STOCK OPTION AGREEMENT
Exhibit 10.9
This Stock Option Agreement (the “Agreement”) dated as of the day of , (the
“Grant Date”), by and between REPUBLIC SERVICES, INC., a Delaware corporation (the “Company”) and
(“Optionee”), is made pursuant and subject to the provisions of the Company’s 2007
Incentive Plan, as it may be amended from time to time (the “Plan”).
1. Definitions. All capitalized terms used herein but not expressly defined shall
have the meaning ascribed to them in the Plan, a copy of which is being provided via email and is
incorporated herein by reference. All references to the Company herein also shall be deemed to
include references to any and all entities directly or indirectly controlled by the Company and
which are consolidated with the Company for financial accounting purposes.
2. Grant of Option. Subject to the terms and conditions of the Plan and to the terms
and conditions set forth in this Agreement, the Company hereby grants to the Optionee the right and
option to purchase from the Company all or part of an aggregate of
shares of the Stock at the
Exercise Price of $ per share (the “Option”). The Option shall be treated as a
Non-Qualified Stock Option.
3. Vesting and Expiration.
(a) Vesting Schedule. Except as otherwise provided in this subparagraph or in Section
3(b) hereof, this Option shall vest and become nonforfeitable on the dates (each a “Vesting Date”)
and in the percentages set forth in the following schedule, provided that the Optionee’s continuous
service with the Company continues until the applicable Vesting Date:
| Vesting Date | Vesting Percentage | |||
| 25 | % | |||
| 50 | % | |||
| 75 | % | |||
| 100 | % | |||
Except as otherwise specifically provided herein, there shall be no proportionate or partial
vesting in the periods prior to each Vesting Date and all vesting shall occur only on the
applicable Vesting Date.
(b) Acceleration of Vesting on Account of Death, Disability, Retirement, Employment
Agreement or Change in Control.
(i) The unvested portion of the Option shall become 100% vested in the event that the
Optionee’s continuous service with the Company terminates by reason of:
(A) the Optionee’s death or Disability; or
(B) the Optionee’s retirement, if at the time of such retirement, the Optionee:
(1) is at least fifty-five (55) years old and has completed six (6)
years of continuous service with the Company or is at least sixty-five (65)
years old (without regard to years of service), and in either case has
provided the Company not less than twelve (12) months prior written notice
of Optionee’s intent to retire; or
(2) is at least sixty (60) years old and has completed fifteen (15)
years of continuous service with the Company or is sixty-five (65) years old
and has completed five (5) years of continuous service with the Company.
Any retirement pursuant to Section 3(b)(i)(B) is sometimes hereinafter referred to as a
(“Retirement”).
For purposes of determining years of continuous service, service shall include service
with any entity whose financial statements are required to be consolidated with the
financial statements of Republic, including service with any such entity prior to the date
on which the entity’s financial statements were required to be so consolidated.
(ii) The unvested portion of the Option shall become fully or partially vested at such
times and in such amounts as may be required pursuant to any employment agreement or
consulting agreement between the Optionee and the Company.
(iii) The unvested portion of the Option shall not become vested on account of the
occurrence of a Change in Control, except if and to the extent required pursuant to any
employment agreement or consulting agreement between the Optionee and the Company.
(c) Expiration. Any portion of the Option that has not previously been exercised, or
terminated pursuant to Sections 7, 8 or 9 hereof, shall automatically terminate and expire on the
seventh anniversary of the Grant Date.
4. Method of Exercise. The vested portion of this Option shall be exercisable in
whole or in part in accordance with the vesting provisions set forth in Section 3 hereof, and may
be exercised in accordance with the procedures set forth in Section 7(i) of the Plan (except that
the address to which any notice is sent thereunder shall be the address set forth in Section 16
hereof).
5. Method of Payment. The Optionee may elect to pay the Exercise Price for the vested
portion of this Option pursuant to any of the following methods: (a) by cash, certified or
cashier’s check, bank draft or money order, or (b) through any of the other methods described in
Section 7(j) of the Plan (including without limitation pursuant to a “cashless exercise sale and
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remittance procedure” described in Section 7(j)(iii) of the Plan) or through the withholding
of shares of Common Stock that otherwise would be delivered to the Optionee as a result of the
exercise of the Option (in which case the withheld shares shall be valued at their fair market
value on the Exercise Date).
6. Tax Withholding.
(a) The Optionee shall make arrangements satisfactory to the Company to pay to the Company any
federal, state or local income taxes required to be withheld as a result of the exercise of the
Option. If the Optionee shall fail to make such tax payments as are required, the Company shall,
to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due
to the Optionee, any federal, state or local taxes of any kind required by law to be withheld as a
result of the exercise of the Option.
(b) The Optionee may elect, by notice to the Committee, to satisfy his or her minimum
withholding tax obligation as a result of the exercise of the Option, by the Company’s withholding
a portion of the shares of Common Stock otherwise deliverable to Optionee, such shares being valued
at their fair market value as of the Exercise Date, or by the Optionee’s delivery to the Company of
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 Optionee to the Company.
7. Termination of Continuous Service. Except as otherwise provided in Section 8 or 9
hereof, or as otherwise provided in any employment or consulting agreement between the Optionee and
the Company, in the event that the Optionee’s continuous service with the Company terminates for
any reason other than the Optionee’s death, Disability, or Retirement, then any portion of the
Option that has not previously vested pursuant to Section 3 hereof shall automatically terminate on
the date on which the Optionee’s continuous service terminates, and the portion of the Option, if
any, that is vested or becomes vested as a result of such termination of continuous service shall
automatically and without notice terminate and become null and void on the earliest to occur of the
following:
(a) Immediately upon termination of the Optionee’s continuous service with the Company if such
termination is by the Company for Cause or is a voluntary termination within ninety (90) days after
the occurrence of an event that would be grounds for termination of continuous service by the
Company for Cause (without regard to any notice or cure period requirement);
(b) Ninety (90) days after the termination of the Optionee’s continuous service for any reason
other than the Optionee’s death, Disability, Cause, Retirement, or a voluntary termination within
ninety (90) days after the occurrence of an event which would be grounds for termination by the
Company for Cause; or
(c) the Expiration Date.
8. Extended Exercise Period in the Event of Certain Retirement. If the Optionee’s
continuous service with the Company terminates by reason of the Optionee’s Retirement, the Optionee
shall have the right, at any time on or before the earlier of (i) the third anniversary of
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the date of the Optionee’s Retirement or (ii) the Expiration Date, to exercise the Option in
whole or in part.
9. Extended Exercise Period in the Event of Death or Disability.
(a) Death. If the Optionee’s continuous service with the Company terminates by reason
of the Optionee’s death, the Optionee’s estate, devisee or heir-at-law (as applicable) shall have
the right, at any time, on or before the earlier of the (i) fifth anniversary of the date of the
Optionee’s death and (ii) the Expiration Date, to exercise the Option, in whole or in part;
provided, however, that the Board of Directors of the Company (or any committee thereof) may
provide, in its discretion, that following the death of the Optionee, the estate, devisee or
heir-at-law (as applicable) may exercise the Option, in whole or in part, at any time subsequent to
such Optionee’s death and prior to the Expiration Date.
(b) Disability. If the Optionee’s continuous service with the Company terminates by
reason of the Optionee’s Disability, then the Optionee shall have the right to exercise the
Option, in whole or in part, at any time, on or before the earlier of (i) the fifth anniversary of
the date on which the Optionee’s continuous service terminates, and (ii) the Expiration Date;
provided, however, that the Board of Directors of the Company (or any committee thereof) may
provide, in its discretion, that the Optionee may, in the event of the termination of employment or
service of the Optionee with the Company by reason of the Optionee’s Disability, exercise Option,
in whole or in part, at any time subsequent to such termination of employment or service and prior
to the Expiration Date either subject to or without regard to any vesting or other limitation on
exercise.
10. Transferability of Options.
(a) Restrictions on Transfer. Except as otherwise provided in Section 10(b), no
Options shall be transferable or assignable by the Optionee, other than by will or the laws of
descent and distribution or pursuant to a Qualified Domestic Relations Order, and such Options
shall be exercisable during the Optionee’s lifetime only by the Optionee.
(b) Permitted Transfers. The Optionee may Transfer the Option (or a portion thereof)
for no value to (i) a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the
Optionee’s household (other than a tenant or employee), (iii) a trust in which the persons
described in (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which
the Optionee or the persons described in (i) or (ii) own more than 50% of the voting interests.
(c) Notice. No transfer by will or the laws of descent and distribution, or transfers
permitted under Section 10(b), of any Options or the right to exercise any Option, shall be
effective to bind the Company unless the Committee shall have been furnished with (i) written
notice thereof and with a copy of the will, assignment or transfer document and/or such evidence as
the Committee may deem necessary to establish the validity of the transfer, and (ii) an agreement
by the transferee to comply with all the terms and conditions of the Option that are or would have
been applicable to the Optionee.
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11. Forfeiture by Reason of Detrimental Activity. This Option shall be subject to
cancellation by the Committee, in accordance with Section 15(n) of the Plan and this Section 10 if
the Optionee engages in any Detrimental Activity. Notwithstanding any other provision of this
Agreement to the contrary, if the Optionee engages in any Detrimental Activity at any time prior
to, or during the one year period after, the exercise of any portion of the Option, the Company
shall, upon the recommendation of the Committee, in its sole and absolute discretion, be entitled
to (a) immediately terminate and cancel any portion of the Option that has not previously been
exercised, and/or (b) with respect to any portion of the Option that has been previously exercised,
recover from the Optionee at any time within two (2) years after such exercise but prior to a
Change in Control (and the Optionee shall be obligated to pay over to the Company with respect to
any portion of the Option that has been exercised) (i) an amount equal to the excess of the Fair
Market Value of the Common Stock for which the Option was exercised over the Exercise Price
(regardless of the form by which payment was made) with respect to the Option, and (B) any cash or
other property (other than Common Stock) received by the Optionee from the Company pursuant to the
Option.
12. Right to Set-Off. By accepting this Agreement, the Optionee consents to a
deduction from any amounts the Company owes the Optionee from time to time (including amounts owed
to the Optionee as wages or other compensation, fringe benefits, or vacation pay, as well as any
other amounts owed to Optionee by the Company), up to the dollar amount Optionee owes the Company
under Section 11 hereof. Whether or not the Company elects to make any setoff in whole or in part,
if the Company does not recover by means of set-off the full amount the Optionee owes the Company
calculated as set forth above, the Optionee agrees to pay immediately the unpaid balance to the
Company.
13. Board of Director Discretion. The Optionee may be released from his or her
obligations under Sections 11 and 12 hereof only if the Board of Directors of the Company, or a
duly authorized committee thereof, determines, in its sole and absolute discretion, that such
action is not adverse to the interests of the Company.
14. No Right to Continued Employment or Service. This Agreement does not confer upon
the Optionee any right to continued employment or service with the Company, and shall not in any
way interfere with the right of the Company to terminate the Optionee’s employment at any time.
15. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to its principles of conflict of laws. The
parties agree that any action, suit or proceeding arising out of or relative to this Agreement or
the relationship of Optionee and the Company, shall be instituted only in the state or federal
courts located in Maricopa County in the State of Arizona, and each party waives any objection
which such party may now or hereafter have to such venue or jurisdictional court in any action,
suit, or proceeding. Any and all services of process and any other notice in any such action, suit
or proceeding shall be effective against any party if given by mail (registered or certified where
possible, return receipt requested), postage prepaid, mailed to such party at the address set forth
herein.
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16. Severability. The invalidity or enforceability of any one or more provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. In the event that a court of competent
jurisdiction should determine that any time periods provided for in Section 11 are unenforceable,
then that period shall be reduced to the longest period of time which such court shall deem
enforceable, taking into consideration the purpose and intent of the Plan to serve the interest of
the Company and its shareholders.
17. Notices. All notices or other communications with respect to the Options shall be
deemed given and delivered in person or by facsimile transmission, telefaxed, or mailed by
registered or certified mail (return receipt requested, postage prepaid) to the Company’s Stock
Option Administrator at the following address (or such other address, as shall be specified by like
notice of a change of address) and shall be effective upon receipt:
18. Binding Effect. Subject to the limitation stated herein and in the Plan, this
Agreement shall be binding upon and inure to the benefit of the successors and assigns of the
Company and to Optionee’s heirs, legatees, distributees and personal representatives.
19. Interpretation/Provisions of Plan Control. In the event that any provision of
this Agreement should conflict with any provision of the Plan, the Plan shall govern and be
controlling. The Optionee hereby accepts as final, conclusive and binding, any decisions by the
Committee with respect to the interpretation or administration of the Plan and this Agreement.
20. Integration. This Agreement supersedes all prior agreements and understanding
between the Company and Optionee relating to the grant of the Option.
21. Waiver. The failure of any party at any time to require strict performance of any
condition, promise, agreement or understanding set forth herein shall not be construed as a waiver
or relinquishment of the right to require strict performance of the same condition, promise,
agreement or understanding at a subsequent time.
22. Certification. Upon exercise of all or any portion of the Option, the Optionee
shall certify in a manner acceptable to the Company that the Optionee has not engaged in any
Detrimental Activity that would give the Company the rights described in Section 11 hereof.
23. Optionee Bound by Terms of the Plan. Optionee hereby acknowledges receipt of a
copy of the Plan, and agrees to be bound by all of the terms, conditions and provisions hereof.
24. Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. The facsimile or email transmission of a signed signature page, by any party
to the other(s), shall constitute valid execution and acceptance of this Agreement by the
signing/transmitting party.
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IN WITNESS WHEREOF, the parties hereto have executed the Agreement.
| REPUBLIC SERVICES, INC. | ||
| Date: | ||
| OPTIONEE | ||
| Date: | ||
|
|
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