. Unless otherwise
provided in an Award Agreement, until the expiration of all
applicable restrictions, (i) the Restricted Stock shall be
treated as outstanding, (ii) the Participant holding shares
of Restricted Stock may exercise full voting rights with respect
to such shares, and (iii) the Participant holding shares of
Restricted Stock shall be entitled to receive all dividends and
other distributions paid with respect to such shares while they
are so held. If any such dividends or distributions are paid in
shares of Common Stock, such shares shall be subject to the same
restrictions on transferability and forfeitability as the shares
of Restricted Stock with respect to which they were paid.
Notwithstanding anything to the contrary, at the discretion of
the Committee, all such dividends and distributions may be held
in escrow by the Company (subject to the same restrictions on
forfeitability) until all restrictions on the respective
Restricted Stock have lapsed.

     
(f) Termination of Service. Unless otherwise
provided in a Award Agreement, if a Participant’s
employment or other service with the Company terminates for any
reason, all unvested shares of Restricted Stock held by the
Participant and any dividends or distributions held in escrow by
Republic with respect to such Restricted Stock shall be
forfeited immediately and returned to the Company.
Notwithstanding this paragraph, all grants of Restricted Stock
that vest solely upon the attainment of Performance Goals shall
be treated pursuant to the terms and conditions that would have
been applicable under Section 9(c) as if such grants of
Restricted Stock were Awards of Performance Shares.

13

 

Notwithstanding anything in this Plan to the contrary, the
Committee may provide, in its sole and absolute discretion, that
following the termination of employment or other service of a
Participant with the Company for any reason, any unvested shares
of Restricted Stock held by the Participant that vest solely
upon a future service requirement shall vest in whole or in
part, at any time subsequent to such termination of employment
or other service.

10.     PERFORMANCE SHARES AND
PERFORMANCE UNITS

     
(a) Grant of Performance Shares and Performance
Units. Subject to the terms and conditions of the Plan,
the Committee may grant to such Eligible Individuals as the
Committee may determine, Performance Shares and Performance
Units, in such amounts, and on such terms and conditions the
Committee shall determine in its sole and absolute discretion.
Each grant of a Performance Share or a Performance Unit shall
satisfy the requirements as set forth in this Section.

     
(b) Performance Goals. Performance Goals will
be based on one or more of the following criteria, as determined
by the Committee in its absolute and sole discretion:
(i) the attainment of certain target levels of, or a
specified increase in, Republic’s enterprise value or value
creation targets; (ii) the attainment of certain target
levels of, or a percentage increase in, Republic’s
after-tax or pre-tax profits including, without limitation, that
attributable to Republic’s continuing and/or other
operations; (iii) the attainment of certain target levels
of, or a specified increase relating to, Republic’s
operational cash flow or working capital, or a component
thereof; (iv) the attainment of certain target levels of,
or a specified decrease relating to, Republic’s operational
costs, or a component thereof (v) the attainment of a
certain level of reduction of, or other specified objectives
with regard to limiting the level of increase in all or a
portion of bank debt or other of Republic’s long-term or
short-term public or private debt or other similar financial
obligations of Republic, which may be calculated net of cash
balances and/or other offsets and adjustments as may be
established by the Committee; (vi) the attainment of a
specified percentage increase in earnings per share or earnings
per share from Republic’s continuing operations;
(vii) the attainment of certain target levels of, or a
specified percentage increase in, Republic’s net sales,
revenues, net income or earnings before income tax or other
exclusions; (viii) the attainment of certain target levels
of, or a specified increase in, Republic’s return on
capital employed or return on invested capital; (ix) the
attainment of certain target levels of, or a percentage increase
in, Republic’s after-tax or pre-tax return on shareholder
equity; (x) the attainment of certain target levels in the
fair market value of Republic’s Common Stock; (xi) the
growth in the value of an investment in the Common Stock
assuming the reinvestment of dividends; and/or (xii) the
attainment of certain target levels of, or a specified increase
in, EBITDA (earnings before income tax, depreciation and
amortization). In addition, Performance Goals may be based upon
the attainment by a subsidiary, division or other operational
unit of Republic of specified levels of performance under one or
more of the measures described above. Further, the Performance
Goals may be based upon the attainment by Republic (or a
subsidiary, division or other operational unit of Republic) of
specified levels of performance under one or more of the
foregoing measures relative to the performance of other
corporations. To the extent permitted under Code
Section 162(m) of the Code (including, without limitation,
compliance with any requirements for shareholder approval), the
Committee may, in its sole and absolute discretion:
(i) designate additional business criteria upon which the
Performance Goals may be based; (ii) modify, amend or
adjust the business criteria described herein or
(iii) incorporate in the Performance Goals

14

 

provisions regarding changes in accounting methods, corporate
transactions (including, without limitation, dispositions or
acquisitions) and similar events or circumstances. Performance
Goals may include a threshold level of performance below which
no Award will be earned, levels of performance at which an Award
will become partially earned and a level at which an Award will
be fully earned.

     
(c) Terms and Conditions of Performance Shares and
Performance Units. The applicable Award Agreement shall
set forth (i) the number of Performance Shares or the
dollar value of Performance Units granted to the Participant;
(ii) the Performance Period and Performance Goals with
respect to each such Award; (iii) the threshold, target and
maximum shares of Common Stock or dollar values of each
Performance Share or Performance Unit and corresponding
Performance Goals, and (iv) any other terms and conditions
as the Committee determines in its sole and absolute discretion.
The Committee shall establish, in its sole and absolute
discretion, the Performance Goals for the applicable Performance
Period for each Performance Share or Performance Unit granted
hereunder. Performance Goals for different Participants and for
different grants of Performance Shares and Performance Units
need not be identical. Unless otherwise provided in an Award
Agreement, the Participants’ rights as a shareholder in
Performance Shares shall be substantially identical to the terms
and conditions that would have been applicable under
Section 9 above if the Performance Shares were Restricted
Stock. A holder of Performance Units is not entitled to the
rights of a holder of our Common Stock.

     
(d) Determination and Payment of Performance Units or
Performance Shares Earned. As soon as practicable after
the end of a Performance Period, the Committee shall determine
the extent to which Performance Shares or Performance Units have
been earned on the basis of the Company’s actual
performance in relation to the established Performance Goals as
set forth in the applicable Award Agreement and shall certify
these results in writing. As soon as practicable after the
Committee has determined that an amount is payable or should be
distributed with respect to a Performance Share or a Performance
Unit, the Committee shall cause the amount of such Award to be
paid or distributed to the Participant or the Participant’s
estate, devisee or heir at law (whichever is applicable). Unless
otherwise provided in an Award Agreement, the Committee shall
determine in its sole and absolute discretion whether payment
with respect to the Performance Share or Performance Unit shall
be made in cash, in shares of Common Stock, or in a combination
thereof. For purposes of making payment or a distribution with
respect to a Performance Share or Performance Unit, the cash
equivalent of a share of Common Stock shall be determined by the
Fair Market Value of the Common Stock on the day the Committee
designates the Performance Shares or Performance Units to be
payable.

     
(e) Termination of Employment. Unless
otherwise provided in an Award Agreement, if a
Participant’s employment or other service with the Company
terminates for any reason, all of the Participant’s
outstanding Performance Shares and Performance Units shall be
subject to the rules of this Section.

		
	 	     
    (i) Termination for Reason Other Than Death or
    Disability. If a Participant’s employment or other
    service with the Company terminates prior to the expiration of a
    Performance Period with respect to any Performance Units or
    Performance Shares held by such Participant for any reason other
    than death or Disability the outstanding Performance Units or
    Performance Shares held by such Participant for which the
    Performance Period has not yet expired shall terminate upon such
    termination and the

15

 

		
	 	
    Participant shall have no further rights pursuant to such
    Performance Units or Performance Shares.
	 
	 	     
    (ii) Termination of Employment for Death or
    Disability. If a Participant’s employment or other
    service with the Company terminates by reason of the
    Participant’s death or Disability prior to the end of a
    Performance Period, the Participant, or the Participant’s
    estate, devisee or heir at law (whichever is applicable) shall
    be entitled to a payment of the Participant’s outstanding
    Performance Units and Performance Share at the end of the
    applicable Performance Period, pursuant to the terms of the Plan
    and the Participant’s Award Agreement; provided,
    however, that the Participant shall be deemed to have earned
    only that proportion (to the nearest whole unit or share) of the
    Performance Units or Performance Shares granted to the
    Participant under such Award as the number of months of the
    Performance Period which have elapsed since the first day of the
    Performance Period for which the Award was granted to the end of
    the month in which the Participant’s termination of
    employment or other service, bears to the total number of months
    in the Performance Period, subject to the attainment of the
    Performance Goals associated with the Award as certified by the
    Committee. The right to receive any remaining Performance Units
    or Performance Shares shall be canceled and forfeited.

11.     AWARD GRANTS TO NON-EMPLOYEE
DIRECTORS

     
Vesting of Certain Non-Employee Director Awards.
Notwithstanding the minimum vesting provisions in
Section 7(h) and 9(b) of the Plan, any Award granted to a
Non-Employee Director in lieu of cash compensation shall not be
subject to any minimum vesting requirements.

12.     CHANGE IN CONTROL

     
Unless otherwise provided in an Award Agreement, all Awards
shall immediately become exercisable or vested, without regard
to any limitation imposed pursuant to this Plan. Prior to a
Change in Control of Republic, the Committee may in its sole and
absolute discretion, provide on a case by case basis that
(i) all Awards shall terminate, provided that Participants
shall have the right, immediately prior to the occurrence of
such Change in Control and during such reasonable period as the
Committee in its sole discretion shall determine and designate,
to exercise Awards in whole or in part, (ii) all Awards
shall terminate provided that Participants shall be entitled to
a cash payment equal to the Change in Control Price with respect
to shares subject to the Award net of the Exercise Price thereof
(if applicable), (iv) provide that, in connection with a
liquidation or dissolution of Republic, Awards shall convert
into the right to receive liquidation proceeds net of the
Exercise Price (if applicable) and (v) any combination of
the foregoing; provided, however, that all Awards shall be
treated as immediately exercisable and vested. The Committee
shall not take any action permitted by this Section unless
counsel for Republic determines that such action will not result
in adverse tax consequences to a Participant under
Section 409A of the Code. In the event that the Committee
does not terminate or convert an Award upon a Change in Control
of Republic, then the Award shall be assumed, or substantially
equivalent Awards shall be substituted, by the acquiring, or
succeeding corporation (or an affiliate thereof).

16

 

13.     CHANGE IN STATUS OF PARENT
OR SUBSIDIARY

     
Unless otherwise provided in an Award Agreement or otherwise
determined by the Committee, in the event that an entity which
was previously a part of the Company is no longer a part of the
Company, as determined by the Committee in its sole discretion,
the Committee may, in its sole and absolute discretion
(i) provide on a case by case basis that some or all
outstanding Awards held by a Participant employed by or
performing service for such entity may become immediately
exercisable or vested, without regard to any limitation imposed
pursuant to this Plan; (ii) provide on a case by case basis
that some or all outstanding Awards held by a Participant
employed by or performing service for such entity or business
unit may remain outstanding, may continue to vest, and/or may
remain exercisable for a period not exceeding one (1) year,
subject to the terms of the Award Agreement and this Plan;
and/or (iii) treat the employment or other services of a
Participant employed by such entity as terminated if such
Participant is not employed by Republic or any entity that is a
part of the Company immediately after such event.

14.     REQUIREMENTS OF LAW

     
(a) Violations of Law. The Company shall not
be required to sell or issue any shares of Common Stock under
any Award if the sale or issuance of such shares would
constitute a violation by the individual exercising the Award,
the Participant or the Company of any provisions of any law or
regulation of any governmental authority, including without
limitation any provisions of the Sarbanes-Oxley Act, and any
other federal or state securities laws or regulations. Any
determination in this connection by the Committee shall be
final, binding, and conclusive. The Company shall not be
obligated to take any affirmative action in order to cause the
exercise of an Award, the issuance of shares pursuant thereto or
the grant of an Award to comply with any law or regulation of
any governmental authority.

     
(b) Registration. At the time of any exercise
or receipt of any Award, the Company may, if it shall determine
it necessary or desirable for any reason, require the
Participant (or Participant’s heirs, legatees or legal
representative, as the case may be), as a condition to the
exercise or grant thereof, to deliver to the Company a written
representation of present intention to hold the shares for their
own account as an investment and not with a view to, or for sale
in connection with, the distribution of such shares, except in
compliance with applicable federal and state securities laws
with respect thereto. In the event such representation is
required to be delivered, an appropriate legend may be placed
upon each certificate delivered to the Participant (or
Participant’s heirs, legatees or legal representative, as
the case may be) upon the Participant’s exercise of part or
all of the Award or receipt of an Award and a stop transfer
order may be placed with the transfer agent. Each Award shall
also be subject to the requirement that, if at any time the
Company determines, in its discretion, that the listing,
registration or qualification of the shares subject to the Award
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body
is necessary or desirable as a condition of or in connection
with, the issuance or purchase of the shares thereunder, the
Award may not be exercised in whole or in part and the
restrictions on an Award may not be removed unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to
the Company in its sole discretion. The Participant shall
provide the Company with any certificates, representations and
information that the Company requests and shall otherwise
cooperate with the Company in obtaining any listing,
registration, qualification, consent or

17

 

approval that the Company deems necessary or appropriate. The
Company shall not be obligated to take any affirmative action in
order to cause the exercisability or vesting of an Award, to
cause the exercise of an Award or the issuance of shares
pursuant thereto, or to cause the grant of Award to comply with
any law or regulation of any governmental authority.

     
(c) Withholding for Taxes; Set-Off for Debt.
Whenever the Company proposes or is required to issue or
transfer shares of Common Stock to a Participant under the Plan,
the Company shall have the right to require the Participant to
remit to the Company an amount sufficient to satisfy all
federal, state and local withholding tax requirements prior to
the delivery of any certificate or certificates for such shares.
If such certificates have been delivered prior to the time a
withholding obligation arises, the Company shall have the right
to require the Participant to remit to the Company an amount
sufficient to satisfy all federal, state or local withholding
tax requirements at the time such obligation arises and to
withhold from other amounts payable to the Participant, as
compensation or otherwise, as necessary. Whenever payments under
the Plan are to be made to a Participant in cash, such payments
shall be net of any amounts sufficient to satisfy all federal,
state and local withholding tax requirements. In lieu of
requiring a Participant to make a payment to the Company in an
amount related to the withholding tax requirement, the Committee
may, in its discretion, provide that at the Participant’s
election, the tax withholding obligation shall be satisfied by
the Company’s withholding a portion of the shares otherwise
distributable to the Participant, such shares being valued at
their fair market value at the date of exercise, or by the
Participant’s delivering to the Company a portion of the
shares previously delivered by the Company, such shares being
valued at their fair market value as of the date of delivery of
such shares by the Participant to the Company.

     
In addition, the Company shall have the right of set-off for
debt to the Company (Employee Debt) incurred by a Participant
whose employment has terminated but who exercises options
subject to the Plan. In such instance, the Company may withhold
payment or portion of the shares otherwise distributable to the
Participant, such shares being valued at their fair market value
at the date of the exercise, in an amount equal to such Employee
Debt (which may include, but is not limited to, amounts owed the
Company for breaches of any security agreement, relocation
expense agreement or other indebtedness).

     
(d) Governing Law. The Plan shall be governed
by, and construed and enforced in accordance with, the laws of
the State of Delaware.

15.     GENERAL PROVISIONS

     
(a) Award Agreements. All Awards granted
pursuant to the Plan shall be evidenced by an Award Agreement.
Each Award Agreement shall specify the terms and conditions of
the Award granted and shall contain any additional provisions,
as the Committee shall deem appropriate, in its sole and
absolute discretion (including, to the extent that the Committee
deems appropriate, provisions relating to confidentiality,
non-competition, non-solicitation and similar matters). The
terms of each Award Agreement need not be identical for Eligible
Individuals provided that all Award Agreements comply with the
terms of the Plan.

     
(b) Purchase Price. To the extent the
purchase price of any Award granted hereunder is less than par
value of a share of Common Stock and such purchase price is

18

 

not permitted by applicable law, the per share purchase price
shall be deemed to be equal to the par value of a share of
Common Stock.

     
(c) Dividends and Dividend Equivalents.
Except as provided by the Committee in its sole and absolute
discretion or as otherwise provided in Sections 6(d), 9(e)
and 10 of the Plan, a Participant shall not be entitled to
receive, currently or on a deferred basis, cash or stock
dividends, Dividend Equivalents, or cash payments in amounts
equivalent to cash or stock dividends on shares of Commons Stock
covered by an Award which has not vested or an Option. The
Committee in its absolute and sole discretion may credit a
Participant’s Award with Dividend Equivalents with respect
to any Awards. To the extent that dividends and distributions
relating to an Award are held in escrow by the Company, or
Dividend Equivalents are credited to an Award, a Participant
shall not be entitled to any interest on any such amounts. The
Committee may not grant Dividend Equivalents to an Award subject
to performance-based vesting to the extent that the grant of
such Dividend Equivalents would limit the Company’s
deduction of the compensation payable under such Award for
federal tax purposes pursuant to Code Section 162(m).

     
(d) Deferral of Awards. The Committee may
from time to time establish procedures pursuant to which a
Participant may elect to defer, until a time or times later than
the vesting of an Award, receipt of all or a portion of the
shares of Common Stock or cash subject to such Award and to
receive Common Stock or cash at such later time or times, all on
such terms and conditions as the Committee shall determine. The
Committee shall not permit the deferral of an Award unless
counsel for Republic determines that such action will not result
in adverse tax consequences to a Participant under
Section 409A of the Code. If any such deferrals are
permitted, then notwithstanding anything to the contrary herein,
a Participant who elects to defer receipt of Common Stock shall
not have any rights as a shareholder with respect to deferred
shares of Common Stock unless and until shares of Common Stock
are actually delivered to the Participant with respect thereto,
except to the extent otherwise determined by the Committee.

     
(e) Prospective Employees. Notwithstanding
anything to the contrary, any Award granted to a Prospective
Employee shall not become vested prior to the date the
Prospective Employee first becomes an employee of the Company.

     
(f) Issuance of Certificates; Shareholder’s
Rights. Republic shall deliver to the Participant a
certificate evidencing the Participant’s ownership of
shares of Common Stock issued pursuant to the exercise of an
Award as soon as administratively practicable after satisfaction
of all conditions relating to the issuance of such shares. A
Participant shall not have any of the rights of a shareholder
with respect to such Common Stock prior to satisfaction of all
conditions relating to the issuance of such Common Stock, and,
except as expressly provided in the Plan, no adjustment shall be
made for dividends, distributions or other rights of any kind
for which the record date is prior to the date on which all such
conditions have been satisfied.

     
(g) Transferability of Awards. A Participant
may not Transfer an Award other than by will or the laws of
descent and distribution. Awards may be exercised during the
Participant’s lifetime only by the Participant. No Award
shall be liable for or subject to the debts, contracts, or
liabilities of any Participant, nor shall any Award be subject
to legal process or attachment for or against such person. Any
purported Transfer of an Award in contravention of the
provisions of the Plan shall have no force or effect and shall
be null and void, and the purported transferee of such Award
shall not acquire any rights with respect to such Award.
Notwithstanding anything to the contrary, the Committee may

19

 

in its sole and absolute discretion permit the Transfer of an
Award to a Participant’s “family member” as such
term is defined in the
Form S-8
Registration Statement under the Securities Act of 1933, as
amended, under such terms and conditions as specified by the
Committee. In such case, such Award shall be exercisable only by
the transferee approved of by the Committee. To the extent that
the Committee permits the Transfer of an Incentive Stock Option
to a “family member”, so that such Option fails to
continue to satisfy the requirements of an incentive stock
option under the Code such Option shall automatically be
re-designated as a Non-Qualified Stock Option.

     
(h) Buyout and Settlement Provisions. Except
as prohibited in Section 7(d) of the Plan, the Committee
may at any time on behalf of Republic offer to buy out any
Awards previously granted based on such terms and conditions as
the Committee shall determine which shall be communicated to the
Participants at the time such offer is made.

     
(i) Use of Proceeds. The proceeds received by
Republic from the issuance of Common Stock pursuant to Awards
granted under the Plan shall constitute general funds of
Republic.

     
(j) Modification or Substitution of an Award.
Subject to the terms and conditions of the Plan, the Committee
may modify outstanding Awards. Notwithstanding the following, no
modification of an Award shall adversely affect any rights or
obligations of the Participant under the applicable Award
Agreement without the Participant’s consent. The Committee
in its sole and absolute discretion may rescind, modify, or
waive any vesting requirements or other conditions applicable to
an Award. Notwithstanding the foregoing, without the approval of
the shareholders of Republic, an Award may not be modified to
reduce the exercise price thereof nor may an Award at a lower
price be substituted for a surrender of an Award, provided that
(i) the foregoing shall not apply to adjustments or
substitutions in accordance with Section 6 or
Section 12, and (ii) if an Award is modified, extended
or renewed and thereby deemed to be in issuance of a new Award
under the Code or the applicable accounting rules, the exercise
price of such Award may continue to be the original Exercise
Price even if less than Fair Market Value of the Common Stock at
the time of such modification, extension or renewal.

     
(k) Amendment and Termination of Plan. The
Board may, at any time and from time to time, amend, suspend or
terminate the Plan as to any shares of Common Stock as to which
Awards have not been granted; provided, however, that the
approval of the shareholders of Republic in accordance with
applicable law and the Articles of Incorporation and Bylaws of
Republic shall be required for any amendment: (i) that
changes the class of individuals eligible to receive Awards
under the Plan; (ii) that increases the maximum number of
shares of Common Stock in the aggregate that may be subject to
Awards that are granted under the Plan (except as permitted
under Section 5 or Section 12 hereof); (iii) the
approval of which is necessary to comply with federal or state
law (including without limitation Section 162(m) of the
Code and
Rule 16b-3 under
the Exchange Act) or with the rules of any stock exchange or
automated quotation system on which the Common Stock may be
listed or traded; or (iv) that proposed to eliminate a
requirement provided herein that the shareholders of Republic
must approve an action to be undertaken under the Plan. Except
as permitted under Section 5 or Section 12 hereof, no
amendment, suspension or termination of the Plan shall, without
the consent of the holder of an Award, alter or impair rights or
obligations under any Award theretofore granted under the Plan.
Awards granted prior to the termination of the Plan may extend
beyond the date the Plan is terminated and shall continue
subject to the terms of the Plan as in effect on the date the
Plan is terminated

20

 

     
(l) Section 409A of the Code. With
respect to Awards subject to Section 409A of the Code, this
Plan is intended to comply with the requirements of such
Section, and the provisions hereof shall be interpreted in a
manner that satisfies the requirements of such Section and the
related regulations, and the Plan shall be operated accordingly.
If any provision of this Plan or any term or condition of any
Award would otherwise frustrate or conflict with this intent,
the provision, term or condition will be interpreted and deemed
amended so as to avoid this conflict.

     
(m) Notification of 83(b) Election. If in
connection with the grant of any Award any Participant makes an
election permitted under Code Section 83(b), such
Participant must notify the Company in writing of such election
within ten (10) days of filing such election with the
Internal Revenue Service.

     
(n) Detrimental Activity. All Awards shall be
subject to cancellation by the Committee in accordance with the
terms of this Section 15(n) if the Participant engages in
any Detrimental Activity. To the extent that a Participant
engages in any Detrimental Activity at any time prior to, or
during the one year period after, any exercise or vesting of an
Award but prior to a Change in Control, the Company shall, upon
the recommendation of the Committee, in its sole and absolute
discretion, be entitled to (i) immediately terminate and
cancel any Awards held by the Participant that have not yet been
exercised, and/or (ii) with respect to Awards of the
Participant that have been previously exercised, recover from
the Participant at any time within two (2) years after such
exercise but prior to a Change in Control (and the Participant
shall be obligated to pay over to the Company with respect to
any such Award previously held by such Participant):
(A) with respect to any Options exercised, an amount equal
to the excess of the Fair Market Value of the Common Stock for
which any Option was exercised over the Exercise Price paid
(regardless of the form by which payment was made) with respect
to such Option; (B) with respect to any Award other than an
Option, any shares of Common Stock granted and vested pursuant
to such Award, and if such shares are not still owned by the
Participant, the Fair Market Value of such shares on the date
they were issued, or if later, the date all vesting restrictions
were satisfied; and (C) any cash or other property (other
than Common Stock) received by the Participant from the Company
pursuant to an Award. Without limiting the generality of the
foregoing, in the event that a Participant engages in any
Detrimental Activity at any time prior to any exercise of an
Award and the Company exercises its remedies pursuant to this
Section 15(n) following the exercise of such Award, such
exercise shall be treated as having been null and void, provided
that the Company will nevertheless be entitled to recover the
amounts referenced above.

     
(o) Disclaimer of Rights. No provision in the
Plan, any Award granted or any Award Agreement entered into
pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ of or other service
with the Company or to interfere in any way with the right and
authority of the Company either to increase or decrease the
compensation of any individual, including any holder of an
Award, at any time, or to terminate any employment or other
relationship between any individual and the Company. The grant
of an Award pursuant to the Plan shall not affect or limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or
liquidate, or to sell or transfer all or any part of its
business or assets.

     
(p) Unfunded Status of Plan. The Plan is
intended to constitute an “unfunded” plan for
incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested
interest but which are not yet made to such Participant

21

 

by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general
creditor of the Company.

     
(q) Nonexclusivity of Plan. The adoption of
the Plan shall not be construed as creating any limitations upon
the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals
or specifically to a particular individual or individuals) as
the Board in its discretion determines desirable.

     
(r) Other Benefits. No Award payment under
the Plan shall be deemed compensation for purposes of computing
benefits under any retirement plan of the Company or any
agreement between a Participant and the Company, nor affect any
benefits under any other benefit plan of the Company now or
subsequently in effect under which benefits are based upon a
Participant’s level of compensation.

     
(s) Headings. The section headings in the
Plan are for convenience only; they form no part of this
Agreement and shall not affect its interpretation.

     
(t) Pronouns. The use of any gender in the
Plan shall be deemed to include all genders, and the use of the
singular shall be deemed to include the plural and vice versa,
wherever it appears appropriate from the context.

     
(u) Successors and Assigns. The Plan shall be
binding on all successors of the Company and all successors and
permitted assigns of a Participant, including, but not limited
to, a Participant’s estate, devisee, or heir at law.

     
(v) Severability. If any provision of the
Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the
remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.

     
(w) Notices. Any communication or notice
required or permitted to be given under the Plan shall be in
writing, and mailed by registered or certified mail or delivered
by hand, to Republic, to its principal place of business,
attention: General Counsel, and if to the holder of an Award, to
the address as appearing on the records of the Company.

22

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