Document:

exv10w3

EXHIBIT 10.3

EXECUTIVE EMPLOYMENT AGREEMENT

     ALLIED WASTE INDUSTRIES, INC., a Delaware corporation (“Company”) and DONALD W. SLAGER
(“Executive”) enter into this amended and restated Executive Employment Agreement (“Agreement”) to
set forth the terms and conditions of Executive’s employment. This Agreement supersedes any prior
employment agreement(s) between the parties. The parties agree as follows:

     1. Certain Definitions and Understandings. As used in this Agreement, the following terms
have the meanings prescribed below:

          Applicable Period is defined in Section 10.3.

          Annual Incentive Compensation is defined in Section 4.2.

          Base Salary is defined in Section 4.1.

          Beneficial Owner is defined in Rule 13(d)-3 under the Exchange Act; provided, however, and
without limitation, that any individual, corporation, partnership, group, association or other
person or entity that has the right to acquire any Voting Stock at any time in the future, whether
such right is (a) contingent or absolute, or (b) exercisable presently or at any time in the
future, pursuant to any agreement or understanding or upon the exercise or conversion of rights,
options or warrants, or otherwise, shall be the Beneficial Owner of such Voting Stock.

          Cash Termination Excise Tax is defined in Section 6.6(a).

          Cause is defined in Section 5.3.

          Change in Control of the Company means one of the following: (a) the Company merges or
consolidates, or agrees to merge or to consolidate, with any other corporation (other than a
wholly-owned direct or indirect subsidiary of the Company) and is not the surviving corporation (or
survives as a subsidiary of another corporation), (b) the Company sells, or agrees to sell, all or
substantially all of its assets to any other person or entity, (c) the Company is dissolved, (d)
any third person or entity (other than Apollo Advisors, L.P., The Blackstone Group L.P., or a
trustee or committee of any qualified employee benefit plan of the Company) together with its
Affiliates shall become (by tender offer or otherwise), directly or indirectly, the Beneficial
Owner of at least 30% of the Voting Stock of the Company, or (e) the individuals who constitute the
Board of Directors of the Company as of the Initial Effective Date (“Incumbent Board”) shall cease
for any reason to constitute at least a majority of the Board of Directors; provided, that any
person becoming a director whose election or nomination for election was approved by a majority of
the members of the Incumbent Board shall be considered, for the purposes of this Agreement, a
member of the Incumbent Board.

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          Change in Control Date is defined in Section 6.5.

          Change in Control Payment is defined in Section 6.6(a).

          Code means the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated by the Internal Revenue Service thereunder.

          Common Stock means the Company’s common stock, par value $.01 per share.

          Company means Allied Waste Industries, Inc., a Delaware corporation.

          Compensation Plans is defined in Section 4.6.

          Confidential Information is defined in Section 7.2.

          Continuing Obligations is defined in Section 3.

          Date of Termination means the earliest to occur of (a) the date of the Executive’s death, or
(b) the date specified in the Notice of Termination, in accordance with Section 5.8.

          Disability means an illness or other disability which prevents the Executive from discharging
his responsibilities under this Agreement for a period of 180 consecutive calendar days, or an
aggregate of 180 calendar days in any calendar year, during the Term, all as determined in good
faith by the Board of Directors of the Company (or a committee thereof).

          Effective Date means the effective date of this amended and restated Executive Employment
Agreement, which is January 1, 2005, except as may otherwise be provided herein.

          Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder.

          Executive means Donald W. Slager.

          Good Reason is defined in Section 5.5.

          Gross-Up Payment is defined in Section 6.6(c).

          Initial Effective Date means January 1, 2004.

          LTIP means the Long-Term Incentive Plan.

          Notice of Termination is defined in Section 5.8. Retirement is defined in Section 5.7.

          Safe Harbor Amount is defined in Section 6.6(a).

          Share Price has the same meaning as “Fair Market Value” as that term is defined in the
Company’s 1991 Incentive Stock Plan, as amended.

          Targeted Annual Incentive Compensation is defined in Section 4.2.

          Term is defined in Section 3.

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          Threshold Share Price means (a) in the case of the calendar year beginning January 1, 2007, a
Share Price of $16 or more, or (b) in the case of subsequent calendar years, a Share Price which is
at least fifteen percent (15%) greater than the Threshold Share Price for the preceding calendar
year.

          Unrestricted Payments means those payments to which the Executive is entitled under Sections
6.2(a)(1), 6.3(a)(1), 6.4(a), and 6.5(a)(1) of this Agreement.

          Vacation Time is defined in Section 4.3.

          Voting Stock means all outstanding shares of capital stock of the Company entitled to vote
generally in an election of directors; provided, however, that if the Company has shares of Voting
Stock entitled to more or less than one (1) vote per share, each reference to a proportion of the
issued and outstanding shares of Voting Stock shall be deemed to refer to the proportion of the
aggregate votes entitled to be cast by the issued and outstanding shares of Voting Stock.

          Welfare Plans is defined in Section 4.7.

          Without Cause is defined in Section 5.4.

          In addition, throughout this Agreement, the parties have defined certain words and intend for
those definitions to apply whenever the parties have used a defined word in this Agreement. One of
the defined terms is “Company” which means Allied Waste Industries, Inc. However, the parties
expect that some or all of the Company’s obligations under this Agreement will be fulfilled through
its parent, subsidiary, related, or successor companies or businesses (which will be called
“Affiliates” in this Agreement). Accordingly, Executive acknowledges that the discharge of any
obligation of the Company under this Agreement, which may be through the acts of one or more
Affiliates, discharges any such obligation of the Company. Moreover, the obligations Executive
assumes under this Agreement will be owed to the Company and to its Affiliates. Accordingly, the
parties expressly intend for the Affiliates to be third-party beneficiaries of the promises made
and obligations assumed by Executive in this Agreement.

     2. General Duties of Company and Executive.

          2.1. The Company will employ the Executive as its President and Chief Operating Officer. The
Executive’s authority, duties and responsibilities shall be those assigned by the Company’s Board
of Directors (or a committee thereof) and agreed to by the Executive. The Executive shall devote
reasonable time and attention during normal business hours to the affairs of the Company and use
his best efforts to perform faithfully and efficiently his duties and responsibilities. The
Executive may (a) serve on corporate, civic or charitable boards or committees, (b) deliver
lectures, fulfill speaking engagements or teach at educational institutions, and (c) manage
personal investments, so long as such activities do not significantly interfere with the
performance of the Executive’s duties and responsibilities.

          2.2. The Executive agrees and acknowledges that he owes a fiduciary duty of loyalty, fidelity
and allegiance to act at all times in the best interests of the Company and to do no act and to
make no statement, oral or written, which would injure the Company’s business, its interests or its
reputation. The Executive also agrees that he shall not knowingly become involved in
a conflict of interest with the Company and, upon discovery of any such conflict, that he will
inform the Company of the conflict and will not allow the conflict to continue.

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          2.3. The Executive agrees to comply at all times with all applicable policies, rules and
regulations of the Company, including, without limitation, the Company’s Code of Ethics and the
Company’s policies regarding trading in Common Stock, as each is in effect from time to time.

          3. Term. The “Term” of this Agreement shall be a continuous period of two (2) years (i.e., on
any given date the Term shall be a period of two (2) years from that date), beginning on the
Initial Effective Date, unless this Agreement is terminated earlier pursuant to Section 5 of this
Agreement, in which case the Term shall end on the Date of Termination. Neither the termination of
this Agreement nor the consequent end of the Term shall affect the Company’s obligations under
Section 6 of this Agreement or the Executive’s obligations under Sections 7 through 10 of this
Agreement (or under Section 2.3 with respect to the Company’s policies regarding trading in Common
Stock) (collectively, “Continuing Obligations”).

     4. Compensation and Benefits.

          4.1. Base Salary. As compensation for services to the Company during the Term, the Company
shall pay to the Executive until the Date of Termination a base salary at the annual rate of Six
Hundred Sixty-Six Thousand Dollars ($663,000.00) or such other rate as may be specified from time
to time by the Board of Directors (or a committee thereof) in its discretion (“Base Salary”). The
Base Salary shall be payable in equal bi-weekly installments or in accordance with the Company’s
established policy, subject only to such payroll and withholding deductions as may be required by
law and other deductions applied generally to employees of the Company for insurance and other
employee benefit plans. For all purposes under this Agreement, the Executive’s Base Salary shall
include any portion thereof which is deferred under any nonqualified plan or arrangement.

          4.2. Annual Incentive Compensation. In addition to Base Salary, the Executive shall be
awarded, for each fiscal year during the Term until the Date of Termination, annual cash incentive
compensation (either pursuant to an incentive plan or program of the Company or otherwise) in an
amount to be determined by the Board of Directors (or a committee thereof) in its sole discretion
(“Annual Incentive Compensation”). “Targeted Annual Incentive Compensation”, earned upon the
achievement of one hundred percent (100%) of the annual target goals for the Executive, shall be
one hundred percent (100%) of the Executive’s Base Salary, unless otherwise determined by the Board
of Directors (or a committee thereof) in its sole discretion. All such Annual Incentive
Compensation shall be payable at a time to be determined by the Board of Directors (or a committee
thereof) in its sole discretion. For all purposes under this Agreement, the Executive’s Annual
Incentive Compensation shall include any portion thereof which is deferred under any nonqualified
plan or arrangement.

          4.3. Vacation Time. Commencing on the Initial Effective Date and continuing until the Date of
Termination, for each full calendar year in which the Executive is employed under this Agreement,
the Executive shall be entitled to four (4) weeks paid vacation (“Vacation Time”). For any partial
calendar year during which the Executive is employed under this Agreement, he will be entitled to a
prorated amount of Vacation Time, based on the number of weeks worked in the

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calendar year pursuant to the Company’s then current vacation policy. Vacation Time must be
taken during the calendar year in which it accrued and will be forfeited at the end of the calendar
year if not used.

          4.4. Automobile Allowance. Commencing on the Initial Effective Date and continuing until the
Date of Termination, the Executive shall receive an automobile allowance of Six Hundred Dollars
($600.00) per month (“Automobile Allowance”). The Board of Directors (or a committee thereof), in
its discretion, may increase the Automobile Allowance based upon relevant circumstances.

          4.5. Club Membership Dues. Commencing on the Initial Effective Date and continuing until the
Date of Termination, the Executive shall receive an amount per month equal to the monthly
membership dues (i.e., the regular membership fee, and not incidental or ancillary charges such as
food, beverages, rentals, coaching, training, supplies, therapy, spa, etc.) which the Executive
pays for one club or organization of Executive’s choice.

          4.6. Incentive, Savings, Retirement and Stock Plans. The Executive shall be entitled to
participate in and be eligible to receive benefits under all executive incentive, savings,
retirement, deferred compensation and stock (including any stock option, restricted stock,
restricted stock units, phantom stock and other stock rights and interests, including derivative
interests) plans and programs currently maintained or hereinafter established by the Company for
the benefit of its executive officers and/or employees (collectively “Compensation Plans”). The
Executive’s participation in all such Compensation Plans shall be governed by the terms and
provisions of each such Compensation Plan.

          4.7. Welfare Plans. The Executive shall be eligible to participate in and shall receive all
benefits under each welfare benefit plan of the Company currently maintained or subsequently
established by the Company for the benefit of its employees. Such welfare benefit plans may include
medical, dental, vision, disability, group life, accidental death and travel accident insurance
plans and programs (collectively “Welfare Plans”). The Executive’s participation in the Welfare
Plans shall be subject to the terms and conditions of each Welfare Plan.

          4.8. Reimbursement of Expenses. The Executive may from time to time during the Term incur
various business expenses customarily incurred by persons holding positions of like responsibility,
including, without limitation, travel, entertainment and similar expenses incurred for the benefit
of the Company. Subject to the Company’s policy regarding the reimbursement of such expenses as in
effect from time to time during the Term, which does not necessarily allow reimbursement of all
such expenses, and following the Company’s receipt of proper documentation for such expenses, the
Company shall reimburse .the Executive for such expenses from time to time, at the Executive’s
request, and the Executive shall account to the Company for all such expenses.

          4.9. Indemnification and Insurance. At all times during the term of this Agreement, and for
such additional periods as are provided for in this Agreement, the Executive shall be covered under
the Company’s directors’ and officers’ liability insurance, if any, to the extent such coverage is
commercially feasible, and under a separate Indemnification Agreement with the Company.

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     5. Termination.

          5.1. Death. This Agreement shall terminate automatically upon the death of the Executive.

          5.2. Disability. The Company may terminate this Agreement, upon written notice to the
Executive delivered in accordance with Sections 5.8 and 11.1, upon the Disability of the Executive.

          5.3. Cause. The Company may terminate this Agreement, upon written notice to the Executive
delivered in accordance with Sections 5.8 and 11.1, for Cause. For purposes of this Agreement,
“Cause” means (a) the conviction of the Executive for a felony, (b) the Executive’s willful
refusal, without proper legal cause, to perform his duties and responsibilities as contemplated in
this Agreement, or (c) the Executive’s willfully engaging in activities which (1) constitute a
breach of any term of this Agreement, the Company’s Code of Ethics, the Company’s policies
regarding trading in Common Stock, reimbursement of business expenses, or any other applicable
policies, rules or regulations of the Company or (2) result in a material injury to the business,
condition (financial or otherwise), results of operations, or prospects of the Company or its
Affiliates (as determined in good faith by the Board of Directors of the Company or a committee
thereof). For purposes of the definition of “Cause,” no act or failure to act shall be considered
“willful” unless it is done, or omitted to be done, in bad faith without reasonable belief that the
action or omission was in the best interests of the Company.

          5.4. Without Cause. The Company may terminate this Agreement Without Cause, upon written
notice to the Executive delivered in accordance with Sections 5.8 and 11.1, For purposes of this
Agreement, the Executive will be deemed to have been terminated “Without Cause” if the Executive is
terminated by the Company for any reason other than Cause, Disability or death.

          5.5. Good Reason. The Executive may terminate this Agreement for Good Reason, upon written
notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of this
Agreement, “Good Reason” means (a) the assignment to the Executive of any duties that are
materially inconsistent with the Executive’s duties or responsibilities as contemplated in this
Agreement, (b) any other action by the Company which results in a material diminishment in the
Executive’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities (provided, however, that a temporary diminishment, whether material or
not, due to the Executive’s illness or injury will not constitute grounds for a termination for
Good Reason by the Executive), (c) any material breach by the Company of any of the provisions of
this Agreement, (d) requiring the Executive to relocate permanently to any office or location,
except in the Phoenix-Scottsdale metropolitan area or any other location to which the majority of
the Company’s executive officers are relocated, without his consent, (e) any material reduction, or
attempted material reduction, at any time during the Term, of the Base Salary or of any of the
compensation or benefits described in Article 4 of this Agreement (provided, however, that any
change in the targeted percentage for purposes of determining the Executive’s Annual Incentive
Compensation, any change in the Company’s reimbursement policies, or any change in any Compensation
Plans or Welfare Plans, which affects a majority of the employees covered by those policies or
plans, shall not be considered “Good Reason”).

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          5.6. Without Good Reason. The Executive may terminate this Agreement Without Good Reason, upon
written notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of
this Agreement, the Executive will be deemed to have terminated “Without Good Reason” if the
Executive terminates this Agreement for any reason other than Good Reason or due to the Executive’s
death or Retirement.

          5.7. Retirement. The Executive may terminate this Agreement upon Retirement, upon written
notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of this
Agreement, “Retirement” means the Executive’s bona fide retirement from the Company.

          5.8. Notice of Termination. Any termination of this Agreement by the Company for Cause,
Without Cause or as a result of the Executive’s Disability, or by the Executive for Good Reason or
Without Good Reason or upon Retirement shall be communicated by a Notice of Termination to the
other party. A “Notice of Termination” means a written notice which (a) indicates the specific
termination provision in this Agreement relied upon and (b) if the termination is by the Company
for Cause or by the Executive for Good Reason, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated. The Notice of Termination must specify the Date of Termination. In the case
of a termination by the Company for Cause or due to the Executive’s Disability or by the Executive
for Good Reason or due to Retirement, the Date of Termination may be as early as the date notice is
given but no later than thirty (30) calendar days after notice is given, unless otherwise agreed to
in writing by both parties. In the case of a termination by the Company Without Cause or by the
Executive Without Good Reason, the Date of Termination may be as early as fourteen (14) calendar
days after notice is given but no later than sixty (60) calendar days after notice is given, unless
otherwise agreed to by the parties in writing. The Notice of Termination shall also conform with
the provisions of Section 11.1.

     6. Obligations of Company Upon Termination.

          6.1. Cause, Without Good Reason. If this Agreement is terminated either by the Company for
Cause or by the Executive Without Good Reason, the Company shall pay to the Executive, in a lump
sum cash payment within thirty (30) days after the Date of Termination, the aggregate of (a) any
unpaid portion of the Executive’s Base Salary (as in effect on the Date of Termination) owing as of
the Date of Termination and (b) any accrued but unpaid Vacation Time as of the Date of Termination.
The Company also shall promptly pay or reimburse to the Executive any costs and expenses (and
moving and relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred
by the Executive which would have been payable under Section 4.8 of this Agreement if the
Executive’s employment had not terminated.

          All other obligations of the Company and rights of the Executive hereunder shall terminate
effective as of the Date of Termination; provided, however, that the Executive’s rights under any
Compensation Plan or Welfare Plan shall be governed by the terms and provisions of each such plan
and are not necessarily severed on the Date of Termination.

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          6.2. Death or Disability. If this Agreement is terminated as a result of the Executive’s death
or Disability:

               (a) The Company shall pay to the Executive (or to his estate, in the event the Executive is
deceased) the following amounts:

               (1) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of
Termination) through the Date of Termination, any unpaid portion of the Annual Incentive
Compensation previously awarded to the Executive, and any accrued but unpaid Vacation Time
as of the Date of Termination, in a lump sum cash payment within thirty (30) days after the
Date of Termination; and

               (2) an amount equal to two (2) times the sum of the Executive’s Base Salary (as in
effect on the Date of Termination) plus the Executive’s Target Annual Incentive Compensation
for the fiscal year during which the Date of Termination occurs. If the termination is due
to death, this amount will be paid in substantially equal hi-weekly installments over a two
(2) year period following the Executive’s Date of Termination. If the termination is due to
Disability, this amount will be paid in substantially equal bi-weekly installments beginning
as of the first payroll date immediately following the six (6) month anniversary of the Date
of Termination and continuing until the first payroll date immediately following the two (2)
year anniversary of the Date of Termination; provided, however, that the first payment shall
include the amount that would have been paid prior to the actual first payment date had the
first payment date been the first payroll date immediately following the Date of
Termination. The Company shall, to the extent feasible, purchase insurance to cover all or
any part of the obligation contemplated in this paragraph, and the Executive agrees to
submit to a physical examination and otherwise cooperate with the Company to facilitate the
procurement of such insurance.

               (b) The Company shall, promptly upon submission by the Executive (or his estate) of supporting
documentation, pay or reimburse to the Executive any costs and expenses (and moving and relocation
expenses, if otherwise agreed to by the Company in writing) paid or incurred by the Executive which
would have been payable under Section 4.8 of this Agreement if the Executive’s employment had not
terminated.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s spouse and dependents, at least equal to that which would have
been provided to him under Section 4.7 if the Executive’s employment had not terminated, if such
coverage continues to be available to the Company, until the earlier of (1) the date the Executive
becomes eligible for any comparable medical, dental, or vision coverage provided by any other
employer, (2) the date the Executive 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), or (3) the fifth anniversary of the Executive’s Date of Termination.
Notwithstanding the foregoing, the medical, dental, and/or vision coverage provided under this
Section 6.2(c) shall cease immediately if the Executive violates any of his Continuing Obligations.

               (d) Whenever compensation is payable to the Executive under this Agreement during a period in
which he is partially or totally disabled, and such Disability would (except for the provisions of
this Agreement) entitle the Executive to Disability income or salary continuation payments from the
Company according to the terms of any plan or program presently

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maintained or hereafter established by the Company, the Disability income or salary
continuation paid to the Executive pursuant to any such plan or program shall be considered a
portion of (and not in addition to) the payment to be made to the Executive pursuant to this
Section 6.2. If disability income is payable directly to the Executive by an insurance company
under the terms of an insurance policy paid for by the Company, the amounts paid to the Executive
by such insurance company shall be considered a portion of the payment (and not in addition to the
payment) to be made to the Executive pursuant to this Section 6.2.

               (e) The Executive (or the Executive’s estate, as the case may be) shall continue to vest and,
if applicable, continue to be permitted to exercise, all of the rights and employed by the Company,
for a period of three (3) years following the Date of Termination (or, if interests awarded to the
Executive under the Company’s stock plans, as if the Executive were still less, for the remainder
of the stated terms of the rights or interests). ALTERNATIVE 1. Notwithstanding the foregoing,
with respect to any stock options that were both granted prior to January 1, 2004 and not vested as
of December 31, 2004, the extension of the vesting and exercise periods for such options, pursuant
to this paragraph, shall be limited to (i.e., shall not extend beyond) the later of (1) the
fifteenth (15th) day of the third (3”1) calendar month following the date on
which such options would have otherwise expired based on the terms of such options as of their
original date of grant, or (2) December 31 of the calendar year in which such options would have
otherwise expired based on the terms of such options as of their original date of grant.
ALTERNATIVE 2: Notwithstanding the forgoing, with respect to any stock options that were both
granted prior to January 1, 2004 and not vested as of December 31, 2004, nothing contained in this
paragraph shall permit the exercise of such options on a date (or dates) other than that (or those)
specifically set forth in the amended option agreement governing such options.

[NOTE: OPTIONS THAT WERE NOT VESTED AS OF 12/31/04 ARE NOT GRANDFATHERED AND THEREFORE MUST
EITHER QUALIFY FOR EXEMPTION FROM CODE SECTION 409A (ALTERNATIVE 1 ABOVE) OR COMPLY WITH CODE
SECTION 409A (ALTERNATIVE 2 ABOVE). ALTERNATIVE 1 LIMITS THE POST-TERMINATION EXERCISE PERIOD FOR
NON-GRANDFATHERED OPTIONS THAT DO NOT CURRENTLY MEET THE EXEMPTION (I.E., OPTIONS GRANTED PRIOR TO
1/1/04 BUT NOT VESTED AS OF 12/31/04) TO FIT WITHIN THE CODE SECTION 409A EXEMPTION. THUS,
ALTERNATIVE 1 WOULD LIMIT THE PERIOD OF TIME, POST-TERMINATION, THAT THE EXECUTIVE CAN EXERCISE,
BUT WOULD RETAIN THE FLEXIBILITY TO EXERCISE AT ANY TIME DURING EMPLOYMENT AND DURING THE LIMITED
POST-EXERCISE PERIOD. ALTERNATIVE 2 PROVIDES THAT THIS PROVISION WILL NOT AFFECT THE EXERCISE
DATE, WHICH WILL BE SET FORTH IN AN AMENDMENT TO THE OPTION AGREEMENT. UNDER ALTERNATIVE 2, IN
COMPLIANCE WITH CODE SECTION 409A, THE AMENDMENT TO THE OPTION AGREEMENT WOULD SET A FIXED DATE ON
WHICH THE OPTION MUST BE EXERCISED. THE EXECUTIVE WOULD NOT HAVE THE FLEXIBILITY TO DECIDE WHETHER
TO EXERCISE ON A DIFFERENT DATE.]

               (f) The Executive (or the Executive’s estate, as the case may be) shall continue to be covered
under the Company’s directors’ and officers’ liability insurance, if any, to the extent such
coverage is commercially feasible, and under his separate Indemnification Agreement with the
Company, as if the Executive’s employment had not terminated, for a period of
ten (10) years following his Date of Termination (or, in the case, of the Indemnification
Agreement, for such longer term as may be provided for in the Indemnification Agreement).

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               (g) All other obligations of the Company and rights of the Executive hereunder shall terminate
effective as of the Date of Termination; provided, however, that except as otherwise specifically
modified by the terms of this Agreement the Executive’s rights under the Compensation Plans and
Welfare Plans shall be governed by the terms and provisions of those Plans and are not necessarily
severed on the Date of Termination.

          6.3. Good Reason; Without Cause. If this Agreement is terminated either by the Executive for
Good Reason or by the Company Without Cause (other than in connection with a Change in Control as
described in Section 6.5):

               (a) The Company shall pay to the Executive the following amounts:

               (1) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of
Termination) through the Date of Termination, any unpaid portion of the Annual Incentive
Compensation previously awarded to the Executive, and any accrued but unpaid Vacation Time
as of the Date of Termination, in a lump sum cash payment within thirty (30) days after the
Date of Termination; and

               (2) an amount equal to three (3) times the sum of the Executive’s Base Salary (as in
effect on the Date of Termination) plus the Executive’s Targeted Annual Incentive
Compensation for the fiscal year during which the Date of Termination occurs, in
substantially equal bi-weekly installments beginning as of the first payroll date
immediately following the six (6) month anniversary of the Date of Termination and
continuing until the first payroll date immediately following the three (3) year anniversary
of the Date of Termination; provided, however, that the first payment shall include the
amount that would have been paid prior to the actual first payment date had the first
payment date been the first payroll date immediately following the Date of Termination, and
further provided that such payments shall cease immediately if the Executive violates any of
his Continuing Obligations.

               (b) The Company shall promptly pay or reimburse to the Executive any costs and expenses (and
moving and relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred
by the Executive which would have been payable under Section 4.8 of this Agreement if the
Executive’s employment had not terminated.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s spouse and dependents, at least equal to that which would have
been provided to the Executive under Section 4.7 if the Executive’s employment had not terminated,
until the earlier of (1) the date the Executive becomes eligible for any comparable medical,
dental, or vision coverage provided by any other employer, (2) the date the Executive 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), or (3) the fifth anniversary
of the Executive’s Date of Termination; provided that such coverage shall cease immediately if the
Executive violates any of his Continuing Obligations.

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               (d) The Executive (or the Executive’s estate, as the case may be) shall continue to vest and, if
applicable, continue to be permitted to exercise, all of the rights and interests awarded to the
Executive under the Company’s stock plans, as if the Executive were still employed by the Company,
for a period of three (3) years following the Date of Termination (or, if less, for the remainder
of the stated terms of the rights and interests). ALTERNATIVE 1:” Notwithstanding the foregoing,
with respect to any stock options that were both granted prior to January 1, 2004 and not vested as
of December 31, 2004, the extension of the vesting and exercise periods for such options, pursuant
to this paragraph, shall be limited to (i.e., shall not extend beyond) the later of (1) the
fifteenth (15th) day of the third (3rd) calendar month following
the date on which such options would have otherwise expired based on the terms of such options as
of their original date of grant, or (2) December 31 of the calendar year in which such options
would have otherwise expired based on the terms of such options as of their original date of grant.
ALTERNATIVE 2: Notwithstanding the forgoing, with respect to any stock options that were both
granted prior to January I, 2004 and not vested as of December 31, 2004, nothing contained in this
paragraph shall permit the exercise of such options on a date (or dates) other than that (or those)
specifically set forth in the amended option agreement governing such options.

[NOTE: OPTIONS THAT WERE NOT VESTED AS OF 12/31/04 ARE NOT GRANDFATHERED AND THEREFORE MUST EITHER
QUALIFY FOR EXEMPTION FROM CODE SECTION 409A (ALTERNATIVE 1 ABOVE) OR COMPLY WITH CODE SECTION 409A
(ALTERNATIVE 2 ABOVE). ALTERNATIVE 1 LIMITS THE POST-TERMINATION EXERCISE PERIOD FOR
NON-GRANDFATHERED OPTIONS THAT DO NOT CURRENTLY MEET THE EXEMPTION (I.E., OPTIONS GRANTED PRIOR TO
1/1/04 BUT NOT VESTED AS OF 12/31/04) TO FIT WITHIN THE CODE SECTION 409A EXEMPTION. THUS,
ALTERNATIVE 1 WOULD LIMIT THE PERIOD OF TIME, POST-TERMINATION, THAT THE EXECUTIVE CAN EXERCISE,
BUT WOULD RETAIN THE FLEXIBILITY TO EXERCISE AT ANY TIME DURING EMPLOYMENT AND DURING THE LIMITED
POST-EXERCISE PERIOD. ALTERNATIVE 2 PROVIDES THAT THIS PROVISION WILL NOT AFFECT THE EXERCISE DATE,
WHICH WILL BE SET FORTH IN AN AMENDMENT TO THE OPTION AGREEMENT. UNDER ALTERNATIVE 2, IN COMPLIANCE
WITH CODE SECTION 409A, THE AMENDMENT TO THE OPTION AGREEMENT WOULD SET A FIXED DATE ON WHICH THE
OPTION MUST BE EXERCISED. THE EXECUTIVE WOULD NOT HAVE THE FLEXIBILITY TO DECIDE WHETHER TO
EXERCISE ON A DIFFERENT DATE.]

               (e) The Executive shall continue to be covered under the Company’s directors’ and officers’
liability insurance, if any, to the extent such coverage is commercially feasible, and under his
separate Indemnification Agreement with the Company, as if the Executive’s employment had not
terminated, for a period of ten (10) years following his Date of Termination (or, in the case of
the Indemnification Agreement, for such longer term as may be provided for in the Indemnification
Agreement).

               (f) The Company shall (through an agency of Company’s choosing) provide outplacement services
to the Executive for a period of one (1) year following the Date of Termination, provided that the
cost of such services shall not exceed $50,000 (or such higher amount as may be approved by the
Board of Directors (or a committee thereof).

11

 

               (g) Notwithstanding any contrary provision of the LTIP, the Executive’s Awards for Performance
Cycles (as defined in the LTIP) in effect as of the Date of Termination shall be prorated in the
manner described in Section 8(a) of the LTIP.

               (h) All other obligations of the Company and rights of the Executive hereunder shall terminate
effective as of the Date of Termination; provided, however, that except as otherwise specifically
modified by the terms of this Agreement the Executive’s rights under the Compensation Plans and
Welfare Plans shall be governed by the terms and provisions of these Plans and are not necessarily
severed on the Date of Termination.

               (i) Notwithstanding anything to the contrary, if this Agreement is terminated either by the
Executive for Good Reason or by the Company Without Cause (other than in connection with a Change
in Control as described in Section 6.5) and the Date of Termination is within one (1) year of the
date on which the Executive would have satisfied the criteria for eligibility for maximum
retirement payments as specified in Section 6.4(d)(1) below, the termination will be deemed to have
been in contemplation of the Executive’s Retirement, and the rights and obligations of the parties
shall be governed by Section 6.4 rather than this Section 6.3.

          6.4. Retirement. If this Agreement is terminated by the Executive due to Retirement:

               (a) The Company shall pay to the Executive, in a lump sum cash payment within thirty (30) days
after the Date of Termination, the aggregate of the following amounts: (1) any unpaid portion of
the Executive’s Base Salary (as in effect on the Date of Termination) through the Date of
Termination; (2) any unpaid portion of the Annual Incentive Compensation previously awarded to the
Executive; and (3) any accrued but unpaid Vacation Time as of the Date of Termination.

               (b) The Company shall promptly pay or reimburse to the Executive any costs and expenses (and
moving and relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred
by the Executive which would have been payable under Section 4.8 of this Agreement if the
Executive’s employment had not terminated.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s family, at least equal to that which would have been provided to
the Executive under Section 4.7 if the Executive’s employment had not terminated, until the earlier
of (1) the date the Executive becomes eligible for any comparable medical, dental, or vision
coverage provided by any other employer, or (2) the date the Executive 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), provided that such coverage shall cease
immediately if the Executive violates any of his Continuing Obligations. Following the date on
which the Executive becomes eligible for coverage under Medicare, the Executive may, at his
election, continue to be covered under the Company’s health coverage, if available, provided that
the Executive pays all applicable premiums charged by the Company or its third-party provider(s).

12

 

               (d) The Company shall pay to the Executive full or partial retirement payments, as provided
below:

               (1) If, as of the Date of Termination, the sum of the Executive’s age and years of
service with the Company equal at least sixty-three (63), the Executive is at least
fifty-five (55) years old, and the Executive has completed at least twenty (20) years of
service with the Company, the Executive is entitled to maximum retirement payments for each
year during the ten (10) year payment period equal to the product of sixty percent (60%) of
the Executive’s average Base Salary during the three (3) consecutive full calendar years of
employment immediately preceding the Date of Termination (or, if less than three (3) years,
the average for the actual number of whole calendar years during which the Executive was
employed by the Company). Payments shall commence on the first payroll date immediately
following the six (6) month anniversary of the Date of Termination and shall continue until
the first payroll date immediately following the ten (10) year anniversary of the Date of
Termination (“Payment Period”). Payments shall be made each payroll date during the Payment
Period in substantially equal installments; provided, however, that the first payment shall
include the amount that would have been paid prior to the actual first payment date had the
first payment date been the first payroll date immediately following the Date of
Termination. Notwithstanding the foregoing, if, as of the Date of Termination, the sum of
the Executive’s age and years of service with the Company equal at least sixty-three (63)
and the Executive has completed at least twenty (20) years of service with the Company, but
the Executive is younger than age fifty-five (55), the Executive shall be entitled to
deferred maximum retirement payments, in the amount and form described in the preceding
sentence. The Executive’s deferred maximum retirement payments shall commence on the first
payroll date immediately following the Executive’s attainment of age fifty-five (55) and
shall continue for ten (10) years thereafter; provided, however, that if the Executive
attains age fifty-five (55) prior to the six (6) month anniversary of the Date of
Termination, the first payment shall not be made until the first payroll period immediately
following the six (6) month anniversary of the Date of Termination and the first payment
shall include the amount that would have been paid prior to the actual first payment date
had the first payment date been the first payroll date immediately following the Executive’s
attainment of age fifty-five (55). For purposes of this Section 6.4(d), years of service
include all whole (12 month) years of employment with the Company and with any entity
acquired by the Company, beginning with the Executive’s initial date of employment with the
Company or the acquired entity.

               (2) In the event of the Executive’s death prior to the payment of all of the retirement
payments determined under this Section 6.4(d), the balance of the payments shall be made to
the Executive’s surviving spouse, if any, or to any other beneficiary named by the Executive
in writing at the same time as such payments would have been made to the Executive.

               (3) Any remaining retirement payments shall immediately cease in the event the
Executive works for a competitor (as determined by the Company in its sole discretion),
becomes employed by any other employer without the prior written consent of the Company, or
violates any of his Continuing Obligations. Notwithstanding the foregoing, with the prior
written consent of the Company, the Executive may be employed by an entity

13

 

which is not deemed by the Company to be in competition with the Company in a capacity
in which the economic value of his total compensation is comparable to his total
compensation while employed by the Company, and receive retirement benefits which are
reduced proportionately by the compensation received by the Executive in the new position.
Also with the prior written consent of the Company, the Executive may be employed by an
entity which is not deemed by the Company to be in competition with the Company, in a
capacity in which his total compensation is materially less than his total compensation
while employed by the Company, in which case there would be no reduction in retirement
benefits.

               (e) The Executive (or the Executive’s estate, as the case may be) shall continue to vest and,
if applicable, continue to be permitted to exercise, all of the rights and interests awarded to the
Executive under the Company’s stock plans, for a period of three (3) years following the Date
of Termination (or, if less, for the remainder of the stated terms of the rights and
ALTERNATIVE 1: Notwithstanding the foregoing, with respect to any stock options interest at were
both granted prior to January 1, 2004 and not vested as of December 31, 2004, the extension of the
vesting and exercise periods for such options, pursuant to this paragraph, shall be limited to
(i.e., shall not extend beyond) the later of (1) the fifteenth (15th) day of the third
(3rd) calendar month following the date on which such options would have
otherwise expired based on the terms of such options as of their original date of grant, or (2)
December 31 of the calendar year in which such options would have otherwise expired based on the
terms of such options as of their original date of grant. ALTERNATIVE 2: Notwithstanding the
forgoing, with respect to any stock options that were both granted prior to January 1, 2004 and not
vested as of December 31, 2004, nothing contained in this paragraph shall permit the exercise of
such options on a date (or dates) other than that (or those) specifically set forth in the amended
option agreement governing such options.

[NOTE: OPTIONS THAT WERE NOT VESTED AS OF 12/31/04 ARE NOT GRANDFATHERED AND THEREFORE MUST EITHER
QUALIFY FOR EXEMPTION FROM CODE SECTION 409A (ALTERNATIVE 1 ABOVE) OR COMPLY WITH CODE SECTION 409A
(ALTERNATIVE 2 ABOVE). ALTERNATIVE 1 LIMITS THE POST-TERMINATION EXERCISE PERIOD FOR
NON-GRANDFATHERED OPTIONS THAT DO NOT CURRENTLY MEET THE EXEMPTION (I.E., OPTIONS GRANTED PRIOR TO
1/1/04 BUT NOT VESTED AS OF 12/31/04) TO FIT WITHIN THE CODE SECTION 409A EXEMPTION. THUS,
ALTERNATIVE 1 WOULD LIMIT THE PERIOD OF TIME, POST-TERMINATION, THAT THE EXECUTIVE CAN EXERCISE,
BUT WOULD RETAIN THE FLEXIBILITY TO EXERCISE AT ANY TIME DURING EMPLOYMENT AND DURING THE LIMITED
POST-EXERCISE PERIOD. ALTERNATIVE 2 PROVIDES THAT THIS PROVISION WILL NOT AFFECT THE EXERCISE DATE,
WHICH WILL BE SET FORTH IN AN AMENDMENT TO THE OPTION AGREEMENT. UNDER ALTERNATIVE 2, IN COMPLIANCE
WITH CODE SECTION 409A, THE AMENDMENT TO THE OPTION AGREEMENT WOULD SET A FIXED DATE ON WHICH THE
OPTION MUST BE EXERCISED. THE EXECUTIVE WOULD NOT HAVE THE FLEXIBILITY TO DECIDE WHETHER TO
EXERCISE ON A DIFFERENT DATE.]

               (f) The Executive shall continue to be covered under the Company’s directors’ and officers’
liability insurance, if any, to the extent such coverage is commercially feasible, and under his
separate Indemnification Agreement with the Company, as if the Executive’s

14

 

employment had not terminated, for a period of ten (10) years following his Date of
Termination (or, in the case of the Indemnification Agreement, for such longer term as may be
provided for in the Indemnification Agreement).

               (g) All other obligations of the Company and rights of the Executive hereunder shall terminate
effective as of the Date of Termination; provided, however, that except as otherwise specifically
modified by the terms of this Agreement the Executive’s rights under the Compensation Plans and
Welfare Plans shall be governed by the terms and provisions of these Plans and are not necessarily
severed on the Date of Termination.

               (h) The payments and benefits provided under this Section 6.4 shall be in lieu of any payments
to which the Executive (or his family) may have otherwise been entitled under the terms of Section
6.2, 6.3 or 6.5, and vice versa.

          6.5. Change in Control. If this Agreement is terminated either by the Executive for Good
Reason or by the Company Without Cause, and the termination occurs within the one (1) year period
preceding or the eighteen (18) month period following the date on which the Change in Control
occurs (“Change in Control Date”):

               (a) As reasonable compensation for services rendered by the Executive to the Company prior to
the Date of Termination, the Company shall pay to the Executive the following amounts:

               (1) in a lump sum cash payment within thirty (30) days after the later to occur of the
Change in Control Date or the Date of Termination, any unpaid portion of the Executive’s
Base Salary (as in effect on the Date of Termination) through the Date of Termination, any
unpaid portion of the Annual Incentive Compensation previously awarded to the Executive, and
any accrued but unpaid Vacation Time as of the Date of Termination; and

               (2) in a lump sum cash payment within thirty (30) days after the later to occur of the
Change in Control Date or the six (6) month anniversary of the Date of Termination, an
amount equal to three (3) times the sum of the Executive’s Base Salary (as in effect on the
Date of Termination) plus the Executive’s Targeted Annual Incentive Compensation for the
fiscal year during which the Date of Termination occurs,

               (b) The Company shall promptly pay or reimburse to the Executive any costs and expenses (and
moving and relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred
by the Executive which would have been payable under Section 4.8 of this Agreement if the
Executive’s employment had not terminated.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s family, at least equal to that which would have been provided to
the Executive under Section 4.7 if the Executive’s employment had not terminated, until the earlier
of (1) the date the Executive becomes eligible for any comparable medical, dental, or vision
coverage provided by any other employer, or (2) the date the Executive 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).

15

 

               (d) As reasonable compensation for services provided by the Executive to the Company prior to
the Date of Termination, the Company shall (through an agency of Company’s choosing) provide
outplacement services to the Executive for a period of one (1) year following the later of the Date
of Termination or the Change in Control Date, provided that the cost of such services shall not
exceed $50,000 (or such higher amount as may be approved by the Board of Directors (or a committee
thereof).

               (e) The Executive shall fully and immediately vest in all of the rights and interests awarded
to the Executive under the Company’s stock plans.

               (f) The Executive shall continue to be covered under the Company’s directors’ and officers’
liability insurance, if any, to the extent such coverage is commercially feasible, and under his
separate Indemnification Agreement with the Company, as if the Executive’s employment had not
terminated, for a period of ten (10) years following his Date of Termination (or, in the case of
the Indemnification Agreement, for such longer term as may be provided for in the Indemnification
Agreement).

               (g) All other obligations of the Company and rights of the Executive hereunder shall terminate
effective as of the Date of Termination; provided, however, that except as otherwise specifically
modified by the terms of this Agreement the Executive’s rights under the Compensation Plans and
Welfare Plans shall be governed by the terms and provisions of these Plans and are not necessarily
severed on the Date of Termination.

               (h) In the event the Change in Control Date occurs subsequent to the Executive’s Date of
Termination, the payments and benefits provided under this Section 6.5 shall be reduced by and to
the extent of any payments and benefits previously paid or provided to the Executive under Section
6.3, and in no event shall the Executive or his family be entitled to any duplicate payments or
benefits.

          6.6. Change in Control Gross-Up Payments.

               (a) In the event that (1) any payment or benefits provided for under this Agreement and/or any
other arrangement or agreement with the Company in connection with a Change in Control (“Change in
Control Payment”) would subject the Executive to the excise tax imposed by Code Section 4999 (“Cash
Termination Excise Tax”) and (2) the Change in Control Payment is less than 110% of the sum of
three (3) times the “base amount” (as defined in Code Section 280G) minus $1.00 (“Safe Harbor
Amount”), then any amounts payable under this Agreement shall be reduced so that the Change in
Control 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 (other than Unrestricted Payments), unless an alternative method of reduction
is agreed to by the Company and the Executive. No reduction shall occur if the Change in Control
Payment is 110% (or more) of the Safe Harbor Amount.

               (b) In the event that (1) there is a Change in Control Payment which would subject the
Executive to the Cash Termination Excise Tax and is not subject to reduction under Section 6.6(a)
and (2) the closing stock price of the Company on the date of the Change in

16

 

Control equals or exceeds the Threshold Share Price, then the Executive shall be entitled to
receive the payment described in Section 6.6(c) below.

               (c) If the requirements of Section 6.6(b) are met, the Executive shall be entitled to receive
an additional payment (a “Gross-Up Payment”) such that the net amount retained by the Executive,
after deduction of any excise tax on the Executive’s Change in Control Payment, as determined for
purposes of Code Section 280G, and any federal, state, and local income and employment taxes and
excise tax upon the Gross-Up Payment, shall be equal to the Change in Control Payment; provided,
however, that in determining the amount of the Gross-Up Payment to which the Executive is entitled
under this Section, the Gross-Up Payment (1) shall be capped at 250% of the “base amount” (as
defined in Code Section 280G), and (2) shall not include any amounts payable to the Executive under
the Allied Waste Industries, Inc. Supplemental Executive Retirement Plan. The Gross-Up Payment, if
any, shall be paid to the Executive, or, at the discretion of the Company, to governmental
authorities on the Executive’s behalf, as soon as practicable following the determination of the
Change in Control Payment, but, in any event, not later than five (5) business days immediately
following the payment of the Executive’s Change in Control Payment.

               (d) Subject to the provisions of Section 6.6(e), all determinations required to be made under
this Section 6.6, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by tax counsel appointed by the Company (the “Tax Counsel”). All fees and expenses of the Tax
Counsel shall be borne solely by the Company. As a result of the uncertainty in the application of
Code Section 4999 at the time of the initial determination by the Tax Counsel hereunder, it is
possible that Gross-Up Payments, which will not have been made by the Company, should have been
made (“Underpayment”). In the event that it is ultimately determined in accordance with the
procedures set forth in Section 6.6(e) that the Executive is required to make a payment of any
excise tax, the Tax Counsel shall determine the amount of the Underpayment that has occurred, and
any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

               (e) The Executive shall notify the Company in writing of any claims by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than thirty (30) days after the
Executive actually receives notice in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the 30-day period following the date on which he
gives such notice to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the Executive shall:

               (1) give the Company any information reasonably requested by the Company relating to
such claim;

               (2) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without

17

 

limitation, accepting legal representation with respect to such claim by an attorney
selected by the Company and reasonably acceptable to the Executive;

               (3) cooperate with the Company in good faith in order to effectively contest such
claim; and

               (4) if the Company elects not to assume and control the defense of such claim, permit
the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any excise tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this Section 6.6(e), the
Company shall have the right, at its sole option, to assume the defense of and control all
proceedings in connection with such contest, in which case it may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim and may either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial jurisdiction and in one
or more appellate courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any excise tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s right to assume the defense of and control the contest shall be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder, and the Executive
shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

               (f) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 6.6(e), the Executive becomes entitled to receive any refund with respect to such claim,
the Executive shall (subject to the Company’s complying with the requirements of Section 6.6(e))
promptly pay to the Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 6.6(e), a determination is made that the Executive
shall not be entitled to any refund with respect to such claim, and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the expiration of
thirty (30) days after such determination, then such advance shall be forgiven and shall not be
required to be repaid, and the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.

               6.7. Payments Contingent on Executive’s Release of Company. All of the payments and benefits
to which the Executive would otherwise be entitled under Sections 6.2, 6.3,

18

 

6.4, 6.5, or 6.6, except for the Unrestricted Payments, shall be contingent on the Executive’s
delivery to the Company of a signed release of all claims against the Company, in a form specified
by the Company.

     7. Executive’s Confidentiality Obligation.

          7.1. The Executive hereby acknowledges, understands and agrees that all Confidential
Information is the exclusive and confidential property of the Company and its Affiliates which
shall at all times be regarded, treated and protected as such in accordance with this Article 7.
The Executive acknowledges that all such Confidential Information is in the nature of a trade
secret.

          7.2. For purposes of this Agreement, “Confidential Information” means information that is used
in the business of the Company or its Affiliates and (a) is proprietary to, about or created by the
Company or its Affiliates, (b) gives the Company or its Affiliates some competitive business
advantage or the opportunity of obtaining such advantage or the disclosure of which could be
detrimental to the interests of the Company or its Affiliates, (c) is designated as Confidential
Information by the Company or its Affiliates, is known by the Executive to be considered
confidential by the Company or its Affiliates, or from all the relevant circumstances should
reasonably be assumed by the Executive to be confidential and proprietary to the Company or its
Affiliates, or (d) is not generally known by non-Company personnel. Such Confidential Information
includes, without limitation, the following types of information and other information of a similar
nature (whether or not reduced to writing or designed as confidential):

               (a) Internal personnel and financial information of the Company or its Affiliates, information
about vendors that is not generally known but is known to the Company as a result of the Company’s
relationship with the vendor (including vendor characteristics, services, prices, lists and
agreements), purchasing and internal cost information, internal service and operational manuals,
and the manner and methods of conducting the business of the Company or its Affiliates;

               (b) Marketing and development plans, price and cost data, price and fee amounts, pricing and
billing policies, quoting procedures, marketing techniques, forecasts and forecast assumptions and
volumes, and future plans and potential strategies (including, without limitation, all information
relating to any acquisition prospect and the identity of any key contact within the organization of
any acquisition prospect) of the Company or its Affiliates which have been or are being discussed;

               (c) Names of customers and their representatives, contracts (including their contents and
parties), customer services, and the type, quantity, specifications and content of products and
services purchased, leased, licensed or received by customers of the Company or its Affiliates;

               (d) Confidential and proprietary information provided to the Company or its Affiliates by any
actual or potential customer, government agency or other third party (including businesses,
consultants and other entities and individuals);

19

 

               (e) Any non-public information about the Company’s landfill development plans, landfill
capacity, and the status of the permitting process with respect to any aspect of the Company’s
business; and

               (f) any non-public information about the existence or status of any governmental
investigation, charge, or lawsuit, the status or the position of the Company regarding the value of
any claim or charge (whether filed by the government or a third party), the Company’s interest in
resolving any such claim or charge; or any non-public information regarding the Company’s
compliance with federal, state or local laws.

          7.3. As a consequence of the Executive’s acquisition or anticipated acquisition of
Confidential Information, the Executive shall occupy a position of trust and confidence with
respect to the affairs and business of the Company and its Affiliates. In view of the foregoing,
and of the consideration to be provided to the Executive, the Executive agrees that it is
reasonable and necessary that the Executive make each of the following covenants:

               (a) At any time during the Term and thereafter, the Executive shall not 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 as set forth in Article 2, without first
obtaining the Company’s prior written consent (unless such disclosure is compelled pursuant to
court orders or subpoena, and at which time the Executive shall give notice of such proceedings to
the Company).

               (b) At any time during the Term and thereafter, the Executive shall not use, copy or transfer
Confidential Information other than as necessary in carrying out his duties and responsibilities as
set forth in Article 2, without first obtaining the Company’s prior written consent.

               (c) On the Date of Termination, the Executive shall promptly deliver to the Company (or its
designee) all written materials, records and documents made by the Executive or which came into his
possession prior to or during the Term concerning the business or affairs of the Company or its
Affiliates, including, without limitation, all materials containing Confidential Information.

          7.4. The Executive acknowledges and agrees that the use of the term “Company” in this Section
7 means both the Company and its Affiliates.

     8. Disclosure of Information, Ideas, Concepts, Improvements, Discoveries and Inventions.
Consistent with the Executive’s fiduciary duties to the Company and its Affiliates, the Executive
agrees that during his employment by the Company and/or its Affiliates, the Executive shall
promptly disclose in writing to the Company all information, ideas, concepts, improvements,
discoveries and inventions, which are conceived, developed, made or acquired by the Executive,
either individually or jointly with others, and which relate to the business, products or services
of the Company or its Affiliates, irrespective of whether the Executive used the Company’s or
Affiliate’s time or facilities and irrespective of whether such information, idea, concept,
improvement, discovery or invention was conceived, developed, discovered or acquired by the
Executive on the job, at home, or elsewhere. This obligation extends to all types of information,
ideas and concepts, including, information, ideas and concepts relating to new types of services,

20

 

corporate opportunities, acquisition prospects, the identity of key representatives within
acquisition prospect organizations, prospective names or service marks for the Company’s or
Affiliate’s business activities, and the like.

     9. Ownership of Information, Ideas, Concepts, Improvements, Discoveries and all Original Works
of Authorship.

          9.1. All information, ideas, concepts, improvements, and discoveries which are conceived,
made, developed or acquired by the Executive or which are disclosed or made known to the Executive,
individually or in conjunction with others, during the Executive’s employment by the Company and/or
its Affiliates and which relate to the business, products or services of the Company or its
Affiliates (including, without limitation, all such information relating to corporate
opportunities, research, financial and sales data, pricing and trading terms, evaluations,
opinions, interpretations, acquisition prospects, the identity of customers or their requirements,
the identity of key contacts within the customers’ organizations or within the organization of
acquisition prospects, marketing and merchandising techniques, and prospective names and service
marks) are and shall be the sole and exclusive property of the Company. Furthermore, all drawings,
memoranda, notes, records, files, correspondence, manuals, models, specifications, computer
programs, maps and all other writings or materials of any type embodying any of such information,
ideas, concepts, improvements, and discoveries are and shall be the sole and exclusive property of
the Company.

          9.2. In particular, the Executive hereby specifically sells, assigns, transfers and conveys to
the Company all of his worldwide right, title and interest in and to all such information, ideas,
concepts, improvements, and discoveries, and any United States or foreign applications therefor.
The Executive shall assist the Company and its nominee at all times and in all manners, during the
Term and thereafter, in the protection of such information, ideas, concepts, improvements, or
discoveries.

          9.3. In the event the Executive individually, or jointly with others, creates, during the
Term, any original work of authorship fixed in any tangible medium of expression which is the
subject matter of copyright (such as videotapes, written presentations on acquisitions, computer
programs, drawings, maps, architectural renditions, models, manuals, brochures or the like)
relating to the Company’s or its Affiliate’s business products or services, the Company shall be
deemed the author of such work if the work is prepared by the Executive within the scope of his
employment; or, if the work is not prepared by the Executive within the scope of his employment but
is specially ordered by the Company or its Affiliates as a contribution to a collective work, as a
part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a
compilation or as an instructional text, then the work shall be considered to be a work made for
hire, and the Company shall be the author of such work. If such work is neither prepared by the
Executive within the scope of his employment nor a work specially ordered and deemed to be a work
made for hire, then the Executive hereby agrees to sell, transfer, assign and convey, and by these
presents, does sell, transfer, assign and convey, to the Company all of the Executive’s worldwide
right, title and interest in and to such work and all rights of copyright therein. The Executive
agrees to assist the Company and its Affiliates, at all times, during the Term and thereafter, in
the protection of the Company’s worldwide right, title and interest in and to such work and all
rights of copyright therein, which assistance shall include, but shall not be limited to, the
execution of all documents

21

 

requested by the Company or its nominee and the execution of all lawful oaths and applications
for registration of copyright in the United States and foreign countries.

     10. Executive’s Non-Competition and Non-Solicitation Obligations.

          10.1. Non-Competition. During the Applicable Period, the Executive shall not, acting alone or
in conjunction with others, directly or indirectly, engage, participate, invest, accept employment
or render services as a principal, director, officer, agent, employee, employer, consultant or in
any other individual or representative capacity in or with any business which competes, directly or
indirectly, with the Company’s business in any of the business territories in which the Company or
any of its Affiliates is presently or from time to time during the Term or at the Date of
Termination conducting business, or take any action inconsistent with the fiduciary relationship of
an employee to his employer; provided, however, that the beneficial ownership by the Executive of
up to 3% of the Voting Stock of any corporation subject to the periodic reporting requirements of
the Exchange Act shall not violate this Section 10.1.

          10.2. Non-Solicitation. During the Applicable Period, the Executive agrees that he shall not,
directly or indirectly, (a) induce, entice or solicit any employee of the Company to leave his
employment, (b) contact, communicate or solicit any customer or acquisition prospect of the Company
derived from any customer list, customer lead, mail, printed matter or other information secured
from the Company or its present or past employees (other than in connection with the performance of
his services for the Company in accordance with Article 2 of this Agreement), or (c) in any other
manner use any customer lists or customer leads, mail, telephone numbers, printed material or other
information of the Company relating thereto (other than in connection with the performance of his
services for the Company in accordance with Article 2 of this Agreement).

          10.3. Applicable Period. For purposes of Sections 10.1 and 10.2 above, the term “Applicable
Period” means the period of time beginning on the Initial Effective Date of this Agreement and
ending on (a) the second (2nd) anniversary of the Date of Termination if the termination
is the result of the Executive’s Disability or death, (b) the third (3rd)
anniversary of the Date of Termination if the termination is (1) by the Company for Cause or
by the Executive without Good Reason, (2) other than in connection with a Change in Control, by the
Company Without Cause or by the Executive for Good Reason, or (3) by the Executive upon Retirement,
or (c) the Date of Termination if the termination is in connection with a Change in Control and by
the Company Without Cause or by the Executive for Good Reason.

22

 

     11. Miscellaneous.

          11.1. Notices. All notices and other communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when delivered by hand or
mailed by registered or certified mail, return receipt requested, as follows (provided that notice
of a change of address shall be deemed given only when received):

	 	 	 	 	 	 	 
	 

	 	If to the Company:
	 	Allied Waste Industries, Inc.
	 	 
	 

	 	 	 	18500 North Allied Way	 	 
	 

	 	 	 	Phoenix, Arizona 85054	 	 
	 

	 	 	 	ATTN: General Counsel	 	 
	 
	 	 	 	 	 	 
	 

	 	If to the Executive:
	 	Donald W. Slager, President and Chief
	 	 
	 

	 	 	 	   Operating Officer	 	 
	 

	 	 	 	c/o Allied Waste Industries, Inc.	 	 
	 

	 	 	 	18500 North Allied Way	 	 
	 

	 	 	 	Phoenix, Arizona 85054	 	 

or to such other names or addresses as the Company or the Executive, as the case may be, shall
designate by notice to the other party in the manner specified in this Section 11.1.

          11.2. Waiver of Breach. The waiver by any party of a breach of any provision of this Agreement
shall neither operate nor be construed as a waiver of any subsequent breach by any party. No breach
shall be deemed waived unless the waiver is in a writing signed by the non-breaching party.

          11.3. Assignment. This Agreement shall be binding upon and inure to the benefit of the
Company, its Affiliates, successors, legal representatives and assigns, and upon the Executive, his
heirs, executors, administrators, legal representatives and assigns; provided, however, the
Executive agrees that his rights and obligations hereunder are personal to him and may not be
assigned without the express written consent of the Company.

          11.4. Entire Agreement, No Oral Amendments. This Agreement, together with any schedule or
exhibit attached hereto and any document, policy, rule or regulation referred to herein, replaces
and merges all previous agreements and discussions relating to the same or similar subject matter
between the Executive and the Company and constitutes the entire agreement between the Executive
and the Company with respect to the subject matter of this Agreement. This Agreement may not be
modified in any respect by any verbal statement, representation or agreement made by any employee,
officer, or representative of the Company or by any written agreement unless signed by an officer
of the Company who is expressly authorized by the Company to execute such document.

          11.5. Enforceability. If any provision of this Agreement or application thereof to anyone or
under any circumstances shall be determined to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions or applications of this Agreement which can
be given effect without the invalid or unenforceable provision or application.

          11.6. Jurisdiction, Venue. The laws of the State of Arizona shall govern the interpretation,
validity and effect of this Agreement without regard to the place of execution or the place for
performance thereof, and the Company and the Executive agree that the courts situated in Maricopa
County, Arizona shall have personal jurisdiction over the Company and the Executive to hear all
disputes arising under this Agreement. This Agreement is to be at least partially performed in
Maricopa County, Arizona, and as such, the Company and the Executive agree that venue shall be
proper with the courts in Maricopa County, Arizona to hear such disputes. In the event either party
is not able to effect service of process upon the other party with respect to such disputes, the
Company and the Executive expressly agree that the Secretary of State for the State of Arizona
shall be an agent of the Company and/or the Executive to receive service of process on behalf of
the Company and/or the Executive with respect to such disputes.

23

 

          11.7. Injunctive Relief The Company and the Executive agree that a breach of any term of this
Agreement by the Executive would cause irreparable damage to the Company and that, in the event of
such breach, the Company shall have, in addition to any and all remedies of law, the right to any
injunction, specific performance and other equitable relief to prevent or to redress the violation
of the Executive’s obligations under this Agreement.

          11.8. Withholding. All payments made pursuant to this Agreement shall be net of payroll and
withholding deductions as may be required by law and other deductions that are either applied
generally to employees of the Company for insurance and other employee benefit plans or authorized
by Executive.

          11.9. Arbitration. With the sole exception of any breach by the Executive of the obligations
he assumed under Sections 10.1, 10.2, and/or 10.3 of this Agreement (the breach of which permits
the Company to obtain judicial relief due to the exigent circumstances presented by such a breach),
all other alleged breaches of this Agreement, or any other dispute between the parties to this
Agreement arising out of or in connection with the Executive’s employment with the Company will be
settled by binding arbitration to the fullest extent permitted by law. This Agreement to arbitrate
applies to any claim for relief of any nature, including but not limited to claims of wrongful
discharge under statutory law and common law; employment discrimination based on federal, state or
local statute, ordinance, or governmental regulations, including discrimination prohibited by: (a)
Title VII of the Civil Rights Act of 1964, as amended, (b) the Age Discrimination in Employment
Act, (c) the Americans with Disabilities Act, (d) the Fair Labor Standards Act, and (e) claims of
retaliatory discharge or other acts of retaliation; compensation disputes; tortuous conduct;
allegedly contractual violations; ERISA violations; and other statutory and common law claims and
disputes, regardless of whether the statute was enacted or whether the common law doctrine was
recognized at the time this Agreement was signed.

          The parties to this Agreement understand that they are agreeing to substitute one legitimate
dispute resolution forum (arbitration) for another (litigation) because of the mutual advantages
this forum offers, and are waiving their right to have their disputes (except as to breaches of
Sections 10.1, 10.2, and/or 10.3 of this Agreement) resolved in court. This substitution involves
no surrender, by either party, of any substantive statutory or common law benefit, protection, or
defense.

          The arbitration proceeding shall be conducted in Maricopa County, Arizona, in accordance with
the National Rules for the Resolution of Employment Disputes (National Rules) of the American
Arbitration Association (AAA) in effect at the time a demand for arbitration is made.

          One arbitrator shall be used and he or she shall be chosen by mutual agreement of the parties
to this Agreement. If, within thirty (30) days after the Executive notifies the Company of an
arbitrable dispute, no arbitrator has been chosen, an arbitrator shall be chosen by the AAA
pursuant to its National Rules. The arbitrator shall coordinate and, as appropriate, limit all
pre-arbitration discovery. However, the parties to this Agreement will have the right to obtain
discovery through appropriate decision and award, stating the reasons for the award. The decision
and award shall be exclusive, final, and binding on both parties to this Agreement, their heirs,
executors, administrators, successors, and assigns.

24

 

          The Company will pay all costs and expenses of the arbitration, except for the filing fees and
costs that would have been required had the proceeding been initiated and maintained in the
Maricopa County Superior Court, which fees and costs the Executive will pay. Each party shall pay
their own attorneys’ fees and expenses throughout the arbitration proceeding. However, the
arbitrator may award the successful party its attorneys’ fees and expenses at the conclusion of the
arbitration (and any other relief provided by law).

Dated: March 2, 2007

	 	 	 	 	 
	 

	 	ALLIED WASTE INDUSTRIES, INC.

	 
	 	 	 	 
	 

	 	By
	 	/s/ John J. Zillmer
	 

	 	 	 	 
	 

	 	 	 	John J. Zillmer,
	 

	 	 	 	Chief Executive Officer
	 

	 	 	 	& Chairman of the Board
	 
	 	 	 	 
	 

	 	 	 	“Company”
	Dated: March 2, 2007
	 	 	 	 
	 
	 	 	 	 
	 

	 	By
	 	/s/ Donald W. Slager
	 

	 	 	 	 
	 

	 	 	 	Donald W. Slager
	 

	 	 	 	“Executive”

25exv10w4

EXHIBIT 10.4

EXECUTIVE EMPLOYMENT AGREEMENT

     ALLIED WASTE INDUSTRIES, INC., a Delaware corporation (“Company”) and PETER S. HATHAWAY
(“Executive”) enter into this amended and restated Executive Employment Agreement (“Agreement”) as
of this 22nd day of June, 2008 to set forth the terms and conditions of Executive’s employment.
This Agreement supersedes any prior employment agreement(s) between the parties. The parties agree
as follows:

     1. Certain Definitions and Understandings. As used in this Agreement, the following terms have
the meanings prescribed below:

          Annual Incentive Compensation is defined in Section 4.2.

          Base Salary is defined in Section 4.1.

          Beneficial Owner is defined in Rule 13(d)-3 under the Exchange Act; provided, however, and
without limitation, that any individual, corporation, partnership, group, association or other
person or entity that has the right to acquire any Voting Stock at any time in the future, whether
such right is (a) contingent or absolute, or (b) exercisable presently or at any time in the
future, pursuant to any agreement or understanding or upon the exercise or conversion of rights,
options or warrants, or otherwise, shall be the Beneficial Owner of such Voting Stock.

          Board of Directors (or Board) means the Company’s Board of Directors.

          Cash Termination Excise Tax is defined in Section 6.6(a).

          Cause is defined in Section 5.3.

          Change in Control of the Company means one of the following: (a) the Company merges or
consolidates, or agrees to merge or to consolidate, with any other corporation (other than a
wholly-owned direct or indirect subsidiary of the Company) and is not the surviving corporation (or
survives as a subsidiary of another corporation), (b) the Company sells, or agrees to sell, all or
substantially all of its assets to any other person or entity, (c) the Company is dissolved, (d)
any third person or entity (other than Apollo Advisors, L.P., The Blackstone Group L.P., or a
trustee or committee of any qualified employee benefit plan of the Company) together with its
Affiliates shall become (by tender offer or otherwise), directly or indirectly, the Beneficial
Owner of at least 30% of the Voting Stock of the Company, or (e) the individuals who constitute the
Board of Directors of the Company as of the January 1, 2004 (“Incumbent Board”) shall cease for any
reason to constitute at least a majority of the Board of Directors; provided, that any person
becoming a director whose election or nomination for election was approved by a majority of the
members of the Incumbent Board shall be considered, for the purposes of this Agreement, a member of
the Incumbent Board.

          Change in Control Date is defined in Section 6.5.

 

 

          Change in Control Payment is defined in Section 6.6(a).

          Code means the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated by the Internal Revenue Service thereunder.

          Common Stock means the Company’s common stock, par value $.01 per share.

          Company means Allied Waste Industries, Inc., a Delaware corporation.

          Compensation Plans is defined in Section 4.6.

          Confidential Information is defined in Section 7.2.

          Continuing Obligations is defined in Section 3.

          Date of Termination means the earliest to occur of (a) the date of the Executive’s death, or
(b) the date specified in the Notice of Termination, in accordance with Section 5.8.

          Disability means an illness or other disability which prevents the Executive from discharging
the essential functions of his responsibilities under this Agreement, with or without a reasonable
accommodation, for a period of 180 consecutive calendar days, or an aggregate of 180 calendar days
in any calendar year, during the Term, all as determined in good faith by the Board of Directors
(or a committee thereof).

          Effective Date means the effective date of this amended and restated Executive Employment
Agreement, which is January 1, 2008, except as may otherwise be provided herein.

          Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder.

          Executive means Peter S. Hathaway (or, as applicable, his heirs).

          Good Reason is defined in Section 5.5.

          Gross-Up Payment is defined in Section 6.6(c).

          LTIP means the Company’s Long-Term Incentive Plan.

          Notice of Termination is defined in Section 5.8.

          Paid Leave is defined in Section 4.3.

          Retirement is defined in Section 5.7.

          Safe Harbor Amount is defined in Section 6.6(a).

          Targeted Annual Incentive Compensation is defined in Section 4.2.

          Term is defined in Section 3.

 - 2 - 

 

          Termination of Employment means the Executive’s separation from service with the Company
(whether initiated by the Executive or by the Company), determined in accordance with Section 409A
of the Code and Treasury Regulations thereunder (“Section 409A”).

          Unrestricted Payments means those payments to which the Executive is entitled under Sections
6.2(a)(1), 6.3(a)(1), 6.4(a), and 6.5(a)(1) of this Agreement.

          Voting Stock means all outstanding shares of capital stock of the Company entitled to vote
generally in an election of directors; provided, however, that if the Company has shares of Voting
Stock entitled to more or less than one (1) vote per share, each reference to a proportion of the
issued and outstanding shares of Voting Stock shall be deemed to refer to the proportion of the
aggregate votes entitled to be cast by the issued and outstanding shares of Voting Stock.

          Welfare Plans is defined in Section 4.7.

          Without Cause is defined in Section 5.4.

          In addition, throughout this Agreement, the parties have defined certain words and intend for
those definitions to apply whenever the parties have used a defined word in this Agreement. One of
the defined terms is “Company” which means Allied Waste Industries, Inc. However, the parties
expect that some or all of the Company’s obligations under this Agreement will be fulfilled through
its parent, subsidiary, related, or successor companies or businesses (which will be called
“Affiliates” in this Agreement). Accordingly, Executive acknowledges that the discharge of any
obligation of the Company under this Agreement, which may be through the acts of one or more
Affiliates, discharges any such obligation of the Company. Moreover, the obligations Executive
assumes under this Agreement will be owed to the Company and to its Affiliates. Accordingly, the
parties expressly intend for the Affiliates to be third-party beneficiaries of the promises made
and obligations assumed by Executive in this Agreement. If, in connection with a Change in Control
(the “Initial Change of Control”), the Company survives as a subsidiary of another corporation and
the other corporation assumes this Agreement, the term Company for purposes of this Agreement shall
mean such other entity; provided, however, that (i) the provisions of and rights of the Executive
with respect to the Initial Change of Control under this Agreement shall apply as such provisions
and terms exist immediately prior to such Initial Change in Control notwithstanding the assumption
of the Agreement by such entity, (ii) any subsequent Change in Control will be determined based
upon changes to such entity, and (iii) years of service as used in this Agreement shall include
years of employment with the Company prior to the Change in Control and such entity after the
Change in Control.

     2. General Duties of Company and Executive.

          2.1. The Company will employ the Executive as its Executive Vice President and Chief Financial
Officer. The Executive’s authority, duties and responsibilities shall be those assigned by the
Company’s Chief Executive Officer and/or Board of Directors (or a committee thereof) and agreed to
by the Executive. The Executive shall devote reasonable time and attention during normal business
hours to the affairs of the Company and use his best efforts to perform faithfully and efficiently
his duties and responsibilities. The Executive may (a) serve on

 - 3 - 

 

corporate, civic or charitable boards or committees, (b) deliver lectures, fulfill speaking
engagements or teach at educational institutions, and (c) manage personal investments, so long as
such activities do not significantly interfere with the performance of the Executive’s duties and
responsibilities.

          2.2. The Executive agrees and acknowledges that he owes a fiduciary duty of loyalty, fidelity
and allegiance to act at all times in the best interests of the Company and to do no act and to
make no statement, oral or written, which would injure the Company’s business, its interests or its
reputation, except as may be required by applicable law or regulation. The Executive also agrees
that he shall not knowingly become involved in a conflict of interest with the Company and, upon
discovery of any such conflict, that he will inform the Company of the conflict and will not allow
the conflict to continue.

          2.3. The Executive agrees to comply at all times with all applicable policies, rules and
regulations of the Company, including, but not limited to, the Company’s Code of Ethics and the
Company’s policies regarding trading in Common Stock, stock ownership and retention guidelines, and
reimbursement of expenses, as each is in effect from time to time.

     3. Term. The “Term” of this Agreement shall continue indefinitely until either party
terminates this Agreement pursuant to Section 5 of this Agreement, in which case the Term shall end
on the Date of Termination specified in the Notice of Termination (or on the Executive’s date of
death if termination is due to the Executive’s death). Neither the termination of this Agreement
nor the consequent end of the Term shall affect the Company’s obligations under Section 6 of this
Agreement or the Executive’s obligations under Sections 7 through 10 of this Agreement (or under
Section 2.3 with respect to the Company’s policies regarding trading in Common Stock)
(collectively, “Continuing Obligations”).

     4. Compensation and Benefits.

          4.1. Base Salary. As compensation for services to the Company during the Term, the Company
shall pay to the Executive until the Date of Termination a base salary at the annual rate of Six
Hundred Fifteen Thousand Dollars ($615,000.00), as of March 1, 2007, or such higher rate as may be
determined from time to time in the discretion of the Board of Directors (or a committee thereof)
(“Base Salary”). Base Salary shall be payable in equal bi-weekly installments or in accordance with
the Company’s established policy, subject only to such payroll and withholding deductions as may be
required by law and other deductions that are either applied generally to employees of the Company
for insurance and other employee benefit plans or which are authorized by the Executive. For all
purposes under this Agreement, the Executive’s Base Salary shall include any portion thereof which
is deferred under any nonqualified plan or arrangement.

          4.2. Annual Incentive Compensation. In addition to Base Salary, the Executive shall be
eligible to be awarded, for each fiscal year during the Term until the Date of Termination, annual
cash incentive compensation (either pursuant to an incentive plan or program of the Company or
otherwise) (“Annual Incentive Compensation”) in an amount to be determined by the Board of
Directors (or a committee thereof) in its sole discretion and specified as a percentage of the
Executive’s Base Salary (“Targeted Annual Incentive Compensation”).

 - 4 - 

 

The Executive’s actual Annual Incentive Compensation may range from zero percent (0%) to the
maximum percentage of the Executive’s Base Salary permitted by the terms of the Company’s annual
incentive compensation plan(s), as amended from time to time. All such Annual Incentive
Compensation shall be payable at a time to be determined by the Board of Directors (or a committee
thereof) in its sole discretion. For all purposes under this Agreement, the Executive’s Annual
Incentive Compensation shall include any portion thereof which is deferred under any nonqualified
plan or arrangement.

          4.3. Paid Leave. Commencing on the Effective Date and continuing until the Date of
Termination, for each full calendar year in which the Executive is employed under this Agreement,
the Executive shall be entitled to twenty (20) days’ paid leave (“Paid Leave”) during the year
without any reduction in the Compensation to which he is entitled under this Article 4. For any
partial calendar year during which the Executive is employed under this Agreement, he will be
entitled to a prorated amount of this Paid Leave, based on the number of weeks worked in the
calendar year and pursuant to the Company’s then current paid leave policy. Because the Company
intends for this Paid Leave to be used by the Executive, so that he benefits from having time away
from his customary employment duties, the Executive must use the Paid Leave provided under this
Section 4.3, for each calendar year, during the relevant calendar year for which it is provided. If
the Executive does not use all of the Paid Leave to which he is entitled in any calendar year, he
will forfeit this benefit at the end of that calendar year and shall have no right to take more
than twenty (20) days of Paid Leave in the following or any subsequent calendar year or to be
otherwise compensated for not having utilized the Paid Leave.

          4.4. Automobile Allowance. Commencing on the Effective Date and continuing until the Date of
Termination, the Executive shall receive an automobile allowance of Six Hundred Dollars ($600.00)
per month (“Automobile Allowance”). The Board of Directors (or a committee thereof), in its
discretion, may increase the Automobile Allowance based upon relevant circumstances.

          4.5. Club Membership Dues. Commencing on the Effective Date and continuing until the Date of
Termination, the Executive shall receive an allowance for monthly membership dues (i.e., the
regular membership fee, and not incidental or ancillary charges such as food, beverages, rentals,
coaching, training, supplies, therapy, spa, etc.) for a club or organization of Executive’s choice
in the amount of Six Hundred Dollars ($600.00) per month (“Club Allowance”). The Executive will not
be entitled to this Club Allowance if the Company determines that membership in the relevant club
or organization would violate the letter or spirit of any Company policy.

          4.6. Incentive, Savings, Retirement and Stock Plans. The Executive shall be entitled to
participate in and be eligible to receive benefits under all executive incentive, savings,
retirement, deferral, and stock (including any stock option, restricted stock, restricted stock
units, phantom stock and other stock rights and interests, including derivative interests) plans
and programs currently maintained or hereinafter established by the Company for the benefit of its
similarly-situated executive officers (collectively “Compensation Plans”). The Executive’s
participation in the Compensation Plans shall be governed by the terms and conditions of those
plans. Subject to the terms of the Company’s stock ownership and retention guidelines, as adopted
and/or amended by the Board of Directors (or a committee thereof) from time to time,

 - 5 - 

 

the Executive is expected to retain fifty percent (50%) of the shares received upon the
exercise of any options or the vesting of any restricted stock (after netting such shares for the
purpose of satisfying the Executive’s income and payroll tax obligations incurred as the result of
any exercise or vesting event), until such time as he has accumulated stock with a value of at
least two and one-half (2.5) times the Executive’s Base Salary. For purposes of the preceding
sentence, “Base Salary” shall be during each calendar year during the Term, the Executive’s Base
Salary as of the first day of such calendar year.

          4.7. Welfare Plans. The Executive shall be eligible to participate in and shall receive all
benefits under each welfare benefit plan of the Company currently maintained or subsequently
established by the Company for the benefit of its similarly-situated executive officers. Such
welfare benefit plans may include medical, dental, vision, disability, group life, accidental death
and travel accident insurance plans and programs (collectively “Welfare Plans”). The Executive’s
participation in the Welfare Plans shall be governed by the terms and conditions of those plans.

          4.8. Reimbursement of Expenses. The Executive may from time to time during the Term incur
various business expenses customarily incurred by persons holding positions of like responsibility,
including, without limitation, travel, entertainment and similar expenses incurred for the benefit
of the Company. The Company shall reimburse the Executive for all legitimate expenses incurred on
the Company’s behalf, upon the Company’s receipt of proper documentation for such expenses,
provided that reimbursement of the expenses would not violate the letter or spirit of any Company
policy regarding the reimbursement of such expenses.

          4.9. Indemnification and Insurance. At all times during the term of this Agreement, and for
such additional periods as are provided for in this Agreement, the Executive shall be covered under
the Company’s directors’ and officers’ liability insurance, if any, and under a separate Indemnity
Agreement with the Company.

     5. Termination. This Agreement may be terminated as follows:

          5.1. Death. This Agreement shall terminate automatically upon the death of the Executive.

          5.2. Disability. The Company may terminate this Agreement, upon written notice to the
Executive delivered in accordance with Sections 5.8 and 11.1, upon the Disability of the Executive.

          5.3. Cause. The Company may terminate this Agreement, upon written notice to the Executive
delivered in accordance with Sections 5.8 and 11.1, for Cause. For purposes of this Agreement:

               (a) For any determination of the Cause prior to a Change in Control “Cause” means (1) the
Executive is convicted of, or pleads guilty or nolo contendere to, (i) a felony, or (ii) any other
crime involving the Company, (2) the Board of Directors makes a reasonable, good faith
determination that the Executive has breached any material term of this Agreement, (3) the Board of
Directors makes a reasonable, good faith determination that the Executive has violated any
applicable policies, rules, or regulations of the Company, including

 - 6 - 

 

but not limited to, the Company’s Code of Ethics and the Company’s policies regarding trading
of Common Stock and reimbursement of expenses, (4) the Board of Directors determines that the
Executive engaged in (i) willful or deliberate conduct, the result of which exposes the Company to
actual or potential financial or other injury, except as required by applicable law or regulation,
(ii) fraud, (iii) misappropriation of tangible or intangible property or funds of the Company, or
(iv) embezzlement of Company funds, (5) the Board of Directors determines that the Executive (i)
willfully or deliberately failed or refused to perform his assigned duties, except where the
performance of such duties would result in the Executive’s violation of applicable law or
regulation, and (ii) failed to cure his nonperformance within thirty (30) days of receipt of a
written notice from the Board of Directors setting forth in reasonable detail the facts and
circumstances of his nonperformance, or (6) the Executive breached any statutory or common law duty
of loyalty to the Company. For purposes of this Section 5.3(a), a determination by the Board of
Directors is evidenced by a resolution, duly adopted by at least two-thirds (2/3) of the entire
membership of the Board of Directors at a meeting called and held for the purpose of considering
the termination of the Executive’s employment for Cause, at which the Executive and his
representative have the right to attend and address the Board of Directors, finding that, in the
good faith belief of the Board of Directors the Executive engaged in conduct described in this
Section 5.3(a) and specifying the particulars thereof in reasonable detail. No determination by the
Board of Directors will prevent the Executive from contesting such determination through
arbitration, as provided in Section 11.9 of the Agreement.

               (b) For any determination of Cause on or after a Change in Control (including with respect to
any events which may have occurred prior to the Change in Control), “Cause” means (1) the Executive
is convicted of, or pleads guilty or nolo contendere to, (i) a felony, or (ii) any other crime
involving the Company, (2) the Executive has breached any material term of this Agreement, (3) the
Executive has violated the Company’s Code of Ethics and the Company’s policies regarding trading of
Common Stock and reimbursement of expenses, (4) the Executive engaged in (i) willful or deliberate
conduct, the result of which exposes the Company to actual or potential financial or other injury,
except as required by applicable law or regulation, (ii) fraud, (iii) misappropriation of tangible
or intangible property or funds of the Company, or (iv) embezzlement of Company funds, or (5) the
Executive (i) willfully or deliberately failed or refused to perform his assigned duties, except
where the performance of such duties would result in the Executive’s violation of applicable law or
regulation, and (ii) failed to cure his nonperformance within thirty (30) days of receipt of a
written notice from the Board of Directors setting forth in reasonable detail the facts and
circumstances of his nonperformance. For purposes of this Section 5.3(b), Cause shall not exist
unless the Board of Directors, as evidenced by a resolution, duly adopted by at least two-thirds
(2/3) of the entire membership of the Board of Directors at a meeting called and held for the
purpose of considering the termination of the Executive’s employment for Cause, at which the
Executive and his representative have the right to attend and address the Board, determines that
the Executive engaged in conduct described in this Section 5.3(b) and specifying the particulars
thereof in reasonable detail. No determination by the Board of Directors will prevent the Executive
from contesting such determination through arbitration, as provided in Section 11.9 of the
Agreement.

          5.4. Without Cause. The Company may terminate this Agreement Without Cause, upon written
notice to the Executive delivered in accordance with Sections 5.8 and 11.1.

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For purposes of this Agreement, the Executive will be deemed to have been terminated “Without
Cause” if the Executive is terminated by the Company for any reason other than Cause, Disability,
or death.

          5.5. Good Reason. The Executive may terminate this Agreement for Good Reason, upon written
notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of this
Agreement, “Good Reason” means (a) the assignment to the Executive of any duties that are
materially inconsistent with the Executive’s duties or responsibilities as contemplated in this
Agreement, including any duties that would result in the Executive’s violation of applicable law or
regulation, (b) any other action by the Company which results in a material diminishment in the
Executive’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities (provided, however, that a temporary diminishment, whether material or
not, due to the Executive’s illness or injury, will not constitute grounds for a termination for
Good Reason by the Executive), (c) any material breach by the Company of any of the provisions of
this Agreement, (d) requiring the Executive to relocate permanently to any office or location,
except in the Phoenix-Scottsdale metropolitan area, (e) any material reduction, or attempted
material reduction, at any time during the Term, of the Base Salary or in the aggregate of the
compensation or benefits described in Article 4 of this Agreement (provided, however, that any
change in the targeted percentage for purposes of determining the Executive’s Annual Incentive
Compensation, any change in the Company’s reimbursement policies, or any change in any Compensation
Plans or Welfare Plans, which affects a majority of the similarly situated executive officers
covered by those policies or plans, shall not be considered “Good Reason”), or (f) the Company’s
failure to comply, or the Company’s preventing or impeding the Executive from compliance, with any
legal obligation which would subject the Executive to any civil or criminal liability, or which
would result in the Executive’s violation of applicable law or regulation.

          5.6. Without Good Reason. The Executive may terminate this Agreement Without Good Reason, upon
written notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of
this Agreement, the Executive will be deemed to have terminated “Without Good Reason” if the
Executive terminates this Agreement for any reason other than Good Reason or if this Agreement is
terminated due to the Executive’s death or Retirement.

          5.7. Retirement. The Executive may terminate this Agreement upon Retirement, upon written
notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of this
Agreement, “Retirement” means a voluntary Termination of Employment by the Executive which occurs
on or after the date on which the Executive’s age and years of service with the Company equal at
least sixty-three (63), the Executive is at least fifty-five (55) years old, and the Executive has
completed at least nine (9) years of service with the Company. Years of service means all twelve
(12) consecutive month periods of employment with the Company and with any entity acquired by the
Company, beginning with the Executive’s initial date of employment with the Company or the acquired
entity. An involuntary Termination of Employment (i.e., a Termination of Employment initiated by
the Company for any reason) will not be considered Retirement even if the Executive has completed
the age and years of service requirements at the time the involuntary Termination of Employment
occurs.

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          5.8. Notice of Termination. Any termination of this Agreement by the Company for Cause,
Without Cause or as a result of the Executive’s Disability, or by the Executive for Good Reason or
Without Good Reason or upon Retirement shall be communicated by a Notice of Termination to the
other party. A “Notice of Termination” means a written notice which (a) indicates the specific
termination provision in this Agreement relied upon and (b) if the termination is by the Company
for Cause or by the Executive for Good Reason, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated. The Notice of Termination must specify the Date of Termination. In the case
of a termination by the Company for Cause or due to the Executive’s Disability or by the Executive
for Good Reason or due to Retirement, the Date of Termination may be as early as the date notice is
given but no later than thirty (30) calendar days after notice is given, unless otherwise agreed to
in writing by both parties. In the case of a termination by the Company Without Cause or by the
Executive Without Good Reason, the Date of Termination may be as early as fourteen (14) calendar
days after notice is given but no later than sixty (60) calendar days after notice is given, unless
otherwise agreed to by the parties in writing. The Notice of Termination shall also conform with
the provisions of Section 11.1.

     6. Obligations of Company Upon Termination.

          6.1. Cause, Without Good Reason. If this Agreement is terminated either by the Company for
Cause or by the Executive Without Good Reason and the Executive has a Termination of Employment,
the Company shall pay to the Executive, in a lump sum cash payment within thirty (30) days after
the Date of Termination, the aggregate of (a) any unpaid portion of the Executive’s Base Salary (as
in effect on the Date of Termination) owed as of the Date of Termination and (b) any accrued but
unpaid Paid Leave as of the Date of Termination. The Company also shall pay or reimburse to the
Executive in a lump sum cash payment within ninety (90) days after the Date of Termination any
costs and expenses (and moving and relocation expenses, if otherwise agreed to by the Company in
writing) paid or incurred by the Executive which would have been payable under Section 4.8 of this
Agreement if the Executive’s employment had not terminated, provided that the Executive provides
proper documentation of such costs and expenses within thirty (30) days after the Date of
Termination.

          All other obligations of the Company and rights of the Executive hereunder (except those
described in Section 6.8 of this Agreement) shall terminate effective as of the Date of
Termination; provided, however, that the Executive’s rights under any Compensation Plan or Welfare
Plan shall be governed by the terms and provisions of each such plan and are not necessarily
severed on the Date of Termination.

          6.2. Death or Disability. If this Agreement is terminated as a result of the Executive’s death
or Disability and the Executive has a Termination of Employment:

               (a) The Company shall pay to the Executive (or to his estate, in the event the Executive is
deceased) the following amounts:

               (1) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of
Termination) owed as of the Date of Termination, any unpaid portion of the Annual Incentive
Compensation previously awarded to the Executive, and

 - 9 - 

 

any accrued but unpaid Paid Leave as of the Date of Termination, in a lump sum cash
payment within thirty (30) days after the Date of Termination; and

                    (2) an amount equal to two (2) times the sum of the Executive’s Base Salary (as in
effect on the Date of Termination) plus the Executive’s Target Annual Incentive Compensation
for the fiscal year during which the Date of Termination occurs. If the termination is due
to death, this amount will be paid in substantially equal bi-weekly installments over a two
(2) year period following the Executive’s Date of Termination. If the termination is due to
Disability, this amount will be paid in substantially equal bi-weekly installments beginning
as of the first payroll date immediately following the six (6) month anniversary of the Date
of Termination and continuing until the first payroll date immediately following the two (2)
year anniversary of the Date of Termination; provided, however, that the first payment shall
include the amount that would have been paid prior to the actual first payment date had the
first payment date been the first payroll date immediately following the Date of
Termination. The Company may, to the extent feasible, purchase insurance to cover all or any
part of the obligation contemplated in this paragraph, and the Executive agrees to submit to
a physical examination and otherwise cooperate with the Company to facilitate the
procurement of such insurance.

               (b) The Company shall pay or reimburse to the Executive in a lump cash payment within ninety
(90) days after the Date of Termination any costs and expenses (including moving and relocation
expenses, if otherwise agreed to by the Company in writing) paid or incurred by the Executive which
would have been payable under Section 4.8 of this Agreement if the Executive’s employment had not
terminated, provided that the Executive (or his estate) provides proper documentation of such costs
and expenses within thirty (30) days after the Date of Termination.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s spouse and dependents, equal to that which would have been
provided to him under Section 4.7 if the Executive’s employment had not terminated, until the
earlier of (1) the date the Executive becomes eligible for any comparable medical, dental, or
vision coverage provided by any other employer, (2) the date the Executive 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), or (3) the fifth anniversary of the
Executive’s Date of Termination; provided that (i) the benefits provided during the Executive’s
taxable year may not affect the benefits provided to the Executive in any other taxable year
(except as permitted under Section 409A), (ii) reimbursement of any eligible expenses must be made
on or before the last day of the Executive’s taxable year following the taxable year in which the
expense was incurred, and (iii) the right to such continued coverage is not subject to liquidation
or exchange for another benefit.

               (d) Whenever compensation is payable to the Executive under this Agreement during a period in
which he is partially or totally disabled, and such disability would (except for the provisions of
this Agreement) entitle the Executive to disability income or salary continuation payments from the
Company according to the terms of any plan or program presently maintained or hereafter established
by the Company, the disability income or salary

 - 10 - 

 

continuation paid to the Executive pursuant to any such plan or program shall be considered a
portion of (and not in addition to) the payment to be made to the Executive pursuant to this
Section 6.2. If disability income is payable directly to the Executive by an insurance company
under the terms of an insurance policy paid for by the Company, the amounts paid to the Executive
by such insurance company shall be considered a portion of the payment (and not in addition to the
payment) to be made to the Executive pursuant to this Section 6.2.

               (e) The Executive (or the Executive’s estate, as the case may be) shall continue to vest and,
if applicable, continue to be permitted to exercise, all of the rights and interests awarded to the
Executive under the Company’s stock plans, as if the Executive were still employed by the Company,
for a period of three (3) years following the Date of Termination (or, if less, for the remainder
of the stated terms of the rights or interests). Notwithstanding any contrary provision of the
LTIP, the Executive’s Awards for the Performance Cycles (as defined in the LTIP) in effect as of
the Date of Termination shall be prorated in the manner described in Section 8(a) of the LTIP.

               (f) The Executive (or the Executive’s estate, as the case may be) shall continue to be covered
under the Company’s directors’ and officers’ liability insurance, if any, and under his separate
Indemnity Agreement with the Company, as if the Executive’s employment had not terminated, for a
period of ten (10) years following his Date of Termination (or, in the case of the Indemnity
Agreement, for such longer term as may be provided for in the Indemnity Agreement).

               (g) All other obligations of the Company and rights of the Executive hereunder (except those
described in Section 6.8 of this Agreement) shall terminate effective as of the Date of
Termination; provided, however, that except as otherwise specifically modified by the terms of this
Agreement the Executive’s rights under the Compensation Plans and Welfare Plans shall be governed
by the terms and provisions of those Plans and are not necessarily severed on the Date of
Termination.

          6.3. Good Reason; Without Cause. If this Agreement is terminated either by the Executive for
Good Reason or by the Company Without Cause (other than in connection with a Change in Control as
described in Section 6.5) and the Executive has a Termination of Employment:

               (a) The Company shall pay to the Executive the following amounts:

                    (1) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of
Termination) owed as of the Date of Termination, any unpaid portion of the Annual Incentive
Compensation previously awarded to the Executive, and any accrued but unpaid Paid Leave as
of the Date of Termination, in a lump sum cash payment within thirty (30) days after the
Date of Termination; and

                    (2) an amount equal to three (3) times the sum of the Executive’s Base Salary (as in
effect on the Date of Termination) plus the Executive’s Target Annual Incentive Compensation
for the fiscal year during which the Date of Termination occurs, in substantially equal
bi-weekly installments beginning as of the first

 - 11 - 

 

payroll date immediately following the six (6) month anniversary of the Date of
Termination and continuing until the first payroll date immediately following the three (3)
year anniversary of the Date of Termination; provided, however, that the first payment shall
include the amount that would have been paid prior to the actual first payment date had the
first payment date been the first payroll date immediately following the Date of
Termination.

               (b) The Company shall pay or reimburse to the Executive in a lump sum cash payment within (90)
days after the Date of Termination any costs and expenses (including moving and relocation
expenses, if otherwise agreed to by the Company in writing) paid or incurred by the Executive which
would have been payable under Section 4.8 of this Agreement if the Executive’s employment had not
terminated, provided that the Executive (or his estate) provides proper documentation of such costs
and expenses within thirty (30) days after the Date of Termination.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s spouse and dependents, equal to that which would have been
provided to the Executive under Section 4.7 if the Executive’s employment had not terminated, until
the earlier of (1) the date the Executive becomes eligible for any comparable medical, dental, or
vision coverage provided by any other employer, (2) the date the Executive 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), or (3) the fifth anniversary of the
Executive’s Date of Termination; provided that (i) the benefits provided during the Executive’s
taxable year may not affect the benefits provided to the Executive in any other taxable year
(except as permitted under Section 409A), (ii) reimbursement of any eligible expenses must be made
on or before the last day of the Executive’s taxable year following the taxable year in which the
expense was incurred, and (iii) the right to such continued coverage is not subject to liquidation
or exchange for another benefit.

               (d) The Executive (or the Executive’s estate, as the case may be) shall continue to vest and,
if applicable, continue to be permitted to exercise, all of the rights and interests awarded to the
Executive under the Company’s stock plans, as if the Executive were still employed by the Company,
for a period of three (3) years following the Date of Termination (or, if less, for the remainder
of the stated terms of the rights and interests). Notwithstanding any contrary provision of the
LTIP, the Executive’s Awards for the Performance Cycles (as defined in the LTIP) in effect as of
the Date of Termination shall be prorated in the manner described in Section 8(a) of the LTIP.

               (e) The Executive shall continue to be covered under the Company’s directors’ and officers’
liability insurance, if any, and under his separate Indemnity Agreement with the Company, as if the
Executive’s employment had not terminated, for a period of ten (10) years following his Date of
Termination (or, in the case of the Indemnity Agreement, for such longer term as may be provided
for in the Indemnity Agreement).

               (f) The Company shall (through an agency of Company’s choosing) provide outplacement services
to the Executive for a period of one (1) year following the Date of

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Termination, provided that the cost of such services shall not exceed $50,000 or such higher
amount as may be approved by the Board of Directors (or a committee thereof).

               (g) All other obligations of the Company and rights of the Executive hereunder (except those
described in Section 6.8 of this Agreement) shall terminate effective as of the Date of
Termination; provided, however, that except as otherwise specifically modified by the terms of this
Agreement the Executive’s rights under the Compensation Plans and Welfare Plans shall be governed
by the terms and provisions of these Plans and are not necessarily severed on the Date of
Termination.

          6.4. Retirement. If this Agreement is terminated by the Executive due to Retirement and the
Executive has a Termination of Employment:

               (a) The Company shall pay to the Executive, in a lump sum cash payment within thirty (30) days
after the Date of Termination, the aggregate of the following amounts: (1) any unpaid portion of
the Executive’s Base Salary (as in effect on the Date of Termination) owed as of the Date of
Termination; (2) any unpaid portion of the Annual Incentive Compensation previously awarded to the
Executive; and (3) any accrued but unpaid Paid Leave as of the Date of Termination.

               (b) The Company shall in a lump sum cash payment within ninety (90) days after the Date of
Termination pay or reimburse to the Executive any costs and expenses (including moving and
relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred by the
Executive which would have been payable under Section 4.8 of this Agreement if the Executive’s
employment had not terminated, provided that the Executive (or his estate) provides proper
documentation of such costs and expenses within thirty (30) days after the Date of Termination.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s family, equal to that which would have been provided to the
Executive under Section 4.7 if the Executive’s employment had not terminated, until the earlier of
(1) the date the Executive becomes eligible for any comparable medical, dental, or vision coverage
provided by any other employer, or (2) the date the Executive 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); provided that (i) the benefits provided during the
Executive’s taxable year may not affect the benefits provided to the Executive in any other taxable
year (except as permitted under Section 409A), (ii) reimbursement of any eligible expenses must be
made on or before the last day of the Executive’s taxable year following the taxable year in which
the expense was incurred, and (iii) the right to such continued coverage is not subject to
liquidation or exchange for another benefit.

               (d) The Executive (or the Executive’s estate, as the case may be) shall continue to vest and,
if applicable, continue to be permitted to exercise, all of the rights and interests awarded to the
Executive under the Company’s stock plans, for a period of three (3) years following the Date of
Termination (or, if less, for the remainder of the stated terms of the rights and interests).

 - 13 - 

 

               (e) The Executive shall continue to be covered under the Company’s directors’ and officers’
liability insurance, if any, and under his separate Indemnity Agreement with the Company, as if the
Executive’s employment had not terminated, for a period of ten (10) years following his Date of
Termination (or, in the case of the Indemnity Agreement, for such longer term as may be provided
for in the Indemnity Agreement).

               (f) All other obligations of the Company and rights of the Executive hereunder (except those
described in Section 6.8 of this Agreement) shall terminate effective as of the Date of
Termination; provided, however, that except as otherwise specifically modified by the terms of this
Agreement the Executive’s rights under the Compensation Plans and Welfare Plans shall be governed
by the terms and provisions of these Plans and are not necessarily severed on the Date of
Termination.

               (g) If the Executive elects to terminate this Agreement due to Retirement, the payments and
benefits provided under this Section 6.4 shall be in lieu of any payments to which the Executive
(or his family) may have otherwise been entitled under the terms of Section 6.2, 6.3 or 6.5, and
vice versa.

          6.5. Change in Control. If this Agreement is terminated either by the Executive for Good
Reason or by the Company Without Cause, and the Executive has a Termination of Employment within
the six (6) month period preceding, or the twelve (12) month period following, the date on which
the Change in Control occurs (“Change in Control Date”):

               (a) As reasonable compensation for services rendered by the Executive to the Company prior to
the Date of Termination, the Company shall pay to the Executive the following amounts:

                    (1) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of
Termination) owed as of the Date of Termination, any unpaid portion of the Annual Incentive
Compensation previously awarded to the Executive, and any accrued but unpaid Paid Leave as
of the Date of Termination in a lump sum cash payment within thirty (30) days after the
later to occur of the Change in Control Date or the Date of Termination; and

               (2) (i) if the Change in Control constitutes a change in control event (as
defined for purposes of Section 409A) and the Date of Termination occurs within the
twelve (12) month period following the Change in Control Date, a lump sum cash
payment within thirty (30) days after the six (6) month anniversary of the Date of
Termination, in an amount equal to three (3) times the sum of the Executive’s Base
Salary (as in effect on the Date of Termination) plus the Executive’s Target Annual
Incentive Compensation for the fiscal year during which the Date of Termination
occurs.

                    (ii) if the Change in Control does not constitute a change in control event (as
defined for purposes of Section 409A) and the Date of Termination occurs within the
twelve (12) month period following the Change in Control Date, an amount equal to
three (3) times the sum of the Executive’s Base

 - 14 - 

 

Salary (as in effect on the Date of Termination) plus the Executive’s Target
Annual Incentive Compensation for the fiscal year during which the Date of
Termination occurs, in substantially equal bi-weekly installments beginning as of
the first payroll date immediately following the six (6) month anniversary of the
Date of Termination and continuing until the first payroll date immediately
following the three (3) year anniversary of the Date of Termination; provided,
however, that the first payment shall include the amount that would have been paid
prior to the actual first payment date had the first payment date been the first
payroll date immediately following the Date of Termination.

                    (iii) if the Change in Control constitutes a change in control event (as
defined for purposes of Section 409A) and the Date of Termination occurs within the
six (6) month period preceding the Change in Control Date, an amount equal to three
(3) times the sum of the Executive’s Base Salary (as in effect on the Date of
Termination) plus the Executive’s Target Annual Incentive Compensation for the
fiscal year during which the Date of Termination occurs, in substantially equal
bi-weekly installments beginning as of the first payroll date immediately following
the six (6) month anniversary of the Date of Termination and continuing until the
first payroll date immediately following the three (3) year anniversary of the Date
of Termination; provided, however, that the first payment shall include the amount
that would have been paid prior to the actual first payment date had the first
payment date been the first payroll date immediately following the Date of
Termination.

               (b) The Company shall pay or reimburse to the Executive in a lump sum cash payment within
ninety (90) days after the Date of Termination any costs and expenses (including moving and
relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred by the
Executive which would have been payable under Section 4.8 of this Agreement if the Executive’s
employment had not terminated, provided that the Executive (or his estate) provides proper
documentation of such costs and expenses within thirty (30) days after the Date of Termination.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the
Executive and/or the Executive’s family, equal to that which would have been provided to the
Executive under Section 4.7 if the Executive’s employment had not terminated, until the earlier of
(1) the date the Executive becomes eligible for any comparable medical, dental, or vision coverage
provided by any other employer, or (2) the date the Executive 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); provided that (i) the benefits provided during the
Executive’s taxable year may not affect the benefits provided to the Executive in any other taxable
year (except as permitted under Section 409A), (ii) reimbursement of any eligible expenses must be
made on or before the last day of the Executive’s taxable year following the taxable year in which
the expense was incurred, and (iii) the right to such continued coverage is not subject to
liquidation or exchange for another benefit.

               (d) As reasonable compensation for services provided by the Executive to the Company prior to
the Date of Termination, the Company shall (through an

 - 15 - 

 

agency of Company’s choosing) provide outplacement services to the Executive for a period of
one (1) year following the later of the Date of Termination or the Change in Control Date, provided
that the cost of such services shall not exceed $50,000 or such higher amount as may be approved by
the Board of Directors (or a committee thereof).

               (e) The Executive (or the Executive’s estate, as the case may be) shall become fully and
immediately vested as of the later of the Date of Termination or the Change in Control Date and, if
applicable, continue to be permitted to exercise, all of the rights and interests awarded to the
Executive under the Company’s stock plans (“Awards”), as if the Executive were still employed by
the Company, for a period of two (2) years following the later of the Date of Termination or the
Change in Control Date (or, if less, for the remainder of the stated terms of the rights and
interests).

               (f) The Executive shall continue to be covered under the Company’s directors’ and officers’
liability insurance, if any, and under his separate Indemnity Agreement with the Company, as if the
Executive’s employment had not terminated, for a period of ten (10) years following his Date of
Termination (or, in the case of the Indemnity Agreement, for such longer term as may be provided
for in the Indemnity Agreement).

               (g) If the Executive’s Date of Termination is within the twelve (12) month period following
the Change in Control Date, the Company shall pay to the Executive a lump sum cash payment within
thirty (30) days after the six (6) month anniversary of the Date of Termination, equal to the
product of (1) the Executive’s Targeted Annual Incentive Compensation for the fiscal year in which
the Date of Termination occurs, multiplied by (2) a fraction of which the numerator is the number
of days which have elapsed in such year through the Date of Termination and the denominator is 365.

               (h) All other obligations of the Company and rights of the Executive hereunder (except those
described in Section 6.8 of this Agreement) shall terminate effective as of the Date of
Termination; provided, however, that except as otherwise specifically modified by the terms of this
Agreement the Executive’s rights under the Compensation Plans and Welfare Plans shall be governed
by the terms and provisions of these Plans and are not necessarily severed on the Date of
Termination.

               (i) In the event the Change in Control Date occurs subsequent to the Executive’s Date of
Termination, the payments and benefits provided under this Section 6.5 shall be reduced by and to
the extent of any payments and benefits previously paid or provided to the Executive under Section
6.3, and in no event shall the Executive or his family be entitled to any duplicate payments or
benefits.

          6.6. Change in Control Gross-Up Payments.

               (a) In the event that (1) any payment or benefits provided for under this Agreement and/or any
other arrangement or agreement with the Company or any other person in connection with a
transaction involving the Company (“Change in Control Payment”) would subject the Executive to the
excise tax imposed by Code Section 4999 (“Cash Termination Excise Tax”) and (2) the Change in
Control Payment is less than 110% of the sum of three (3)

 - 16 - 

 

times the “base amount” (as defined in Code Section 280G) minus $1.00 (“Safe Harbor Amount”),
then any amounts payable under this Agreement shall be reduced so that the Change in Control
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 (other than Unrestricted Payments). No reduction shall occur if the Change in Control
Payment is 110% (or more) of the Safe Harbor Amount.

               (b) In the event that there is a Change in Control Payment which would subject the Executive
to the Cash Termination Excise Tax and is not subject to reduction under Section 6.6(a), then the
Executive shall be entitled to receive the payment described in Section 6.6(c) below.

               (c) If the requirements of Section 6.6(b) are met, the Executive shall be entitled to receive
an additional payment (a “Gross-Up Payment”) such that the net amount retained by the Executive
(after considering the Gross-Up Payment and the Change in Control Payment), after deduction of any
excise tax on the Executive’s Change in Control Payment, as determined for purposes of Code Section
280G, and any federal, state, and local income and employment taxes and excise tax upon the
Gross-Up Payment, shall be equal to the Change in Control Payment. The Gross-Up Payment, if any,
shall be paid to the Executive, or, at the discretion of the Company, to governmental authorities
on the Executive’s behalf, as soon as practicable following the determination of the Change in
Control Payment, but, in any event, not later than the earlier of (1) five (5) business days
immediately following the payment of the Executive’s Change in Control Payment, or (2) the last day
of the Executive’s taxable year next following the taxable year during which the Executive remits
the related taxes.

               (d) Subject to the provisions of Section 6.6(e), all determinations required to be made under
this Section 6.6, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by tax counsel appointed by the Company (the “Tax Counsel”). All fees and expenses of the Tax
Counsel shall be borne solely by the Company. As a result of the uncertainty in the application of
Code Section 4999 at the time of the initial determination by the Tax Counsel hereunder, it is
possible that Gross-Up Payments, which will not have been made by the Company, should have been
made (“Underpayment”). In the event that it is ultimately determined in accordance with the
procedures set forth in Section 6.6(e) that the Executive is required to make a payment of any
excise tax, the Tax Counsel shall determine the amount of the Underpayment that has occurred, and
any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

               (e) The Executive shall notify the Company in writing of any claims by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than thirty (30) days after the
Executive actually receives notice in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the 30-day period following the date on which he
gives such notice to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company

 - 17 - 

 

notifies the Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:

                    (1) give the Company any information reasonably requested by the Company relating to
such claim;

                    (2) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney selected by the Company and
reasonably acceptable to the Executive;

                    (3) cooperate with the Company in good faith in order to effectively contest such
claim; and

                    (4) if the Company elects not to assume and control the defense of such claim, permit
the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any excise tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this Section 6.6(e), the
Company shall have the right, at its sole option, to assume the defense of and control all
proceedings in connection with such contest, in which case it may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim and may either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial jurisdiction and in one
or more appellate courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any excise tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s right to assume the defense of and control the contest shall be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder, and the Executive
shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

               (f) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 6.6(e), the Executive becomes entitled to receive any refund with respect to such claim,
the Executive shall (subject to the Company’s complying with the requirements of Section 6.6(e))
promptly pay to the Company the amount of such refund

 - 18 - 

 

(together with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of an amount advanced by the Company pursuant to Section 6.6(e),
a determination is made that the Executive shall not be entitled to any refund with respect to such
claim, and the Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid, and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

          6.7. Payments Contingent on Executive’s Release of Company, Compliance with Continuing
Obligations, and Certain Other Contingencies. All of the payments and benefits to which the
Executive would otherwise be entitled under Sections 6.2, 6.3, 6.4, 6.5, 6.6, or 6.8, except the
Unrestricted Payments, shall be contingent on (a) the Executive’s delivery to the Company of a
signed and enforceable release of all claims against the Company, in a form specified by the
Company, except that no such release shall be required in the event that the Company fails to
tender such release to the Executive for his signature within thirty (30) days of his Date of
Termination, and (b) the Executive’s compliance with the Continuing Obligations. In addition, if
the Executive fails to comply with the Continuing Obligations, then the Company shall have the
right, upon notice to the Executive (describing such failure to comply in reasonable detail) to
terminate all of the payments and benefits described in the preceding sentence, other than the
Unrestricted Payments, and to recover from the Executive any and all payments made or benefits paid
to or for the benefit of the Executive, other than the Unrestricted Payments, that the Company paid
to or for the benefit of the Executive or to which the Executive otherwise would not have been
entitled if the Company had terminated the Executive for Cause as of the date of termination of
this Agreement. Furthermore, if the Company becomes aware and notifies the Executive in writing
within the one (1) year period subsequent to the Date of Termination, that the Executive was
engaged in conduct during the Term that, had the Company been aware of such conduct, would have
permitted the Company to terminate this Agreement during the Term for Cause, then the Company shall
have the right, upon notice to the Executive (describing such conduct in reasonable detail), (A) to
terminate all payments and benefits, other than the Unrestricted Payments, then remaining payable
to or for the benefit of the Executive under Sections 6.2, 6.3, 6.4, 6.5, 6.6, or 6.8 (including
but not limited to continued vesting or payment of any unvested or unexercised awards under the
Company’s Compensation Plans), and (B) to recover from the Executive any and all payments made or
benefits paid to or for the benefit of the Executive, including all or any portion of the
Unrestricted Payments, that the Company would not have been obligated to pay to or for the benefit
of the Executive or to which the Executive otherwise would not have been entitled if the Company
had terminated the Executive for Cause as a result of such conduct at or promptly after the time on
which such conduct first occurred. The Executive shall repay to the Company all amounts due under
the preceding sentences promptly upon demand for such payment by the Company.

          6.8. Supplemental Retirement Benefit. If the Executive has a Termination of Employment for
any reason other than Cause, the Executive shall receive a supplemental retirement benefit, as
follows:

               (a) If the Executive has a Termination of Employment for any reason other than Cause and the
Date of Termination is prior to a Change in Control, the Company shall pay the Executive a cash
lump sum supplemental retirement benefit within thirty (30) days

 - 19 - 

 

following the six (6) month anniversary of the Date of Termination, but no earlier than
January 1, 2009, equal to the product of (1) the lump sum Present Value of the SERP Benefit,
multiplied by (2) a fraction (not to exceed one (1)), the numerator of which equals the Executive’s
Years of Service prior to the Date of Termination (rounded up to the next full Year of Service) and
the denominator of which is ten (10).

               (b) If the Executive has a Termination of Employment for Good Reason or Without Cause and the
Date of Termination is within the twelve (12) month period following a Change in Control, the
Executive’s supplemental retirement benefit shall be payable and determined as set forth in
paragraph (a) above, except that, for this purpose, the fraction used in paragraph (a)(2) shall be
one (1).

               (c) If the Executive has a Termination of Employment for any reason other than Cause and the
Date of Termination is after a Change in Control and the provisions of paragraph (b) above do not
apply, the Executive shall be paid a lump sum cash payment within thirty (30) days following the
six (6) month anniversary of the Date of Termination in an amount equal to the lump sum that would
have been payable to the Executive under paragraph (a) above if the Executive’s Date of Termination
was immediately prior to the Change in Control increased during the period from the date of the
Change in Control until the Date of Termination based upon an annual interest rate of six percent
(6%).

               (d) The following terms shall have the following meanings for purposes of this Section 6.8:

                    (1) SERP Benefit means ten (10) annual installment payments each in the amount of sixty
percent (60%) of the Executive’s average Base Salary during the three (3) consecutive full
calendar years of employment immediately preceding the Date of Termination (or, if less than
three (3), the average Base Salary for such shorter period);

                    (2) The Present Value of the SERP Benefit shall be calculated by using (i) an annual
interest rate of six percent (6%), and (ii) by assuming the ten (10) annual installment
payments would have commenced upon the Executive reaching the age of fifty-five (55) or, if
later, the Date of Termination; and

                    (3) Years of Service means years of service as determined under Section 5.7.

     7. Executive’s Confidentiality Obligation.

          7.1. The Executive hereby acknowledges, understands and agrees that all Confidential
Information is the exclusive and confidential property of the Company and its Affiliates which
shall at all times be regarded, treated and protected as such in accordance with this Article 7.
The Executive acknowledges that all such Confidential Information is in the nature of a trade
secret.

          7.2. For purposes of this Agreement, “Confidential Information” means information, not
generally known to the public, that is used in the business of the Company and

 - 20 - 

 

(a) is proprietary to, about or created by the Company, (b) gives the Company some competitive
business advantage or the opportunity of obtaining such advantage or the disclosure of which is
likely to be detrimental to the interests of the Company, (c) is designated as Confidential
Information by the Company, is known by the Executive to be considered confidential by the Company,
or from all the relevant circumstances should reasonably be assumed by the Executive to be
confidential and proprietary to the Company, or (d) is not generally known by non-Company
personnel. Such Confidential Information includes, without limitation, the following types of
information and other information of a similar nature (whether or not reduced to writing or
designated as confidential):

               (a) Internal personnel and financial information of the Company, information about vendors
that is not generally known but is known to the Company as a result of the Company’s relationship
with the vendor (including vendor characteristics, services, prices, lists and agreements),
purchasing and internal cost information, internal service and operational manuals, and the manner
and methods of conducting the business of the Company;

               (b) Marketing and development plans, price and cost data, price and fee amounts, pricing and
billing policies, quoting procedures, marketing techniques, forecasts and forecast assumptions and
volumes, and future plans and potential strategies (including, without limitation, all information
relating to any acquisition prospect and the identity of any key contact within the organization of
any acquisition prospect) of the Company which have been or are being discussed;

               (c) Names of customers and their representatives, contracts (including their contents and
parties), customer services, and the type, quantity, specifications and content of products and
services purchased, leased, licensed or received by customers of the Company;

               (d) Confidential and proprietary information provided to the Company by any actual or
potential customer, government agency or other third party (including businesses, consultants and
other entities and individuals);

               (e) Any non-public information about the Company’s landfill development plans, landfill
capacity, and the status of the permitting process with respect to any aspect of the Company’s
business; and

               (f) Any non-public information about the existence or status of any governmental
investigation, charge, or lawsuit, the status or the position of the Company regarding the value of
any claim or charge (whether filed by the government or a third party), the Company’s interest in
resolving any such claim or charge; or any non-public information regarding the Company’s
compliance with federal, state or local laws.

          7.3. As a consequence of the Executive’s acquisition or anticipated acquisition of
Confidential Information, the Executive shall occupy a position of trust and confidence with
respect to the affairs and business of the Company. In view of the foregoing, and of the
consideration to be provided to the Executive, the Executive agrees that it is reasonable and
necessary that the Executive make each of the following covenants:

 - 21 - 

 

               (a) At any time during the Term and thereafter, the Executive shall not 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 as set forth in Article 2, without first
obtaining the Company’s prior written consent, unless such disclosure is required by applicable law
or regulation;

               (b) At any time during the Term and thereafter, the Executive shall not use, copy or transfer
Confidential Information other than as necessary in carrying out his duties and responsibilities as
set forth in Article 2, without first obtaining the Company’s prior written consent, except as
required by applicable law or regulation; and

               (c) On the Date of Termination, the Executive shall promptly deliver to the Company (or its
designee) all written materials, records and documents made by the Executive or which came into his
possession prior to or during the Term concerning the business or affairs of the Company,
including, without limitation, all materials containing Confidential Information.

          7.4. The Executive acknowledges and agrees that the use of the term “Company” in this Article
7 means both the Company and its Affiliates.

     8. Disclosure of Information, Ideas, Concepts, Improvements, Discoveries and Inventions.
Consistent with the Executive’s fiduciary duties to the Company, the Executive agrees that during
his employment by the Company, the Executive shall promptly disclose in writing to the Company all
information, ideas, concepts, improvements, discoveries and inventions, which are conceived,
developed, made or acquired by the Executive, either individually or jointly with others, and which
relate to the business, products or services of the Company, irrespective of whether the Executive
used the Company’s time or facilities and irrespective of whether such information, idea, concept,
improvement, discovery or invention was conceived, developed, discovered or acquired by the
Executive on the job, at home, or elsewhere. This obligation extends to all types of information,
ideas and concepts, including, information, ideas and concepts relating to new types of services,
corporate opportunities, acquisition prospects, the identity of key representatives within
acquisition prospect organizations, prospective trade names or service marks for the Company’s
business activities, and the like. The Executive acknowledges and agrees that the use of the term
“Company” in this Article 8 means both the Company and its Affiliates.

     9. Ownership of Information, Ideas, Concepts, Improvements, Discoveries and all Original Works
of Authorship.

          9.1. All information, ideas, concepts, improvements, and discoveries which are conceived,
made, developed or acquired by the Executive or which are disclosed or made known to the Executive,
individually or in conjunction with others, during the Executive’s employment by the Company and
which relate to the business, products or services of the Company (including, without limitation,
all such information relating to corporate opportunities, research, financial and sales data,
pricing and trading terms, evaluations, opinions, interpretations, acquisition prospects, the
identity of customers or their requirements, the identity of key contacts within the customers’
organizations or within the organization of acquisition prospects,

 - 22 - 

 

marketing and merchandising techniques, and prospective names and service marks) are and shall
be the sole and exclusive property of the Company. Furthermore, all drawings, memoranda, notes,
records, files, correspondence, manuals, models, specifications, computer programs, maps and all
other writings or materials of any type embodying any of such information, ideas, concepts,
improvements, and discoveries are and shall be the sole and exclusive property of the Company.

          9.2. In particular, the Executive hereby specifically sells, assigns, transfers and conveys to
the Company all of his worldwide right, title and interest in and to all such information, ideas,
concepts, improvements, and discoveries, and any United States or foreign applications therefore.
The Executive shall assist the Company and its nominee at all times and in all manners, during the
Term and thereafter, in the protection of such information, ideas, concepts, improvements, or
discoveries.

          9.3. In the event the Executive individually, or jointly with others, creates, during the
Term, any original work of authorship fixed in any tangible medium of expression which is the
subject matter of copyright (such as videotapes, written presentations on acquisitions, computer
programs, drawings, maps, architectural renditions, models, manuals, brochures or the like)
relating to the Company’s business products or services, the Company shall be deemed the author of
such work if the work is prepared by the Executive within the scope of his employment; or, if the
work is not prepared by the Executive within the scope of his employment but is specially ordered
by the Company as a contribution to a collective work, as a part of a motion picture or other
audiovisual work, as a translation, as a supplementary work, as a compilation or as an
instructional text, then the work shall be considered to be a work made for hire, and the Company
shall be the author of such work. If such work is neither prepared by the Executive within the
scope of his employment nor a work specially ordered and deemed to be a work made for hire, then
the Executive hereby agrees to sell, transfer, assign and convey, and by these presents, does sell,
transfer, assign and convey, to the Company all of the Executive’s worldwide right, title and
interest in and to such work and all rights of copyright therein. The Executive agrees to assist
the Company, at all times, during the Term and thereafter, in the protection of the Company’s
worldwide right, title and interest in and to such work and all rights of copyright therein, which
assistance shall include, but shall not be limited to, the execution of all documents requested by
the Company or its nominee and the execution of all lawful oaths and applications for registration
of copyright in the United States and foreign countries.

          9.4. The Executive acknowledges and agrees that the use of the term “Company” in this Article
9 means both the Company and its Affiliates.

     10. Executive’s Non-Competition and Non-Solicitation Obligations.

          10.1. For purposes of this Article 10:

               (a) “Company” means both the Company and its Affiliates.

               (b) “Competitor” means any company that provides Non-hazardous Solid Waste Management services
in any state in which the Company does business. “Principal Competitor” means Waste Management,
Inc., Republic Services, Inc., Capital Environmental

 - 23 - 

 

Resource, Inc., Onyx Waste Services Incorporated, Waste Industries USA, Inc., Waste
Connections, Inc., or Casella Waste Systems, Inc. (or their predecessors and successors,
subsidiaries, or affiliate operations), or any other public or private business (including their
predecessors and successors, subsidiaries, or affiliate operations) conducting Non-hazardous Solid
Waste Management in three (3) or more states in which the Company does business.

               (c) For purposes of Section 10.3(c) and (d), “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: (1) performing any kind of services or duties
related to Non-hazardous Solid Waste Management; (2) managing, selling, marketing or brokering
Non-hazardous Solid Waste Management services; (3) developing, managing or otherwise handling data
or information concerning potential or actual acquisitions of businesses that engage in
Non-hazardous Solid Waste Management; (4) participating in any decision, or developing or
implementing any strategy, to acquire such businesses; (5) formulating, reviewing or implementing
marketing, sales, financial or operational strategies related to Non-hazardous Solid Waste
Management; (6) conducting or reviewing cost benefit analysis on actual or proposed projects
related to Non-hazardous Solid Waste Management; or (7) performing any functions that are the same
as, or substantially similar to, the duties Executive performed under Section 2 of this Agreement.

               (d) For purposes of Section 10.3(e), “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: (1) managing, selling, marketing or brokering
portable toilet, street sweeping or other services then provided by the Company; (2) formulating,
reviewing or implementing marketing, sales, financial or operational strategies related to portable
toilet, street sweeping or other services then provided by the Company; (3) conducting or reviewing
cost benefit analysis on actual or proposed projects related to portable toilet, street sweeping or
other services then provided by the Company; or (4) performing any functions that are the same as,
or substantially similar to, the duties Executive performed under Section 2 of this Agreement.

               (e) “Contact” means any direct or indirect interaction between the Executive 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.

               (f) “Non-hazardous Solid Waste Management” means the collection, hauling, disposal or
recycling of non-hazardous refuse.

               (g) “Facility” means any office, transfer station, hauling operation, landfill, or recycling
center of the Company.

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          10.2. Prohibition on Competition and Solicitation During Employment.

               (a) At no time during the Term will the Executive, directly or indirectly, provide service as
a principal, director, officer, agent, employee, consultant or contractor in or to any business
that conducts Non-hazardous Solid Waste Management operations or provides portable toilet, street
sweeping or any other services that the Company provides.

               (b) At no time during the Term will the Executive directly or indirectly (1) induce, entice or
solicit any employee of the Company to leave his or her employment, (2) Contact, communicate or
solicit any customer, potential customer, or acquisition prospect of the Company for the purpose of
ending or avoiding a business relationship, or (3) use any information regarding actual or
potential customers or acquisition targets of the Company for any purpose other than in performing
his duties under this Agreement.

          10.3. Prohibition Against Competition After Employment.

               (a) The Executive agrees that, after the Date of Termination, he will not compete with the
Company to the extent, and subject to the express limitations, provided in this Section 10.3. At no
time during the Term will the Executive, directly or indirectly, provide service as a principal,
director, officer, agent, employee, consultant or contractor in or to any business that conducts
Non-hazardous Solid Waste Management operations or provides portable toilet, street sweeping or any
other services that the Company provides.

               (b) The Executive’s obligation not to compete with the Company will end three (3) years after
the Date of Termination. If a court concludes that three (3) years is an unreasonable time for that
obligation, the Executive’s obligation to not compete with the Company will end two (2) years after
the Date of Termination.

               (c) During the Executive’s employment as Executive Vice President and Chief Financial Officer,
he will be active in all significant management and operational issues and will possess
Confidential Information regarding the Company’s operations across the nation, not just in any
particular geographic area around where his office is or will be located. Confidential Information
the Executive may be given about the Company’s strategic plans, its acquisition targets, and cost
and profit margins in various markets, for example, will not be limited to the area around the
corporate office or any other particular geographic area of the country. Thus, the scope of
Executive’s obligation to not compete with the Company cannot reasonably be limited to a particular
geographic area. Executive’s employment with any business that provides Non-hazardous Solid Waste
Management services, regardless of location, is likely to harm the Company’s business interests.
Accordingly, Executive agrees that he will not Render Services to any Competitor or any Principal
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.

               (d) The parties acknowledge that they have chosen Arizona law to apply to this Agreement (see
Section 11.6) and that Arizona courts have not addressed under

 - 25 - 

 

what circumstances, and to what extent, restrictive covenants that apply to a multi-state area
are enforceable. Thus, the parties wish to include Section 10.3(d) as a back-up to the restrictions
in Section 10.3(c) in the event a court concludes that those restrictions are not reasonably
limited and severs the applicable portions of Section 10.3(c) under Arizona’s “blue pencil” rule.
Accordingly, Executive will not Render Services to any Competitor or Principal 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. Executive acknowledges that the
restrictions in this Section 10.3(d) are separate and apart from the restrictions in Section
10.3(c) above.

               (e) Additionally, Executive will not Render Services to any business providing portable toilet
street sweeping or other services within forty (40) miles of any Facility at which the same or
similar services are provided.

               (f) The non-compete restrictions in this Section 10.3 are expressly intended to preclude the
Executive from physically working in a geographic area that is not covered by the applicable
restriction (i.e., working in a state in which the Company is not conducting business) but where
the Executive’s responsibilities would include any management, oversight or analysis of a business
unit in a geographic area covered by the applicable restriction.

          10.4. Prohibition Against Solicitation After Employment.

               (a) The Executive agrees that, after the Date of Termination, he will limit his activities
relating to the customers, potential customers, acquisition prospects, and employees of the Company
to the extent, and subject to the express limitations, provided in this Section 10.4.

               (b) The Executive’s obligations under this Section 10.4 will end three (3) years after the
Date of Termination. If a court concludes that three (3) years is an unreasonable time for those
obligations, Executive’s obligations under this Section 10.4 will end two (2) years after the Date
of Termination.

               (c) The Executive will not Contact customers, potential customers, or acquisition prospects of
the Company for any purpose related to providing Non-hazardous Solid Waste Management services in
any state in which the Company does business. In the event a court concludes that this particular
restriction is not reasonably limited, the Executive will not Contact customers, potential
customers or acquisition prospects of the Company for any purpose related to providing
Non-hazardous Solid Waste Management services within forty (40) miles of any Facility.

               (d) Additionally, the Executive will not Contact customers, potential customers or acquisition
prospects of the Company for any purpose related to providing portable toilet, street sweeping or
other services within forty (40) miles of any Facility at which the same or similar services are
provided.

               (e) The Executive will not solicit any employee or consultant of the Company to work for any
other person or to leave his or her employment. The Executive will not, directly or indirectly, be
involved in the recruiting and/or hiring (whether that involvement is

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in the nature of serving as a reference or as a decision-maker) of any person employed or
retained as a consultant by the Company.

               (f) In the event a court concludes that the restrictions in Section 10.4(e) are not reasonably
limited, Executive will not: (i) solicit any employee or consultant of the Company who, directly
or indirectly, reported to Executive at any time during the Term, where the solicitation is to
encourage the employee or consultant to work for any other person or entity, or to leave his or her
employment; or (ii) be involved in the recruiting and/or hiring (whether that involvement is in the
nature of serving as a reference or as a decision-maker) of any such employee or consultant.

          10.5. Other Provisions.

               (a) The Executive acknowledges and agrees that a violation of the promises he has made under
this Article 10 is likely to cause irreparable harm to the Company and justify the grant of
injunctive relief. Additionally, to provide the Company with the protections it has bargained for
in this Article 10, any period of time in which the Executive has been in breach of the provisions
in this Article 10 will extend, by that amount of time, the time for which he should be precluded
from further breaching the promises made in this Article 10, provided that the Company does not
unreasonably delay in bringing appropriate legal action after discovery of any such breach by
Executive.

               (b) If the applicable temporal or geographic limitations agreed to by the parties in this
Article 10 are found by a court to be overly broad, the parties expressly authorize the judge
before whom any dispute is brought to impose the broadest temporal and geographic limitations
permissible under the law, so as to effectuate the parties’ intent and ensure that the Company
obtains the protections it sought and for which it provided material consideration in this
Agreement.

     11. Miscellaneous.

          11.1. Notices. All notices and other communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been given when delivered by hand or mailed by
registered or certified mail, return receipt requested, as follows (provided that notice of a
change of address shall be deemed given only when received):

	 	 	 	 	 
	 

	 	If to the Company:
	 	Allied Waste Industries, Inc.
	 

	 	 	 	18500 North Allied Way
	 

	 	 	 	Phoenix, Arizona 85054
	 

	 	 	 	ATTN: General Counsel
	 
	 	 	 	 
	 

	 	If to the Executive:
	 	Peter S. Hathaway, Executive Vice
President and 

Chief Financial Officer
	 

	 	 	 	c/o Allied Waste Industries, Inc.
	 

	 	 	 	18500 North Allied Way
	 

	 	 	 	Phoenix, Arizona 85054

 - 27 - 

 

or to such other names or addresses as the Company or the Executive, as the case may be, shall
designate by notice to the other party in the manner specified in this Section 11.1.

          11.2. Waiver of Breach. The waiver by any party of a breach of any provision of this Agreement
shall neither operate nor be construed as a waiver of any subsequent breach by any party. No breach
shall be deemed waived unless the waiver is in a writing signed by the non-breaching party.

          11.3. Assignment. This Agreement shall be binding upon and inure to the benefit of the
Company, its Affiliates, successors, legal representatives and assigns, and upon the Executive, his
heirs, executors, administrators, legal representatives and assigns; provided, however, the
Executive agrees that his rights and obligations hereunder are personal to him and may not be
assigned without the express written consent of the Company.

          11.4. Entire Agreement, No Oral Amendments. This Agreement, together with any schedule or
exhibit attached hereto and any document, policy, rule or regulation referred to herein, replaces
and merges all previous agreements and discussions relating to the same or similar subject matter
between the Executive and the Company and constitutes the entire agreement between the Executive
and the Company with respect to the subject matter of this Agreement. This Agreement may not be
modified in any respect by any verbal statement, representation or agreement made by any employee,
officer, or representative of the Company or by any written agreement unless signed by an officer
of the Company who is expressly authorized by the Company to execute such document.

          11.5. Enforceability. If any provision of this Agreement or application thereof to anyone or
under any circumstances shall be determined to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions or applications of this Agreement which can
be given effect without the invalid or unenforceable provision or application.

          11.6. Jurisdiction, Venue. The laws of the State of Arizona shall govern the interpretation,
validity and effect of this Agreement without regard to the place of execution or the place for
performance thereof, and the Company and the Executive agree that the courts situated in Maricopa
County, Arizona shall have personal jurisdiction over the Company and the Executive to hear all
disputes arising under this Agreement. This Agreement is to be at least partially performed in
Maricopa County, Arizona, and as such, the Company and the Executive agree that venue shall be
proper with the courts in Maricopa County, Arizona to hear such disputes. In the event either party
is not able to effect service of process upon the other party with respect to such disputes, the
Company and the Executive expressly agree that the Secretary of State for the State of Arizona
shall be an agent of the Company and/or the Executive to receive service of process on behalf of
the Company and/or the Executive with respect to such disputes.

          11.7. Injunctive Relief. The Company and the Executive agree that a breach of any term of this
Agreement by the Executive would cause irreparable damage to the Company and that, in the event of
such breach, the Company shall have, in addition to any and all remedies

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of law, the right to any injunction, specific performance and other equitable relief to
prevent or to redress the violation of the Executive’s obligations under this Agreement.

          11.8. Withholding. All payments made pursuant to this Agreement shall be net of payroll and
withholding deductions as may be required by law and other deductions that are either applied
generally to employees of the Company for insurance and other employee benefit plans or authorized
by Executive.

          11.9. Arbitration. With the sole exception of any breach by the Executive of the obligations
he assumed under Sections 10.1, 10.2, 10.3, 10.4 and/or 10.5 of this Agreement (the breach of which
permits the Company to obtain judicial relief due to the exigent circumstances presented by such a
breach), all other alleged breaches of this Agreement, or any other dispute between the parties to
this Agreement arising out of or in connection with the Executive’s employment with the Company
will be settled by binding arbitration to the fullest extent permitted by law. This Agreement to
arbitrate applies to any claim for relief of any nature, including but not limited to claims of
wrongful discharge under statutory law and common law; employment discrimination based on federal,
state or local statute, ordinance, or governmental regulations, including discrimination prohibited
by: (a) Title VII of the Civil Rights Act of 1964, as amended, (b) the Age Discrimination in
Employment Act, (c) the Americans with Disabilities Act, (d) the Fair Labor Standards Act, and (e)
claims of retaliatory discharge or other acts of retaliation; compensation disputes; tortuous
conduct; allegedly contractual violations; ERISA violations; and other statutory and common law
claims and disputes, regardless of whether the statute was enacted or whether the common law
doctrine was recognized at the time this Agreement was signed.

          The parties to this Agreement understand that they are agreeing to substitute one legitimate
dispute resolution forum (arbitration) for another (litigation) because of the mutual advantages
this forum offers, and are waiving their right to have their disputes (except as to breaches of
Sections 10.1, 10.2, 10.3, 10.4 and/or 10.5 of this Agreement) resolved in court. This substitution
involves no surrender, by either party, of any substantive statutory or common law benefit,
protection, or defense.

          The arbitration proceeding shall be conducted in Maricopa County, Arizona, in accordance with
the National Rules for the Resolution of Employment Disputes (National Rules) of the American
Arbitration Association (AAA) in effect at the time a demand for arbitration is made.

          One arbitrator shall be used and he or she shall be chosen by mutual agreement of the parties
to this Agreement. If, within thirty (30) days after the Executive notifies the Company of an
arbitrable dispute, no arbitrator has been chosen, an arbitrator shall be chosen by the AAA
pursuant to its National Rules. The arbitrator shall coordinate and, as appropriate, limit all
pre-arbitration discovery. However, the parties to this Agreement will have the right to obtain
discovery through appropriate decision and award, stating the reasons for the award. The decision
and award shall be exclusive, final, and binding on both parties to this Agreement, their heirs,
executors, administrators, successors, and assigns.

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          The Company will pay all costs and expenses of the arbitration, except for the filing fees and
costs that would have been required had the proceeding been initiated and maintained in the
Maricopa County Superior Court, which fees and costs the Executive will pay. Each party shall pay
their own attorneys’ fees and expenses throughout the arbitration proceeding. However, the
arbitrator may award the successful party its attorneys’ fees and expenses at the conclusion of the
arbitration (and any other relief provided by law).

          11.10. Section 409. It is intended that the Agreement comply with Section 409A, and the
Agreement shall be interpreted, administered and operated accordingly. Nothing herein shall be
construed as an entitlement to or guarantee of any particular tax treatment to the Executive. The
Executive and the Company agree that this Agreement may be amended, by mutual agreement, without
any further consideration to the Executive, to the extent needed to avoid penalties under Section
409A.

[Signature page follows.]

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	Dated: June 22, 2008	 	ALLIED WASTE INDUSTRIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	John J. Zillmer, Chief Executive Officer &
Chairman of the Board of Directors

“Company”

	 	 	 
	Dated: June 22, 2008
	 	 
	 

	 	 
	 

	 	Peter S. Hathaway

“Executive”

 - 31 -

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