Document:

EX-10.3

 Exhibit 10.3 
 STOCK OPTION AWARD AGREEMENT 
 This Stock Option Award Agreement
(“Agreement”) is entered into effective as of March 8, 2013, (the “Grant Date”), by and between Waste Management, Inc., a Delaware corporation (together with its Subsidiaries and Affiliates, the “Company”), and
you, (the “Employee”), pursuant to the Waste Management, Inc. 2009 Stock Incentive Plan (the “Plan”). Employee agrees that the terms and conditions of this Agreement will govern Employee’s rights with respect to the Award
exclusively, notwithstanding any contrary provisions in any employment agreement or prior award. Employee and the Company agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the
intent of this Agreement. The terms and conditions of this Agreement as offered herein must be accepted by Employee prior to April 22, 2013. Failure to timely accept the terms by such time will result in the immediate and irrevocable
cancellation of the Award offered. 
 1. Grant. In accordance with, and subject to, the terms of
the Plan, the Company hereby grants to Employee a stock option award (the “Award”) subject to the terms and conditions set forth herein. This Award of stock options grants you the right to purchase the shares of common stock of Waste
Management, Inc., $.01 par value, (“Common Stock”) set forth below at the Grant Price set forth below (the “Grant Price”), subject to the conditions and restrictions on exercise and transferability set forth below and in the
Plan. The number of shares subject to option under this Award is the number of announced to Employee on March 8, 2013. The Grant Price is the Fair Market Value of a share of Common Stock on the Grant Date. The maximum term of the Award is the
10th anniversary of the Grant Date. 

2. Right to Exercise. 
 (a) General Rule. Except as provided in the remainder of this Section, the Award shall become exercisable as follows: 

 

					
	 Exercise Date
	  	Percentage
of Option
Exercisable	 
	 Prior to the first anniversary of the Grant Date
	  	 	0	% 
	 On or after the first anniversary of the Grant Date
	  	 	25	% 
	 On or after the second anniversary of the Grant Date
	  	 	25	% 
	 On or after the third anniversary of the Grant Date
	  	 	50	% 

 provided, however, except as otherwise provided for under this Agreement, the Employee must remain employed by the
Company continuously through the applicable exercise dates. 

  
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 (b) Retirement. Upon the Employee’s termination of employment from the Company
due to Retirement, the Options subject to the Award shall continue to become exercisable following the schedule under paragraph (a) above for three years following the Employee’s Retirement and once exercisable shall remain exercisable for
the three year period following the Employee’s Retirement; provided, however, in no event will the Award be exercisable beyond the original term of the Award. 
 (c) Death or Disability. Upon termination of employment from the Company by reason of Employee’s death or disability (as determined by the Committee), Employee (or in the case of
Employee’s death, Employee’s beneficiary) shall be entitled to exercise all of the options then outstanding under the Award (whether or not previously exercisable under paragraph (a) above) for one year following the Employee’s
termination of employment due to death or disability, as the case may be; provided, however, in no event will the Award be exercisable beyond the original term of the Award. Notwithstanding the foregoing, in the event Employee was eligible for
Retirement at the time of his death or disability, the Award will remain exercisable for three years following the termination of employment; provided, however, in no event with the Award be exercisable beyond the original term of the Award.

 (d) Involuntary Termination of Employment Without Cause or Resignation by Employee. Upon an involuntary termination of
employment without Cause by the Company or a voluntary resignation by Employee which is accepted by the Company, Employee shall be entitled to exercise all of the options then outstanding and exercisable under the Award immediately prior to
termination of employment for a period of 90 days following the Employee’s termination of employment; provided, however, in no event will the Award be exercisable beyond the original term of the Award. 

(e) Termination for Cause. Upon a termination of employment by the Company with Cause, Employee shall forfeit all options under
the Award, whether or not previously exercisable, without the payment of any consideration or further consideration by the Company. Upon forfeiture, neither Employee nor any successors, heirs, assigns, or legal representatives of Employee shall
thereafter have any further rights or interest in the unvested portion of the Award. 
 (f) Involuntary Termination by
Company or Resignation by Employee for Good Reason following a Change in Control. In the event of an involuntary termination of employment without Cause or a resignation from employment by the Employee for Good Reason that, in either case,
occurs on or before the second anniversary of the occurrence of a Change in Control, the Award shall become exercisable immediately (whether or not previously exercisable under paragraph (a) above). For purposes of this Section 2(f),
“Good Reason” has the meaning assigned in Employee’s written employment agreement, as in effect on the Grant Date; in the event there is no such agreement or definition provided, then “Good Reason” means the initial
existence of one or more of the following conditions, arising without the consent of Employee: (1) a material diminution in Employee’s base compensation; (2) a material diminution in the service provider’s authority, duties, or
responsibilities, so as to effectively cause Employee to no longer be performing the duties of his position; (3) a material diminution in the authority, duties, or responsibilities of the supervisor to whom Employee is

  
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required to report. Upon an the occurrence of such a termination of employment or resignation, the Options subject to the Award shall remain exercisable for the three (3) year period
following the termination of employment; provided, however, in no event will the Award be exercisable beyond the original term of the Award. 
 (g) Restrictive Covenants. Notwithstanding any other term of this Agreement to the contrary, in order to be eligible to exercise any portion of the Award, Employee must also have entered into an
agreement containing restrictive covenants concerning limitations on Employee’s behavior following termination of employment that is satisfactory to the Company and its affiliates. 

4. Exercise. 
 (a) Manner of Exercise. To the extent exercisable under Section 3, the Employee may exercise his or her Award, in whole or in part, by delivering written notice to the Company in accordance
with Section 22 and in such form as the Company may require from time to time. Such notice of exercise shall: 
  

	 	(i)	specify the number of Common Shares subject to the Option to be purchased; 

 

	 	(ii)	specify the aggregate Grant Price for such Common Shares; 

  

	 	(iii)	be accompanied by payment in full of such aggregate Grant Price. 

 (b) Payment of Grant Price. The Grant Price shall be payable to the Company in full by either: 
  

	 	(i)	in cash or its equivalent; 

  

	 	(ii)	by tendering previously acquired Common Stock that has been held for at least six months and having an aggregate fair market value at the time of exercise equal to the
aggregate Grant Price; or 

  

	 	(iii)	a combination of sub-paragraphs (i) and (ii). 

 In addition, payment of the Grant Price may be made by one or more of the following methods either upon written consent from the Committee or if one or more of the following methods will not result in a
charge to earnings for financial reporting purposes: 
  

	 	(iv)	by withholding Common Stock that otherwise would be acquired on exercise having an aggregate fair market value at the time of exercise equal to the aggregate Grant
Price; 

  

	 	(v)	by tendering other Awards payable under the Plan; 

  
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	 	(vi)	 by cashless exercise through delivery of irrevocable instructions to a broker to promptly deliver to the Company the amount of proceeds from a sale of
shares having a fair market value equal to the Grant Price, provided that such broker is (A) an approved designee of the Company for these purposes and (B) such instructions are delivered by no later than close of the New York Stock
Exchange on the last Trading Day prior to the 10th
anniversary of the Grant Date. Payment by cashless exercise shall not be considered to have occurred until such time as such broker has issued confirmation of the transaction; 

 

	 	(vii)	a combination of sub-paragraphs (iv) through (vi). 

 (c) No Fractional Shares. The Company shall not be required to issue any fractional shares of Common Stock. 
 5. Repayment of Benefits Arising from Misconduct. 
 (a) Notwithstanding any
provision of this Agreement to the contrary, if it is determined by the Committee that Employee either engaged in or benefited from Misconduct, then, to the extent permitted by law, Employee will refund to the Company any amounts, plus interest,
received by Employee under this Agreement. 
 (b) Following a finding of Misconduct of the Employee, the Employee may dispute
the occurrence of Misconduct pursuant to binding arbitration. Individuals determined to have benefited from, but not engaged in, Misconduct will have no right to challenge the finding of Misconduct through arbitration. The Company and Employee
hereby agree that any dispute arising out of or relating to a finding that Employee engaged in Misconduct shall be settled exclusively by final and binding arbitration, as governed by the Federal Arbitration Act (9 U.S.C. 1 et seq.). The
arbitration proceeding, including the rendering of an award, shall be administered by JAMS pursuant to its Employment Arbitration Rules and Procedures, which may be found on the JAMS web site www.jamsadr.com. All expenses associated with the
arbitration shall be borne by Company. Such arbitration expenses will not include attorney fees incurred by the respective parties. The award of the arbitrator shall be final and binding upon the parties. Judgment on any arbitration award may be
entered in any court having jurisdiction. 
 (c) The Company must initiate any attempt at recovery pursuant to this Section
within the earlier to occur of (i) one year after discovery of alleged Misconduct or (ii) the second anniversary of Employee’s termination of employment. 
 (d) The provisions of this Section 5, without implication as to any other section hereof, shall survive the expiration or termination of this Agreement and of Employee’s employment. 

6. Restrictions on Transfer. 
 (a) Absent prior written consent of the Committee, the Award granted hereunder to Employee may not be sold, assigned, transferred, pledged or otherwise

  
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encumbered, whether voluntarily or involuntarily, by operation of law or otherwise; provided, however, that the transfer of any shares of Common Stock with respect to the Award purchased upon
exercise hereunder shall not be restricted by virtue of this Agreement. 
 (b) Consistent with the foregoing, except as
contemplated by Section 7, no right or benefit under this Agreement shall be subject to transfer, anticipation, alienation, sale, assignment, pledge, encumbrance or charge, whether voluntary, involuntary, by operation of law or otherwise, and
any attempt to transfer, anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person
entitled to such benefits. If Employee or his Beneficiary hereunder shall attempt to transfer, anticipate, alienate, assign, sell, pledge, encumber or charge any right or benefit hereunder, other than as contemplated by Section 7, or if any
creditor shall attempt to subject the same to a writ of garnishment, attachment, execution sequestration, or any other form of process or involuntary lien or seizure, then such attempt shall have no effect and shall be void. 

7. Assignment and Transfers. Prior to the exercise of the Award and the delivery of the Common Stock with respect to the Award,
the Award is not transferable (either voluntarily or involuntarily), other than pursuant to a domestic relations order. Employee may designate a beneficiary or beneficiaries (the “Beneficiary”) to whom the Award will pass upon
Employee’s death and may change such designation from time to time by filing a written designation of beneficiary on such form as may be prescribed by the Company, provided that no such designation shall be effective until filed with the
Company. Following Employee’s death, the Award will pass to the designated Beneficiary and such person will be deemed Employee for purposes of any applicable provisions of this Agreement. If no such designation is made or if the designated
Beneficiary does not survive Employee’s death, the Award shall pass by will or, if none, then by the laws of descent and distribution. 
 8. Withholding Tax. The Employee acknowledges and agrees that the Employee is responsible for the tax consequences associated with the grant of the Award and its exercise. To the extent that the
receipt of this Award, exercise, or the delivery of the Common Stock with respect to any Award results in a taxable event to Employee for federal or state tax purposes, Employee shall deliver to the Company at such time, such amount of money or
shares of Common Stock earned or owned by Employee, at Employee’s election, as the Company may require to meet its obligation under applicable tax laws or regulations, and, if Employee fails to do so, the Company is authorized to withhold from
any cash or other form of remuneration then or thereafter payable to Employee any tax required to be withheld by reasons of such resulting taxation. 
 9. Changes in Capital Structure. As may be determined to be appropriate and equitable by the Committee, in its complete and sole discretion, to prevent dilution or enlargement of rights, the
Committee shall make or authorize to be made an adjustment in the number and class of Common Stock and/or the Grant Price to prevent dilution or enlargement of rights, as a result of the following: 

  
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	 	(a)	any adjustment, recapitalization, reorganization or other changes in the Company’s capital structure or its business; 

 

	 	(b)	any merger or consolidation of the Company; 

  

	 	(c)	any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Company’s Common Stock or the rights thereof;

  

	 	(d)	the dissolution or liquidation of the Company; 

  

	 	(e)	any sale or transfer of all or any part of the Company’s assets or business; or 

 

	 	(f)	any other corporate act or proceeding, whether of a similar character or otherwise. 

10. Compliance with Laws. The Company reserves the right to delay the Employee’s exercise of the Award and will not be
required to deliver any shares of Common Stock pursuant to this Agreement, if, in the opinion of counsel for the Company, such issuance would violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations.
Prior to the issuance of any shares pursuant to this Agreement, the Company may require that Employee (or Employee’s legal representative upon Employee’s death or disability) 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, including an agreement (in such form as the Committee may specify) in which Employee represents that the shares of Common
Stock acquired by him or her upon exercise are being acquired for investment and not with a view to the sale or distribution thereof. 
 The Company may postpone issuing and delivering any Common Stock for so long as the Company reasonably determines to be necessary to satisfy the following conditions: 

 

	 	(a)	its completing or amending any securities registration or qualification of the Common Stock or it of the Employee satisfying any exemption from registration under any
federal or state law, rule or regulation; 

  

	 	(b)	its receiving proof it considers satisfactory that a person seeking to exercise the Award after the Employee’s death is entitled to do so;

  

	 	(c)	the Employee complying with any requests for representations under the Plan; and 

 

	 	(d)	the Employee complying with any federal, state or local tax withholding obligations. 

11. Employee to Have no Rights as a Stockholder. Employee shall have no rights as a stockholder with respect to any shares of
Common Stock subject to this Award prior to the date on which he or she is recorded as the holder of such shares of Common Stock on the records of the Company, including no right to dividends declared on the Common Stock underlying the Award.

  
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 12. Successors and Assigns. 

(a) This Agreement shall bind and inure to the benefit of and be enforceable by Employee, the Company and their respective permitted
successors or assigns (including personal representatives, heirs and legatees), except that Employee may not assign any rights or obligations under this Agreement except to the extent, and in the manner, expressly permitted herein. 

(b) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 13. Limitation of Rights. Nothing in this Agreement or the Plan may be construed to: 

(a) give Employee any right to be awarded any further Options (or other form of stock incentive awards) other than in the sole discretion
of the Committee; 
 (b) give Employee or any other person any interest in any fund or in any specified asset or assets of the
Company (other than the Award and applicable Common Stock following the exercise of such Award); or 
 (c) confer upon Employee
the right to continue in the employment or service of the Company. 
 14. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Texas, without reference to principles of conflict of laws. 
 15. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. 

16. No Waiver. The failure of Employee or the Company to insist upon strict compliance with any provision of this Agreement or the
failure to assert any right Employee or the Company may have under this Agreement shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. 

17. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings set forth in
the Plan. Certain other terms used herein have definitions given to them in the first place in which they are used. In addition, the following terms shall have the meanings set forth in this Section 17. 

  
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 (a) “Board” means the Board of Directors of Waste Management, Inc.

 (b) “Cause” means any of the following: (i) willful or deliberate and continual refusal to materially perform
Employee’s employment duties reasonably requested by the Company after receipt of written notice to Employee of such failure to perform, specifying such failure (other than as a result of Employee’s sickness, illness, injury, death or
disability) and Employee fails to cure such nonperformance within ten (10) days of receipt of said written notice; (ii) breach of any statutory or common law duty of loyalty to the Company; (iii) Employee has been convicted of, or
pleaded nolo contendre to, any felony; (iv) Employee willfully or intentionally caused material injury to the Company, its property, or its assets; (v) Employee disclosed to unauthorized person(s) proprietary or confidential
information of the Company that causes a material injury to the Company; (vi) any material violation or a repeated and willful violation of the Company’s policies or procedures, including but not limited to, the Company’s Code of
Business Conduct and Ethics (or any successor policy) then in effect. 
 (c) “Change in Control” means the first to
occur on or after the Grant Date of any of the following events: 
  

	 	(i)	any Person, or Persons acting as a group (within the meaning of Section 409A), acquires, directly or indirectly, including by purchase, merger, consolidation or
otherwise, ownership of securities of the Company that, together with securities held by such Person or Persons, represents fifty percent (50%) or more of the total voting power or total fair market value of the Company’s then outstanding
securities; 

  

	 	(ii)	any Person, or Persons acting as a group (within the meaning of Section 409A), acquires (or has acquired during the 12-month period ending on the date of the most
recent acquisition by such Person or Persons), directly or indirectly, including by purchase, merger, consolidation or otherwise, ownership of securities of the Company that represents thirty percent (30%) or more of the total voting power of
the Company’s then outstanding voting securities; 

  

	 	(iii)	the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, at the Grant Date, constitute the
Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating or the election of directors of the
Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a majority of the directors before the date of such appointment or election or whose
appointment, election or nomination for election was previously so approved or recommended; or 

  

	 	(iv)	 the stockholders of the Company approve a plan of complete liquidation of the Company and such liquidation is actually commenced or there is
consummated an agreement for the sale or disposition by the Company of all 

  
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or substantially all of the Company’s assets (or any transaction having a similar effect), other than a sale or disposition by the Company of all or substantially all of the Company’s
assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior
to such sale. For purposes hereof, a “sale or other disposition by the Company of all or substantially all of the Company’s assets” will not be deemed to have occurred if the sale involves assets having a total gross fair market value
of less than forty percent (40%) of the total gross fair market value of all assets of the Company immediately prior to such sale. 

 For purposes of this definition, the following terms shall have the following meanings: 
  

	 	(A)	“Exchange Act” means the Securities and Exchange Act of 1934, as amended from time to time; 

 

	 	(B)	“Person” shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that
such term shall not include (1) the Company, (2) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, (3) an employee benefit plan of the Company, (4) an underwriter temporarily holding
securities pursuant to an offering of such securities or (5) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of shares of Common Stock.

 (d) “Committee” means the Management Development and Compensation Committee of the Board or such
other committee of the Board as the Board may designate from time to time. 
 (e) “Fair Market Value” means the
average of the highest and lowest sales price per share of Common Stock as of a particular date on the New York Stock Exchange, or if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so
reported. 
 (f) “Misconduct” means (i) any act or failure to act by any employee of the Company that
(ii) caused or was intended to cause a violation of the Company’s policies, generally accepted accounting principles or any applicable laws in effect at the time of the act(s) or failure(s) to act in question and that (iii) materially
increased the value of the payment or award received by Employee under this Agreement. Determination as to the existence of Misconduct shall be made by an independent third party (either a law firm or an accounting firm) appointed by the Committee.

 (g) “Retirement” means the voluntary resignation of employment by Employee, after Employee: (i) has attained
the age of 55 or greater; (ii) has a sum of age plus full years of Service with the Company equal to 65 or greater; and, (iii) has completed at least 5 consecutive full years of Service with the Company during the 5 year period immediately
preceding the resignation. 

  
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 (h) “Service” is measured from Employee’s original date of hire by the
Company, except as provided below. In the case of a break of employment by Employee from the Company of one year or more in length, Employee’s service before the break of employment shall not be included in his or her Service hereunder. In the
case of service with an entity acquired by the Company, Employee’s service with such entity shall be considered Service hereunder, so long as Employee remained continuously employed with such predecessor company(ies) and the Company. In the
case of a break of employment between a predecessor company and the Company of any length, Employee’s Service shall be measured from the original date of hire by the Company and shall not include any service with any predecessor company.

 (i) “Termination of Employment” means the termination of Employee’s employment with the Company. Temporary
absences from employment because of illness, vacation or leave of absence and transfers among Waste Management, Inc. and its Subsidiaries and Affiliates will not be considered a Termination of Employment. Any questions as to whether and when there
has been a Termination of Employment, and the cause of such termination, shall be determined by the Committee, and its determination will be final. 
 (j) “Trading Day” means a day on which the New York Stock Exchange is open for trading for its regular trading sessions. 
 18. Entire Agreement. 
 (a) Employee understands that the Options have been
granted pursuant to the terms of the Plan, and the Award and this Agreement are in all respect governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Agreement by
reference or are expressly cited. Any inconsistency between the Agreement and the Plan shall be resolved in favor of the Plan. Employee hereby acknowledges that he has received, reviewed and accepted the terms and conditions applicable to this
Agreement. Employee hereby accepts such terms and conditions, subject to the provisions of the Plan and administrative interpretations. Employee further agrees that such terms and conditions will control this Agreement, notwithstanding any
provisions in any employment agreement or in any prior awards. 
 (b) Employee hereby acknowledges that he is to consult with
and rely upon only Employee’s own tax, legal, and financial advisors regarding the consequences and risks of this Agreement and the Award of Options. 
 (c) This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. 

  
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 19. Compliance with Code Section 409A. It is the intention of the Company and
Employee that the Award of Options hereunder not be subject to Code Section 409A and that this Agreement not result in an unfavorable tax consequences to Employee under Code Section 409A. Accordingly, Employee consents to any amendment of
this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, Employee a copy of such amendment. Any such amendments shall be made in a manner that preserves to the
maximum extent possible the intended benefits to Employee. This paragraph 19 does not create an obligation on the part of Company to modify this Agreement and does not guarantee that the amounts or benefits owed under the Agreement will not be
subject to interest and penalties under Code Section 409A. 
 20. Electronic Delivery. The Company may, in its
sole discretion, deliver any documents related to the Options awarded under this Agreement or the Plan by electronic means or request Employee’s consent to participate in the administration of this Agreement and the Plan by electronic
means. Employee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the
Company. 
 21. Use of Personal Data. By executing this Agreement, Employee acknowledges and agrees to the collection,
use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position, social security number (or other tax identification number) and details of all past Awards and current Awards outstanding
under the Plan (“Data”), for the purpose of managing and administering the Plan. The Employee is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his
or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients
of Data may be located elsewhere throughout the world. The Employee authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and
managing the Plan. The Employee may, at any time, review Data with respect to the Employee and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing;
however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan. 
 22. Notices. Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the
Secretary of the Company, at its then corporate headquarters, and the Employee at the Employee’s address as shown on the Company’s records, or to such other address as Employee, by notice to the Company, may designate in writing from time
to time. 
 23. Counterparts. This Agreement may be executed in counterparts, which together shall constitute one and the
same original. 

  
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 IN WITNESS WHEREOF, Waste Management, Inc. has caused this Agreement to be duly executed by
one of its officers thereunto duly authorized and Employee has executed this Agreement, effective as of the day and year first above written. 
  

	
	 WASTE MANAGEMENT, INC.

	

	 James E. Trevathan

	
	
	 Employee

	
	 Accepted by electronic confirmation

  
 -12-EX-10.1

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT (this
“Agreement”) between Vermillion, Inc., a Delaware corporation (the “Company”), and Thomas McLain (“Executive,” and together with the Company, the “Parties”) is effective as of
March 18, 2013 (the “Effective Date”). 
 WHEREAS, the Parties mutually desire to enter into this
Agreement in order to establish the terms and conditions of the Executive’s employment with the Company on and after the Effective Date. 
 NOW, THEREFORE, the Parties agree as follows: 
 1. Position. The Company will employ
Executive as its President and Chief Executive Officer. In this position, Executive will be expected to devote Executive’s full business time, attention and energies to the performance of Executive’s duties with the Company. Executive may
devote time to outside board or advisory positions as pre-approved by the Company’s Board of Directors. Executive will render such business and professional services in the performance of such duties, consistent with Executive’s position
within the Company, as shall be reasonably assigned to Executive by the Company’s Board of Directors. Executive will be based in Austin, Texas and will travel as needed, including to collaborator and partner locations, academic medical centers,
banking and other conferences, and other locations as necessary or advisable in performance of Executive’s duties. 
 2.
Compensation. The Company will pay Executive a base salary of at least $350,000 on an annualized basis, payable in accordance with the Company’s standard payroll policies, including compliance with applicable tax withholding
requirements. In addition, Executive will be eligible for a bonus of up to fifty percent (50%) of Executive’s base salary (prorated for partial years) for achievement of reasonable Company and individual performance-related goals to be
defined by the Company’s Board of Directors. The exact payment terms of a bonus, if any, are to be set by the Compensation Committee of the Board of Directors, as authorized by the Company’s Board of Directors in its sole discretion. Any
such bonus will be payable to Executive within thirty (30) days of receipt by the Compensation Committee of the Board of Directors of the Company’s final year-end financial statements. In addition, you are eligible to receive a one-time
milestone incentive bonus of $50,000 that will be paid within 30 days after the successful completion of a fund raising event of a minimum net to Vermillion of $4 million. 
 3. Benefits. During the term of Executive’s employment, Executive will be entitled to the Company’s standard benefits covering employees at Executive’s level, including (i) the
Company’s group health, life, short- and long-term disability, 401(k) and other employee benefit plans, as such plans may be in effect from time to time, subject to the Company’s right to cancel or change the benefit plans and programs it
offers to its employees at any time, and (ii) not less than twenty (20) days of paid time off per full calendar year (prorated for partial years), in addition to standard holidays, in accordance with the Company’s policies in effect
from time to time. 

 4. At-Will Employment. Executive’s employment with the Company is for an unspecified duration
and constitutes “at will” employment. This employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or Executive, with or without notice. 

5. Termination without Cause or for Good Reason. In the event that the Company terminates Executive’s employment for reasons other than for
Cause (as defined below) or Executive terminates his employment for Good Reason (as defined below) at any time following the date which is six (6) months following the Effective Date, and provided that Executive signs and does not revoke a
standard separation agreement releasing all claims against the Company, in a form reasonably satisfactory to the Company, does not breach any provision of this Agreement (including but not limited to Section 10, Section 11 and
Section 12 hereof), and continues to comply with the PIIA, as hereinafter defined, Executive shall be entitled to receive, subject to Section 14 below: 
 (i) continued payment of Executive’s base salary as then in effect for a period of twelve (12) months following the date of termination (the “Severance Period”), to be paid
periodically in accordance with the Company’s standard payroll practices, provided that Executive shall immediately repay to the Company any amounts that he receives hereunder if within sixty (60) days following termination of his
employment he either has failed to execute the standard release described above or has revoked the general release after he executes it; and 
 (ii) continuation of Company health and dental benefits through COBRA premiums paid by the Company directly to the COBRA administrator during the Severance Period; provided, however, that such premium
payments shall cease prior to the end of the Severance Period if Executive commences other employment with reasonably comparable or greater health and dental benefits. 
 Executive will not be eligible for any bonus or other benefits not described above after termination, except as may be required by law. 
 6. Termination After Change of Control. If Executive’s employment is terminated by the Company for reasons other than for Cause (as defined below) or by Executive for Good Reason (as defined
below) within the twelve (12) month period following a Change of Control (as defined below), then, in addition to the severance obligations due to Executive under Section 5 above, one-hundred percent (100%) of any then-unvested shares
under Company stock options then held by Executive will vest upon the date of such termination and the period of time for their exercise will be at the discretion of the Company, provided that no option shall be exercisable after expiration of its
original term. It may very well be necessary for the Executive to exercise such shares on the day of Change in Control, and the Company shall use its best efforts to provide Executive with a reasonable period of advance written notice in such event.

 7. Definitions. For purposes of this Agreement: 

  
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 (a) “Cause” means termination of employment by reason of Executive’s:

 (i) material breach of this Agreement, the Proprietary Information and Inventions Agreement entered into between Executive
and the Company (the “PIIA”) or any other confidentiality, invention assignment or similar agreement with the Company; 
 (ii) repeated negligence in the performance of duties or nonperformance or misperformance of such duties that in the good faith judgment of the Board of Directors of the Company adversely affects the
operations or reputation of the Company; 
 (iii) refusal to abide by or comply with the good faith directives of the
Company’s Board of Directors or the Company’s standard policies and procedures, which actions continue for a period of at least ten (10) days after written notice from the Company; 

(iv) violation or breach of the Company’s Code of Ethics, Financial Information Integrity Policy, Insider Trading Compliance
Program, or any other similar code or policy adopted by the Company and generally applicable to the Company’s employees, as then in effect; 
 (v) willful dishonesty, fraud, or misappropriation of funds or property with respect to the business or affairs of the Company; 
 (vi) conviction by or entry of a plea of guilty or nolo contendere, in a court of competent and final jurisdiction, for any crime which constitutes a felony in the jurisdiction involved; or 

(vii) abuse of alcohol or drugs (legal or illegal) that, in the Board of Director’s reasonable judgment, materially impairs
Executive’s ability to perform Executive’s duties. 
 (b) “Change of Control” means: 

(i) after the date hereof, any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of
the total voting power represented by the Company’s then outstanding voting securities; or 
 (ii) the date of the
consummation of a merger or consolidation of the Company with any other corporation or entity that has been approved by the stockholders of the Company, other than a merger or consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation; or 

  
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 (iii) the date of the consummation of the sale or disposition of all or substantially all
of the Company’s assets. 
 (c) “Good Reason” means, the occurrence of any one or more of the following
events, without Executive’s consent, which continues uncured for a period of not less than thirty (30) days following written notice given by Executive to the Company within thirty (30) days following the occurrence of such event:

 (i) a material and adverse change in Executive’s title or duties (excluding any changes in such duties resulting from
the Company becoming part of a larger entity pursuant to a Change of Control) or in Executive’s base salary; or 
 (ii)
Executive being required to relocate to an office location more than fifty (50) miles from Executive’s current office in Austin, Texas. Should Executive be required and agree to relocate from Executive’s current office in Austin,
Texas, all reasonable moving expenses to relocate Executive’s office and private residence shall be paid for and billed directly to Company, with all reimbursements being requested and made within one (1) year after being incurred.

 In addition, Executive must actually terminate Executive’s employment with the Company within six (6) months
following the initial existence of the condition described above in (i) and (ii) giving rise to Good Reason. 
 (d)
“Separation from Service” or “Separates from Service” shall mean Executive’s termination of employment, as determined in accordance with Treas. Reg. § 1.409A-1(h). Executive shall be considered to have
experienced a termination of employment when the facts and circumstances indicate that Executive and the Company reasonably anticipate that either (i) no further services will be performed for the Company after a certain date, or (ii) that
the level of bona fide services Executive will perform for the Company after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than twenty percent (20%) of the average level of bona fide
services performed by Executive (whether as an employee or independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Company if Executive has been providing services to the
Company for less than thirty-six (36) months). If Executive is on military leave, sick leave, or other bona fide leave of absence, the employment relationship between Executive and the Company shall be treated as continuing intact, provided
that the period of such leave does not exceed six (6) months, or if longer, so long as Executive retains a right to reemployment with the Company under an applicable statute or by contract. If the period of a military leave, sick leave, or
other bona fide leave of absence exceeds six (6) months and Executive does not retain a right to reemployment under an applicable statute or by contract, the employment relationship shall be considered to be terminated for purposes of this
Agreement as of the first (1st) day immediately following the end of such six (6) month period. In applying the provisions of this Section, a leave of absence shall be considered a bona fide leave of absence only if there is a reasonable
expectation that Executive will return to perform services for the Company. 

  
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 8. Employment, Confidential Information and Invention Assignment Agreement. As a condition of
Executive’s employment, Executive shall complete, sign and return the Company’s standard form of Proprietary Information and Inventions Agreement. 
 9. Non Contravention. Executive represents to the Company that Executive’s signing of this Agreement, the PIIA, the issuance of stock options to Executive, and Executive’s commencement of
employment with the Company does not violate any agreement Executive has with any of Executive’s previous employers and Executive’s signature confirms this representation. 
 10. Conflicting Employment. Executive agrees that, during the term of Executive’s employment with the Company and during the Severance Period, Executive will not engage in any other
employment, occupation, consulting or other business activity competitive with or directly related to the business in which the Company is now involved or becomes involved during the term of Executive’s employment, nor will Executive engage in
any other activities that conflict with Executive’s obligations to the Company. Executive acknowledges that compliance with the obligations of this Section is a condition to Executive’s right to receive the severance payments set forth in
Section 5 above. 
 11. Nonsolicitation. From the Effective Date of this Agreement until twelve (12) months after the
termination of this Agreement (the “Restricted Period”), Executive will not, directly or indirectly, solicit or encourage any employee or contractor of the Company or its affiliates to terminate employment with, or cease providing
services to, the Company or its affiliates. During the Restricted Period, Executive will not, whether for Executive’s own account or for the account of any other person, firm, corporation or other business organization, solicit or interfere
with any person who is or during the period of Executive’s engagement by the Company was a collaborator, partner, licensor, licensee, vendor, supplier, customer or client of the Company or its affiliates to the Company’s detriment.
Executive acknowledges that compliance with the obligations of this Section is a condition to Executive’s right to receive the severance payments set forth in Section 5 above. 
 12. Nondisparagement. From the Effective Date of this Agreement and surviving any termination for any reason, Executive will not disparage or defame, whether orally or in writing, whether directly
or indirectly, whether truthfully or falsely, and whether acting alone or through any other person, the Company or its affiliates or their respective current or former directors, officers, employees, agents, successors or assigns (both individually
or in their official capacities with the Company or its affiliates). Executive acknowledges that compliance with the obligations of this Section is a condition to Executive’s right to receive the severance payments set forth in Section 5
above. 
 13. Arbitration and Equitable Relief. 
 (a) In consideration of Executive’s employment with the Company, its promise to arbitrate all employment related disputes and Executive’s receipt of the compensation

  
 5 

 
and other benefits paid to Executive by the Company, at present and in the future, EXECUTIVE AGREES THAT ANY AND ALL CONTROVERSIES, CLAIMS, OR DISPUTES WITH ANYONE (INCLUDING THE COMPANY AND ANY
EMPLOYEE, OFFICER, DIRECTOR, STOCKHOLDER OR BENEFIT PLAN OF THE COMPANY IN THEIR CAPACITY AS SUCH OR OTHERWISE) ARISING OUT OF, RELATING TO, OR RESULTING FROM EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR THE TERMINATION OF EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY, INCLUDING ANY BREACH OF THIS AGREEMENT, SHALL BE SUBJECT TO BINDING ARBITRATION UNDER THE ARBITRATION RULES SET FORTH IN TEXAS CIVIL PRACTICE AND REMEDY CODE SECTION 171.001 THROUGH SECTION 171.098 (THE
“RULES”) AND PURSUANT TO TEXAS LAW. Disputes which Executive agrees to arbitrate, and thereby agree to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to,
claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, and claims of harassment, discrimination or wrongful
termination. Executive further understands that this agreement to arbitrate also applies to any disputes that the Company may have with Executive. 
 (b) Executive agrees that any arbitration will be administered by the American Arbitration Association (“AAA”) and that the neutral arbitrator will be selected in a manner consistent with
its National Rules for the Resolution of Employment Disputes. Executive agrees that the arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and
motions to dismiss and demurrers, prior to any arbitration hearing. Executive also agrees that the arbitrator shall have the power to award any remedies, including attorneys’ fees and costs, available under applicable law. Executive understands
the Company will pay for any administrative or hearing fees charged by the arbitrator or AAA except that Executive shall pay the first $125.00 of any filing fees associated with any arbitration that Executive initiates. Executive agrees that the
arbitrator shall administer and conduct any arbitration in a mariner consistent with the Rules and that to the extent that the AAA’s National Rules for the Resolution of Employment Disputes conflict with the Rules, the Rules shall take
precedence. Executive agrees that the decision of the arbitrator shall be in writing. 
 (c) Except as provided by the Rules and
this Agreement, arbitration shall be the sole, exclusive and final remedy for any dispute between Executive and the Company. Accordingly, except as provided for by the Rules and this Agreement, neither Executive nor the Company will be permitted to
pursue court action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful company policy, and the arbitrator shall not order or require the Company
to adopt a policy not otherwise required by law which the Company has not adopted. 
 (d) In addition to the right under the
Rules to petition the court for provisional relief, Executive agrees that any party may also petition the court for injunctive relief where either party alleges or claims a violation of the PIIA between Executive and the Company or any

  
 6 

 
other agreement regarding trade secrets, confidential information, nonsolicitation, nondisparagement or Labor Code §2870. Executive understands that any breach or threatened breach of such
an agreement will cause irreparable injury and that money damages will not provide an adequate remedy therefor and both parties hereby consent to the issuance of an injunction. In the event either party seeks injunctive relief, the prevailing party
shall be entitled to recover reasonable costs and attorneys’ fees. 
 (e) Executive understands that this Agreement does
not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body such as the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission or the Workers’ Compensation
Board. This Agreement does, however, preclude Executive from pursuing court action regarding any such claim. 
 (f) Executive
acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. Executive further acknowledges and agrees that Executive has carefully read this Agreement and
that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understand it, including that Executive is waiving Executive’s right to a jury trial. Finally,
Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement. 
 14. Taxes. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes. Notwithstanding the foregoing, Executive is solely responsible and liable for the
satisfaction of any federal, state, province or local taxes that may arise with respect to this Agreement (including any taxes arising under Section 409A of the Internal Revenue Code (“IRC”). Neither the Company nor any of its
employees, officers, directors, or service providers shall have any obligation whatsoever to pay such taxes, to prevent Executive from incurring them, or to mitigate or protect Executive from any such tax liabilities. Notwithstanding anything in
this Agreement to the contrary, if any amounts that become due under this Agreement on account of Executive’s termination of employment constitute “nonqualified deferred compensation” within the meaning of IRC Section 409A,
payment of such amounts shall not commence until Executive incurs a Separation from Service. If, at the time of Executive’s termination of employment under this Agreement, Executive is a “specified employee” (within the meaning of IRC
Section 409A), any amounts that constitute “nonqualified deferred compensation” within the meaning of IRC Section 409A that become payable to Executive on account of Executive’s Separation from Service (including any amounts
payable pursuant to the preceding sentence) will not be paid until after the end of the sixth (6th) calendar month beginning after Executive’s Separation from Service (the “409A Suspension Period”). Within fourteen
(14) calendar days after the end of the 409A Suspension Period, Executive shall be paid a lump sum payment in cash equal to any payments delayed because of the preceding sentence. Thereafter, Executive shall receive any remaining benefits as if
there had not been an earlier delay. Each payment due under this Agreement is treated as a separate payment for purposes of Treasury Regulations Sections 1.409A-1(b)(4)(F) and 1.409A-2(b)(2). 

  
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 15. Liability Insurance. To the extent that the Company maintains liability insurance applicable to
directors, officers, employees, agents or fiduciaries, Executive shall be covered by such policies in such a manner as to provide to Executive the same rights and benefits as are provided to the most favorably insured of the Company’s officers.
Additionally, the Company and Executive will enter into an indemnification agreement which will provide to Executive the same rights and benefits as are provided to the most favorably indemnified of the Company’s officers. 

16. Successors of the Company. The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and assigns of the Company. This Agreement shall be assignable by the Company in the event of a merger or similar transaction in which the Company is not the surviving entity, or of a sale of all or substantially all of the
Company’s assets. 
 17. Enforceability; Severability. If any provision of this Agreement shall be invalid or unenforceable, in
whole or in part, such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by law as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the
case may be. 
 18. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Texas
without giving effect to Texas’s choice of law rules. This Agreement is deemed to be entered into entirely in the State of Texas. This Agreement shall not be strictly construed for or against either party. 

19. No Waiver. No waiver of any term of this Agreement constitutes a waiver of any other term of this Agreement. 

20. Amendment To This Agreement. This Agreement may be amended only in writing by an agreement specifically referencing this Agreement, which is
signed by both Executive and an executive officer or member of the Board of Directors of the Company authorized to do so by the Board by resolution. 
 21. Headings. Section headings in this Agreement are for convenience only and shall be given no effect in the construction or interpretation of this Agreement. 

22. Notice. All notices made pursuant to this Agreement, shall be given in writing, delivered by a generally recognized overnight express delivery
service, and shall be made to the following addresses, or such other addresses as the Parties may later designate in writing: 

If to the Company: 
 Vermillion, Inc. 

  
 8 

 12117 Bee Caves Road 

Building Three, Suite 100 
 Austin, TX 78738 
 If to Executive: 

Thomas McLain 
 1076 118th
Terrace North 
 St. Petersburg, FL 33716 
 23. Expense Reimbursement. The Company shall promptly reimburse Executive (i) for reasonable business expenses incurred by Executive in furtherance of or in connection with the performance of
Executive’s duties hereunder, including expenditures for travel, in accordance with the Company’s expense reimbursement policy as in effect from time to time; and (ii) for up to $10,000 of legal fees that Executive may incur in
connection with being represented by Executive’s own legal counsel with respect to this Agreement; provided that any and all reimbursements hereunder shall be requested and made within one (1) year after being incurred. 

24. General; Conflict. This Agreement and the PIIA, when signed by Executive, set forth the terms of Executive’s employment with the Company
and supersede any and all prior representations and agreements, whether written or oral. 
 [Signature Page Follows] 

  
 9 

 
			
	 VERMILLION, INC.
 a Delaware corporation

		
	By:	 	  /s/ James S. Burns

	Name:	 	James S. Burns
	Title:	 	Chairman of the Board of Directors

  

	
	 ACCEPTED AND AGREED TO this

9th day of March, 2013.

	
	  /s/ Thomas McLain

	Thomas McLain

  
 10

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