EXHIBIT 10.4
ALLIED WASTE INDUSTRIES, INC.
STOCK OPTION AGREEMENT
(UNDER THE 2005 NON-EMPLOYEE DIRECTOR
EQUITY COMPENSATION PLAN)
THIS STOCK OPTION AGREEMENT ("Option Agreement"), made is dated
______________________ ("Date of Grant"), between ALLIED WASTE INDUSTRIES, INC.,
a Delaware corporation ("Company"), and ___________________ ("Director"):
R E C I T A L S:
The Company has adopted the Allied Waste Industries, Inc. 2005
Non-Employee Director Equity Compensation Plan (formerly known as the Allied
Waste Industries, Inc. 1994 Amended and Restated Non-Employee Director Stock
Option Plan), as most recently amended and restated effective _____________,
2005 ("Plan"), all of the terms and provisions of which are incorporated herein
by reference and made a part of this Agreement. All capitalized terms used but
not defined in this Agreement have the meanings given to them in the Plan.
The Plan permits the Plan Administrator to make initial and/or annual
grants under the Plan in the form of an option to purchase Common Stock, instead
of shares of Restricted Stock or units of Restricted Stock. The Plan
Administrator has determined that it would be in the best interest of the
Company and its stockholders to grant the option provided for herein ("Option"),
instead of shares of Restricted Stock or units of Restricted Stock, to Director
pursuant to the Plan and the terms set forth herein as an inducement to serve as
a director of the Company and to provide Director with a proprietary interest in
the future of the Company.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Grant of the Option. The Company hereby grants to Director the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of an aggregate of _______ shares ("Stock") of the presently
authorized but unissued common stock, par value $.01 per share, of the Company
("Common Stock"). The purchase price of the Stock subject to this Option shall
be $______ per share, being the Fair Market Value of the Common Stock on the
Date of Grant, as defined in the Plan.
2. Exercise of Option.
(a) This Option may be exercised in whole or in part, at any time
or from time to time during the period commencing on the Date of Grant (subject
to the provisions of Paragraph 2(b) below) and ending ten years from the Date of
Grant (or, if earlier, ending (i) on the last day of the three-month period
beginning on the date on which the Director ceases to be a member of the Board
for any reason other than the Director's death, or (ii) on the last day of the
six-month period beginning on the date of the Director's death while serving as
a member of the Board).
(b) Each Option awarded to Director hereunder may be exercised
only to the extent it has become vested and nonforfeitable. This Option shall
vest and become exercisable with respect to the shares of Stock covered by this
Option as follows:
[Initial grant - 0% vested until the last day of Director's first one-year
term ending after the Date of Grant; 1/3 vested on the last day of Director's
first one-year term ending after the Date of Grant; an additional 1/3 vested on
the last day of Director's second one-year term ending after the Date of Grant;
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and an additional 1/3 vested on the last day of the Director's third one-year
term ending after the Date of Grant.
[Annual grant - 0% vested until the last day of Director's first one-year
term ending after the Date of Grant; and 100% vested on the last day of
Director's first one-year term ending after the Date of Grant.
To the extent not exercised, this Option shall accumulate and remain
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date on which the Option expires.
(c) Options may be exercised in whole or in part with respect to
whole shares only within the period permitted for exercise thereof, and shall be
exercised by written notice delivered to the Company at its principal office of
intent to exercise the Option with respect to a specified number of shares and
specifying the address to which certificates representing such shares are to be
mailed. Such notice shall be accompanied by cash or certified check, bank draft,
or postal or express money order payable to the order of the Company, for an
amount equal to the product obtained by multiplying the exercise price of the
Option by the number of shares of Common Stock with respect to which the Option
is then being exercised, or, with the consent of the Board, the payment of the
Option price may be made in whole or in part in Common Stock which is owned by
the Director and valued at its Fair Market Value on the date of exercise. Any
payment in shares of Common Stock shall be effected by delivery of such shares
to the Secretary of the Company, duly endorsed in blank or accompanied by stock
powers duly executed in blank, together with any other documents or evidence as
the Secretary shall require from time to time.
(d) This Option may not be exercised prior to the registration of
the Stock with the Securities and Exchange Commission and any applicable state
agencies. However, this condition may be waived by the Board if it determines
that such registration is not necessary in order to legally issue shares of
Stock to Director.
(e) Upon the Company's determination that the Option has been
validly exercised as to any of the Stock, the Secretary of the Company shall
issue a certificate or certificates in the Director's name for the number of
shares set forth in his written notice. However, the Company shall not be liable
to the Director for damages relating to any delays in issuing the certificate(s)
to him, any loss of the certificate(s) or any mistakes or errors in the issuance
of the certificate(s) or in the certificate(s) themselves.
(f) The Option is not transferable or assignable by the Director
except: (1) by will or by the laws of descent or distribution, or pursuant to a
Qualified Domestic Relations Order; (2) without consideration to members of the
Director's family (e.g., children, grandchildren and spouse); (3) without
consideration to any person sharing the Director's household (other than a
tenant or employee); (4) without consideration to a trust in which the persons
described in (2) or (3) (or the Director) hold more than 50% of the beneficial
interest; or (4) a private foundation in which the persons described in (2) or
(3) (or the Director) own more than 50% of the voting interests. No such
transfer or assignment shall be effective to bind the Company unless the Company
shall have been furnished with written notice thereof and a copy of such
evidence as the Board (or Committee, if any) may deem necessary to establish the
validity of the transfer or assignment and the acceptance by the transferee(s)
or assignee(s) of the terms and conditions hereof.
3. Term of Directorship. This Option shall not grant to Director any
right to continue serving as a director of the Company.
4. Notices; Deliveries. Any notice or delivery required to be given
under the terms of this Option Agreement shall be addressed to the Company in
care of its Secretary at its principal office in Scottsdale, Arizona and any
notice or delivery to be given to Director shall be addressed to him at the
address given by him beneath his signature hereto or such other address as
either party hereto may hereafter designate in writing to the other. Any such
notice or delivery shall be deemed to have been duly given when addressed as
aforesaid, registered or certified mail, and deposited (postage or registration
or certification fee prepaid) in a post office or branch post office regularly
maintained by the United States.
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5. Disputes. As a condition of the granting of the Option hereby, the
Director and his heirs and successors agree that any dispute or disagreement
which may arise hereunder shall be determined by the Board (or Committee, if
any) in its sole discretion and judgment, and that any such determination and
any interpretation by the Board (or Committee, if any) of the terms of this
Option shall be final and shall be binding and conclusive, for all purposes,
upon the Company, Director, his heirs and personal representatives.
6. Legend on Certificates. The certificate(s) representing the shares
of Stock purchased by exercise of this Option will be stamped or otherwise
imprinted with a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on the sale or transfer of such
shares and the stock transfer records of the Company will reflect stop-transfer
instructions with respect to such shares.
7. Option Subject to Plan. This Option is subject to the Plan. In the
event of a conflict between any term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the Plan will
govern and prevail. All definitions of words and terms contained in the Plan
shall be applicable to this Option.
8. Death of Director. Upon the death of Director, all shares with
respect to which this Option would be exercisable at the date of such death
shall be thereafter exercisable by Director's executor or administrator, or the
person or persons to whom his rights under this Agreement shall pass by will or
by the laws of descent and distribution, as the case may be, until the
termination of the Option in accordance with this Agreement and the Plan. In no
event may this Option be exercised after the end of the option period specified
in paragraph 2(a). Any heir or legatee of Director shall take rights herein
granted subject to the terms and conditions hereof.
9. Miscellaneous.
(a) All decisions of the Board (or Committee, if any) upon any
questions arising under the Plan or under this Option Agreement shall be
conclusive.
(b) Director agrees to make appropriate arrangements with the
Company for satisfaction of any applicable federal, state or local income tax,
withholding requirements or like requirements, including the payment to the
Company at the time of exercise of the Option of all such taxes and
requirements.
(c) Whenever the term "Director" is used herein under
circumstances applicable to any other person or persons to whom this Option, in
accordance with the provisions hereof, may be transferred, the word "Director"
shall be deemed to include such person or persons.
(d) Notwithstanding any of the other provisions hereof, Director
agrees that he will not exercise this Option and that the Company will not be
obligated to issue any of the Stock pursuant to this Option Agreement, if the
exercise of the Option or the issuance of such shares of Common Stock would
constitute a violation by the Director or by the Company of any provision of any
law or regulation of any governmental authority or national securities exchange.
Upon the acquisition of any Stock pursuant to the exercise of the Option herein
granted, Director will enter into such written representations, warranties and
agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Agreement.
(e) This Agreement shall be binding upon and inure to the benefit
of any successor or successors of the Company.
(f) The interpretation, performance and enforcement of this Option
Agreement shall be governed by the laws of the State of Arizona.
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IN WITNESS WHEREOF, the Company has, as of the date and place first above
written, caused this Agreement to be executed on its behalf by its President or
any Vice President and Director has hereunto set his hand as of the date and
place first written, which date is the date of grant of this Option.
ALLIED WASTE INDUSTRIES, INC.
By________________________________
DIRECTOR
________________________________
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