Exhibit 10.12
EMPLOYMENT AGREEMENT
     This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into on
this 7th day of December, 2009, but effective as of the date set forth herein,
by and between Waste Management, Inc. (the “Company”), and Puneet Bhasin (the
“Executive”).
     1. Employment.
     The Company shall employ Executive, and Executive shall be employed by the
Company upon the terms and subject to the conditions set forth in this
Agreement.
     2. Term of Employment.
     The period of Executive’s employment under this Agreement shall commence on
December 7, 2009 (“Employment Date”), and shall continue for a period of two
(2) years, and shall automatically be renewed for successive one (1) year
periods on each anniversary of the Employment Date thereafter, unless
Executive’s employment is terminated in accordance with Section 5 below. The
period during which Executive is employed hereunder shall be referred to as the
“Employment Period.”
     3. Duties and Responsibilities.
     (a) Executive shall serve as the Senior Vice President and Chief
Information Officer. In such capacity, Executive shall perform such duties and
have the power, authority, and functions commensurate with such position in
similarly-sized public companies, and have and possess such other authority and
functions consistent with such position as may be assigned to Executive from
time to time by the Chief Executive Officer or the Board of Directors (the
“Board”) of the Company.
     (b) Executive shall devote substantially all of his working time, attention
and energies to the business of the Company, and its affiliated entities.
Executive may make and manage his personal investments (provided such
investments in other activities do not violate, in any material respect, the
provisions of Section 10 of this Agreement), be involved in charitable and
professional activities, and, with the prior written consent of the Board, serve
on boards of other for profit entities, provided such activities do not
materially interfere with the performance of his duties hereunder (however, the
Board does not typically allow officers to serve on more than one public company
board at a time).
     4. Compensation and Benefits.
     (a) Base Salary. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of Three Hundred Eighty Thousand
Dollars ($380,000.00) per year, or such higher rate as may be determined from
time to time by the Company (“Base Salary”). Such Base Salary shall be paid in
accordance with the Company’s standard payroll practice for its executive
officers. Once increased, Base Salary shall not be reduced.

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     (b) Annual Bonus. Beginning on January 1, 2010 and continuing during the
remaining Employment Period, Executive will be entitled to participate in an
annual incentive compensation plan of the Company, as established by the
Compensation Committee of the Board from time to time. The Executive’s target
annual bonus will be seventy-five percent (75%) of his Base Salary in effect for
such year (the “Target Bonus”), and his actual annual bonus may range from 0% to
150% of Base Salary (i.e., a maximum possible bonus of two times the Target
Bonus), and will be determined based upon (i) the achievement of certain
corporate performance goals, as may be established and approved from time to
time by the Compensation Committee of the Board, and (ii) the achievement of
personal performance goals as may be established by Executive’s immediate
supervisor. The annual bonus will be paid at such time and in such manner as set
forth in the annual incentive compensation plan document. Executive will not be
eligible for a bonus for calendar year 2009.
     (c) Benefit Plans and Vacation. Subject to the terms of such plans,
Executive shall be eligible to participate in or receive benefits under any
pension plan, profit sharing plan, salary deferral plan, medical and dental
benefits plan, life insurance plan, short-term and long-term disability plans,
or any other health, welfare or fringe benefit plan, generally made available by
the Company to similarly-situated executive employees. The Company shall not be
obligated to institute, maintain, or refrain from changing, amending, or
discontinuing any benefit plan, so long as such changes are similarly applicable
to similarly-situated employees generally. The Company will also reimburse
Executive for the actual cost of continued COBRA coverage, if applicable, until
such time as he is eligible to participate in the Company’s medical and dental
benefits plans.
     During the Employment Period, Executive shall be entitled to vacation each
year in accordance with the Company’s policies in effect from time to time, but
in no event less than four (4) weeks paid vacation per calendar year. Vacation
not taken in the calendar year in which it is granted cannot be carried forward
to any subsequent year.
     (d) Expense Reimbursement. The Company shall promptly reimburse Executive
for the ordinary and necessary business expenses incurred by Executive in the
performance of the duties hereunder in accordance with the Company’s customary
practices applicable to executive officers. The reimbursement of expenses during
a year will not affect the expenses eligible for reimbursement in any other
year. In no event shall any expense be reimbursed after the last day of the year
following the year in which the expense was incurred.
     (e) Other Perquisites. Executive shall be entitled to all perquisites
provided to Senior Vice Presidents of the Company as approved by the
Compensation Committee of the Board, and as they may exist from time to time.
     (f) Sign-on Bonus. The Company will pay Executive an initial sign-on bonus
in the amount of Two Hundred Twenty-Five Thousand Dollars ($225,000.00) within
thirty (30) days of the Employment Date. It is expressly agreed and understood
that should Executive resign without “Good Reason” (as that term is defined in
Section 5(d) below) prior to December 7, 2010, then Executive shall repay on
demand by the Company the entire sign-on bonus, net withholding taxes. It is
further agreed that any obligation of the Company to provide future

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payments to Executive beyond his employment with the Company shall be first
credited and applied to the repayment of this sign-on bonus.
     (g) Employment Commencement Equity Based Incentive Award. Subject to
approval by the Compensation Committee of the Board, effective on or about the
Employment Date, Executive shall be granted a one-time, promotional award of
Restricted Stock Units pursuant to the Waste Management, Inc. 2009 Stock
Incentive Plan, valued at approximately Four Hundred Fifty-Five Thousand Dollars
($455,000.00). Such Restricted Stock Units will be subject to the restrictions
imposed by, and governed by the provisions of, the Stock Incentive Plan and the
award agreement issued to Executive in connection thereto; provided, however,
that, unless earlier vested or forfeited pursuant to such award agreement, the
restrictions on this promotional award will lapse on certain anniversary dates
of the grant date of the promotional award in accordance with the following
schedule: first anniversary of the grant date — 50%; second anniversary of the
grant date — 100%.
     (h) Relocation to Houston. Prior to the first anniversary of the Employment
Date, Executive will relocate his residence to the Houston, Texas area.
Executive’s relocation of his residence to Houston will be eligible for coverage
under the Company’s relocation policy. It is expressly agreed to and understood
that should Executive resign without “Good Reason” (as that term is defined in
Section 5(d) below) during the twelve-month period following such relocation,
then Executive shall be required to reimburse the Company for the prorated
portion of the relocation expense.
     5. Termination of Employment.
     Executive’s employment hereunder may be terminated during the Employment
Period under the following circumstances:
     (a) Death. Executive’s employment hereunder shall terminate upon
Executive’s death.
     (b) Total Disability. The Company may terminate Executive’s employment
hereunder upon Executive’s becoming “Totally Disabled.” For purposes of this
Agreement, Executive shall be considered “Totally Disabled” if Executive has
been physically or mentally incapacitated so as to render Executive incapable of
performing the essential functions of any substantial gainful activity that is
expected to result in death or to last for a continuous period of at least 12
months. Executive’s receipt of disability benefits under the Company’s long-term
disability plan or receipt of Social Security disability benefits shall be
deemed conclusive evidence of Total Disability for purpose of this Agreement.
     (c) Termination by the Company for Cause. The Company may terminate
Executive’s employment hereunder for “Cause” at any time after providing a
Notice of Termination for Cause to Executive.

  (i)   For purposes of this Agreement, the term “Cause” means any of the
following: Executive’s (A) willful or deliberate and continual refusal to
perform Executive’s

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      employment duties reasonably requested by the Company after receipt of
written notice to Executive of such failure to perform, specifying such failure
(other than as a result of Executive’s sickness, illness or injury) and
Executive’s failure to cure such nonperformance within ten (10) days of receipt
of said written notice; (B) breach of any statutory or common law duty of
loyalty to the Company; (C) conviction of, or plea of nolo contendre to, any
felony; (D) willful or intentional cause of material injury to the Company, its
property, or its assets; (E) disclosure to unauthorized person(s) of the
Company’s proprietary or confidential information; (F) material violation or a
repeated and willful violation of the Company’s policies or procedures,
including but not limited to, the Company’s Code of Business Conduct and Ethics
(or any successor policy) then in effect; or (G) breach of any of the covenants
set forth in Section 10 hereof.     (ii)   For purposes of this Agreement, the
phrase “Notice of Termination for Cause” shall mean a written notice that shall
indicate the specific termination provision or provisions in Section 5(c)(i)
relied upon, and shall set forth in reasonable detail the facts and
circumstances which provide the basis for termination for Cause.

     (d) Voluntary Termination by Executive. Executive may terminate his
employment hereunder with or without Good Reason at any time upon written notice
to the Company.

  (i)   A termination for “Good Reason” means a resignation of employment by
Executive by written notice (“Notice of Termination for Good Reason”) given to
the Company’s Chief Executive Officer within ninety (90) days after the
occurrence of the Good Reason event, unless such circumstances are substantially
corrected prior to the date of termination specified in the Notice of
Termination for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean the occurrence or failure to cause the occurrence, as the case may be,
without Executive’s express written consent, of any of the following
circumstances: (A) the Company materially diminishes Executive’s core duties or
responsibility for those core duties, so as to effectively cause Executive to no
longer be performing the duties of his position (except in each case in
connection with the termination of Executive’s employment for Death, Total
Disability, or Cause, or temporarily as a result of Executive’s illness or other
absence); (B) in the event of the Company becoming a fifty percent or more
subsidiary of any other entity, the Company materially diminishes the duties,
authority or responsibilities of the person to whom Executive is required to
report; (C) removal or the non-reelection of the Executive from the officer
position with the Company specified herein, or removal of the Executive from any
of his then officer positions; (D) any material breach by the Company of any
provision of this Agreement, including without limitation Section 10 hereof; or
(E) failure of any successor to the Company (whether direct or indirect and
whether by merger, acquisition, consolidation or otherwise) to assume in a
writing delivered to Executive upon the assignee becoming such, the obligations
of the Company hereunder, resulting in a material negative change in the
employment relationship.

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  (ii)   A “Notice of Termination for Good Reason” shall mean a notice that
shall indicate the specific termination provision or provisions relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for Termination for Good Reason. The Notice of Termination for
Good Reason shall provide for a date of termination not less than thirty
(30) nor more than sixty (60) days after the date such Notice of Termination for
Good Reason is given, provided that in the case of the events set forth in
Sections 5(d)(i)(A) or (B), the date may be twenty (20) days after the giving of
such notice.

     (e) Termination by the Company without Cause. The Company may terminate
Executive’s employment hereunder without Cause at any time upon written notice
to Executive.
     (f) Effect of Termination. Upon any termination of employment for any
reason, Executive shall immediately resign from all Board memberships and other
positions with the Company or any of its subsidiaries held by him at such time.
     6. Compensation Following Termination of Employment.
     In the event that Executive’s employment hereunder is terminated in a
manner as set forth in Section 5 above, Executive shall be entitled to the
compensation and benefits provided under this Section 6, in each case subject to
potential reduction as may be required by Section 22, as applicable to the form
of termination:
     (a) Termination by Reason of Death. In the event that Executive’s
employment is terminated by reason of Executive’s death, the Company shall pay
the following amounts to Executive’s beneficiary or estate:

  (i)   Any accrued but unpaid Base Salary for services rendered to the date of
death, any accrued but unpaid expenses required to be reimbursed under this
Agreement, any vacation accrued to the date of termination, any earned but
unpaid bonuses for any prior calendar year, and, to the extent not otherwise
paid, a pro-rata bonus or incentive compensation payment for the current
calendar year to the extent payments are awarded to senior executives of the
Company and paid at the same time as senior executives are paid.     (ii)   Any
benefits accrued through the date of termination to which Executive may be
entitled pursuant to the plans, policies and arrangements (including those
referred to in Section 4(c) hereof), as determined and paid in accordance with
the terms of such plans, policies and arrangements.

     (b) Termination by Reason of Total Disability. In the event that
Executive’s employment is terminated by the Company by reason of Executive’s
Total Disability (as determined in accordance with Section 5(b)), the Company
shall pay the following amounts to Executive:

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  (i)   Any accrued but unpaid Base Salary for services rendered to the date of
termination, any accrued but unpaid expenses required to be reimbursed under
this Agreement, any vacation accrued to the date of termination, and any earned
but unpaid bonuses for any prior calendar year. Executive shall also be eligible
for a pro-rata bonus or incentive compensation payment for the current calendar
year to the extent such awards are made to senior executives of the Company for
the year in which Executive is terminated, and to the extent not otherwise paid
to the Executive.     (ii)   Any benefits accrued through the date of
termination to which Executive may be entitled pursuant to the plans, policies
and arrangements (including those referred to in Section 4(c) hereof) shall be
determined and paid in accordance with the terms of such plans, policies and
arrangements.

     (c) Termination for Cause. In the event that Executive’s employment is
terminated by the Company for Cause, the Company shall pay the following amounts
to Executive:

  (i)   Any accrued but unpaid Base Salary for services rendered to the date of
termination, any accrued but unpaid expenses required to be reimbursed under
this Agreement, any vacation accrued to the date of termination, and any earned
but unpaid bonuses for any prior calendar year.     (ii)   Any benefits accrued
through the date of termination to which Executive may be entitled pursuant to
the plans, policies and arrangements (including those referred to in Section
4(c) hereof up to the date of termination) shall be determined and paid in
accordance with the terms of such plans, policies and arrangements.

     (d) Voluntary Termination by Executive. In the event that Executive
voluntarily terminates employment other than for Good Reason, the Company shall
pay the following amounts to Executive:

  (i)   Any accrued but unpaid Base Salary for services rendered to the date of
termination, any accrued but unpaid expenses required to be reimbursed under
this Agreement, any vacation accrued to the date of termination, and any earned
but unpaid bonuses for any prior calendar year.     (ii)   Any benefits accrued
through the date of termination to which Executive may be entitled pursuant to
the plans, policies and arrangements (including those referred to in Section
4(c) hereof up to the date of termination) shall be determined and paid in
accordance with the terms of such plans, policies and arrangements.

     (e) Termination by the Company Without Cause Outside a Change in Control
Period; Termination by Executive for Good Reason Outside a Change in Control
Period. In the event that Executive’s employment is terminated by the Company
outside a Change in Control Period (as defined in Section 7 below) for reasons
other than death, Total Disability or Cause, or Executive terminates his
employment for Good Reason outside of a Change in Control Period, the Company
shall pay the following amounts to Executive:

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  (i)   Any accrued but unpaid Base Salary for services rendered to the date of
termination, any accrued but unpaid expenses required to be reimbursed under
this Agreement, any vacation accrued to the date of termination, and any earned
but unpaid bonuses for any prior calendar year.     (ii)   Any benefits accrued
through the date of termination to which Executive may be entitled pursuant to
the plans, policies and arrangements referred to in Section 4(c) hereof shall be
determined and paid in accordance with the terms of such plans, policies and
arrangements.     (iii)   Subject to Executive’s execution of the Release (as
defined in Section 7), Executive shall be eligible for a bonus or incentive
compensation payment, at the same time, on the same basis, and to the same
extent payments are made to senior executives of the Company, pro-rated for the
fiscal year in which the Executive is terminated.     (iv)   Subject to
Executive’s execution of the Release (as defined in Section 7), an amount equal
to two (2) times the sum of Executive’s Base Salary plus his Target Annual Bonus
(in each case, as then in effect), of which one-half shall be paid in a lump sum
within the calendar quarter in which the 60th day falls after the employment
termination date and one-half shall be paid during the two (2) year period
beginning in the calendar quarter within which the 60th day following
Executive’s employment termination date falls and continuing at the same time
and in the same manner as Base Salary would have been paid if Executive had
remained in active employment until the end of such period.     (v)   Subject to
Executive’s execution of the Release (as defined in Section 7), the Company will
continue for Executive and Executive’s spouse and eligible dependents coverage
under the Company’s health benefit plan and disability benefit plans, in which
Executive was a participant at any time during the twelve-month period prior to
the date of termination, until the earliest to occur of (A) twenty-four
(24) months after the date of termination; (B) Executive’s death (provided that
benefits provided to Executive’s spouse and dependents shall not terminate until
twenty-four (24) months after the employment termination date); or (C) with
respect to any particular plan, the date Executive becomes eligible to
participate in a comparable benefit provided by a subsequent employer. In the
event that Executive’s continued participation in any such Company plan is
prohibited, the Company will arrange to provide Executive with benefits
substantially similar to those which Executive would have been entitled to
receive under such plan, for such 24-month period on a basis which provides
Executive with no additional after-tax cost.

     (f) Suspension and Refund of Termination Benefits for Subsequently
Discovered Cause. Notwithstanding any provision of this Agreement to the
contrary, if within one (1) year of Executive’s employment termination date for
any reason other than for Cause, it is determined

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by Company that Executive could have been terminated for Cause then, to the
extent permitted by law:

  (i)   the Company may elect to cancel any and all payments of any benefits
otherwise due Executive, but not yet paid, under this Agreement or otherwise;
and     (ii)   Executive will refund to the Company any amounts, plus interest,
previously paid by Company to Executive pursuant to Subsections 6(e)(iii),
6(e)(iv) or 6(e)(v).

     7. Resignation by Executive for Good Reason or Termination by Company
Without Cause During a Change in Control Period.
     (a) Certain Terminations During a Change in Control Period. Subject to
reduction required by Section 22, in the event a Change in Control occurs and
(x) Executive terminates his employment for Good Reason during a Change in
Control Period, or (y) the Company terminates Executive’s employment without
Cause (and for reason other than Death of Total Disability) during a Change in
Control Period, the Company shall, subject to Executive’s execution of the
Release (as defined in this Section 7), pay the following amounts to Executive:

  (i)   The payments and benefits provided for in Section 6(e)(i), (ii),
(iv) and (v) in the same form as provided for therein.     (ii)   A one time
payment of the sum of Executive’s Base Salary plus his Target Annual Bonus, and
12 times the applicable monthly COBRA premium for the Company’s medical benefit
plans in which Executive participates (in each case, as then in effect), which
shall be paid in a lump-sum on the 60th day after the later of the effective
date of Executive’s termination or the Change in Control.     (iii)   Executive
shall also receive a bonus or incentive compensation payment for the calendar
year of the termination, payable at 100% of the maximum bonus available to
Executive, pro-rated as of the effective date of the employment termination.
Such bonus payment shall be payable within five (5) days after the later of the
effective date of Executive’s termination or the Change in Control.

     (b) Certain Definitions.

  (i)   For purposes of this Agreement, “Change in Control” means the first to
occur on or after the date on which this Agreement is first signed, the
occurrence of any of the following events:

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

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  (B)   any Person, or Persons acting as a group (within the meaning of
Section 409A of the Code), acquires, (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such Person or Persons)
directly or indirectly, including by purchases, merger, consolidation or
otherwise, ownership of the securities of the Company that represent thirty
percent (30%) or more of the total voting power of the Company’s then
outstanding voting securities;     (C)   the following individuals cease for any
reason to constitute a majority of the number of directors then serving during
any 12-month period: individuals who, at the beginning of the 12-month period,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating or the
election of directors of the Company) whose appointment or election by the Board
or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least a majority of the directors before the date of
such appointment or election or whose appointment, election or nomination for
election was previously so approved or recommended     (D)   a Person or Persons
acting as a group acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such Person or Persons) assets from
the Company that have a total gross fair market value equal to or more than
forty percent (40%) of the total gross fair market value of all of the assets of
the Company immediately before such acquisition or acquisitions, other than a
sale or disposition by the Company of such assets to an entity, at least fifty
percent (50%) of the combined voting power of the voting securities of which are
owned by the Company or by the stockholders of the Company in substantially the
same proportions as their ownership of the Company immediately prior to such
sale.

  (ii)   For purposes of this Agreement, “Change in Control Period” means the
period commencing on the date occurring six months immediately prior to the date
on which a Change in Control occurs and ending on the second anniversary of the
date on which a Change in Control occurs.     (iii)   For purposes of this
Agreement, “Exchange Act” means the Securities and Exchange Act of 1934, as
amended from time to time;     (iv)   For purposes of this Section 7, “Person”
shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (1) the Company, (2) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, (3) an employee
benefit plan of the Company, (4) an underwriter temporarily holding securities
pursuant to an offering of such securities or (5) a corporation owned, directly
or indirectly, by the stockholders of the Company in

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      substantially the same proportions as their ownership of shares of Common
Stock of the Company.     (v)   For purposes of this Agreement, “Release” means
that specific document which the Company shall present to Executive for
consideration and execution after any termination of employment pursuant to
Section 5(e) and Section 6(e), wherein if he agrees to such, he will irrevocably
and unconditionally release and forever discharge the Company, it subsidiaries,
affiliates and related parties from any and all causes of action which Executive
at that time had or may have had against the Company (excluding any claim for
indemnity under this Agreement, any claim under state workers’ compensation or
unemployment laws, or any claim under COBRA).

     8. No Other Benefits or Compensation. Except as may be provided under this
Agreement, or under the terms of any incentive compensation, employee benefit,
or fringe benefit plan applicable to Executive at the time of Executive’s
termination or resignation, Executive shall have no right to receive any other
compensation, or to participate in any other plan, arrangement or benefit, with
respect to future periods after such termination or resignation.
     9. No Mitigation. In the event of any termination of employment hereunder,
Executive shall be under no obligation to seek other employment, and there shall
be no offset against any amounts due Executive under this Agreement on account
of any remuneration attributable to any subsequent employment that Executive may
obtain.
10. Covenants
     (a) Company Property. All written materials, records, data, and other
documents prepared or possessed by Executive during Executive’s employment with
the Company are the Company’s property. All information, ideas, concepts,
improvements, discoveries, and inventions that are conceived, made, developed,
or acquired by Executive individually or in conjunction with others during
Executive’s employment (whether during business hours and whether on the
Company’s premises or otherwise) which relate to the Company’s business,
products, or services are the Company’s sole and exclusive property. All
memoranda, notes, records, files, correspondence, drawings, manuals, models,
specifications, computer programs, maps, and all other documents, data, or
materials of any type embodying such information, ideas, concepts, improvements,
discoveries, and inventions are the Company’s property. At the termination of
Executive’s employment with the Company for any reason, Executive shall return
all of the Company’s documents, data, or other Company property to the Company.
     (b) Confidential Information; Non-Disclosure. Executive acknowledges that
the business of the Company is highly competitive and that the Company and will
provide Executive with access to “Confidential Information” relating to the
business of the Company and its affiliates.
     For purposes of this Agreement, “Confidential Information” means and
includes the Company’s confidential and/or proprietary information and/or trade
secrets that have been

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developed or used and/or will be developed and that cannot be obtained readily
by third parties from outside sources. Confidential Information includes, by way
of example and without limitation, the following information regarding
customers, employees, contractors, and the industry not generally known to the
public; strategies, methods, books, records, and documents; technical
information concerning products, equipment, services, and processes; procurement
procedures and pricing techniques; the names of and other information concerning
customers, investors, and business affiliates (such as contact name, service
provided, pricing for that customer, type and amount of services used, credit
and financial data, and/or other information relating to the Company’s
relationship with that customer); pricing strategies and price curves;
positions, plans, and strategies for expansion or acquisitions; budgets;
customer lists; research; weather data; financial and sales data; trading
methodologies and terms; evaluations, opinions, and interpretations of
information and data; marketing and merchandising techniques; prospective
customers’ names and marks; grids and maps; electronic databases; models;
specifications; computer programs; internal business records; contracts
benefiting or obligating the Company; bids or proposals submitted to any third
party; technologies and methods; training methods and training processes;
organizational structure; personnel information, including salaries of
personnel; payment amounts or rates paid to consultants or other service
providers; and other such confidential or proprietary information.
     Information need not qualify as a trade secret to be protected as
Confidential Information under this Agreement, and the authorized and controlled
disclosure of Confidential Information to authorized parties by Company in the
pursuit of its business will not cause the information to lose its protected
status under this Agreement. Executive acknowledges that this Confidential
Information constitutes a valuable, special, and unique asset used by the
Company or its affiliates in their businesses to obtain a competitive advantage
over their competitors. Executive further acknowledges that protection of such
Confidential Information against unauthorized disclosure and use is of critical
importance to the Company and its affiliates in maintaining their competitive
position.
     Executive will also have access to Confidential Information of third
parties, such as actual and potential customers, suppliers, partners, joint
venturers, investors, financing sources, and the like, of the Company and its
affiliates.
     The Company also agrees to provide Executive with one or more of the
following: access to Confidential Information; specialized training regarding
the Company’s methodologies and business strategies, and/or support in the
development of goodwill such as introductions, information and reimbursement of
customer development expenses consistent with Company policy. The foregoing is
not contingent on continued employment, but is contingent upon Executive’s use
of the Confidential Information access, specialized training, and goodwill
support provided by Company for the exclusive benefit of the Company and upon
Executive’s full compliance with the restrictions on Executive’s conduct
provided for in this Agreement.
     In addition to the requirements set forth in Section 5(c)(i), Executive
agrees that Executive will not after Executive’s employment with the Company,
make any unauthorized disclosure of any then Confidential Information or
specialized training of the Company or its affiliates, or make any use thereof,
except in the carrying out of his employment responsibilities

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hereunder. Executive also agrees to preserve and protect the confidentiality of
third party Confidential Information to the same extent, and on the same basis,
as the Company’s Confidential Information.
     (c) Unfair Competition Restrictions. The Company agrees to and shall
provide Executive with immediate access to Confidential Information. Ancillary
to the rights provided to Executive following employment termination, the
Company’s provision of Confidential Information, specialized training, and/or
goodwill support to Executive, and Executive’s agreements, regarding the use of
same, and in order to protect the value of any restricted stock, training,
goodwill support and/or the Confidential Information described above, the
Company and Executive agree to the following provisions against unfair
competition. Executive agrees that for a period of two (2) years following the
termination of employment for any reason (“Restricted Term”), Executive will
not, directly or indirectly, for Executive or for others, anywhere in the United
States (including all parishes in Louisiana, and Puerto Rico) (the “Restricted
Area”) do the following, unless expressly authorized to do so in writing by the
Chief Executive Officer of the Company:
Engage in, or assist any person, entity, or business engaged in, the selling or
providing of products or services that would displace the products or services
that (i) the Company is currently in the business of providing and was in the
business of providing, or was planning to be in the business of providing, at
the time Executive was employed with the Company, and (ii) that Executive had
involvement in or received Confidential Information about in the course of
employment; the foregoing is expressly understood to include, without
limitation, the business of the collection, transfer, recycling and resource
recovery, or disposal of solid waste, hazardous or other waste, including the
operation of waste-to-energy facilities.
     It is further agreed that during the Restricted Term, Executive cannot
engage in any of the enumerated prohibited activities in the Restricted Area by
means of telephone, telecommunications, satellite communications,
correspondence, or other contact from outside the Restricted Area. Executive
further understands that the foregoing restrictions may limit his ability to
engage in certain businesses during the Restricted Term, but acknowledges that
these restrictions are necessary to protect the Confidential Information the
Company has provided to Executive.
     A failure to comply with the foregoing restrictions will create a
presumption that Executive is engaging in unfair competition. Executive agrees
that this Section defining unfair competition with the Company does not prevent
Executive from using and offering the skills that Executive possessed prior to
receiving access to Confidential Information, confidential training, and
knowledge from the Company. This Agreement creates an advance approval process,
and nothing herein is intended, or will be construed as, a general restriction
against the pursuit of lawful employment in violation of any controlling state
or federal laws. Executive shall be permitted to engage in activities that would
otherwise be prohibited by this covenant if such

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activities are determined in the sole discretion of the Chief Executive Officer
of the Company to be no material threat to the legitimate business interests of
the Company.
     (d) Non-Solicitation of Customers. For the Restricted Term, Executive will
not call on, service, or solicit competing business from customers of the
Company or its affiliates whom Executive, within the previous twelve
(12) months, (i) had or made contact with, or (ii) had access to information and
files about, or induce or encourage any such customer or other source of ongoing
business to stop doing business with Company.
     (e) Non-Solicitation of Employees. During Executive’s employment, and for
the Restricted Term, Executive will not, either directly or indirectly, call on,
solicit, encourage, or induce any other employee or officer of the Company or
its affiliates whom Executive had contact with, knowledge of, or association
within the course of employment with the Company to terminate his employment,
and will not assist any other person or entity in such a solicitation.
     (f) Non-Disparagement. Executive covenants and agrees that Executive shall
not engage in any pattern of conduct that involves the making or publishing of
written or oral statements or remarks (including, without limitation, the
repetition or distribution of derogatory rumors, allegations, negative reports
or comments) which are disparaging, deleterious or damaging to the integrity,
reputation or good will of the Company, its management, or of management of
corporations affiliated with the Company.
     11. Enforcement of Covenants.
     (a) Termination of Employment and Forfeiture of Compensation. Executive
agrees that any breach by Executive of any of the covenants set forth in
Section 10 hereof (a) during Executive’s employment by the Company, shall be
grounds for immediate dismissal of Executive for Cause pursuant to
Section 5(c)(i), which shall be in addition to and not exclusive of any and all
other rights and remedies the Company may have against Executive; or (b) after
Executive’s employment terminated without Cause or for Good Reason and during
the Restricted Term, shall result in the forfeiture of any remaining amounts
under Section 6(e) or 7 of this Agreement.
     (b) Right to Injunction. Executive acknowledges that a breach of the
covenants set forth in Section 10 hereof will cause irreparable damage to the
Company with respect to which the Company’s remedy at law for damages will be
inadequate. Therefore, in the event of breach or anticipatory breach of the
covenants set forth in this section by Executive, Executive and the Company
agree that the Company shall be entitled to seek the following particular forms
of relief, in addition to remedies otherwise available to it at law or equity:
(A) injunctions, both preliminary and permanent, enjoining or restraining such
breach or anticipatory breach and Executive hereby consents to the issuance
thereof forthwith and without bond by any court of competent jurisdiction; and
(B) recovery of all reasonable sums as determined by a court of competent
jurisdiction expended and costs, including reasonable attorney’s fees, incurred
by the Company to enforce the covenants set forth in this section.

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     (c) Separability of Covenants. The covenants contained in Section 10 hereof
constitute a series of separate but ancillary covenants, one for each applicable
State in the United States and the District of Columbia, and one for each
applicable foreign country. If in any judicial proceeding, a court shall hold
that any of the covenants set forth in Section 10 exceed the time, geographic,
or occupational limitations permitted by applicable laws, Executive and the
Company agree that such provisions shall and are hereby reformed to the maximum
time, geographic, or occupational limitations permitted by such laws. Further,
in the event a court shall hold unenforceable any of the separate covenants
deemed included herein, then such unenforceable covenant or covenants shall be
deemed eliminated from the provisions of this Agreement for the purpose of such
proceeding to the extent necessary to permit the remaining separate covenants to
be enforced in such proceeding. Executive and the Company further agree that the
covenants in Section 10 shall each be construed as a separate agreement
independent of any other provisions of this Agreement, and the existence of any
claim or cause of action by Executive against the Company whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of any of the covenants of Section 10.
     12. Indemnification.
     The Company shall indemnify and hold harmless Executive to the fullest
extent permitted by Delaware law for any action or inaction of Executive while
serving as an officer and director of the Company or, at the Company’s request,
as an officer or director of any other entity or as a fiduciary of any benefit
plan. This provision includes the obligation and undertaking of the Executive to
reimburse the Company for any fees advanced by the Company on behalf of the
Executive should it later be determined that Executive was not entitled to have
such fees advanced by the Company under Delaware law. The Company shall cover
the Executive under directors and officers liability insurance both during and,
while potential liability exists, after the Employment Period in the same amount
and to the same extent as the Company covers its other officers and directors.
     13. Arbitration.
     Except with respect to enforcement of the covenants contained in Section 10
herein, the parties agree that any dispute relating to this Agreement, or to the
breach of this Agreement, arising between Executive and the Company shall be
settled by arbitration in accordance with the Federal Arbitration Act and the
commercial arbitration rules of the American Arbitration Association (“AAA”), or
any other mutually agreed upon arbitration service. The arbitration proceeding,
including the rendering of an award, shall take place in Houston, Texas, and
shall be administered by the AAA (or any other mutually agreed upon arbitration
service). The arbitrator shall be jointly selected by the Company and Executive
within thirty (30) days of the notice of dispute, or if the parties cannot
agree, in accordance with the commercial arbitration rules of the AAA (or any
other mutually agreed upon arbitration service). All fees and expenses
associated with the arbitration shall be borne equally by Executive and the
Company during the arbitration, pending final decision by the arbitrator as to
who should bear fees, unless otherwise ordered by the arbitrator. The arbitrator
shall not be authorized to create a cause of action or remedy not recognized by
applicable state or federal law. The award of the arbitrator shall be final and
binding upon the parties without appeal or review, except as permitted by the
arbitration laws of

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the State of Texas. The award shall be enforceable through a court of law upon
motion of either party.
     14. Requirement of Timely Payments.
     If any amounts which are required, or determined to be paid or payable, or
reimbursed or reimbursable, to Executive under this Agreement (or any other
plan, agreement, policy or arrangement with the Company) are not so paid
promptly at the times provided herein or therein, such amounts shall accrue
interest, compounded daily, at an 8% annual percentage rate, from the date such
amounts were required or determined to have been paid or payable, reimbursed or
reimbursable to Executive, until such amounts and any interest accrued thereon
are finally and fully paid, provided, however, that in no event shall the amount
of interest contracted for, charged or received hereunder, exceed the maximum
non-usurious amount of interest allowed by applicable law.
     15. Withholding of Taxes.
     The Company may withhold from any compensation and benefits payable under
this Agreement all applicable federal, state, local, or other taxes.
     16. Source of Payments.
     All payments provided under this Agreement, other than payments made
pursuant to a plan which provides otherwise, shall be paid from the general
funds of the Company, and no special or separate fund shall be established, and
no other segregation of assets made, to assure payment. Executive shall have no
right, title or interest whatever in or to any investments which the Company may
make to aid the Company in meeting its obligations hereunder. To the extent that
any person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right of an unsecured creditor of the
Company.
     17. Assignment.
     Except as otherwise provided in this Agreement, this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns. This Agreement shall not be
assignable by Executive (but any payments due hereunder which would be payable
at a time after Executive’s death shall be paid to Executive’s designated
beneficiary or, if none, his estate) and shall be assignable by the Company only
to any financially solvent corporation or other entity resulting from the
reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to or with which the
Company’s business or substantially all of its business or assets may be sold,
exchanged or transferred, and it must be so assigned by the Company to, and
accepted as binding upon it by, such other corporation or entity in connection
with any such reorganization, merger, consolidation, sale, exchange or transfer
in a writing delivered to Executive in a form reasonably acceptable to Executive
(the provisions of this sentence also being applicable to any successive such
transaction).

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     18. Entire Agreement; Amendment.
     This Agreement shall supersede any and all existing oral or written
agreements, representations, or warranties between Executive and the Company or
any of its subsidiaries or affiliated entities relating to the terms of
Executive’s employment by the Company. It may not be amended except by a written
agreement signed by both parties.
     19. Governing Law.
     This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas applicable to agreements made and to be performed in
that State, without regard to its conflict of laws provisions.
     20. Notices.
     Any notice, consent, request or other communication made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by registered or certified mail, return
receipt requested, or by facsimile or by hand delivery, to those listed below at
their following respective addresses or at such other address as each may
specify by notice to the others:

         
 
  To the Company:   Waste Management, Inc.
 
      1001 Fannin, Suite 4000
 
      Houston, Texas 77002
 
      Attention: Corporate Secretary
 
       
 
  To Executive:   At the address for Executive set forth below.

     21. Miscellaneous.
     (a) Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
     (b) Separability. Subject to Section 11 hereof, if any term or provision of
this Agreement is declared illegal or unenforceable by any court of competent
jurisdiction and cannot be modified to be enforceable, such term or provision
shall immediately become null and void, leaving the remainder of this Agreement
in full force and effect.
     (c) Headings. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this Agreement.
     (d) Rules of Construction. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.

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     (e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, and
such counterparts will together constitute but one Agreement.
     22. Potential Limitation on Severance Benefits.
     (a) Maximum Severance Amount. Notwithstanding any provision in this
Agreement to the contrary, in the event of a qualifying termination (or
resignation) under Section 6(e) or Section 7 of this Agreement it is determined
by the Company that the Severance Benefits (as defined in Section 22(b) below)
would exceed 2.99 times the sum of the Executive’s then current base salary and
target bonus (the “Maximum Severance Amount”), then the aggregate present value
of the Severance Benefits provided to the Executive shall be reduced by the
Company to the Reduced Amount. The “Reduced Amount” shall be an amount,
expressed in present value, that maximizes the aggregate present value of the
Severance Benefits without exceeding the Maximum Severance Amount.
     (b) Severance Benefits. For purposes of determining Severance Benefits
under Section 22(a) above, Severance Benefits means the present value of
payments or distributions by the Company, its subsidiaries or affiliated
entities to or for the benefit of the Executive (whether paid or provided
pursuant to the terms of this Agreement or otherwise), and
(A) including: (i) cash amounts payable by the Company in the event of
termination of Executive’s employment; and (ii) the present value of benefits or
perquisites provided for periods after termination of employment (but excluding
benefits or perquisites provided to employees generally); and
(B) excluding: (i) payments of salary, bonus or performance award amounts that
had accrued at the time of termination; (ii) payments based on accrued qualified
and non-qualified deferred compensation plans, including retirement and savings
benefits; (iii) any benefits or perquisites provided under plans or programs
applicable to employees generally; (iv) amounts paid as part of any agreement
intended to “make-whole” any forfeiture of benefits from a prior employer;
(v) amounts paid for services following termination of employment for a
reasonable consulting agreement for a period not to exceed one year;
(vi) amounts paid for post-termination covenants (such as a covenant not to
compete); (vii) the value of accelerated vesting or payment of any outstanding
equity-based award; and (viii) any payment that the Board or any committee
thereof determines in good faith to be a reasonable settlement of any claim made
against the Company.
     (c) Possible 280G Reduction. Following application of Section 22(a), in the
event that the payment of the remaining Severance Benefits to Executive plus any
other payments to Executive which would be subject to Code Section 280G
(including any reduced Severance Benefits) (“280G Severance Benefits”) would be
subject (in whole or part), to any excise tax imposed under Code Section 4999
(the “Excise Tax”), then the cash portion of the 280G Severance Benefits shall
first be further reduced, and the non-cash 280G Severance Benefits shall
thereafter be further reduced, to the extent necessary so that no portion of the
280G Severance Benefits is subject to the Excise Tax, but only if (i) the amount
of the 280G Severance Benefits to be received by Executive, as so reduced by
this Section 22(c) and after subtracting

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the amount of federal, state and local income taxes on such reduced 280G
Severance Benefits (after taking into account the phase out of itemized
deductions and personal exemptions attributable to such reduced 280G Severance
Benefits) is greater than or equal to (ii) the amount of the 280G Severance
Benefits to be received by Executive without such reduction by this Section
22(c) after subtracting the amount of federal, state and local income taxes on
such 280G Severance Benefits and the amount of the Excise Tax to which Executive
would be subject in respect of such unreduced 280G Severance Benefits (after
taking into account the phase out of itemized deductions and personal exemptions
attributable to such unreduced 280G Severance Benefits ).
     (d) Calculation of 280G Severance Benefits. For purposes of determining the
280G Severance Benefits, (i) no portion of the 280G Severance Benefits, the
receipt or enjoyment of which Executive shall have waived at such time and in
such manner as not to constitute a “payment” within the meaning of Code
Section 280G(b), shall be taken into account, (ii) no portion of the 280G
Severance Benefits shall be taken into account which, in the opinion of tax
counsel (“Tax Counsel”) who is reasonably acceptable to Executive and selected
by the accounting firm (the “Auditor”) which was, immediately prior to the
Change in Control, the Company’s independent auditor, does not constitute a
“parachute payment” within the meaning of Code Section 280G(b)(2) (including by
reason of Code Section 280G(b)(4)(A)); (iii) no portion of the 280G Severance
Benefits shall be taken into account which, in the opinion of Tax Counsel,
constitutes reasonable compensation for services actually rendered, within the
meaning of Code Section 280G(b)(4)(B), in excess of the “base amount” (as
defined in Code Section 280G(b)(3)) allocable to such reasonable compensation,
and (iv) the value of any non-cash benefit or any deferred payment or benefit
included in the 280G Severance Benefits shall be determined by the Auditor in
accordance with the principles of Code Sections 280G(d)(3) and (4).
     (e) Determination of Present Value. For purposes of this Section 22, the
present value of Severance Benefits and 280G Severance Benefits 280G shall be
determined in accordance with Code Section 280G(d)(4).
     23. Compliance with Code Section 409A.
     (a) Compliance. It is the intention of the Company and Executive that this
Employment Agreement not result in unfavorable tax consequences to Executive
under Code Section 409A. This Section 23 does not create an obligation on the
part of Company to modify the Employment Agreement in the future and does not
guarantee that the amounts or benefits owed under the Employment Agreement will
not be subject to interest and penalties under Code Section 409A.
     (b) Payment Timing. The payments of severance under Sections 6(e)(iii) and
(iv) and Sections 7(a)(i), (ii) and (iii) above (“Separation Payments”) are
designated as separate payments for purposes of the short-term deferral rules
under Treasury Regulation Section 1.409A-1(b)(4)(i)(F), and, with respect to
such Separation Payments, the exemption for involuntary terminations under
separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii). As a
result, (A) Separation Payments that are by their terms scheduled to be made on
or before March 15th of the calendar year following the applicable year of
termination

18

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(excluding for this purpose any payments to be made under Section 7(a)(ii)),
(B) any additional Separation Payments that are made on or before December 31st
of the second calendar year following the year of Executive’s termination and do
not exceed the lesser of two times Base Salary or two times the limit under Code
Section 401(a)(17) then in effect, and (C) any Separation Payments under Section
7(a) made on account of a 409A Change in Control within the meaning of Code
Section 409A are exempt from the requirements of Code Section 409A. If Executive
is designated as a “specified employee” within the meaning of Code Section 409A,
then to the extent the Disability Payments and Separation Payments to be made
during the first six month period following Executive’s termination of
employment exceed such exempt amounts, the payments shall be withheld and the
amount of the payments withheld will be paid in a lump sum, with interest (at
the Company’s then applicable overnight rate), on the date that is six
(6) months and one (1) day after Executive’s termination. Continued medical
benefits under Sections 6(e)(v) and 7(a)(i) above are intended to satisfy the
exemption for medical expense reimbursements under Treasury Regulation Section
1.409A-1(b)(9)(v)(B).
          IN WITNESS WHEREOF, this Agreement is EXECUTED as of the date first
set forth above and effective as set forth therein.

                  EXECUTIVE   WASTE MANAGEMENT, INC.    
 
               
Signature:
  /s/ Puneet Bhasin
 
  By:   /s/ David P. Steiner
 
     
Printed Name:
  Puneet Bhasin            
 
               
 
                                Home Address:            
 
                              Street            
 
                              City, State, Zip            

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