Waste Management 2011 Annual Report Download - page 67

Termination of Employment and Withdrawal
If an employee withdraws from participation in the ESPP or terminates employment for any reason,
including retirement or death, during an Offering Period, the payroll deductions credited to the employee’s
account will be refunded promptly without interest.
Amendment and Termination of ESPP
The Board of Directors may amend the ESPP at any time; provided, however, the ESPP may not be
amended in any way (a) that will cause rights issued thereunder to fail to meet the requirements for employee
stock purchase plans as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”)
or (b) that requires stockholder approval, unless such stockholder approval is obtained.
The ESPP will terminate on the earlier of (a) the date that participating employees become entitled to
purchase an aggregate number of shares greater than the number of shares remaining available for purchase
under the ESPP and (b) the date on which the ESPP is terminated by the Board of Directors.
Federal Income Tax Consequences
The following discussion is intended to be a general summary only of the federal income tax aspects of
purchase rights granted under the ESPP and not of state or local taxes that may be applicable. Tax consequences
may vary depending on the particular circumstances, and administrative and judicial interpretations of the
application of the federal income tax laws are subject to change. Participants in the ESPP who are residents of or
are employed in a country other than the United States may be subject to taxation in accordance with the tax laws
of that particular country in addition to or in lieu of U.S. federal income taxes.
The ESPP is intended to be an “employee stock purchase plan” as defined in Section 423 of the Code. A
participant recognizes no taxable income either as a result of commencing participation in the ESPP or
purchasing Common Stock under the terms of the ESPP. If a participant disposes of shares purchased under the
ESPP within either two years from the first day of the applicable Offering Period or within one year from the
purchase date, known as disqualifying dispositions, the participant will realize ordinary income in the year of
such disposition equal to the amount by which the fair market value of the shares on the purchase date exceeds
the purchase price. The amount of the ordinary income will be added to the participant’s basis in the shares, and
any additional gain or resulting loss recognized on the disposition of the shares will be a capital gain or loss,
which will be long-term if the participant’s holding period is more than 12 months. If the participant disposes of
shares purchased under the ESPP at least two years after the first day of the applicable Offering Period and at
least one year after the purchase date, the participant will realize ordinary income in the year of disposition equal
to the lesser of (a) the excess of the fair market value of the shares on the date of disposition over the purchase
price or (b) 15% of the fair market value of the shares on the fist day of the applicable Offering Period. The
amount of any ordinary income will be added to the participant’s basis in the shares, and any additional gain
recognized upon the disposition after such basis adjustment will be a long-term capital gain. If the fair market
value of the shares on the date of disposition is less than the purchase price, there will be no ordinary income and
any loss recognized will be a long-term capital loss. If the participant still owns the shares at the time of death,
the lesser of (a) the excess of the fair market value of the shares on the date of death over the purchase price or
(b) 15% of the fair market value of the shares on the first day of the Offering Period in which the shares were
purchased will constitute ordinary income in the year of death. Any ordinary income recognized by a participant
upon the disqualifying disposition of the shares generally should be deductible by the Company for federal
income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code or the
regulations thereunder.
New Plan Benefits
The value of the Common Stock purchased through the ESPP will vary based on the fair market value of our
Common Stock on the first and last days of the Offering Period. Accordingly, the number of shares that may be
purchased by the named executive officers, the executive officers as a group and all employees, including all
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