REPUBLIC SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tables in millions, except per share data) Ì (Continued)
7. STOCKHOLDERS' EQUITY
During 2000 through 2004, the Board of Directors authorized the repurchase of up to $1,025.0 million of
the Company's Common Stock. As of December 31, 2004, the Company had paid $750.4 million to
repurchase 35.2 million shares of its common stock, of which 9.6 million shares were acquired during the year
ended December 31, 2004 for $266.1 million.
In July 2003, the Company announced that its board of directors initiated a quarterly cash dividend of
$.06 per share, which was increased to $.12 per share in the third quarter of 2004. Dividends declared were
$54.6 million and $19.0 million during 2004 and 2003, respectively. As of December 31, 2004, the Company
recorded a dividend payable of approximately $18.1 million to shareholders of record at the close of business
on January 3, 2005.
8. EMPLOYEE BENEFIT PLANS
In July 1998, the Company adopted the 1998 Stock Incentive Plan (""Stock Incentive Plan'') to provide
for grants of options to purchase shares of common stock, restricted stock and other equity-based compensa-
tion (""Equity-Based Compensation Units'') to employees and non-employee directors of the Company who
are eligible to participate in the Stock Incentive Plan. The Company accounts for stock-based compensation in
accordance with Accounting Principles Board Opinion No. 25, ""Accounting for Stock Issued to Employees''
(""APB 25''), and related interpretations. Stock options are granted at prices equal to the fair market value of
the Company's common stock on the date of grant; therefore, no compensation expense is recognized.
Compensation expense resulting from grants of restricted stock or stock units is recognized during the vesting
period.
Options granted under the Stock Incentive Plan are non-qualiÑed and are granted at a price equal to the
fair market value of the Company's common stock at the date of grant. Generally, options granted have a term
of ten years from the date of grant, and vest in increments of 25% per year over a four year period beginning on
the Ñrst anniversary date of the grant. Options granted to non-employee directors have a term of ten years and
vest immediately at the date of grant. In May 2002, the Company's stockholders approved and adopted an
amendment and restatement of the Stock Incentive Plan, which modiÑed a number of its provisions, including
an increase in the number of shares of common stock reserved for issuance under the Stock Incentive Plan
from 20.0 million to 27.0 million. As of December 31, 2004, there were 6.0 million stock options reserved for
future grants under the Stock Incentive Plan.
During the three months ended March 31, 2004, the Company awarded 20,000 deferred stock units to its
non-employee directors under its Stock Incentive Plan. An additional 5,000 deferred stock units were granted
to a new director during the three months ended December 31, 2004. These stock units vest immediately but
the directors receive the underlying shares only after their board service ends. The stock units do not carry any
voting or dividend rights, except the right to receive additional stock units in lieu of dividends.
Also during the three months ended March 31, 2004, the Company awarded 79,500 shares of restricted
stock to its executive oÇcers. 7,500 of these restricted shares vest eÅective January 1, 2005. The remaining
72,000 shares vest in four equal annual installments beginning one year from the date of grant except that
vesting may be accelerated based upon the achievement of certain performance targets. During the vesting
period, the participants have voting rights and receive dividends, but the shares may not be sold, assigned,
transferred, pledged or otherwise encumbered. Additionally, granted but unvested shares are forfeited upon
termination of employment.