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EXHIBIT 10.9
THIRD AMENDMENT TO
STERICYCLE, INC. DIRECTORS STOCK OPTION PLAN
The Stericycle, Inc. Directors Stock Option Plan, as amended by First
and Second Amendments (as amended, the "Plan") is amended as follows pursuant to
the authority of the Board of Directors of Stericycle, Inc. under Paragraph 8.2
of the Plan:
1. ARTICLE 2. The following definition is added to Article 2 of the Plan:
PREFERRED STOCK means the Company's Series A Convertible Preferred
Stock, par value $.01 per share.
2. ARTICLE 5. Article 5 of the Plan is amended to read as follows:
ARTICLE 5
ADMINISTRATION
This Plan shall be administered by the Board. Subject to the express
provisions of the Plan, the Board may interpret the Plan, adopt and
revise policies and procedures to administer the Plan and make all
determinations required for the Plan's administration. The actions of the
Board shall be final and binding.
3. ARTICLE 6. Article 6 of the Plan is amended to read as follows:
ARTICLE 6
STOCK OPTIONS
6.1 OPTION GRANTS. The Company shall grant Options to Outside
Directors at the times and in the amounts that the Board determines, in
its discretion, taking the following guidelines into account as starting
points:
(a) on the date of the Annual Meeting each year, each incumbent
Outside Director who is reelected as a Director at the Annual Meeting
might receive an Option for the number of shares of Common Stock
determined by multiplying 7,000 shares by a fraction, the numerator
of which is $12.00 and the denominator of which is the Closing Price
on the date of the Annual Meeting (or on the last trading day
preceding the Annual Meeting if it is not a trading day), subject to
a minimum grant of 4,500 shares and a maximum grant of 9,500 shares;
(b) on the date of the Annual Meeting each year, each new
Outside Director who is elected as a Director at the Annual Meeting
might receive an Option for the number of shares of Common Stock
determined by multiplying 21,000 shares by a fraction, the numerator
of which is $12.00 and the denominator of which is the Closing Price
on the date of the Annual Meeting (or on the last trading day
preceding the Annual Meeting if it is not a trading day), subject to
a minimum grant of 13,500 shares and a maximum grant of 28,500
shares; and
(c) on the date of election of each new Outside Director who is
elected as a Director other than at an Annual Meeting, the new
Outside Director might receive an Option for the number
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of shares equal to three times the number of shares for which each
incumbent Outside Director was granted an Option on the date of the
Annual Meeting preceding the election of the new Outside Director.
These guidelines do not require Options to be granted at the
particular times described or, if granted, to be granted for the number
of shares of Common Stock specified. The Board, in its discretion, may
grant Options at different times and may grant Options for more or fewer
shares.
The exercise price per share of each Option granted to an Outside
Director shall be the Closing Price on the Grant Date (or the last
trading day preceding the Grant Date if it is not trading day).
6.2 TERM. Each Option granted prior to January 1, 2000 shall have a
six-year term expiring on the sixth anniversary of the date that it was
granted (its "Expiration Date"), and each Option granted after December
31, 1999 shall have a 10-year term expiring on the tenth anniversary of
the date that it was granted (its "Expiration Date"), subject to early
expiration as provided in Paragraph 6.3. An Option may be exercised in
whole or in part at any time prior to its Expiration Date to the extent
that it is vested. Each Option granted prior to April 1, 1998 shall
become vested in 16 consecutive equal quarterly installments beginning on
the first day of the first January, April, July or October following the
date on which it was granted; and each Option granted after March 31,
1998 shall become vested in 12 consecutive equal monthly installments,
beginning on the first day of the first month following the month in
which it was granted, or in accordance with any other vesting schedule
approved by the Board (either generally or in the particular instance).
An Option shall not continue to vest if the holder of the Option for any
reason ceases to serve as an Outside Director. Each outstanding Option
held by an incumbent Outside Director shall become fully vested upon a
Change in Control. In addition, the Board, in its discretion, at any time
may accelerate the vesting of all outstanding Options held by incumbent
Outside Directors under any related or other circumstances.
6.3 EARLY EXPIRATION. If the holder of an Option ceases to serve as
an Outside Director, the unvested portion of the Option shall expire on
the date that he or she ceases to serve as an outside director. The
vested portion of the Option shall expire or remain exercisable as
follows:
(a) If the holder ceases to serve as an Outside Director by
reason of his or her death or disability, the vested portion shall
remain exercisable for the term of the Option and expire on the
Expiration Date.
(b) If the holder ceases to serve as an Outside Director for any
reason other than his or her death or disability or removal from
office, the vested portion shall remain exercisable for the term of
the Option and expire on the Expiration Date unless the Board, taking
into account the circumstances in which the holder ceases to serve as
an Outside Director, considers an earlier expiration date appropriate
(but in no event shall the expiration date be earlier than 30 days
after the date that the holder ceases to serve as an Outside
Director).
(c) If the holder ceases to serve as an Outside Director by
reason of his or her removal from office, the vested portion shall
remain exercisable for 30 days after the date that the holder ceases
to serve as an Outside Director.
6.4 TRANSFERABILITY. An Option may be transferred by the Outside
Director to whom it was granted subject to the following conditions and
limitations:
(a) The Option may be transferred only to one or more of the
following persons or entities ("Permissible Transferees"):
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(1) a member of the Outside Director's immediate family
(consisting of his or her spouse, children and grandchildren);
(2) a trust for the primary benefit of the Outside Director
or any one or more members of his or her immediate family;
(3) a corporation, partnership or other entity which,
together with its affiliates, owns at the time of transfer at
least 2.0% of the issued and outstanding shares of Common Stock
or at least 10.0% of the issued and outstanding shares of
Preferred Stock and with which the Outside Director has a
contractual obligation to pay over or assign his or her
"outside" remuneration directly or indirectly received by reason
of his or her employment by or affiliation with such
corporation, partnership or other entity.
(b) A Permissible Transferee to whom an Option is transferred
shall be subject to all of the terms and conditions of the Plan and
of the Option Agreement evidencing the Option. The Permissible
Transferee may not transfer, assign or pledge the Option, however,
except, solely if the Permissible Transferee is a natural person, by
will or applicable intestacy laws. Section 6.3, dealing with the
early expiration of Options, shall continue in effect in respect of
the Permissible Transferee as if the Outside Director who transferred
the Option had not done so, i.e., references in Section 6.3 to the
"holder of an Option" or "holder" shall be construed as referring to
the Outside Director who transferred the Option and not to the
Permissible Transferee. The Company shall not be under any duty to
notify the Permissible Transferee that the Outside Director who
transferred the Option has ceased to serve as an Outside Director.
(c) No transfer of an Option by an Outside Director to a
Permissible Transferee shall relieve the Outside Director of his or
her withholding obligations under Section 7.3.
Except for transfers to Permissible Transferees, an Outside Director may
not transfer, assign or pledge an Option (whether by operation of law or
otherwise) except as provided by will or applicable intestacy laws; and
no Option shall be subject to execution, attachment or similar process.
An Option may be exercised only by the Outside Director to whom it was
granted (or by the Permissible Transferee to whom the Outside Director
transferred the Option), except in the case of the death of the Outside
Director (or the death of the Permissible Transferee), when it may be
exercised by the person or persons to whom it passes by will or
applicable intestacy laws.
6.5 OPTION AGREEMENTS. Each Option shall be evidenced by a written
agreement (an "Option Agreement") entered into by the Company and the
Outside Director to whom the Option is granted, which shall be
substantially in the form of the option agreement attached as EXHIBIT A
or otherwise in a form approved by the Board.
4. EFFECTIVE DATE. This Amendment shall become effective as of the date
of its approval by the Board of Directors of Stericycle, Inc.
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