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EXCEL - IDEA: XBRL DOCUMENT - Waste Connections US, Inc. | Financial_Report.xls |
10-Q - FORM 10-Q - Waste Connections US, Inc. | c02449e10vq.htm |
EX-31.2 - EXHIBIT 31.2 - Waste Connections US, Inc. | c02449exv31w2.htm |
EX-31.1 - EXHIBIT 31.1 - Waste Connections US, Inc. | c02449exv31w1.htm |
EX-32.1 - EXHIBIT 32.1 - Waste Connections US, Inc. | c02449exv32w1.htm |
Exhibit 10.1
WASTE CONNECTIONS, INC.
THIRD AMENDED AND RESTATED
2004 EQUITY INCENTIVE PLAN
THIRD AMENDED AND RESTATED
2004 EQUITY INCENTIVE PLAN
1. PURPOSE.
The purpose of the Plan is to provide a means for the Company and any Subsidiary, through the grant
of Nonqualified Stock Options and/or Restricted Stock or Restricted Stock Units to selected
Employees (including officers), Directors and Consultants, to attract and retain persons of ability
as Employees, Directors and Consultants, and to motivate such persons to exert their best efforts
on behalf of the Company and any Subsidiary.
2. DEFINITIONS.
(a) Board means the Companys Board of Directors.
(b) Change in Control means:
(i) any reorganization, liquidation or consolidation of the Company, or any merger or other
business combination of the Company with any other corporation, other than any such merger or other
combination that would result in 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 entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity outstanding
immediately after such transaction;
(ii) any sale, lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company; or
(iii) a transaction or series of related transactions in which any person (as defined in
Section 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the
Companys outstanding voting securities (except that for purposes of this definition, person
shall not include any person (or any person that controls, is controlled by or is under common
control with such person) who as of the date of an Option Agreement or a Restricted Stock or
Restricted Stock Unit Agreement owns ten percent (10%) or more of the total voting power
represented by the outstanding voting securities of the Company, or a trustee or other fiduciary
holding securities under any employee benefit plan of the Company, or a corporation that is owned
directly or indirectly by the stockholders of the Company in substantially the same percentage as
their ownership of the Company).
A transaction shall not constitute a Change in Control if its sole purpose is to change the state
of the Companys incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Companys securities immediately before such
transaction.
(c) Code means the Internal Revenue Code of 1986, as amended from time to time.
(d) Committee means a committee appointed by the Board in accordance with Section 4(b) of
the Plan.
(e) Company means Waste Connections, Inc., a Delaware corporation.
(f) Consultant means any person, including an advisor, engaged by the Company or a
Subsidiary to render consulting services and who is compensated for such services; provided that
the term Consultant shall not include Directors.
(g) Continuous Status as an Employee, Director or Consultant means the individuals
employment as an Employee or relationship as a Consultant is not interrupted or terminated, or, in
the case of a Director who is not an Employee, the term means the Director remains a Director of
the Company. The Board, in its sole discretion, may determine whether Continuous Status as an
Employee, Director or Consultant shall be considered interrupted in the
case of (i) any leave of absence approved by the Board, including sick leave, military leave
or any other personal leave, or (ii) transfers between locations of the Company or between the
Company and a Subsidiary or their successors.
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(h) Director means a member of the Companys Board.
(i) Disability means permanent and total disability within the meaning of Section 422(c)(6)
of the Code.
(j) Employee means any person employed by the Company or any Subsidiary of the Company. Any
officer of the Company or a Subsidiary is an Employee. A Director is not an Employee unless he or
she has an employment relationship with the Company or a Subsidiary in addition to being a
Director. Service as a Consultant shall not be sufficient to constitute employment by the
Company.
(k) Exchange Act means the Securities Exchange Act of 1934, as amended.
(l) Fair Market Value means, as of any date, the value of Stock determined as follows:
(i) If the Stock is listed on any established stock exchange or a national market system,
including without limitation the New York Stock Exchange, its Fair Market Value shall be the
closing sales price for the Stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the market trading day of the date of determination, or, if the date of
determination is not a market trading day, the last market trading day prior to the date of
determination, in each case as reported in The Wall Street Journal or such other sources as the
Board deems reliable;
(ii) If the Stock is regularly quoted by a recognized securities dealer but selling prices
are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices
for the Stock on the market trading day of the date of determination, or, if the date of
determination is not a market trading day, the last market trading day prior to the date of
determination; or
(iii) In absence of an established market for the Stock, the Fair Market Value thereof shall
be determined in good faith by the Board.
(m) Nonqualified Stock Options means Options that are not intended to qualify as incentive
stock options within the meaning of Section 422 of the Code.
(n) Option Agreement means a written certificate or agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. Each Option Agreement
shall be subject to the terms and conditions of the Plan that apply to Options.
(o) Optionee means an Employee, Director or Consultant who holds an outstanding Option.
(p) Options means Nonqualified Stock Options.
(q) Plan means this Waste Connections, Inc. Third Amended and Restated 2004 Equity
Incentive Plan.
(r) Restricted Stock means Stock awarded under the Plan in accordance with the terms and
conditions set forth in Section 6.
(s) Restricted Stock Agreement means a written certificate or award agreement between the
Company and a Restricted Stock Participant evidencing a Restricted Stock Award. Each Restricted
Stock Agreement shall be subject to the terms and conditions of the Plan that apply to Restricted
Stock.
(t) Restricted Stock Award means shares of Restricted Stock awarded pursuant to the terms
and conditions of the Plan.
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(u) Restricted Stock Participant means an Employee, Director or Consultant who holds an
outstanding Restricted Stock Award.
(v) Restricted Stock Unit means a contractual right to receive Stock under the Plan upon
the attainment of designated performance milestones or the completion of a specified period of
employment or service with the Corporation or any Subsidiary or upon a specified date or dates
following the attainment of such milestones or the completion of such service period.
(w) Restricted Stock Unit Agreement means a written agreement between the Company and a
Restricted Stock Unit Participant evidencing a Restricted Stock Unit Award. Each Restricted Stock
Unit Agreement shall be subject to the terms and conditions of the Plan that apply to Restricted
Stock Units.
(x) Restricted Stock Unit Award means an award of Restricted Stock Units made pursuant to
the terms and conditions of the Plan.
(y) Restricted Stock Unit Participant means an Employee, Director or Consultant who holds
an outstanding Restricted Stock Unit Award.
(z) Restriction Period means a time period, which may or may not be based on performance
goals and/or the satisfaction of vesting provisions (which may depend on the Continuous Status as
an Employee, Director or Consultant of the applicable Restricted Stock Participant), that applies
to, and is established or specified by the Board at the time of, each Restricted Stock Award.
(aa) Rule 16b-3 means Rule 16b-3 under the Exchange Act or any successor to Rule 16b-3, as
amended from time to time.
(bb) Securities Act means the Securities Act of 1933, as amended.
(cc) Stock means the Common Stock of the Company.
(dd) Subsidiary means any corporation that at the time an Option or a Restricted Stock or
Restricted Stock Unit Award is granted under the Plan qualifies as a subsidiary of the Company
under the definition of subsidiary corporation contained in Section 424(f) of the Code, or any
similar provision hereafter enacted.
3. SHARES SUBJECT TO THE PLAN.
(a) Stock Available for Awards. Subject to adjustment as provided in Section 9 for
changes in Stock, the Stock that may be sold or delivered pursuant to Options, Restricted Stock
and/or Restricted Stock Unit Awards shall not exceed 4,775,000 shares. The Company shall reserve
for Options, Restricted Stock and/or Restricted Stock Unit Awards 4,775,000 shares of Stock,
subject to adjustment as provided in Section 9. If any Option for any reason terminates, expires or
is cancelled without having been exercised in full, the Stock not purchased under such Option shall
revert to and again become available for issuance under the Plan. Shares of Stock that are issued
pursuant to Restricted Stock or Restricted Stock Unit Awards may be either authorized and unissued
shares (which will not be subject to preemptive rights) or previously issued shares acquired by the
Company or any Subsidiary. Any shares of Stock subject to a Restricted Stock Award that are
forfeited shall revert to and again become available for issuance under the Plan. If any Restricted
Stock Unit Award terminates or is cancelled for any reason before all the shares of Stock subject
to such award vest and become issuable, the shares of Stock which do not vest and become issuable
under that Restricted Stock Unit Award shall revert to and again become available for issuance
under the Plan.
(b) Annual Award Limit. The maximum number of shares of Stock for which any one
person may be granted Options, Restricted Stock and Restricted Stock Units in any one calendar year
shall not exceed seventy-five thousand (75,000) shares in the aggregate, subject to adjustment
under Section 9.
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4. ADMINISTRATION.
(a) Boards Power and Responsibilities. The Plan shall be administered by the Board
or, at the election of the Board, by a Committee, as provided in subsection (b), or, as to certain
functions, by an officer of the Company, as provided in subsection (c). Subject to the Plan, the
Board shall:
(i) determine and designate from time to time those Employees, Directors and Consultants to
whom Options, Restricted Stock Awards and/or Restricted Stock Unit Awards are to be granted;
(ii) authorize the granting of Options, Restricted Stock Awards and Restricted Stock Unit
Awards;
(iii) determine the number of shares subject to each Option, the exercise price of each
Option, the time or times when and the manner in which each Option shall be exercisable, and the
duration of the exercise period;
(iv) determine the number of shares of Stock to be included in any Restricted Stock Award,
the Restriction Period for such Award, and the vesting schedule of such Award over the Restriction
Period;
(v) determine the number of shares of Stock to be subject to any Restricted Stock Unit Award,
the vesting schedule for those shares of Stock and the date or dates on which the shares of Stock
which vest under the Award are actually to be issued;
(vi) construe and interpret the Plan and each Option, Restricted Stock and Restricted Stock
Unit Agreement, and establish, amend and revoke rules and regulations for the Plans
administration, and correct any defect, omission or inconsistency in the Plan or any Option,
Restricted Stock or Restricted Stock Unit Agreement in a manner and to the extent it deems
necessary or expedient to make the Plan fully effective;
(vii) adopt such procedures and subplans and grant Options and Restricted Stock and
Restricted Stock Unit Awards on such terms and conditions as the Board determines necessary or
appropriate to permit participation in the Plan by individuals otherwise eligible to so participate
who are foreign nationals or employed outside of the United States, or otherwise to conform to
applicable requirements or practices of jurisdictions outside of the United States;
(viii) prescribe and approve the form and content of certificates and agreements for use
under the Plan;
(ix) establish and administer any terms, conditions, performance criteria, restrictions,
limitations, forfeiture, vesting schedule, and other provisions of or relating to any Option or any
Restricted Stock or Restricted Stock Unit Award;
(x) grant waivers of terms, conditions, restrictions and limitations under the Plan or
applicable to any Option or Restricted Stock or Restricted Stock Unit Award, or accelerate the
vesting of any Option or any Restricted Stock or Restricted Stock Unit Award or the issuance of
vested Stock under any Restricted Stock Unit Award;
(xi) amend or adjust the terms and conditions of any outstanding Option or any Restricted
Stock or Restricted Stock Unit Award and/or adjust the number and/or class of shares of Stock
subject to any outstanding Option or any outstanding Restricted Stock or Restricted Stock Unit
Award, provided that no such amendment or adjustment shall reduce the exercise price of any Option
to a price lower than the Fair Market Value of the Stock covered by such Option on the date the
Option was granted;
(xii) at any time and from time to time after the granting of an Option or a Restricted Stock
or Restricted Stock Unit Award, specify such additional terms, conditions and restrictions with
respect to any such Option or any such Restricted Stock or Restricted Stock Unit Award as may be
deemed necessary or appropriate to ensure compliance with any and all applicable laws or rules,
including, but not limited to, terms, restrictions and conditions for compliance with applicable
securities laws and methods of withholding or providing for the payment of required taxes;
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(xiii) offer to buy out a Restricted Stock or Restricted Stock Unit Award previously granted,
based on such terms and conditions as the Board shall establish with and communicate to the
Restricted Stock or Restricted Stock Unit Participant at the time such offer is made;
(xiv) to the extent permitted under the applicable Restricted Stock Agreement, permit the
transfer of a Restricted Stock Award by one other than the Restricted Stock Participant who
received the grant of such Restricted Stock Award; and
(xv) take any and all other actions it deems necessary for the purposes of the Plan.
The Board shall have full discretionary authority in all matters related to the discharge of
its responsibilities and the exercise of its authority under the Plan. Decisions and actions by the
Board with respect to the Plan and any Option Agreement or any Restricted Stock or Restricted Stock
Unit Agreement shall be final, conclusive and binding on all persons having or claiming to have any
right or interest in or under the Plan and/or any Option Agreement or Restricted Stock or
Restricted Stock Unit Agreement.
(b) Authority to Delegate to Committee. The Board may delegate administration of the
Plan to one or more Committees of the Board. Each such Committee shall consist of one or more
members appointed by the Board. Subject to the foregoing, the Board may from time to time increase
the size of any such Committee and appoint additional members, remove members (with or without
cause) and appoint new members in substitution therefor, or fill vacancies, however caused. If the
Board delegates administration of the Plan to a Committee, the Committee shall have the same powers
theretofore possessed by the Board with respect to the administration of the Plan (and references
in this Plan to the Board shall apply to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish any such Committee at any time and revest in the Board the previously delegated
administration of the Plan.
(c) Authority to Delegate to Officers. The Board may delegate administration of
Sections 4(a)(i) through 4(a)(v) above to the Chief Executive Officer of the Company; provided,
however, that such officer may not grant Options, Restricted Stock Awards and Restricted Stock Unit
Awards covering more than 2,250,000 shares of Stock in the aggregate.
(d) Ten Year Grant Period. Notwithstanding the foregoing, no Option or any Restricted
Stock or Restricted Stock Unit Award shall be granted after the expiration of ten years from the
effective date of the Plan specified in Section 15 below.
(e) Modification of Terms and Conditions through Employment or Consulting Agreements.
Notwithstanding the provisions of any Option Agreement or any Restricted Stock or Restricted Stock
Unit Agreement, any modifications to the terms and conditions of any Option or any Restricted Stock
or Restricted Stock Unit Award permitted by Section 4(a) with respect to any Employee or Consultant
may be effected by including the modification in an employment or consulting agreement between the
Company or a Subsidiary and the Optionee or the Restricted Stock or Restricted Stock Unit
Participant.
(f) Restricted Stock and Restricted Stock Unit Vesting Limitations. Notwithstanding
any other provision of this Plan to the contrary, Restricted Stock and Restricted Stock Unit Awards
made to Employees or Consultants shall become vested over a period of not less than three years
(or, in the case of vesting based upon the attainment of performance-based objectives, over a
period of not less than one year) following the date the Restricted Stock or Restricted Stock Unit
Award is made, and the Board may not waive such vesting periods on a discretionary basis except in
the case of the death, disability or retirement of the Restricted Stock Participant or Restricted
Stock Unit Participant, a Change in Control, the terms and conditions of an employment or
consulting agreement between the Company or a Subsidiary and the Restricted Stock Participant or
Restricted Stock Unit Participant (whether entered into prior to, on or after the Effective Date of
this Plan, as provided in Section 15(a) hereof) or pursuant to Section 4(e); provided, however,
that, notwithstanding the foregoing, Restricted Stock and Restricted Stock Unit Awards that result
in the issuance of an aggregate of up to 5% of the shares of Stock available pursuant to Section
3(a) may be granted to any one or more Employee and/or Consultant without respect to such minimum
vesting provisions and restrictions on waiver of this Section 4(f).
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5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted shall be evidenced by an Option Agreement in substantially the form
attached hereto as Annex A or such other form as may be approved by the Board. Each Option
Agreement shall include the following terms and conditions and such other terms and conditions as
the Board may deem appropriate:
(a) Option Term. Each Option Agreement shall specify the term for which the Option
thereunder is granted and shall provide that such Option shall expire at the end of such term. The
Board may extend such term; provided that the term of any Option, including any such extensions,
shall not exceed five years from the date of grant.
(b) Exercise Price. Each Option Agreement shall specify the exercise price per share,
as determined by the Board at the time the Option is granted, which exercise price shall in no
event be less than the Fair Market Value when the Option is granted.
(c) Vesting. Each Option Agreement shall specify when it is exercisable. The total
number of shares of Stock subject to an Option may, but need not, be allotted in periodic
installments (which may, but need not, be equal). An Option Agreement may provide that from time to
time during each of such installment periods, the Option may become exercisable (vest) with
respect to some or all of the shares allotted to that period, and may be exercised with respect to
some or all of the shares allotted to such period or any prior period as to which the Option shall
have become vested but shall not have been fully exercised. An Option may be subject to such other
terms and conditions on the time or times when it may be exercised (which may be based on
performance or other criteria) as the Board deems appropriate.
(d) Payment of Purchase Price on Exercise. Each Option Agreement shall provide that
the purchase price of the shares as to which such Option may be exercised shall be paid to the
Company at the time of exercise either (i) in cash, or (ii) in the absolute discretion of the Board
(which discretion may be exercised in a particular case without regard to any other case or cases),
at the time of the grant or thereafter, (A) by the withholding of shares of Stock issuable on
exercise of the Option or the delivery to the Company of other Stock owned by the Optionee,
provided in either case that the Optionee has owned shares of Stock equal in number to the shares
so withheld for a period sufficient to avoid a charge to the Companys reported earnings, (B)
subject to compliance with applicable law, according to a deferred payment or other arrangement
(which may include, without limiting the generality of the foregoing, the use of Stock) with the
person to whom the Option is granted or to whom the Option is transferred pursuant to Section 5(e),
(C) by delivery of a properly executed notice together with irrevocable instructions to a broker
providing for the assignment to the Company of the proceeds of a sale or loan with respect to some
or all of the Stock being acquired upon the exercise of the Option, including, without limitation,
through an exercise complying with the provisions of Regulation T as promulgated from time to time
by the Board of Governors of the Federal Reserve System (a cashless exercise), or (D) in any
other form or combination of forms of legal consideration that may be acceptable to the Board.
In the case of any deferred payment arrangement, interest shall be payable at least annually
and shall be charged at the minimum rate necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any amounts other than amounts stated to be interest under
the deferred payment arrangement, or if less, the maximum rate permitted by law.
(e) Transferability. An Option shall not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of by the Optionee during his or her lifetime, whether by
operation of law or otherwise, other than by will or the laws of descent and distribution
applicable to the Optionee, and shall not be made subject to execution, attachment or similar
process; provided that the Board may in its discretion at the time of approval of the grant of an
Option or thereafter permit an Optionee to transfer an Option to a trust or other entity
established by the Optionee for estate planning purposes, and may permit further transferability or
impose conditions or limitations on any permitted transferability. Otherwise, during the lifetime
of an Optionee, an Option shall be exercisable only by such Optionee. In the event any Option is to
be exercised by the executors, administrators, heirs or distributees of the estate of a deceased
Optionee, or such an Optionees beneficiary, in any such case pursuant to the terms and conditions
of the Plan and the applicable Option Agreement and in accordance with such terms and conditions as
may be specified from time to time by the Board, the Company shall be under no obligation to issue
Stock thereunder unless and until the Board is satisfied that the person to receive such Stock is
the duly appointed legal
representative of the deceased Optionees estate or the proper legatee or distributee thereof
or the named beneficiary of such Optionee.
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(f) Exercise of Option After Death of Optionee. If an Optionee dies (i) while an
Employee, Director or Consultant, or (ii) within three months after termination of the Optionees
Continuous Status as an Employee, Director or Consultant because of his or her Disability or
retirement, his or her Options may be exercised (to the extent that the Optionee was entitled to do
so on the date of death or termination) by the Optionees estate or by a person who shall have
acquired the right to exercise the Options by bequest or inheritance, but only within the period
ending on the earlier of (A) one year after the Optionees death (or such shorter or longer period
specified in the Option Agreement, which period shall not be less than six months), or (B) the
expiration date specified in the Option Agreement. If, after the Optionees death, the Optionees
estate or the person who acquired the right to exercise the Optionees Options does not exercise
the Options within the time specified herein, the Options shall terminate and the shares covered by
such Options shall revert to and again become available for issuance under the Plan.
(g) Exercise of Option After Termination of Optionees Continuous Status as an Employee,
Director or Consultant as a Result of Disability or Retirement. If an Optionees Continuous
Status as an Employee, Director or Consultant terminates as a result of the Optionees Disability
or retirement, and the Optionee does not die within the following three months, the Optionee may
exercise his or her Options (to the extent that the Optionee was entitled to exercise them on the
date of termination), but only within the period ending on the earlier of (i) six months after
Disability or retirement (or such longer period specified in the Option Agreement), and (ii) the
expiration of the term set forth in the Option Agreement. If, after termination, the Optionee does
not exercise his or her Options within the time specified herein, the Options shall terminate, and
the shares covered by such Options shall revert to and again become available for issuance under
the Plan.
(h) No Exercise of Option After Termination of Optionees Continuous Status as an
Employee, Director or Consultant Other Than as a Result of Death, Disability or Retirement. If
an Optionees Continuous Status as an Employee, Director or Consultant terminates other than as a
result of the Optionees death, Disability or retirement, all right of the Optionee to exercise his
or her Options shall terminate on the date of termination of such Continuous Status as an Employee,
Director or Consultant. The Options shall terminate on such termination date, and the shares
covered by such Options shall revert to and again become available for issuance under the Plan.
(i) Exceptions. Notwithstanding subsections (f), (g) and (h), the Board shall have the
authority to extend the expiration date of any outstanding Option in circumstances in which it
deems such action to be appropriate, provided that no such extension shall extend the term of an
Option beyond the expiration date of the term of such Option as set forth in the Option Agreement.
(j) Companys Repurchase Right or Option Shares. Each Option Agreement may, but is not
required to, include provisions whereby the Company shall have the right to repurchase any and all
shares acquired by an Optionee on exercise of any Option granted under the Plan, at such price and
on such other terms and conditions as the Board may approve and as may be set forth in the Option
Agreement. Such right shall be exercisable by the Company after termination of an Optionees
Continuous Status as an Employee, Director or Consultant, whenever such termination may occur and
whether such termination is voluntary or involuntary, with cause or without cause, without regard
to the reason therefor, if any.
6. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
(a) Restricted Stock Award Agreement. Each Restricted Stock Award shall be evidenced
by a Restricted Stock Agreement in substantially the form attached hereto as Annex B or such other
form as may be approved by the Board. Each Restricted Stock Agreement shall be executed by the
Company and the Restricted Stock Participant to whom such Restricted Stock Award has been granted,
unless the Restricted Stock Agreement provides otherwise; two or more Restricted Stock Awards
granted to a single Restricted Stock Participant may, however, be combined in a single Restricted
Stock Agreement. A Restricted Stock Agreement shall not be a precondition to the granting of a
Restricted Stock Award; no person shall have any rights under any Restricted Stock Award, however,
unless and until the Restricted Stock Participant to whom the Restricted Stock Award shall have
been granted (i) shall have executed and delivered to the Company a Restricted Stock Agreement or
other instrument evidencing the Restricted
Stock Award, unless such Restricted Stock Agreement provides otherwise, (ii) has satisfied the
applicable federal, state, local and/or foreign income and employment withholding tax liability
with respect to the shares of Stock which vest or become issuable under the Restricted Stock Award,
and (iii) has otherwise complied with the applicable terms and conditions of the Restricted Stock
Award.
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(b) Restricted Stock Awards Subject to Plan. All Restricted Stock Awards under the
Plan shall be subject to all the applicable provisions of the Plan, including the following terms
and conditions, and to such other terms and conditions not inconsistent therewith, as the Board
shall determine and which are set forth in the applicable Restricted Stock Agreement.
(i) The Restricted Stock subject to a Restricted Stock Award shall entitle the Restricted
Stock Participant to receive shares of Restricted Stock, which vest over the Restriction Period.
The Board shall have the discretionary authority to authorize Restricted Stock Awards and determine
the Restriction Period for each such award.
(ii) Subject to the terms and restrictions of this Section 6 or the applicable Restricted
Stock Agreement or as otherwise determined by the Board, upon delivery of Restricted Stock to a
Restricted Stock Participant, or upon creation of a book entry evidencing a Restricted Stock
Participants ownership of shares of Restricted Stock, pursuant to Section 6(f), the Restricted
Stock Participant shall have all of the rights of a stockholder with respect to such shares.
(c) Cash Payment. The Board may make any such Restricted Stock Award without the
requirement of any cash payment from the Restricted Stock Participant to whom such Restricted Stock
Award is made, or may require a cash payment from such a Restricted Stock Participant in an amount
no greater than the aggregate Fair Market Value of the Restricted Stock as of the date of grant in
exchange for, or as a condition precedent to, the completion of such Restricted Stock Award and the
issuance of such shares of Restricted Stock.
(d) Transferability. During the Restriction Period stated in the Restricted Stock
Agreement, the Restricted Stock Participant who receives a Restricted Stock Award shall not be
permitted to sell, transfer, pledge, assign, encumber or otherwise dispose of such Restricted Stock
whether by operation of law or otherwise and shall not be made subject to execution, attachment or
similar process. Any attempt by such Restricted Stock Participant to do so shall constitute the
immediate and automatic forfeiture of such Restricted Stock Award. Notwithstanding the foregoing,
the Restricted Stock Agreement may permit the payment or distribution of a Restricted Stock
Participants Award (or any portion thereof) after his or her death to the beneficiary most
recently named by such Restricted Stock Participant in a written designation thereof filed with the
Company, or, in lieu of any such surviving beneficiary, as designated by the Restricted Stock
Participant by will or by the laws of descent and distribution. In the event any Restricted Stock
Award is to be paid or distributed to the executors, administrators, heirs or distributees of the
estate of a deceased Restricted Stock Participant, or such a Restricted Stock Participants
beneficiary, in any such case pursuant to the terms and conditions of the Plan and the applicable
Restricted Stock Agreement and in accordance with such terms and conditions as may be specified
from time to time by the Board, the Company shall be under no obligation to issue Stock thereunder
unless and until the Board is satisfied that each person to receive such Stock is the duly
appointed legal representative of the deceased Restricted Stock Participants estate or the proper
legatee or distributee thereof or the named beneficiary of such Restricted Stock Participant.
(e) Forfeiture of Restricted Stock. If, during the Restriction Period, the Restricted
Stock Participants Continuous Status as an Employee, Director or Consultant terminates for any
reason, all of such Restricted Stock Participants shares of Restricted Stock as to which the
Restriction Period has not yet expired shall be forfeited and revert to the Plan, unless the Board
has provided otherwise in the Restricted Stock Agreement or in an employment or consulting
agreement with the Restricted Stock Participant, or the Board, in its discretion, otherwise
determines to waive such forfeiture.
(f) Receipt of Stock Certificates. Each Restricted Stock Participant who receives a
Restricted Stock Award shall be issued one or more stock certificates in respect of such shares of
Restricted Stock. Any such stock certificates for shares of Restricted Stock shall be registered in
the name of the Restricted Stock Participant but shall be appropriately legended and returned to
the Company or its agent by the recipient, together with a stock power or other appropriate
instrument of transfer, endorsed in blank by the recipient. Notwithstanding anything in the
foregoing to the contrary, in lieu of the issuance of certificates for any shares of Restricted
Stock during the
applicable Restriction Period, a book entry (i.e., a computerized or manual entry) may be
made in the records of the Company, or its designated agent, as the Board, in its discretion, may
deem appropriate, to evidence the ownership of such shares of Restricted Stock in the name of the
applicable Restricted Stock Participant. Such records of the Company or such agent shall, absent
manifest error, be binding on all Restricted Stock Participants hereunder. The holding of shares of
Restricted Stock by the Company or its agent, or the use of book entries to evidence the ownership
of shares of Restricted Stock, in accordance with this Section 6(f), shall not affect the rights of
Restricted Stock Participants as owners of their shares of Restricted Stock, nor affect the
Restriction Period applicable to such shares under the Plan or the Restricted Stock Agreement.
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(g) Dividends. A Restricted Stock Participant who holds outstanding shares of
Restricted Stock shall not be entitled to any dividends paid thereon, other than dividends in the
form of the Companys stock.
(h) Expiration of Restriction Period. A Restricted Stock Participants shares of
Restricted Stock shall become free of the foregoing restrictions on the earlier of a Change in
Control or the expiration of the applicable Restriction Period, and the Company shall, subject to
Sections 8(a) and 8(b), then deliver stock certificates evidencing such Stock to such Restricted
Stock Participant. Such certificates shall be freely transferable, subject to any market black-out
periods which may be imposed by the Company from time to time or insider trading policies to which
the Restricted Stock Participant may at the time be subject.
(i) Substitution of Restricted Stock Awards. The Board may accept the surrender of
outstanding shares of Restricted Stock (to the extent that the Restriction Period or other
restrictions applicable to such shares have not yet lapsed) and grant new Restricted Stock Awards
in substitution for such Restricted Stock.
7. TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS.
(a) Restricted Stock Unit Award Agreement. Each Restricted Stock Unit Award shall be
evidenced by a Restricted Stock Unit Agreement in substantially the form attached hereto as Annex C
or such other form as may be approved by the Board. Each Restricted Stock Unit Agreement shall be
executed by the Company and the Restricted Stock Unit Participant to whom such Restricted Stock
Unit Award has been granted, unless the Restricted Stock Unit Agreement provides otherwise; two or
more Restricted Stock Unit Awards granted to a single Restricted Stock Unit Participant may,
however, be combined in a single Restricted Stock Unit Agreement. A Restricted Stock Unit Agreement
shall not be a precondition to the granting of a Restricted Stock Unit Award; however, no person
shall be entitled to receive any shares of Stock pursuant to a Restricted Stock Unit Award unless
and until the Restricted Stock Unit Participant to whom the Restricted Stock Unit Award shall have
been granted (i) shall have executed and delivered to the Company a Restricted Stock Unit Agreement
or other instrument evidencing the Restricted Stock Unit Award, unless such Restricted Stock Unit
Agreement provides otherwise, (ii) has satisfied the applicable federal, state, local and/or
foreign income and employment withholding tax liability with respect to the shares of Stock which
vest or become issuable under the Restricted Stock Unit Award and (iii) has otherwise complied with
all the other applicable terms and conditions of the Restricted Stock Unit Award.
(b) Restricted Stock Unit Awards Subject to Plan. All Restricted Stock Unit Awards
under the Plan shall be subject to all the applicable provisions of the Plan, including the
following terms and conditions, and to such other terms and conditions not inconsistent therewith,
as the Board shall determine and which are set forth in the applicable Restricted Stock Unit
Agreement.
(i) The Restricted Stock Units subject to a Restricted Stock Unit Award shall entitle the
Restricted Stock Unit Participant to receive the shares of Stock underlying those Units upon the
attainment of designated performance goals or the satisfaction of specified employment or service
requirements or upon the expiration of a designated time period following the attainment of such
goals or the satisfaction of the applicable service period. The Board shall have the discretionary
authority to determine the performance milestones or service period required for the vesting of the
Restricted Stock Units and the date or dates when the shares of Stock which vest under those
Restricted Stock Units are actually to be issued. The Board may alternatively provide the
Restricted Stock Unit Participant with the right to elect the issue date or dates for the shares of
Stock which vest under his or her Restricted Stock Unit Award. The issuance of vested shares under
the Restricted Stock Unit Award may be deferred to a date following the termination of the
Restricted Stock Unit Participants employment or service with the Company and its Subsidiaries.
9
(ii) The Restricted Stock Unit Participant shall not have any stockholder rights with respect
to the shares of Stock subject to his or her Restricted Stock Unit Award until that Award vests and
the shares of Stock are actually issued thereunder. However, dividend-equivalent units may, in the
sole discretion of the Board, be paid or credited, either in cash or in actual or phantom shares of
Stock, on one or more outstanding Restricted Stock Units, subject to such terms and conditions as
the Board may deem appropriate.
(iii) An outstanding Restricted Stock Unit Award shall automatically terminate, and no shares
of Stock shall actually be issued in satisfaction of that Award, if the performance goals or
service requirements established for such Award are not attained or satisfied. The Board, however,
shall have the discretionary authority to issue vested shares of Stock under one or more
outstanding Restricted Stock Unit Awards as to which the designated performance goals or service
requirements have not been attained or satisfied.
(iv) Service requirements for the vesting of Restricted Stock Unit Awards may include service
as an Employee, Consultant or non-employee Director.
(c) No Cash Payment. Restricted Stock Unit Awards shall not require any cash payment
from the Restricted Stock Unit Participant to whom such Restricted Stock Unit Award is made, either
at the time such Award is made or at the time any shares of Stock become issuable under that Award.
However, the issuance of such shares shall be subject to the Restricted Stock Unit Participants
satisfaction of all applicable federal, state, local and/or foreign income and employment
withholding taxes.
(d) Transferability. The Restricted Stock Unit Participant who receives a Restricted
Stock Unit Award shall not be permitted to sell, transfer, pledge, assign, encumber or otherwise
dispose of his or her interest in such Award or the underlying shares of Stock, whether by
operation of law or otherwise, and such Award shall not be made subject to execution, attachment or
similar process. Any attempt by such Restricted Stock Unit Participant to do so shall constitute
the immediate and automatic forfeiture of such Restricted Stock Unit Award. Notwithstanding the
foregoing, any shares of Stock which vest under the Restricted Stock Unit Agreement but which
remain unissued at the time of the Restricted Stock Unit Participants death shall be issued to the
beneficiary most recently named by such Restricted Stock Unit Participant in a written designation
thereof filed with the Company, or, in lieu of any such surviving beneficiary, as designated by the
Restricted Stock Unit Participant by will or by the laws of descent and distribution. In the event
such vested shares of Stock are to be issued to the executors, administrators, heirs or
distributees of the estate of a deceased Restricted Stock Unit Participant, or his or her
designated beneficiary, in any such case pursuant to the terms and conditions of the Plan and the
applicable Restricted Stock Unit Agreement and in accordance with such terms and conditions as may
be specified from time to time by the Board, the Company shall be under no obligation to effect
such issuance unless and until the Board is satisfied that each person to receive such Stock is the
duly appointed legal representative of the deceased Restricted Stock Unit Participants estate or
the proper legatee or distributee thereof or the named beneficiary of such Restricted Stock Unit
Participant.
(e) Forfeiture of Restricted Stock Units. If the Restricted Stock Unit Participants
Continuous Status as an Employee, Director or Consultant terminates for any reason, all of the
Restricted Stock Units subject to his or her outstanding Restricted Stock Unit Awards shall, to the
extent not vested at that time, be forfeited, and no shares of Stock shall be issued pursuant to
those forfeited Restricted Stock Units, unless the Board has provided in the Restricted Stock Unit
Agreement or in an employment or consulting agreement with the Restricted Stock Unit Participant
that no such forfeiture shall occur, or the Board, in its sole discretion, otherwise determines to
waive such forfeiture.
(f) Issuance of Stock Certificates. Each Restricted Stock Unit Participant who becomes
entitled to an issuance of shares of Stock following the vesting of his or her Restricted Stock
Unit Award shall, subject to Sections 8(a) and 8(b), be issued one or more stock certificates for
those shares. Subject to such Sections 8(a) and 8(b), each such stock certificate shall be
registered in the name of the Restricted Stock Unit Participant and shall be freely transferable,
subject to any market black-out periods which may be imposed by the Company from time to time or
insider trading policies to which the Restricted Stock Unit Participant may at the time be subject.
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8. CONDITIONS ON EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.
(a) Securities Law Compliance. The Plan, the grant of Options and Restricted Stock or
Restricted Stock Unit Awards thereunder, the exercise of Options thereunder and the obligation of
the Company to issue shares of Stock on the exercise of Options, at the expiration of the
applicable Restriction Period for Restricted Stock or upon the occurrence of the designated
issuance date for shares of Stock subject to vested Restricted Stock Units, shall be subject to all
applicable Federal and state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required, in the opinion of the Board. Options may not be exercised,
Restricted Stock and Restricted Stock Unit Awards may not be granted, and shares of Stock may not
be issued if any such action would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. No Option may be exercised unless (i) a
registration statement under the Securities Act shall at the time of exercise of the Option be in
effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of
legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in
accordance with the terms of an applicable exemption from the registration requirements of the
Securities Act. No Stock may be issued in connection with a Restricted Stock or Restricted Stock
Unit Award unless (i) a registration statement under the Securities Act shall at the time of
issuance of the Stock be in effect with respect to the shares of Stock to be issued or (ii) in the
opinion of legal counsel to the Company, the shares of Stock to be issued on expiration of the
applicable Restriction Period or upon the designated issuance date for vested Restricted Stock
Units may be issued in accordance with the terms of an applicable exemption from the registration
requirements of the Securities Act. The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Companys legal counsel to be necessary to
the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite authority shall not
have been obtained. As a condition to the exercise of any Option and the issuance of any Stock in
connection with a Restricted Stock or Restricted Stock Unit Award, the Company may require the
Optionee or the Restricted Stock or Restricted Stock Unit Participant to satisfy any qualifications
that may be necessary or appropriate to evidence compliance with any applicable law or regulation
and to make any representation or warranty with respect thereto as may be requested by the Company.
(b) Investment Representations. The Company may require any Optionee or a Restricted
Stock or Restricted Stock Unit Participant, or any person to whom an Option or Restricted Stock or
Restricted Stock Unit Award is transferred, as a condition of exercising such Option or receiving
shares of Stock pursuant to such Restricted Stock or Restricted Stock Unit Award, to (A) give
written assurances satisfactory to the Company as to such persons knowledge and experience in
financial and business matters or to employ a purchaser representative reasonably satisfactory to
the Company who is knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option or receiving such Stock, and (B) to give written assurances
satisfactory to the Company stating that such person is acquiring the Stock for such persons own
account and not with any present intention of selling or otherwise distributing the Stock. The
foregoing requirements, and any assurances given pursuant to such requirements, shall not apply if
(1) the issuance of the Stock has been registered under a then currently effective registration
statement under the Securities Act, or (2) counsel for the Company determines as to any particular
requirement that such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, with the advice of its counsel, place such legends on stock
certificates issued under the Plan as the Company deems necessary or appropriate to comply with
applicable securities laws, including, but not limited to, legends restricting the transfer of the
Stock.
9. ADJUSTMENTS ON CERTAIN EVENTS.
(a) No Effect on Powers of Board or Shareholders. The existence of the Plan and any
Options or any Restricted Stock or Restricted Stock Unit Awards granted hereunder shall not affect
in any way the right or power of the Board or the stockholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the capital structure or
business of the Company or any of its subsidiaries, any merger or consolidation of the Company or a
subsidiary of the Company, any issue of debt, preferred or prior preference stock ahead of or
affecting Stock, the authorization or issuance of additional shares of Stock, the dissolution or
liquidation of the Company or its subsidiaries, any sale or transfer of all or part of its assets
or business or any other corporate act or proceeding.
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(b) Changes in Control.
(i) Options. Each Option Agreement shall provide that in the event that the Company
is subject to a Change in Control:
(A) immediately prior thereto all outstanding Options shall be automatically accelerated and
become immediately exercisable as to all of the shares of Stock covered thereby, notwithstanding
anything to the contrary in the Plan or the Option Agreement; and
(B) the Board may, in its discretion, and on such terms and conditions as it deems
appropriate, by resolution adopted by the Board or by the terms of any agreement of sale, merger or
consolidation giving rise to the Change in Control, provide that, without Optionees consent, the
shares subject to an Option may (1) continue as an immediately exercisable Option of the Company
(if the Company is the surviving corporation), (2) be assumed as immediately exercisable Options by
the surviving corporation or its parent, (3) be substituted by immediately exercisable options
granted by the surviving corporation or its parent with substantially the same terms for the
Option, or (4) be cancelled after payment to the Optionee of an amount in cash or other
consideration delivered to stockholders of the Company in the transaction resulting in a Change in
Control of the Company equal to the total number of shares subject to the Option multiplied by the
remainder of (i) the amount per share to be received by holders of the Companys Stock in the sale,
merger or consolidation, minus (ii) the exercise price per share of the shares subject to the
Option.
(ii) Restricted Stock Awards. Each Restricted Stock Agreement shall provide that,
immediately prior to a Change in Control, all restrictions imposed by the Board on any outstanding
Restricted Stock Award shall be automatically canceled, the Restriction Period applicable to all
outstanding Restricted Stock Awards shall immediately terminate, and such Restricted Stock Awards
shall be fully vested, subject to the Restricted Stock Participants satisfaction of all applicable
federal, state, local and/or foreign income and employment withholding taxes. Any applicable
performance goals shall be deemed achieved at not less than the target level, notwithstanding
anything to the contrary in the Plan or the Restricted Stock Agreement.
(iii) Restricted Stock Unit Awards. Each Restricted Stock Unit Agreement shall provide
that, immediately upon a Change in Control, the Restricted Stock Units subject to such Agreement
shall automatically vest in full, and the shares subject to those vested Restricted Stock Units
shall be issued, notwithstanding any deferred issuance date otherwise in effect at the time for
such shares, subject to the Restricted Stock Unit Participants satisfaction of all applicable
federal, state, local and/or foreign income and employment withholding taxes. Accordingly, all
performance milestones or service requirements in effect for those Restricted Stock Units shall be
deemed to have been fully achieved or completed, notwithstanding anything to the contrary in the
Plan or the Restricted Stock Unit Agreement.
(c) Adjustment Of Shares. The aggregate number, class and kind of shares of stock
available for issuance under the Plan, the aggregate number, class and kind of shares of stock as
to which Restricted Stock or Restricted Stock Unit Awards may be granted, the limitation set forth
in Section 4(c) on the number of shares of Stock that may be issued by a single officer under the
Plan, the number, class and kind of shares under each outstanding Restricted Stock or Restricted
Stock Unit Award, the exercise price of each Option and the number of shares purchasable on
exercise of such Option shall be appropriately adjusted by the Board in its discretion to preserve
the benefits or potential benefits intended to be made available under the Plan or with respect to
any outstanding Options or any outstanding Restricted Stock or Restricted Stock Unit Awards or
otherwise necessary to reflect any such change, if the Company shall (i) pay a dividend in, or make
a distribution of, shares of Stock (or securities convertible into, exchangeable for or otherwise
entitling a holder thereof to receive Stock), or evidences of indebtedness or other property or
assets, on outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater number
of shares, (iii) combine the outstanding shares of Stock into a smaller number of shares or (iv)
issue any shares of its capital stock in a reclassification of the Stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the resulting
corporation). An adjustment made pursuant to this Section 9(c) shall, in the case of a dividend or
distribution, be made as of the record date therefor and, in the case of a subdivision, combination
or reclassification, be made as of the effective date thereof. In case of any adjustment pursuant
to this Section 9(c) with respect to an Option, the total number of shares and the number of shares
or other units of such other securities purchasable on exercise of the Option immediately prior
thereto shall be
adjusted so that the Optionee shall be entitled to receive at the same aggregate purchase
price the number of shares of Stock and the number of shares or other units of such other
securities that the Optionee would have owned or would have been entitled to receive immediately
following the occurrence of any of the events described above had the Option been exercised in full
immediately prior to the occurrence (or applicable record date) of such event. If, as a result of
any adjustment pursuant to this Section 9(c), the Optionee shall become entitled to receive shares
of two or more classes or series of securities of the Company, the Board shall equitably determine
the allocation of the adjusted exercise price between or among shares or other units of such
classes or series and shall notify the Optionee of such allocation. Any new or additional shares or
securities received by a Restricted Stock Participant shall be subject to the same terms and
conditions, including the Restriction Period, as related to the original Restricted Stock Award.
12
(d) Receipt of Assets Other Than Stock. If at any time, as a result of an adjustment
made pursuant to this Section 9, an Optionee or a Restricted Stock or Restricted Stock Unit
Participant shall become entitled to receive any shares of capital stock or shares or other units
of other securities or property or assets other than Stock, the number of such other shares or
units so receivable on any exercise of the Option or expiration of the Restriction Period or the
designated issuance date for the securities subject to vested Restricted Stock Units shall be
subject to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Stock in this Section 9, and the
provisions of this Plan with respect to the shares of Stock shall apply, with necessary changes in
points of detail, on like terms to any such other shares or units.
(e) Fractional Shares. All calculations under this Section 9 shall be, in the case of
exercise price, rounded up to the nearest cent or, in the case of shares, rounded down to the
nearest one-hundredth of a share, but in no event shall the Company be obligated to issue any
fractional share.
(f) Inability to Prevent Acts Described in Section 9; Uniformity of Actions Not
Required. No Optionee and no Restricted Stock or Restricted Stock Unit Participant shall have
or be deemed to have any right to prevent the consummation of the acts described in this Section 9
affecting the number of shares of Stock subject to any Option or any Restricted Stock or Restricted
Stock Unit Award held by the Optionee or the Restricted Stock or Restricted Stock Unit Participant.
Any actions or determinations by the Board under this Section 9 need not be uniform as to all
outstanding Options or outstanding Restricted Stock or Restricted Stock Unit Awards, and need not
treat all Optionees or all Restricted Stock or Restricted Stock Unit Participants identically.
10. TAX WITHHOLDING OBLIGATIONS.
(a) General Authorization. The Company is authorized to take whatever actions are
necessary and proper to satisfy all obligations of Optionees and Restricted Stock and Restricted
Stock Unit Participants (including, for purposes of this Section 10, any other person entitled to
exercise an Option or receive shares of Stock pursuant to a Restricted Stock or Restricted Stock
Unit Award under the Plan) for the payment of all federal, state, local and/or foreign taxes in
connection with any Option grant or exercise, any Restricted Stock Award or any Stock issuance
pursuant to a vested Restricted Stock Unit Award (including, but not limited to, actions pursuant
to the following Section 10(b)).
(b) Withholding Requirement and Procedure.
(i) Options. Whenever the Company proposes or is required to issue or transfer shares
of Stock with respect to an Option, the Company shall have the right to require the grantee to
remit to the Company an amount sufficient to satisfy any federal, state and/or local withholding
tax requirements prior to the delivery of any certificate or certificates for such shares,
including, for each Optionee who is an Employee, the employee portion of the FICA (Social Security
and Medicare) taxes. Alternatively, the Company may issue or transfer such shares net of the number
of shares sufficient to satisfy the minimum withholding tax requirements. For withholding tax
purposes, the shares of Stock shall be valued on the date the withholding obligation is incurred.
(ii) Restricted Stock. Each Restricted Stock Participant shall, no later than the date
as of which the value of the Restricted Stock Award first becomes includible in the gross income of
the Restricted Stock Participant for income tax purposes, pay to the Company in cash, or make
arrangements satisfactory to the Company regarding payment to the Company of, any taxes of any kind
required by law to be withheld with respect to the Stock or other
property subject to such Restricted Stock Award, including, for each Restricted Stock
Participant who is an Employee, the employee portion of the FICA (Social Security and Medicare)
taxes applicable to the shares of Stock or other property. No Stock shall be delivered to a
Restricted Stock Participant with respect to a Restricted Stock Award until such payment or
arrangement has been made. The Company shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to such Restricted Stock
Participant. Notwithstanding the above, the Board may, in its discretion and pursuant to procedures
approved by the Board, permit the Restricted Stock Participant to elect withholding by the Company
of Stock or other property otherwise deliverable to such Restricted Stock Participant pursuant to
his or her Restricted Stock Award, provided, however, that the amount of any Stock so withheld
shall not exceed the amount necessary to satisfy the Companys required tax withholding obligations
using the minimum statutory withholding rates for federal, state and/or local tax purposes,
including payroll taxes, that are applicable to supplemental taxable income in full or partial
satisfaction of such tax obligations, based on the Fair Market Value of the Stock on the payment
date.
13
(c) Section 83(b) Election. If a Restricted Stock Participant makes an election under
Code Section 83(b), or any successor section thereto, to be taxed with respect to a Restricted
Stock Award as of the date of transfer of the Restricted Stock rather than as of the date or dates
on which the Restricted Stock Participant would otherwise be taxable under Code Section 83(a), such
Restricted Stock Participant shall deliver a copy of such election to the Company immediately after
filing such election with the Internal Revenue Service. Neither the Company nor any of its
affiliates shall have any liability or responsibility relating to or arising out of the filing or
not filing of any such election or any defects in its construction.
(d) Restricted Stock Units. Each Restricted Stock Unit Participant shall comply with
the following tax withholding requirements:
(i) Income Taxes. The Restricted Stock Unit Participant shall no later than the date
as of which the shares of Stock which vest under his or her vested Restricted Stock Unit Award
first becomes includible in his or her gross income for income tax purposes, pay to the Company in
cash, or make arrangements satisfactory to the Company regarding payment to the Company of, any
income taxes required by law to be withheld with respect to the Stock or other property issuable
pursuant to such vested Restricted Stock Unit Award.
(ii) Employment Taxes. Any Restricted Stock Unit Participant who is an Employee shall
be liable for the payment of the employee portion of the FICA (Social Security and Medicare) taxes
applicable to the shares of Stock subject to his or her Restricted Stock Unit Award at the time
those shares vest. The FICA taxes shall be based upon the Fair Market Value of the shares of Stock
on the date those shares vest under the Restricted Stock Unit Award.
No Stock shall be delivered to a Restricted Stock Unit Participant with respect to a
Restricted Stock Unit Award until such income and employment withholding taxes have been collected.
The Company shall, to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Restricted Stock Unit Participant. Notwithstanding the
above, the Board may, in its discretion and pursuant to procedures approved by the Board, permit
the Restricted Stock Unit Participant to satisfy the federal, state and local income withholding
taxes applicable to the issued shares of Stock, together with any FICA withholding taxes due at the
time of such Stock issuance, by having the Company withhold shares of Stock (based on the Fair
Market Value of the Stock on the issuance date) or other property otherwise deliverable to such
Restricted Stock Unit Participant in settlement of his or her vested Restricted Stock Unit Award,
provided, however, that the amount of any Stock so withheld shall not exceed the amount necessary
to satisfy the Companys required income tax withholding obligations using the minimum statutory
withholding rates for federal, state and/or local tax purposes, that are applicable to supplemental
taxable income
11. AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.
(a) Amendment, Termination or Suspension of Plan. The Board, at any time and from time
to time, may terminate, amend or modify the Plan; provided, however, that to the extent necessary
and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company
shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as
required; provided further, however, that unless otherwise required by law or specifically provided
herein, no such termination, amendment or alteration shall be made that would materially impair the
previously accrued rights of any Optionee or any Restricted Stock or Restricted Stock
Unit Participant with respect to his or her Option or his or her Restricted Stock or
Restricted Stock Unit Award without his or her written consent.
14
(b) Amendment of Options and Restricted Stock and Restricted Stock Unit Awards. The
Board may amend the terms of any Option or any Restricted Stock or Restricted Stock Unit Award
previously granted, including any Option Agreement or any Restricted Stock or Restricted Stock Unit
Agreement, retroactively or prospectively, but no such amendment shall materially impair the
previously accrued rights of any Optionee or any Restricted Stock or Restricted Stock Unit
Participant with respect to any such Option or any Restricted Stock or Restricted Stock Unit Award
without his or her written consent.
(c) Automatic Termination of Plan. Unless sooner terminated, the Plan shall terminate
on the date that the aggregate the total number of shares of Stock subject to the Plan have been
issued pursuant to the Plans provisions, and no shares covered by a Restricted Stock Award are any
longer subject to any Restriction Period.
12. RIGHTS OF EMPLOYEES, DIRECTORS, CONSULTANTS AND OTHER PERSONS.
Neither this Plan nor any Options or Restricted Stock or Restricted Stock Unit Awards shall
confer on any Optionee, Restricted Stock or Restricted Stock Unit Participant or other person:
(a) Any rights or claims under the Plan except in accordance with the provisions of the Plan
and the applicable agreement;
(b) Any right with respect to continuation of employment by the Company or any Subsidiary or
engagement as a Consultant or Director, nor shall they interfere in any way with the right of the
Company or any Subsidiary that employs or engages an Optionee or a Restricted Stock or Restricted
Stock Unit Participant to terminate that persons employment or engagement at any time with or
without cause.
(c) Any right to be selected to participate in the Plan or to be granted an Option or a
Restricted Stock or Restricted Stock Unit Award; or
(d) Any right to receive any bonus, whether payable in cash or in Stock, or in any combination
thereof, from the Company or its subsidiaries, nor be construed as limiting in any way the right of
the Company or its subsidiaries to determine, in its sole discretion, whether or not it shall pay
any employee or consultant bonus, and, if so paid, the amount thereof and the manner of such
payment.
13. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT.
So long as a class of the Companys equity securities is registered under Section 12 of the
Exchange Act, the Company intends that the Plan shall comply in all respects with Rule 16b-3. If
during such time any provision of this Plan is found not to be in compliance with Rule 16b-3, that
provision shall be deemed to have been amended or deleted as and to the extent necessary to comply
with Rule 16b-3, and the remaining provisions of the Plan shall continue in full force and effect
without change. All transactions under the Plan during such time shall be executed in accordance
with the requirements of Section 16 of the Exchange Act and the applicable regulations promulgated
thereunder.
14. LIMITATION OF LIABILITY AND INDEMNIFICATION.
(a) Contractual Liability Limitation. Any liability of the Company or its subsidiaries
to any Optionee or any Restricted Stock or Restricted Stock Unit Participant with respect to any
Option or any Restricted Stock or Restricted Stock Unit Award shall be based solely on contractual
obligations created by the Plan and the Option Agreements and the Restricted Stock or Restricted
Stock Unit Agreements outstanding thereunder.
15
(b) Indemnification. In addition to such other rights of indemnification as they may
have as Directors or officers, Directors and officers to whom authority to act for the Board or the
Company is delegated shall be indemnified by the Company against all reasonable expenses, including
attorneys fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason of any action taken
or failure to act under or in connection with the Plan, or any right granted hereunder, and against
all amounts paid by them in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days after the
institution of such action, suit or proceeding, such person shall offer to the Company, in writing,
the opportunity at its own expense to handle and defend the same.
15. MISCELLANEOUS
(a) Effective Date. The effective date of the Plan shall be the date the Plan is
approved by the stockholders of the Company or such later date as shall be determined by the Board.
(b) Acceptance of Terms and Conditions of Plan By accepting any benefit under the
Plan, each Optionee and each Restricted Stock or Restricted Stock Unit Participant and each person
claiming under or through such Optionee or such Restricted Stock or Restricted Stock Unit
Participant shall be conclusively deemed to have indicated their acceptance and ratification of,
and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by
the Company, the Board or the Committee, in any case in accordance with the terms and conditions of
the Plan.
(c) No Effect on Other Arrangements. Neither the adoption of the Plan nor anything
contained herein shall affect any other compensation or incentive plans or arrangements of the
Company or its subsidiaries, or prevent or limit the right of the Company or any subsidiary to
establish any other forms of incentives or compensation for their Employees, Directors or
Consultants or grant or assume restricted stock or other rights otherwise than under the Plan.
(d) Choice of Law. The Plan shall be governed by and construed in accordance with the
laws of the State of California, without regard to such states conflict of law provisions, and, in
any event, except as superseded by applicable Federal law.
16
Annex A
NONQUALIFIED STOCK OPTION AGREEMENT
Dear :
Waste Connections, Inc. (the Company), pursuant to its Third Amended and Restated 2004
Equity Incentive Plan (the Plan), has granted to you an option to purchase shares of the common
stock of the Company (Stock). This option is not intended to qualify and will not be treated as
an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the Code).
The grant under this Nonqualified Stock Option Agreement (the Agreement) is in connection
with and in furtherance of the Companys compensatory benefit plan for participation of the
Companys Employees, Directors and Consultants. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Plan.
The option granted hereunder is subject to and governed by the following terms and conditions:
1. | Award Date:
_____
|
||
2. | Number of Shares Subject to Option:
_____
|
||
3. | Vesting Schedule. Subject to the limitations herein and in the Plan, this option shall
become exercisable (vest) as follows: |
Number of Shares | Date of Earliest Exercise | |
(Installment) | (Vesting) | |
The installments provided for are cumulative. Each such installment that becomes exercisable shall
remain exercisable until expiration or earlier termination of the option.
4. Exercise Price.
(a) The exercise price of this option is $ per share.
(b) Payment of the exercise price per share is due in full in cash (including check) on
exercise of all or any part of each installment that has become exercisable by you; provided that,
if at the time of exercise the Stock is publicly traded and quoted regularly in the Wall Street
Journal, payment of the exercise price, to the extent permitted by the Company and applicable
statutes and regulations, may be made by having the Company withhold shares of Stock issuable on
such exercise, by delivering shares of Stock already owned by you, by cashless exercise described
in Section 5(d) of the Plan and complying with its provisions, or by delivering a combination of
such forms of payment. Such Stock (i) shall be valued at its Fair Market Value at the close of
business on the date of exercise, (ii) if originally acquired from the Company, must have been held
for the period required to avoid a charge to the Companys reported earnings, and (iii) must be
owned free and clear of any liens, claims, encumbrances or security interests.
Annex A: Page 1
5. Partial or Early Exercise.
(a) Subject to the provisions of this Agreement, you may elect at any time during your
Continuous Status as an Employee, Director or Consultant to exercise this option as to any part or
all of the shares subject to this option at any time during the term hereof, including, without
limitation, a time prior to the date of earliest exercise (vesting) stated in paragraph 3 hereof;
provided that:
(i) a partial exercise of this option shall be deemed to cover first vested shares and then
unvested shares next vesting;
(ii) any shares so purchased that shall not have vested as of the date of exercise shall be
subject to the purchase option in favor of the Company as described in the Early Exercise Stock
Purchase Agreement available from the Company; and
(iii) you shall enter into an Early Exercise Stock Purchase Agreement in the form available
from the Company with a vesting schedule that will result in the same vesting as if no early
exercise had occurred.
(b) The election provided in this paragraph 5 to purchase shares on the exercise of this
option prior to the vesting dates shall cease on termination of your Continuous Status as an
Employee, Director or Consultant and may not be exercised from or after the date thereof.
6. Fractional Shares. This option may not be exercised for any number of shares that would
require the issuance of anything other than whole shares.
7. Securities Law Compliance. Notwithstanding anything to the contrary herein, this option may
not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of
any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then be listed. In
addition, this option may not be exercised unless (a) a registration statement under the Securities
Act shall at the time of exercise of the option be in effect with respect to the shares issuable
upon exercise of the option or (b) in the opinion of legal counsel to the Company, the shares
issuable upon exercise of the option may be issued in accordance with the terms of an applicable
exemption from the registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Companys
legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the exercise of any
option, the Company may require the Optionee to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the Company.
8. Term. The term of this option commences on the date hereof and, unless sooner terminated as
set forth below or in the Plan, terminates on
_____
(which date shall be no more than
five years from the award date in Section 1 of this Agreement). In no event may this option be
exercised on or after the date on which it terminates. This option shall terminate prior to the
expiration of its term on the date of termination of your Continuous Status as an Employee,
Director or Consultant for any reason or for no reason, unless:
(a) such termination is due to your retirement or Disability and you do not die within the
three months after such termination, in which event the option shall terminate on the earlier of
the termination date set forth above or six months after such termination of your Continuous Status
as an Employee, Director or Consultant; or
(b) such termination is due to your death, or such termination is due to your retirement or
Disability and you die within three months after such termination, in which event the option shall
terminate on the earlier of the termination date set forth above or the first anniversary of your
death.
Annex A: Page 2
Notwithstanding any of the foregoing provisions to the contrary however, this option may be
exercised following termination of your Continuous Status as an Employee, Director or Consultant
only as to that number of shares as to which it shall have been exercisable under Section 2 of this
Agreement on the date of such termination.
9. Conditions on Exercise.
(a) This option may be exercised, to the extent specified above, by delivering a notice of
exercise (in a form designated by the Company) together with the exercise price to the Secretary of
the Company, or to such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require pursuant to Section 7 of
the Plan.
(b) By exercising this option you agree that the Company (or a representative of the
underwriters) may, in connection with an underwritten registration of the offering of any
securities of the Company under the Exchange Act, require that you not sell or otherwise transfer
or dispose of any shares of Stock or other securities of the Company during such period (not to
exceed 180 days) following the effective date (the Effective Date) of the registration statement
of the Company filed under the Exchange Act as may be requested by the Company or the
representative of the underwriters. For purposes of this restriction, you will be deemed to own
securities which (A) are owned directly or indirectly by you, including securities held for your
benefit by nominees, custodians, brokers or pledgees, (B) may be acquired by you within sixty days
of the Effective Date, (C) are owned directly or indirectly, by or for your brothers or sisters
(whether by whole or half blood), spouse, ancestors and lineal descendants, or (D) are owned,
directly or indirectly, by or for a corporation, partnership, estate or trust of which you are a
shareholder, partner or beneficiary, but only to the extent of your proportionate interest therein
as a shareholder, partner or beneficiary thereof. You further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restrictions until
the end of such period.
10. Adjustments on Certain Events.
(a) In the event that the Company is subject to a Change in Control:
(i) immediately prior thereto this option shall be automatically accelerated and become
immediately exercisable as to all of the shares of Stock covered hereby, notwithstanding anything
to the contrary in the Plan or this Agreement; and
(ii) the Board may, in its discretion, and on such terms and conditions as it deems
appropriate, by resolution adopted by the Board or by the terms of any agreement of sale, merger or
consolidation giving rise to the Change in Control, provide that, without Optionees consent, the
shares subject to this option may (A) continue as an immediately exercisable option of the Company
(if the Company is the surviving corporation), (B) be assumed as immediately exercisable options by
the surviving corporation or its parent, (C) be substituted by immediately exercisable options
granted by the surviving corporation or its parent with substantially the same terms for this
option, or (D) be cancelled after payment to Optionee of an amount in cash or other consideration
delivered to stockholders of the Company in the transaction resulting in a Change in Control of the
Company equal to the total number of shares subject to this option multiplied by the remainder of
(1) the amount per share to be received by holders of the Companys Stock in the sale, merger or
consolidation, minus (2) the exercise price per share of the shares subject to this option.
(b) The exercise price shall be subject to adjustment from time to time in the event that the
Company shall (i) pay a dividend in, or make a distribution of, shares of Stock (or securities
convertible into, exchangeable for or otherwise entitling a holder thereof to receive Stock), or
evidences of indebtedness or other property or assets, on outstanding Stock, (ii) subdivide the
outstanding shares of Stock into a greater number of shares, (iii) combine the outstanding shares
of Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a
reclassification of the Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the resulting corporation). An adjustment made
pursuant to this Section 10(b) shall, in the case of a dividend or distribution, be made as of the
record date therefor and, in the case of a subdivision, combination or reclassification, be made as
of the effective date thereof. In any such case, the total number of shares and the number of
shares or other units of such other securities purchasable on exercise of the option immediately
prior thereto shall be adjusted so that the Optionee shall be entitled to receive at the same
aggregate purchase price
the number of shares of Stock and the number of shares or other units of such other securities
that the Optionee would have owned or would have been entitled to receive immediately following the
occurrence of any of the events described above had the option been exercised in full immediately
prior to the occurrence (or applicable record date) of such event. If, as a result of any
adjustment pursuant to this Section 10(b), the Optionee shall become entitled to receive shares of
two or more classes or series of securities of the Company, the Board shall equitably determine the
allocation of the adjusted exercise price between or among shares or other units of such classes or
series and shall notify the Optionee of such allocation.
Annex A: Page 3
(c) If at any time, as a result of an adjustment made pursuant to this Section 10, the
Optionee shall become entitled to receive any shares of capital stock or shares or other units of
other securities or property or assets other than Stock, the number of such other shares or units
so receivable on any exercise of the option shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with respect to the
shares of Stock in this Section 10, and the provisions of this Agreement with respect to the shares
of Stock shall apply, with necessary changes in points of detail, on like terms to any such other
shares or units.
(d) All calculations under this Section 10 shall be, in the case of exercise price, rounded up
to the nearest cent or, in the case of shares subject to this option, rounded down to the nearest
one-hundredth of a share, but in no event shall the Company be obligated to issue any fractional
share on any exercise of the option.
11. Non-Transferability. This option is generally not transferable, except by will or by the
laws of descent and distribution, unless the Company expressly permits a transfer, such as to a
trust or other entity for estate planning purposes. Unless the Company approves such a transfer,
this option is exercisable during your life only by you.
12. Rights of Optionee. This Agreement is not an employment contract and nothing in this
Agreement shall be deemed to create in any way whatsoever any obligation on your part to continue
in the employ of the Company, or of the Company to continue your employment with the Company. If
this option is granted to you in connection with your performance of services as a Consultant,
references to employment, Employee and similar terms shall be deemed to include the performance of
services as a Consultant; provided that no rights as an Employee shall arise by reason of the use
of such terms.
13. Tax Withholding Obligations. Whenever the Company proposes or is required to issue or
transfer shares of Stock to you with respect to an Option, the Company shall have the right to
require you to remit to the Company an amount sufficient to satisfy any Federal, state or local
withholding tax requirements, including your applicable share of any employment taxes, prior to the
delivery of any certificate or certificates for such shares. Alternatively, the Company may issue
or transfer such shares net of the number of shares sufficient to satisfy the withholding tax
requirements. For withholding tax purposes, the shares of Stock shall be valued on the date the
withholding obligation is incurred.
14. Notice. Any notice or other communication to be given under or in connection with this
Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt
or, in the case of notices from the Company to you, five days after deposit in the United States
mail, postage prepaid, addressed to you at the address specified below or at such other address as
you may hereafter designate by notice to the Company.
15. Agreement Subject to Plan. This Agreement is subject to all provisions of the Plan, a copy
of which is attached hereto and made a part of this Agreement, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement
and those of the Plan, the provisions of the Plan shall control.
WASTE CONNECTIONS, INC. |
||||
By | ||||
Ronald J. Mittelstaedt | ||||
Chairman and Chief Executive Officer |
Annex A: Page 4
ATTACHMENTS:
Waste Connections, Inc. Third Amended and Restated 2004 Equity Incentive Plan
Notice of Exercise
Notice of Exercise
Annex A: Page 5
The undersigned:
(a) Acknowledges receipt of the foregoing Nonqualified Stock Option Agreement and the
attachments referenced therein and understands that all rights and liabilities with respect to the
option granted under the Agreement are set forth in such Agreement and the Plan; and
(b) Acknowledges that as of the date of grant set forth in such Agreement, the Agreement sets
forth the entire understanding between the undersigned optionee and the Company and its
Subsidiaries regarding the acquisition of Stock pursuant to the option and supersedes all prior
oral and written agreements on that subject with the exception of (i) the options, if any,
previously granted and delivered to the undersigned under stock option plans of the Company, and
(ii) the following agreements only:
NONE: |
||||
OTHER: |
||||
OPTIONEE | ||||||
Address: | ||||||
Annex A: Page 6
NOTICE OF EXERCISE
Waste Connections, Inc.
2295 Iron Point Road, Suite 200
Folsom, CA 95630-8767 Date of Exercise: _____
2295 Iron Point Road, Suite 200
Folsom, CA 95630-8767 Date of Exercise: _____
Ladies and Gentlemen:
This constitutes notice under my Nonqualified Stock Option Agreement that I elect to purchase the
number of shares of Common Stock (Stock) of Waste Connections, Inc. (the Company) for the price
set forth below.
Option Agreement dated: |
||||
Number of shares as to which option is exercised: |
||||
Certificates to be issued in name of: |
||||
Total exercise price: |
$ | |||
Cash payment delivered herewith: |
$ | |||
Value of _____________ shares
of ________________ common
stock delivered herewith:(1) |
$ | |||
By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the Waste Connections, Inc. Third Amended and Restated 2004 Equity Incentive Plan
or the Option Agreement, and (ii) to provide for the payment by me to you (in the manner designated
by you) of your withholding obligation, if any, relating to the exercise of this option.
I hereby represent, warrant and agree with respect to the shares of Stock of the Company that
I am acquiring by this exercise of the option (the Shares) that, if required by the Company (or a
representative of the underwriters) in connection with an underwritten registration of the offering
of any securities of the Company under the Securities Act, I will not sell or otherwise transfer or
dispose of any shares of Stock or other securities of the Company during such period (not to exceed
180 days) following the effective date of the registration statement of the Company filed under the
Securities Act (the Effective Date) as may be requested by the Company or the representative of
the underwriters. For purposes of this restriction, I will be deemed to own securities that (i) are
owned, directly or indirectly by me, including securities held for my benefit by nominees,
custodians, brokers or pledgees; (ii) may be acquired by me within sixty days of the Effective
Date; (iii) are owned directly or indirectly, by or for my brothers or sisters (whether by whole or
half blood), spouse, ancestors and lineal descendants; or (iv) are owned, directly or indirectly,
by or for a corporation, partnership, estate or trust of which I am a shareholder, partner or
beneficiary, but only to the extent of my proportionate interest therein as a shareholder, partner
or beneficiary thereof. I further agree that the Company may impose stop-transfer instructions with
respect to securities subject to this restriction until the end of such period.
Very truly yours,
(1) | Shares must meet the public trading requirements set forth in the Options Agreement. Shares
must be valued in accordance with the terms of the option being exercised, must have been
owned for the minimum period required in the Option Agreement, and must be owned free and
clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed
or accompanied by an executed assignment separate from certificate. |
Annex A: Page 7
Annex B
RESTRICTED STOCK AGREEMENT
Dear :
Waste Connections, Inc. (the Company), pursuant to its Third Amended and Restated 2004
Equity Incentive Plan (the Plan) has granted to you an award of Restricted Stock (Award) in
shares of common stock of the Company (Stock). The Restricted Stock will be issued to you
subject to restrictions on transfer and otherwise, which will lapse over the Restricted Period,
provided that you maintain Continuous Status as an Employee, Director or Consultant.
The grant under this Restricted Stock Agreement (the Agreement) is in connection with and in
furtherance of the Companys compensatory benefit plan for participation of the Companys
Employees, Directors and Consultants. Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Plan.
The Award granted hereunder is subject to and governed by the following terms and conditions:
1. | Award Date: . |
||
2. | Number of Shares Subject to Award: . |
||
3. | Purchase Price. The purchase price for each share of Stock awarded by this Agreement is $ . |
||
4. | Vesting Schedule. The Award of Restricted Stock shall be deemed non-forfeitable and
such Stock shall no longer be considered Restricted Stock on the earlier of a Change in
Control or the expiration of the Restriction Period on the following dates with respect to
the following percentages of the total shares of Restricted Stock awarded, and the Company
shall, within a reasonable time and subject to Section 5, deliver stock certificates
evidencing such Stock to you: |
(a) Schedule of Expiration of Restriction Period. The overall restriction period, which begins
on the date of the grant of the Award and ends on the
_____
anniversary of the grant of the
Award (the Restriction Period), expires in
_____
equal phases:
Restriction Period Expires with | ||||
Respect to the Following | ||||
Percentage of Total Shares of | ||||
Date | Restricted Stock Awarded | |||
On grant |
0 | % | ||
As of __________, 20__ (first anniversary of grant) |
| % | ||
[As of __________, 20__ (second anniversary of grant)] |
[__ | %] | ||
[As of __________, 20__ (third anniversary of grant)] |
[__ | %] | ||
[As of __________, 20__ (fourth anniversary of grant)] |
[__ | %] |
Annex B: Page 1
(b) Forfeiture of Restricted Stock. If, during the Restriction Period, your Continuous Status
as an Employee, Director or Consultant terminates for any reason, you will forfeit any shares of
Restricted Stock as to which the Restriction Period has not yet expired.
5. Conditions on Awards. Notwithstanding anything to the contrary herein:
(a) Securities Law Compliance. Awards may not be granted and shares of stock may not be issued
if either such action would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock exchange or market
system on which the Stock may then be listed. In addition, no Stock may be issued unless (a) a
registration statement under the Securities Act shall at the time of issuance of the Stock be in
effect with respect to the shares of Stock to be issued or (b) in the opinion of legal counsel to
the Company, the shares of Stock to be issued on expiration of the applicable Restriction Period
may be issued in accordance with the terms of an applicable exemption from the registration
requirements of the Securities Act. The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Companys legal counsel to be necessary to
the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite authority shall not
have been obtained. As a condition to the issuance of any Stock, the Company may require you to
satisfy any qualifications that may be necessary or appropriate to evidence compliance with any
applicable law or regulation and to make any representation or warranty with respect thereto as may
be requested by the Company.
(b) Investment Representation. The Company may require you, or any person to whom an Award is
transferred, as a condition of receiving shares of Stock pursuant to such Award, to (A) give
written assurances satisfactory to the Company as to your knowledge and experience in financial and
business matters or to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters, and that you are capable of
evaluating, alone or together with the purchaser representative, the merits and risks of receiving
such Stock, and (B) to give written assurances satisfactory to the Company stating that you are
acquiring the Stock for your own account and not with any present intention of selling or otherwise
distributing the Stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall not apply if (1) the issuance of the Stock has been registered under a then
currently effective registration statement under the Securities Act, or (2) counsel for the Company
determines as to any particular requirement that such requirement need not be met in the
circumstances under the then applicable securities laws.
6. Non-Transferability of Award. During the Restriction Period stated herein, you shall not
sell, transfer, pledge, assign, encumber or otherwise dispose of the Restricted Stock whether by
operation of law or otherwise and shall not make such Restricted Stock subject to execution,
attachment or similar process. Any attempt by you to do so shall constitute the immediate and
automatic forfeiture of such Award. Notwithstanding the foregoing, you may designate the payment or
distribution of the Award (or any portion thereof) after your death to the beneficiary most
recently named by you in a written designation thereof filed with the Company, or, in lieu of any
such surviving beneficiary, as designated by you by will or by the laws of descent and
distribution. In the event any Award is to be paid or distributed to the executors, administrators,
heirs or distributees of your estate, or to your beneficiary, in any such case pursuant to the
terms and conditions of the Plan and in accordance with such terms and conditions as may be
specified from time to time by the Committee, the Company shall be under no obligation to issue
Stock thereunder unless and until the Committee is satisfied that the person or persons to receive
such Stock is the duly appointed legal representative of your estate or the proper legatee or
distributee thereof or your named beneficiary.
7. Adjustments on Certain Events.
(a) Changes in Control. Immediately prior to a Change in Control, all restrictions imposed by
the Committee on any outstanding Award shall be immediately automatically canceled, the Restriction
Period shall immediately terminate and the Award shall be fully vested, notwithstanding anything to
the contrary in the Plan or the Agreement.
Annex B: Page 2
(b) Adjustment of Shares. The number, class and kind of shares under the Award shall be
appropriately adjusted by the Committee in its discretion to preserve the benefits or potential
benefits intended to be made available under the Plan or with respect to the Award or otherwise
necessary to reflect any such change, if the
Company shall (i) pay a dividend in, or make a distribution of, shares of Stock (or securities
convertible into, exchangeable for or otherwise entitling a holder thereof to receive Stock), or
evidences of indebtedness or other property or assets, on outstanding Stock, (ii) subdivide the
outstanding shares of Stock into a greater number of shares, (iii) combine the outstanding shares
of Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a
reclassification of the Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the resulting corporation). An adjustment made
pursuant to this Section 7(b) shall, in the case of a dividend or distribution, be made as of the
record date therefor and, in the case of a subdivision, combination or reclassification, be made as
of the effective date thereof. Any new or additional shares or securities that you receive are
subject to the same terms and conditions, including the Restriction Period, as related to the
original Award.
(c) Receipt of Assets other than Stock. If at any time, as a result of an adjustment made
pursuant to this Section 7, you shall become entitled to receive any shares of capital stock or
shares or other units of other securities or property or assets other than Stock, the number of
such other shares or units so receivable on expiration of the Restriction Period shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Stock in this Section 7, and the provisions of this
Agreement with respect to the shares of Stock shall apply, with necessary changes in points of
detail, on like terms to any such other shares or units.
(d) Fractional Shares. All calculations under this Section 7 shall be made to the nearest cent
or to the nearest one-hundredth of a share, as the case may be, but in no event shall the Company
be obligated to issue any fractional share.
(e) Inability to Prevent Acts Described in Section 7; Uniformity of Actions Not Required. No
Restricted Stock Participant shall have or be deemed to have any right to prevent the consummation
of the acts described in this Section 7 affecting the number of shares of Stock subject to any
Award held by the Restricted Stock Participant. Any actions or determinations by the Committee
under this Section 7 need not be uniform as to all outstanding Awards, and need not treat all
Restricted Stock Participants identically.
8. Rights of Restricted Stock Participant. This Plan and the Awards shall not confer on you
or any other person:
(a) Any rights or claims under the Plan except in accordance with the provisions of the Plan
and the applicable agreement;
(b) Any right with respect to continuation of employment or a consulting or directorship
arrangement with the Company or any Subsidiary, nor shall they interfere in any way with the right
of the Company or any Subsidiary that employs you or engages you as a consultant or director to
terminate your employment or consulting or directorship arrangement at any time with or without
cause;
(c) Any right to be selected to participate in the Plan or to be granted an Award; or
(d) Any right to receive any bonus, whether payable in cash or in Stock, or in any
combination thereof, from the Company or its subsidiaries, nor be construed as limiting in any way
the right of the Company or its subsidiaries to determine, in its sole discretion, whether or not
it shall pay any employee, consultant or director bonuses, and, if so paid, the amount thereof and
the manner of such payment.
Annex B: Page 3
9. Tax Withholding Obligations.
(a) Withholding Requirement and Procedure. You shall (and in no event shall Stock be delivered
to you with respect to an Award until), no later than the date as of which the value of the Award
first becomes includible in your gross income for income tax purposes, pay to the Company in cash,
or make arrangements satisfactory to the Company, as determined in the Committees discretion,
regarding payment to the Company of, any taxes of any kind required by law to be withheld with
respect to the Stock or other property subject to such Award, including your applicable share of
any employment taxes, and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind otherwise due to
you. Notwithstanding the above, the Committee may, in its discretion and pursuant to procedures
approved by the Committee, permit you to elect withholding by the Company of Stock or other
property otherwise deliverable to you pursuant to your Award, provided, however, that the amount of
any Stock so withheld shall not exceed the amount necessary to satisfy the Companys required tax
withholding obligations using the minimum statutory withholding rates for Federal, state and/or
local tax purposes, including payroll taxes, that are applicable to supplemental taxable income in
full or partial satisfaction of such tax obligations, based on the Fair Market Value of the Stock
on the payment date.
(b) Section 83(b) Election. If you make an election under Code Section 83(b), or any successor
section thereto, to be taxed with respect to an Award as of the date of transfer of the Restricted
Stock rather than as of the date or dates on which you would otherwise be taxable under Code
Section 83(a), you shall deliver a copy of such election to the Company immediately after filing
such election with the Internal Revenue Service. Neither the Company nor any of its affiliates
shall have any liability or responsibility relating to or arising out of the filing or not filing
of any such election or any defects in its construction.
10. Notice. Any notice or other communication to be given under or in connection with this
Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt
or, in the case of notices from the Company to you, five days after deposit in the United States
mail, postage prepaid, addressed to you at the address specified below or at such other address as
you may hereafter designate by notice to the Company.
11. Agreement Subject to Plan. This Agreement is subject to all provisions of the Plan, a copy
of which is attached hereto and made a part of this Agreement, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement
and those of the Plan, the provisions of the Plan shall control.
WASTE CONNECTIONS, INC. |
||||
By | ||||
Ronald J. Mittelstaedt | ||||
Chairman and Chief Executive Officer | ||||
ATTACHMENT:
Waste Connections, Inc. Third Amended and Restated 2004 Equity Incentive Plan
Annex B: Page 4
The undersigned:
(a) Acknowledges receipt of the foregoing Restricted Stock Award Agreement and the
attachments referenced therein and understands that all rights and liabilities with respect to the
Award granted under the Agreement are set forth in such Agreement and the Plan; and
(b) Acknowledges that as of the date of the Award set forth in such Agreement, the Agreement
sets forth the entire understanding between the undersigned participant and the Company and it
Subsidiaries regarding the acquisition of Stock pursuant to the Award and supersedes all prior oral
and written agreements on that subject.
RESTRICTED STOCK PARTICIPANT | ||||
Address: | ||||
Annex B: Page 5
Annex C
RESTRICTED STOCK UNIT AGREEMENT
Dear :
Waste Connections, Inc. (the Company) is pleased to inform you that you have been awarded
Restricted Stock Units under the Companys Third Amended and Restated 2004 Equity Incentive Plan
(the Plan). The units will entitle you to receive shares of the Companys common stock in a
series of installments over your period of continued service with the Company. Each Restricted
Stock Unit represents the right to receive one share of the Companys common stock (Common Stock)
on the vesting date of that unit. Unlike a typical stock option program, the shares will be issued
to you as a bonus for your continued service over the vesting period, without any cash payment
required from you. However, you must pay the applicable income and employment withholding taxes
(described below) when due.
The award under this Restricted Stock Unit Agreement (the Agreement) is in connection with
and in furtherance of the Companys compensatory benefit plan for participation of the Companys
Employees, Directors and Consultants. Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Plan.
This Agreement sets the number of shares of the Common Stock subject to your award, the
applicable vesting schedule for the issuance of those shares, and the remaining terms and
conditions governing your award (the Award).
Award Date: | _____ | |||
Number of Shares Subject to Award: | _____ shares of the Companys common stock (the Shares). | |||
Vesting Schedule: | The Shares will vest and become issuable in a series of _____ ( _____ ) successive equal annual installments upon your completion of each year of Continuous Status as an Employee, Director or Consultant over the _____ ( _____ ) year period measured from the Award Date. However, no Shares which vest in accordance with such schedule will actually be issued until you satisfy all applicable income and employment withholding taxes. |
Other important features of your Award may be summarized as follows:
1. Forfeitability: Should your Continuous Status as an Employee, Director or Consultant cease
for any reason prior to vesting in one or more Shares subject to your Award, then your Award will
be cancelled with respect to those unvested Shares and the number of your Restricted Stock Units
will be reduced accordingly, and you will cease to have any right or entitlement to receive any
Shares under those cancelled units.
2. Transferability: Prior to your actual receipt of the Shares in which you vest under your
Award, you may not transfer any interest in your Award or the underlying Shares or pledge or
otherwise hedge the sale of those Shares, including (without limitation) any short sale, put or
call option or any other instrument tied to the value of those Shares. Any attempt by you to do so
will result in an immediate forfeiture of the Restricted Stock Units awarded to you hereunder.
However, your right to receive any Shares which have vested under your Restricted Stock Units but
which remain unissued at the time of your death may be transferred pursuant to the provisions of
your will or the laws of inheritance or to your designated beneficiary following your death. In the
event the Shares which vest hereunder are to be issued to the executors, administrators, heirs or
distributees of your estate or to your designated beneficiary, the Company shall be under no
obligation to effect such issuance unless and until the Committee is
satisfied that the person to receive those Shares is the duly appointed legal representative
of your estate or the proper legatee or distributee thereof or your named beneficiary.
Annex C: Page 1
Any Shares issued to you pursuant to the terms of this Agreement may not be sold or
transferred in contravention of (i) any market black-out periods the Company may impose from time
to time or (ii) the Companys insider trading policies to the extent applicable to you.
3. Adjustments: The number, class and kind of securities subject to your Restricted Stock
Units hereunder shall be appropriately adjusted by the Committee in its discretion to preserve the
benefits or potential benefits intended to be made available under the Plan or with respect to
those Restricted Stock Units or as otherwise necessary to reflect any such change, if the Company
shall (i) pay a dividend in, or make a distribution of, shares of Common Stock (or securities
convertible into, exchangeable for or otherwise entitling a holder thereof to receive such Common
Stock), or evidences of indebtedness or other property or assets, on the outstanding Common Stock,
(ii) subdivide the outstanding shares of Common Stock into a greater number of shares, (iii)
combine the outstanding shares of Common Stock into a smaller number of shares or (iv) issue any
shares of its capital stock in a reclassification of such Common Stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the resulting
corporation). An adjustment made pursuant to this Section 3 shall, in the case of a dividend or
distribution, be made as of the record date therefor and, in the case of a subdivision, combination
or reclassification, be made as of the effective date thereof.
4. Federal Income Taxation: You will recognize ordinary income for federal income tax purposes
on the date the Shares subject to your Award vest, and you must satisfy the income tax withholding
obligation applicable to that income. The amount of your taxable income will be equal to the
closing selling price per share of Common Stock on the New York Stock Exchange on the vesting date
times the number of Shares which vest on that date.
5. FICA Taxes: You will be liable for the payment of the employee share of the FICA (Social
Security and Medicare) taxes applicable to the Shares subject to your Award at the time those
shares vest. FICA taxes will be based on the closing selling price of the shares on the New York
Stock Exchange on the date those Shares vest under your Award.
6. Withholding Taxes: You must pay all applicable federal, state and local income and
employment withholding taxes when due.
(a) The Company shall collect the applicable federal, state and local income and employment
withholding taxes with respect to the vested Shares through an automatic Share withholding
procedure pursuant to which the Company will withhold, immediately as the Shares vest under the
Award, a portion of those vested Shares with a fair market value (measured as of the vesting date)
equal to the amount of such withholding taxes (the Share Withholding Method); provided, however,
that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the
Companys required tax withholding obligations using the minimum statutory withholding rates for
federal, state and local tax purposes, including payroll taxes, that are applicable to supplemental
taxable income. You shall be notified in writing in the event such Share Withholding Method is no
longer available.
(b) Should any Shares vest under the Award at a time the Share Withholding Method is not
available, then the applicable federal, state and local income and employment withholding taxes
shall be collected from you through either of the following alternatives:
your delivery of a separate check payable to the Company in the amount of such
withholding taxes, or
the use of the proceeds from a next-day sale of the Shares issued to you; provided and
only if (i) such a sale is permissible under the Companys trading policies governing the sale
of Common Stock, (ii) you make an irrevocable commitment, on or before the vesting date for
those Shares, to effect such sale of the Shares and (iii) the transaction is not otherwise
deemed to constitute a prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002.
Annex C: Page 2
7. Stockholder Rights: You will not have any stockholder rights, including voting rights and
actual dividend rights, with respect to the Shares subject to your Award until you become the
record holder of those Shares following their actual issuance to you and your satisfaction of the
applicable withholding taxes.
8. Dividend Equivalent Rights: Should a regular cash dividend be declared on the Common Stock
at a time when unissued shares of such Common Stock are subject to your Award, then the number of
Shares at that time subject to your Award will automatically be increased by an amount determined
in accordance with the following formula, rounded down to the nearest whole share:
X = (A x B)/C, where | ||||||
X | = | the additional number of Shares which will become subject to your Award by reason of the cash dividend; | ||||
A | = | the number of unissued Shares subject to this Award as of the record date for such dividend; | ||||
B | = | the per Share amount of the cash dividend; and | ||||
C | = | the closing selling price per share of Common Stock on the New York Stock Exchange on the payment date of such dividend. |
The additional Shares resulting from such calculation will be subject to the same terms and
conditions as the unissued Shares to which they relate under your Award.
9. Change in Control: In the event of a Change in Control, the vesting of the Shares subject
to your Award will accelerate in full immediately upon such Change in Control and the shares
subject to your Award shall be issued, subject to your satisfaction of all applicable federal,
state, local and/or foreign income and employment withholding taxes.
10. Securities Law Compliance: No Shares will be issued pursuant to your Award if such
issuance would constitute a violation of any applicable federal, state or foreign securities laws
or other law or regulations or the requirements of any stock exchange or market system on which the
Common Stock may then be listed. In addition, no Shares will be issued unless: (a) a registration
statement under the Securities Act is in effect at that time with respect to the Shares to be
issued; or (b) in the opinion of legal counsel to the Company, those Shares may be issued in
accordance with the terms of an applicable exemption from the registration requirements of the
Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Companys legal counsel to be necessary to the lawful issuance
of any Shares hereunder shall relieve the Company of any liability in respect of the failure to
issue such Shares as to which such requisite authority shall not have been obtained. As a condition
to the issuance of any Shares, the Company may require you to satisfy any qualifications that may
be necessary or appropriate to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by the Company.
11. Notice: Any notice or other communication to be given under or in connection with this
Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt
or, in the case of notices from the Company to you, five days after deposit in the United States
mail, postage prepaid, addressed to you at the address specified below or at such other address as
you may hereafter designate by notice to the Company.
Annex C: Page 3
12. Remaining Terms: The remaining terms and conditions of your Award are governed by the
Plan, and your Award is also subject to all interpretations, amendments, rules and regulations
which may from time to time be adopted under the Plan. Along with this Agreement, you also received
a copy of the official prospectus summarizing the principal features of the Plan. Please review the
plan prospectus carefully so that you fully understand your rights and benefits under your Award
and the limitations, restrictions and vesting provisions applicable to the
Award. In the event of any conflict between the provisions of this Agreement and those of the
Plan, the provisions of the Plan shall be controlling.
13. Limitations: Nothing in this Agreement or the Plan shall confer on you or any other
person:
(a) Any rights or claims under the Plan except in accordance with the provisions of the Plan
and the applicable agreement;
(b) Any right with respect to continuation of employment or a consulting or directorship
arrangement with the Company or any Subsidiary, nor shall they interfere in any way with the right
of the Company or any Subsidiary that employs you or engages you as a consultant or director to
terminate your employment or consulting or directorship arrangement at any time, with or without
cause;
(c) Any right to be selected to participate in the Plan or to be granted an Award; or
(d) Any right to receive any bonus, whether payable in cash or in Common Stock, or in any
combination thereof, from the Company or its Subsidiaries, nor be construed as limiting in any way
the right of the Company or its Subsidiaries to determine, in its sole discretion, whether or not
it shall pay any employee, consultant or director bonuses, and, if so paid, the amount thereof and
the manner of such payment.
Please execute the Acknowledgment section below to indicate your acceptance of the terms and
conditions of your Award.
WASTE CONNECTIONS, INC. |
||||
By | ||||
Ronald J. Mittelstaedt | ||||
Chairman and Chief Executive Officer |
Annex C: Page 4
ACKNOWLEDGMENT
I hereby acknowledge and accept the foregoing terms and conditions of the restricted stock unit
award evidenced hereby. I further acknowledge and agree that the foregoing sets forth the entire
understanding between the Company and me regarding my entitlement to receive the shares of the
Companys common stock subject to such award and supersedes all prior oral and written agreements
on that subject.
SIGNATURE: | ||||
PRINTED NAME: | ||||
DATED: | , 200_ | |||||
ADDRESS: | ||||||
Annex C: Page 5