exv10w2



 





EXHIBIT 10.2



ALLIED WASTE INDUSTRIES, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

(UNDER THE AMENDED AND RESTATED

1991 INCENTIVE STOCK PLAN)




          THIS OPTION AGREEMENT (“Agreement”) dated October 4, 2004 (the “Date of
Grant”), between ALLIED WASTE INDUSTRIES, INC., a Delaware corporation (the
“Company”), and CHARLES H. COTROS (“Optionee”):



R E C I T A L S:




          The Company has adopted the Allied Waste Industries, Inc. 1991 Incentive
Stock Plan, as subsequently amended (the “Plan”), all of the terms and
provisions of which are incorporated herein by reference and made a part of
this Agreement. All capitalized terms used but not defined in this Agreement
have the meanings given to them in the Plan.



          The Management Development and Compensation Committee of the Board of
Directors (the “Committee”) has determined that it would be in the best
interests of the Company and its stockholders to grant the option provided for
herein (the “Option”) to Optionee pursuant to the Plan, as an inducement to
serve as an employee of the Company and to provide Optionee with a proprietary
interest in the future of the Company.



          NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:



          1.      Grant of the Option. The Company hereby grants to Optionee the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of an aggregate of 240,000 shares of the presently authorized but
unissued common stock, par value $.01 per share, of the Company (the “Stock”).
The purchase price of the Stock subject to this Option shall be the closing
sales price per share, as reported on the New York Stock Exchange, on the date
of this Agreement.



          2.      Exercise of Option.



                    (a)      Subject to Sections 2(b) and 2(f) hereof, the Option (to the extent
vested) may be exercised in whole or in part, at any time or from time to time
during the period commencing six months after the Date of Grant and ending
October 4, 2010. The Option is not transferable or assignable by the Optionee
except to the following persons or entities (“permitted transferees”): (1) by
will or the laws of descent and distribution, or pursuant to a Qualified
Domestic Relations Order; (2) without consideration, to certain members of the
Optionee’s family or household, as described in Sections 6(c)(vi)(A) and (B) of
the Plan (“family members”); (3) without consideration, to trusts for the
benefit of the Optionee’s family members, as described in Section 6(c)(vi)(C)
of the Plan; (4) without consideration, to a private foundation as described in
Section 6(c)(vi)(D) of the Plan; or (5) without consideration, to any entity
whose voting interests are the Optionee’s family members, as described in
Section 6(c)(vi) of the Plan. During the Optionee’s lifetime, the Option shall
be exercisable only by the Optionee, a broker-dealer acting on his behalf
pursuant to Section 6(c)(iv) of the Plan, or any permitted transferee.



                    (b)      Each Option awarded to Optionee under this Grant may be exercised only
to the extent it has become vested and nonforfeitable. This Option shall vest
and become exercisable with respect to 50% on April 4, 2005, and an additional
50% on October 4, 2005, respectively, of the shares of Stock covered by the
Option. If Optionee’s employment with the Company is terminated for Cause or
Without Good Reason (as those terms are defined in Optionee’s Executive
Employment Agreement with



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the Company), any portion of the Option not vested as of the time of the
Optionee’s termination of employment shall be forfeited as of such termination
date. To the extent vested but not exercised, this Option shall accumulate and
remain exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date on which the Option expires.



                    (c)      This Option may be exercised by written notice of intent to exercise
the Option with respect to any or all of the shares of Stock covered by the
Option, delivered to the Company at its principal office. Such notice shall be
accompanied by this Agreement and shall specify the number of shares of Stock
with respect to which this Option is being exercised. Such notice shall also
be accompanied by payment in full to the Company, at its principal office, of
the option price for the shares of Stock with respect to which this Option is
then being exercised. The payment of the option price shall be made (i) in
cash or by certified check, bank draft, or postal or express money order
payable to the order of the Company or, (ii) with the consent of the Committee,
in whole or in part in Stock which has been owned by the Optionee for at least
six months prior to the effective date of exercise and valued at its Fair
Market Value on the effective date of exercise, (iii) with the consent of the
Committee, in the form of a “cashless exercise”, as described in the Plan, or
(iv) with the consent of the Committee, in any combination of the foregoing.
Any payment in shares of Stock shall be effected by delivery of such shares to
the Secretary of the Company, duly endorsed in blank or accompanied by stock
powers duly executed in blank, together with any other documents or evidence as
the Secretary shall require from time to time. The effective date of exercise
will be the date established by the Secretary, which shall be as soon as
administratively possible (but not later than five business days) after the
Secretary receives the written notice, a copy of this Agreement, and payment
from Optionee.



                    (d)      This Option may not be exercised prior to the registration of the
Stock with the Securities and Exchange Commission and any applicable state
agencies. However, this condition may be waived by the Committee if it
determines that such registration is not necessary in order to legally issue
shares of Stock to Optionee.



                    (e)      Upon the Company’s determination that this Option has been validly
exercised as to any shares of Stock, the Secretary of the Company shall issue a
certificate or certificates to the Optionee or permitted transferee for the
number of shares set forth in his written notice. However, the Company shall
not be liable to the Optionee for damages relating to any delays in issuing the
certificate(s) to him, any loss of the certificate(s), or any mistakes or
errors in the issuance of the certificate(s) or in the certificate(s)
themselves.



                    (f)       To the extent vested, this Option shall remain exercisable through
October 4, 2010. The Committee shall, by resolution, confirm that this
provision is consistent with its interpretation of the relevant provisions of
the Plan.



          3.      Term of Employment. This Option does not grant to Optionee any right
to continue serving as an employee of the Company.



          4.      Notices; Deliveries. Any notice or delivery required to be given under
the terms of this Agreement shall be addressed to the Company, in care of its
Secretary, at its principal office at 15880 N. Greenway-Hayden Loop, Suite 100,
Scottsdale, Arizona 85260, and any notice or delivery to be given to Optionee
shall be addressed to him at the address given by him beneath his signature
hereto or such other address as either party hereto may hereafter designate in
writing to the other. Any such notice or delivery shall be deemed to have been
duly given when addressed as aforesaid, registered or certified mail, and
deposited (postage or registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United States.



          5.      Disputes. As a condition of the granting of this Option, Optionee and
his heirs and successors agree that any dispute or disagreement which may arise
hereunder shall be determined by the Committee in its sole discretion and
judgment, and that any such determination and any interpretation by the
Committee of the terms of the Option shall be final and shall be binding and
conclusive, for all purposes, upon the Company, Optionee, his heirs and
personal representatives, and all permitted transferees.



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          6.       Legend on Certificates. The certificate(s) representing the shares of
Stock purchased upon the exercise of this Option will be stamped or otherwise
imprinted with a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on the sale or transfer of such
shares and the stock transfer records of the Company will reflect stop-transfer
instructions with respect to such shares.



          7.       Options Subject to Plan. This Option is subject to the terms and
provisions of the Plan. In the event of a conflict between any term or
provision contained herein and a term or provision of the Plan, the applicable
terms and provisions of the Plan will govern and prevail under all
circumstances.



          8.       Deferral of Delivery of Shares. The Committee, in its sole discretion,
may require or permit Optionee to have shares of Stock that would otherwise be
delivered to Optionee converted into a deferred compensation account in
accordance with the terms of the Plan.



          9.       Miscellaneous.



                    (a)       All decisions of the Committee with respect to any questions arising
under the Plan or under this Agreement shall be conclusive.



                    (b)      Nothing herein contained shall affect Optionee’s right to participate
in and receive benefits from and in accordance with the then current provisions
of any employee pension, welfare, or fringe benefit plan or program of the
Company.



                    (c)      Optionee agrees to make appropriate arrangements with the Company for
the satisfaction of any applicable federal, state or local income tax
withholding or similar requirements, including the payment to the Company at
the time of exercise of this Option of all such taxes and the satisfaction of
all such requirements.



                    (d)       Whenever the term “Optionee” is used herein under circumstances
applicable to any other person or persons to whom this Option, in accordance
with the provisions of this Agreement, may be transferred, the word “Optionee”
shall be deemed to include such person or persons.



                    (e)       If any provision of this Agreement or of the Plan would disqualify the
Agreement or the Plan under Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, or would not otherwise comply with Rule 16b-3, such
provision shall be construed or deemed amended to conform to Rule 16b-3 to the
extent permitted by applicable law and deemed advisable by the Company’s Board
of Directors.



                    (f)       Notwithstanding any of the other provisions of this Agreement or of
the Plan, Optionee agrees that he will not exercise this Option, and that the
Company will not be obligated to issue any of the Stock pursuant to this
Agreement, if the exercise of the Option or the issuance of such shares of
Stock would constitute a violation by Optionee or by the Company of any
provision of any law or regulation of any governmental authority or national
securities exchange. Upon the acquisition of any Stock pursuant to the
exercise of this Option, Optionee will 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.



                    (g)       This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company.



                    (h)       The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Arizona.



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                    IN WITNESS WHEREOF, the Company has, as of the date and place first above
written, caused this Agreement to be executed on its behalf by its Chairman,
President or any Vice President, and Optionee has hereunder set his hand as of
the date and place first above written, which date is the Date of Grant of this
Option.



	 	 	 	 	 
	ALLIED WASTE INDUSTRIES, INC.	 	OPTIONEE
	



	 	 	 	 
	By 




	 	

Steven M. Helm, Senior Vice President

and General Counsel
	 	

Charles H. Cotros








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