<PAGE>   1
                                                                EXHIBIT 10(E)




                                      1996

                                   MANAGEMENT
                                 INCENTIVE PLAN
<PAGE>   2




                                                        Rev:  September 12, 1995


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                    Page No.
                                                                                                                    --------
<S>      <C>                                                                                                           <C>
I.       OVERVIEW                                                                                                       1

II.      PLAN OBJECTIVES                                                                                                1

III.     ATTAINING GOALS                                                                                                2

IV.      ELIGIBILITY FOR PLAN PARTICIPATION                                                                             3

V.       PLAN STRUCTURE                                                                                                 3

         A.      Performance Measures                                                                                   3
                 1.  Revenue                                                                                            3
                 2.  Return on Assets                                                                                   3
                 3.  Individual Goals                                                                                   4
                          Table  1: Performance Rating Qualitative Category                                             4

         B.      Performance Criteria and Target Bonuses                                                                4
                 1.  Target Bonus Level                                                                                 4
                 2.  Performance Weights                                                                                4
                          Table 2: Target Bonus and Goals by Position                                                   5
                 3.  Units of Measure                                                                                   5
                          Table 3:  Units of Measure and Weights by Position                                            6

         C.      Payout Schedule                                                                                        6
                          Table 4:  Schedule A:  Payout Schedule for Annual
                                  Revenue/ROA Achieved Against Committed
                                  Targets                                                                               7
                          Table 5:  Schedule B:  Payout Schedule for Annual
                                    Revenue/ROA Achieved Against Committed
                                    Targets                                                                             8

VI.      PAYMENT OF AWARDS                                                                                              9

VII.     PLAN ADMINISTRATION                                                                                            9

VIII.    SUMMARY AND CONCLUSION                                                                                        10
                                                                                                                         
</TABLE>
<PAGE>   3



                                  I.  OVERVIEW
                                      --------

The Management Incentive Compensation Plan is a short-term cash incentive bonus
plan covering Corporate Executive Staff positions, Vice Presidents, Directors,
Facility Managers, Operations Managers, and other select key management
positions.  The plan allows selected management employees to share directly in
the success of the company through the payment of annual incentive awards which
are in turn based on the attainment of business unit goals and individual
performance objectives.

The plan will provide the company with a mechanism to communicate its
expectations for Company performance while at the same time allowing the
management team the opportunity to earn a total compensation package that is
competitive for the industry.


                              II.  PLAN OBJECTIVES
                                   ---------------

The purpose of a bonus compensation plan is to motivate key management
performance and to reward those individuals considered responsible for the
success of the business.  Laidlaw Environmental Services, Inc. has developed a
Management Incentive Plan for key managerial personnel which will provide a
significant economic opportunity based on their business unit contribution to
the Corporation and on their own individual performance.

The objective of this Plan is to increase Laidlaw's market share, ensure
maximum cooperation between Sales and Operations through the creation of common
goals, sustain teamwork across operational units, and effectively manage
capital assets. In order to accomplish these objectives, a certain percentage
of a key management's total compensation package will be at risk.  Therefore,
key managers must direct their efforts and set goals which will maximize the
success of their business unit as defined by the Plan.
<PAGE>   4

III.  ATTAINING GOALS
      ---------------

The success of the Management Incentive Compensation Plan will be measured by
the success of attaining the preset goals for revenue, return on assets, and
qualitative goals as established at the beginning of the year.  This can only
be accomplished by the combined support of the corporation's management team.

Each participant should understand that their earning opportunities are
dependent upon the attainment of these preset goals.  To enhance this
understanding, each participant will be given an explanation of the plan along
with their individual goals and bonus potentials.  This will allow the
participant to clearly understand that increased effort which increases results
will produce higher rewards.

In implementing and maintaining this plan, the following factors are of
critical importance:

 -       Performance goals will be quantitative and qualitative in
         nature.  The quantitative goals will be tied to the Company's annual
         financial budget.  The use of such goals will also help generate and
         reinforce a commitment to the budgeting process.  The qualitative
         goals will be established through a goal setting exercise between the
         immediate superior and participant.  It will be of such a nature which
         will drive the business forward strategically.  Measurements of these
         goals must be defined and agreed upon by both parties.  Copies of
         these goals must be forwarded to the respective Regional or Staff
         Vice President.

 -       Incentive awards will be based upon the achievement of
         aggressive objectives.  These "stretch" objectives will help assure
         that the plan pays for itself; and that stockholders receive an
         appropriate return on investment in the incentive payments.

 -       The threshold of incentive awards will only be at a
         "competent" level of performance but appreciably more award will
         result from extra efforts and results achieved due to higher levels of
         performance.






<PAGE>   5


                   IV.  ELIGIBILITY FOR PLAN PARTICIPATION
                        ----------------------------------

<TABLE>
<CAPTION>
For fiscal year 1996 participation in the plan will be limited to:
         <S>                                       <C>
         * President                               * Regional Managers
         * Senior Vice Presidents                  * Facility Managers
         * Vice Presidents                         * Operations Managers
         * Directors
</TABLE>

These positions are targeted because of their direct accountability for the
operating results of a major business unit, and/or their indirect impact on
total Company results, and their accountability for structuring a function
under them.

To receive an annual incentive award, a participant must be employed by the
Company at the time the checks are distributed and be a participant in the
Management Incentive Plan as of April 1, 1996.  Participants who have not
occupied an incentive eligible position for the full fiscal year will be
prorated based on the number of full months of participation. These eligibility
criteria apply to current employees promoted to eligible positions, new hires
hired into eligible positions, or employees in positions subsequently selected
to participate in the Plan.

                               V.  PLAN STRUCTURE
                                   --------------

A.  PERFORMANCE MEASURES

Participants will be judged against achieving three separate goals which will
be set at the beginning of the year.  These are revenue, return on assets, and
qualitative goals.

1.  Revenue

Revenue  is defined as accrued and billed sales, including intercompany sales.
Intercompany sales are being included to encourage pass-through business.  The
revenue goal will be judged against the year-end revenue as stated on the
appropriate FY96 Profit and Loss Statement.

2.  Return on Assets

Return on assets is defined as earnings before interest and  taxes divided by
average monthly assets.  While EBIT will be obtained from the last monthly
Profit and Loss Statement, assets will be averaged across each ending month's
balance.  Although assets could be averaged across each quarter or even across
beginning and ending year balance, averaging across each month has been chosen
as the best method to encourage timely asset management.






<PAGE>   6

                               V.  PLAN STRUCTURE
                                  (Continued)

3.  Individual Goals

While the appropriate performance rating in this category of payout is more
subjective, definitions of ratings have been created to assist in the final
determination.  The rating schedule has been established in such a way as to
encourage superior performance.

<TABLE>
<CAPTION>
      DEFINITION:
      -----------
     <S>                          <C>
     OUTSTANDING:                 Significantly beyond expectations, distinguished results.
     SUPERIOR:                    Generally exceeded expectations.
     GOOD:                        Results expected were met with some aspects above average.
     SATISFACTORY:                Results expected were met with some aspects needing attention.
     UNACCEPTABLE:                Outcomes did not meet expectations.

                                                         TABLE 1
                                                    PERFORMANCE RATING
                                                    ------------------
                                                   QUALITATIVE CATEGORY
                                                   --------------------

     1.  Outstanding                       = 100% of points assigned
     2.  Superior                          =  80% of points assigned
     3.  Good                              =  60% of points assigned
     4.  Satisfactory                      =  40% of points assigned
     5.  Unacceptable                      =   0% of points assigned
</TABLE>


B.  PERFORMANCE CRITERIA AND TARGET BONUSES

1.  Target Bonus Level

The target bonus payout is the monetary award that will be paid if all goals
are achieved exactly as set.  This will be calculated as a percentage of base
pay called the target bonus percent.  For example, a participant whose base pay
is $50,000 and whose target bonus percent is 30% will receive a $15,000 award
if all the performance goals are met.  This award can fluctuate if the goals
are missed or exceeded.  The base pay level used to calculate bonus awards will
be the base annualized salary paid as of





                                       
<PAGE>   7

August 31, 1996.  Target bonus percents are presented in Table 2 below.

2.  Performance Weights

Each  participant will be judged on a combination of the three separate goals:
Revenue, ROA, and individual goals. These goals do not carry equal weight in
determining the plan payout but are separately weighted according to each
position.  These weights are outlined by position in Table 2. To obtain a full
incentive payout, all three goals must be fully achieved.



                               V.  PLAN STRUCTURE
                                  (Continued)

                                    TABLE 2
                             TARGET BONUS AND GOALS
                                  BY POSITION

<TABLE>
<CAPTION>
                                                            Goal
                         Target     Payout                 Weights
 Position                 Bonus    Schedule    Revenue       ROA       Indiv.
=============================================================================
<S>                       <C>       <C>         <C>          <C>        <C>
 President                50%       Table 4      40%         40%        20%
 Senior VP                40%       Table 5      40%         40%        20%
 Regional VP              35%       Table 5      40%         40%        20%
 Staff VP                 35%       Table 4      40%         40%        20%
 Ops Director             30%       Table 5      40%         40%        20%
 Staff Dir - Corp.        20%       Table 4      40%         40%        20%
 Staff Dir - Div.         20%       Table 5      40%         40%        20%
 Facility Manager         30%       Table 5      40%         40%        20%
 Operations Mgr           15%       Table 5      40%         40%        20%
</TABLE>


3.  Units of Measure

The performance criteria for each plan participant should focus upon the
appropriate areas in which the position has an opportunity to impact.  The
following list defines the various units of measure against which the two
financial performance goals will be judged.  It should be noted that these
weightings are not permanently fixed and could vary from year to year.



    Corporate  -  All of Laidlaw Environmental Services, Inc.





              
<PAGE>   8



<TABLE>
     <S>                  <C>     <C>
     Divisional           -       A specific division under the control of a Senior Vice President.

     Regional             -       A territory or line of business within a division that is under the control of an
                                  Operating Vice President, i.e., East Central, Western, et cetera.

     District             -       A grouping of several facilities that is usually controlled by a Director.

     Facility             -       A specific operating center.
</TABLE>

Each position will be judged against at least one of the units of measure
defined above.  The unit of measure used and its associated weight is based
upon the position's level of control within the organization.  These are
presented in Table 3 below:



                               V.  PLAN STRUCTURE
                                  (Continued)

                                    TABLE 3
                          UNITS OF MEASURE AND WEIGHTS
                                  BY POSITION

<TABLE>
<CAPTION>
                                                Weights
 Position               Corporate   Divisional  Regional    District  Facility
 <S>                      <C>         <C>          <C>        <C>       <C>
==============================================================================
 President                100%
 Senior VP                 25%         75%

 Regional VP                                       100%

 Staff VP                 100%

 Ops Director                                                 100%
 Staff Dir - Corp.        100%

 Staff Dir - Div.                      100%

 Facility Manager                                                       100%

 Operations Mgr                                                         100%
</TABLE>



IN ORDER TO BE ELIGIBLE FOR ANY INCENTIVE AWARD, 90% OR MORE OF THE ROA GOAL
WITH THE UNIT OF MEASURE THAT CARRIES THE HIGHEST WEIGHT MUST FIRST BE
ACHIEVED.  For example, SVPs have two ROA goals split 25/75 between the
corporation and their division.  To be eligible for the rest of the plan, SVPs
must achieve at least 90% of the ROA goal for their division.

C.  PAYOUT SCHEDULE





                                       
<PAGE>   9

The achievement level attained against each goal will determine how much of
each goal will be paid.  The following schedules in Tables 4 and 5 presents the
payout percentages for various levels of achievement.  Different payout
schedules are used depending upon the level of influence of the position. The
payout schedule associated with each position is presented in Table 2.  In
order to be paid an award for a particular goal, at least 90% of the goal must
be achieved.  This is called the threshold level.  Achievement will not be
rounded to the next highest level.  For example, if achievement against targets
is 92.9%, the payout will be based on 92%, not 93%.





Page 6





<PAGE>   10


                              V.  PLAN STRUCTURE
                                 (Continued)

                                   TABLE 4

                                 SCHEDULE A:
                   PAYOUT SCHEDULE FOR ANNUAL  REVENUE/ROA
                      ACHIEVED AGAINST COMMITTED TARGETS



<TABLE>
<CAPTION>
  INCENTIVE          ACHIEVEMENT
    STEP               AGAINST                PAYOUT LEVEL
                  COMMITTET TARGETS
===========================================================
     <S>                  <C>                  <C>
     21                   110%+                 135%
     20                   109%                  131%
     19                   108%                  127%
     18                   107%                  123%
     17                   106%                  119%
     16                   105%                  115%
     14                   103%                  109%
     13                   102%                  106%
     12                   101%                  103%
     11                   100%                  100%
     10                    99%                  95%
     9                     98%                  90%
     8                     97%                  85%
     7                     96%                  80%
     6                     95%                  75%
     5                     94%                  70%
     4                     93%                  65%
     3                     92%                  60%
     2                     91%                  55%
     1                     90%                  50%
     0                    <90%                   0%
</TABLE>




                                     Page 7





<PAGE>   11



                              V.  PLAN STRUCTURE
                                 (Continued)

                                   TABLE 5

                                 SCHEDULE B:
                   PAYOUT SCHEDULE FOR ANNUAL  REVENUE/ROA
                      ACHIEVED AGAINST COMMITTED TARGETS



<TABLE>
<CAPTION>
  Incentive        Achievement Against      Payout Level
     Step           Committet Targets
========================================================
     <S>                  <C>                  <C>
     21                   110%+                 135%
     20                   109%                  131%
     19                   108%                  127%
     18                   107%                  123%
     17                   106%                  119%
     16                   105%                  115%
     15                   104%                  112%
     14                   103%                  109%
     13                   102%                  106%
     12                   101%                  103%
     11                   100%                  100%
     10                    99%                  90%
     9                     98%                  81%
     8                     97%                  73%
     7                     96%                  65%
     6                     95%                  58%
     5                     94%                  52%
     4                     93%                  46%
     3                     92%                  41%
     2                     91%                  36%
     1                     90%                  32%
     0                    <90%                   0%
</TABLE>





Page 8





<PAGE>   12


                              V.  PLAN STRUCTURE
                                 (Continued)




An example of a bonus calculation is as follows:

Facility Manager
Annual  Salary:  $50,000
Target Bonus Percent:  30%

<TABLE>
<CAPTION>
      Goal      Achievement      Payout     Goal       Target    Annual         Goal
                                            Weight     Bonus     Salary         Payout
==========================================================================================
 <S>            <C>               <C>    <C> <C>    <C> <C>    <C> <C>        <C>  <C>
 Dist. ROA          108.9%        127%   x    40%   x    30%   x   $50,000    =     $7,620

 Dist. Rev.          98.2%         81%   x    40%   x    30%   x   $50,000    =     $4,860
 Ind. Goals        Superior        80%   x    20%   x    30%   x   $50,000    =     $2,400
                Total:                                                             $14,880
</TABLE>




                             VI.  PAYMENT OF AWARDS

Each incentive award will be reviewed and approved by the appropriate most
senior Vice President, the Vice President - Administration, and the President.
Checks will be issued no later than November 15, 1996.  Participants that
voluntarily terminate their employment with Laidlaw prior to awards being
issued will forfeit their right to receive the award.

Any adjustments to bonus amounts must be approved by the Vice President -
Administration, and the President.

                           VII.  PLAN ADMINISTRATION

The President of Laidlaw Environmental Services, Inc. is the sole interpreter
and arbitrator of these provisions and has the right to amend, withdraw or
revoke them at any time.





<PAGE>   13



                                       Page 9
                         VIII.  SUMMARY AND CONCLUSION

The conceptual framework and basic guidelines covered in this Plan represent
those elements that necessarily must be examined to assure the value to the
Company of utilizing a short-term cash incentive compensation plan.  Several
steps must be taken to ensure that those objectives which the plan is designed
to meet can be accomplished.  These steps are described as follows:

     Communication of the Plan
     -------------------------

     It is important that the Plan be effectively communicated to all
     participants.  This would include individual discussions with each
     participant.  These discussions should include a review of the measures
     and standards that should be developed to assess personal and/or business
     unit performance, as well as a clarification of the details of the plan
     and individual opportunities.

     Development of Performance Measures
     -----------------------------------

     Business unit and individual goals should be established and communicated
     at the beginning of the fiscal year.  Accepted standards are those that
     are reasonable and realistic reflections of current opportunity, as well
     as a striving for improvement.  Measurements of performance should use
     relevant quantitative criteria.