<PAGE>   1
                                                                   EXHIBIT 10.39

                 SECOND AMENDED EXECUTIVE EMPLOYMENT AGREEMENT


         This SECOND AMENDED EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") dated
as of the 16th day of March, 1999, but effective as provided herein, by and
between GREYHOUND LINES, INC. (together with its successors, the "Company"),
LAIDLAW, INC. (together with its successors, the "Parent") and JOHN WERNER
HAUGSLAND (the "Executive").

         WHEREAS, the Executive has considerable experience, expertise and
training in management related to the types of services offered by the Company;
and

         WHEREAS, the Executive and the Company entered into a First Amended
Executive Employment Agreement (the "Prior Agreement"), which was effective May
15, 1995; and

         WHEREAS, pursuant to the Agreement and Plan of Merger dated as of
October 16, 1998 (the "Merger Agreement") by and among Parent, Laidlaw Transit
Acquisition Corp., a wholly-owned subsidiary of Parent, and the Company, as
amended, at the Effective Time of the Merger (the "Effective Time"), as defined
in the Merger Agreement, Laidlaw Transit Acquisition Corp. will be merged with
and into the Company, with the Company as the surviving entity (the "Merger");
and

         WHEREAS, the Company and Parent desire and intend to continue to
employ the Executive as the Executive Vice President and Chief Operating
Officer of the Company pursuant to the terms and conditions set forth in this
Agreement; and

         WHEREAS, in view of the changes in the nature and scope of the duties
and responsibilities of the Executive that will occur as a result of the
Merger, the Company, Parent and the Executive desire to amend and restate
certain of the terms and conditions of the Executive's employment with the
Company as set forth in the Prior Agreement;

         WHEREAS, the Company, Parent and the Executive have read and
understood the terms and provisions set forth in this Agreement, and have been
afforded a reasonable opportunity to review this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Agreement, the Executive, Parent and the Company agree as
follows:

1.       COMPENSATION: During his employment pursuant to this Agreement, the
Company agrees to provide the Executive the following compensation:

         a. BASE SALARY: From the Effective Time until changed as provided in
this section, the Company agrees to pay the Executive an annual salary of
$305,000.00 (the "Base Salary"), payable in at least equal monthly installments
in accordance with the Company's ordinary payroll policies and procedures for
executive compensation. The Company and the Executive acknowledge that during
the employment of the Executive pursuant to this Agreement, the Executive's
Base Salary will be subject to an annual review and adjustment by the Board of
Directors of the Company (the




<PAGE>   2




"Board of Directors") but, in no event, will the Executive's annual Base Salary
be less than the amount set forth in this section.

         b. BUSINESS EXPENSES: The Company agrees that the Executive shall be
entitled to reimbursement by the Company for all reasonable expenses (including
first class air travel) that the Executive may incur in the performance of his
duties and obligations under this Agreement, consistent with the Company's
policies for documentation, reimbursement and payment.

         c. INCENTIVE BONUS: The Company agrees that the Executive shall be
entitled to additional bonus compensation (the "Incentive Compensation") on
terms not less favorable than those applicable to other officers of the Company
(other than the President and Chief Executive Officer of the Company). For the
year ending August 31, 1999, Executive's Incentive Compensation shall be
determined on the same basis as prior years, except that such Incentive
Compensation shall be pro-rated to approximately reflect the partial year. For
subsequent years, the Executive shall be eligible for annual incentive bonus
consideration under the successor to the 1998 Management Incentive Plan for the
duration of this Agreement with an annual Target Award of at least 45% of Base
Salary and a maximum award of 90% of Base Salary for each respective year.

         d. EMPLOYEE BENEFITS: The parties acknowledge and agree that certain
employee benefits will be provided to the Executive incident to his employment
as Chief Operating Officer of the Company. Except as specifically modified by
this section, these employee benefits shall be governed by the applicable plan
documents, and the Executive shall be entitled to participate in all benefits
provided to officers of the Company on terms not less favorable than to other
officers of the Company (other than the President and Chief Executive Officer
of the Company). These employee benefits shall continue without amendment or
change, except changes that increase compensation, for a period of not less
than 12 months following the Effective Time. Thereafter, benefits may be
amended, terminated or replaced, provided that the employee benefits provided
to the Executive shall provide, in the aggregate, not less than a substantially
equivalent level of benefits to the Executive. The Company agrees, however,
that to the extent not prohibited by law, the Company will provide Executive
the benefits listed in this Subsection and that the following provisions shall
apply to any employee benefits provided by the Company:

                  (1) SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN: For purposes of
the Greyhound Lines, Inc. Supplemental Executive Retirement Plan (the "SERP"),
all of the Executive's prior service with Greyhound Lines, Inc. will be
credited for all purposes under the SERP, the Executive shall continue to be a
designated person eligible for coverage and benefits under the SERP, and the
Executive shall be entitled to an annual contribution of 20% of Executive's
annual Base Salary. At the Effective Time, to the extent not theretofore in
effect, the Company shall establish and fully fund, at the Company's option, in
cash, a letter of credit of Parent, or any combination thereof, a so-called
"rabbi" trust for the benefit of the Executive to secure the payment of
benefits provided to the Executive under this Subsection. Not less frequently
than annually thereafter, the Company shall contribute sufficient additional
assets to such trust to fund any increase in the liabilities of the SERP
attributable to the Executive.



                                       2

<PAGE>   3




                  (2) AUTOMOBILE ALLOWANCE: During the term of his employment
with the Company, the Executive shall be entitled to an automobile allowance,
of not less than $1,000.00 per month.

                  (3) LIFE INSURANCE: At all times during the term of this
Agreement, Executive will receive life insurance coverage as provided by the
Company on terms not less favorable than that provided to other executives of
the Company. In addition to any life insurance provided pursuant to the
preceding sentence, the Executive will be provided with Company-paid life
insurance which will provide death benefits in the event of his death in an
amount of at least $1,500,000.00 payable to the beneficiary or beneficiaries
named by the Executive. The Company shall have the right to purchase insurance
to fund its obligations to the Executive under this section; provided, however,
that any insurance company or companies selected by the Company to fund its
obligations under this Subsection must be the company or companies that
underwrite life insurance benefits covering other officers of the Company.

                  (4) PHYSICAL EXAMINATIONS: At least once a year, the
Executive will be entitled to a Company-paid physical examination at a clinic
or doctor mutually acceptable to the Executive and the Company.

                  (5) COUNTY CLUB DUES: The Company agrees to pay all
initiation fees and monthly membership dues on behalf of the Executive at a
country club mutually selected by the Executive and the Company.

                  (6) ESTATE, TAX AND FINANCIAL PLANNING: During the term of
his employment with the Company, the Executive shall be entitled to $15,000 per
year for estate, tax and financial planning. Such reimbursement payments shall
be paid by the Company within a reasonable time after such expenses are
incurred by the Executive.

                  (7) LONG TERM DISABILITY: The Company will provide Executive
long-term disability coverage and benefits on terms which are not less
favorable than that provided to other executives of the Company but which will
provide an annual disability benefit to the Executive of at least fifty percent
(50%) of his expected annual Base Salary, payable for the year during which
Executive was disabled.

                  (8) VACATION: The Company will provide vacation to the
Executive on terms not less favorable than that provided to executive officers
of the Company. For purposes of determining the amount of vacation, Executive's
prior service with Greyhound Lines, Inc. (or any affiliate of Greyhound Lines,
Inc.) shall be deemed to be service with the Company.

                  (9) OTHER BENEFITS: For purposes of any and all other
benefits provided by the Company to its Chief Operating Officer, the Executive
shall be eligible for such benefits to the same extent Executive was eligible
for such benefits immediately prior to the Effective Time. Additionally, for
purposes of determining eligibility, funding or vesting with respect to any
other benefits, the Executive's prior service with Greyhound Lines, Inc. shall
be deemed to be prior service with the Company.





                                       3
<PAGE>   4




2. DURATION: The duration of this Agreement shall be defined and determined as
follows:

         a. INITIAL TERM: This Agreement shall continue in full force and
effect for three (3) years (the "Initial Term"), commencing on the Effective
Time and expiring on the third anniversary thereof (the "Expiration Date"),
unless terminated prior to the Expiration Date in accordance with Subsection
2(c).

         b. RENEWAL: Notwithstanding Subsection 2(a), this Agreement shall
automatically renew for a period of two (2) years (the "Renewal Term") on the
Expiration Date unless either party gives effective written notice to the other
party of the party's intention not to renew this Agreement ("Notice of
Non-Renewal"), with or without Good Cause, at least ninety (90) days prior to
the Expiration Date. At the expiration of each Renewal Term, this Agreement
shall automatically renew for another two (2) year Renewal Term, unless and
until either party terminates the Agreement in accordance with Subsection 2(c).
If any Change of Control (as hereafter defined) occurs on or after the first
anniversary of the Effective Time, this Agreement will be deemed to have
renewed for a two (2) year period, and in such event, the Expiration Date(s)
will occur every two years from the date of such Change of Control.

         c. TERMINATION AND NON-RENEWAL: This Agreement may be terminated as
follows:

                  (1) DEATH: The Agreement will terminate in the event of the
Executive's death, provided, however, that the Executive's estate shall be paid
(a) the Base Salary through the date of death and (b) a pro rata portion of the
entire Annual Target Award of Incentive Compensation (based upon the
Executive's annual Base Salary), payable when the Incentive Compensation
payments are made to other executives of the Company. The pro rata share will
be calculated by the month of the date of death. In addition, the Executive's
designated beneficiaries shall be entitled to receive any life insurance
benefits provided to the Executive in accordance with the applicable plan
documents and/or insurance policies governing such benefits, including but not
limited to, the Life Insurance benefits set forth in Subsection l(d)(3) of this
Agreement.

                  (2) DISABILITY: The Company shall be entitled to terminate
this Agreement in the event the Executive becomes "disabled," as that term is
defined in the Greyhound Lines, Inc. Employee Long Term Disability Plan ("the
LTD Plan"), and is unable to perform the essential functions of his position,
with reasonable accommodation, for a period of one hundred eighty (180)
consecutive days. The Executive will be paid his Base Salary through the
expiration of such one hundred eighty day period and a pro rata portion of the
entire Annual Target Award of Incentive Compensation (based upon the
Executive's annual Base Salary) in accordance with the previous Subsection.

                  (3)      GOOD CAUSE:

                           (a) The Company shall be entitled to terminate this
Agreement by providing the Executive with written notice that the Company is
terminating the Agreement for Good Cause, as defined herein ("Notice of
Termination for Good Cause") at any time during his employment.



                                       4
<PAGE>   5




                           (b) The Company shall be entitled to terminate this
Agreement by communicating Notice of Non-Renewal for Good Cause, as defined
herein, at least ninety (90) days prior to the Expiration Date, or at least
ninety (90) days prior to the expiration of any Renewal Tenn or Extension.

                           (c) For purposes of this Agreement, "Good Cause"
shall be defined as follows:

                                    i)   Any act or omission constituting fraud
                           under the law of the State of Texas; or

                                    ii)  Conviction of, or a plea of nolo
                           contendere to, a felony; or

                                    iii) Use of illegal drugs; or

                                    iv)  Embezzlement of Company property or
                           funds; or

                                    v)   The material breach of any provision of
                           this Agreement; or continued gross neglect of his
                           duties under this Agreement; or unauthorized
                           competition with the Company during his employment
                           pursuant to this Agreement; or unauthorized use of
                           Confidential Information (as defined in Section 9);
                           which, in any event, is materially detrimental to the
                           Company;

                           (d) In the event the Company believes "Good Cause"
exists for terminating this Agreement pursuant to Subsection (c)(v), the Company
shall be required to give the Executive written Notice of the acts or omissions
constituting "Good Cause" ("Cause Notice").

                           (e) No Notice of Termination for Good Cause or Notice
of Non-Renewal for Good Cause pursuant to Subsection (c)(v) shall be
communicated by the Company unless and until the Executive fails to cure such
acts or omissions within thirty (30) days after receipt of the Cause Notice.

                           (f) In the event the Company communicates a Notice of
Termination For Good Cause or Notice of Non-Renewal for Good Cause pursuant to
this section, the Executive shall have the right to a hearing before the
President/Chief Executive Officer, on a date determined by the President/Chief
Executive Officer not later than thirty (30) days after the date such Notice is
received, to contest the alleged "Good Cause" for the Notice of Termination or
Notice of Non-Renewal. The President/Chief Executive Officer shall provide the
Executive with written notice of his decision resolving any contest under this
section, and no termination or non-renewal of this Agreement shall be deemed to
be effective until such written notice is received by the Executive. In the
event that the President/Chief Executive Officer affirms the "Good Cause" for
termination or non-renewal, the Executive shall have the right to the Dispute
Resolution procedures set forth in Section 10.




                                       5
<PAGE>   6




                  (4) WITHOUT GOOD CAUSE:

                           (a) The Company shall be entitled to terminate the
Executive's employment under this Agreement by providing a written Notice of
Termination "Without Good Cause" at any time during his employment, or by
providing a written Notice of Non-Renewal "Without Good Cause," as defined
herein, at least ninety (90) days prior to the Expiration Date or at least
ninety (90) days prior to the expiration of any Renewal Term or Extension.
Provided, however, that in the event of any Notice of Termination Without Good
Cause or Notice of Non-Renewal Without Good Cause, the Company shall be required
to pay Severance Pay in accordance with the Severance provisions in Section 5.

                           (b) Any termination of employment or non-renewal of
this Agreement which is not for "Good Cause," as defined above in Subsection
2(c)(3), or which does not result from the death of the Executive, or the
disability of the Executive, shall be deemed to be a termination or non-renewal
"Without Good Cause." Furthermore, in the event that the Company communicates a
Notice of Termination for Good Cause or a Notice of Non-Renewal for Good Cause,
and either the President/Chief Executive Officer (under Subsection 2(c)(3)(f))
or an arbitration or a final, non-appealable judicial proceeding (under Section
10) determine that no Good Cause exists or existed for the Notice of Termination
or Notice of Non-Renewal that was originally communicated, then such Notice of
Termination or Notice of Non-Renewal shall be deemed to have been communication
of a Notice of Termination Without Good Cause or Notice of Non-Renewal Without
Good Cause, as appropriate, for all purposes under this Agreement.

                  (5) RESIGNATION: The Executive shall be entitled to terminate
his employment under this Agreement by providing the Company with a written
Notice of Resignation at least ninety (90) days prior to his intended
resignation date, subject to the following provisions:


                           (a) RESIGNATION FOR GOOD REASON: The Executive shall
have the right to resign for any "Good Reason," as defined herein, and such
resignation shall be deemed to be a termination "Without Good Cause" as defined
in Subsection 2(c)(4) for all purposes under this Agreement, including the
Change of Control provisions set forth in Section 4 and the Severance provisions
set forth in Section 5. For purposes of this Section, the term "Good Reason"
shall be defined as:

                                    i)   The Company's failure to perform any
                           material provision of this Agreement; or

                                    ii)  Any material changes by the Company or
                           the Board of Directors in the authority, duties, or
                           responsibilities of the Executive under this
                           Agreement, without the written consent of the
                           Executive, other than a termination or non-renewal
                           for "Good Cause," as defined herein; or

                                    iii) Any request by the Board of Directors
                           that the Executive perform, assist, abet or approve
                           any act which is or could be construed to be illegal
                           under any federal, state or local law; or



                                       6
<PAGE>   7




                                    iv)  Any requirement by the Board of
                           Directors that the Executive relocate from the
                           Dallas, Texas, metropolitan area without his consent;
                           or

                                    v)   In the event the Company fails to
                           maintain adequate liability insurance coverage in
                           accordance with Section 8 of this Agreement, without
                           the written consent of the Executive.

                           (b) OPPORTUNITY TO CURE: In the event he believes
"Good Reason" exists for his resignation, the Executive shall be required to
give the President/Chief Executive Officer of the Company written notice of the
acts or omissions constituting Good Reason, and no Notice of Resignation with
Good Reason shall be communicated to the Company unless and until the Company
fails to cure such acts or omissions within thirty (30) days after receipt of
the notice described in this sentence. Any Notice of Resignation with Good
Reason shall be deemed to be effective immediately, and no other notice or
opportunity to cure shall be required.

                           (c) RESIGNATION WITHOUT GOOD REASON: Any resignation
by the Executive for any reason other than "Good Reason," as defined above,
shall be deemed to be a resignation "Without Good Reason." In the event of a
Resignation Without Good Reason, the Change of Control provisions in Section 4
(except during the thirteenth month following the Change of Control as provided
in Section 4) and the Severance provisions in Section 5 shall be inapplicable.

3. RESPONSIBILITIES: The Executive and the Company acknowledge and agree that
the Executive shall be employed as Executive Vice President and Chief Operating
Officer of the Company. Executive's responsibilities shall include the
inter-city coach, coach charter and line haul and any other related business
thereto of Parent and its subsidiaries in the United States. The Executive
covenants and agrees that he will faithfully devote his best efforts and full
time, attention and skill to the business of the Company as is necessary to
perform his obligations under this Agreement. The Executive shall report to the
President and Chief Executive Officer of the Company. The Executive shall have
or perform no other business responsibilities or obligations during the term of
this Agreement without the prior written approval of the President of the
Company.

4. CHANGE OF CONTROL: The parties acknowledge that the Executive has agreed to
continue in the position of Executive Vice President and Chief Operating
Officer of the Company and to enter into this Agreement based upon his
confidence in the current shareholder of the Company, the support of the Board
of Directors, and the continued execution of the current business strategy of
the Company. Accordingly, if the Company should undergo a "Change of Control"
while the Executive is employed by the Company or any parent or subsidiary
corporation of the Company, or in the case of Section 4(d), in all events, the
parties agree as follows:

         a. VESTING OF STOCK INCENTIVES AND AWARDS: At the Effective Time and
in the event of a Change of Control, as defined in this section, all Stock
Incentives and Awards provided in Section 6 of this Agreement shall immediately
become vested and exercisable, all other equity incentive awards held by the
Executive shall become fully vested and all other stock options held by the
Executive shall become fully exercisable, effective at the Effective Time and
on the date of the



                                       7
<PAGE>   8




Change of Control, as the case may be, or at such other time as is necessary to
permit the Executive to be treated with respect to vesting and exercisability
no less favorably than other shareholders.

         b. COMPENSATION: In the event that the employment of the Executive is
terminated:

                  (1) at any time within twenty four (24) months after the date
of a Change of Control, as defined in this section, by: (i) the Company
communicating a Notice of Termination Without Good Cause; (ii) the Company
communicating a Notice of Non-Renewal Without Good Cause, or (iii) the
Executive communicating a Notice of Resignation for Good Reason; or

                  (2) by the resignation of the Executive, whether with or
without Good Reason, within thirty (30) days of the first Anniversary Date
(i.e., one year from the date) of a Change of Control,

the Company agrees to pay to the Executive a lump sum cash payment equal to
three (3) times the sum of: (x) an amount equal to the Executive's then
current, annualized Base Salary, and (y) the greater of: (a) the applicable
Annual Payout of Incentive Compensation paid for the Plan Year immediately
prior to the termination, or (b) the full, non-pro rata Annual Target Award for
Incentive Compensation based upon Executive's annual Base Salary for the Plan
Year in which the termination occurs, which payment shall be paid within thirty
(30) days after the effective date of termination, non-renewal or resignation.
The Company further agrees to pay benefits to the Executive as provided in
Subsection 5(d) for a period of thirty-six (36) months.

         c. DEFINITIONS: For purposes of this Agreement and notwithstanding
anything in this Agreement to the contrary, a "Change of Control" shall be
deemed to exist in the event that any of the following occurs:

                  (1) Parent ceases to be the beneficial owner, directly or
indirectly, of 51% or more of the voting shares of the Company or Parent and
its subsidiaries sell or cause to be sold all or substantially all of the
assets of the Company; or

                  (2) Any individual, or incorporated or unincorporated entity
or group of the foregoing acting jointly and in concert acquires beneficial
ownership, directly or indirectly, of 30% or more of Parent's voting shares; or

                  (3) A majority of the individuals who serve as directors of
Parent at the commencement of any 18 month period are replaced other than by
replacement directors who became directors at the initiative of management or
pursuant to a management proxy solicitation.

For the purpose of this Agreement, the acquisition of the Company by Parent is
not a Change of Control.

For purposes of this Subsection, a sale of all or substantially all of the
assets of the Company shall be deemed to occur if any corporation, person or
group acting in concert (a "Person") as described in Subsection 14(d)(2) of the
Securities Exchange Act of 1934, as amended, acquires (or during the 12-month
period on the date of the most recent acquisition by such Person, has acquired)
gross assets



                                       8
<PAGE>   9




of the Company that have an aggregate fair market value equal to 50% of the
fair market value of all of the gross assets of the Company immediately prior
to such acquisition(s).

         d. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

                  (1) Anything in this Agreement to the contrary
notwithstanding, but subject to Section 4(d)(8), in the event that it shall be
determined (as hereafter provided) that any payment (other than the Gross-Up
payments provided for in this Section 4(d)) or distribution by Parent, the
Company or any of their affiliates to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without limitation any stock
option, performance share, performance unit, stock appreciation right or
similar right, or the lapse or termination of any restriction on or the vesting
or exercisability of any of the foregoing (a "Payment"), would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") (or any successor provision thereto) by reason of being
considered "contingent on a change in ownership or control" of the Company or
of Parent, within the meaning of Section 280G of the Code (or any successor
provision thereto) or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such tax (such tax or taxes, together
with any such interest and penalties, being hereafter collectively referred to
as the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment or payments (collectively, a "Gross-Up Payment"); provided,
however, that no Gross-up Payment shall be made with respect to the Excise Tax,
if any, attributable to (a) any incentive stock option, as defined by Section
422 of the Code ("ISO") granted prior to the initial execution of the Original
Agreement (as such term is defined in the Prior Agreement), or (b) any stock
appreciation or similar right, whether or not limited, granted in tandem with
any ISO described in clause (a). The Gross-Up Payment shall be in an amount
such that, after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including any Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

                  (2) Subject to the provisions of Section 4(d)(6), all
determinations required to be made under this Section 4(d), including whether
an Excise Tax is payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required to be paid by the Company to the
Executive and the amount of such Gross-Up Payment, if any, shall be made by a
nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting
Firm to submit its determination and detailed supporting calculations to both
the Company and the Executive within 30 calendar days after the date of
termination of the Executive's employment, if applicable, and any such other
time or times as may be requested by the Company or the Executive. If the
Accounting Firm determines that any Excise Tax is payable by the Executive, the
Company shall pay the required Gross-Up Payment to the Executive within five
business days after receipt of such determination and calculations with respect
to any Payment to the Executive. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the same time as it makes
such determination, furnish the Company and the Executive an opinion that the
Executive has substantial authority not to report any Excise Tax on his
federal, state or local income or other tax return. As a result of the
uncertainty in the application of Section 4999 of the Code (or any successor
provision thereto) and the possibility of



                                       9
<PAGE>   10




similar uncertainty regarding applicable state or local tax law at the time of
any determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (an "Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts or fails to pursue its
remedies pursuant to Section 4(d)(6) and the Executive thereafter is required
to make a payment of any Excise Tax, the Executive shall direct the Accounting
Firm to determine the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting calculations to both the
Company and the Executive as promptly as possible. Any such Underpayment shall
be promptly paid by the Company to, or for the benefit of, the Executive within
five business days after receipt of such determination and calculations.

                  (3) The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determinations and
calculations contemplated by Section 4(d)(2). Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment shall be binding upon
the Company and the Executive.

                  (4) The federal, state and local income or other tax returns
filed by the Executive shall be prepared and filed on a consistent basis with
the determination of the Accounting Firm with respect to the Excise Tax payable
by the Executive. The Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income tax return as filed
with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment.
If prior to the filing of the Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company the amount of such
reduction.

                  (5) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations contemplated by
Section 4(d)(2) shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within five business days after receipt
from the Executive of a statement therefor and reasonable evidence of his
payment thereof.

                  (6) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up Payment.
Such notification shall be given as promptly as practicable but no later than
10 business days after the Executive actually receives notice of such claim and
the Executive shall further apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid (in each case, to the
extent known by the Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day period following the
date on which he gives such notice to the Company and (b) the date that any
payment



                                       10
<PAGE>   11




of amount with respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:

                  (i)   provide the Company with any written records or 
         documents in his possession relating to such claim reasonably requested
         by the Company;

                  (ii)  take such action in connection with contesting such
         claim as the Company shall reasonably request in writing from time to
         time, including without limitation accepting legal representation with
         respect to such claim by an attorney competent in respect of the
         subject matter and reasonably selected by the Company;

                  (iii) cooperate with the Company in good faith in order
         effectively to contest such claim; and

                  (iv)  permit the Company to participate in any proceedings
         relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold harmless the Executive, on an after-tax
basis, for and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of
this Section 4(d)(6), the Company shall control all proceedings taken in
connection with the contest of any claim contemplated by this Section 4(d)(6)
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim (provided, however, that the Executive may participate
therein at his own cost and expense) and may, at its option, either direct the
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
the tax claimed and sue for a refund, the Company shall advance the amount of
such payment to the Executive on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income or other tax, including interest or penalties with respect thereto,
imposed with respect to such advance; and provided further, however, that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which the contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company's control of any such contested claim shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

                  (7) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 4(d)(6), the Executive receives any
refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 4(d)(6)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 4(d)(6),
a determination is made that the Executive



                                       11
<PAGE>   12




shall not be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such denial
or refund prior to the expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of any such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid by the Company to the Executive
pursuant to this Section 4(d).

                  (8) Notwithstanding any provision of this Agreement to the
contrary, if (a) but for this sentence, the Company would be obligated to make
a Gross-Up Payment to the Executive, (b) the aggregate "present value" of the
"parachute payments" to be paid or provided to the Executive under this
Agreement or otherwise does not exceed 1.15 multiplied by three times the
Executive's "base amount," and (c) but for this sentence, the net after-tax
benefit to the Executive of the Gross-Up Payment would not exceed $50,000
(taking into account both income taxes and any Excise Tax), then the payments
and benefits to be paid or provided under this Agreement will be reduced to the
minimum extent necessary (but in no event to less than zero) so that no portion
of any payment or benefit to the Executive, as so reduced, constitutes an
"excess parachute payment." For purposes of this Section 4(d)(8), the terms
"excess parachute payment," "present value," "parachute payment," and "base
amount" will have the meanings assigned to them by Section 280G of the Code.
The determination of whether any reduction in such payments or benefits to be
provided under this Agreement is required pursuant to the preceding sentence
will be made at the expense of the Company, if requested by the Executive or
the Company, by the Accounting Firm. The fact that the Executive's right to
payments or benefits may be reduced by reason of the limitations contained in
this Section 4(d)(8) will not of itself limit or otherwise affect any other
rights of the Executive other than pursuant to this Agreement. In the event
that any payment or benefit intended to be provided under this Agreement or
otherwise is required to be reduced pursuant to this Section 4(d)(8), the
Executive will be entitled to designate the payments and/or benefits to be so
reduced in order to give effect to this Section 4(d)(8). The Company will
provide the Executive with all information reasonably requested by the
Executive to permit the Executive to make such designation. In the event that
the Executive fails to make such designation within 10 business days of the
date of termination of the Executive's employment, the Company may effect such
reduction in any manner it deems appropriate.

5. SEVERANCE: Severance shall be paid as follows:

         a. NON-RENEWAL WITHOUT GOOD CAUSE: In the event that the Agreement is
not renewed by the Company (except where the renewal is for Good Cause), the
Company shall pay the severance required by Subsection 5(b) in accordance with
Subsection 5(c) and continue the benefits as required by Subsection 5(d).



                                       12
<PAGE>   13




         b. RESIGNATION FOR GOOD REASON OR TERMINATION WITHOUT GOOD CAUSE: In
the event the Company terminates this Agreement without "Good Cause," as
defined in Subsection 2(c)(3), or the Executive resigns for "Good Reason," the
Executive shall be entitled to receive a lump sum payment equal to three (3)
times the sum of: (i) an amount equal to his then current, annualized Base
Salary, and (ii) the greater of: (x) the applicable Annual Payout of Incentive
Compensation paid for the Plan Year immediately prior to the termination, or
(y) the full non-pro rata Annual Target Award for Incentive Compensation based
upon Executive's annual Base Salary for the Plan Year in which the termination
occurs.

         c. TERMS OF PAYMENT: Severance Pay required pursuant to this section
shall be payable in cash in full within thirty (30) days after the termination
date, non-renewal date or resignation date of the Executive's employment.

         d. CONTINUATION OF BENEFITS: In the event of a Non-Renewal Without
Good Cause or a Termination Without Good Cause or a Resignation For Good
Reason, the Company agrees to continue any and all benefits as provided in the
Greyhound Lines, Inc. Medical Plan and Subsections 1(d)(2) through (8) of this
Agreement, as modified pursuant to the terms of Subsection l(d), for
twenty-four (24) months after the effective date of termination, non-renewal or
resignation. Additionally, Executive shall be permitted to continue
participation in the benefits provided in Subsection 1(d)(1) to the extent
permitted by law so as not to cause disqualification of the 401 k Plan and
1(d)(3) without further Company contributions, except earnings on contributions
made prior to termination and except contributions the Company is required to
make to ensure that such benefits are fully funded for service prior to
termination.

         e. EXCEPTIONS: Severance Pay shall not be payable under this section
in any of the following circumstances:

                  (1) In the event that this Agreement is terminated as a
result of the death or disability of the Executive, as provided in Subsections
2(c)(1)-(2); or

                  (2) In the event that this Agreement is terminated pursuant
to a Notice of Termination For Good Cause or a Notice of Non-Renewal for Good
Cause communicated by the Company, as provided in Subsection 2(c)(3), and such
termination or non-renewal is affirmed by both the President/Chief Executive
Officer (if applicable), and by the Dispute Resolution procedures set forth in
Section 10; or

                  (3) In the event the provisions of Section 4 are applicable
as a result of a "Change of Control" having occurred, and the payments provided
for in Section 4 are paid by the Company; or

                  (4) In the event that the Executive communicates Notice of
Resignation Without Good Reason as defined in Subsection 2(c)(5).




                                       13
<PAGE>   14




         f. EXCLUSIVITY: The Company and the Executive acknowledge and agree
that the Severance Payments required under this section are intended to be
exclusive and to supersede any severance pay plans or policies adopted by the
Company and that the Executive shall not be entitled to any additional
severance compensation under any other severance plan or policy adopted by the
Company.

         g. MITIGATION: The payment of the severance compensation by the
Company to the Executive in accordance with Sections 4 and 5 of this Agreement
is hereby acknowledged by the Company to be reasonable, and the Executive will
not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, nor will any profits,
income, earnings or other benefits from any source whatsoever create any
mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise.

6. STOCK INCENTIVES AND AWARDS: In addition to the other compensation set forth
in this Agreement and in addition to stock incentives and awards that were
granted under the terms of the Original Agreement (as such term is defined in
the Prior Agreement), Executive shall be entitled to participate in such stock
incentives and awards plans on terms not less favorable than to other officers
and directors of the Company (except for the President and Chief Executive
Officer of the Company), except that Parent may provide for additional
benefits, incentives, or awards to Executive and except that the following
shall apply to any options granted to Executive after the Effective Time:

         a. DEATH AND DISABILITY: If Executive dies or becomes disabled during
the term of this Agreement, (1) all unvested options as of the date of such
death or disability shall vest immediately; and (2) Executive (or his legal
representative or Estate) may exercise such options in accordance with the
exercise period prescribed in the stock incentive and award plan or twelve (12)
months from such death or disability, whichever is longer.

         b. RETIREMENT: If Executive retires (as defined in the 401 k plan,
except that, for purposes of this Section, the service requirement will be
modified to be no more than ten (10) years and the age requirement will be no
more than age 55), (1) all unvested options as of the date of such retirement
shall vest immediately; and (2) Executive (or his Estate) may exercise such
options in accordance with the exercise period prescribed in the stock
incentive and award plan or thirty-six (36) months, whichever is longer.

Further, notwithstanding anything to the contrary herein, nothing in this
Agreement will affect to the Executive's disadvantage any non-qualified stock
incentive and awards previously granted to Executive, whether under the
Original Agreement between Executive and the Company or otherwise.

7. SUCCESSORS AND ASSIGNS: The parties acknowledge and agree that this
Agreement may not be assigned by either party without the written consent of
the other party. In the event of a "Change of Control" as defined in Subsection
4(c), the Company shall be entitled to assign this Agreement to any successor
or assignee; provided, however, that such assignment shall not or be construed
to, in any way whatsoever, release, limit or excuse the Company from the
performance of its obligations and the payment of its liabilities under this
Agreement, regardless of whether such obligations or liabilities accrued or
accrue before, after or as a result of such assignment, and



                                       14
<PAGE>   15




regardless of whether such obligations or liabilities are or were assumed by
any successor or assignee. In the event of the Executive's death, this
Agreement shall be enforceable by the Executive's estate, executors or legal
representatives, but only to the extent that such persons may collect any
compensation (including stock incentives and awards) due to the Executive under
this Agreement.

8. INDEMNIFICATION: During and after the employment of the Executive pursuant
to this Agreement, the Company shall indemnify the Executive against all
judgments, penalties, fines, assessments, losses, amounts paid in settlement
and reasonable expenses (including, but not limited to, attorneys' fees) for
which the Executive may become liable as a result of his performance of his
duties and responsibilities pursuant to this Agreement and shall advance and
pay any expenses incurred in defending such claims, to the fullest extent
permissible under the laws of the State of Delaware. In addition, the Company
agrees to purchase liability insurance for any such judgments, penalties,
fines, assessments, losses, amounts paid in settlement and reasonable expenses
(including, but not limited to, attorneys' fees) for which the Executive may
become liable as a result of his performance of his duties and responsibilities
pursuant to this Agreement in an amount not less than the amount of director
and officer liability insurance in effect at the Effective Time, and consistent
with coverage provided to other officers of the Company.

9. NON-COMPETITION AND NON-DISCLOSURE: The Company and the Executive agree as
follows:

         a. During the term of this Agreement, the Company agrees that it will
disclose to Executive Confidential Information, as defined in this section, to
the extent necessary for Executive to carry out his obligations to the Company.
During and after his employment by the Company, the Executive agrees that he
shall not directly or indirectly disclose any Confidential Information, as
defined in this section, unless such disclosure is: (i) to an employee or a
member of the Board of Directors of, Parent, the Company or its subsidiaries;
or (ii) to a person to whom disclosure is reasonably necessary or appropriate
in connection with the performance of his duties as an executive of the
Company; or (iii) authorized in writing by the Board of Directors; or (iv)
required by law.

         b. In the event that Executive's employment under this Agreement is
terminated for any reason, the Executive agrees that he shall promptly return
all records, files, documents, materials and copies relating to the business of
the Company or its subsidiaries which came into the possession of the Executive
during his employment pursuant to this Agreement; provided, however, that
nothing in this section shall be construed as any limitation on the Executive's
right to retain any documents or other information which was in the possession
of the Executive prior to the Effective Date of the Original Agreement (as such
terms are defined in the Prior Agreement).



                                       15
<PAGE>   16




         c. For purposes of this Agreement, the term "Confidential Information"
shall be defined as any information relating to the business of the Company or
its subsidiaries which is not generally available to the public and which the
Company takes affirmative steps to maintain as confidential. The term shall not
include any information that the Executive was aware of prior to May 15, 1995,
information that is a matter of any public record, information contained in any
document filed or submitted to any governmental entity, any information that is
common knowledge in any industry in which the Company does business, any
information that has previously been made available to persons who are not
employees of the Company or any information that is known to the Company's
competitors.

         d. Both the Company and the Executive recognize that in his employment
at the Company, the Executive will be provided with Confidential Information,
as defined above. Both the Company and the Executive recognize that the
disclosure of such Confidential Information to a competitor of the Company
could place the Company at a competitive disadvantage. Accordingly, in
consideration of the Company agreeing to provide Confidential Information to
him, and to prevent the disclosure or use of such information to the
competitive disadvantage of the Company, the parties agree that in the event
that the Executive's employment with the Company is terminated as a result of
either: (i) Notice of Termination for Good Cause or Notice of Non-Renewal for
Good Cause, as defined in Subsection 2(c)(3); or (ii) the resignation of the
Executive "Without Good Reason," as defined by Subsection 2(c)(5), the
Executive covenants and agrees not to compete with the Company for twelve (12)
calendar months subsequent to such termination, non-renewal or resignation from
employment, in the business of providing inter-city transport of passengers or
cargo by automobile or motorbus in any city in which the Company engaged in
such business during the twelve (12) calendar months prior to such termination,
nonrenewal or resignation. This provision shall not apply in the event that the
employment of the Executive is terminated for any reason other than "Good
Cause" or in the event of a "Resignation for Good Reason."

         e. Unless the Board of Directors provides prior written approval, for
one (1) year following the termination of the Executive's employment by the
Company, the Executive shall not, directly or indirectly:

                  (1) solicit, entice, persuade or induce any employee of the
Company, or its subsidiaries, to terminate his/her employment with the Company,
or its subsidiaries, or to become employed by any Person other than the
Company, or its subsidiaries; or

                  (2) approach any such employee for any of the foregoing
purposes; or

                  (3) authorize or assist in the taking of such actions by any
third party.

10. DISPUTE RESOLUTION: The Company and the Executive agree as follows:

         a. Any claim or controversy arising out of or relating to this
Agreement, or any breach of this Agreement, shall be submitted to non-binding
arbitration in the city of Dallas, Texas in accordance with procedures or rules
established by the American Arbitration Association. The Executive and the
Company agree that either party must request such non-binding arbitration of
any claim or controversy on or before the earlier of: (i) the fifteenth (15th)
business day after the



                                       16
<PAGE>   17




termination or non-renewal of this Agreement becomes effective; or (ii) the
sixtieth (60th) business day after the date the claim or controversy first
arises, by giving written notice of the party's request for non-binding
arbitration ("Arbitration Notice"). If both parties fail to give such
Arbitration Notice, either party may proceed to seek judicial relief in a court
of competent jurisdiction located in Dallas County, Texas.

         b. In the event that any dispute arising under this Agreement concerns
the amount of any payment required to be made under any provision of this
Agreement, either party agrees to pay the undisputed portion of the payment to
the other party and deposit the disputed portion of the payment in an interest
bearing account with a financial institution acceptable to the other party
within five (5) days after either party effectively communicates its
Arbitration Notice or files an original petition or complaint in a court of
competent jurisdiction.

         c. At the election of both the Executive and the Company, all claims
or controversies subject to arbitration under this Agreement may be submitted
to final and binding arbitration in accordance with the applicable Rules of the
American Arbitration Association.

         d. In any dispute arising under the terms of this Agreement, without
regard to whether such dispute proceeds to arbitration or litigation, the
Company will reimburse the Executive for reasonable and necessary attorney's
fees up to a maximum amount of Forty Thousand Dollars ($40,000.00), unless a
court of competent jurisdiction (or the Arbitrator, if the parties so elect
according to Section 10), finds that the Executive's position in such
proceeding was frivolous.

11. RULES OF CONSTRUCTION: The following provisions shall govern the
interpretation and enforcement of this Agreement:

         a. SEVERABILITY: The parties acknowledge and agree that each provision
of this Agreement shall be enforceable independently of every other provision.
Furthermore, the parties acknowledge and agree that, in the event any provision
of this Agreement is determined to be unenforceable for any reason, the
remaining covenants and/or provisions will remain effective, binding and
enforceable.

         b. WAIVER: The parties acknowledge and agree that the failure of
either to enforce any provision of this Agreement shall not constitute a waiver
of that particular provision, or of any other provisions, of this Agreement,
except as otherwise stated in this Agreement.

         c. CHOICE OF LAW: The parties acknowledge and agree that except as
specifically provided otherwise in this Agreement, the law of Texas will govern
the validity, interpretation and effect of this Agreement and any other dispute
relating to, or arising out of, the employment relationship between the Company
and the Executive.

         d. MODIFICATION: The parties acknowledge and agree that, except as
expressly provided herein, this Agreement constitutes the complete and entire
agreement between the parties; that the parties have executed this Agreement
based upon the express terms and provisions set forth herein; that the parties
have not relied on any representations, oral or written, which are not set
forth in this Agreement; that no previous agreement, either oral or written,
shall have any effect on the terms or



                                       17
<PAGE>   18




provisions of this Agreement; and that all previous agreements, either oral or
written, are expressly superseded and revoked by this Agreement. In addition,
the parties acknowledge and agree that the provisions of this Agreement may not
be modified by any subsequent agreement unless the modifying agreement (i) is
in writing (ii) contains an express provision referencing this Agreement (iii)
is signed by the Executive and (iv) is approved by the Board of Directors and
by Parent.

         e. EXECUTION: The parties agree that this Agreement may be executed in
multiple counterparts, each of which shall be deemed an original for all
purposes.

         f. HEADINGS: The parties agree that the subject headings set forth at
the beginning of each section in this Agreement are provided for ease of
reference only, and shall not be utilized for any purpose in connection with
the construction, interpretation or enforcement of this Agreement.

12. LEGAL CONSULTATION: The parties acknowledge and agree that all parties have
been accorded a reasonable opportunity to review this Agreement with legal
counsel prior to executing the agreement.

13. NOTICES: The parties acknowledge and agree that any and all Notices
required to be delivered under the terms of this Agreement shall be forwarded
by personal delivery or certified U.S. mail. Either party may change their
respective address for the purpose of receiving notices only by providing
written notification via certified mail, five (5) days in advance of such
change. Notices shall be deemed to be communicated and effective on the day of
receipt. Such Notices shall be addressed to each party as follows:

<TABLE>
<S>                                 <C>                                <C>
John Werner Haugsland               Greyhound Lines, Inc.              Laidlaw, Inc.
17824 Cedar Creek Canyon            15110 No. Dallas Parkway           3221 North Service
Dallas, Texas 75252                 Dallas, Texas 75248                Burlington, Ontario
                                    Attn: General Counsel              Canada  L7R 3Y8
                                                                       Attn:  General Counsel

With a copy to:                     With a copy to:                    With a copy to:

Robert E. Sheeder, Esq.             Craig R. Lentzsch                  President and Chief
1445 Ross Avenue, Suite 3200        President and Chief Executive       Executive Officer
Dallas, Texas 75202                  Officer                           Laidlaw, Inc.
                                    Greyhound Lines, Inc.              3221 North Service
                                    15110 North Dallas Parkway         Burlington, Ontario
                                    Dallas, Texas 75248                Canada  L7R 3Y8
                                                                       Attn:  General Counsel
</TABLE>



                                       18
<PAGE>   19



14. EFFECTIVENESS; PRIOR AGREEMENT: This Agreement will become effective upon
and the Prior Agreement will terminate immediately prior to, the Effective
Time. Notwithstanding any other provision of this Agreement, if the Merger
Agreement is terminated prior to the Effective Time, this Agreement will have
no further force or effect, and the Prior Agreement will remain in full force
and effect as though this Agreement had not been entered into.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written, but effective as provided in Section 14.

                                            JOHN WERNER HAUGSLAND




                                            ------------------------------------
                                            GREYHOUND LINES, INC.



                                            By:
                                               ---------------------------------
                                            Title:
                                                  ------------------------------

                                            LAIDLAW, INC.



                                            By:
                                               ---------------------------------
                                            Title:
                                                  ------------------------------



                                       19