<PAGE>

                                                                   EXHIBIT 10.31

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective the 21st day of January, 2004 by and between Waste Management, Inc.
(the "Company"), and JIMMY D. LaVALLEY (the "Executive").

         1.       EMPLOYMENT AND TERMINATION OF PREVIOUS EMPLOYMENT AGREEMENT.

         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 January 21, 2004 ("Employment Date"), and shall continue for a
period of two (2) years thereafter, and shall automatically be renewed for
successive one (1) year periods 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." This
offer is subject to the successful completion of background check and drug
screen.

         3.       DUTIES AND RESPONSIBILITIES.

         (a)      Executive shall serve as the Senior Vice President-People. 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, President, Chief Operations Officer, Chief
Administrative Officer, Chief Financial Officer, or other Senior executive of
the Company to whom he may report, or the Board of Directors.

         (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 8 of this Agreement), be involved in charitable and
professional activities, and, with the prior written consent of the Board of
Directors, 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 TWENTY THOUSAND
DOLLARS ($320,000.00) 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.

<PAGE>

         (b)      ANNUAL BONUS. During the 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 of Directors 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% (two times 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 of Directors, and (ii) the achievement of personal
performance goals as may be established by the Company's Chief Executive
Officer, President, Chief Operations Officer, Chief Administrative Officer,
Chief Financial Officer, or other Senior executive of the Company to whom he may
report, or the Board of Directors. Executive's bonus for 2004 will be calculated
as if he had been in his position of SVP-People beginning January 1, 2004.

         (c)      STOCK OPTIONS. Effective on or about the Employment Date,
Executive shall be granted a stock option for Fifty Thousand (50,000) shares of
common stock of Waste Management, Inc., with one-fourth (1/4) of such options
vesting on each of the next four (4) anniversaries of the grant date, subject to
the approval of the Compensation Committee of the Board of Directors. The
exercise price shall be the fair market value on the date of grant of the
option.

         The award, vesting, and exercise of all options shall be subject to and
governed by the provisions of the applicable Waste Management, Inc. Stock
Incentive Plan. Executive shall be eligible to considered for additional stock
option grants under the Company's annual stock option award program as
administered by, and at the discretion of, the Compensation Committee of the
Board of Directors, beginning in 2005.

         (d)      RESTRICTED STOCK AWARD. Effective on or about the Employment
Date, the Company will grant Executive an award of 4,600 restricted shares of
the Company's common stock (the "Stock") under the Waste Management, Inc. 2000
Stock Incentive Plan (the "Stock Incentive Plan") that will vest in equal
installments on each of the first four (4) anniversaries of the Effective Date,
subject (except as otherwise provided herein) to Executive's continuous
employment with the Company through the applicable vesting date (the "Restricted
Stock Grant"). The Restricted Stock Grant shall be deemed outstanding shares for
all purposes and Executive shall be fully vested in any cash dividends paid
therein (and non cash dividends being subject to the same forfeiture provisions
as the underlying Restricted Stock Grant shares).

         (e)      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, or perquisite, so long as such changes are
similarly applicable to similarly situated employees generally.

         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

                                       2
<PAGE>

four (4) weeks paid vacation per calendar year.

         (f)      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 its executive officers.

         (g)      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 of Directors, and as they may exist from
time to time, including the following:

                  1.       Automobile allowance at the annual rate of Twelve
Thousand Dollars ($12,000.00), payable in accordance with the Company's standard
payroll practice for its executive officers and prorated in any year that
Executive does not work a full calendar year;

                  2.       Financial planning services at actual cost, and not
to exceed Fifteen Thousand Dollars ($15,000.00) annually;

                  3.       Social Organization Initiation Fees and Dues with a
benefit of a one time initiation fee at actual cost but not to exceed ten
percent (10%) of Executive's Base Salary, and dues at actual cost but not to
exceed $500 per month; and

                  4.       An annual physical examination on a program
designated by the Company.

         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 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 Executive's position with or
without reasonable accommodation. 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; provided, however, that in the absence of Executive's
receipt of such long-term disability benefits or Social Security benefits, the
Company's Board of Directors may, in its reasonable discretion (but based upon
appropriate medical evidence), determine that Executive is Totally Disabled.

         (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.

                                       3
<PAGE>

         (i)      For purposes of this Agreement, the term "Cause" means any of
                  the following: (A) willful or deliberate and continual refusal
                  to perform Executive's 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 fails 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)
                  has been convicted of, or pleaded nolo contendre to, any
                  felony; (D) willfully or intentionally caused material injury
                  to the Company, its property, or its assets; (E) disclosed to
                  unauthorized person(s) proprietary or confidential information
                  of the Company; or (F) breach of any of the covenants set
                  forth in Section 8 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 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. Further, a Notification of Termination
                  for Cause shall be required to include a copy of a resolution
                  duly adopted by at least two-thirds (2/3) of the entire
                  membership of the Board of Directors at a meeting of the Board
                  which was called for the purpose of considering such
                  employment termination, and at which Executive and his
                  representative had the right to attend and address the Board,
                  finding that, in the good faith belief of the Board, Executive
                  engaged in conduct set forth in Section 5(c)(i) herein and
                  specifying the particulars thereof in reasonable detail. The
                  date of termination for Cause shall be the date indicated in
                  the Notice of Termination for Cause. Any purported termination
                  for Cause which is held by an arbitrator not to have been
                  based on the grounds set forth in this Agreement or not to
                  have followed the procedures set forth in this Agreement shall
                  be deemed a termination by the Company without 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 substantially changes
                  Executive's core duties or removes Executive's 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 Cause or Total Disability or as a result of
                  Executive's death, or temporarily as a result of

                                       4
<PAGE>

                  Executive's illness or other absence); provided that if the
                  Company becomes a fifty percent or more subsidiary of any
                  other entity, Executive shall be deemed to have a substantial
                  change in the core duties of his position unless he is also
                  Senior Vice-President of the ultimate parent entity; (B)
                  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; (C)
                  any material breach by the Company of any provision of this
                  Agreement, including without limitation Section 10 hereof; or
                  (D) 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; or (E) the reassignment of Executive to a
                  geographic location more than fifty (50) miles from his then
                  business office location.

         (ii)     A "Notice of Termination for Good Reason" shall mean a notice
                  that shall indicate the specific termination provision relied
                  upon and shall set forth in reasonable detail the facts and
                  circumstances claimed to provide a basis for Termination for
                  Good Reason. The failure by Executive to set forth in the
                  Notice of Termination for Good Reason any facts or
                  circumstances which contribute to the showing of Good Reason
                  shall not waive any right of Executive hereunder or preclude
                  Executive from asserting such fact or circumstance in
                  enforcing his rights hereunder. The Notice of Termination for
                  Good Reason shall provide for a date of termination not less
                  than ten (10) 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 five (5) business 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,
Executive shall be entitled to the following compensation and benefits upon such
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 period, and, to the extent not otherwise paid, a
                  pro-rata bonus or

                                       5
<PAGE>

                  incentive compensation payment 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 to which Executive may be entitled pursuant to
                  the plans, policies and arrangements (including those referred
                  to in Section 4(d) hereof), as determined and paid in
                  accordance with the terms of such plans, policies and
                  arrangements.

         (iii)    An amount equal to the Base Salary (at the rate in effect as
                  of the date of Executive's death) which would have been
                  payable to Executive if Executive had continued in employment
                  for two additional years. Said payments will be paid to
                  Executive's estate or beneficiary at the same time and in the
                  same manner as such compensation would have been paid if
                  Executive had remained in active employment.

         (iv)     As of the date of termination by reason of Executive's death,
                  stock options previously awarded to Executive as of the date
                  of death, and the Restricted Stock Grant, shall be fully
                  vested, and Executive's estate or beneficiary shall have up to
                  one (1) year from the date of death to exercise all such
                  previously-awarded options, provided that in no event will any
                  option be exercisable beyond its term. No stock options
                  contemplated by this Agreement, but not yet awarded to
                  Executive as of the time of his death, shall be granted.

         (b)      TERMINATION BY REASON OF TOTAL DISABILITY. In the event that
Executive's employment is terminated by reason of Executive's Total Disability
as determined in accordance with Section 5(b), 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 period. Executive shall also be eligible
                  for a pro-rata bonus or incentive compensation payment 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 to which Executive may be entitled pursuant to
                  the plans, policies and arrangements (including those referred
                  to in Section 4(d) hereof) shall be determined and paid in
                  accordance with the terms of such plans, policies and
                  arrangements.

         (iii)    An amount equal to the Base Salary (at the rate in effect as
                  of the date of Executive's Total Disability) which would have
                  been payable to Executive if Executive had continued in active
                  employment for two years following termination of employment,
                  less any payments under any long-term disability plan or
                  arrangement paid for by the Company. Payment shall be made at
                  the same time and in the same manner as such compensation
                  would have been paid if

                                       6
<PAGE>

                  Executive had remained in active employment until the end of
                  such period.

         (iv)     As of the date of termination by reason of Executive's Total
                  Disability, stock options previously awarded to Executive as
                  of the date of termination, and the Restricted Stock Grant,
                  shall be fully vested, and Executive or his legal guardian
                  shall have up to one (1) year from the date of termination to
                  exercise all such previously-awarded options, provided that in
                  no event will any option be exercisable beyond its term. No
                  stock options contemplated by this Agreement, but not yet
                  awarded to Executive as of the time of his employment
                  termination, shall be granted.

         (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 period.

         (ii)     Any benefits to which Executive may be entitled pursuant to
                  the plans, policies and arrangements (including those referred
                  to in Section 4(d) hereof up to the date of termination) shall
                  be determined and paid in accordance with the terms of such
                  plans, policies and arrangements.

         (iii)    All options, whether vested or not vested prior to the date of
                  such termination of employment, and all unvested restricted
                  stock, shall be automatically cancelled on the date of
                  employment termination. However, it is expressly understood
                  and agreed that Executive would have no obligation to repay or
                  otherwise reimburse the Company for funds received as a result
                  of Executive's having exercised any previously-vested stock
                  options prior to his employment termination.

         (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 period.

         (ii)     Any benefits to which Executive may be entitled pursuant to
                  the plans, policies and arrangements (including those referred
                  to in Section 4(d) hereof up to the date of termination) shall
                  be determined and paid in accordance with the terms of such
                  plans, policies and arrangements.

         (iii)    Any stock options and any restricted stock that have not then
                  vested shall be

                                       7
<PAGE>

                  automatically cancelled as of that date, and Executive shall
                  have ninety (90) days following the date of termination of
                  employment to exercise any previously vested but unexercised
                  options; provided that in no event will any option be
                  exercisable beyond its term. No stock options contemplated by
                  this Agreement, but not yet awarded to Executive as of the
                  time of his employment termination, shall be granted.

         (e)      TERMINATION BY THE COMPANY WITHOUT CAUSE; TERMINATION BY
EXECUTIVE FOR GOOD REASON. In the event that Executive's employment is
terminated by the Company for reasons other than death, Total Disability or
Cause, or Executive terminates his employment 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 period.

         (ii)     Any benefits to which Executive may be entitled pursuant to
                  the plans, policies and arrangements referred to in Section
                  4(d) hereof shall be determined and paid in accordance with
                  the terms of such plans, policies and arrangements.

         (iii)    An amount equal to two 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
                  ten (10) days after such termination and one-half shall be
                  paid during the two (2) year period beginning on the date of
                  Executive's termination and shall be paid 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.

         (iv)     The Company at its expense will continue for Executive and
                  Executive's spouse and dependents, all health benefit plans,
                  programs or arrangements, whether group or individual,
                  disability, and other benefit plans, in which Executive was
                  entitled to participate at any time during the twelve-month
                  period prior to the date of termination, until the earliest to
                  occur of (A) two years after the date of termination; (B)
                  Executive's death (provided that benefits provided to
                  Executive's spouse and dependents shall not terminate upon
                  Executive's death); or (C) with respect to any particular
                  plan, program or arrangement, 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, program, or
                  arrangement 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,
                  program, or arrangement, for such period on a basis which
                  provides Executive with no additional after tax cost.

         (v)      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

                                       8
<PAGE>

                  terminated.

         (vi)     Executive shall continue to vest in all stock option awards or
                  restricted stock awards over the two (2) year period
                  commencing on the date of such termination. Executive shall
                  have two (2) years and six (6) months after the date of
                  termination to exercise all options to the extent then vested,
                  provided that in no event may any option be exercisable beyond
                  its term.

         (f)      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 Executive at the time of
Executive's termination or resignation of employment, 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.

         (g)      NO MITIGATION; NO SET-OFF. 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. The amounts payable hereunder shall not be
subject to setoff, counterclaim, recoupment, defense or other right which the
Company may have against the Executive or others, except upon obtaining by the
Company of a final non-appealable judgment against Executive.

         7.       RESIGNATION BY EXECUTIVE FOR GOOD REASON AND COMPENSATION
PAYABLE FOLLOWING CHANGE IN CONTROL.

         (a)      RESIGNATION FOR GOOD REASON FOLLOWING CHANGE IN CONTROL. In
the event a "Change in Control" occurs and Executive terminates his employment
for Good Reason thereafter, or the Company terminates Executive's employment
other than for Cause, or such termination for Good Reason or without Cause
occurs in contemplation of such Change in Control (any termination within six
(6) months prior to such Change in Control being presumed to be in contemplation
unless rebutted by clear and demonstrable evidence to the contrary), the Company
shall pay the following amounts to Executive:

         (i)      The payments and benefits provided for in Section 6(e), except
                  that (A) the amount and period with respect to which severance
                  is calculated pursuant to Section 6(e)(iii) will be three (3)
                  years and the amount shall be paid in a lump-sum and (B) the
                  benefit continuation period in Section 6(e)(iv) shall be for
                  three (3) years.

         (ii)     In lieu of Section 6(e)(vi), Executive will be 100% vested in
                  all benefits, awards, and grants (including stock option
                  grants and all other stock awards, all of such stock options
                  being exercisable for three (3) years following Termination,
                  provided that in no event will any option be exercisable
                  beyond its term) accrued but unpaid as of the date of
                  termination under any non-qualified pension plan,

                                       9
<PAGE>

                  supplemental and/or incentive compensation or bonus plans, in
                  which Executive was a participant as of the date of
                  termination. Executive shall also receive a bonus or incentive
                  compensation payment (the "bonus payment"), payable at 100% of
                  the maximum bonus available to Executive, pro-rated as of the
                  effective date of the termination. The bonus payment shall be
                  payable within five (5) days after the effective date of
                  Executive's termination. Except as may be provided under this
                  Section 7 or under the terms of any incentive compensation,
                  employee benefit, or fringe benefit plan applicable to
                  Executive at the time of Executive's termination of
                  employment, 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
                  resignation or termination.

         (b)      CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

         (i)      In the event that the Executive shall become entitled to
                  payments and/or benefits provided by this Agreement or any
                  other amounts in the "nature of compensation" (whether
                  pursuant to the terms of this Agreement or any other plan,
                  arrangement or agreement with the Company, any person whose
                  actions result in a change of ownership or effective control
                  covered by Section 280G(b)(2) of the Code or any person
                  affiliated with the Company or such person) as a result of
                  such change in ownership or effective control (collectively
                  the "Company Payments"), and such Company Payments will be
                  subject to the tax (the "Excise Tax") imposed by Section 4999
                  of the Code (and any similar tax that may hereafter be imposed
                  by any taxing authority) the Company shall pay to the
                  Executive at the time specified in subsection (iv) below an
                  additional amount (the "Gross-up Payment") such that the net
                  amount retained by the Executive, after deduction of any
                  Excise Tax on the Company Payments and any U.S. federal,
                  state, and for local income or payroll tax upon the Gross-up
                  Payment provided for by this Section 7(b), but before
                  deduction for any U.S. federal, state, and local income or
                  payroll tax on the Company Payments, shall be equal to the
                  Company Payments.

         (ii)     For purposes of determining whether any of the Company
                  Payments and Gross-up Payments (collectively the "Total
                  Payments") will be subject to the Excise Tax and the amount of
                  such Excise Tax, (x) the Total Payments shall be treated as
                  "parachute payments" within the meaning of Section 280G(b)(2)
                  of the Code, and all "parachute payments" in excess of the
                  "base amount" (as defined under Code Section 280G(b)(3) of the
                  Code) shall be treated as subject to the Excise Tax, unless
                  and except to the extent that, in the opinion of the Company's
                  independent certified public accountants appointed prior to
                  any change in ownership (as defined under Code Section
                  280G(b)(2)) or tax counsel selected by such accountants (the
                  "Accountants") such Total Payments (in whole or in part)
                  either do not constitute "parachute payments," represent
                  reasonable compensation for services actually rendered within
                  the meaning of Section 280G(b)(4) of the Code in excess of the
                  "base amount" or are otherwise not subject to the Excise Tax,
                  and (y) the value of any non-cash benefits or any deferred
                  payment or benefit shall be determined by the Accountants in
                  accordance with the principles of Section 280G of the Code.

                                       10
<PAGE>

         (iii)    For purposes of determining the amount of the Gross-up
                  Payment, the Executive shall be deemed to pay U.S. federal
                  income taxes at the highest marginal rate of U.S. federal
                  income taxation in the calendar year in which the Gross-up
                  Payment is to be made and state and local income taxes at the
                  highest marginal rate of taxation in the state and locality of
                  the Executive's residence for the calendar year in which the
                  Company Payment is to be made, net of the maximum reduction in
                  U.S. federal income taxes which could be obtained from
                  deduction of such state and local taxes if paid in such year.
                  In the event that the Excise Tax is subsequently determined by
                  the Accountants to be less than the amount taken into account
                  hereunder at the time the Gross-up Payment is made, the
                  Executive shall repay to the Company, at the time that the
                  amount of such reduction in Excise Tax is finally determined,
                  the portion of the prior Gross-up Payment attributable to such
                  reduction (plus the portion of the Gross-up Payment
                  attributable to the Excise Tax and U.S. federal, state and
                  local income tax imposed on the portion of the Gross-up
                  Payment being repaid by the Executive if such repayment
                  results in a reduction in Excise Tax or a U.S. federal, state
                  and local income tax deduction), plus interest on the amount
                  of such repayment at the rate provided in Section
                  1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in
                  the event any portion of the Gross-up Payment to be refunded
                  to the Company has been paid to any U.S. federal, state and
                  local tax authority, repayment thereof (and related amounts)
                  shall not be required until actual refund or credit of such
                  portion has been made to the Executive, and interest payable
                  to the Company shall not exceed the interest received or
                  credited to the Executive by such tax authority for the period
                  it held such portion. The Executive and the Company shall
                  mutually agree upon the course of action to be pursued (and
                  the method of allocating the expense thereof) if the
                  Executive's claim for refund or credit is denied.

                  In the event that the Excise Tax is later determined by the
                  Accountant or the Internal Revenue Service to exceed the
                  amount taken into account hereunder at the time the Gross-up
                  Payment is made (including by reason of any payment the
                  existence or amount of which cannot be determined at the time
                  of the Gross-up Payment), the Company shall make an additional
                  Gross-up Payment in respect of such excess (plus any interest
                  or penalties payable with respect to such excess) at the time
                  that the amount of such excess is finally determined.

         (iv)     The Gross-up Payment or portion thereof provided for in
                  subsection (iii) above shall be paid not later than the
                  thirtieth (30th) day following an event occurring which
                  subjects the Executive to the Excise Tax; provided, however,
                  that if the amount of such Gross-up Payment or portion thereof
                  cannot be finally determined on or before such day, the
                  Company shall pay to the Executive on such day an estimate, as
                  determined in good faith by the Accountant, of the minimum
                  amount of such payments and shall pay the remainder of such
                  payments (together with interest at the rate provided in
                  Section 1274(b)(2)(B) of the Code), subject to further
                  payments pursuant to subsection (iii) hereof, as soon as the
                  amount thereof can reasonably be determined, but in no event
                  later than the ninetieth day after the occurrence of the event
                  subjecting the Executive to the Excise Tax. In the event

                                       11
<PAGE>

                  that the amount of the estimated payments exceeds the amount
                  subsequently determined to have been due, such excess shall
                  constitute a loan by the Company to the Executive, payable on
                  the fifth day after demand by the Company (together with
                  interest at the rate provided in Section 1274(b)(2)(B) of the
                  Code).

         (v)      In the event of any controversy with the Internal Revenue
                  Service (or other taxing authority) with regard to the Excise
                  Tax, the Executive shall permit the Company to control issues
                  related to the Excise Tax (at its expense), provided that such
                  issues do not potentially materially adversely affect the
                  Executive, but the Executive shall control any other issues.
                  In the event the issues are interrelated, the Executive and
                  the Company shall in good faith cooperate so as not to
                  jeopardize resolution of either issue, but if the parties
                  cannot agree the Executive shall make the final determination
                  with regard to the issues. In the event of any conference with
                  any taxing authority as to the Excise Tax or associated income
                  taxes, the Executive shall permit the representative of the
                  Company to accompany the Executive, and the Executive and the
                  Executive's representative shall cooperate with the Company
                  and its representative.

         (vi)     The Company shall be responsible for all charges of the
                  Accountant.

         (vii)    The Company and the Executive shall promptly deliver to each
                  other copies of any written communications, and summaries of
                  any verbal communications, with any taxing authority regarding
                  the Excise Tax covered by this Section 7(b).

         (c)      CHANGE IN CONTROL. For purposes of this Agreement, "Change in
Control" means the occurrence of any of the following events:

         (i)      any Person is or becomes the Beneficial Owner, directly or
                  indirectly, of securities of the Company (not including in the
                  securities beneficially owned by such person any securities
                  acquired directly from the Company or its Affiliates)
                  representing twenty-five percent (25%) or more of the combined
                  voting power of the Company's then outstanding voting
                  securities;

         (ii)     the following individuals cease for any reason to constitute a
                  majority of the number of directors then serving: individuals
                  who, on the Employment Date, 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 to 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 the at least two-thirds (2/3rds) of
                  the directors then still in office who either were directors
                  on the Employment Date or whose appointment, election or
                  nomination for election was previously so approved or
                  recommended;

         (iii)    there is a consummated merger or consolidation of the Company
                  or any direct or indirect subsidiary of the Company with any
                  other corporation, other than (A) a

                                       12
<PAGE>

                  merger or consolidation which would result in the voting
                  securities of the Company outstanding immediately prior
                  thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving or parent entity) more than fifty percent (50%)
                  of the combined voting power of the voting securities of the
                  Company or such surviving or parent entity outstanding
                  immediately after such merger or consolidation or (B) a merger
                  or consolidation effected to implement a recapitalization of
                  the Company (or similar transaction) in which no Person,
                  directly or indirectly, acquired twenty-five percent (25%) or
                  more of the combined voting power of the Company's then
                  outstanding securities (not including in the securities
                  beneficially owned by such person any securities acquired
                  directly from the Company or its Affiliates); or

         (iv)     the stock holders of the Company approve a plan of complete
                  liquidation of the Company or there is consummated an
                  agreement for the sale or disposition by the Company of all or
                  substantially all of the Company's assets (or any transaction
                  having a similar effect), other than a sale or disposition by
                  the Company of all or substantially all of the Company's
                  assets to an entity, at least fifty percent (50%) of the
                  combined voting power of the voting securities of which are
                  owned by stockholders of the Company in substantially the same
                  proportions as their ownership of the Company immediately
                  prior to such sale.

         For purposes of this Section 7(c), the following terms shall have the
following meanings:

         (i)      "Affiliate" shall mean an affiliate of the Company, as defined
                  in Rule 12b-2 promulgated under Section 12 of the Securities
                  Exchange Act of 1934, as amended from time to time (the
                  "Exchange Act");

         (ii)     "Beneficial Owner" shall have the meaning set forth in Rule
                  13d-3 under the Exchange Act;

         (iii)    "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 underwriter temporarily holding securities pursuant to an
                  offering of such securities or (4) a corporation owned,
                  directly or indirectly, by the stockholders of the Company in
                  substantially the same proportions as their ownership of
                  shares of Common Stock of the Company.

         8.       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,

                                       13
<PAGE>

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 has agreed to provide and immediately 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 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 also will have access to, or knowledge of, 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

                                       14
<PAGE>

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 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. Upon Executive's Employment
Date, 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 the above-referenced stock options, 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

                                       15
<PAGE>

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 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 a period of two (2) years
following the termination of employment for any reason, 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 a period of two (2) years following the termination of employment for
any reason, 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 or her 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.

         9.       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 8 hereof 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.

         (b)      RIGHT TO INJUNCTION. Executive acknowledges that a breach of
the covenants set forth in Section 8 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

                                       16
<PAGE>

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.

         (c)      SEPARABILITY OF COVENANTS. The covenants contained in Section
8 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 8 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 8 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 8.

         10.      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.

         11.      DISPUTES AND PAYMENT OF ATTORNEY'S FEES.

         If at any time during the term of this Agreement or afterwards there
should arise any dispute as to the validity, interpretation or application of
any term or condition of this Agreement, the Company agrees, upon written demand
by Executive (and Executive shall be entitled upon application to any court of
competent jurisdiction, to the entry of a mandatory injunction, without the
necessity of posting any bond with respect thereto, compelling the Company) to
promptly provide sums sufficient to pay on a current basis (either directly or
by reimbursing Executive) Executive's costs and reasonable attorney's fees
(including expenses of investigation and disbursements for the fees and expenses
of experts, etc.) incurred by Executive

                                       17
<PAGE>

in connection with any such dispute or any litigation, provided that Executive
shall repay any such amounts paid or advanced if Executive is not the prevailing
party with respect to at least one material claim or issue in such dispute or
litigation. The provisions of this Section 11, without implication as to any
other section hereof, shall survive the expiration or termination of this
Agreement and of Executive's employment hereunder.

         12.      WITHHOLDING OF TAXES.

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

         13.      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.

         14.      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).

         15.      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.

                                       18
<PAGE>

         16.      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.

         17.      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.

         18.      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.

         19.      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 9 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.

                                       19
<PAGE>

         (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.

         (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, this Agreement is EXECUTED and EFFECTIVE as of the
day set forth above.

                                JIMMY D. LaVALLEY
                                ("Executive")

                                   /s/ Jimmy La Valley
                                ------------------------------------------------
                                Jimmy D. LaValley

                                Address;
                                ________________________________________________
                                ________________________________________________

                                WASTE MANAGEMENT, INC.
                                (The "Company")

                                By:     /s/ Lawrence O'Donnell, III
                                    --------------------------------------------
                                    Lawrence O'Donnell, III
                                    Executive Vice President, Operations Support
                                    & Chief Administrative Officer

                                       20