EXHIBIT 10.3
ALLIED WASTE INDUSTRIES, INC.
EXECUTIVE INCENTIVE COMPENSATION PLAN
(Approved by the Board of Directors on February 9, 2006;
Approved by the Stockholders on May 25, 2006)

1.   Establishment, Objectives, Duration.

     Allied Waste Industries, Inc. (“Company”) hereby establishes a short-term
incentive compensation plan to be known as the “Allied Waste Industries, Inc.
Executive Incentive Compensation Plan” (“Plan”).
     The purpose of the Plan is to enhance the Company’s ability to attract and
retain highly qualified executives and to provide such executives with
additional financial incentives to promote the success of the Company and its
Affiliates and Subsidiaries. Awards payable under the Plan are intended to
constitute “performance-based compensation” under Code Section 162(m) and
regulations promulgated thereunder, and the Plan shall be construed consistently
with such intention.
     The Plan is effective as of January 1, 2006, subject to the approval of the
Plan by the stockholders of the Company at the 2006 Annual Meeting. The Plan
will remain in effect until such time as it shall be terminated by the Board,
pursuant to Section 11 herein.

2.   Definitions.

     The following terms, when capitalized, shall have the meanings set forth
below:
     (a) “Affiliate” means any person or entity which directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with the Company.
     (b) “Award” means a bonus or other incentive compensation award payable in
cash, Shares or any combination thereof, granted to a Participant under or
pursuant to this Plan with respect to a particular Performance Period, in
accordance with any applicable terms, conditions and limitations as the
Committee may establish in order to fulfill the objectives of the Plan.
     (c) “Board” means the Board of Directors of the Company.
     (d) “Code” means the Internal Revenue Code of 1986, as amended.
     (e) “Committee” means the Management Development/Compensation Committee of
the Board or another committee appointed by the Board that satisfies the
requirements of Code Section 162(m).
     (f) “Company” means Allied Waste Industries, Inc., a Delaware corporation.
     (g) “Employee” means any person who is employed by the Company or any of
its Affiliates or Subsidiaries.
     (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     (i) “Fair Market Value” means, as of any date, the value of a Share
determined as follows:
     (i) Where there exists a public market for the Share, the Fair Market Value
shall be (A) the closing sales price for a Share for the last market trading day
prior to the

 

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time of the determination (or, if no sales were reported on that date, on the
last trading date on which sales were reported) on the principal securities
exchange on which the Share is then listed for trading, or (B) if not so
reported, the average of the closing bid and asked prices of a Share on that
date (or if that date is not a business day, on the immediately preceding
business day) as quoted on the NASDAQ National Market, or (C) if not quoted on
the NASDAQ National Market, the average of the closing bid and asked prices of a
Share on that date (or if that date is not a business day, on the immediately
preceding business day) as quoted on the NASDAQ Small Cap Market, the National
Quotation Bureau’s “Pink Sheets”, or the National Association of Securities
Dealers’ OTC Bulletin Board System, or such other source as the Committee deems
reliable; or
     (ii) In the absence of an established market of the type described above
for the Share, the Fair Market Value thereof shall be determined by the
Committee in good faith, and such determination shall be conclusive and binding
on all persons.
     (j) “Operating Income Before Depreciation and Amortization” means revenue
minus (i) the cost of operations, and (ii) selling, general and administrative
expenses, as adjusted to exclude the effect of restructurings, discontinued
operations, extraordinary items, write-offs associated with goodwill, the gain
or loss associated with the sale of a business, the transition costs associated
with the acquisition of a business, and the cumulative effect of tax and
accounting changes, as each of those items is calculated in accordance with
generally accepted accounting principles, if applicable, as of the date on which
the calculation is made.
     (k) “Participant” means any person that the Committee determines, in its
discretion, is or may be a “covered employee” of the Company within the meaning
of Code Section 162(m) and regulations promulgated thereunder and who is
selected by the Committee to participate in the Plan. “Participant” also means
any other Employee(s) who the Committee may select to participate in the Plan
for one or more specified Performance Periods.
     (l) “Performance Period” means the fiscal year of the Company, or such
shorter or longer period as designated by the Committee; provided, however, that
a Performance Period shall in no event be less than six (6) months or more than
five (5) years.
     (m) “Plan” means the Allied Waste Industries, Inc. Executive Incentive
Compensation Plan.
     (n) “Share” means a share of common stock of the Company, par value one
cent ($.01) per share.
     (o) “Section 409A” means Section 409A of the Code and any related
regulations or other guidance promulgated thereunder by the U.S. Department of
Treasury or the Internal Revenue Service.
     (p) “Subsidiary” means any corporation in which the Company owns, directly
or indirectly, at least fifty percent (50%) of the total combined voting power
of all classes of stock, or any other entity (including, but not limited to,
partnerships and joint ventures) in which the Company owns, directly or
indirectly, at least fifty percent (50%) of the combined equity thereof.

3.   Administration of the Plan.

     (a) The Committee. The Plan shall be administered by the Committee.
     (b) Authority of the Committee. Subject to applicable laws and the
provisions of the Plan (including any other powers given to the Committee
hereunder), and except as otherwise provided by the Board, the Committee shall
have full and final authority in its discretion to

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establish rules and take all actions, including, without limitation,
interpreting the terms of the Plan and Awards, and any related rules or
regulations or other documents enacted hereunder and deciding all questions of
fact arising in their application, determined by the Committee to be necessary
in the administration of the Plan.
     (c) Effect of Committee’s Decision. All decisions, determinations and
interpretations of the Committee shall be final, binding and conclusive on all
persons, including the Company, its Subsidiaries, its stockholders, the
Participants and their estates and beneficiaries.
     (d) Limit on Liability. No member of the Committee or any Employee or
committee of the Company to whom the Committee has delegated authority under
this Plan will be liable for anything done or omitted to be done by him, by any
member of the Committee or by any Employee of the Company in connection with the
performance of any duties under this Plan, except for his own willful misconduct
or as expressly provided by statute.

4.   Eligibility.

     Eligibility under this Plan is limited to Participants designated by the
Committee, in its sole and absolute discretion. Except as otherwise specified in
a written agreement between the Company and an Employee, no Employee shall at
any time have the right (a) to be selected as a Participant in the Plan for any
Performance Period, (b) if so selected, to be entitled to an Award, or (c) if
selected as a Participant in one Performance Period, to be selected as a
Participant in any subsequent Performance Period.

5.   Form of Payment of Awards.

     Payment of Awards under the Plan shall be made in cash, Shares or a
combination thereof, as the Committee shall determine, subject to the
limitations set forth in Sections 6 and 7 herein.

6.   Shares Subject to the Plan.

     Award payments that are made in the form of Shares, in whole or in part,
shall be made from the aggregate number of Shares authorized to be issued under
and otherwise in accordance with the terms of the Allied Waste Industries, Inc.
2006 Incentive Stock Plan (or any successor stock incentive plan approved by the
stockholders of the Company); provided, however, that if the Company’s
stockholders do not approve the 2006 Incentive Stock Plan, then Award payments
that are made in the form of Shares, in whole or in part, shall be made from the
aggregate number of Shares authorized to be issued under and otherwise in
accordance with the terms of the Allied Waste Industries, Inc. Amended and
Restated 1991 Incentive Stock Plan (or any successor incentive stock plan
approved by the Company’s stockholders).

7.   Awards.

     (a) Selection of Participants and Designation of Performance Period and
Terms of Award. Within ninety (90) days after the beginning of each Performance
Period or, if less than ninety (90) days, the number of days which is equal to
twenty-five percent (25%) of the relevant Performance Period applicable to an
Award, the Committee shall, in writing, (i) select the Participants to whom
Awards shall be granted, (ii) designate the applicable Performance Period, and
(iii) specify terms and conditions for the determination and payment of the
Award for each Participant for such Performance Period, including, without
limitation, the extent to which the Participant shall have the right to receive
an Award following termination of the Participant’s employment. The terms and
conditions for the determination and payment of each Award shall be determined
in the sole discretion of the Committee, need not be uniform among all Awards,
and may reflect distinctions based on such criteria as the Committee determines
in its sole discretion.

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     (b) Awards. The Company’s Chief Executive Officer shall be eligible to
receive an Award for each designated Performance Period equal to one-half
percent (0.50%) of Operating Income Before Depreciation and Amortization for
such Performance Period. Each of the Participants other than the Company’s Chief
Executive Officer shall be eligible to receive an Award for each designated
Performance Period equal to one quarter percent (0.25%) of Operating Income
Before Depreciation and Amortization for such Performance Period.
Notwithstanding the foregoing, the maximum Award that may be paid under the Plan
to the Company’s Chief Executive Officer for any fiscal year of the Company
shall be the lesser of (i) one-half percent (0.50%) of Operating Income Before
Depreciation and Amortization for such Performance Period, or (ii) five million
dollars ($5,000,000.00), and the maximum Award that may be paid under the Plan
to any Participant other than the Company’s Chief Executive Officer for any
fiscal year of the Company shall be the lesser of (A) one-quarter percent
(0.25%) of Operating Income Before Depreciation and Amortization for such
Performance Period, or (B) three million dollars ($3,000,000.00).
Notwithstanding the foregoing, the Committee may condition payment of an Award
upon the satisfaction of such objective or subjective standards as the Committee
shall determine to be appropriate, in its sole and absolute discretion, and the
Committee shall retain the discretion to reduce the amount of any Award that
would otherwise be payable to a Participant, including a reduction in such
amount to zero.

8.   Committee Certification and Payment of Awards.

     As soon as reasonably practicable following the end of each Performance
Period, the Committee shall determine the amount of the Award to be paid to each
Participant for such Performance Period and shall certify such determination in
writing. Awards shall be paid to the Participants following such certification
by the Committee no later than seventy (70) days following the close of the
Performance Period with respect to which the Awards are made, unless all or a
portion of a Participant’s Award is deferred pursuant to the Participant’s
timely and validly made election made in accordance with such terms of any
Company sponsored deferred compensation plan in which the Participant is
eligible to participate.

9.   Termination of Employment.

     Except as may be specifically provided in an Award pursuant to
Section 7(a), a Participant shall have no right to an Award under the Plan for
any Performance Period in which the Participant is not actively employed by the
Company, an Affiliate or a Subsidiary on the last day of the Performance Period
to which such Award relates. In establishing Awards under Section 7(a), the
Committee may provide that in the event a Participant is not employed by the
Company, an Affiliate or a Subsidiary on the date on which the Award is paid,
the Participant may receive a pro rata portion of the Award or forfeit all or a
portion of his or her right to the Award paid under the Plan.

10.   Taxes.

     The Company shall have the power and right to deduct or withhold, or
require a Participant to remit to the Company (or an Affiliate or Subsidiary),
an amount (in cash, or in Shares valued at Fair Market Value), sufficient to
satisfy any applicable tax withholding requirements applicable to an Award.
Whenever under the Plan payments are to be made in cash, such payments shall be
net of an amount sufficient to satisfy any applicable tax withholding
requirements. Subject to such restrictions as the Committee may prescribe, a
Participant may satisfy all or a portion of any tax withholding requirements
relating to Awards payable in Shares by electing to have the Company withhold
Shares having a Fair Market Value equal to the amount to be withheld.

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11.   Amendment or Termination of the Plan.

     The Board may at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part; provided, however, that no amendment
that requires stockholder approval in order to maintain the qualification of
Awards as performance-based compensation pursuant to Code Section 162(m) and
regulations promulgated thereunder shall be made without such stockholder
approval. If changes are made to Code Section 162(m) or regulations promulgated
thereunder to permit greater flexibility with respect to any Award or Awards
available under the Plan, the Committee may, subject to this Section 11, make
such adjustments to the Plan and/or Awards as it deems appropriate.

12.   No Rights to Employment.

     The Plan shall not confer upon any Participant any right with respect to
continuation of employment with the Company, any Affiliate, or Subsidiary, nor
shall it interfere in any way with his right or the Company’s right to terminate
his employment at any time, with or without cause.

13.   No Assignment.

     Except as otherwise required by applicable law, any interest, benefit,
payment, claim or right of any Participant under the Plan shall not be sold,
transferred, assigned, pledged, encumbered or hypothecated by any Participant
and shall not be subject in any manner to any claims of any creditor of any
Participant or beneficiary, and any attempt to take any such action shall be
null and void. During the lifetime of any Participant, payment of an Award shall
only be made to such Participant. Notwithstanding the foregoing, the Committee
may establish such procedures as it deems necessary for a Participant to
designate a beneficiary to whom any amounts would be payable in the event of any
Participant’s death.

14.   Legal Construction.

     (a) Gender, Number and References. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular and the singular shall include the plural. Any
reference in the Plan to a section of the Plan either in the Plan or to an act
or code or to any section thereof or rule or regulation thereunder shall be
deemed to refer to such section of the Plan, act, code, section, rule or
regulation, as it may be amended from time to time, or to any successor section
of the Plan, act, code, section, rule or regulation.
     (b) Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
     (c) Requirements of Law. The granting of Awards and the issuance of cash or
Shares under the Plan shall be subject to all applicable laws and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
     (d) Unfunded Plan. Awards under the Plan will be paid from the general
assets of the Company, and the rights of Participants under the Plan will be
only those of general unsecured creditors of the Company.
     (e) Governing Law. To the extent not preempted by federal law, the Plan
shall be construed in accordance with and governed by the laws of the State of
Arizona, excluding any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Plan to the substantive
law of another jurisdiction.

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     (f) Non-Exclusive Plan. Neither the adoption of the Plan by the Board nor
its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board or a committee
thereof to adopt such other incentive arrangements as it may deem desirable.
     (g) Code Section 409A Compliance. To the extent applicable, it is intended
that this Plan and any Awards granted hereunder comply with the requirements of
Code Section 409A.

            ALLIED WASTE INDUSTRIES, INC.,
a Delaware corporation
      By         Title:        

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