Document:

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                                                                   EXHIBIT 10.35

                              EMPLOYMENT AGREEMENT

         WASTE MANAGEMENT, INC. (the "Company"), and A. Maurice Myers (the
"Executive") hereby enter into this EMPLOYMENT AGREEMENT ("Agreement") dated as
of November 8, 1999, as follows:

1.    EMPLOYMENT.

The Company shall employ Executive, and Executive shall be employed by the
Company upon the terms and subject to the conditions set forth in this
Agreement.

2.    TERM OF EMPLOYMENT.

The period of Executive's employment under this Agreement shall commence on
November 10, 1999 and be for a continuously renewing (on a daily basis) five (5)
year term, without any further action by either the Company or Executive, unless
Executive's employment is terminated in accordance with Section 5 below. The
date on which Executive commences employment with the Company shall be referred
to as the "Commencement Date" and the period during which Executive is employed
hereunder shall be referred to as the "Employment Period".

3.    DUTIES AND RESPONSIBILITIES.

(a)   Executive shall serve as Chief Executive Officer and President of the
      Company and shall serve as Chairman of the Board of Directors of the
      Company (the "Board"). In such capacities, Executive shall perform such
      duties and have the power, authority and functions commensurate with such
      positions in similarly sized public companies and such other authority and
      functions consistent with such positions as may be assigned to Executive
      from time to time by the Board.

(b)   Executive shall devote substantially all of his working time, attention
      and energies to the business of the Company, and affiliated entities.
      Executive may make and manage his personal investments (provided such
      investments in other activities do not violate, in any material respect,
      the provisions of Section 8 of this Agreement), be involved in charitable
      and professional activities and, with the consent of the Board (which
      shall not unreasonably be withheld or delayed) serve on boards of other
      for profit entities, provided such activities do not materially interfere
      with the performance of his duties hereunder. Service on the for profit
      boards that Executive is currently serving on are hereby approved.

4.    COMPENSATION AND BENEFITS.

(a)   BASE SALARY. During the Employment Period, the Company shall pay Executive
      a base salary at the annual rate of eight hundred fifty thousand
      ($850,000) dollars per

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      year or such higher rate as may be determined from time to time by the
      Company ("Base Salary"). Such Base Salary shall be paid in accordance with
      the Company's standard payroll practice for its executive officers. Once
      increased, Base Salary shall not be reduced.

(b)   ANNUAL BONUS. During the Employment Period, Executive will be entitled to
      participate in an annual incentive compensation plan of the Company. The
      Executive's target annual bonus will be 100% of his Base Salary as in
      effect for such year (the "Target Bonus"), and his actual annual bonus may
      range from 0% to 200%, and will be determined based upon achievement of
      performance goals established by the Compensation Committee of the Board
      pursuant to such plan.

(c)   REPLACEMENT AWARDS. In order to address certain forfeitures that Executive
      will face upon termination of his employment with his prior employer,
      Executive shall be awarded or receive the following:

      (i)   Cash Award. Within thirty (30) days after the Commencement Date, the
            Company will pay Executive $650,000.

      (ii)  Restricted Stock Award. Effective as of November 11, 1999 (the
            "Grant Date"), the Company will grant Executive an award of 265,000
            restricted shares of the Company's common stock (the "Stock") under
            the Waste Management, Inc. 1993 Stock Incentive Plan (the "Stock
            Incentive Plan") that will vest in equal installments on each of the
            first three anniversaries of the Commencement Date, subject (except
            as otherwise provided herein) to Executive's continuous employment
            with the Company through the applicable vesting date (the
            "Restricted Stock Grant"). The Restricted Stock Grant shall be
            deemed outstanding shares for all purposes and Executive shall be
            fully vested in any cash dividends paid therein (and non cash
            dividends being subject to the same forfeiture provisions as the
            underlying Restricted Stock Grant shares).

      (iii) Stock Options. Effective as of the Grant Date, Executive will be
            granted a ten-year stock option award under the Stock Incentive Plan
            to purchase 650,000 shares of Stock. The exercise price shall be the
            fair market value as on the Grant Date, and the options shall vest
            on the fifth anniversary of the Commencement Date, provided that the
            options shall earlier vest as follows, if the average of the closing
            price of the Stock on the New York Stock Exchange (or, if not listed
            on the New York Stock Exchange, such primary exchange or market on
            which the Stock is listed) for any continuous sixty trading-day
            period exceeds the following: one-third shall vest if such average
            closing price exceeds $21.50, an additional one-third shall vest if
            such average closing price exceeds $27.00 and the remaining
            one-third shall vest if

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                  such average closing stock price exceeds $34.00. Such closing
                  stock price targets shall be appropriately adjusted to reflect
                  any stock split, reverse stock split, extraordinary dividend
                  or other similar event with respect to the stock in each case,
                  subject (except as otherwise provided herein) to Executive's
                  continuous employment with the Company through the applicable
                  vesting date.

      (d)   LONG TERM INCENTIVE AWARD. Effective as of the Grant Date, Executive
            will be granted a 10-year stock option award to purchase 1,000,000
            shares of Stock. The exercise price of the options will be the fair
            market value per share of Stock on the Grant Date. The option award
            shall be divided into three equal tranches: The first tranche shall
            vest one-third on the Grant Date, one-third on the second
            anniversary of the Commencement Date and one-third on the third
            anniversary; the second tranche shall vest in three equal annual
            installments commencing on the second anniversary of the
            Commencement Date; and the third tranche shall vest in three equal
            annual installments commencing on the third anniversary of the
            Commencement Date, in each case subject (except as otherwise
            provided herein) to Executive's continuous employment with the
            Company through the applicable vesting date. Notwithstanding the
            foregoing, because of the maximum per individual per year grant
            limits in the Stock Incentive Plan, 150,000 options of the third
            tranche (the "Shortfall") will not be permitted to be granted until
            January 1, 2000. Such options plus an Adjustment Amount, if
            appropriate, will be granted on such date at the then fair market
            value. The Adjustment Amount shall be granted only if the fair
            market value is greater on January 1, 2000 than it is on the Grant
            Date and shall be equal to the Shortfall multiplied by the
            difference in fair market value between the two dates and further
            multiplied by .7432. The Options under (c) and (d) shall be
            transferable to family members in accordance with Section 9.2 of the
            Stock Incentive Plan.

      (e)   OTHER COMPENSATION. Executive shall be entitled to participate in
            any incentive or supplemental compensation plan or arrangement
            maintained or instituted by the Company, and covering its principal
            executive officers, at a level commensurate with his positions and
            to receive additional compensation from the Company in such form,
            and to such extent, if any, as the Compensation Committee may in its
            sole discretion from time to time specify.

      (f)   BENEFIT PLANS AND VACATION. Executive shall be eligible to
            participate in or receive benefits under any pension plan, profit
            sharing plan, medical and dental benefits plan, life insurance plan,
            short-term and long-term disability plans, or any other health,
            welfare or fringe benefit plan, generally made available by the
            Company to its executive officers at a level commensurate with his
            positions. All waiting periods for welfare plans shall be waived.
            During the Employment Period, Executive shall be entitled to
            vacation each year in accordance with the Company's policies in
            effect

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      from time to time, but in no event less than four (4) weeks paid vacation
      per calendar year. The Executive shall also be entitled to such periods of
      sick leave as is customarily provided by the Company for its senior
      executive employees.

(g)   SUPPLEMENTAL RETIREMENT BENEFIT. Executive (or his surviving spouse) shall
      be entitled to the supplemental retirement benefit payable by the Company
      set forth below (the "Supplemental Retirement Benefit"). One Hundred
      Thousand Dollars ($100,000) of such retirement benefit shall first become
      payable on May 1, 2001 or, if earlier, the termination of Executive's
      employment with the Company and the remainder upon the termination of
      Executive's employment with the Company and shall be payable each year to
      Executive through the remainder of his life in quarterly calendar
      installments (with a prorated initial installment if necessary), with a
      one hundred percent right of survivorship.

      (i)   Voluntary Termination. In the event Executive voluntarily terminates
            his employment other than for Good Reason or is terminated for
            Cause, the Supplemental Retirement Benefit shall be:

<TABLE>
<CAPTION>

                  Date of Employment Termination                           Supplemental Retirement Benefit
          -------------------------------------------------              ----------------------------------

<S>                                                                      <C>
          On or after the fifth anniversary of the
          Commencement Date                                                          $ 600,000

          On or after the fourth anniversary of the
          Commencement Date                                                          $ 500,000

          On or after the third anniversary of the
          Commencement Date                                                          $ 400,000

          On or after the 18-month anniversary of the
          Commencement Date                                                          $ 100,000

          Prior to the 18-month anniversary of the
          Commencement Date                                                             none
</TABLE>

      (ii)  Certain Involuntary Terminations. In the event Executive's
            employment terminates as a result of his death or Total Disability,
            the Company terminates his employment other than for Cause or
            Executive terminates his employment for Good Reason, the
            Supplemental Retirement Benefit shall be (with proration between
            specified dates based on the number of three-month

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            periods in which he was employed compared to 4 and, in any event
            $600,000 if after, at, or in contemplation of, a Change in Control):

<TABLE>
<CAPTION>

                    Date of Employment Termination                         Supplemental Retirement Benefit
          ------------------------------------------------               ----------------------------------

<S>                                                                      <C>
          On or after the fourth anniversary of the
          Commencement Date                                                          $ 600,000

          On or after the third anniversary of the
          Commencement Date                                                          $ 500,000

          On or after the second anniversary of the
          Commencement Date                                                          $ 400,000

          On or after the first anniversary of the
          Commencement Date                                                          $ 300,000

          Prior to the first anniversary of the
          Commencement Date                                                          $ 200,000
</TABLE>

(h)   WHOLE LIFE INSURANCE POLICY. During the Employment Period the Company
      shall pay the premiums on the $1 million whole life insurance policy that
      Executive's prior employer has heretofore paid in the amount of
      approximately $2,400 per month.

(i)   EXPENSE REIMBURSEMENT. The Company shall promptly reimburse Executive for
      the ordinary and necessary business expenses incurred by Executive in the
      performance of the duties hereunder in accordance with the Company's
      customary practices applicable to its executive officers. In addition the
      Company shall (i) pay for the reasonable costs, fees and expenses incurred
      by Executive, his consultants or legal advisors in connection with the
      negotiation and execution of this Agreement (in an amount not to exceed
      $25,000 (or such greater amount as the parties may agree)) and (ii)
      reimburse Executive (on a fully grossed up basis for any amounts taxable
      to Executive) for reasonable costs incurred in connection with the
      relocation of his principal residence to the Houston, Texas area at a
      level commensurate with Executive's position and the type of relocation
      benefits provided by public companies of similar size to their executives,
      which shall in any event include the purchase by the Company (or a
      relocation company) of such residence at its fair market value if not sold
      within 90 days of the Commencement Date, any real estate commissions
      incurred in connection with the sale of such residence and any points on a
      loan for a new home. In addition, the Company shall provide Executive
      temporary housing in the Houston area for up to six (6) months.

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(j)   SPECIAL LOAN. In the event Executive's stock options to purchase
      securities of his prior employer would expire at a time that he could not
      sell the stock issued on their exercise for security law reasons, at the
      Executive's request, the Company shall lend or arrange to be loaned to the
      Executive (until the earlier of six (6) months after such loan or sale of
      the underlying corresponding stock) on an unsecured basis, but with
      interest at the applicable federal rate, an amount sufficient to exercise
      such option and to pay any necessary withholding on the income from such
      exercise.

(k)   SECURITY NEEDS. The Company will provide Executive and his family with
      personal safety and security protection as appropriate and reasonable
      under the circumstances.

5.    TERMINATION OF EMPLOYMENT.

Executive's employment hereunder may be terminated under the following
circumstances:

(a)   DEATH. Executive's employment hereunder shall terminate upon Executive's
      death.

(b)   TOTAL DISABILITY. The Company may terminate Executive's employment
      hereunder upon Executive becoming "Totally Disabled". For purposes of this
      Agreement, Executive shall be "Totally Disabled" if Executive has been
      physically or mentally incapacitated so as to render Executive incapable
      of performing Executive's material usual and customary duties under this
      Agreement for six (6) consecutive months (such consecutive absence not
      being deemed interrupted by Executive's return to service for less than 10
      consecutive business days if absent thereafter for the same illness or
      disability). Any such termination shall be upon thirty (30) days written
      notice given at any time thereafter while Executive remains Totally
      Disabled, provided that a termination for Total Disability hereunder shall
      not be effective if Executive returns to full performance of his duties
      within such thirty (30) day period.

(c)   TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
      Executive's employment hereunder for "Cause" at any time within ninety
      (90) days after the Chairman of the Audit or Governance Committee of the
      Board has knowledge thereof.

           (i) For purposes of this Agreement, the term "Cause" shall be limited
      to (1) willful misconduct by Executive with regard to the Company which
      has a material adverse effect on the Company; (2) the willful refusal of
      Executive to attempt to follow the proper written direction of the Board,
      provided that the foregoing refusal shall not be "Cause" if Executive in
      good faith believes that such direction is illegal, unethical or immoral
      and promptly so notifies the Board; (3) substantial and continuing willful
      refusal by the Executive to attempt to perform the duties required of him
      hereunder (other than any such failure resulting from incapacity due to
      physical or mental illness) after a written demand for substantial

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      performance is delivered to the Executive by the Board which specifically
      identifies the manner in which it is believed that the Executive has
      substantially and continually refused to attempt to perform his duties
      hereunder; or (4) the Executive being convicted of a felony (other than a
      felony involving a traffic violation or as a result of vicarious
      liability). For purposes of this paragraph, no act, or failure to act, on
      Executive's part shall be considered "willful" unless done or omitted to
      be done, by him not in good faith and without reasonable belief that his
      action or omission was in the best interests of the Company.

             (ii) A Notice of Termination for Cause shall mean a notice that
      shall indicate the specific termination provision in Section 5(c)(i)
      relied upon and shall set forth in reasonable detail the facts and
      circumstances which provide for a basis for termination for Cause.
      Further, a Notification for Cause shall be required to include a copy of a
      resolution duly adopted by at least two-thirds (2/3rds) of the entire
      membership of the Board at a meeting of the Board which was called for the
      purpose of considering such termination and which Executive and his
      representative had the right to attend and address the Board, finding
      that, in the good faith of the Board, Executive engaged in conduct set
      forth in the definition of Cause herein and specifying the particulars
      thereof in reasonable detail. The date of termination for a termination
      for Cause shall be the date indicated in the Notice of Termination. Any
      purported termination for Cause which is held by a court or arbitrator not
      to have been based on the grounds set forth in this Agreement or not to
      have followed the procedures set forth in this Agreement shall be deemed a
      termination by the Company without Cause.

(d)   VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate employment
      hereunder with or without Good Reason at any time upon written notice to
      the Company.

           (i) A Termination for Good Reason means a termination by Executive by
      written notice given within ninety (90) days after the occurrence of the
      Good Reason event, unless such circumstances are fully corrected prior to
      the date of termination specified in the Notice of Termination for Good
      Reason. For purposes of this Agreement, "Good Reason" shall mean the
      occurrence or failure to cause the occurrence, as the case may be, without
      Executive's express written consent, of any of the following
      circumstances: (1) any material diminution of Executive's positions,
      duties or responsibilities hereunder (except in each case in connection
      with the termination of Executive's employment for Cause or Total
      Disability or as a result of Executive's death, or temporarily as a result
      of Executive's illness or other absence), or, the assignment to Executive
      of duties or responsibilities that are inconsistent with Executive's then
      position; provided that if the Company becomes a fifty percent or more
      subsidiary of any other entity, Executive shall be deemed to have a
      material diminution of his position unless he is also Chairman and Chief
      Executive Officer of

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      the ultimate parent entity; (2) removal of, or the nonreelection of, the
      Executive from officer positions with the Company specified herein or
      removal of the Executive from any of his then officer positions; (3)
      requiring Executive's principal place of business to be located other than
      in the Houston, Texas greater Metropolitan region; (4) a failure by the
      Company (I) to continue any bonus plan, program or arrangement in which
      Executive is entitled to participate (the "Bonus Plans"), provided that
      any such Bonus Plans may be modified at the Company's discretion from time
      to time but shall be deemed terminated if (x) any such plan does not
      remain substantially in the form in effect prior to such modification and
      (y) if plans providing Executive with substantially similar benefits are
      not substituted therefor ("Substitute Plans"), or (II) to continue
      Executive as a participant in the Bonus Plans and Substitute Plans on at
      least the same basis as to potential amount of the bonus as Executive
      participated in prior to any change in such plans or awards, in accordance
      with the Bonus Plans and the Substitute Plans; (5) any material breach by
      the Company of any provision of this Agreement, including without
      limitation Section 10 hereof; (6) Executive's removal from or failure to
      be elected or reelected to the Board; or (7) failure of any successor to
      the Company (whether direct or indirect and whether by merger,
      acquisition, consolidation or otherwise) to assume in a writing delivered
      to Executive upon the assignee becoming such, the obligations of the
      Company hereunder.

           (ii) A Notice of Termination for Good Reason shall mean a notice that
      shall indicate the specific termination provision relied upon and shall
      set forth in reasonable detail the facts and circumstances claimed to
      provide a basis for Termination for Good Reason. The failure by Executive
      to set forth in the Notice of Termination for Good Reason any facts or
      circumstances which contribute to the showing of Good Reason shall not
      waive any right of Executive hereunder or preclude Executive from
      asserting such fact or circumstance in enforcing his rights hereunder. The
      Notice of Termination for Good Reason shall provide for a date of
      termination not less than ten (10) nor more than sixty (60) days after the
      date such Notice of Termination for Good Reason is given, provided that in
      the case of the events set forth in Sections (i)(1) or (2) the date may be
      five (5) days after the giving of such notice.

(e)   TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
      Executive's employment hereunder without Cause at any time upon written
      notice to Executive.

(f)   EFFECT OF TERMINATION. Upon any termination of employment, Executive shall
      immediately resign from all Board memberships and other positions with the
      Company or any of its subsidiaries held by him at such time.

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6.    COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT.

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

(a)   TERMINATION BY REASON OF DEATH. In the event that Executive's employment
      is terminated by reason of Executive's death, the Company shall pay the
      following amounts to Executive's beneficiary or estate:

      (i)   Any accrued but unpaid Base Salary for services rendered to the date
            of death, any accrued but unpaid expenses required to be reimbursed
            under this Agreement, any vacation accrued to the date of
            termination, any earned but unpaid bonuses for any prior period, a
            pro-rata "bonus" or incentive compensation payment to the extent
            payments are awarded senior executives and paid at the same time as
            senior executives are paid, and any vacation accrued to the date of
            death.

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

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

      (iv)  As of the date of termination by reason of Executive's death, stock
            options awarded to Executive and the Restricted Stock Grant shall be
            fully vested and Executive's estate or beneficiary shall have up to
            one (1) year from the date of death to exercise all such options.

      (v)   As otherwise specifically provided herein.

(b)   TERMINATION BY REASON OF TOTAL DISABILITY. In the event that Executive's
      employment is terminated by reason of Executive's Total Disability as
      determined in accordance with Section 5(b), the Company shall pay the
      following amounts to Executive:

      (i)   Any accrued but unpaid Base Salary for services rendered to the date
            of termination, any accrued but unpaid expenses required to be
            reimbursed under this Agreement, any vacation accrued to the date of
            termination and

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            any earned but unpaid bonuses for any prior period. Executive shall
            also be eligible for a pro-rata bonus or incentive compensation
            payment to the extent such awards are made to senior executives for
            the year in which Executive is terminated.

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

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

      (iv)  As of the date of termination by reason of Executive's total
            disability, Executive shall be fully vested in all stock option
            awards and the Restricted Stock Grant and Executive shall have up to
            one (1) year from the date of termination by reason of total
            disability to exercise all such options.

      (v)   As otherwise specifically provided herein.

(c)   TERMINATION FOR CAUSE. In the event that Executive's employment is
      terminated by the Company for Cause, the Company shall pay the following
      amounts to Executive:

      (i)   Any accrued but unpaid Base Salary for services rendered to the date
            of termination, any accrued but unpaid expenses required to be
            reimbursed under this Agreement, any vacation accrued to the date of
            termination and any earned but unpaid bonuses for any prior period.

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

      (iii) As otherwise specifically provided herein.

      Any options, restricted stock or other awards that have not vested prior
      to the date of such termination of employment shall be cancelled and any
      options held by Executive shall be cancelled, whether or not then vested.

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(d)   VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive
      voluntarily terminates employment other than for Good Reason, the Company
      shall pay the following amounts to Executive:

      (i)   Any accrued but unpaid Base Salary for services rendered to the date
            of termination, any accrued but unpaid expenses required to be
            reimbursed under this Agreement, any vacation accrued to the date of
            termination and any earned but unpaid bonuses for any prior period.

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

      (iii) As otherwise specifically provided herein.

      Any options, restricted stock or other awards that have not vested prior
      to the date of such termination of employment shall be cancelled and
      Executive shall have 90 days following termination of employment to
      exercise any previously vested options (or, if earlier, until the stated
      expiration thereof).

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

      (i)   Any accrued but unpaid Base Salary for services rendered to the date
            of termination, any accrued but unpaid expenses required to be
            reimbursed under this Agreement, any vacation accrued to the date of
            termination and any earned but unpaid bonuses for any prior period.

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

      (iii) An amount equal to two times the sum of Executive's Base Salary plus
            his Target Annual Bonus (in each case as then in effect), of which
            one-half shall be paid in a lump sum within ten (10) days after such
            termination and one-half shall be paid during the two (2) year
            period beginning on the date of Executive's termination and shall be
            paid at the same time and in the same manner as Base Salary would
            have been paid if Executive had remained in active employment until
            the end of such period.

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      (iv)  The Company at its expense will continue for Executive and
            Executive's spouse and dependents, all health benefit plans,
            programs or arrangements, whether group or individual, and also
            including deferred compensation, disability, automobile, and other
            benefit plans, in which Executive was entitled to participate at any
            time during the twelve-month period prior to the date of
            termination, until the earliest to occur of (A) two years after the
            date of termination; (B) Executive's death (provided that benefits
            payable to Executive's beneficiaries shall not terminate upon
            Executive's death); or (C) with respect to any particular plan,
            program or arrangement, the date Executive becomes covered by a
            comparable benefit by a subsequent employer. In the event that
            Executive's continued participation in any such plan, program, or
            arrangement of the Company is prohibited, the Company will arrange
            to provide Executive with benefits substantially similar to those
            which Executive would have been entitled to receive under such plan,
            program, or arrangement, for such period on a basis which provides
            Executive with no additional after tax cost.

      (v)   Except to the extent prohibited by law, and except as otherwise
            provided herein, Executive will be 100% vested in all benefits,
            awards, and grants accrued but unpaid as of the date of termination
            under any pension plan, profit sharing plan, supplemental and/or
            incentive compensation plans in which Executive was a participant as
            of the date of termination. Executive shall also be eligible for a
            bonus or incentive compensation payment, at the same time, on the
            same basis, and to the same extent payments are made to senior
            executives, pro-rated for the fiscal year in which the Executive is
            terminated.

      (vi)  Executive shall continue to vest in all stock option awards or
            restricted stock awards over the two (2) year period commencing on
            the date of such termination of employment. Executive shall have two
            (2) years and six (6) months after the date of termination to
            exercise all options, unless by virtue of the particular stock
            option award, the option grant expires on an earlier date.

      (vii) As otherwise specifically provided herein.

(f)   NO OTHER BENEFITS OR COMPENSATION. Except as may be provided under this
      Agreement, under the terms of any incentive compensation, employee
      benefit, or fringe benefit plan applicable to Executive at the time of
      Executive's termination or resignation of employment, Executive shall have
      no right to receive any other compensation, or to participate in any other
      plan, arrangement or benefit, with respect to future periods after such
      termination or resignation.

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(g)   NO MITIGATION; NO SET-OFF. In the event of any termination of employment
      hereunder, Executive shall be under no obligation to seek other employment
      and there shall be no offset against any amounts due Executive under this
      Agreement on account of any remuneration attributable to any subsequent
      employment that Executive may obtain. The amounts payable hereunder shall
      not be subject to setoff, counterclaim, recoupment, defense or other right
      which the Company may have against the Executive or others, except upon
      obtaining by the Company of a final unappealable judgment against
      Executive.

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

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

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

      (ii)  Executive will be 100% vested in all benefits, awards, and grants
            (including stock option grants and stock awards, all of such stock
            options exercisable for three (3) years following Termination)
            accrued but unpaid as of the date of termination under any
            non-qualified pension plan, supplemental and/or incentive
            compensation or bonus plans, in which Executive was a participant as
            of the date of termination and will be fully vested in the $600,000
            retirement benefit provided under Section 4(g) hereof. Executive
            shall also receive a bonus or incentive compensation payment (the
            "bonus payment"), payable at 100% of the maximum bonus available to
            Executive, pro-rated as of the effective date of the termination.
            The bonus payment shall be payable within five (5) days after the
            effective date of Employee's termination. Except as may be provided
            under this Section 7 or under the terms of any incentive
            compensation, employee benefit, or fringe benefit plan applicable to
            Executive at the time of Executive's resignation from employment,
            Executive shall have no right to receive any other compensation, or
            to

                                       13
<PAGE>   14

            participate in any other plan, arrangement or benefit, with respect
            to future periods after such resignation or termination.

(b)   CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

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

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

      (iii) For purposes of determining the amount of the Gross-up Payment, the
            Executive shall be deemed to pay U.S. federal income taxes at the
            highest marginal rate of U.S. federal income taxation in the
            calendar year in which

                                       14
<PAGE>   15

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

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

      (iv)  The Gross-up Payment or portion thereof provided for in subsection
            (iii) above shall be paid not later than the thirtieth (30th) day
            following an event occurring which subjects the Executive to the
            Excise Tax; provided, however, that if the amount of such Gross-up
            Payment or portion thereof cannot be finally determined on or before
            such day, the Company shall pay to the Executive on such day an
            estimate, as determined in good faith by the Accountant, of the
            minimum amount of such payments and shall pay the remainder of such
            payments (together with interest at the rate provided in

                                       15
<PAGE>   16

            Section 1274(b)(2)(B) of the Code), subject to further payments
            pursuant to subsection (iii) hereof, as soon as the amount thereof
            can reasonably be determined, but in no event later than the
            ninetieth day after the occurrence of the event subjecting the
            Executive to the Excise Tax. In the event that the amount of the
            estimated payments exceeds the amount subsequently determined to
            have been due, such excess shall constitute a loan by the Company to
            the Executive, payable on the fifth day after demand by the Company
            (together with interest at the rate provided in Section
            1274(b)(2)(B) of the Code).

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

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

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

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

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

      (ii)  the following individuals cease for any reason to constitute a
            majority of the number of directors then serving: individuals who,
            on the Commencement 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

                                       16
<PAGE>   17

            the election of directors of the Company) whose appointment or
            election by the Board or nomination for election by the Company's
            stockholders was approved or recommended by a vote of the at least
            two-thirds (2/3rds) of the directors then still in office who either
            were directors on the Commencement Date or whose appointment,
            election or nomination for election was previously so approved or
            recommended;

      (iii) there is a consummated merger or consolidation of the Company or any
            direct or indirect subsidiary of the Company with any other
            corporation, other than (A) a 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 equity outstanding immediately after such
            merger or consolidation or (B) a merger or consolidation effected to
            implement a recapitalization of the Company (or similar transaction)
            in which no Person, directly or indirectly, acquired twenty-five
            percent (25%) or more of the combined voting power of the Company's
            then outstanding securities (not including in the securities
            beneficially owned by such person any securities acquired directly
            from the Company or its Affiliates); or

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

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

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

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

               (iii) "Person" shall have the meaning set forth in Section
            3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
            and 14(d) thereof,

                                       17
<PAGE>   18

            except that such term shall not include (1) the Company, (2) a
            trustee or other fiduciary holding securities under an employee
            benefit plan of the Company, (3) an underwriter temporarily holding
            securities pursuant to an offering of such securities or (4) a
            corporation owned, directly or indirectly, by the stockholders of
            the Company in substantially the same proportions as their ownership
            of shares of Common Stock of the Company.

8.    RESTRICTIVE COVENANTS.

(a)   COMPETITIVE ACTIVITY. Executive covenants and agrees that at all times
      during Executive's period of employment with the Company, and for two (2)
      years thereafter, Executive will not engage in, assist, or have any active
      interest or involvement, whether as an employee, agent, consultant,
      creditor, advisor, officer, director, stockholder (excluding holding of
      less than 3% of the stock of a public company), partner, proprietor or any
      type of principal whatsoever in any person, firm, or business entity
      which, directly or indirectly, is materially engaged in the waste
      management business competitive with that conducted and carried on by the
      Company, without the Company's specific written consent to do so.
      "Material" shall mean more than five (5%) percent of their revenue is
      generated from the waste management business; provided that the revenues
      within Executive's area of responsibility or authority are not more than
      10% composed of revenues from the waste disposal business. Notwithstanding
      the foregoing, Executive may be employed by or provide services to, an
      investment banking firm or consulting firm that provides services to
      entities described in the previous sentence, provided that Executive does
      not personally represent or provide services to such entities.

(b)   NON-SOLICITATION. Executive covenants and agrees that at all times during
      Executive's period of employment with the Company, and for a period of two
      (2) years after the Termination thereof, whether such termination is
      voluntary or involuntary by wrongful discharge, or otherwise, Executive
      will not directly and personally knowingly (i) induce any customers of the
      Company or corporations affiliated with the Company to patronize any
      similar business which competes with any material business of the Company;
      (ii) after his termination of employment, request or advise any customers
      of the Company or corporations affiliated with the Company to withdraw,
      curtail or cancel such customer's business with the Company; or (iii)
      after his termination of employment, individually or through any person,
      firm, association or corporation with which he is now, or may hereafter
      become associated, solicit, entice or induce any then employee of the
      Company, or any subsidiary of the Company, to leave the employ of the
      Company, or such other corporation, to accept employment with, or
      compensation from the Employee, or any person, firm, association or
      corporation with which Executive is affiliated without prior written
      consent of the Company. The foregoing shall not prevent Executive from
      serving as a reference for employees.

                                       18
<PAGE>   19

(c)   PROTECTED INFORMATION. Executive recognizes and acknowledges that
      Executive has had and will continue to have access to various confidential
      or proprietary information concerning the Company and corporations
      affiliated with the Company of a special and unique value which may
      include, without limitation, (i) books and records relating to operation,
      finance, accounting, sales, personnel and management, (ii) policies and
      matters relating particularly to operations such as customer service
      requirements, costs of providing service and equipment, operating costs
      and pricing matters, and (iii) various trade or business secrets,
      including customer lists, route sheets, business opportunities, marketing
      or business diversification plans, business development and bidding
      techniques, methods and processes, financial data and the like, to the
      extent not generally known in the industry (collectively, the "Protected
      Information"). Executive therefore covenants and agrees that Executive
      will not at any time, either while employed by the Company or afterwards,
      knowingly make any independent use of, or knowingly disclose to any other
      person or organization (except as authorized by the Company) any of the
      Protected Information, provided that (i) while employed by the Company,
      Executive may in good faith make disclosures he believes desirable, and
      (ii) Executive may comply with legal process.

9.    ENFORCEMENT OF COVENANTS.

(a)   RIGHT TO INJUNCTION. Executive acknowledges that a breach of the covenants
      set forth in Section 8 hereof will cause irreparable damage to the Company
      with respect to which the Company's remedy at law for damages may be
      inadequate. Therefore, in the event of breach or threatened breach of the
      covenants set forth in this section by Executive, Executive and the
      Company agree that the Company shall be entitled to the following
      particular forms of relief, in addition to remedies otherwise available to
      it at law or equity; injunctions, both preliminary and permanent,
      enjoining or restraining such breach or threatened breach and Executive
      hereby consents to the issuance thereof forthwith and without bond by any
      court of competent jurisdiction.

(b)   SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof
      constitute a series of separate covenants, one for each applicable State
      in the United States and the District of Columbia, and one for each
      applicable foreign country. If in any judicial proceeding, a court shall
      hold that any of the covenants set forth in Section 8 exceed the time,
      geographic, or occupational limitations permitted by applicable laws,
      Executive and the Company agree that such provisions shall and are hereby
      reformed to the maximum time, geographic, or occupational limitations
      permitted by such laws. Further, in the event a court shall hold
      unenforceable any of the separate covenants deemed included herein, then
      such unenforceable covenant or covenants shall be deemed eliminated from
      the provisions of this Agreement for the purpose of such proceeding to the
      extent necessary to permit the remaining separate covenants to be enforced
      in such proceeding.

                                       19
<PAGE>   20

Executive and the Company further agree that the covenants in Section 8 shall
each be construed as a separate agreement independent of any other provisions of
this Agreement, and the existence of any claim or cause of action by Executive
against the Company whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any of the covenants
of Section 8.

10.   INDEMNIFICATION.

The Company shall indemnify and hold harmless Executive to the fullest extent
permitted by law for any action or inaction of Executive while serving as an
officer and director of the Company or, at the Company's request, as an officer
or director of any other entity or as a fiduciary of any benefit plan. The
Company shall cover the Executive under directors and officers liability
insurance both during and, while potential liability exists, after the
Employment Term in the same amount and to the same extent as the Company covers
its other officers and directors.

11.   DISPUTES AND PAYMENT OF ATTORNEY'S FEES.

If at any time during the term of this Agreement or afterwards there should
arise any dispute as to the validity, interpretation or application of any term
or condition of this Agreement, the Company agrees, upon written demand by
Executive (and Executive shall be entitled upon application to any court of
competent jurisdiction, to the entry of a mandatory injunction, without the
necessity of posting any bond with respect thereto, compelling the Company) to
promptly provide sums sufficient to pay on a current basis (either directly or
by reimbursing Executive) Executive's costs and reasonable attorney's fees
(including expenses of investigation and disbursements for the fees and expenses
of experts, etc.) incurred by Executive in connection with any such dispute or
any litigation, provided that Executive shall repay any such amounts paid or
advanced if Executive is not the prevailing party with respect to at least one
material claim or issue in such dispute or litigation. The provisions of this
Section 11, without implication as to any other section hereof, shall survive
the expiration or termination of this Agreement and of Executive's employment
hereunder.

12.   WITHHOLDING OF TAXES.

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

13.   SOURCE OF PAYMENTS.

All payments provided under this Agreement, other than payments made pursuant to
a plan which provides otherwise, shall be paid from the general funds of the
Company, and no special or separate fund shall be established, and no other
segregation of assets made, to assure payment. Executive shall have no right,
title or interest whatever in or to any

                                       20
<PAGE>   21

investments which the Company may make to aid the Company in meeting its
obligations hereunder. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company.

14.   ASSIGNMENT.

Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns. This Agreement shall not be
assignable by Executive (but any payments due hereunder which would be payable
at a time after Executive's death shall be paid to Executive's designated
beneficiary or, if none, his estate) and shall be assignable by the Company only
to any financially solvent corporation or other entity resulting from the
reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to or with which the
Company's business or substantially all of its business or assets may be sold,
exchanged or transferred, and it must be so assigned by the Company to, and
accepted as binding upon it by, such other corporation or entity in connection
with any such reorganization, merger, consolidation, sale, exchange or transfer
in a writing delivered to Executive in a form reasonably acceptable to Executive
(the provisions of this sentence also being applicable to any successive such
transaction).

15.   ENTIRE AGREEMENT; AMENDMENT.

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

16.   GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions.

17.   REQUIREMENT OF TIMELY PAYMENTS.

If any amounts which are required, or determined to be paid or payable, or
reimbursed or reimbursable, to Executive under this Agreement (or any other
plan, agreement, policy or arrangement with the Company) are not so paid
promptly at the times provided herein or therein, such amounts shall accrue
interest, compounded daily, at an 8% annual percentage rate, from the date such
amounts were required or determined to have been paid or payable, reimbursed or
reimbursable to Executive, until such amounts and any interest accrued thereon
are finally and fully paid, provided, however, that in no event

                                       21
<PAGE>   22

shall the amount of interest contracted for, charged or received hereunder,
exceed the maximum non-usurious amount of interest allowed by applicable law.

18.   NOTICES

Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by facsimile or by hand delivery, to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:

To the Company:          Waste Management , Inc.
                         1001 Fannin, Suite 4000
                         Houston, Texas 77002
                         Attention: Corporate Secretary

To Executive:            At the address for Executive set forth below.

19.   MISCELLANEOUS.

(a)   WAIVER. The failure of a party to insist upon strict adherence to any term
      of this Agreement on any occasion shall not be considered a waiver thereof
      or deprive that party of the right thereafter to insist upon strict
      adherence to that term or any other term of this Agreement.

(b)   SEPARABILITY. Subject to Section 9 hereof, if any term or provision of
      this Agreement is declared illegal or unenforceable by any court of
      competent jurisdiction and cannot be modified to be enforceable, such term
      or provision shall immediately become null and void, leaving the remainder
      of this Agreement in full force and effect.

(c)   HEADINGS. Section headings are used herein for convenience of reference
      only and shall not affect the meaning of any provision of this Agreement.

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

(e)   COUNTERPARTS. This Agreement may be executed in any number of
      counterparts, each of which so executed shall be deemed to be an original,
      and such counterparts will together constitute but one Agreement.

                                       22
<PAGE>   23

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

WASTE MANAGEMENT, INC.

By:    /s/ Ralph V. Whitworth
   ----------------------------------------

Name:      Ralph V. Whitworth
     --------------------------------------

Title:     Chairman
      -------------------------------------

Date:      November 8, 1999
     --------------------------------------

EXECUTIVE

           A. Maurice Myers
-------------------------------------------

Date:      November 8, 1999
     --------------------------------------

Address:   1111 Caroline, Apt. 2805
           Houston, Texas  77010

                                       23<PAGE>   1
                                                                   EXHIBIT 10.36

                              EMPLOYMENT AGREEMENT

WASTE MANAGEMENT, INC. (the "Company"), and LAWRENCE O'DONNELL, III (the
"Executive") hereby enter into this EMPLOYMENT AGREEMENT ("Agreement") dated as
of January 21, 2000, as follows:

1.       EMPLOYMENT.

The Company shall employ Executive, and Executive shall be employed by the
Company upon the terms and subject to the conditions set forth in this
Agreement.

2.       TERM OF EMPLOYMENT.

The period of Executive's employment under this Agreement shall commence on
February 14, 2000, or sooner at the option of the Executive, and be for a
continuously renewing (on a daily basis) five (5) year term, without any further
action by either the Company or Executive, unless Executive's employment is
terminated in accordance with Section 5 below. The date on which Executive
commences employment with the Company shall be referred to as the "Commencement
Date" and the period during which Executive is employed hereunder shall be
referred to as the "Employment Period".

3.       DUTIES AND RESPONSIBILITIES.

(a)      Executive shall serve as Senior Vice President and General Counsel, and
         shall serve as Secretary to the Board of Directors of the Company (the
         "Board"). In such capacities, Executive shall perform such duties and
         have the power, authority and functions commensurate with such
         positions in similarly sized public companies and such other authority
         and functions consistent with such positions as may be assigned to
         Executive from time to time by the Board.

(b)      Executive shall devote substantially all of his working time, attention
         and energies to the business of the Company, and affiliated entities.
         Executive may make and manage his personal investments (provided such
         investments in other activities do not violate, in any material
         respect, the provisions of Section 8 of this Agreement), be involved in
         charitable and professional activities and, with the consent of the
         Board (which shall not unreasonably be withheld or delayed) serve on
         boards of other for profit entities, provided such activities do not
         materially interfere with the performance of his duties hereunder.
         Service on the for profit boards that Executive is currently serving on
         are hereby approved.

4.       COMPENSATION AND BENEFITS.

(a)      BASE SALARY. During the Employment Period, the Company shall pay
         Executive a base salary at the annual rate of four hundred seventy
         thousand ($470,000) dollars per year or such higher rate as may be
         determined from time to time by the Company ("Base Salary"). Such Base
         Salary shall be paid in accordance with the Company's standard payroll
         practice for its executive officers. Once increased, Base Salary shall
         not be reduced.

<PAGE>   2

(b)      ANNUAL BONUS. During the Employment Period, Executive will be entitled
         to participate in an annual incentive compensation plan of the Company.
         The Executive's target annual bonus will be sixty percent (60%) of his
         Base Salary as in effect for such year (the "Target Bonus"), and his
         actual annual bonus may range from 0% to 120% (two times target), and
         will be determined based upon achievement of performance goals (seventy
         percent [70%] financial [return on capital investments and EBITDA] and
         thirty percent [30%] personal) as approved by the Compensation
         Committee of the Board.

(c)      SIGN-ON BONUS. Within thirty (30) days after the Commencement Date, the
         Company will pay Executive a two hundred thousand ($200,000) dollar
         sign-on bonus.

(d)      FIRST BONUS GUARANTEED. The Company will pay to Executive a minimum
         guaranteed bonus in the amount of one hundred eighty-eight thousand
         ($188,000) dollars, to be paid in 2001.

(e)      STOCK OPTIONS.

         (i)   Effective as of the date of this Agreement, Executive will be
               granted a ten-year stock option award under the Stock Incentive
               Plan to purchase three hundred fifty thousand (350,000) shares of
               Stock. The exercise price shall be the fair market value on such
               date, and the options shall vest in equal installments in each of
               the first four (4) anniversaries of the date of this Agreement.

         (ii)  Following the February/March, 2001 meeting of the Compensation
               Committee of the Board of Directors, Executive will be granted a
               ten (10) year stock option award under the Stock Incentive Plan
               to purchase one hundred seventy-five thousand (175,000) shares of
               Stock. The exercise price shall be the fair market value on the
               date the Compensation Committee meets to award the options, and
               the options shall vest in equal installments over five (5) years.
               Thereafter, Executive shall participate in the Company's annual
               stock option award program as administered by, and at the
               discretion of, the Compensation Committee of the Board of
               Directors.

(f)      REPLACEMENT AWARDS. In order to address certain forfeitures that
         Executive will face upon termination of his employment with his prior
         employer, Executive shall be awarded or receive the following:

              Restricted Stock Award. Effective as of the Commencement Date, the
              Company will grant Executive an award of restricted shares of the
              Company's common stock (the "Stock") (valued at three hundred
              thousand [$300,000] dollars on the date of grant) under the Waste
              Management, Inc. 1993 Stock Incentive Plan (the "Stock Incentive
              Plan") that will vest in equal installments on each of the first
              four (4) anniversaries of the Commencement Date, subject (except
              as otherwise provided herein) to Executive's continuous employment
              with the Company through the applicable vesting date (the
              "Restricted Stock Grant"). The Restricted Stock Grant shall be
              deemed outstanding shares for all purposes and Executive shall be
              fully vested in any cash

                                  Page 2 of 19
<PAGE>   3

              dividends paid therein (and non cash dividends being subject to
              the same forfeiture provisions as the underlying Restricted Stock
              Grant shares).

(g)      OTHER COMPENSATION. Executive shall be entitled to participate in the
         Company's "Executive Deferral Plan" and any incentive or supplemental
         compensation plan, or arrangement maintained or instituted by the
         Company, and covering its principal executive officers, at a level
         commensurate with his positions and to receive additional compensation
         from the Company in such form, and to such extent, if any, as the
         Compensation Committee may in its sole discretion from time to time
         specify.

(h)      BENEFIT PLANS AND VACATION. Executive shall be eligible to participate
         in or receive benefits under any pension plan, profit sharing plan,
         medical and dental benefits plan, life insurance plan, short-term and
         long-term disability plans, or any other health, welfare or fringe
         benefit plan, generally made available by the Company to its executive
         officers at a level commensurate with his positions. All waiting
         periods for welfare plans shall be waived, and pre-existing medical
         conditions for Executive and Executive's family members will not be a
         basis for withholding medical insurance benefits. During the Employment
         Period, Executive shall be entitled to vacation each year in accordance
         with the Company's policies in effect from time to time, but in no
         event less than four (4) weeks paid vacation per calendar year. The
         Executive shall also be entitled to such periods of sick leave as is
         customarily provided by the Company for its senior executive employees.
         Executive shall be eligible to participate in the Company's 401(k) Plan
         after 90 days of employment.

(i)      OTHER PERQUISITES. Executive shall be entitled to the following
         benefits:

         1.    Auto Allowance in the amount of one thousand ($1,000) dollars per
               month;

         2.    Financial Planning Services at actual cost, and not to exceed
               fifteen thousand ($15,000) dollars annually;

         3.    Club Dues and Assessments at actual cost, and not to exceed
               twelve thousand ($12,000) dollars annually; and

         4.    An Annual Physical Examination on a program designated by the
               Company.

(j)      EXPENSE REIMBURSEMENT. The Company shall promptly reimburse Executive
         for the ordinary and necessary business expenses incurred by Executive
         in the performance of the duties hereunder in accordance with the
         Company's customary practices applicable to its executive officers. In
         addition the Company shall (i) pay for the reasonable costs, fees and
         expenses incurred by Executive, his consultants or legal advisors in
         connection with the negotiation and execution of this Agreement in an
         amount not to exceed ten thousand ($10,000) dollars.

                                  Page 3 of 19
<PAGE>   4

5.       TERMINATION OF EMPLOYMENT.

Executive's employment hereunder may be terminated under the following
circumstances:

(a)      DEATH. Executive's employment hereunder shall terminate upon
         Executive's death.

(b)      TOTAL DISABILITY. The Company may terminate Executive's employment
         hereunder upon Executive becoming "Totally Disabled". For purposes of
         this Agreement, Executive shall be "Totally Disabled" if Executive has
         been physically or mentally incapacitated so as to render Executive
         incapable of performing Executive's material usual and customary duties
         under this Agreement for six (6) consecutive months (such consecutive
         absence not being deemed interrupted by Executive's return to service
         for less than 10 consecutive business days if absent thereafter for the
         same illness or disability). Any such termination shall be upon thirty
         (30) days written notice given at any time thereafter while Executive
         remains Totally Disabled, provided that a termination for Total
         Disability hereunder shall not be effective if Executive returns to
         full performance of his duties within such thirty (30) day period.

(c)      TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
         Executive's employment hereunder for "Cause" at any time within ninety
         (90) days after the Chairman of the Audit or Governance Committee of
         the Board has knowledge thereof.

         (i)   For purposes of this Agreement, the term "Cause" shall be limited
               to (1) willful misconduct by Executive with regard to the Company
               which has a material adverse effect on the Company; (2) the
               willful refusal of Executive to attempt to follow the proper
               written direction of the Board, provided that the foregoing
               refusal shall not be "Cause" if Executive in good faith believes
               that such direction is illegal, unethical or immoral and promptly
               so notifies the Board; (3) substantial and continuing willful
               refusal by the Executive to attempt to perform the duties
               required of him hereunder (other than any such failure resulting
               from incapacity due to physical or mental illness) after a
               written demand for substantial performance is delivered to the
               Executive by the Board which specifically identifies the manner
               in which it is believed that the Executive has substantially and
               continually refused to attempt to perform his duties hereunder;
               or (4) the Executive being convicted of a felony (other than a
               felony involving a traffic violation or as a result of vicarious
               liability). For purposes of this paragraph, no act, or failure to
               act, on Executive's part shall be considered "willful" unless
               done or omitted to be done, by him not in good faith and without
               reasonable belief that his action or omission was in the best
               interests of the Company.

         (ii)  A Notice of Termination for Cause shall mean a notice that shall
               indicate the specific termination provision in Section 5(c)(i)
               relied upon and shall set forth in reasonable detail the facts
               and circumstances which provide for a basis for termination for
               Cause. Further, a Notification for Cause shall be required to

                                  Page 4 of 19
<PAGE>   5

               include a copy of a resolution duly adopted by at least
               two-thirds (2/3rds) of the entire membership of the Board at a
               meeting of the Board which was called for the purpose of
               considering such termination and which Executive and his
               representative had the right to attend and address the Board,
               finding that, in the good faith of the Board, Executive engaged
               in conduct set forth in the definition of Cause herein and
               specifying the particulars thereof in reasonable detail. The date
               of termination for a termination for Cause shall be the date
               indicated in the Notice of Termination. Any purported termination
               for Cause which is held by a court or arbitrator not to have been
               based on the grounds set forth in this Agreement or not to have
               followed the procedures set forth in this Agreement shall be
               deemed a termination by the Company without Cause.

(d)      VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate employment
         hereunder with or without Good Reason at any time upon written notice
         to the Company.

         (i)   A Termination for Good Reason means a termination by Executive by
               written notice given within ninety (90) days after the occurrence
               of the Good Reason event, unless such circumstances are fully
               corrected prior to the date of termination specified in the
               Notice of Termination for Good Reason. For purposes of this
               Agreement, "Good Reason" shall mean the occurrence or failure to
               cause the occurrence, as the case may be, without Executive's
               express written consent, of any of the following circumstances:
               (1) any material diminution of Executive's positions, duties or
               responsibilities hereunder (except in each case in connection
               with the termination of Executive's employment for Cause or Total
               Disability or as a result of Executive's death, or temporarily as
               a result of Executive's illness or other absence), or, the
               assignment to Executive of duties or responsibilities that are
               inconsistent with Executive's then position; provided that if the
               Company becomes a fifty percent or more subsidiary of any other
               entity, Executive shall be deemed to have a material diminution
               of his position unless he is also Senior Vice President and
               General Counsel, and Secretary to the Board of the ultimate
               parent entity; (2) removal of, or the non-re-election of, the
               Executive from officer positions with the Company specified
               herein or removal of the Executive from any of his then officer
               positions; (3) requiring Executive's principal place of business
               to be located other than in the Houston, Texas greater
               Metropolitan region; (4) a failure by the Company (I) to continue
               any bonus plan, program or arrangement in which Executive is
               entitled to participate (the "Bonus Plans"), provided that any
               such Bonus Plans may be modified at the Company's discretion from
               time to time but shall be deemed terminated if (x) any such plan
               does not remain substantially in the form in effect prior to such
               modification and (y) if plans providing Executive with
               substantially similar benefits are not substituted therefor
               ("Substitute Plans"), or (II) to continue Executive as a
               participant in the Bonus Plans and Substitute Plans on at least
               the same basis as to potential amount of the bonus as Executive
               participated in prior to any change in such plans or awards, in
               accordance with the Bonus Plans and the Substitute Plans; (5) any
               material breach by the Company of any provision of this
               Agreement, including without limitation Section 10 hereof; or (6)
               failure of any

                                  Page 5 of 19
<PAGE>   6

               successor to the Company (whether direct or indirect and whether
               by merger, acquisition, consolidation or otherwise) to assume in
               a writing delivered to Executive upon the assignee becoming such,
               the obligations of the Company hereunder.

         (ii)  A Notice of Termination for Good Reason shall mean a notice that
               shall indicate the specific termination provision relied upon and
               shall set forth in reasonable detail the facts and circumstances
               claimed to provide a basis for Termination for Good Reason. The
               failure by Executive to set forth in the Notice of Termination
               for Good Reason any facts or circumstances which contribute to
               the showing of Good Reason shall not waive any right of Executive
               hereunder or preclude Executive from asserting such fact or
               circumstance in enforcing his rights hereunder. The Notice of
               Termination for Good Reason shall provide for a date of
               termination not less than ten (10) nor more than sixty (60) days
               after the date such Notice of Termination for Good Reason is
               given, provided that in the case of the events set forth in
               Sections (i)(1) or (2) the date may be five (5) days after the
               giving of such notice.

(e)      TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
         Executive's employment hereunder without Cause at any time upon written
         notice to Executive.

(f)      EFFECT OF TERMINATION. Upon any termination of employment, Executive
         shall immediately resign from all Board memberships and other positions
         with the Company or any of its subsidiaries held by him at such time.

6.       COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT.

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

(a)      TERMINATION BY REASON OF DEATH. In the event that Executive's
         employment is terminated by reason of Executive's death, the Company
         shall pay the following amounts to Executive's beneficiary or estate:

         (i)   Any accrued but unpaid Base Salary for services rendered to the
               date of death, any accrued but unpaid expenses required to be
               reimbursed under this Agreement, any vacation accrued to the date
               of termination, any earned but unpaid bonuses for any prior
               period, a pro-rata "bonus" or incentive compensation payment to
               the extent payments are awarded senior executives and paid at the
               same time as senior executives are paid, and any vacation accrued
               to the date of death.

         (ii)  Any benefits to which Executive may be entitled pursuant to the
               plans, policies and arrangements (including those referred to in
               Sections 4(g)-(i) hereof), as determined and paid in accordance
               with the terms of such plans, policies and arrangements.

                                  Page 6 of 19
<PAGE>   7

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

         (iv)  As of the date of termination by reason of Executive's death,
               stock options awarded to Executive and the Restricted Stock Grant
               shall be fully vested and Executive's estate or beneficiary shall
               have up to one (1) year from the date of death to exercise all
               such options.

         (v)   As otherwise specifically provided herein.

(b)      TERMINATION BY REASON OF TOTAL DISABILITY. In the event that
         Executive's employment is terminated by reason of Executive's Total
         Disability as determined in accordance with Section 5(b), the Company
         shall pay the following amounts to Executive:

         (i)   Any accrued but unpaid Base Salary for services rendered to the
               date of termination, any accrued but unpaid expenses required to
               be reimbursed under this Agreement, any vacation accrued to the
               date of termination and any earned but unpaid bonuses for any
               prior period. Executive shall also be eligible for a pro-rata
               bonus or incentive compensation payment to the extent such awards
               are made to senior executives for the year in which Executive is
               terminated.

         (ii)  Any benefits to which Executive may be entitled pursuant to the
               plans, policies and arrangements (including those referred to in
               Sections 4(g)-(i) hereof) shall be determined and paid in
               accordance with the terms of such plans, policies and
               arrangements.

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

         (iv)  As of the date of termination by reason of Executive's Total
               Disability, Executive shall be fully vested in all stock option
               awards and the Restricted Stock Grant and Executive shall have up
               to one (1) year from the date of termination by reason of Total
               Disability to exercise all such options.

         (v)   As otherwise specifically provided herein.

                                  Page 7 of 19
<PAGE>   8

(c)      TERMINATION FOR CAUSE. In the event that Executive's employment is
         terminated by the Company for Cause, the Company shall pay the
         following amounts to Executive:

         (i)   Any accrued but unpaid Base Salary for services rendered to the
               date of termination, any accrued but unpaid expenses required to
               be reimbursed under this Agreement, any vacation accrued to the
               date of termination and any earned but unpaid bonuses for any
               prior period.

         (ii)  Any benefits to which Executive may be entitled pursuant to the
               plans, policies and arrangements (including those referred to in
               Sections 4(g)-(i) hereof) shall be determined and paid in
               accordance with the terms of such plans, policies and
               arrangements.

         (iii) As otherwise specifically provided herein.

         Any options, restricted stock or other awards that have not vested
         prior to the date of such termination of employment shall be cancelled
         and any options held by Executive shall be cancelled, whether or not
         then vested.

(d)      VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive
         voluntarily terminates employment other than for Good Reason, the
         Company shall pay the following amounts to Executive:

         (i)   Any accrued but unpaid Base Salary for services rendered to the
               date of termination, any accrued but unpaid expenses required to
               be reimbursed under this Agreement, any vacation accrued to the
               date of termination and any earned but unpaid bonuses for any
               prior period.

         (ii)  Any benefits to which Executive may be entitled pursuant to the
               plans, policies and arrangements (including those referred to in
               Sections 4(g)-(i) hereof) shall be determined and paid in
               accordance with the terms of such plans, policies and
               arrangements.

         (iii) As otherwise specifically provided herein.

         Any options, restricted stock or other awards that have not vested
         prior to the date of such termination of employment shall be cancelled
         and Executive shall have 90 days following termination of employment to
         exercise any previously vested options (or, if earlier, until the
         stated expiration thereof).

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

                                  Page 8 of 19
<PAGE>   9

         (i)   Any accrued but unpaid Base Salary for services rendered to the
               date of termination, any accrued but unpaid expenses required to
               be reimbursed under this Agreement, any vacation accrued to the
               date of termination and any earned but unpaid bonuses for any
               prior period.

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

         (iii) An amount equal to two times the sum of Executive's Base Salary
               plus his Target Annual Bonus (in each case as then in effect), of
               which one-half shall be paid in a lump sum within ten (10) days
               after such termination and one-half shall be paid during the two
               (2) year period beginning on the date of Executive's termination
               and shall be paid at the same time and in the same manner as Base
               Salary would have been paid if Executive had remained in active
               employment until the end of such period.

         (iv)  The Company at its expense will continue for Executive and
               Executive's spouse and dependents, all health benefit plans,
               programs or arrangements, whether group or individual, and also
               including deferred compensation, disability, automobile, and
               other benefit plans, in which Executive was entitled to
               participate at any time during the twelve-month period prior to
               the date of termination, until the earliest to occur of (A) two
               years after the date of termination; (B) Executive's death
               (provided that benefits payable to Executive's beneficiaries
               shall not terminate upon Executive's death); or (C) with respect
               to any particular plan, program or arrangement, the date
               Executive becomes covered by a comparable benefit by a subsequent
               employer. In the event that Executive's continued participation
               in any such plan, program, or arrangement of the Company is
               prohibited, the Company will arrange to provide Executive with
               benefits substantially similar to those which Executive would
               have been entitled to receive under such plan, program, or
               arrangement, for such period on a basis which provides Executive
               with no additional after tax cost.

         (v)   Except to the extent prohibited by law, and except as otherwise
               provided herein, Executive will be 100% vested in all benefits,
               awards, and grants accrued but unpaid as of the date of
               termination under any pension plan, profit sharing plan,
               supplemental and/or incentive compensation plans in which
               Executive was a participant as of the date of termination.
               Executive shall also be eligible for a bonus or incentive
               compensation payment, at the same time, on the same basis, and to
               the same extent payments are made to senior executives, pro-rated
               for the fiscal year in which the Executive is terminated.

         (vi)  As of the date of such termination of employment, the stock
               options awarded to Executive pursuant to Section 4(e)(i) hereof
               and the Restricted Stock Grant shall be fully vested. Executive
               shall continue to vest in all other stock option awards or
               restricted stock awards over the two (2) year period commencing
               on the date of

                                  Page 9 of 19
<PAGE>   10

               such termination. Executive shall have two (2) years and six (6)
               months after the date of termination to exercise all options,
               unless by virtue of the particular stock option award, the option
               grant expires on an earlier date.

         (vii) As otherwise specifically provided herein.

(f)      NO OTHER BENEFITS OR COMPENSATION. Except as may be provided under this
         Agreement, under the terms of any incentive compensation, employee
         benefit, or fringe benefit plan applicable to Executive at the time of
         Executive's termination or resignation of employment, Executive shall
         have no right to receive any other compensation, or to participate in
         any other plan, arrangement or benefit, with respect to future periods
         after such termination or resignation.

(g)      NO MITIGATION; NO SET-OFF. In the event of any termination of
         employment hereunder, Executive shall be under no obligation to seek
         other employment and there shall be no offset against any amounts due
         Executive under this Agreement on account of any remuneration
         attributable to any subsequent employment that Executive may obtain.
         The amounts payable hereunder shall not be subject to setoff,
         counterclaim, recoupment, defense or other right which the Company may
         have against the Executive or others, except upon obtaining by the
         Company of a final unappealable judgment against Executive.

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

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

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

         (ii)  Executive will be 100% vested in all benefits, awards, and grants
               (including stock option grants and stock awards, all of such
               stock options exercisable for three (3) years following
               Termination) accrued but unpaid as of the date of termination
               under any non-qualified pension plan, supplemental and/or
               incentive compensation or bonus plans, in which Executive was a
               participant as of the date of termination. Executive shall also
               receive a bonus or incentive compensation payment (the "bonus
               payment"), payable at 100% of the maximum bonus available to
               Executive, pro-rated as of the effective date of the termination.
               The

                                 Page 10 of 19
<PAGE>   11

               bonus payment shall be payable within five (5) days after the
               effective date of Employee's termination. Except as may be
               provided under this Section 7 or under the terms of any incentive
               compensation, employee benefit, or fringe benefit plan applicable
               to Executive at the time of Executive's resignation from
               employment, Executive shall have no right to receive any other
               compensation, or to participate in any other plan, arrangement or
               benefit, with respect to future periods after such resignation or
               termination.

(b)      CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

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

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

         (iii) For purposes of determining the amount of the Gross-up Payment,
               the Executive shall be deemed to pay U.S. federal income taxes at
               the highest marginal rate of

                                 Page 11 of 19
<PAGE>   12

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

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

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

                                 Page 12 of 19
<PAGE>   13

               to the Executive, payable on the fifth day after demand by the
               Company (together with interest at the rate provided in Section
               1274(b)(2)(B) of the Code).

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

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

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

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

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

         (ii)  the following individuals cease for any reason to constitute a
               majority of the number of directors then serving: individuals
               who, on the Commencement Date, constitute the Board and any new
               director (other than a director whose initial assumption of
               office is in connection with an actual or threatened election
               contest, including but not limited to a consent solicitation,
               relating to the election of directors of the Company) whose
               appointment or election by the Board or nomination for election
               by the Company's stockholders was approved or recommended by a
               vote of the at least two-thirds (2/3rds) of the directors then
               still in office who either were directors on the Commencement
               Date or whose appointment, election or nomination for election
               was previously so approved or recommended;

         (iii) there is a consummated merger or consolidation of the Company or
               any direct or indirect subsidiary of the Company with any other
               corporation, other than (A) a merger or consolidation which would
               result in the voting securities of the

                                 Page 13 of 19
<PAGE>   14

               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
               equity outstanding immediately after such merger or consolidation
               or (B) a merger or consolidation effected to implement a
               recapitalization of the Company (or similar transaction) in which
               no Person, directly or indirectly, acquired twenty-five percent
               (25%) or more of the combined voting power of the Company's then
               outstanding securities (not including in the securities
               beneficially owned by such person any securities acquired
               directly from the Company or its Affiliates); or

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

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

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

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

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

8.       RESTRICTIVE COVENANTS.

(a)      COMPETITIVE ACTIVITY. Executive covenants and agrees that at all times
         during Executive's period of employment with the Company, and for two
         (2) years thereafter, Executive will not engage in, assist, or have any
         active interest or involvement, whether as an employee, agent,
         consultant, creditor, advisor, officer, director, stockholder
         (excluding holding of less than 3% of the stock of a public company),
         partner, proprietor or any type of principal whatsoever in any person,
         firm, or business entity which, directly

                                 Page 14 of 19
<PAGE>   15

         or indirectly, is materially engaged in the waste management business
         competitive with that conducted and carried on by the Company, without
         the Company's specific written consent to do so. "Material" shall mean
         more than five (5%) percent of their revenue is generated from the
         waste management business; provided that the revenues within
         Executive's area of responsibility or authority are more than 10%
         composed of revenues from the waste disposal business. Notwithstanding
         the foregoing, Executive may be employed by or provide services to, an
         investment banking firm, law firm or consulting firm that provides
         services to entities described in the previous sentence, provided that
         Executive does not personally represent or provide services to such
         entities.

(b)      NON-SOLICITATION. Executive covenants and agrees that at all times
         during Executive's period of employment with the Company, and for a
         period of two (2) years after the Termination thereof, whether such
         termination is voluntary or involuntary by wrongful discharge, or
         otherwise, Executive will not directly and personally knowingly (i)
         induce any customers of the Company or corporations affiliated with the
         Company to patronize any similar business which competes with any
         material business of the Company; (ii) after his termination of
         employment, request or advise any customers of the Company or
         corporations affiliated with the Company to withdraw, curtail or cancel
         such customer's business with the Company; or (iii) after his
         termination of employment, individually or through any person, firm,
         association or corporation with which he is now, or may hereafter
         become associated, solicit, entice or induce any then employee of the
         Company, or any subsidiary of the Company, to leave the employ of the
         Company, or such other corporation, to accept employment with, or
         compensation from the Executive, or any person, firm, association or
         corporation with which Executive is affiliated without prior written
         consent of the Company. The foregoing shall not prevent Executive from
         serving as a reference for employees.

(c)      PROTECTED INFORMATION. Executive recognizes and acknowledges that
         Executive has had and will continue to have access to various
         confidential or proprietary information concerning the Company and
         corporations affiliated with the Company of a special and unique value
         which may include, without limitation, (i) books and records relating
         to operation, finance, accounting, sales, personnel and management,
         (ii) policies and matters relating particularly to operations such as
         customer service requirements, costs of providing service and
         equipment, operating costs and pricing matters, and (iii) various trade
         or business secrets, including customer lists, route sheets, business
         opportunities, marketing or business diversification plans, business
         development and bidding techniques, methods and processes, financial
         data and the like, to the extent not generally known in the industry
         (collectively, the "Protected Information"). Executive therefore
         covenants and agrees that Executive will not at any time, either while
         employed by the Company or afterwards, knowingly make any independent
         use of, or knowingly disclose to any other person or organization
         (except as authorized by the Company) any of the Protected Information,
         provided that (i) while employed by the Company, Executive may in good
         faith make disclosures he believes desirable, and (ii) Executive may
         comply with legal process.

                                 Page 15 of 19
<PAGE>   16

9.       ENFORCEMENT OF COVENANTS.

(a)      RIGHT TO INJUNCTION. Executive acknowledges that a breach of the
         covenants set forth in Section 8 hereof will cause irreparable damage
         to the Company with respect to which the Company's remedy at law for
         damages may be inadequate. Therefore, in the event of breach or
         threatened breach of the covenants set forth in this section by
         Executive, Executive and the Company agree that the Company shall be
         entitled to the following particular forms of relief, in addition to
         remedies otherwise available to it at law or equity; injunctions, both
         preliminary and permanent, enjoining or restraining such breach or
         threatened breach and Executive hereby consents to the issuance thereof
         forthwith and without bond by any court of competent jurisdiction.

(b)      SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof
         constitute a series of separate covenants, one for each applicable
         State in the United States and the District of Columbia, and one for
         each applicable foreign country. If in any judicial proceeding, a court
         shall hold that any of the covenants set forth in Section 8 exceed the
         time, geographic, or occupational limitations permitted by applicable
         laws, Executive and the Company agree that such provisions shall and
         are hereby reformed to the maximum time, geographic, or occupational
         limitations permitted by such laws. Further, in the event a court shall
         hold unenforceable any of the separate covenants deemed included
         herein, then such unenforceable covenant or covenants shall be deemed
         eliminated from the provisions of this Agreement for the purpose of
         such proceeding to the extent necessary to permit the remaining
         separate covenants to be enforced in such proceeding.

         Executive and the Company further agree that the covenants in Section 8
         shall each be construed as a separate agreement independent of any
         other provisions of this Agreement, and the existence of any claim or
         cause of action by Executive against the Company whether predicated on
         this Agreement or otherwise, shall not constitute a defense to the
         enforcement by the Company of any of the covenants of Section 8.

10.      INDEMNIFICATION.

The Company shall indemnify and hold harmless Executive to the fullest extent
permitted by law for any action or inaction of Executive while serving as an
officer and director of the Company or, at the Company's request, as an officer
or director of any other entity or as a fiduciary of any benefit plan. The
Company shall cover the Executive under directors and officers liability
insurance both during and, while potential liability exists, after the
Employment Term in the same amount and to the same extent as the Company covers
its other officers and directors.

11.      DISPUTES AND PAYMENT OF ATTORNEY'S FEES.

If at any time during the term of this Agreement or afterwards there should
arise any dispute as to the validity, interpretation or application of any term
or condition of this Agreement, the Company agrees, upon written demand by
Executive (and Executive shall be entitled upon application to any court of
competent jurisdiction, to the entry of a mandatory injunction, without the
necessity of posting any bond with respect thereto, compelling the Company) to
promptly

                                 Page 16 of 19
<PAGE>   17

provide sums sufficient to pay on a current basis (either directly or by
reimbursing Executive) Executive's costs and reasonable attorney's fees
(including expenses of investigation and disbursements for the fees and expenses
of experts, etc.) incurred by Executive in connection with any such dispute or
any litigation, provided that Executive shall repay any such amounts paid or
advanced if Executive is not the prevailing party with respect to at least one
material claim or issue in such dispute or litigation. The provisions of this
Section 11, without implication as to any other section hereof, shall survive
the expiration or termination of this Agreement and of Executive's employment
hereunder.

12.      WITHHOLDING OF TAXES.

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

13.      SOURCE OF PAYMENTS.

All payments provided under this Agreement, other than payments made pursuant to
a plan which provides otherwise, shall be paid from the general funds of the
Company, and no special or separate fund shall be established, and no other
segregation of assets made, to assure payment. Executive shall have no right,
title or interest whatever in or to any investments which the Company may make
to aid the Company in meeting its obligations hereunder. To the extent that any
person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right of an unsecured creditor of the
Company.

14.      ASSIGNMENT.

Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns. This Agreement shall not be
assignable by Executive (but any payments due hereunder which would be payable
at a time after Executive's death shall be paid to Executive's designated
beneficiary or, if none, his estate) and shall be assignable by the Company only
to any financially solvent corporation or other entity resulting from the
reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to or with which the
Company's business or substantially all of its business or assets may be sold,
exchanged or transferred, and it must be so assigned by the Company to, and
accepted as binding upon it by, such other corporation or entity in connection
with any such reorganization, merger, consolidation, sale, exchange or transfer
in a writing delivered to Executive in a form reasonably acceptable to Executive
(the provisions of this sentence also being applicable to any successive such
transaction).

15.      ENTIRE AGREEMENT; AMENDMENT.

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

                                 Page 17 of 19
<PAGE>   18

16.      GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions.

17.      REQUIREMENT OF TIMELY PAYMENTS.

If any amounts which are required, or determined to be paid or payable, or
reimbursed or reimbursable, to Executive under this Agreement (or any other
plan, agreement, policy or arrangement with the Company) are not so paid
promptly at the times provided herein or therein, such amounts shall accrue
interest, compounded daily, at an 8% annual percentage rate, from the date such
amounts were required or determined to have been paid or payable, reimbursed or
reimbursable to Executive, until such amounts and any interest accrued thereon
are finally and fully paid, provided, however, that in no event shall the amount
of interest contracted for, charged or received hereunder, exceed the maximum
non-usurious amount of interest allowed by applicable law.

18.      NOTICES.

Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by facsimile or by hand delivery, to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:

               To the Company:    Waste Management , Inc.
                                  1001 Fannin, Suite 4000
                                  Houston, Texas 77002
                                  Attention: Corporate Secretary

               To Executive:      At the address for Executive set forth below.

19.      MISCELLANEOUS.

(a)      WAIVER. The failure of a party to insist upon strict adherence to any
         term of this Agreement on any occasion shall not be considered a waiver
         thereof or deprive that party of the right thereafter to insist upon
         strict adherence to that term or any other term of this Agreement.

(b)      SEPARABILITY. Subject to Section 9 hereof, if any term or provision of
         this Agreement is declared illegal or unenforceable by any court of
         competent jurisdiction and cannot be modified to be enforceable, such
         term or provision shall immediately become null and void, leaving the
         remainder of this Agreement in full force and effect.

                                 Page 18 of 19
<PAGE>   19

(c)      HEADINGS. Section headings are used herein for convenience of reference
         only and shall not affect the meaning of any provision of this
         Agreement.

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

(e)      COUNTERPARTS. This Agreement may be executed in any number of
         counterparts, each of which so executed shall be deemed to be an
         original, and such counterparts will together constitute but one
         Agreement.

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

WASTE MANAGEMENT, INC.

By:        /s/ A. Maurice Myers
   ------------------------------------------------
Name:     A. Maurice Myers
Title:    Chairman, Chief Executive Officer and President

Date:     January 21, 2000
     ----------------------------------------------

EXECUTIVE

         /s/ Lawrence O'Donnell, III
---------------------------------------------------
Lawrence O'Donnell, III

Date:        January 21, 2000
     ----------------------------------------------
Social Security Number: ###-##-####

Address:  221 Bryn Mawr Circle
          Houston, Texas  77024

                                 Page 19 of 19

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