RESTRICTED STOCK UNIT AWARD AGREEMENT
Exhibit 10.10
This Restricted Stock Unit Award Agreement (“Agreement”) is entered into effective as of
January 27, 2006 (the “Grant Date”), by and between Waste Management, Inc., a Delaware
corporation (together with its Subsidiaries and Affiliates, the “Company”), and «Full_NameFirst»
(the “Employee”), pursuant to the Waste Management, Inc. 2004 Stock Incentive Plan (the “Plan”).
Employee and the Company agree to execute such further instruments and to take such further action
as may reasonably be necessary to carry out the intent of this Agreement.
(a) Vesting Schedule. For a period of four (4) years commencing on the Grant
Date, the Restricted Stock Units will be subject to the restrictions as set forth herein;
provided, however, that, unless earlier vested or forfeited pursuant to this Agreement, the
restrictions will lapse on certain anniversary dates of the Grant Date on a number of units
during the Restricted Period as determined in accordance with the following schedule:
| Percentage of Units granted on the Grant | ||||||
| Date | Date to be Vested | |||||
First anniversary of Grant Date |
25 | % | ||||
Second anniversary of Grant Date |
50 | % | ||||
Third anniversary of Grant Date |
75 | % | ||||
Fourth anniversary Grant Date |
100 | % | ||||
When applying this schedule, any fractional units shall be rounded up to the next whole
unit, but in the aggregate may not exceed the total number of Restricted Stock Units granted
on the Grant Date. Unless timely deferred by Employee in accordance with Section 5, upon
vesting, each Restricted Stock Unit will be converted into one share of Company Common Stock
and Employee will be issued shares of Common Stock equal to the number of Restricted Stock
Units held, free of any restrictions.
(i) Acceleration on Death or Disability. Upon Termination of
Employment from the Company by reason of Employee’s death or disability (as
determined by the Committee), or upon Employee’s disability prior to a Termination
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of Employment (as determined by the Committee and within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”))
all Restricted Stock Units that are not vested at that time immediately will become
vested in full.
(ii) Pro-rated Vesting upon Involuntary Termination by the Company or
Retirement by Employee. Upon either an involuntary Termination of Employment
without Cause by the Company or a qualifying Retirement by Employee, Employee will
be entitled to have vested under this award (including the amount of Restricted
Stock Units that have already vested at that time) the amount of Restricted Stock
Units equivalent to the total Restricted Stock Units granted under this Agreement
multiplied by the fraction which has as its numerator the total number of days that
Employee was employed by the Company during the period beginning on the Grant Date,
and has as its denominator 1,460 (being four times 365 days).
(iii) Possible Acceleration upon Change in Control or Certain Terminations
Following Change in Control. If there is a Change in Control of Waste
Management, Inc., all outstanding but unvested Restricted Stock Units that are not
vested will become immediately vested in full, unless the successor entity assumes
all awards granted under the Plan and converts the awards to equivalent grants in
the successor effective as of the Change in Control. Provided, however, even if the
successor entity so assumes and converts all awards granted under the Plan, if the
successor entity terminates Employee’s employment during the Window Period without
Cause (as each term is defined in Section 16 below), or due to Employee’s death or
disability, then all outstanding but unvested Restricted Stock Units (or its
equivalent grant in the successor entity) will become immediately vested in full as
of such termination.
(a) Absent prior written consent of the Committee, the Restricted Stock Units granted
hereunder to Employee may not be sold, assigned, transferred, pledged or otherwise
encumbered, whether voluntarily or involuntarily, by operation of law or otherwise, from the
Grant Date until such shares have become vested and not subject to deferral.
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(b) Consistent with the foregoing, except as contemplated by Section 10, no right or
benefit under this Agreement shall be subject to transfer, anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, whether voluntary, involuntary, by operation of
law or otherwise, and any attempt to transfer, anticipate, alienate, sell, assign, pledge,
encumber or charge the same shall be void. No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities or torts of the person
entitled to such benefits. If Employee or his or her Beneficiary hereunder shall attempt to
transfer, anticipate, alienate, assign, sell, pledge, encumber or charge any right or
benefit hereunder, other than as contemplated by Section 10, or if any creditor shall
attempt to subject the same to a writ of garnishment, attachment, execution, sequestration,
or any other form of process or involuntary lien or seizure, then such attempt shall have no
effect and shall be void.
(a) The Committee may establish procedures pursuant to which Employee may elect to
defer, until a time or times later than the vesting of a Restricted Stock Unit, receipt of
all or a portion of the shares of Common Stock deliverable in respect of a Restricted Stock
Unit, all on such terms and conditions as Company shall determine in its sole discretion. If
any such deferrals are permitted for Employee, then notwithstanding any provision of this
Agreement or the Plan to the contrary, an Employee who elects such deferral shall not have
any rights as a stockholder with respect to any such deferred shares of Common Stock unless
and until the date the deferral expires and certificates representing such shares are
required to be delivered to Employee.
(b) Notwithstanding any provision to the contrary in this Agreement, if deferral of
Restricted Stock Units is permitted, each provision of this Agreement shall be interpreted
to permit the deferral of compensation only as allowed in compliance with the requirements
of Section 409A of the Internal Revenue Code and any provision that would conflict with such
requirements shall not be valid or enforceable. Employee acknowledges, without limitation,
and consents that application of Section 409A of the Internal Revenue Code to this Agreement
may require additional delay of payments otherwise payable under this Agreement. Employee
and the Company further hereby agree to execute such further instruments and take such
further action as reasonably may be necessary to comply with Section 409A of the Internal
Revenue Code.
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subject to a deferral election of Employee pursuant to Section 5, the Company will pay Dividend
Equivalents in the form of cash or additional Restricted Stock Units, at Employee’s election, at
such time as dividends are paid on the Company’s outstanding shares of Common Stock.
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the
Restricted Stock Units shall pass by will or, if none, then by the laws of descent and
distribution.
(a) This Agreement shall bind and inure to the benefit of and be enforceable by
Employee, the Company and their respective permitted successors or assigns (including
personal representatives, heirs and legatees), except that Employee may not assign any
rights or obligations under this Agreement except to the extent, and in the manner,
expressly permitted herein.
(b) The Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company that assumes all Awards granted under the Plan as contemplated by
Section 2(c)(iii) to assume expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no such
succession had taken place, subject to the vesting rights under Section 2(c)(iii).
12. Limitation of Rights. Nothing in this Agreement or the Plan may be construed
to:
(a) give Employee any right to be awarded any further Restricted Stock Units (or other
form of stock incentive awards) other than in the sole discretion of the Committee;
(b) give Employee or any other person any interest in any fund or in any specified
asset or assets of the Company (other than the Restricted Stock Units and applicable Common
Stock following the vesting of such Restricted Stock Units); or
(c) confer upon Employee the right to continue in the employment or service of the
Company.
13. Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Texas, without reference to principles of conflict of laws.
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(a) “Board” means the Board of Directors of Waste Management, Inc.
(b) “Cause” means any of the following: (i) willful or deliberate and continual refusal
to materially perform Employee’s employment duties reasonably requested by the Company after
receipt of written notice to Employee of such failure to perform, specifying such failure
(other than as a result of Employee’s sickness, illness, injury, death or disability) and
Employee fails to cure such nonperformance within ten (10) days of receipt of said written
notice; (ii) breach of any statutory or common law duty of loyalty to the Company; (iii)
Employee has been convicted of, or pleaded nolo contendre to, any felony; (iv) Employee
willfully or intentionally caused material injury to the Company, its property, or its
assets; (v) Employee disclosed to unauthorized person(s) proprietary or confidential
information of the Company that causes a material injury to the Company; (vi) any material
violation or a repeated and willful violation of the Company’s policies or procedures,
including but not limited to, the Company’s Code of Business Conduct and Ethics (or any
successor policy) then in effect.
(c) “Change in Control” means the first to occur on or after the Grant Date of any of
the following events:
(i) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing twenty-five percent (25%) or more of the
combined voting power of the Company’s then outstanding voting securities;
(ii) the following individuals cease for any reason to constitute a majority of
the number of directors then serving: individuals who, on the Grant Date, constitute
the Board and any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest, including but
not limited to a consent solicitation relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for election by
the Company’s stockholders was approved or recommended by a vote of at least
two-thirds (2/3rds) of the directors then still in office who either were directors
on the Grant Date or whose appointment, election or nomination for election was
previously so approved or recommended (the “Incumbent Board”);
(iii) there is a consummated merger or consolidation of the Company with any
other corporation, other than (1) a merger or consolidation which would result in
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the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving or parent entity) more than fifty percent (50%) of
the combined voting power of the voting securities of the Company or such surviving
or parent entity outstanding immediately after such merger or consolidation or (2) a
merger or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person, directly or indirectly, acquired
twenty-five percent (25%) or more of the combined voting power of the Company’s then
outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or there is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (or any transaction
having a similar effect), other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least fifty percent (50%)
of the combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their ownership
of the Company immediately prior to such sale.
For purposes of this definition, the following terms shall have the following
meanings:
(A) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3
under the Exchange Act;
(B) “Exchange Act” means the Securities and Exchange Act of 1934, as
amended from time to time;
(C) “Person” shall have the meaning set forth in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (1) the Company, (2) a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, (3) an employee benefit plan of the Company, (4) an underwriter
temporarily holding securities pursuant to an offering of such securities or
(5) a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of shares
of Common Stock.
This definition of Change in Control will be modified if and to the extent necessary to
ensure compliance with the requirements of Section 409A of the Code, and Employee and the
Company agree to execute such further instruments and take such further action as reasonably
may be necessary to comply with Section 409A of the Code.
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(d) “Committee” means the Compensation Committee of the Board or such other committee
of the Board as the Board may designate from time to time.
(e) “Dividend Equivalent” means an amount of cash equal to all dividends and other
distributions (or the economic equivalent thereof) that are payable by the Company on one
share of Common Stock to stockholders of record, which, in the discretion of the Committee,
may be awarded (a) in connection with any Award under the Plan while such Award is
outstanding or otherwise subject to a Restriction Period and on a like number of shares of
Common Stock under such Award or (b) singly.
(f) “Retirement” means the voluntary resignation of employment by Employee, after
Employee: (i) has attained the age of 55 or greater; (ii) has a sum of age plus full years
of Service with the Company equal to 65 or greater; and, (iii) has completed at least 5
consecutive full years of Service with the Company during the 5 year period immediately
preceding the resignation.
(g) “Service” is measured from Employee’s original date of hire by the Company, except
as provided below. In the case of a break of employment by Employee from the Company of one
year or more in length, Employee’s service before the break of employment shall not be
included in his or her Service hereunder. In the case of service with an entity acquired by
the Company, Employee’s service with such entity shall be considered Service hereunder, so
long as Employee remained continuously employed with such predecessor company(ies) and the
Company. In the case of a break of employment between a predecessor company and the Company
of any length, Employee’s Service shall be measured from the original date of hire by the
Company and shall not include any service with any predecessor company.
(h) “Termination of Employment” means the termination of Employee’s employment with the
Company. Temporary absences from employment because of illness, vacation or leave of
absence and transfers among Waste Management, Inc. and its Subsidiaries and Affiliates will
not be considered a Termination of Employment. Any questions as to whether and when there
has been a Termination of Employment, and the cause of such termination, shall be determined
by the Committee, and its determination will be final.
(i) “Window Period” means the period commencing on the date six months immediately
prior to the date on which a Change in Control first occurs and ending the second
anniversary of the date on which a Change in Control occurs.
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(a) Employee hereby acknowledges that he or she has received, reviewed and accepted the
terms and conditions applicable to this Agreement. Employee hereby accepts such terms and
conditions, subject to the provisions of the Plan and administrative interpretations
thereof. Employee further agrees that such terms and conditions will control this
Agreement, notwithstanding any provisions in any employment agreement or in any prior
awards.
(b) Employee hereby acknowledges that he or she is to consult with and rely upon only
Employee’s own tax, legal, and financial advisors regarding the consequences and risks of
this Agreement and the award of Restricted Stock Units.
(c) This Agreement may not be amended or modified except by a written agreement
executed by the parties hereto or their respective successors and legal representatives.
The captions of this Agreement are not part of the provisions hereof and shall have no force
or effect.
| WASTE MANAGEMENT, INC. | ||||
| By: | Xxxxx XxXxxxxx |
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| Xxxxx XxXxxxxx Senior Vice-President, People |
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| EMPLOYEE | ||||
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