EXHIBIT 10.10
RESTRICTED STOCK UNIT AWARD AGREEMENT
This Restricted Stock Unit Award Agreement ("Agreement") is entered into
effective as of ________________ (the "Grant Date"), by and between Waste
Management, Inc., a Delaware corporation (together with its Subsidiaries and
Affiliates, the "Company"), and ________________________ (the "Employee"),
pursuant to the Waste Management, Inc. 2004 Stock Incentive Plan (the "Plan").
Employee and the Company agree to execute such further instruments and to take
such further action as may reasonably be necessary to carry out the intent of
this Agreement.
1. Award. The Company hereby grants to Employee ___________________
"Restricted Stock Units". Restricted Stock Units are notational units of
measurement denominated in shares of common stock of Waste Management, Inc.,
$.01 par value ("Common Stock"). Each Restricted Stock Unit represents a
hypothetical share of Common Stock, subject to the conditions and restrictions
on transferability set forth below and in the Plan. The Restricted Stock Units
will be credited to Employee in an unfunded bookkeeping account established for
Employee.
2. Vesting of Restricted Stock Units. The period of time between the
Grant Date and the vesting of Restricted Stock Units (and the termination of
restriction thereon) will be referred to herein as the "Restricted Period."
(a) Vesting Schedule. For a period of four (4) years commencing on
the Grant Date, the Restricted Stock Units will be subject to the
restrictions as set forth herein; provided, however, that, unless earlier
vested or forfeited pursuant to this Agreement, the restrictions will
lapse on certain anniversary dates of the Grant Date on a number of units
during the Restricted Period as determined in accordance with the
following schedule:
PERCENTAGE OF UNITS GRANTED ON THE
----------------------------------
DATE GRANT DATE TO BE VESTED
---- -----------------------
First anniversary of Grant Date 25%
Second anniversary of Grant Date 50%
Third anniversary of Grant Date 75%
Fourth anniversary Grant Date 100%
When applying this schedule, any fractional units shall be rounded up to
the next whole unit, but in the aggregate may not exceed the total number
of Restricted Stock Units granted on the Grant Date. Unless timely
deferred by Employee in accordance with Section 5, upon vesting, each
Restricted Stock Unit will be converted into one share of Company Common
Stock and Employee will be issued shares of Common Stock equal to the
number of Restricted Stock Units held, free of any restrictions.
(b) Vesting in Event of Retirement. Upon Termination of Employment
from the Company by reason of retirement (as determined by the Committee,
as defined in Section 16 below), Restricted Stock Units subject to this
Agreement will continue to vest pursuant to the
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schedule set forth in Subsection 3(a) for the 36-month period commencing
on the date of such termination; provided, however, that if Employee is
determined by the Company to have violated any post-termination
obligations to the Company (including, but not limited to,
non-competition, non-solicitation or non-disparagement obligations under
Employee's employment agreement, if any), then Employee shall immediately
forfeit all Restricted Stock Units that remain unvested on the date such
violation is discovered by the Company. Employee shall immediately forfeit
all Restricted Stock Units that remain unvested on the date on which such
36-month period expires.
(c) Accelerated Vesting of Restricted Stock Units.
(i) Acceleration on Death or Disability. Upon Termination of
Employment from the Company by reason of Employee's death or
disability (as determined by the Committee), or upon Employee's
disability prior to a Termination of Employment (as determined by
the Committee and within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code")) all
Restricted Stock Units that are not vested at that time immediately
will become vested in full.
(ii) Pro-rated Vesting upon Involuntary Termination. Upon
involuntary Termination of Employment without Cause by the Company,
Employee will be entitled to have vested under this award (including
the amount of Restricted Stock Units that have already vested at
that time) the amount of Restricted Stock Units equivalent to the
total Restricted Stock Units granted under this Agreement multiplied
by the fraction which has as its numerator the total number of days
that the Employee was employed by the Company during the period
beginning on the Grant Date, and has as its denominator 1,460 (being
four times 365 days).
(iii) Possible Acceleration upon Change in Control or Certain
Terminations Following Change in Control. If there is a Change in
Control of Waste Management, Inc., all outstanding but unvested
Restricted Stock Units that are not vested will become immediately
vested in full, unless the successor entity assumes all awards
granted under the Plan and converts the awards to equivalent grants
in the successor effective as of the Change in Control. Provided,
however, even if the successor entity so assumes and converts all
awards granted under the Plan, if the successor entity terminates
Employee's employment during the Window Period without Cause (as
each term is defined in Section 16 below), or due to Employee's
death or disability, then all outstanding but unvested Restricted
Stock Units (or its equivalent grant in the successor entity) will
become immediately vested in full as of such termination.
3. Forfeitures of Restricted Stock Units. Upon Termination of
Employment from the Company for any reason other than as described in Section 2,
Employee shall immediately forfeit all unvested Restricted Stock Units, without
the payment of any consideration or further consideration by the Company. Upon
forfeiture, neither Employee nor any successors, heirs, assigns, or legal
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representatives of Employee shall thereafter have any further rights or interest
in the unvested Restricted Stock Units or certificates therefor.
4. Restrictions on Transfer Before Vesting.
(a) Absent prior written consent of the Committee, the Restricted
Stock Units granted hereunder to Employee may not be sold, assigned,
transferred, pledged or otherwise encumbered, whether voluntarily or
involuntarily, by operation of law or otherwise, from the Grant Date until
such shares have become vested and not subject to deferral.
(b) Consistent with the foregoing, except as contemplated by
Section 10, no right or benefit under this Agreement shall be subject to
transfer, anticipation, alienation, sale, assignment, pledge, encumbrance
or charge, whether voluntary, involuntary, by operation of law or
otherwise, and any attempt to transfer, anticipate, alienate, sell,
assign, pledge, encumber or charge the same shall be void. No right or
benefit hereunder shall in any manner be liable for or subject to any
debts, contracts, liabilities or torts of the person entitled to such
benefits. If Employee or his or her Beneficiary hereunder shall attempt to
transfer, anticipate, alienate, assign, sell, pledge, encumber or charge
any right or benefit hereunder, other than as contemplated by Section 10,
or if any creditor shall attempt to subject the same to a writ of
garnishment, attachment, execution, sequestration, or any other form of
process or involuntary lien or seizure, then such attempt shall have no
effect and shall be void.
5. Elective Deferrals Prior to Vesting.
(a) The Committee may establish procedures pursuant to which
Employee may elect to defer, until a time or times later than the vesting
of a Restricted Stock Unit, receipt of all or a portion of the shares of
Common Stock deliverable in respect of a Restricted Stock Unit, all on
such terms and conditions as Company shall determine in its sole
discretion. If any such deferrals are permitted for Employee, then
notwithstanding any provision of this Agreement or the Plan to the
contrary, an Employee who elects such deferral shall not have any rights
as a stockholder with respect to any such deferred shares of Common Stock
unless and until the date the deferral expires and certificates
representing such shares are required to be delivered to Employee.
(b) Notwithstanding any provision to the contrary in this Agreement,
if deferral of Restricted Stock Units is permitted, each provision of this
Agreement shall be interpreted to permit the deferral of compensation only
as allowed in compliance with the requirements of Section 409A of the
Internal Revenue Code and any provision that would conflict with such
requirements shall not be valid or enforceable. Employee and the Company
further hereby agree to execute such further instruments and take such
further action as reasonably may be necessary to comply with Section 409A
of the Internal Revenue Code.
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6. Rights as a Stockholder. Employee will have no rights as a
stockholder with regard to the Restricted Stock Units prior to vesting. However,
the Company will pay Dividend Equivalents on unvested Restricted Stock Units, in
the form of cash at such time as dividends are paid on the Company's outstanding
shares of Common Stock; provided that, for Restricted Stock Units that are
subject to a deferral election of Employee pursuant to Section 5, the Company
will pay Dividend Equivalents in the form of cash or additional Restricted Stock
Units, at Employee's election, at such time as dividends are paid on the
Company's outstanding shares of Common Stock.
7. Taxes. To the extent that the vesting or receipt of the Restricted
Stock Units or the lapse of any restrictions results in income to Employee for
federal or state tax purposes, Employee shall deliver to the Company at the time
of such receipt or lapse, as the case may be, such amount of money or shares of
Common Stock received upon vesting of Restricted Stock Units or other shares of
Common Stock owned by employee, at Employee's election, as the Company may
require to meet its obligation under applicable tax laws or regulations, and, if
Employee fails to do so, the Company is authorized to withhold from the shares
of Common Stock deliverable as a result of the vesting of the Restricted Stock
Units or from any cash or other form of remuneration then or thereafter payable
to Employee an amount equivalent to any tax required to be withheld by reasons
of such resulting compensation income.
8. Changes in Capital Structure. If the outstanding shares of Common
Stock or other securities of Waste Management, Inc., or both, shall at any time
be changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind of Restricted
Stock Units shall be appropriately and equitably adjusted so as to maintain the
proportionate number of shares.
9. Compliance With Securities Laws. The Company will not be required to
deliver any shares of Common Stock pursuant to this Agreement if, in the opinion
of counsel for the Company, such issuance would violate the Securities Act of
1933 or any other applicable federal or state securities laws or regulations.
Prior to the issuance of any shares pursuant to this Agreement, the Company may
require that Employee (or Employee's legal representative upon Employee's death
or disability) enter into such written representations, warranties and
agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Agreement.
10. Assignment. The Restricted Stock Units are not transferable (either
voluntarily or involuntarily), other than pursuant to a domestic relations
order. Employee may designate a beneficiary or beneficiaries (the "Beneficiary")
to whom the Restricted Stock Units will pass upon Employee's death and may
change such designation from time to time by filing a written designation of
Beneficiary on the form attached hereto as Exhibit A, or such other form as may
be prescribed by the Committee; provided that no such designation shall be
effective until filed with the Company. Employee may change his or her
Beneficiary without the consent of any prior Beneficiary by filing a new
designation with the Company; provided that no such designation shall be
effective prior to receipt by the Company. Following Employee's death, the
Restricted Stock Units will pass to the designated Beneficiary and such person
will be deemed Employee for purposes of any applicable provisions of this
Agreement. If no such designation is made or if the designated Beneficiary does
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not survive Employee's death, the Restricted Stock Units shall pass by will or,
if none, then by the laws of descent and distribution.
11. Successors and Assigns.
(a) This Agreement shall bind and inure to the benefit of and be
enforceable by Employee, the Company and their respective permitted
successors or assigns (including personal representatives, heirs and
legatees), except that Employee may not assign any rights or obligations
under this Agreement except to the extent, and in the manner, expressly
permitted herein.
(b) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company that
assumes all Awards granted under the Plan as contemplated by Section
2(c)(iii) to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place, subject to the vesting
rights under Section 2(c)(iii).
12. Limitation of Rights. Nothing in this Agreement or the Plan may be
construed to:
(a) give Employee any right to be awarded any further Restricted
Stock Units (or other form of stock incentive awards) other than in the
sole discretion of the Committee;
(b) give Employee or any other person any interest in any fund or
in any specified asset or assets of the Company (other than the Restricted
Stock Units and applicable Common Stock following the vesting of such
Restricted Stock Units); or
(c) confer upon Employee the right to continue in the employment
or service of the Company.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas, without reference to
principles of conflict of laws.
14. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
15. No Waiver. The failure of Employee or the Company to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right Employee or the Company may have under this Agreement shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.
16. Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings set forth in the Plan. Certain
other terms used herein have definitions
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given to them in the first place in which they are used. In addition, the
following terms shall have the meanings set forth in this Section 16.
(a) "Board" means the Board of Directors of Waste Management, Inc.
(b) "Cause" means any of the following: (i) willful or deliberate
and continual refusal to materially perform Employee's employment duties
reasonably requested by the Company after receipt of written notice to
Employee of such failure to perform, specifying such failure (other than
as a result of Employee's sickness, illness, injury, death or disability)
and Employee fails to cure such nonperformance within ten (10) days of
receipt of said written notice; (ii) breach of any statutory or common law
duty of loyalty to the Company; (iii) Employee has been convicted of, or
pleaded nolo contendre to, any felony; (iv) Employee willfully or
intentionally caused material injury to the Company, its property, or its
assets; (v) Employee disclosed to unauthorized person(s) proprietary or
confidential information of the Company that causes a material injury to
the Company; (vi) any material violation or a repeated and willful
violation of the Company's policies or procedures, including but not
limited to, the Company's Code of Business Conduct and Ethics (or any
successor policy) then in effect.
(c) "Change in Control" means the first to occur on or after the
Grant Date of any of the following events:
(i) any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing twenty-five
percent (25%) or more of the combined voting power of the Company's
then outstanding voting securities;
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the Grant Date, constitute the Board and any new
director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation relating to the
election of directors of the Company) whose appointment or election
by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least
two-thirds (2/3rds) of the directors then still in office who either
were directors on the Grant Date or whose appointment, election or
nomination for election was previously so approved or recommended
(the "Incumbent Board");
(iii) there is a consummated merger or consolidation of the
Company with any other corporation, other than (1) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving or parent entity) more than
fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving or parent entity
outstanding immediately after such merger or consolidation or (2) a
merger or consolidation effected to implement a recapitalization of
the Company (or
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similar transaction) in which no Person, directly or indirectly,
acquired twenty-five percent (25%) or more of the combined voting
power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction having
a similar effect), other than a sale or disposition by the Company
of all or substantially all of the Company's assets to an entity, at
least fifty percent (50%) of the combined voting power of the voting
securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company
immediately prior to such sale.
For purposes of this definition, the following terms
shall have the following meanings:
(A) "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act;
(B) "Exchange Act" means the Securities and Exchange
Act of 1934, as amended from time to time;
(C) "Person" shall have the meaning set forth in
Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall
not include (1) the Company, (2) a trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, (3) an employee benefit plan of the Company, (4) an
underwriter temporarily holding securities pursuant to an
offering of such securities or (5) a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
shares of Common Stock.
This definition of Change in Control will be modified if and to the
extent necessary to ensure compliance with the requirements of Section
409A of the Code, and Employee and the Company agree to execute such
further instruments and take such further action as reasonably may be
necessary to comply with Section 409A of the Code.
(d) "Committee" means the Compensation Committee of the Board or
such other committee of the Board as the Board may designate from time to
time.
(e) "Dividend Equivalent" means an amount of cash equal to all
dividends and other distributions (or the economic equivalent thereof)
that are payable by the Company on one share of Common Stock to
stockholders of record, which, in the discretion of the Committee, may be
awarded (a) in connection with any Award under the Plan while such Award
is
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outstanding or otherwise subject to a Restriction Period and on a like
number of shares of Common Stock under such Award or (b) singly.
(f) "Termination of Employment" means the termination of
Employee's employment with the Company. Temporary absences from employment
because of illness, vacation or leave of absence and transfers among Waste
Management, Inc. and its Subsidiaries and Affiliates will not be
considered a Termination of Employment. Any questions as to whether and
when there has been a Termination of Employment, and the cause of such
termination, shall be determined by the Committee, and its determination
will be final.
(g) "Window Period" means the period commencing on the date six
months immediately prior to the date on which a Change in Control first
occurs and ending the second anniversary of the date on which a Change in
Control occurs.
17. Entire Agreement.
(a) Employee hereby acknowledges that he or she has received,
reviewed and accepted the terms and conditions applicable to this
Agreement. Employee hereby accepts such terms and conditions, subject to
the provisions of the Plan and administrative interpretations thereof.
Employee further agrees that such terms and conditions will control this
Agreement, notwithstanding any provisions in any employment agreement or
in any prior awards.
(b) Employee hereby acknowledges that he or she is to consult with
and rely upon only Employee's own tax, legal, and financial advisors
regarding the consequences and risks of this Agreement and the award of
Restricted Stock Units.
(c) This Agreement may not be amended or modified except by a
written agreement executed by the parties hereto or their respective
successors and legal representatives. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
18. Counterparts. This Agreement may be executed in counterparts, which
together shall constitute one and the same original.
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IN WITNESS WHEREOF, Waste Management, Inc. has caused this Agreement to be
duly executed by one of its officers thereunto duly authorized, which execution
may be facsimile, engraved or printed, which shall be deemed an original, and
Employee has executed this Agreement, effective as of the day and year first
above written.
WASTE MANAGEMENT, INC.
By:
------------------------------------------
EMPLOYEE
By:
------------------------------------------
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EXHIBIT A TO RESTRICTED STOCK
UNIT AWARD AGREEMENT
RESTRICTED STOCK UNIT AGREEMENT PURSUANT TO THE
WASTE MANAGEMENT, INC. 2004 STOCK INCENTIVE PLAN
DESIGNATION OF BENEFICIARY
I, _____________________________________ ("Employee") hereby declare that
upon my death ___________________ (the "Beneficiary") of _______________________
Name Street Address
___________________________, who is my _______________________, will be entitled
City State Zip Code Relationship to Employee
to the Restricted Stock Units and all other rights accorded Employee by the
above-referenced Restricted Stock Unit Award Agreement.
It is understood that this designation of Beneficiary is made pursuant to
the Agreement and is subject to the conditions stated therein, including the
Beneficiary's survival of Employee. If any such condition is not satisfied, such
rights shall devolve according to Employee's last will and testament, or if
none, then the laws of descent and distribution.
It is further understood that all prior designations of beneficiary under
the Agreement are hereby revoked and that this designation of Beneficiary may
only be revoked in writing, signed by Employee, duly notarized, and filed with
the Company.
__________________________________
Employee
__________________________________
Date
Signed before me, this _______
day of ______, 20____.
___________________________________
Notary Public, State of ___________