EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     WASTE MANAGEMENT, INC., for and on behalf of its affiliated corporations
(collectively referred to as the “Company”), and CHERIE RICE (the “Employee”)
agree to enter into this EMPLOYMENT AGREEMENT (the “Agreement”) dated as of
July 17, 1998 as follows:

     1.     Employment.

     The Company shall employ Employee, and Employee 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 Employee’s employment under this Agreement shall be for a
period of one year, beginning on August 1, 1998, and shall be continually
renewing for a period of one (1) year thereafter unless terminated pursuant to
the provisions of Section 5 of this Agreement. Company.

     3.     Duties and Responsibilities.

     (a)  Employee shall serve as Vice President, Investor Relations. In such
capacity, Employee shall perform such duties as may be assigned to Employee from
time to time by Company.

     (b)  Employee shall faithfully serve the Company, devote Employee’s full
working time, attention and energies to the business of the Company and perform
the duties under this Agreement to the best of Employee’s abilities.

     (c)  Employee shall (i) comply with all applicable laws, rules and
regulations, and all requirements of all applicable regulatory, self-regulatory,
and administrative bodies; (ii) comply with the Company’s rules, procedures,
policies, requirements, and directions; and (iii) not engage in any other
business or employment without the written consent of the Company except as
otherwise specifically provided herein.

     4.     Compensation and Benefits.

     (a)  Base Salary. During the Employment Term, the Company shall pay
Employee a base salary at the annual rate of one hundred thirty-seven thousand
($137,000.) dollars 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 employees.

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     (b)  Expense Reimbursement. The Company shall promptly reimburse Employee
for the ordinary and necessary business expenses incurred by Employee in the
performance of Employee’s duties hereunder in accordance with the Company’s
customary practices applicable to employees, provided that such expenses are
incurred and accounted for in accordance with the Company’s policy.

     (c)  Benefit Plans. Employee shall be eligible to participate in or receive
benefits under any pension plan, profit sharing plan, medical and dental
benefits plan, life insurance plan, short-term and long-term disability plans,
supplemental and/or incentive compensation plans, practices or arrangements, or
any other benefit plan or arrangement, generally made available by the Company
to employees of similar status and responsibilities (“similarly situated
employees”).

     (d)  Stock Options. Employee shall be awarded fifteen (15,000) Waste
Management, Inc., stock options, subject to the approval of the Compensation
Committee of the Board of Directors.

     5.     Termination of Employment.

     Employee’s employment hereunder may be terminated under the following
circumstances:

     (a)  Death. Employee’s employment hereunder shall terminate upon Employee’s
death.

     (b)  Total Disability. The Company may terminate Employee’s employment
hereunder upon Employee’s becoming “Totally Disabled”. For purposes of this
Agreement, Employee shall be “Totally Disabled” if Employee is physically or
mentally incapacitated so as to render Employee incapable of performing the
usual and customary duties under this Agreement. Employee’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; provided, however, that in the absence
of Employee’s receipt of such long-term disability benefits of Social Security
benefits, the Company may, in its reasonable discretion (but based upon
appropriate medical evidence), determine that Employee is Totally Disabled.

     (c)  Termination by the Company for Cause. The Company may terminate
Employee’s employment hereunder for “Cause” at any time after providing written
notice to Employee.

  (i)   For purposes of this Agreement, the term “Cause” shall mean any of the
following: (A) conviction of a crime (including conviction on a nolo contendere
plea) involving a felony or, in the good faith judgment of the Company, fraud,
dishonesty, or moral turpitude; (B) deliberate and continual refusal to perform
employment duties reasonably requested by the

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      Company or an affiliate after thirty (30) days’ written notice by
certified mail of such failure to perform, specifying that the failure
constitutes cause (other than as a result of vacation, sickness, illness or
injury); (C) fraud or embezzlement determined in accordance with the Company’s
normal, internal investigative procedures consistently applied in comparable
circumstances; (D) gross misconduct or gross negligence in connection with the
business of the Company or an affiliate which has substantial effect on the
Company or the affiliate; or (E) breach of any of the covenants set forth in
Section 7 hereof.     (ii)   An individual will be considered to have been
terminated for Cause if the Company determines that the individual engaged in an
act constituting Cause at any time prior to a payment date for an award,
regardless of whether the individual terminates employment voluntarily or is
terminated involuntarily, and regardless of whether the individual’s termination
initially was considered to have been for Cause.     (iii)   Any determination
of Cause under this Agreement shall be made by the Company after giving Employee
a reasonable opportunity to be heard.

     (d)  Voluntary Termination by Employee. Employee may terminate employment
hereunder at any time after providing ten (10) days’ written notice to the
Company.

     (e)  Termination by the Company without Cause. The Company may terminate
Employee’s employment hereunder without Cause at any time after providing
written notice to Employee.

     6.     Compensation Following Termination of Employment.

     In the event that Employee’s employment hereunder is terminated, Employee
shall be entitled to the following compensation and benefits upon such
termination:

     (a)  Termination by Reason of Death. In the event that Employee’s
employment is terminated by reason of Employee’s death, the Company shall pay
the following amounts to Employee’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, and any vacation accrued to the date of death.     (ii)   Any
benefits to which Employee may be entitled pursuant to the plans, policies and
arrangements referred to in Section 4(c) hereof as determined and paid in
accordance with the terms of such plans, policies and arrangements.

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

  (i)   Any accrued but unpaid Base Salary for services rendered to the dates of
termination, any accrued but unpaid expenses required to be reimbursed under
this Agreement, any vacation accrued to the date of termination.     (ii)   Any
benefits to which Employee 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)  
An amount equal to

  (A)   the Base Salary (at the rate in effect as of the date of Employee’s
Total Disability) which would have been payable to Employee if Employee had
continued in active employment until the end of the six (6) month period
beginning on the date of Employee’s termination; reduced by     (B)   the
maximum annual amount of the long term disability benefits payable to Employee
under the Company’s long-term disability plan as determined prior to the
reduction of such benefits under the terms of the plan for other disability
income (if long-term disability [LTD] benefits are payable, pursuant to the
terms of the applicable LTD plan, during the six (6) month period referred to in
Section 6[b][iii][A] above).

      Payment shall be made at the same time and in the same manner as such
compensation would have been paid if Employee had remained in active employment
until the end of such period.

     (c)  Termination for Cause or Voluntary Termination by Employee. In the
event that Employee’s employment is terminated by the Company for Cause pursuant
to Section 5(c), or Employee terminates employment pursuant to Section 5(d), the
Company shall pay the following amounts to Employee:

  (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.     (ii)   Any
benefits to which Employee 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.

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     (d)  Termination by the Company Without Cause. In the event that Employee’s
employment is terminated by the Company pursuant to Section 5(e) for reasons
other than death, Total Disability or Cause, the Company shall pay the following
amounts to Employee:

  (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.     (ii)   Any
benefits to which Employee 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)  
The Base Salary (at the rate in effect as of the date of Employee’s termination)
which would have been payable to Employee if Employee had continued in active
employment until the end of the twelve (12) month period beginning on the date
of Employee’s termination. Payment shall be made at the same time and in the
same manner as such compensation would have been paid if Employee had remained
in active employment until the end of such period. The Employee shall also be
eligible for a bonus or incentive compensation payment to the extent bonuses are
paid to similarly situated employees, pro-rated for the year in which the
Employee is terminated, and paid when similarly situated employees are paid.    
(iv)   The Company completely at its expense will continue for Employee and
Employee’s spouse and dependents, group health plans, programs or arrangements,
in which Employee was entitled to participate at any time during the
twelve-month period prior to the date of termination, until the earlier of:
(A) last day of period during which Employee receives payment in accordance with
clause (iii) above; (B) Employee’s death (provided that benefits payable to
Employee’s beneficiaries shall not terminate upon Employee’s death); or (C) with
respect to any particular plan, program or arrangement, the date Employee
becomes covered by a comparable benefit provided by a subsequent employer.

     (e)  No Other Benefits or Compensation. Except as may be provided under
this Agreement, under the terms of any incentive compensation, employee benefit,
or fringe benefit plan applicable to Employee at the time of Employee’s
termination or resignation of employment, Employee 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.

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     (f)  Suspension or Termination of Benefits and Compensation. In the event
that the Company, in its sole discretion determines that, without the Company’s
express written consent, Employee has

  (i)   directly or indirectly engaged in, assisted or have any active interest
or involvement whether as an employee, agent, consultant, creditor, advisor,
officer, director, stockholder (excluding holding of less than 1% of the stock
of a public company), partner, proprietor, or any type of principal whatsoever,
in any person, firm, or business entity which is directly or indirectly
competitive with the Company or any of its affiliates, or     (ii)   directly or
indirectly, for or on behalf of any person, firm, or business entity which is
directly or indirectly competitive with the Company or any of its affiliates
(A) solicited or accepted from any person or entity who is or was a client of
the Company during the term of Employee’s employment hereunder or during any of
the twelve calendar months preceding or following the termination of Employee’s
employment any business for services similar to those rendered by the Company,
(B) requested or advised any present or future customer of the Company to
withdraw, curtail or cancel its business dealings with the Company, or
(C) requested or advised any employee of the Company to terminate his or her
employment with the Company;

the Company shall have the right to suspend or terminate any or all remaining
benefits payable pursuant to Section 6 of this Agreement. Such suspension or
termination of benefits shall be in addition to and shall not limit any and all
other rights and remedies that the Company may have against Employee.

     7.     Restrictive Covenants

     In consideration of the specialized training Employee has received, the
access Employee has had to confidential and proprietary information and other
promises of the Company contained in this Agreement, Employee agrees as follows:

     (a)  Competitive Activity. Employee covenants and agrees that at all times
during Employee’s period of employment with the Company, and while Employee is
receiving payments pursuant to Section 6 of this Agreement, Employee will not,
directly or indirectly, engage in, assist, or have any active interest or
involvement, whether as an employee, agent, consultant, creditor, advisor,
officer, director, stockholder (excluding holding of less than 1% of the stock
of a public company), partner, proprietor or any type of principal whatsoever in
any person, firm, or business entity which, directly or indirectly, is engaged
in the same business as that conducted and carried on by the Company, without
the Company’s specific written consent to do so. Furthermore, for a period of
one (1) year after the date of termination of Employee’s employment, whether
such termination is voluntary or involuntary, by wrongful discharge, or
otherwise, or

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one (1) year following the cessation of payments made pursuant to Section 6 of
this Agreement, whichever date is later, Employee will not directly or
indirectly, within 75 miles of the principal place of business of the Company,
the principal place of business of any corporation or other entity owned,
controlled by (or otherwise affiliated with) the Company by which Employee may
also be employed or served by Employee, or any other geographic location in
which Employee has specifically represented the interests of the Company or such
other affiliated entity, during the twelve (12) months prior to the termination
of Employee’s employment, engage in, assist, or have any active interest or
involvement, whether as an employee, agent, consultant, creditor, advisor,
officer, director, stockholder (excluding holding of less than 1% of the stock
of a public company), partner, proprietor or any type of principal whatsoever in
any person, firm, or business entity which, directly or indirectly, is engaged
in the same business as that conducted and carried on by the Company, without
the Company’s specific written consent to do so.

     (b)  Non-Solicitation. Employee covenants and agrees that at all times
during Employee’s period of employment with the Company, and for a period of one
(1) year after the date of termination of Employee’s employment, whether such
termination is voluntary or involuntary, by wrongful discharge, or otherwise, or
the date of the cessation of payments made to the Employee pursuant to Section 6
of this Agreement, whichever is later, Employee will not directly or indirectly
(i) induce any customers of the Company or corporations affiliated with the
Company; (iii) directly or indirectly request or advise any customers of the
Company or corporations affiliated with the Company to withdraw, curtail or
cancel such customer’s business with the Company; (iv) directly or indirectly
disclose to any other person, firm or corporation the names or addresses of any
of the customers of the Company or corporations affiliated with the Company; or
(v) individually of through any person, firm, association or corporation with
which Employee is now or may hereafter become associated, cause, solicit,
entice, or induce any present or future employee of the Company, or any
corporation affiliated with the Company to leave the employ of the Company, or
such other corporation to accept employment with, or compensation from, the
Employee or any such person, firm, association or corporation without the prior
written consent of the Company.

     (c)  Non-Disparagement. Employee covenants and agrees that Employee 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 management of
corporations affiliated with the Company.

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     (d)  Protected Information. Employee recognizes and acknowledges that
Employee has had and will continue to have access to various confidential or
proprietary information concerning the Company and corporations affiliated with
the Company of a special and unique value which may include, without limitation,
(i) books and records relating to operation, finance, accounting, sales,
personnel and management, (ii) policies and matters relating particularly to
operations such as customer service requirements, costs of providing service and
equipment, operating costs and pricing matters, and (iii) various trade or
business secrets, including business opportunities, marketing or business
diversification plans, business development and bidding techniques, methods and
processes, financial data and the like (collectively, the “Protected
Information”). Employee therefore covenants and agrees that Employee will not at
any time, either while employed by the Company or afterwards, knowingly make any
independent use of, knowingly disclose to any other person or organization
(except as authorized by the Company) any of the Protected Information.

     8.     Enforcement of Covenants.

     (a)  Termination of Employment and Forfeiture of Compensation. Employee
agrees that any breach by Employee of any of the covenants set forth in
Section 7 hereof during Employee’s employment by the Company, shall be grounds
for immediate dismissal of Employee and forfeiture of any accrued and unpaid
salary, bonus, commissions or other compensation of such Employee as liquidated
damages, which shall be in addition to and not exclusive of any and all other
rights and remedies the Company may have against Employee.

     (b)  Right to Injunction. Employee acknowledges that a breach of the
covenants set forth in Section 7 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 of anticipatory breach of the
covenants set forth in this section by Employee, Employee and the Company agree
that the Company shall be entitled to the following particular forms of relief,
in addition to remedies otherwise available to it at law or equity;
(i) injunctions, both preliminary and permanent, enjoining or retraining such
breach or anticipatory breach and Employee hereby consents to the issuance
thereof forthwith and without bond by any court of competent jurisdiction; and
(ii) recovery of all reasonable sums expended and costs, including reasonable
attorney’s fees, incurred by the Company to enforce the covenants set forth in
this section.

     (c)  Separability of Covenants. The covenants contained in Section 7 hereof
constitute a series of separate 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 7 exceed the time, geographic, or occupational

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limitations permitted by applicable laws, Employee 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. Employee and the Company further agree that the covenants in
Section 7 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 Employee 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 7.

     9.     Withholding of Taxes.

     The Company may withhold from any compensation and benefits payable under
this Agreement all applicable federal, state, local, or other taxes.

     10.     Non-Disclosure of Agreement Terms.

     Employee agrees that Employee will not disclose the terms of this Agreement
to any third party other than Employee’s immediate family, attorney,
accountants, or other consultants or advisors or except as may be required by
any governmental authority.

     11.     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. Employee 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.

     12.     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 Employee.

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     13.     Entire Agreement; Amendment.

     This Agreement shall supersede any and all existing oral or written
agreements, representations, or warranties between Employee and the Company or
any of its subsidiaries or affiliated entities relating to the terms of
Employee’s employment by the Company. It may not be amended except by a written
agreement signed by both parties.

     14.     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.

     15.     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 Employee:   At the address for Employee set forth below.

     16.     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 8 hereof, if any term or provision of
this Agreement is declared illegal or unenforceable by any court of competent
jurisdiction and cannot be modified o 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.

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     (d)  Rules of Construction. Whenever the context so requires, the use of
the singular shall be deemed to include the plural and vice versa.

     (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.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

              WASTE MANAGEMENT, INC.
 
       

  By:   /s/ Susan J. Piller

     

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  Name:    

     

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  Title:    

     

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  Date:    

     

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            EMPLOYEE
 
            /s/ Cherie C. Rice    

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  Date:   July 17, 1998

     

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  Address:    

     

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