Document:

exv10w2

Exhibit 10.2

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT is effective as of June 25, 2010 (the “Effective Date”) by and
between Republic Services, Inc. (the “Company”) and DONALD W. SLAGER (“Employee”).

     Employee and the Company are parties to that Employment Agreement dated as of the effective
time of the merger of Allied Waste Industries, Inc., a Delaware corporation into RS Merger Wedge,
Inc., a Delaware corporation and wholly-owned subsidiary of Republic Services, Inc., a Delaware
corporation (the “Merger”) pursuant to the Agreement & Plan of Merger dated as of June 22, 2008
(the “Effective Time”) (the “2008 Employment Agreement”).

     As of the date hereof, Employee is an employee of the Company and is considered a valued
employee such that the Company desires to retain him.

     The Employee and the Company desire to enter into this Agreement to amend, restate and
continue the provisions of the 2008 Employment Agreement on and after the Effective Date as set
forth herein, including certain additional provisions which shall become effective on January 1,
2011 (the “Transition Date”) which is the date on which the Company’s Chief Executive Officer will
retire and the Employee will become the Company’s Chief Executive Officer.

     In consideration of the premises set forth above, the mutual representations, warranties,
covenants and agreements contained in this Agreement and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. Employment.

          (a) Retention. The Company agrees to employ the Employee prior to the Transition Date
as its President and Chief Operating Officer and on and after the Transition Date as its Chief
Executive Officer and President. Employee agrees to accept such employment, subject to the terms
and conditions of this Agreement. After the Transition Date, the Board of Directors of the Company
may in its sole discretion, after consulting Employee, designate someone other than the Employee to
serve as its President (reporting to Employee), and such action shall not constitute Good Reason
under Section 3 of this Agreement.

          (b) Employment Period. This Agreement shall commence on the Effective Date and,
unless terminated in accordance with the terms of this Agreement shall continue in effect on a
rolling two-year basis, such that at any time during the term of this Agreement there will be two
years remaining (the “Employment Period”). Notwithstanding the evergreen nature of the Employment
Period, the Company may terminate Employee at any time in accordance with the provisions of Section
3 of this Agreement.

          (c) Duties and Responsibilities. During the Employment Period and prior to the
Transition Date, Employee shall serve as President and Chief Operating Officer and on and after the
Transition Date, Employee shall serve as Chief Executive Officer and, if applicable,

 

 

President. On or before the Transition Date, Employee shall be appointed as a member of the
Board of Directors of the Company and shall thereafter be nominated for election and re-election
while he is serving as Chief Executive Officer. As Chief Executive Officer, Employee shall report
to the Board of Directors of the Company. Employee shall have such authority and responsibility
and perform such duties as may be assigned to him from time to time at the direction of the Board
of Directors of the Company, and in the absence of such assignment, such duties as are customary to
Employee’s office and as are necessary or appropriate to the business and operations of the
Company. During the Employment Period, Employee’s employment shall be full time and Employee shall
perform his duties honestly, diligently, in good faith and in the best interests of the Company and
shall use his best efforts to promote the interests of the Company. All executive officers of the
Company shall report to the Chief Executive Officer, and Employee shall, in such capacity, have the
authority and responsibility to assign appropriate duties to such other executive officers as are
necessary or appropriate for the business and operations of the Company.

          (d) Other Activities. Except upon the prior written consent of the Company, Employee,
during the Employment Period, will not accept any other employment. Employee shall be permitted to
engage in any non-competitive businesses, not-for-profit organizations and other ventures, such as
passive real estate investments, serving on charitable and civic boards and organizations, and
similar activities, so long as such activities do not materially interfere with or detract from the
performance of Employee’s duties or constitute a breach of any of the provisions contained in
Section 7 of this Agreement, provided that the Employee may only serve as a director of a
for-profit corporation with the advance written approval of the Company’s Board of Directors.

     2. Compensation.

          (a) Base Salary and Adjusted Salary. In consideration for Employee’s services
hereunder and the restrictive covenants contained herein, Employee shall continue to be paid for
the 2010 Fiscal Year an annual base salary (the “Base Salary”) of $875,000 payable in accordance
with the Company’s customary payroll practices. The Employee’s Base Salary shall be increased to
$1,000,000 effective on the Transition Date. With respect to any Fiscal Year during which Employee
is employed by the Company for less than the entire Fiscal Year, the Base Salary shall be prorated
for the period during which the Employee is so employed. Notwithstanding the foregoing, Employee’s
annual Base Salary may be increased, but not decreased (taking into account prior increases)
without Employee’s consent at anytime and from time to time to levels greater than the levels set
forth in the preceding sentence at the discretion of the Board of Directors of the Company to
reflect merit or other increases. The term “Fiscal Year” as used herein shall mean each period of
twelve (12) calendar months commencing on January 1st of each calendar year during the Employment
Period and expiring on December 31st of such year.

          (b) Annual Awards. In addition to the Base Salary, Employee shall be eligible to
receive Annual Awards in an amount equal to a target of 120% for the 2010 Fiscal Year and 125% for
Performance Periods after the 2010 Fiscal Year, of the Employee’s Base Salary in effect for the
Performance Period with respect to which such Annual Award is granted, as established pursuant to
the terms of the Company’s Executive Incentive Plan, as amended (the

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“Executive Incentive Plan”). The Annual Award shall be based on the achievement of such
Performance Goals as are established by the Compensation Committee of the Board of Directors
pursuant to the Executive Incentive Plan. The achievement of said Performance Goals shall be
determined by the Compensation Committee of the Board of Directors. Except as otherwise provided
in Sections 3 and 24, with respect to any Fiscal Year during which Employee is employed by the
Company for less than the entire Fiscal Year, the Annual Award shall be prorated for the period
during which Employee was so employed. The Annual Award shall be payable within sixty (60) days
after the end of the Company’s Fiscal Year. To the extent of any conflict between the provisions
of this Agreement and the Executive Incentive Plan, the terms of this Agreement shall control.

          (c) Merit and Other Bonuses. Employee shall be entitled to such other bonuses as may
be determined by the Board of Directors of the Company or by a committee of the Board of Directors
as determined by the Board of Directors, in its sole discretion.

          (d) Existing Stock Options and Shares of Restricted Stock. The Company has issued to
Employee options to purchase shares of the Company’s Common Stock pursuant to the terms of various
Option Agreements and the terms of the 2007 Stock Incentive Plan (the “Outstanding Option Grants”).
The Company has also granted to Employee restricted shares of the Company’s Common Stock pursuant
to the terms of the Company’s 2007 Stock Incentive Plan (the “Outstanding Restricted Stock
Grants”). The options issued or to be issued under the Outstanding Option Grants shall continue to
be subject to the terms of the Option Agreements, except to the extent otherwise provided for in
this Agreement. The shares of restricted stock granted or to be granted under the Outstanding
Restricted Stock Grants shall continue to be subject to the terms of the Executive Restricted Stock
Agreements, except to the extent otherwise provided for in this Agreement. Upon execution of the
2008 Employment Agreement, the Employee received shares of restricted stock with a value of
$1,000,000, which vest 100% on the third anniversary thereof provided the Employee is employed on
such date or as otherwise provided herein (“Special Restricted Stock Award”).

          (e) New Grant. As of the Effective Date, the Company shall grant to Employee a number
of shares of restricted stock equal to $2,000,000 divided by the per share closing price on the
Effective Date (rounded up to the next whole share), which will vest 25% on each anniversary of the
Effective Date provided the Employee is employed on such date except as otherwise provided herein,
and which will be in lieu of a discretionary annual grant of restricted stock for Fiscal Year 2011.

          (f) Other Stock Options. Employee shall be entitled to participate and receive option
grants under the 2007 Stock Incentive Plan and such other incentive or stock option plans as may be
in effect from time-to-time, as determined by the Board of Directors of the Company.

          (g) Other Compensation Programs. Employee shall be entitled to participate in the
Company’s incentive and deferred compensation programs and such other programs as are established
and maintained for the benefit of the Company’s employees or executive officers, subject to the
provisions of such plans or programs.

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          (h) Other Benefits. During the term of this Agreement, Employee shall also be
entitled to participate in any other health insurance programs, life insurance programs, disability
programs, stock incentive plans, bonus plans, pension plans and other fringe benefit plans and
programs as are from time to time established and maintained for the benefit of the Company’s
employees or executive officers, subject to the provisions of such plans and programs.

          (i) Expenses. Employee shall be reimbursed for all out-of-pocket expenses reasonably
incurred by him on behalf of or in connection with the business of the Company, pursuant to the
normal standards and guidelines followed from time to time by the Company. Notwithstanding
anything herein to the contrary or otherwise, except to the extent any expense or reimbursement
described in this Section 2(h) does not constitute a “deferral of compensation” within the meaning
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), any expense or
reimbursement described in this Section 2(h) shall meet the following requirements: (i) the amount
of expenses eligible for reimbursement provided to Employee during any calendar year will not
affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Employee
in any other calendar year, (ii) the reimbursements for expenses for which Employee is entitled to
be reimbursed shall be made on or before the last day of the calendar year following the calendar
year in which the applicable expense is incurred, (iii) the right to payment or reimbursement on
in-kind benefits hereunder may not be liquidated or exchanged for any other benefit and (iv) the
reimbursements shall be made pursuant to objectively determinable and nondiscretionary Company
policies and procedures regarding such reimbursement of expenses.

          (j) Long Term Awards. Employee shall be entitled to participate in the Executive
Incentive Plan (or any successor plan maintained by the Company) for purposes of receiving Long
Term Awards pursuant to the terms of this Agreement and the Executive Incentive Plan (or such
successor plan).

          (k) Synergy Incentive Plan. Employee is currently a participant in the Synergy
Incentive Plan. A schedule of the maximum awards that the Employee is eligible to receive under
the Synergy Incentive Plan is attached as Schedule 2(k). Awards under the Synergy Incentive Plan
shall not be considered Annual Awards, Long Term Awards, or equity awards or otherwise taken into
account for purposes of Sections 3, 4 or 24 of this Agreement, but instead, such awards shall be
governed by the terms of the Synergy Incentive Plan.

          (l) Vacation. The Employee shall continue to be entitled to four (4) weeks paid
vacation (“Vacation Time”) for each full calendar year of employment. For the calendar year in
which the Employee’s Date of Termination occurs, the amount of Vacation Time to which the Employee
is entitled shall be prorated. Vacation Time of up to two (2) weeks not taken during the calendar
year in which it is accrued may be carried over to subsequent years with no more than six (6) weeks
Vacation Time available in any Fiscal Year.

          (m) Insurance. At all times during the term of this Agreement, and for ten (10) years
thereafter, the Employee shall be covered under the Company’s directors’ and officers’ liability
insurance, but only to the same extent as other senior officers.

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          (n) Aircraft. It is the intention of the Board of Directors that the Employee have
full access and use of the corporate aircraft as set forth in the March 2009 Corporate Aircraft
Policy. The Company’s March 2009 Corporate Aircraft Policy will apply to Employee during the term
of this Agreement and will not be changed without Employee’s consent unless unforeseen and
unexpected circumstances arise that require the policy to be modified.

     3. Termination.

          (a) For Cause. The Company shall have the right to terminate this Agreement and to
discharge Employee for Cause (as defined below), at any time during the term of this Agreement.
Termination for Cause shall mean, during the term of this Agreement, (i) Employee’s willful and
continued failure to substantially perform his duties after he has received written notice from the
Company identifying the actions or omissions constituting willful and continued failure to perform,
(ii) Employee’s conviction or plea to a felony, misdemeanor or any other crime, (iii) Employee’s
actions or omissions that constitute fraud, dishonesty or gross misconduct, (iv) Employee’s breach
of any fiduciary duty that causes material injury to the Company, (v) Employee’s breach of any duty
causing material injury to the Company, (vi) Employee’s inability to perform his material duties to
the reasonable satisfaction of the Company due to alcohol or other substance abuse, or (vii) any
violation of the Company’s policies or procedures involving discrimination, harassment, substance
abuse or work place violence. Any termination for Cause pursuant to this Section shall occur only
after notice is given to Employee in writing which shall set forth in detail all acts or omissions
upon which the Company is relying to terminate Employee for Cause and, in the case of (i) or (vii),
after which the Employee has failed to cure any actions or omissions which provide the Company with
a basis to terminate the Employee for Cause.

          Upon any determination by the Company that Cause exists to terminate Employee, the Company
shall cause a special meeting of the Board of Directors to be called and held at a time mutually
convenient to the Board of Directors and Employee, but in no event later than ten (10) business
days after Employee’s receipt of the notice that the Company intends to terminate Employee for
Cause. Employee shall have the right to appear before such special meeting of the Board of
Directors with legal counsel of his choosing to refute such allegations and shall have a reasonable
period of time to cure any actions or omissions in the case of (i) or (vii) which provide the
Company with a basis to terminate Employee for Cause (provided that such cure period shall not
exceed 30 days), provided that Company shall not terminate the Employee until the end of the 30 day
period. A majority of the members of the Board of Directors must affirm that Cause exists to
terminate Employee. In the event the Company terminates Employee for Cause, the Company shall only
be obligated to continue to pay in the ordinary and normal course of its business to Employee his
Base Salary plus accrued but unused Vacation Time through the termination date and the Company
shall have no further obligations to Employee under this Agreement from and after the date of
termination.

          (b) Resignation by Employee Without Good Reason. If Employee shall resign or
otherwise terminate his employment with the Company at anytime during the term of this Agreement,
other than for Good Reason (as defined below), Employee shall only be entitled to receive his
accrued and unpaid Base Salary and unused Vacation Time through the

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termination date, and the Company shall have no further obligations under this Agreement from
and after the date of resignation.

          (c) Termination by Company Without Cause and by Employee For Good Reason. At any time
during the term of this Agreement, (i) the Company shall have the right to terminate this Agreement
and to discharge Employee without Cause effective upon delivery of written notice to Employee, and
(ii) Employee shall have the right to terminate this Agreement for Good Reason effective upon
delivery of written notice to the Company. For purposes of this Agreement, “Good Reason” shall
mean: (i) the Company has materially reduced the duties and responsibilities of Employee (x) prior
to the Transition Date from the duties and responsibilities of the Employee as President and Chief
Operating Officer at the Effective Time and (y) on and after the Transition Date from the duties
and responsibilities of the Employee as Chief Executive Officer at the Transition Date, (ii) the
Company has breached any material provision of this Agreement and has not cured such breach within
30 days of receipt of written notice of such breach from Employee, (iii) the Company does not
provide health, life, disability, incentive or equity benefits which are substantially comparable
in the aggregate to the level of such benefits and incentive compensation provided on the Effective
Time, other than due to a reduction in such level of benefits to the extent such reduction applies
to other senior executives of the Company and provided that any particular plan containing such
benefits may be amended or terminated, (iv) Employee’s office is relocated by the Company to a
location which is not located within the Arizona County of Maricopa, (v) Employee has not become
the Chief Executive Officer as of the Transition Date, or (vi) the Company’s termination without
Cause of the continuation of the Employment Period provided in this Agreement. Notwithstanding the
foregoing, the Employee’s termination of employment pursuant to this Agreement shall not be
effective unless (x) the Employee delivers a written notice setting forth the details of the
occurrence giving rise to the claim of termination for Good Reason within a period not to exceed 90
days of its initial existence and (y) the Company fails to cure the same within a thirty (30) day
period.

          Upon any such termination by the Company without Cause, or by Employee for Good Reason, (i)
the Company shall pay to Employee: all of Employee’s accrued but unpaid Base Salary and accrued
but unused Vacation Time through the date of termination in a lump sum within sixty (60) days of
termination; (ii) the Company shall pay to Employee Base Salary for three (3) years from the date
of termination when and as Base Salary would have been due and payable hereunder but for such
termination; (iii) the Company shall continue providing medical, dental, and/or vision coverage to
the Employee and/or the Employee’s family, at least equal to that which would have been provided to
the Employee if the Employee’s employment had not terminated, until the earlier of (1) the date the
Employee becomes eligible for any comparable medical, dental, or vision coverage provided by any
other employer, or (2) the date the Employee becomes eligible for Medicare or any similar
government-sponsored or provided health care program (whether or not such coverage is equivalent to
that provided by the Company); (iv) all stock option grants, restricted stock grants and restricted
stock unit grants (other than the Special Restricted Stock Award), to the extent they would have
vested during the Fiscal Year of termination, will immediately vest and become unrestricted, if not
vested previously, and any such options will remain exercisable for the lesser of the unexpired
term of the option without regard to the termination of Employee’s employment or three (3) years
from

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the date of termination of employment; (v) the Special Restricted Stock Award will immediately
fully vest; (vi) all Annual Awards shall vest and be paid on a prorated basis in an amount equal to
the Annual Awards payment that the Compensation Committee of the Board of Directors determines
would have been paid to Employee pursuant to the Executive Incentive Plan had Employee’s employment
continued to the end of the Performance Period multiplied by a fraction, the numerator of which is
the number of completed months of employment during such Performance Period and the denominator of
which is the total number of months in the Performance Period, within sixty (60) days after the end
of the Company’s Fiscal Year; (vii) all Long Term Awards shall vest and be paid on a prorated basis
in an amount equal to the Long Term Awards payment that the Compensation Committee of the Board of
Directors determines would have been paid to Employee pursuant to the Executive Incentive Plan had
Employee’s employment continued to the end of the Performance Period multiplied by a fraction, the
numerator of which is the number of completed months of employment during such Performance Period
and the denominator of which is the total number of months in the Performance Period, within sixty
(60) days after the end of the Company’s Fiscal Year in which the Performance Period ends; (viii)
as of the termination date Employee shall be paid, in accordance with the terms of any deferred
compensation plan in which Employee was a participant and any elections thereunder, the balance of
all amounts credited or eligible to be credited to Employee’s deferred compensation account
(including all Company contributions, whether or not vested); (ix) the Company shall continue
director and officer liability insurance for ten (10) years; and (x) the Company shall provide
outplacement services which may include administrative support for up to one (1) year, provided
that such amount may not exceed $50,000 (collectively, the foregoing consideration payable to
Employee shall be referred to herein as the “Severance Payment”). Other than the Severance
Payment, the Company shall have no further obligation to Employee except for the obligations set
forth in Sections 10, 17, and 25 of this Agreement after the date of such termination; provided,
however, that Employee shall only be entitled to continuation of the Severance Payment as long as
he is in compliance with the provisions of Sections 7, 8, 10 and 11 of this Agreement.

          (d) Disability of Employee. This Agreement may be terminated by the Company upon the
Disability of Employee. “Disability” shall mean any mental or physical illness, condition,
disability or incapacity which prevents Employee from reasonably discharging his duties and
responsibilities under this Agreement for a period of 180 consecutive days. In the event that any
disagreement or dispute shall arise between the Company and Employee as to whether Employee suffers
from any Disability, then, in such event, Employee shall submit to the physical or mental
examination of a physician licensed under the laws of the State of Arizona, who is mutually
agreeable to the Company and Employee, and such physician shall determine whether Employee suffers
from any Disability. In the absence of fraud or bad faith, the determination of such physician
shall be final and binding upon the Company and Employee. The entire cost of such examination
shall be paid for solely by the Company. In the event the Company has purchased Disability
insurance for Employee, Employee shall be deemed disabled if he is completely (fully) disabled as
defined by the terms of the Disability policy. Disability shall not be deemed to occur unless it
constitutes a “disability,” as such term is defined in Code Section 409A. In the event that at
any time during the term of this Agreement Employee shall suffer a Disability and the Company
terminates Employee’s employment for such Disability, such Disability shall be considered to be a
termination by the Company without Cause or a

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termination by Employee for Good Reason and the Severance Payment shall be paid to Employee to
the same extent and in the same manner as provided for in Section 3(c) above, except that (i)
payments of Annual Salary shall be mitigated by payments under Company-sponsored disability
payments and (ii) the Employee will not be entitled to outplacement services.

          (e) Death of Employee. If during the term of this Agreement Employee shall die, then
the employment of Employee by the Company shall automatically terminate on the date of Employee’s
death. In such event, Employee’s death shall be considered to be a termination by the Company
without Cause or a termination by Employee for Good Reason and the Severance Payment shall be paid
to Employee’s personal representative or estate to the same extent and in the same manner as
provided for in Section 3(c) above (except that Employee will not be entitled to outplacement
services) and without mitigation for any insurance policies held by Employee. Once such payments
have been made to Employee’s personal representative, beneficiary or estate, as the case may be,
the Company shall have no further obligations under this Agreement to said personal representative,
beneficiary or estate, or to any heirs of Employee.

     4. Termination of Employment by Employee for Change of Control.

          (a) Termination Rights. Notwithstanding the provisions of Section 2 and Section 3 of
this Agreement, in the event that there shall occur a Change of Control (as defined below) of the
Company and either within six months before as set forth in Section 4(c) or within two years after
such Change of Control Employee’s employment hereunder is terminated by the Company without Cause
or by Employee for Good Reason, then the Company shall be required to pay to Employee (i) the
Severance Payment provided in Section 3(c), except that the Severance Payment described in the
unnumbered paragraph in Section 3(c)(ii) shall be paid in a single lump sum sixty (60) days after
termination if termination occurs within two years after such Change of Control, and (ii) the
product of three (3) multiplied by the sum of (x) the target Annual Award for the year prior to
termination, plus (y) the target Long Term Award for the performance period ending in the year
prior to termination, payable in a single lump sum sixty (60) days after termination. To the extent
that payments are owed by the Company to Employee pursuant to this Section 4, they shall be made in
lieu of payments pursuant to Section 3, and in no event shall the Company be required to make
payments or provide benefits to Employee under both Section 3 and Section 4.

          (b) Change of Control of the Company Defined. For purposes of this Section 4, the
term “Change of Control of the Company” shall mean the occurrence of any of the following:

               (i) an acquisition (other than directly from the Company) of any voting securities of the
Company (the “Voting Securities”) by any “Person” (as the term person is used for purposes of
Section 13(d) or 14(d) of the Exchange Act), immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of the then outstanding common stock of the Company (“Shares”) or the combined voting
power of the Company’s then outstanding Voting Securities; provided, however, in determining
whether a Change of Control has occurred pursuant to this subsection (a), Shares or Voting
Securities which are acquired in a “Non-Control

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Acquisition” (as hereinafter defined) shall not constitute an acquisition which would cause a
Change of Control. A “Non-Control Acquisition” shall mean an acquisition by (a) an employee
benefit plan (or a trust forming a part thereof) maintained by (1) the Company or (2) any
corporation or other Person of which a majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by the Company (for purposes of this
definition, a “Related Entity”), (b) the Company or any Related Entity, or (c) any Person in
connection with a “Non-Control Transaction” (as hereinafter defined);

               (ii) the individuals who, as of the Effective Time, are members of the Board (the “Incumbent
Board”), cease for any reason to constitute at least a majority of the members of the Board or,
following a Merger Event which results in a Parent Corporation, the board of directors of the
ultimate Parent Corporation (as defined in paragraph (iii)(1)(A) below); provided, however, that if
the election, or nomination for election by the Company’s common stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered as a member of the Incumbent Board; provided further,
however, that no individual shall be considered a member of the Incumbent Board if such individual
initially assumed office as a result of an actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle a Proxy Contest; or

               (iii) the consummation of:

                    (1) a merger, consolidation or reorganization with or into the Company or in which securities
of the Company are issued ( a “Merger Event”), unless such Merger Event is a “Non-Control
Transaction.” A “Non-Control Transaction” shall mean a Merger Event where:

                         (A) the stockholders of the Company, immediately before such Merger Event own directly or
indirectly immediately following such Merger Event at least fifty percent (50%) of the combined
voting power of the outstanding voting securities of (x) the corporation resulting from such Merger
Event (the “Surviving Corporation”) if fifty percent (50%) or more of the combined voting power of
the then outstanding voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly by another Person (a “Parent Corporation”), or (y) if there are one or more
Parent Corporations, the ultimate Parent Corporation; and,

                         (B) the individuals who were members of the Incumbent Board immediately prior to the execution
of the agreement providing for such Merger Event constitute at least a majority of the members of
the board of directors of (x) the Surviving Corporation, if there are no Parent Corporation, or (y)
if there are one or more Parent Corporations, the ultimate Parent Corporation; and

                         (C) no Person other than (1) the Company, (2) any Related Entity, (3) any employee benefit
plan (or any trust forming a part thereof) that, immediately prior to such Merger Event was
maintained by the Company or any Related Entity, or (4) any Person who, immediately prior to such
Merger Event had Beneficial Ownership of

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fifty percent (50%) or more of the then outstanding Voting Securities or Shares, has
Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the outstanding
voting securities or common stock of (x) the Surviving Corporation if there is no Parent
Corporation, or (y) if there are one or more Parent Corporations, the ultimate Parent Corporation.

                    (2) a complete liquidation or dissolution of the Company; or

                    (3) the sale or other disposition of all or substantially all of the assets of the Company to
any Person (other than a transfer to a Related Entity or under conditions that would constitute a
Non-Control Transaction with the disposition of assets being regarded as a Merger Event for this
purpose or the distribution to the Company’s stockholders of the stock of a Related Entity or any
other assets).

          Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount
of the then outstanding Shares or Voting Securities as a result of the acquisition of Shares or
Voting Securities by the Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons,
provided that if a Change of Control would occur (but for the operation of this sentence) as a
result of the acquisition of Shares or Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional
Shares or Voting Securities which increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change of Control shall occur.

          In addition, a Change of Control shall not be deemed to occur unless the event(s) that causes
such Change of Control also constitutes a “change in control event,” as such term is defined in
Code Section 409A.

          (c) If an Employee’s employment or service is terminated by the Company without Cause within
six months prior to the date of a Change of Control but the Employee reasonably demonstrates that
the termination (A) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change of Control or (B) otherwise arose in connection
with, or in anticipation of, a Change of Control which has been threatened or proposed, such
termination shall be deemed to have occurred after a Change of Control for purposes of this
Agreement provided a Change of Control shall actually have occurred.

     5. Gross-Up Payment.

          (a) Amount.

               (i) In the event that (a) any payment or benefit provided for under this Agreement and/or any
other arrangement or agreement with the Company (“Base Payment”) would subject the Employee to the
excise tax (“Excise Tax”) imposed by Section 4999 of the Code (or any other similar tax that may
hereafter be imposed) and (b) the Base Payment is less than 110% of the sum of three (3) times the
“base amount” (as defined in Code Section 280G)

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minus $1.00 (“Safe Harbor Amount”), then any amounts payable under this Agreement shall be
reduced so that the Base Payment, in the aggregate, is reduced to the Safe Harbor Amount. The
reduction of the amounts payable under this Agreement shall be made by first reducing the cash
payments payable under this Agreement. No reduction shall occur if the Base Payment is 110% (or
more) of the Safe Harbor Amount.

               (ii) In the event that (a) the reduction in Section 5(a)(i) is not applicable, (b) there is a
Base Payment which would subject the Employee to the Excise Tax, and (c) the closing stock price of
the Company on the date of the Change of Control equals or exceeds the Threshold Share Price (as
defined below), then the Employee shall be entitled to receive the payment described in Section
5(a)(iii) below. For this purpose, the “Threshold Share Price” equals the average closing price of
a share of Company common stock over the first twenty (20) days following the Merger. The
Threshold Share Price may be reviewed annually and adjusted at the discretion of the Compensation
Committee.

               (iii) If the Base Payment is subject to the Excise Tax imposed by Section 4999 of the Code and
the requirements of Section 5(a)(ii) are met, the Company shall pay to Employee the Gross-Up
Payment determined as follows: The “Gross-Up Payment” shall be equal to the sum of (1) the Excise
Tax imposed with respect to the Base Payment, plus (2) the Excise Tax imposed with respect to the
Gross-Up Payment, plus (3) all other taxes imposed on Employee with respect to the Gross-Up
Payment, including income taxes and Employee’s share of FICA, FUTA and other payroll taxes. The
Gross-Up Payment shall not include the payment of any tax on the Base Payment other than the Excise
Tax. The Gross-Up Payment is intended to place Employee in the same economic position Employee
would have been in if the Excise Tax did not apply, and shall be calculated in accordance with such
intent.

          (b) Tax Rates and Assumptions. For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state
and local income taxes at the highest marginal rate of taxation in the state and locality of
Employee’s residence on the date of termination, net of the maximum reduction in Federal income
taxes which could be obtained from deduction of such state and local taxes.

          (c) Payment and Calculation Procedures. The Gross-Up Payment attributable to a Base
Payment shall be paid to Employee in cash and at such times as such Base Payment is paid or
provided pursuant to this Agreement. Simultaneously with or prior to the Company’s payment of a
Base Payment, the Company shall deliver to Employee a written statement specifying the total amount
of the Base Payment and the Excise Tax and Gross-Up Payment relating to the Base Payment, if any,
together with all supporting calculations and conclusions. If Employee disagrees with the
Company’s determination of the Excise Tax or Gross-Up Payment, Employee shall submit to the
Company, no later than 30 days after receipt of the Company’s written statement, a written notice
advising the Company of the disagreement and setting forth Employee’s calculation of said amounts.
Employee’s failure to submit such notice within such period shall be conclusively deemed to be an
agreement by Employee as to the amount of the Excise Tax and Gross-Up Payment, if any. If the
Company agrees with Employee’s calculations, it shall pay any shortfall in the Gross-Up Payment to
Employee within 20 days after receipt of such a notice from Employee. If the Company does not
agree with Employee’s

- 11 -

 

calculations, it shall provide Employee with a written notice within 20 days after the receipt
of Employee’s calculations advising Employee that the disagreement is to be referred to an
independent accounting firm for resolution. Such disagreement shall be referred to a nationally
recognized independent accounting firm which is not the regular accounting firm of the Company and
which is designated by the Company. The Company shall be required to designate such accounting
firm within 10 days after issuance of the Company’s notice of disagreement. The accounting firm
shall review all information provided to it by the parties and submit a written report to the
parties setting forth its calculation of the Excise Tax and the Gross-Up Payment within 15 days
after submission of the matter to it, and such decision shall be final and binding on all of the
parties. The fees and expenses charged by said accounting firm shall be paid by the Company. If
the amount of the Gross-Up Payment actually paid by the Company was less than the amount calculated
by the accounting firm, the Company shall pay the shortfall to Employee within 5 days after the
accounting firm submits its written report. If the amount of the Gross-Up Payment actually paid by
the Company was greater than the amount calculated by the accounting firm, Employee shall pay the
excess to the Company within 5 days after the accounting firm submits its written report.

          (d) Subsequent Recalculation. In the event the Internal Revenue Service or other
applicable governmental authority imposes an Excise Tax with respect to a Base Payment that is
greater than the amount of the Excise Tax determined pursuant to the immediately preceding
paragraph, the Company shall reimburse Employee for the full amount of such additional Excise Tax
plus any interest and penalties which may be imposed in connection therewith, and pay to Employee a
Gross-up Payment sufficient to make Employee whole and reimburse Employee for any Excise Tax,
income tax and other taxes imposed on the reimbursement of such additional Excise Tax and interest
and penalties, in accordance with the principles set forth above.

          (e) Example. The calculation of the Gross-Up Payment is illustrated by the example
set forth in Schedule 5(e), attached to this Agreement and hereby incorporated by reference. The
amounts set forth in such example are for illustration purposes only and no implication shall be
drawn from such example as to the amounts otherwise payable to Employee by the Company.

     6. Successor To Company. The Company shall require any successor, whether direct or
indirect, to all or substantially all of the business, properties and assets of the Company whether
by purchase, merger, consolidation or otherwise, prior to or simultaneously with such purchase,
merger, consolidation or other acquisition to execute and to deliver to Employee a written
instrument in form and in substance reasonably satisfactory to Employee pursuant to which any such
successor shall agree to assume and to timely perform or to cause to be timely performed all of the
Company’s covenants, agreements and obligations set forth in this Agreement (a “Successor
Agreement”). The failure of the Company to cause any such successor to execute and deliver a
Successor Agreement to Employee shall constitute a material breach of the provisions of this
Agreement by the Company.

     7. Restrictive Covenants. In consideration of his employment and the other benefits
arising under this Agreement, Employee agrees that during the term of this Agreement,

- 12 -

 

and for a period of two (2) years (three (3) years in the event Section 4(a) hereof is
applicable) following the termination of this Agreement, Employee shall not directly or indirectly:

          (a) alone or as a partner, joint venturer, officer, director, member, employee, consultant,
agent, independent contractor or stockholder of, or lender to, any company or business, (i) engage
in the business of solid waste collection, disposal or recycling (the “Solid Waste Services
Business”) in any market in which the Company or any of its subsidiaries or affiliates does
business, or any other line of business which is entered into by the Company or any of its
subsidiaries or affiliates during the term of this Agreement, or (ii) compete with the Company or
any of its subsidiaries or affiliates in acquiring or merging with any other business or acquiring
the assets of such other business; or

          (b) for any reason, (i) induce any customer of the Company or any of its subsidiaries or
affiliates to patronize any business directly or indirectly in competition with the Solid Waste
Services Business conducted by the Company or any of its subsidiaries or affiliates in any market
in which the Company or any of its subsidiaries or affiliates does business; (ii) canvass, solicit
or accept from any customer of the Company or any of its subsidiaries or affiliates any such
competitive business; or (iii) request or advise any customer or vendor of the Company or any of
its subsidiaries or affiliates to withdraw, curtail or cancel any such customer’s or vendor’s
business with the Company or any of its subsidiaries or affiliates; or

          (c) for any reason, employ, or knowingly permit any company or business directly or indirectly
controlled by him, to employ, any person who was employed by the Company or any of its subsidiaries
or affiliates at or within the prior six months, or in any manner seek to induce any such person to
leave his or her employment.

          Notwithstanding the foregoing, the beneficial ownership of less than five percent (5%) of the
shares of stock of any corporation having a class of equity securities actively traded on a
national securities exchange or over-the-counter market shall not be deemed, in and of itself, to
violate the prohibitions of this Section.

     8. Confidentiality. Employee agrees that at all times during the term of this
Agreement and after the termination of employment for as long as such information remains
non-public information, Employee shall (a) hold in confidence and refrain from disclosing to any
other party all information, whether written or oral, tangible or intangible, of a private, secret,
proprietary or confidential nature, of or concerning the Company or any of its subsidiaries or
affiliates and their business and operations, and all files, letters, memoranda, reports, records,
computer disks or other computer storage medium, data, models or any photographic or other tangible
materials containing such information (“Confidential Information”), including without limitation,
any sales, promotional or marketing plans, programs, techniques, practices or strategies, any
expansion plans (including existing and entry into new geographic and/or product markets), and any
customer lists, (b) use the Confidential Information solely in connection with his employment with
the Company or any of its subsidiaries or affiliates and for no other purpose, (c) take all
precautions necessary to ensure that the Confidential Information shall not be, or be permitted to
be, shown, copied or disclosed to third parties, without the prior written consent of the Company
or any of its subsidiaries or affiliates, and (d) observe all security policies implemented by the
Company or any of its subsidiaries or affiliates from time to time

- 13 -

 

with respect to the Confidential Information. In the event that Employee is ordered to
disclose any Confidential Information, whether in a legal or regulatory proceeding or otherwise,
Employee shall provide the Company or any of its subsidiaries or affiliates with prompt notice of
such request or order so that the Company or any of its subsidiaries or affiliates may seek to
prevent disclosure. In addition to the foregoing Employee shall not at any time libel, defame,
ridicule or otherwise disparage the Company.

     9. Specific Performance; Injunction. The parties agree and acknowledge that the
restrictions contained in Sections 7 and 8 are reasonable in scope and duration and are necessary
to protect the Company or any of its subsidiaries or affiliates. If any provision of Section 7 or
8 as applied to any party or to any circumstance is adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other circumstance or the validity or
enforceability of any other provision of this Agreement. If any such provision, or any part
thereof, is held to be unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have the power to reduce
the duration and/or area of such provision, and/or to delete specific words or phrases, and in its
reduced form, such provision shall then be enforceable and shall be enforced. Employee agrees and
acknowledges that the breach of Section 7 or 8 will cause irreparable injury to the Company or any
of its subsidiaries or affiliates and upon breach of any provision of such Sections, the Company or
any of its subsidiaries or affiliates shall be entitled to injunctive relief, specific performance
or other equitable relief, without being required to post a bond; provided, however, that, this
shall in no way limit any other remedies which the Company or any of its subsidiaries or affiliates
may have (including, without limitation, the right to seek monetary damages).

     10. Nondisparagement.

          (a) The Employee shall not, at any time during his employment with the Company or thereafter,
make any public or private statement to the news media, to any Company competitor or client, or to
any other individual or entity, if such statement would disparage any of the Company, any of their
respective businesses or any director or officer of any of them or such businesses or would have a
deleterious effect upon the interests of any of such businesses or the stockholders or other owners
of any of them; provided, however, that the Employee shall not be in breach of this
restriction if such statements consist solely of (i) private statements made to any officers,
directors or employees of any of the Company by the Employee in the course of carrying out his
duties pursuant to this Agreement or, to the extent applicable, his duties as a director or
officer, or (ii) private statements made to persons other than clients or competitors of any of the
Company (or their representatives) or members of the press or the financial community that do not
have a material adverse effect upon any of the Company; and provided that nothing contained in this
paragraph or in any other provision of this Agreement shall preclude the Employee from making any
statement in good faith that is required by law, regulation or order of any court or regulatory
commission, department or agency.

          (b) The Company shall not, at any time during the Employee’s employment with the Company or
thereafter, authorize any person to make, nor shall the Company condone the making of, any
statement, publicly or privately, by its officers which would disparage the Employee;
provided, however, that the Company shall not be in breach of this restriction if
such

- 14 -

 

statements consist solely of (i) private statements made to any officers, directors or
employees of the Company or (ii) private statements made to persons other than clients or
competitors of any of the Company (or their representatives) or members of the press or the
financial community that do not have a material adverse effect upon the Employee; and
provided, further, that nothing contained in this paragraph or in any other
provision of this Agreement shall preclude any officer, director, employee, agent or other
representative of any of the Company from making any statement in good faith which is required by
any law, regulation or order of any court or regulatory commission, department or agency.

     11. Future Cooperation. The Employee agrees to make himself reasonably available to
the Company and its affiliates in connection with any claims, disputes, investigations, regulatory
examinations or actions, lawsuits or administrative proceedings relating to matters in which the
Employee was involved during the period in which he was Chief Operating Officer or Chief Executive
Officer of the Company, and to provide information to the Company and otherwise cooperate with the
Company and its affiliates in the investigation, defense or prosecution of such actions.

     12. Payments Contingent on Employee’s Release of Company. All of the payments and
benefits to which the Employee would otherwise be entitled under Sections 3 and 4, except with
respect to payments of accrued and unpaid Base Salary and vacation pay shall be contingent on the
Employee’s delivery to the Company of a signed and enforceable release of all claims against the
Company, other than with respect to employee pension, health or medical benefit plans, rights to
indemnification under the director and officer liability insurance policy, or under the bylaws or
certificate of incorporation of the Company, within thirty (30) days of termination.

     13. Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing and shall be deemed given if delivered by hand delivery, by certified
or registered mail (first class postage pre-paid), guaranteed overnight delivery or facsimile
transmission if such transmission is confirmed by delivery by certified or registered mail (first
class postage pre-paid) or guaranteed overnight delivery to, the following addresses and telecopy
numbers (or to such other addresses or telecopy numbers which such party shall designate in writing
to the other parties): (a) if to the Company, at its principal executive offices, addressed to the
Chief Financial Officer, with a copy to the General Counsel; and (b) if to Employee, at the address
listed on the signature page hereto.

     14. Amendment. This Agreement may not be modified, amended, or supplemented, except
by written instrument executed by all parties. The rights and remedies of the parties under this
Agreement are in addition to all other rights and remedies, at law or equity, that they may have
against each other.

     15. Assignment; Third Party Beneficiary. This Agreement, and Employee’s rights and
obligations hereunder, may not be assigned or delegated by him. The Company may assign its rights,
and delegate its obligations, hereunder to any affiliate of the Company, or any successor to the
Company or its Solid Waste Services Business, specifically including the restrictive covenants set
forth in Section 7 hereof. The rights and obligations of the Company

- 15 -

 

under this Agreement shall inure to the benefit of and be binding upon its respective
successors and assigns.

     16. Severability; Survival. In the event that any provision of this Agreement is
found to be void and unenforceable by a court of competent jurisdiction, then such unenforceable
provision shall be deemed modified so as to be enforceable (or if not subject to modification then
eliminated herefrom) to the extent necessary to permit the remaining provisions to be enforced in
accordance with the parties intention. The provisions of Sections 7, 8, 9, 10 and 11 will survive
the termination for any reason of Employee’s relationship with the Company.

     17. Indemnification. The Company agrees to indemnify Employee during the term and
after termination of this Agreement in accordance with the provisions of the Company’s certificate
of incorporation and bylaws and the Delaware General Corporation Law.

     18. Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one and the same instrument.

     19. Governing Law. This Agreement shall be construed in accordance with and governed
for all purposes by the laws of the State of Arizona applicable to contracts executed and to be
wholly performed within such State.

     20. Entire Agreement. This Agreement contains the entire understanding of the parties
in respect of its subject matter and supersedes all prior agreements and understandings (oral or
written) between or among the parties with respect to such subject matter. Upon the execution of
this Agreement the provisions of the 2008 Employment Agreement shall be superseded and shall be of
no further force and effect.

     21. Headings. The headings of Paragraphs and Sections are for convenience of
reference and are not part of this Agreement and shall not affect the interpretation of any of its
terms.

     22. Construction. This Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any party. The parties acknowledge that each of them has
reviewed this Agreement and has had the opportunity to have it reviewed by their respective
attorneys and that any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation of this Agreement. Words of one
gender shall be interpreted to mean words of another gender when necessary to construe this
Agreement, and in like manner words in singular may be interpreted to be in the plural, and vice
versa.

     23. Withholding. All payments made to Employee shall be made net of any applicable
withholding for income taxes, Excise Tax and Employee’s share of FICA, FUTA or other taxes. The
Company shall withhold such amounts from such payments to the extent required by applicable law and
remit such amounts to the applicable governmental authorities in accordance with applicable law.

- 16 -

 

     24. Retirement Eligibility. Upon Employee’s retirement, in lieu of payments under
Sections 3 and 4 (but not 25), the Company shall pay to Employee all of Employee’s accrued but
unpaid Base Salary through the date of retirement. In addition, for all stock option or restricted
stock awards (“Equity Awards”) and all monetary awards (including Annual Awards and Long Term
Awards pursuant to the Executive Incentive Plan and any retirement contributions to the deferred
compensation program) (“Monetary Awards”), in each case granted to Employee prior to July 26, 2006
(“Prior Awards”), such Employee shall be eligible to retire for purposes of the Prior Awards, and
such Prior Awards shall fully vest in the event of such retirement, upon attaining either (a) the
age of fifty-five (55) and having completed six (6) years of service with the Company or Allied
Waste Industries, Inc. or (b) the age of sixty-five (65) without regard to years of service with
the Company (the “Original Retirement Policy”). For all Equity Awards and/or Monetary Awards
granted to Employee following July 26, 2006 (“Prospective Awards”), the Original Retirement Policy
shall apply, and such Prospective Awards shall fully vest in the event of such retirement,
provided, and only to the extent that, Employee shall provide the Company with not less than twelve
(12) months prior written notice of Employee’s intent to retire. Failure by Employee to provide
such written notice shall cause the Revised Retirement Policy (as hereinafter defined) to apply
with respect to the vesting of Prospective Awards, but such failure shall have no effect whatsoever
on the Prior Awards, all of which shall continue to be subject to the Original Retirement Policy.
For purposes of this Agreement, (i) “Revised Retirement Policy” shall mean Employee has attained
the age of (x) sixty (60) and has completed fifteen (15) years of continuous service with the
Company or Allied Waste Industries, Inc. or (y) sixty-five (65) with five (5) years of continuous
service with the Company or Allied Waste Industries, Inc. and (ii) all Annual Awards and all Long
Term Awards shall vest and be paid on a prorated basis in an amount equal to the Annual Awards and
Long Term Awards payment that the Compensation Committee of the Board of Directors determines would
have been paid to Employee pursuant to the Executive Incentive Plan had Employee’s employment
continued to the end of the Performance Period multiplied by a fraction, the numerator of which is
the number of completed months of employment during such Performance Period and the denominator of
which is the total number of months in the Performance Period, within sixty (60) days after the end
of the Company’s Fiscal Year in which the Performance Period ends.

     25. Supplemental Retirement Benefit. If the Employee has a termination of employment
for any reason other than due to Employee’s actions or omissions that constitute dishonesty, the
Employee shall receive supplemental retirement benefits, as follows:

          (a) The Company shall pay the Employee a cash lump sum supplemental retirement benefit within
thirty (30) days following the date of termination equal to $2,287,972 increased during the period
from the Merger until the date of termination based upon an annual interest rate of six percent
(6%), compounded annually.

          (b) The Company shall continue providing medical, dental, and/or vision coverage to the
Employee and/or the Employee’s family, at least equal to that which would have been provided to the
Employee if the Employee’s employment had not terminated, until the earlier of (1) the date the
Employee becomes eligible for any comparable medical, dental, or vision coverage provided by any
other employer, or (2) the date the Employee becomes eligible

- 17 -

 

for Medicare or any similar government-sponsored or provided health care program (whether or
not such coverage is equivalent to that provided by the Company).

          If Employee terminates employment due to Employee’s actions or omissions that constitute
dishonesty, he shall not be entitled to the benefits set forth in this Section 25.

     26. Code Section 409A.

          (a) General. It is the intention of both the Company and Employee that the benefits
and rights to which Employee could be entitled pursuant to this Agreement comply with Code Section
409A, to the extent that the requirements of Code Section 409A are applicable thereto, and the
provisions of this Agreement shall be construed in a manner consistent with that intention. If
Employee or the Company believes, at any time, that any such benefit or right that is subject to
Code Section 409A does not so comply, it shall promptly advise the other and shall negotiate
reasonably and in good faith to amend the terms of such benefits and rights such that they comply
with Code Section 409A (with the most limited possible economic effect on Employee and on the
Company).

          (b) Distributions on Account of Separation from Service. If and to the extent
required to comply with Code Section 409A, any payment or benefit required to be paid under this
Agreement on account of termination of Employee’s employment shall be made upon Employee incurring
a “separation of service” within the meaning of Code Section 409A.

          (c) Timing of Severance Payments. Notwithstanding anything in this Agreement to the
contrary, if Employee is deemed to be a “specified employee” for purposes of Code Section 409A, no
Severance Payment or other payments pursuant to, or contemplated by, this Agreement shall be made
to Employee by the Company before the date that is six months after the Employee’s “separation from
service” (or, if earlier, the date of Employee’s death) if and to the extent that such payment or
benefit constitutes deferred compensation (or may be nonqualified deferred compensation) under Code
Section 409A. Any payment or benefit delayed by reason of the prior sentence shall be paid out or
provided in a single lump sum at the end of such required delay period in order to catch up to the
original payment schedule.

          (d) No Acceleration of Payments. Neither the Company nor Employee, individually or in
combination, may accelerate any payment or benefit that is subject to Code Section 409A, except in
compliance with Code Section 409A and the provisions of this Agreement, and no amount that is
subject to Code Section 409A shall be paid prior to the earliest date on which it may be paid
without violating Code Section 409A.

          (e) Treatment of Each Installment as a Separate Payment. For purposes of applying the
provisions of Code Section 409A to this Agreement, each separately identified amount to which
Employee is entitled under this Agreement shall be treated as a separate payment. In addition, to
the extent permissible under Code Section 409A, any series of installment payments under this
Agreement shall be treated as a right to a series of separate payments.

- 18 -

 

          (f) Reimbursements. Notwithstanding anything in this Agreement to the contrary, any
payment, to the extent such payment constitutes deferral of compensation under Code Section 409A,
to reimburse the Employee in an amount equal to all or a designated portion of the Federal, state,
local, or foreign taxes imposed upon Employee as a result of compensation paid or made available to
Employee by the Company, including the amount of additional taxes imposed upon Employee due to the
Company’s payment of the initial taxes on such compensation, or for other reimbursements, shall be
made no later than the end of Employee’s taxable year next following Employee’s taxable year in
which Employee remits the related taxes or incurs such expense.

          (g) Continued Health Benefits. In the event that Employee receives continued health
benefits pursuant to Section 3, 4 or 25 of this Agreement, such expense or reimbursement shall meet
the following requirements: (i) the amount of expenses eligible for reimbursement provided to
Employee during any calendar year will not affect the amount of expenses eligible for reimbursement
or in-kind benefits provided to Employee in any other calendar year, (ii) the reimbursements for
expenses for which Employee is entitled to be reimbursed shall be made on or before the last day of
the calendar year following the calendar year in which the applicable expense is incurred, and
(iii) the right to payment or reimbursement on in-kind benefits hereunder may not be liquidated or
exchanged for any other benefit.

     27. Beneficiary. If the Employee dies before receiving any payments due to him under
Sections 3 or 4, or under Section 25 in the case of his death after terminating employment, the
remaining payments will be paid to his beneficiary.

     28. Arbitration. Except with respect to the remedies set forth in Section 9 hereof,
if in the event of any controversy or claim between the Company or any of its affiliates and the
Employee arising out of or relating to this Agreement, either party delivers to the other party a
written demand for arbitration of a controversy or claim then such claim or controversy shall be
submitted to binding arbitration. The binding arbitration shall be administered by the American
Arbitration Association under its Commercial Arbitration Rules. The arbitration shall take place
in Maricopa County, Arizona. Each of the Company and the Employee shall appoint one person to act
as an arbitrator, and a third arbitrator shall be chosen by the first two arbitrators (such three
arbitrators, the “Panel”). The Panel shall have no authority to award punitive damages against the
Company or the Employee. The arbitrator shall have no authority to add to, alter, amend or refuse
to enforce any portion of the disputed agreements. The Company and the Employee each waive any
right to a jury trial or to petition for stay in any action or proceeding of any kind arising out
of or relating to this Agreement.

[SIGNATURES ON FOLLOWING PAGE]

- 19 -

 

     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date
first above written.

	 	 	 	 	 
	 	REPUBLIC SERVICES, INC., a Delaware

corporation

 	 
	 	By:  	/s/ Michael
P. Rissman	 
	 	Its:  	Executive
Vice President	 
	 		and
General Counsel	 

	 	 	 	 	 
	 	EMPLOYEE:

 	 
	 	/s/ Donald W. Slager
 	 
	 	Donald W. Slager
 	 
	 	Address for Notices:  Address shown on the payroll

records of the Company 	 

- 20 -

 

	 	 	 	 	 

Schedule 2(k)

Maximum Awards Under the Synergy Incentive Plan

	 	 	 
	 	 	Cash
	Donald W. Slager

	 	$10 million

 

 

Schedule 5(e)

Gross-Up Payment Example

     Assume that the Company makes a Base Payment to Employee of $900,000, and that $600,000 is
subject to an Excise Tax of 20%. Also assume that the maximum combined effective federal, state
and local tax rate, including Employee’s share of payroll taxes but not including the Excise Tax
rate, is 45%. Under these circumstances, the Gross-Up Payment would be $342,857.14.

     The Gross-Up Payment in this example is equal to the amount of the Base Payment subject to
the Excise Tax ($600,000), multiplied by the Excise Tax rate, expressed as a decimal (.20), and
divided by the remainder of 1 minus the Excise Tax rate, expressed as a decimal, and minus the
effective rate of tax of Employee exclusive of the Excise Tax, expressed as a decimal (1-.20-.45).
Hence, the Gross-Up Payment is $600,000 x .20 / (1-.20-.45) = $342,857.14.

     The Gross-Up Payment of $342,857.14 represents the sum of the amounts referred to in clauses
(1), (2) and (3) of Section 5(a)(iii) of this Agreement, as set forth below.

	 	 	 	 	 

	clause (1):

Excise Tax on Base Payment (600,000 x .20)
	 	$	120,000.00	 
	clause (2):

Excise Tax on Gross-Up Payment (342,857.14 x .20)
	 	 	68,571.43	 
	clause (3):

Other taxes on Gross-Up Payment (342,857.14 x .45)
	 	 	154,285.71	 
	 
	 	 	 
	Total taxes subject to gross-up
	 	 	342,857.14exv10w3

Exhibit 10.3

     

	 	 	 

	Date:

	 	June 14, 2010
	 
	 	 
	To:

	 	Kevin Walbridge
	 
	 	 
	From:

	 	Don Slager
	 
	 	 
	Re:

	 	Promotion to Executive Vice President of Operations
	 

	 	 

I am very pleased that you have accepted the Company’s offer to promote you to the position of
Executive Vice President, Operations. The terms and conditions of your new position are contingent
on the approval of the Compensation Committee of the Company’s Board of Directors and are outlined
below:

Effective Date: Your position will begin on or about October 1, 2010, or as mutually
agreed;

Reporting: The position reports directly to me, or other individuals as the Company may
direct;

Salary: Your new base salary will be $475,000, less applicable withholdings;

Bonus: You will continue to be eligible to participate in the Company’s Management
Incentive Plan (“MIP”) or any successor or similar plan maintained by the Company for the
benefit of similarly situated employees. Under the current MIP, the target bonus for your
position is 80% of your base compensation, but this bonus is subject to change at the
discretion of the Company;

Equity Award: You will be eligible for an equity award in early 2011 valued at $186,500,
subject to approval by the Compensation Committee of the Company’s Board of Directors;

Long-Term Incentive Plan: You will continue to be eligible to participate in our Long-Term
Incentive Plan for the 2009-2011 and 2010-2012 cycles on the same basis as you are
currently participating. A new award opportunity will be established in 2011 valued at
$250,000, subject to approval by the Compensation Committee. This incentive will be tied
to achieving our key financial goals over the following three-year period (2011—2013). A
new LTIP award opportunity will be established each year so that this incentive will become
part of your annual compensation. The 2011-2013 LTIP cycle and all subsequent LTIP cycles
are provided at the discretion of the Company and subject to the approval of the
Compensation Committee;

 

 

Deferred Compensation Plan: A 2011 annual contribution of $65,000 will be made into the
Deferred Compensation Plan account as a special executive benefit. This contribution is
made at the discretion of the Compensation Committee;

Synergy Incentive Plan: You will continue to be eligible for your one-time integration
bonus in accordance with the terms and conditions of the Company’s Synergy Incentive Plan.
Your target Synergy Bonus opportunity remains $1,000,000;

Vacation: Vacation time will be accrued and used in accordance with the applicable vacation
policy;

Benefits: You will continue to be eligible to participate in all benefit plans that the
Company makes available to similarly-situated employees, including the Company’s 401k,
medical, dental, vision, life insurance, short- term disability, and long-term disability
plans;

Relocation: You will be eligible to receive Republic’s Level 4 Relocation benefits to
assist you with your relocation from Indianapolis to the Phoenix, Arizona area;

Employment Agreement: Your December 5, 2008 Employment Agreement (“Employment Agreement”)
will continue in accordance with its terms except as modified in this offer. This
memorandum shall serve as the new “Appendix B” to your Employment Agreement;

Noncompetition, Non-Solicitation and Confidentiality Agreement: This offer is contingent
on you timely signing and returning to me a new Noncompetition, Non-Solicitation and
Confidentiality Agreement. Your new Agreement is enclosed with this offer and will serve as
“Appendix A” to your Employment Agreement.

Kevin, I am excited to have you join the team in Phoenix and look forward to working with you in
your new role. To confirm the terms and conditions of your new position, please sign below where
indicated. As always, please do not hesitate to contact me if you have any questions.

I understand all the terms offered to me and accept employment on these terms. I understand and
agree that either the Company or I may terminate the employment relationship at any time for any
reason. I agree that no other promises have been made to me and that this memorandum shall have no
effect until it is approved by the Compensation Committee.

	 	 	 	 	 

	/s/ Kevin Walbridge

	 	 
	 	June 28, 2010
	 

	 	 	 	 
	Kevin Walbridge

	 	 	 	Date

2

 

APPENDIX A

NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT

     Republic Services, Inc. (the “Company”) and Kevin Walbridge (“Employee”), enter into this
Non-Competition, Non-Solicitation and Confidentiality Agreement (“Agreement”), effective October 1,
2010 (the “Effective Date”). The Company and Employee will be referred to as the “Parties” in this
Agreement. The Parties agree as follows:

     1. Certain Definitions and Understandings. The Parties expect that some or all of the
obligations the Company will assume to Employee under this Agreement will be fulfilled through its
parent, subsidiary, related, or successor companies (“Affiliates”). Accordingly, Employee
acknowledges that the discharge of any obligation of the Company under this Agreement by one or
more of its Affiliates discharges the Company’s obligation in that regard. Moreover, the
obligations Employee will assume under this Agreement will be owed to the Company and its
Affiliates (collectively referred to as the “Company” for the remainder of this Agreement).

     2. Consideration Employee Will Receive Under This Agreement. The Parties recognize that in
order for Employee to perform his duties, Employee needs to manage, use or otherwise handle
Confidential Information (as defined below in Section 3.1) belonging to the Company. Thus, the
Company agrees to provide Employee with, and access to, Confidential Information necessary to
perform his duties. Employee agrees that, in exchange for the Company providing him with
Confidential Information, and the Company’s agreement to employ him on an at-will basis, Employee
will make the promises set forth in the following sections of this Agreement.

     3. Employee’s Confidentiality Obligations.

          3.1 For purposes of this Agreement, “Confidential Information” is not limited to information
that would qualify as a Trade Secret and includes, but is not limited to: customer lists and
agreements; customer service information; names of customer contacts and the identities of their
decision-makers; routes and/or territories; information provided to the Company by any actual or
potential customer, government agency or other third party; the Company’s internal personnel and
financial information; information about vendors that is not generally known to the public;
purchasing and internal cost information; information about the profitability of particular
operations; internal service and operational manuals and procedures; the manner and methods of
conducting the Company’s business; marketing plans, development plans, price data, cost data, price
and fee amounts, pricing and billing policies, quoting procedures, marketing techniques, forecasts
and forecast assumptions and volumes; future plans and potential acquisition, divestiture and other
development strategies; non-public information about the Company’s landfill development plans,
landfill capacity, special projects, and the status of any permitting process; the status of any
governmental investigation, charge, or lawsuit and the position of the Company regarding the value
of such matter; non-public information regarding the Company’s compliance with federal, state or
local laws; information that gives the Company some competitive business advantage, or the
opportunity of obtaining such an

 

 

          advantage, or the disclosure of which could be detrimental to the interests of the Company;
and/or information that is not generally known outside the Company.

          3.2 As a consequence of Employee’s acquisition of Confidential Information, Employee agrees
that it is reasonable and necessary that he make the following covenants:

               (a) At no time while Employee is employed or at any time after his employment ends will
Employee disclose Confidential Information to any person or entity either inside or outside of the
Company other than as necessary in carrying out his duties and responsibilities, nor will Employee
use, copy, or transfer Confidential Information other than as necessary in carrying out his duties
and responsibilities, without first obtaining the Company’s prior written consent. In the event a
court concludes that the temporal restrictions in this Section 3.2(a) are unreasonable, Employee’s
obligations under this Section 3.2(a) will end three (3) years after his employment ends. Nothing
in this Agreement prohibits Employee from providing information to any administrative or
governmental agency, or from testifying under the power of a subpoena issued from a court of
competent jurisdiction.

               (b) During his employment, Employee agrees to promptly disclose to the Company all
information, ideas, concepts, improvements, discoveries and inventions (“Inventions”), which he
conceives, develops, creates, or acquires, either individually or jointly with others, and which
relate to the business, products, or services of the Company, irrespective of whether such
Inventions were conceived, developed, discovered, or acquired by Employee on the job, at home, or
elsewhere. Employee further agrees that all right, title and interest (including copyrights) in
and to any Inventions shall be the property of the Company.

               (c) When Employee’s employment with the Company ends, Employee will immediately deliver to the
Company (or its designee) anything containing Confidential Information including, but not limited
to, reports, studies, materials, records, documents, books, files, videotapes, tape recordings,
computers, computer disks, flash/thumb drives, CDs, DVDs, PDAs, Blackberry devices, mobile
telephones, and/or other devices used to store electronic data, including any copies thereof,
whether made by Employee or which came into his possession prior to or during his employment
concerning the business or affairs of the Company.

     4. Employee’s Non-Competition and Non-Solicitation Obligations.

          4.1 Definitions:

               (a) “Principal Competitor” means: (i) Waste Management, Inc., Waste Connections, Inc., or
Veolia Environmental Services North America Corp. (including their predecessors, successors,
parents, subsidiaries, or affiliate operations); or (ii) any public or private business (including
their predecessors, successors, parents, subsidiaries, or affiliate operations) conducting
Non-hazardous Solid Waste Management services in three (3) or more states in which the Company
conducts business.

               (b) “Competitor” means any public or private business that provides Non-hazardous Solid Waste
Management services in any state in which the Company conducts business.

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               (c) “Rendering Services” means any of the following activities, whether done directly or
through others, whether done in person or through telephonic, electronic, or some other means of
communication, and whether done as a principal, director, officer, agent, employee, contractor, or
consultant: (i) performing any kind of services or duties related to Non-hazardous Solid Waste
Management; (ii) selling, marketing, managing, or brokering Non-hazardous Solid Waste Management
services; (iii) developing, managing, or otherwise handling data or information concerning
potential or actual acquisitions of businesses that engage in Non-hazardous Solid Waste Management;
(iv) participating in any decision, or developing, or implementing any strategy, to acquire such
businesses; (v) formulating, reviewing, or implementing long or short-term marketing, sales, or
operational strategies related to Non-Hazardous Solid Waste Management; (vi) conducting or
reviewing cost benefit analysis on proposed projects related to Non-Hazardous Solid Waste
Management; (vii) conducting, participating in, or otherwise assisting any review of the prices or
rates charged by the Company, whether in connection with an initial contract bid, a contract
extension, or a request for a price/rate increase; (viii) soliciting, requesting, reviewing,
analyzing, or otherwise handling Confidential Information about the costs (including SG&A or
operational), revenues, or profit margins of the Company; (ix) determining, advising, or
recommending whether to award a contract to the Company, or whether, and to what extent, the
Company is entitled to an increase in its rates or prices; and/or (x) performing any functions that
are the same as, or substantially similar to, the duties Employee performed for the Company at any
time during the last twenty-four (24) months of his employment.

               (d) “Contact” means any direct or indirect interaction between Employee and any customer,
potential customer, or acquisition prospect, which takes place in an effort to further a business
relationship, whether done directly or through others, whether in person or through telephonic,
electronic, or some other means of communication, and whether done as a principal, director,
officer, agent, employee, contractor, or consultant.

               (e) “Non-hazardous Solid Waste Management” means the collection, hauling, disposal, or
recycling, of non-hazardous refuse or other services provided by the Company.

               (f) “Facility” means the physical location at which the Company owns, leases, or operates: (i)
an office; (ii) a collection operation; or (iii) a post-collection operation (including, but not
limited to, landfills, transfer stations, material recovery facilities, recycling facilities and
compost facilities).

               (g) “Solicit” means soliciting directly or through others, whether done in person or through
telephonic, electronic, or some other means of communication, and whether done as a principal,
director, officer, agent, employee, contractor, or consultant.

          4.2 Prohibition Against Competition.

               (a) During his employment, and for a period of twenty-four (24) months after his employment
ends, Employee will not compete with the Company to the extent, and subject to the express
limitations, provided in this Section 4.2. In the event a court concludes that twenty-four (24)
months is an unreasonable period of time, Employee’s obligations under this Section 4.2 will end
eighteen (18) months after his employment ends.

-3-

 

               (b) During his employment, Employee will have detailed knowledge of, and active participation
in, many issues affecting the Company’s operations across the nation. Much of the Confidential
Information Employee will receive will not be limited to a particular geographic area.
Nonetheless, the Parties recognize that an appropriate non-competition obligation should balance
Employee’s interest in future employment with the Company’s interest in protecting its Confidential
Information and other protectable interests. Accordingly, Employee agrees that he will not Render
Services to any Principal Competitor, or to any Competitor, that are: (i) rendered in a state in
which the Company does business; or (ii) directed at achieving, or intended to achieve, a result in
any such state. In the event a court concludes that this particular restriction is not reasonably
limited, Employee will not Render Services to any Principal Competitor, or to any Competitor, that
are: (i) rendered within forty (40) miles of any Facility; or (ii) directed at achieving, or
intended to achieve, a result within forty (40) miles of any Facility.

          4.3 Prohibition Against Solicitation.

               (a) During his employment, and for a period of twenty-four (24) months after his employment
ends, Employee will limit his activities relating to customers, potential customers, acquisition
prospects, employees, consultants and independent contractors of the Company to the extent, and
subject to the express limitations, provided in this Section 4.3. In the event a court concludes
that twenty-four (24) months is an unreasonable period of time, Employee’s obligations under this
Section 4.3 will end eighteen (18) months after his employment ends.

               (b) Employee will not Contact any customers, potential customers, or acquisition prospects of
the Company that Employee generated, serviced, managed, contacted, or maintained at any time during
the last twenty-four (24) months of his employment on behalf of any Principal Competitor, or any
Competitor, that provides Non-hazardous Solid Waste Management services within forty (40) miles of
any Facility.

               (c) Employee will not, either directly or indirectly, raid, Solicit, attempt to Solicit, or
induce, any employee of, consultant to, or independent contractor of, the Company to terminate his
or her relationship with the Company in order to become an employee of, consultant to, independent
contractor of, or act in any other way on behalf of, any other person or entity.

          4.4 Judicial Modification. If the applicable temporal or geographic limitations agreed to by
the Parties in this Section 4 are found by a court to be overbroad, the Parties expressly authorize
the judge before whom any dispute is brought to impose the broadest temporal and geographic
limitations permissible under the law.

     5. Employee’s Obligation to Avoid Conflicts of Interest. Employee agrees to abide by the
Company’s Conflicts of Interests policy, which includes not becoming involved, directly or
indirectly, in a situation that a reasonable person would recognize to be an actual conflict of
interest with the Company. If Employee discovers, or is informed by the Company that he has become
involved in a situation that is an actual or likely conflict of interest with the Company, Employee
will take immediate actions to eliminate the conflict. The Company’s determination as to whether
or not a conflict of interest exists will be conclusive.

-4-

 

     6. Miscellaneous.

          6.1 Waiver of Breach. The waiver by any Party of a breach of any provision of this Agreement
will neither operate nor be construed as a waiver of any subsequent breach.

          6.2 Assignment. The Company may assign this Agreement upon written notice to Employee.
However, Employee agrees that his rights and obligations under this Agreement are personal to him
and may not be assigned without the express written consent of the Company.

          6.3 Entire Agreement, No Oral Amendments. This Agreement replaces and merges all previous
agreements and discussions relating to any non-competition, non-solicitation and/or confidentiality
obligations owed by Employee to the Company and it constitutes the entire agreement between
Employee and the Company with respect to the rights and obligations of either Party in that regard.
This Agreement may not be modified except by a written agreement signed by an executive officer of
the Company.

          6.4 Enforceability. If a court or arbitrator authorized by this Agreement to resolve disputes
between the Parties determines that any provision of this Agreement is invalid or unenforceable,
the invalid or unenforceable provision will be struck from the Agreement without affecting any
other provision of this Agreement. All remaining provisions of this Agreement that were not struck
will be enforced according to their terms.

          6.5 Governing Law, Jurisdiction, and Venue. This Agreement and the rights and obligations of
the Parties hereunder shall be governed and interpreted in accordance with the laws of the State of
Arizona. Additionally, the Parties agree that the courts situated in Maricopa County, Arizona will
have personal jurisdiction over them to hear all disputes arising under, or related to, this
Agreement and that venue will be proper only in Maricopa County, Arizona.

          6.6 Injunctive Relief. The Company and Employee agree that a breach of any term of this
Agreement by Employee would cause irreparable harm to the Company and that, in the event of such
breach, the Company will have, in addition to any and all remedies of law, the right to an
injunction, specific performance and other equitable relief to prevent or redress the violation of
Employee’s obligations under this Agreement. Additionally, to provide the Company with the
protections it has bargained for in this Agreement, any period of time in which Employee has been
in breach will extend, by that amount of time, the time for which Employee should be precluded from
further breaching the promises made in the Agreement.

          6.7 Attorneys’ Fees. The Company and Employee agree that, if Employee is found to have
breached any term of this Agreement, the Company will be entitled to recover the attorneys’ fees
and costs it incurred in enforcing this Agreement.

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     The Parties, intending to be bound, execute this Agreement as of the Effective Date.

	 	 	 	 	 
	EMPLOYEE

	 	 	 	COMPANY
	 
	 	 	 	 
	/s/ Kevin Walbridge

	 	By
	 	/s/ Michael P. Rissman
	 

	 	 	 	 
	Kevin Walbridge
	 	 	 	 
	 
	 	 	 	 
	 

	 	Its
	 	Executive Vice President and General Counsel
	 

	 	 	 	 

-6-

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