Document:

<PAGE>

                                                                   EXHIBIT 10.10

                      RESTRICTED STOCK UNIT AWARD AGREEMENT

      This Restricted Stock Unit Award Agreement ("Agreement") is entered into
effective as of ________________ (the "Grant Date"), by and between Waste
Management, Inc., a Delaware corporation (together with its Subsidiaries and
Affiliates, the "Company"), and ________________________ (the "Employee"),
pursuant to the Waste Management, Inc. 2004 Stock Incentive Plan (the "Plan").
Employee and the Company agree to execute such further instruments and to take
such further action as may reasonably be necessary to carry out the intent of
this Agreement.

      1.    Award. The Company hereby grants to Employee ___________________
"Restricted Stock Units". Restricted Stock Units are notational units of
measurement denominated in shares of common stock of Waste Management, Inc.,
$.01 par value ("Common Stock"). Each Restricted Stock Unit represents a
hypothetical share of Common Stock, subject to the conditions and restrictions
on transferability set forth below and in the Plan. The Restricted Stock Units
will be credited to Employee in an unfunded bookkeeping account established for
Employee.

      2.    Vesting of Restricted Stock Units. The period of time between the
Grant Date and the vesting of Restricted Stock Units (and the termination of
restriction thereon) will be referred to herein as the "Restricted Period."

            (a)   Vesting Schedule. For a period of four (4) years commencing on
      the Grant Date, the Restricted Stock Units will be subject to the
      restrictions as set forth herein; provided, however, that, unless earlier
      vested or forfeited pursuant to this Agreement, the restrictions will
      lapse on certain anniversary dates of the Grant Date on a number of units
      during the Restricted Period as determined in accordance with the
      following schedule:

<TABLE>
<CAPTION>
                                          PERCENTAGE OF UNITS GRANTED ON THE
                                          ----------------------------------
              DATE                             GRANT DATE TO BE VESTED
              ----                             -----------------------
<S>                                       <C>
First anniversary of Grant Date                          25%
Second anniversary of Grant Date                         50%
Third anniversary of Grant Date                          75%
Fourth anniversary Grant Date                           100%
</TABLE>

      When applying this schedule, any fractional units shall be rounded up to
      the next whole unit, but in the aggregate may not exceed the total number
      of Restricted Stock Units granted on the Grant Date. Unless timely
      deferred by Employee in accordance with Section 5, upon vesting, each
      Restricted Stock Unit will be converted into one share of Company Common
      Stock and Employee will be issued shares of Common Stock equal to the
      number of Restricted Stock Units held, free of any restrictions.

            (b) Vesting in Event of Retirement. Upon Termination of Employment
      from the Company by reason of retirement (as determined by the Committee,
      as defined in Section 16 below), Restricted Stock Units subject to this
      Agreement will continue to vest pursuant to the

                                      -1-
<PAGE>

      schedule set forth in Subsection 3(a) for the 36-month period commencing
      on the date of such termination; provided, however, that if Employee is
      determined by the Company to have violated any post-termination
      obligations to the Company (including, but not limited to,
      non-competition, non-solicitation or non-disparagement obligations under
      Employee's employment agreement, if any), then Employee shall immediately
      forfeit all Restricted Stock Units that remain unvested on the date such
      violation is discovered by the Company. Employee shall immediately forfeit
      all Restricted Stock Units that remain unvested on the date on which such
      36-month period expires.

            (c)   Accelerated Vesting of Restricted Stock Units.

                  (i)   Acceleration on Death or Disability. Upon Termination of
            Employment from the Company by reason of Employee's death or
            disability (as determined by the Committee), or upon Employee's
            disability prior to a Termination of Employment (as determined by
            the Committee and within the meaning of Section 409A of the Internal
            Revenue Code of 1986, as amended (the "Internal Revenue Code")) all
            Restricted Stock Units that are not vested at that time immediately
            will become vested in full.

                  (ii) Pro-rated Vesting upon Involuntary Termination. Upon
            involuntary Termination of Employment without Cause by the Company,
            Employee will be entitled to have vested under this award (including
            the amount of Restricted Stock Units that have already vested at
            that time) the amount of Restricted Stock Units equivalent to the
            total Restricted Stock Units granted under this Agreement multiplied
            by the fraction which has as its numerator the total number of days
            that the Employee was employed by the Company during the period
            beginning on the Grant Date, and has as its denominator 1,460 (being
            four times 365 days).

                  (iii) Possible Acceleration upon Change in Control or Certain
            Terminations Following Change in Control. If there is a Change in
            Control of Waste Management, Inc., all outstanding but unvested
            Restricted Stock Units that are not vested will become immediately
            vested in full, unless the successor entity assumes all awards
            granted under the Plan and converts the awards to equivalent grants
            in the successor effective as of the Change in Control. Provided,
            however, even if the successor entity so assumes and converts all
            awards granted under the Plan, if the successor entity terminates
            Employee's employment during the Window Period without Cause (as
            each term is defined in Section 16 below), or due to Employee's
            death or disability, then all outstanding but unvested Restricted
            Stock Units (or its equivalent grant in the successor entity) will
            become immediately vested in full as of such termination.

      3.    Forfeitures of Restricted Stock Units. Upon Termination of
Employment from the Company for any reason other than as described in Section 2,
Employee shall immediately forfeit all unvested Restricted Stock Units, without
the payment of any consideration or further consideration by the Company. Upon
forfeiture, neither Employee nor any successors, heirs, assigns, or legal

                                      -2-
<PAGE>

representatives of Employee shall thereafter have any further rights or interest
in the unvested Restricted Stock Units or certificates therefor.

      4.    Restrictions on Transfer Before Vesting.

            (a)   Absent prior written consent of the Committee, the Restricted
      Stock Units granted hereunder to Employee may not be sold, assigned,
      transferred, pledged or otherwise encumbered, whether voluntarily or
      involuntarily, by operation of law or otherwise, from the Grant Date until
      such shares have become vested and not subject to deferral.

            (b)   Consistent with the foregoing, except as contemplated by
      Section 10, no right or benefit under this Agreement shall be subject to
      transfer, anticipation, alienation, sale, assignment, pledge, encumbrance
      or charge, whether voluntary, involuntary, by operation of law or
      otherwise, and any attempt to transfer, anticipate, alienate, sell,
      assign, pledge, encumber or charge the same shall be void. No right or
      benefit hereunder shall in any manner be liable for or subject to any
      debts, contracts, liabilities or torts of the person entitled to such
      benefits. If Employee or his or her Beneficiary hereunder shall attempt to
      transfer, anticipate, alienate, assign, sell, pledge, encumber or charge
      any right or benefit hereunder, other than as contemplated by Section 10,
      or if any creditor shall attempt to subject the same to a writ of
      garnishment, attachment, execution, sequestration, or any other form of
      process or involuntary lien or seizure, then such attempt shall have no
      effect and shall be void.

      5.    Elective Deferrals Prior to Vesting.

            (a) The Committee may establish procedures pursuant to which
      Employee may elect to defer, until a time or times later than the vesting
      of a Restricted Stock Unit, receipt of all or a portion of the shares of
      Common Stock deliverable in respect of a Restricted Stock Unit, all on
      such terms and conditions as Company shall determine in its sole
      discretion. If any such deferrals are permitted for Employee, then
      notwithstanding any provision of this Agreement or the Plan to the
      contrary, an Employee who elects such deferral shall not have any rights
      as a stockholder with respect to any such deferred shares of Common Stock
      unless and until the date the deferral expires and certificates
      representing such shares are required to be delivered to Employee.

            (b) Notwithstanding any provision to the contrary in this Agreement,
      if deferral of Restricted Stock Units is permitted, each provision of this
      Agreement shall be interpreted to permit the deferral of compensation only
      as allowed in compliance with the requirements of Section 409A of the
      Internal Revenue Code and any provision that would conflict with such
      requirements shall not be valid or enforceable. Employee and the Company
      further hereby agree to execute such further instruments and take such
      further action as reasonably may be necessary to comply with Section 409A
      of the Internal Revenue Code.

                                       -3-
<PAGE>

      6.    Rights as a Stockholder. Employee will have no rights as a
stockholder with regard to the Restricted Stock Units prior to vesting. However,
the Company will pay Dividend Equivalents on unvested Restricted Stock Units, in
the form of cash at such time as dividends are paid on the Company's outstanding
shares of Common Stock; provided that, for Restricted Stock Units that are
subject to a deferral election of Employee pursuant to Section 5, the Company
will pay Dividend Equivalents in the form of cash or additional Restricted Stock
Units, at Employee's election, at such time as dividends are paid on the
Company's outstanding shares of Common Stock.

      7.    Taxes. To the extent that the vesting or receipt of the Restricted
Stock Units or the lapse of any restrictions results in income to Employee for
federal or state tax purposes, Employee shall deliver to the Company at the time
of such receipt or lapse, as the case may be, such amount of money or shares of
Common Stock received upon vesting of Restricted Stock Units or other shares of
Common Stock owned by employee, at Employee's election, as the Company may
require to meet its obligation under applicable tax laws or regulations, and, if
Employee fails to do so, the Company is authorized to withhold from the shares
of Common Stock deliverable as a result of the vesting of the Restricted Stock
Units or from any cash or other form of remuneration then or thereafter payable
to Employee an amount equivalent to any tax required to be withheld by reasons
of such resulting compensation income.

      8.    Changes in Capital Structure. If the outstanding shares of Common
Stock or other securities of Waste Management, Inc., or both, shall at any time
be changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind of Restricted
Stock Units shall be appropriately and equitably adjusted so as to maintain the
proportionate number of shares.

      9.    Compliance With Securities Laws. The Company will not be required to
deliver any shares of Common Stock pursuant to this Agreement if, in the opinion
of counsel for the Company, such issuance would violate the Securities Act of
1933 or any other applicable federal or state securities laws or regulations.
Prior to the issuance of any shares pursuant to this Agreement, the Company may
require that Employee (or Employee's legal representative upon Employee's death
or disability) enter into such written representations, warranties and
agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Agreement.

      10.   Assignment. The Restricted Stock Units are not transferable (either
voluntarily or involuntarily), other than pursuant to a domestic relations
order. Employee may designate a beneficiary or beneficiaries (the "Beneficiary")
to whom the Restricted Stock Units will pass upon Employee's death and may
change such designation from time to time by filing a written designation of
Beneficiary on the form attached hereto as Exhibit A, or such other form as may
be prescribed by the Committee; provided that no such designation shall be
effective until filed with the Company. Employee may change his or her
Beneficiary without the consent of any prior Beneficiary by filing a new
designation with the Company; provided that no such designation shall be
effective prior to receipt by the Company. Following Employee's death, the
Restricted Stock Units will pass to the designated Beneficiary and such person
will be deemed Employee for purposes of any applicable provisions of this
Agreement. If no such designation is made or if the designated Beneficiary does

                                      -4-
<PAGE>

not survive Employee's death, the Restricted Stock Units shall pass by will or,
if none, then by the laws of descent and distribution.

      11.   Successors and Assigns.

            (a) This Agreement shall bind and inure to the benefit of and be
      enforceable by Employee, the Company and their respective permitted
      successors or assigns (including personal representatives, heirs and
      legatees), except that Employee may not assign any rights or obligations
      under this Agreement except to the extent, and in the manner, expressly
      permitted herein.

            (b) The Company shall require any successor (whether direct or
      indirect, by purchase, merger, consolidation or otherwise) to all or
      substantially all of the business and/or assets of the Company that
      assumes all Awards granted under the Plan as contemplated by Section
      2(c)(iii) to assume expressly and agree to perform this Agreement in the
      same manner and to the same extent that the Company would be required to
      perform it if no such succession had taken place, subject to the vesting
      rights under Section 2(c)(iii).

      12.   Limitation of Rights. Nothing in this Agreement or the Plan may be
construed to:

            (a)   give Employee any right to be awarded any further Restricted
      Stock Units (or other form of stock incentive awards) other than in the
      sole discretion of the Committee;

            (b)   give Employee or any other person any interest in any fund or
      in any specified asset or assets of the Company (other than the Restricted
      Stock Units and applicable Common Stock following the vesting of such
      Restricted Stock Units); or

            (c)   confer upon Employee the right to continue in the employment
      or service of the Company.

      13.   Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas, without reference to
principles of conflict of laws.

      14.   Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

      15.   No Waiver. The failure of Employee or the Company to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right Employee or the Company may have under this Agreement shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.

      16.   Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings set forth in the Plan. Certain
other terms used herein have definitions

                                      -5-
<PAGE>

given to them in the first place in which they are used. In addition, the
following terms shall have the meanings set forth in this Section 16.

            (a)   "Board" means the Board of Directors of Waste Management, Inc.

            (b)   "Cause" means any of the following: (i) willful or deliberate
      and continual refusal to materially perform Employee's employment duties
      reasonably requested by the Company after receipt of written notice to
      Employee of such failure to perform, specifying such failure (other than
      as a result of Employee's sickness, illness, injury, death or disability)
      and Employee fails to cure such nonperformance within ten (10) days of
      receipt of said written notice; (ii) breach of any statutory or common law
      duty of loyalty to the Company; (iii) Employee has been convicted of, or
      pleaded nolo contendre to, any felony; (iv) Employee willfully or
      intentionally caused material injury to the Company, its property, or its
      assets; (v) Employee disclosed to unauthorized person(s) proprietary or
      confidential information of the Company that causes a material injury to
      the Company; (vi) any material violation or a repeated and willful
      violation of the Company's policies or procedures, including but not
      limited to, the Company's Code of Business Conduct and Ethics (or any
      successor policy) then in effect.

            (c)   "Change in Control" means the first to occur on or after the
      Grant Date of any of the following events:

                  (i)   any Person is or becomes the Beneficial Owner, directly
            or indirectly, of securities of the Company 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 Grant 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 at least
            two-thirds (2/3rds) of the directors then still in office who either
            were directors on the Grant Date or whose appointment, election or
            nomination for election was previously so approved or recommended
            (the "Incumbent Board");

                  (iii) there is a consummated merger or consolidation of the
            Company with any other corporation, other than (1) a 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 (2) a
            merger or consolidation effected to implement a recapitalization of
            the Company (or

                                      -6-
<PAGE>

            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; or

                  (iv)  the stockholders 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 definition, the following terms
            shall have the following meanings:

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

                        (B)   "Exchange Act" means the Securities and Exchange
                  Act of 1934, as amended from time to time;

                        (C)   "Person" shall have the meaning set forth in
                  Section 3(a)(9) of the Exchange Act, as modified and used in
                  Sections 13(d) and 14(d) thereof, except that such term shall
                  not include (1) the Company, (2) a trustee or other fiduciary
                  holding securities under an employee benefit plan of the
                  Company, (3) an employee benefit plan of the Company, (4) an
                  underwriter temporarily holding securities pursuant to an
                  offering of such securities or (5) a corporation owned,
                  directly or indirectly, by the stockholders of the Company in
                  substantially the same proportions as their ownership of
                  shares of Common Stock.

            This definition of Change in Control will be modified if and to the
      extent necessary to ensure compliance with the requirements of Section
      409A of the Code, and Employee and the Company agree to execute such
      further instruments and take such further action as reasonably may be
      necessary to comply with Section 409A of the Code.

            (d)   "Committee" means the Compensation Committee of the Board or
      such other committee of the Board as the Board may designate from time to
      time.

            (e)   "Dividend Equivalent" means an amount of cash equal to all
      dividends and other distributions (or the economic equivalent thereof)
      that are payable by the Company on one share of Common Stock to
      stockholders of record, which, in the discretion of the Committee, may be
      awarded (a) in connection with any Award under the Plan while such Award
      is

                                      -7-
<PAGE>

      outstanding or otherwise subject to a Restriction Period and on a like
      number of shares of Common Stock under such Award or (b) singly.

            (f)   "Termination of Employment" means the termination of
      Employee's employment with the Company. Temporary absences from employment
      because of illness, vacation or leave of absence and transfers among Waste
      Management, Inc. and its Subsidiaries and Affiliates will not be
      considered a Termination of Employment. Any questions as to whether and
      when there has been a Termination of Employment, and the cause of such
      termination, shall be determined by the Committee, and its determination
      will be final.

            (g)   "Window Period" means the period commencing on the date six
      months immediately prior to the date on which a Change in Control first
      occurs and ending the second anniversary of the date on which a Change in
      Control occurs.

      17.   Entire Agreement.

            (a)   Employee hereby acknowledges that he or she has received,
      reviewed and accepted the terms and conditions applicable to this
      Agreement. Employee hereby accepts such terms and conditions, subject to
      the provisions of the Plan and administrative interpretations thereof.
      Employee further agrees that such terms and conditions will control this
      Agreement, notwithstanding any provisions in any employment agreement or
      in any prior awards.

            (b)   Employee hereby acknowledges that he or she is to consult with
      and rely upon only Employee's own tax, legal, and financial advisors
      regarding the consequences and risks of this Agreement and the award of
      Restricted Stock Units.

            (c)   This Agreement may not be amended or modified except by a
      written agreement executed by the parties hereto or their respective
      successors and legal representatives. The captions of this Agreement are
      not part of the provisions hereof and shall have no force or effect.

      18.   Counterparts. This Agreement may be executed in counterparts, which
together shall constitute one and the same original.

                                      -8-
<PAGE>

      IN WITNESS WHEREOF, Waste Management, Inc. has caused this Agreement to be
duly executed by one of its officers thereunto duly authorized, which execution
may be facsimile, engraved or printed, which shall be deemed an original, and
Employee has executed this Agreement, effective as of the day and year first
above written.

                                WASTE MANAGEMENT, INC.

                                By:
                                    ------------------------------------------

                                EMPLOYEE

                                By:
                                    ------------------------------------------

                                      -9-
<PAGE>

                                                   EXHIBIT A TO RESTRICTED STOCK
                                                            UNIT AWARD AGREEMENT

                 RESTRICTED STOCK UNIT AGREEMENT PURSUANT TO THE
                WASTE MANAGEMENT, INC. 2004 STOCK INCENTIVE PLAN
                           DESIGNATION OF BENEFICIARY

      I, _____________________________________ ("Employee") hereby declare that

upon my death ___________________ (the "Beneficiary") of _______________________

                        Name                                     Street Address

___________________________, who is my _______________________, will be entitled
City    State      Zip Code            Relationship to Employee

to the Restricted Stock Units and all other rights accorded Employee by the
above-referenced Restricted Stock Unit Award Agreement.

      It is understood that this designation of Beneficiary is made pursuant to
the Agreement and is subject to the conditions stated therein, including the
Beneficiary's survival of Employee. If any such condition is not satisfied, such
rights shall devolve according to Employee's last will and testament, or if
none, then the laws of descent and distribution.

      It is further understood that all prior designations of beneficiary under
the Agreement are hereby revoked and that this designation of Beneficiary may
only be revoked in writing, signed by Employee, duly notarized, and filed with
the Company.

                                          __________________________________
                                          Employee

                                          __________________________________
                                          Date

Signed before me, this _______
day of ______, 20____.

___________________________________
Notary Public, State of ___________<PAGE>
                                                                   Exhibit 10.11

                     PERFORMANCE SHARE UNIT AWARD AGREEMENT

      This Performance Share Unit Award Agreement ("Agreement") is entered into
effective as of ________________ the "Grant Date"), by and between Waste
Management, Inc., a Delaware corporation (together with its Subsidiaries and
Affiliates, the "Company"), and_____________________ (the "Employee"), pursuant
to the Waste Management, Inc. 2004 Stock Incentive Plan (the "Plan"). Employee
and the Company agree to execute such further instruments and to take such
further action as may reasonably be necessary to carry out the intent of this
Agreement.

      1. Grant. In accordance with the terms of the Plan, the Company hereby
grants to the Employee a Performance Share Unit Award (the "Award") subject to
the terms and conditions set forth herein. Performance Share Units are
notational units of measurement denominated in shares of common stock of Waste
Management, Inc., $.01 par value, ("Common Stock"), subject to the conditions
and restrictions on transferability set forth below and in the Plan.

      2. Performance Vesting Requirement.

            (a) The "Performance Period" for this Award shall be the 36-month
      period commencing on _______________ and ending on _________________. The
      Award shall be subject to performance vesting requirements based upon the
      achievement of the Performance Target specified below, subject to
      certification of the degree of achievement of such Performance Target by
      the Committee pursuant to Section 7 of the Plan.

            (b) The measurement tool for determining level of achievement shall
      be the average Return on Invested Capital ("ROIC") for the 36-month period
      beginning _______________ and ending _________________. ROIC is defined to
      mean (i) the Company's average "as reported" Net Operating Profit After
      Taxes ("NOPAT") for the Performance Period, divided by (ii) the Company's
      average Invested Capital for the Performance Period. For purposes of this
      Agreement, the average ROIC for the Performance Period will be calculated
      using the following equation:

                     (2005 NOPAT + 2006 NOPAT + 2007 NOPAT)
     (2005 Invested Capital + 2006 Invested Capital + 2007 Invested Capital)

      3. Determining Number of Performance Share Units Earned.

            (a) The "Target Award" for Employee under this Agreement
      is________________ Performance Share Units. The actual number of
      Performance Share Units earned by Employee will be determined as described
      below, based upon the actual achievement of ROIC for the Performance
      Period. The "Threshold ROIC" is the minimum ROIC that must be achieved to
      qualify for any Award; "Target ROIC" is the expected achievement in ROIC;
      and "Maximum ROIC" is the maximum ROIC that could be achieved that would
      result in an increase in the number of Performance Share Units

                                      -1-
<PAGE>

      earned under this Award. These targets will be announced to Employee by
      March 15, 2005, following calculation of year-end financial reporting for
      2004. Subject to adjustment pursuant to Subsection 3(b), 3(c) and 3(d),
      each such percentage correlates to a number of Performance Share Units
      that may be earned under this Award, as follows:

<TABLE>
<CAPTION>
Average ROIC Achieved During
   Performance Period         Resulting Performance Share Units Earned
----------------------------  ----------------------------------------
<S>                           <C>
     Threshold ROIC                     50% of Target Award
       Target ROIC                      100% of Target Award
      Maximum ROIC                      200% of Target Award
</TABLE>

            (b) In the event that the Company's actual performance does not meet
      the Threshold ROIC, no Performance Shares Units shall be earned under this
      Award.

            (c) If the Company's actual ROIC for the Performance Period is
      between Threshold ROIC and Target ROIC, the number of Performance Share
      Units earned shall equal to the sum of (i) the Performance Shares Units
      for achievement of Threshold ROIC plus (ii) the number of Performance
      Shares determined under the following formula:

                             (TAS - TS) X (AP - TP)
                                          ---------
                                           TAP - TP

      TAS = Performance Share Units earned for achievement of the Target ROIC.

      TS = Performance Share Units earned for achievement of the Threshold ROIC.

      AP = Company's actual ROIC.

      TP = Threshold ROIC.

      TAP = Target ROIC.

            (d) If the Company's actual ROIC for the Performance Period is
      between Target ROIC and Maximum ROIC, the number of Performance Share
      Units earned shall equal to the sum of (i) the Performance Share Units
      earned for achievement of Target ROIC plus (ii) the number of Performance
      Share Units determined under the following formula:

                            (MS - TAS) X (AP - TAP)
                                          ---------
                                           MP - TAP

      MS = Performance Share Units earned for achievement of the Maximum ROIC.

      TAS = Performance Share Units earned for achievement of the Target ROIC.

      AP = Company's actual ROIC.

      TAP = Target ROIC.

      MP = Maximum ROIC.

      4. Timing and Form of Payout. Except as hereinafter provided, after the
end of the Performance Period, the Employee shall be entitled to receive his
total number of Performance

                                      -2-
<PAGE>

Shares Units determined under Section 3. Unless timely deferred by Employee in
accordance with Section 9, upon vesting, each Performance Share Unit will be
settled by payment of one share of Common Stock, free of any restrictions.
Payment of such shares of Common Stock shall be made as soon as administratively
feasible after the Committee certifies the actual performance of the Company
during the Performance Period.

      5. Termination of Employment Due to Death, Retirement or Disability. Upon
Termination of Employment from the Company by reason of Employee's death,
retirement or disability (as determined by the Committee), the Employee (or in
the case of Employee's death, the Employee's beneficiary) shall be entitled to
receive the Performance Share Units the Employee would have been entitled to
under Section 3 if he had remained employed until the last day of the
Performance Period. Unless directed otherwise pursuant to Employee's deferral
election, the delivery of shares of Common Stock in satisfaction of such
Performance Share Units shall be made as soon as administratively feasible after
the end of the Performance Period.

      6. Involuntary Termination of Employment Without Cause by the Company.
Upon involuntary Termination of Employment from the Company without Cause by the
Company, the Employee shall be entitled to receive the Performance Share Units
the Employee would have been entitled to under Section 3 if he had remained
employed until the last day of the Performance Period, prorated for the number
of days he was employed during the Performance Period. Unless directed otherwise
pursuant to Employee's deferral election, the delivery of shares of Common Stock
in satisfaction of such Performance Share Units shall be made as soon as
administratively feasible after the end of the Performance Period.

      7. Termination of Employment for Any Other Reason. Except as provided in
Sections 5 and 6, the Employee must be an employee of the Company continuously
from the date of this Award until the last day of the Performance Period to be
entitled to receive any shares of Common Stock with respect to any Performance
Share Units he may have earned hereunder.

      8. Acceleration upon Change in Control. Notwithstanding anything to the
contrary, if there is a Change in Control of Waste Management, Inc. prior to the
end of the Performance Period, Employee will be entitled to immediately receive
both (a) and (b), as follows:

            (a) the Performance Share Units that he would have otherwise
      received based upon achievement of ROIC after reducing the Performance
      Period so that it ends on the last day of the quarter preceding the Change
      in Control (the "Early Measurement Date") and making adjustments to Target
      ROIC so as to be equal to the ROIC budgeted for that period and
      appropriate adjustments to Threshold ROIC and Maximum ROIC so that they
      bear the same ratio to the Threshold ROIC and Maximum ROIC amounts above
      as the revised Target ROIC amount bear to the Target ROIC amount above,
      converted into a cash payment equivalent to the number of Performance
      Share Units earned under this Section 8 multiplied by the closing price of
      the Common Stock on the Early Measurement Date; and

                                      -3-
<PAGE>

            (b) as a substitute award for the lost opportunity to earn
      Performance Stock Units for the entire length of the original Performance
      Period:

                  (i) if the successor entity was a publicly traded company as
            of the Early Measurement Date, an award of restricted stock units in
            the successor entity equal to the number of shares of common stock
            of the successor entity that could have been purchased of such stock
            on the Early Measurement Date with an amount of cash equal to the
            product of the following equation:

                                TAP X EMD__ X CP
                                    --------
                                    1096-EMD

            TAP = the number of Performance Share Units that could be earned for
            achievement of the original Target ROIC specified in Section 3(a)

            EMD = the number of days occurring from the Grant Date to the Early
            Measurement Date

            CP = the closing price of a share of Common Stock of Waste
            Management, Inc. on the Early Measurement Date

            Any restricted stock units in the successor entity awarded under
            this Section 8(b)(i) will vest completely on or before December 31,
            2007, provided that Employee remain continuously employed with the
            successor entity until such date. The foregoing notwithstanding, if
            there is an involuntary Termination of Employee for reason other
            than Cause during the Window Period, Employee will become
            immediately vested in full in the restricted stock units in the
            successor entity awarded pursuant to this Section 8(b)(i).

                  (ii) if the successor entity was not a publicly traded company
            as of the Early Measurement Date, a cash payment equal to the
            product of the following equation:

                                TAP X EMD__ X CP
                                     --------
                                     1096-EMD

            TAP = the number of Performance Share Units that could be earned for
            achievement of the original Target ROIC specified in Section 3(a)

            EMD = the number of days occurring from the Grant Date to the Early
            Measurement Date

            CP = the closing price of a share of Common Stock of Waste
            Management, Inc. on the Early Measurement Date

            Any cash payment calculated under this Section 8(b)(ii) will be paid
            to Employee on December 31, 2007, provided that Employee remain
            continuously employed with the successor entity until such date. The
            foregoing notwithstanding, if there is an involuntary Termination of
            Employee for reason other than Cause during the

                                      -4-
<PAGE>

            Window Period, Employee will be paid by the successor entity the
            amount determined pursuant to this Section 8(b)(ii).

      9. Forfeiture of Award. Upon Termination of Employment from the Company
for any reason other death, retirement, disability, involuntary termination by
the Company without Cause, or Change in Control, Employee shall immediately
forfeit the unvested portion of the Award, without the payment of any
consideration or further consideration by the Company. Upon forfeiture, neither
Employee nor any successors, heirs, assigns, or legal representatives of
Employee shall thereafter have any further rights or interest in the unvested
portion of the Award.

      10. Elective Deferrals.

            (a) The Committee may establish procedures pursuant to which
      Employee may elect to defer, until a time or times later than the vesting
      of a Performance Share Unit, receipt of all or a portion of the shares of
      Common Stock deliverable in respect of a Performance Share Unit, all on
      such terms and conditions as the Committee (or its designee) shall
      determine in its sole discretion. If any such deferrals are permitted for
      Employee, then notwithstanding any provision of this Agreement or the Plan
      to the contrary, an Employee who elects such deferral shall not have any
      rights as a stockholder with respect to any such deferred shares of Common
      Stock unless and until the date the deferral expires and certificates
      representing such shares are required to be delivered to Employee.

            (b) Notwithstanding any provision to the contrary in this Agreement,
      if deferral of Performance Share Units is permitted, each provision of
      this Agreement shall be interpreted to permit the deferral of compensation
      only as allowed in compliance with the requirements of Section 409A of the
      Internal Revenue Code of 1986, as amended, (the "Internal Revenue Code")
      and any provision that would conflict with such requirements shall not be
      valid or enforceable. Employee and the Company further hereby agree to
      execute such further instruments and take such further action as
      reasonably may be necessary to comply with Section 409A of the Internal
      Revenue Code.

      11. Restrictions on Transfer.

            (a) Absent prior written consent of the Committee, the Award granted
      hereunder to Employee may not be sold, assigned, transferred, pledged or
      otherwise encumbered, whether voluntarily or involuntarily, by operation
      of law or otherwise; provided, however, that the transfer of any shares of
      Common Stock with respect to the Performance Share Units earned hereunder
      shall not be restricted by virtue of this Agreement.

            (b) Consistent with the foregoing, except as contemplated by Section
      12, no right or benefit under this Agreement shall be subject to transfer,
      anticipation, alienation, sale, assignment, pledge, encumbrance or charge,
      whether voluntary, involuntary, by

                                      -5-
<PAGE>

      operation of law or otherwise, and any attempt to transfer, anticipate,
      alienate, sell, assign, pledge, encumber or charge the same shall be void.
      No right or benefit hereunder shall in any manner be liable for or subject
      to any debts, contracts, liabilities or torts of the person entitled to
      such benefits. If Employee or his Beneficiary hereunder shall attempt to
      transfer, anticipate, alienate, assign, sell, pledge, encumber or charge
      any right or benefit hereunder, other than as contemplated by Section 12,
      or if any creditor shall attempt to subject the same to a writ of
      garnishment, attachment, execution sequestration, or any other form of
      process or involuntary lien or seizure, then such attempt shall have no
      effect and shall be void.

      12. Assignment and Transfers. Prior to the end of the Performance Period
and the delivery of the Common Stock with respect to any Performance Share Units
earned, the Award is not transferable (either voluntarily or involuntarily),
other than pursuant to a domestic relations order. Employee may designate a
beneficiary or beneficiaries (the "Beneficiary") to whom the Performance Share
Units will pass upon Employee's death and may change such designation from time
to time by filing a written designation of beneficiary on the form attached
hereto as Exhibit A, or such other form as may be prescribed by the Committee,
provided that no such designation shall be effective until filed with the
Company. Following Employee's death, the Performance Share Units will pass to
the designated Beneficiary and such person will be deemed Employee for purposes
of any applicable provisions of this Agreement. If no such designation is made
or if the designated Beneficiary does not survive Employee's death, the
Performance Share Units shall pass by will or, if none, then by the laws of
descent and distribution.

      13. Withholding Tax. To the extent that the receipt of this Award,
vesting, or the delivery of the Common Stock with respect to any Performance
Share Units earned results in income to Employee for federal or state tax
purposes, Employee shall deliver to the Company at the time of such receipt,
such amount of money or shares of Common Stock earned or owned by Employee, at
Employee's election, as the Company may require to meet its obligation under
applicable tax laws or regulations, and, if Employee fails to do so, the Company
is authorized to withhold from any cash or other form of remuneration then or
thereafter payable to Employee any tax required to be withheld by reasons of
such resulting compensation income.

      14. Changes in Capital Structure. If the outstanding shares of Common
Stock or other securities of Waste Management, Inc., or both, shall at any time
be changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number of Performance Share
Units shall be appropriately and equitably adjusted so as to maintain the
proportionate number of shares.

      15. Compliance with Securities Laws. The Company will not be required to
deliver any shares of Common Stock pursuant to this Agreement, if, in the
opinion of counsel for the Company, such issuance would violate the Securities
Act of 1933 or any other applicable federal or state securities laws or
regulations. Prior to the issuance of any shares pursuant to this Agreement, the
Company may require that Employee (or Employee's legal representative upon
Employee's death or disability) enter into such written representations,
warranties and

                                      -6-
<PAGE>

agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Agreement.

      16. Employee to Have no Rights as a Stockholder. The Employee shall have
no rights as a stockholder with respect to any shares of Common Stock subject to
this Award prior to the date on which he or she is recorded as the holder of
such shares of Common Stock on the records of the Company. However, for
Performance Share Units that are vested and deferred pursuant to Section 9, the
Company will pay Dividend Equivalents during the deferral periodin the form, as
elected by Employee at the time of the deferral, of either (a) immediate cash
payments, or (ii) additional Performance Share Units credited to Employee's
deferral account.

      17. Successors and Assigns.

            (a) This Agreement shall bind and inure to the benefit of and be
      enforceable by Employee, the Company and their respective permitted
      successors or assigns (including personal representatives, heirs and
      legatees), except that Employee may not assign any rights or obligations
      under this Agreement except to the extent, and in the manner, expressly
      permitted herein.

            (b) The Company shall require any successor (whether direct or
      indirect, by purchase, merger, consolidation or otherwise) to all or
      substantially all of the business and/or assets of the Company to assume
      expressly and agree to perform this Agreement in the same manner and to
      the same extent that the Company would be required to perform it if no
      such succession had taken place.

      18. Limitation of Rights. Nothing in this Agreement or the Plan may be
construed to:

            (a) give Employee any right to be awarded any further Performance
      Share Units (or other form of stock incentive awards) other than in the
      sole discretion of the Committee;

            (b) give Employee or any other person any interest in any fund or in
      any specified asset or assets of the Company (other than the Award and
      applicable Common Stock following the vesting of such Award); or

            (c) confer upon Employee the right to continue in the employment or
      service of the Company.

      19. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas, without reference to
principles of conflict of laws.

      20. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                                      -7-
<PAGE>

      21. No Waiver. The failure of Employee or the Company to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right Employee or the Company may have under this Agreement shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.

      22. Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings set forth in the Plan. Certain
other terms used herein have definitions given to them in the first place in
which they are used. In addition, the following terms shall have the meanings
set forth in this Section 22.

            (a) "Board" means the Board of Directors of Waste Management, Inc.

            (b) "Cause" means any of the following: (i) willful or deliberate
      and continual refusal to materially perform Employee's employment duties
      reasonably requested by the Company after receipt of written notice to
      Employee of such failure to perform, specifying such failure (other than
      as a result of Employee's sickness, illness, injury, death or disability)
      and Employee fails to cure such nonperformance within ten (10) days of
      receipt of said written notice; (ii) breach of any statutory or common law
      duty of loyalty to the Company; (iii) Employee has been convicted of, or
      pleaded nolo contendre to, any felony; (iv) Employee willfully or
      intentionally caused material injury to the Company, its property, or its
      assets; (v) Employee disclosed to unauthorized person(s) proprietary or
      confidential information of the Company that causes a material injury to
      the Company; (vi) any material violation or a repeated and willful
      violation of the Company's policies or procedures, including but not
      limited to, the Company's Code of Business Conduct and Ethics (or any
      successor policy) then in effect.

            (c) "Change in Control" means the first to occur on or after the
      Grant Date of any of the following events:

                  (i) any Person is or becomes the Beneficial Owner, directly or
            indirectly, of securities of the Company 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 Grant 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 at least
            two-thirds (2/3rds) of the directors then still in office who either
            were directors on the Grant Date or whose appointment, election or
            nomination for election was previously so approved or recommended
            (the "Incumbent Board");

                                      -8-
<PAGE>

                  (iii) there is a consummated merger or consolidation of the
            Company with any other corporation, other than (1) a 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 (2) 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;
            or

                  (iv) the stockholders 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 definition, the following terms shall
            have the following meanings:

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

                        (B) "Exchange Act" means the Securities and Exchange Act
                  of 1934, as amended from time to time;

                        (C) "Person" shall have the meaning set forth in Section
                  3(a)(9) of the Exchange Act, as modified and used in Sections
                  13(d) and 14(d) thereof, except that such term shall not
                  include (1) the Company, (2) a trustee or other fiduciary
                  holding securities under an employee benefit plan of the
                  Company, (3) an employee benefit plan of the Company, (4) an
                  underwriter temporarily holding securities pursuant to an
                  offering of such securities or (5) a corporation owned,
                  directly or indirectly, by the stockholders of the Company in
                  substantially the same proportions as their ownership of
                  shares of Common Stock.

            This definition of Change in Control will be modified if and to the
      extent necessary to ensure compliance with the requirements of Section
      409A of the Internal Revenue Code, and Employee and the Company agree to
      execute such further instruments and take such further action as
      reasonably may be necessary to comply with Section 409A of the Internal
      Revenue Code.

                                      -9-
<PAGE>

            (d) "Committee" means the Compensation Committee of the Board or
      such other committee of the Board as the Board may designate from time to
      time.

            (e) "Depreciation and Amortization Costs and Expenses" has the
      meaning assigned in Item 6 of the Form 10-K filed with the Securities and
      Exchange Commission by the Waste Management, Inc. on February 20, 2004.
      And, for purposes of this Award, shall be calculated in accordance with
      the accounting pronouncements, polices and classifications used therein.

            (f) "Dividend Equivalent" means an amount of cash equal to all
      dividends and other distributions (or the economic equivalent thereof)
      that are payable by the Company on one share of Common Stock to
      stockholders of record, which, in the discretion of the Committee, may be
      awarded (i) in connection with any Award under the Plan while such Award
      is outstanding or otherwise subject to a Restriction Period and on a like
      number of shares of Common Stock under such Award or (ii) singly. Dividend
      Equivalents will be paid at such time as dividends are paid on the
      Company's outstanding shares of Common Stock.

            (g) "EBIT" means the sum of Operating Revenue, less Operating Costs
      and Expenses, less Selling, General and Administrative Costs and Expenses,
      less Depreciation and Amortization Costs and Expenses.

            (h) "Goodwill" means the excess of the cost of an acquired company
      over the sum of the fair market value of its identifiable individual
      assets less the liabilities. For purposes of calculation of this Award,
      the value of Goodwill shall be the balance of such as reported by Waste
      Management, Inc. as of December 31 for each applicable year.

            (i) "Invested Capital" means economic resources that are expected to
      help generate future cash inflows or help reduce future cash outflows.
      Invested Capital is equivalent to current maturities of long term debt,
      plus long term debt, plus shareholders equity, less cash and less
      Goodwill. For purposes of calculation of this Award, the value of Invested
      Capital shall be the balance of such as reported by Waste Management, Inc.
      as of December 31 for each applicable year.

            (j) "Net Operating Profit After Taxes" or "NOPAT" means the product
      of EBIT multiplied by the sum of 1 minus the Tax Rate.

            (k) "Operating Costs and Expenses" has the meaning assigned in Item
      6 of the Form 10-K filed with the Securities and Exchange Commission by
      the Waste Management, Inc. on February 20, 2004, exclusive of Depreciation
      and Amortization. And, for purposes of this Award, Operating Costs and
      Expenses shall be calculated in accordance with the accounting
      pronouncements, polices and classifications used in that Form 10-K.

            (l) "Operating Revenue" has the meaning assigned in Item 6 of the
      Form 10-K filed with the Securities and Exchange Commission by the Waste
      Management, Inc. on

                                     -10-
<PAGE>

      February 20, 2004. And, for purposes of this Award, Operating Revenue
      shall be calculated in accordance with the accounting pronouncements,
      polices and classifications used in that Form 10-K.

            (m) "Selling, General and Administrative Costs and Expenses" has the
      meaning assigned in Item 6 of the Form 10-K filed with the Securities and
      Exchange Commission by the Waste Management, Inc. on February 20, 2004.
      And, for purposes of this Award, Selling, General and Administrative Costs
      and Expenses shall be calculated in accordance with the accounting
      pronouncements, polices and classifications used in that Form 10-K.

            (n) "Tax Rate" is equal to 38.8%, and shall assumed to remain
      constant for the Performance Period.

            (o) "Termination of Employment" means the termination of Employee's
      employment with the Company. Temporary absences from employment because of
      illness, vacation or leave of absence and transfers among Waste
      Management, Inc. and its Subsidiaries and Affiliates will not be
      considered a Termination of Employment. Any questions as to whether and
      when there has been a Termination of Employment, and the cause of such
      termination, shall be determined by the Committee, and its determination
      will be final.

            (p) "Window Period" means the period commencing on the date
      occurring six (6) months immediately prior to the date on which a Change
      in Control first occurs and ending the second anniversary of the date on
      which a Change in Control occurs.

      23. Entire Agreement.

            (a) Employee hereby acknowledges that he has received, reviewed and
      accepted the terms and conditions applicable to this Agreement. Employee
      hereby accepts such terms and conditions, subject to the provisions of the
      Plan and administrative interpretations thereof. Employee further agrees
      that such terms and conditions will control this Agreement,
      notwithstanding any provisions in any employment agreement or in any prior
      awards.

            (b) Employee hereby acknowledges that he is to consult with and rely
      upon only Employee's own tax, legal, and financial advisors regarding the
      consequences and risks of this Agreement and the award of Performance
      Share Units.

            (c) This Agreement may not be amended or modified except by a
      written agreement executed by the parties hereto or their respective
      successors and legal representatives. The captions of this Agreement are
      not part of the provisions hereof and shall have no force or effect.

      24. Counterparts. This Agreement may be executed in counterparts, which
      together shall constitute one and the same original.

                                     -11-
<PAGE>

      IN WITNESS WHEREOF, Waste Management, Inc. has caused this Agreement to be
duly executed by one of its officers thereunto duly authorized, which execution
may be facsimile, engraved or printed, which shall be deemed an original, and
Employee has executed this Agreement, effective as of the day and year first
above written.

                                      WASTE MANAGEMENT, INC.

                                      By:
                                          --------------------------------------

                                      EMPLOYEE

                                      By:
                                          --------------------------------------

                                     -12-
<PAGE>

                                                  EXHIBIT A TO PERFORMANCE SHARE
                                                            UNIT AWARD AGREEMENT

             PERFORMANCE SHARE UNIT AWARD AGREEMENT PURSUANT TO THE
                WASTE MANAGEMENT, INC. 2004 STOCK INCENTIVE PLAN
                           DESIGNATION OF BENEFICIARY

      I, _____________________________________ ("Employee") hereby declare that

upon my death ___________________ (the "Beneficiary") of _______________________

                                                                 Street Address

___________________________, who is my _______________________, will be entitled

City    State      Zip Code            Relationship to Employee

to the Performance Share Units and all other rights accorded Employee by the
above-referenced Performance Share Unit Award Agreement.

      It is understood that this designation of Beneficiary is made pursuant to
the Agreement and is subject to the conditions stated therein, including the
Beneficiary's survival of Employee. If any such condition is not satisfied, such
rights shall devolve according to Employee's last will and testament, or if
none, then the laws of descent and distribution.

      It is further understood that all prior designations of beneficiary under
the Agreement are hereby revoked and that this designation of Beneficiary may
only be revoked in writing, signed by Employee, duly notarized, and filed with
the Company.
                                      __________________________________________
                                      Employee
                                      __________________________________________
                                      Date

Signed before me, this _______
day of ______, 20____.

___________________________________
Notary Public, State of ___________

                                     -13-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]