Waste Management 2014 Annual Report Download - page 63

shares of Common Stock determined by dividing such employee’s payroll deductions accumulated in the ESPP
during such Offering Period by the Offering Price. The Offering Price of each of the shares purchased in a given
Offering Period shall be the lower of (a) 85% of the fair market value of a share of Common Stock on the first
day of the Offering Period and (b) 85% of the fair market value of a share of Common Stock on the last day of
the Offering Period. If an employee withdraws from participation during an Offering Period, the monies
contributed to the Plan are refunded immediately without interest.
Eligible employees may elect to participate in the ESPP by completing an enrollment agreement that
authorizes payroll deductions from the employee’s pay in an amount from 1% to 10% (in whole percentages) of
the employee’s gross base pay. No employee may (a) make payroll deductions during any calendar year in excess
of $21,250; (b) purchase shares under the ESPP if such purchase would result in the employee owning five
percent or more of the total combined voting power or value of the Company’s outstanding capital stock; or
(c) purchase shares under the ESPP with a fair market value in excess of $25,000 per calendar year.
All payroll deductions for the ESPP are placed in our general corporate account. No interest accrues on the
payroll deductions. Employees may purchase Common Stock under the ESPP only through payroll deductions,
and an employee participating in the ESPP may not make any additional payments into the account.
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,
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