Employment Agreement - Waste Management Inc. and Robert P. Damico


                              EMPLOYMENT AGREEMENT

WASTE MANAGEMENT, INC. (the "Company"), and ROBERT P. DAMICO (the "Executive")
hereby enter into this EMPLOYMENT AGREEMENT ("Agreement") dated as of December
17, 1998, 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 begin as of
August 1, 1998, and shall be for continuously renewing three (3) year terms,
unless Executive's employment is terminated in accordance with Section 5 below.

3.  DUTIES AND RESPONSIBILITIES.

(a)      Executive shall serve as Senior Vice President, Midwest Area. In such
         capacity, Executive shall perform such duties as may be assigned to
         Executive from time to time by the Board of Directors, the Chief
         Executive or Chief Operating Officer of the Company.

(b)      Executive shall faithfully serve the Company, and/or its affiliated
         corporations, devote Executive's full working time, attention and
         energies to the business of the Company, and/or its affiliated
         corporations, and perform the duties under this Agreement to the best
         of Executive's abilities. 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.

(c)      Executive shall (i) comply with all applicable laws, rules and
         regulations, and all requirements of all applicable regulatory,
         self-regulatory, and administrative bodies; (ii) comply with the
         Company's rules, procedures, policies, requirements, and directions;
         and (iii) not engage in any other business or employment without the
         written consent of the Company except as otherwise specifically
         provided herein.

4.  COMPENSATION AND BENEFITS.

(a)      BASE SALARY. During the Employment Term, the Company shall pay
         Executive a base salary at the annual rate of Four Hundred Thousand
         ($400,000) 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 executives.

(b)      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 executives, provided that
         such expenses are incurred and accounted for in accordance with the
         Company's policy.



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(c)      BENEFIT PLANS. 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, supplemental and/or incentive compensation plans, or
         any other fringe benefit plan, generally made available by the Company
         to executives working pursuant to this form of Agreement (hereinafter
         referred to as "similarly situated executives."

(d)      EMPLOYEE'S EXPENSES. All costs and expenses (including reasonable
         legal, accounting and other advisory fees) incurred by the Executive to
         (i) defend the validity of this Agreement, (ii) contest any
         determination by the Company concerning the amounts payable (or
         reimbursable) by the Company to the Executive under this Agreement,
         (iii) determine in any tax year of the Executive, the tax consequences
         to the Executive of any amount payable (or reimbursable) under Section
         7(b) or 7(c) hereof, or (iv) prepare responses to an Internal Revenue
         Service audit of, and to otherwise defend, his personal income tax
         return for any year which is the subject of any such audit, or an
         adverse determination, administrative proceedings or civil litigation
         arising therefrom that is occasioned by or related to any audit by the
         Internal Revenue Service of the Company's income tax returns, are, upon
         written demand by the Executive, to be promptly advanced or reimbursed
         to the Executive, or paid directly, on a current basis, by the Company
         or its successors.

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 is
         physically or mentally incapacitated so as to render Executive
         incapable of performing Executive's usual and customary duties under
         this Agreement. Executive's receipt of disability benefits under the
         Company's long-term disability plan or receipt of Social Security
         disability benefits shall be deemed conclusive evidence of Total
         Disability for purpose of this Agreement; provided, however, that in
         the absence of Executive's receipt of such long-term disability
         benefits or Social Security benefits, the Company's Board of Directors
         may, in its reasonable discretion (but based upon appropriate medical
         evidence), determine that Executive is Totally Disabled.

(c)      TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
         Executive's employment hereunder for "Cause" at any time after
         providing written notice to Executive.

         (i)      For purposes of this Agreement, the term "Cause" shall mean
                  any of the following: (A) conviction of a crime (including
                  conviction on a nolo contendere plea) involving a felony or,
                  in the good faith judgment of the Company's Board of
                  Directors, fraud, dishonesty, or moral turpitude; (B)
                  deliberate and continual refusal to perform employment duties
                  reasonably requested by the Company or an affiliate after
                  thirty (30) days' written notice by certified mail of such
                  failure to perform, specifying that the failure constitutes
                  cause (other than as a result of vacation, sickness, illness
                  or injury); (C) fraud or embezzlement determined in accordance
                  with the Company's normal, internal investigative procedures
                  consistently applied in comparable circumstances; (D) gross
                  misconduct or gross negligence in connection with the business
                  of the Company or an affiliate which has substantial effect on
                  the 



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                  Company  or the affiliate; or (E) breach of any of the 
                  covenants set forth in Section 8 hereof.

         (ii)     An individual will be considered to have been terminated for
                  Cause if the Company determines that the individual engaged in
                  an act constituting Cause at any time prior to a payment date
                  for an award, regardless of whether the individual terminates
                  employment voluntarily or is terminated involuntarily, and
                  regardless of whether the individual's termination initially
                  was considered to have been for Cause.

         (iii)    Any determination of Cause under this Agreement shall be made
                  by resolution of the Company's Board of Directors adopted by
                  the affirmative vote of not less than a majority of the entire
                  membership of the Board of Directors at a meeting called and
                  held for that purpose and at which Executive is given an
                  opportunity to be heard.

(d)      VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate employment
         hereunder at any time after providing ninety (90) days' written notice
         to the Company, or for good reason as described in Section 7 of this
         Agreement.

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

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; a pro-rata "bonus" or
                  incentive compensation payment to the extent payments are
                  awarded to similarly situated executives and paid at the same
                  time as similarly situated 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 referred to in Section
                  4(c) 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
                  until the end of the current Employment Term (three [3]
                  years). Such amount shall be paid in a single lump sum cash
                  payment within thirty (30) days after Executive's death.

(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:



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         (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. Executive shall also be
                  eligible for a bonus or incentive compensation payment to the
                  extent such awards are made to similarly situated executives,
                  pro-rated for the year in which Executive is terminated and
                  paid at the same time as similarly situated executives are
                  paid.

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

         (iii)    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
                  until the end of the current Employment Term (three [3]
                  years). 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.

(c)      TERMINATION FOR CAUSE. In the event that Executive's employment is
         terminated by the Company for Cause pursuant to Section 5(c), 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.

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

(d)      VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive
         terminates employment pursuant to Section 5(d), and other than for a
         resignation tendered pursuant to Section 7 of this Agreement, 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.

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

(e)      TERMINATION BY THE COMPANY WITHOUT CAUSE. In the event that Executive's
         employment is terminated by the Company pursuant to Section 5(e) for
         reasons other than death, Total Disability or 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.



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

         (iii)    An annual amount equal to the greater of one hundred percent
                  (100%) of Executive's current base salary, or seventy-five
                  percent (75%) of the average of Executive's "Total Annual
                  Direct Compensation" for the two (2) highest of the three (3)
                  most recent calendar years prior to Executive's termination.
                  Such annual amount shall be paid during the three (3) 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. For purposes
                  of this Agreement, the term "Total Annual Direct Compensation"
                  means the total of the Base Salary and other cash compensation
                  payable to Executive attributable to a calendar year (A)
                  including any cash compensation which would have been payable
                  for such year but for Executive's election to defer payment of
                  such compensation and (B) excluding any amounts recognized as
                  compensation as a result of Executive's exercise of a stock
                  option or receipt of a stock award.

         (iv)     The Company completely at its expense will continue for
                  Executive and Executive's spouse and dependents, all health
                  benefit plans, programs or arrangements, whether group or
                  individual, 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) three (3)
                  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.

         (v)      Except to the extent prohibited by law, 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, and stock option plans in which Executive was a
                  participant as of the date of termination. Executive shall
                  have one (1) year from the date of termination to exercise
                  stock options which have vested as a result of this section
                  (e). All options fully vested as of the date of termination
                  will remain exercisable pursuant to the terms of the
                  applicable Stock Option Plan. Executive shall also be eligible
                  for a bonus or incentive compensation payment, to the extent
                  payments are made to similarly situated executives, pro-rated
                  for the year in which the Executive is terminated, paid at the
                  same time as similarly situated executives are paid.

(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 



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

(g)      SUSPENSION OR TERMINATION OF BENEFITS AND COMPENSATION. In the event
         that the Company, in its sole discretion determines that, without the
         Company's express written consent, Executive has

         (i)      directly or indirectly engaged in, assisted or have any active
                  interest or involvement whether as an employee, agent,
                  consultant, creditor, advisor, officer, director, stockholder
                  (excluding holding of less than 1% of the stock of a public
                  company), partner, proprietor, or any type of principal
                  whatsoever, in any person, firm, or business entity which is
                  directly or indirectly competitive with the Company or any of
                  its affiliates, or

         (ii)     directly or indirectly, for or on behalf of any person, firm,
                  or business entity which is directly or indirectly competitive
                  with the Company or any of its affiliates (A) solicited or
                  accepted from any person or entity who is or was a client of
                  the Company during the term of Executive's employment
                  hereunder or during any of the twelve calendar months
                  preceding or following the termination of Executive's
                  employment any business for services similar to those rendered
                  by the Company, (B) requested or advised any present or future
                  customer of the Company to withdraw, curtail or cancel its
                  business dealings with the Company, or (C) requested or
                  advised any employee of the Company to terminate his or her
                  employment with the Company;

         the Company shall have the right to suspend or terminate any or all
         remaining benefits payable pursuant to Section 6 of this Agreement.
         Such suspension or termination of benefits shall be in addition to and
         shall not limit any and all other rights and remedies that the Company
         may have 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, Executive will be paid the compensation
         described in this Section 7 if Executive resigns or is terminated (both
         a "resignation" and "termination" being referred to as "termination"
         for the purposes of this Section 7) from employment with the Company at
         any time prior to the six (6) month anniversary of the date of the
         Change in Control following the occurrence of any of the following
         events:

         (i)      without Executive's express written consent, the assignment to
                  Executive of any duties inconsistent with Executive's
                  positions, duties, responsibilities and status with the
                  Company immediately before a Change in Control, or a change in
                  Executive's reporting, responsibilities, titles or offices as
                  in effect immediately before a Change in Control, or any
                  removal of Executive from, or any failure to re-elect
                  Executive to, any of such positions, except in connection with
                  the termination of Executive's employment as a result of
                  death, or by the Company for Disability or Cause, or by
                  Executive other than for the reasons described in this Section
                  7(a);

         (ii)     a reduction by the Company in Executive's Base Salary as in
                  effect immediately before a Change in Control plus all
                  increases therein subsequent thereto;



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         (iii)    the failure of the Company substantially to maintain and to
                  continue Executive's participation in the Company's benefit
                  plans as in effect immediately before a Change in Control and
                  with all improvements therein subsequent thereto (other than
                  those plans or improvements that have expired thereafter in
                  accordance with their original terms), or the taking of any
                  action which would materially reduce Executive's benefits
                  under any of such plans or deprive Executive of any material
                  fringe benefit enjoyed by Executive immediately before a
                  Change in Control, unless such reduction or termination is
                  required by law;

         (iv)     the failure of the Company to provide Executive with an
                  appropriate adjustment to compensation such as a lump sum
                  relocation bonus, salary adjustment and/or housing allowance
                  so that Executive can purchase comparable primary housing if
                  required to relocate (it being the intention of this Section
                  7[a][iv] to keep the Executive "whole" if required to
                  relocate). In this regard, comparable housing shall be
                  determined by comparing factors such as location (taking into
                  account, by way of example, items such as the value of the
                  surrounding neighborhood, reputation of the public school
                  district, if applicable, security and proximity to Executive's
                  place of work), quality of construction, design, age, size of
                  the housing and the ratio of the monthly payments including
                  principle, interest, taxes and insurance to the Executive's
                  take home pay, to housing most recently owned by Executive
                  prior to, or as of the effective date of the change of
                  control;

         (v)      the failure by the Company to pay Executive any portion of
                  Executive's current compensation, or any portion of
                  Executive's compensation deferred under any plan, agreement or
                  arrangement of or with the Company, within seven (7) days of
                  the date such compensation is due; or

         (vi)     the failure by the Company to obtain an assumption of, and
                  agreement to perform the obligations of the Company under this
                  Agreement by any successor to the Company.

(b)      COMPENSATION PAYABLE. In the event that Executive terminates employment
         pursuant to Section 7(a), 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.

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

         (iii)    An amount equal to $1.00 less than three (3) times Executive's
                  "base amount" within the full meaning of Section 280G of the
                  Internal Revenue Code. Such amount shall be paid to Executive
                  in a single lump sum cash payment within five (5) business
                  days after the effective date of Executive's termination.

         (iv)     Executive will be 100% vested in all benefits, awards, and
                  grants (including stock options) 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 



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                  Executive was a participant as of the date of termination.
                  Executive shall also be eligible for 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. Employee shall have until the
                  expiration date shown on the stock option award in which to
                  exercise the options which have vested pursuant to this
                  section.

         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.

(c)      CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. In the event that any
         portion of the benefits payable under this Agreement, and any other
         payments and benefits under any other agreement with, or plan of the
         Company to or for the benefit of the Executive (in aggregate, "Total
         Payments") constitute an "excess parachute payment" within the meaning
         of Section 280G of the Internal Revenue Code (the "Code"), then the
         Company shall pay the Executive as promptly as practicable following
         such determination an additional amount (the "Gross-up Payment")
         calculated as described below to reimburse the Executive on an
         after-tax basis for any excise tax imposed on such payments under
         Section 4999 of the Code. The Gross-up Payment shall equal the amount,
         if any, needed to ensure that the net parachute payments (including the
         Gross-up Payment) actually received by the Executive after the
         imposition of federal and state income, employment and excise taxes
         (including any interest or penalties imposed by the Internal Revenue
         Service), are equal to the amount that the Executive would have netted
         after the imposition of federal and state income and employment taxes,
         had the Total Payments not been subject to the taxes imposed by Section
         4999. For purposes of this calculation, it shall be assumed that the
         Executive's tax rate will be the maximum federal rate to be computed
         with regard to Section 1(g) of the Code.

         In the event that the Executive and the Company are unable to agree as
         to the amount of the Gross-up Payment, if any, the Company shall select
         a law firm or accounting firm from among those regularly consulted
         (during the twelve-month period immediately prior to a
         Change-in-Control) by the Company regarding federal income tax matters
         and such law firm or accounting firm shall determine the amount of
         Gross-up Payment and such determination shall be final and binding upon
         the Executive and the Company.

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

         (i)      Any transfer to, assignment to, or any acquisition by any
                  person, corporation or other entity, or group thereof, of the
                  beneficial ownership, within the meaning of Section 13(d) of
                  the Securities Exchange Act of 1934, of any securities of the
                  Company, which transfer, assignment or acquisition results in
                  such person, corporation, entity, or group thereof, becoming
                  the beneficial owner, directly or indirectly, of securities of
                  the Company representing 25 percent (25%) or more of the
                  combined voting power of the Company's then outstanding
                  securities; or



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         (ii)     As a result of a tender offer, merger, consolidation, sale of
                  assets, or contested election, or any combination of such
                  transactions, the persons who were directors immediately
                  before the transaction shall cease to constitute a majority of
                  the Board of Directors of the Company or any successor to 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 during
         the period that payments are made to Executive pursuant to Section 6 of
         this Agreement, 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 1% 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 engaged in
         the same business as that conducted and carried on by the Company,
         without the Company's specific written consent to do so. Executive
         further agrees that for a period of one (1) year after the date
         payments made to Executive pursuant to Section 6 of this Agreement
         cease, or for a period of two (2) years following the date of
         termination, whichever is later, Executive will not, directly or
         indirectly, within seventy-five (75) miles of any operating location of
         any affiliate of the Company, 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 1% 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 engaged in the same business
         as that conducted and carried on by the Company or any of its
         affiliated companies, without the Company's specific written consent to
         do so.

(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 one (1) year after the date payments made to Executive
         pursuant to Section 6 of this Agreement cease, or two (2) years after
         the date of termination of the Executive's employment, whichever date
         is later, whether such termination is voluntary or involuntary by
         wrongful discharge, or otherwise, Executive will not directly or
         indirectly (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) canvass,
         solicit or accept any similar business from any customer of the Company
         or corporations affiliated with the Company; (iii) directly or
         indirectly 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; (iv) directly or indirectly
         disclose to any other person, firm or corporation the names or
         addresses of any of the customers of the Company or corporations
         affiliated with the Company; or (v) individually or through any person,
         firm, association or corporation with which Employee is now or may
         hereafter become associated, cause, solicit, entice, or induce any
         present or future employee of the Company, or any corporation
         affiliated with the Company to leave the employ of the Company, or such
         other corporation to accept employment with, or compensation from, the
         Employee or any such person, firm, association or corporation without
         the prior written consent of the Company.

(c)      NON-DISPARAGEMENT. Executive covenants and agrees that Executive shall
         not engage in any pattern of conduct that involves the making or
         publishing of written or oral statements or remarks (including, without
         limitation, the repetition or distribution of derogatory rumors,



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         allegations, negative reports or comments) which are disparaging,
         deleterious or damaging to the integrity, reputation or good will of
         the Company, its management, or of management of corporations
         affiliated with the Company.

(d)      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 (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.

9.  ENFORCEMENT OF COVENANTS.

(a)      TERMINATION OF EMPLOYMENT AND FORFEITURE OF COMPENSATION. Executive
         agrees that any breach by Executive of any of the covenants set forth
         in Section 8 hereof during Executive's employment by the Company, shall
         be grounds for immediate dismissal of Executive and forfeiture of any
         accrued and unpaid salary, bonus, commissions or other compensation of
         such Executive as liquidated damages, which shall be in addition to and
         not exclusive of any and all other rights and remedies the Company may
         have against Executive.

(b)      RIGHT TO INJUNCTION. Executive acknowledges that a breach of the
         covenants set forth in Section 8 hereof will cause irreparable damage
         to the Company with respect to which the Company's remedy at law for
         damages will be inadequate. Therefore, in the event of breach of
         anticipatory 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; (i) injunctions,
         both preliminary and permanent, enjoining or restraining such breach or
         anticipatory breach and Executive hereby consents to the issuance
         thereof forthwith and without bond by any court of competent
         jurisdiction; and (ii) recovery of all reasonable sums expended and
         costs, including reasonable attorney's fees, incurred by the Company to
         enforce the covenants set forth in this section.

(c)      SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof
         constitute a series of separate 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 



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   11

         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.  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, (a) provided that Executive shall repay any such amounts paid or
advanced if Executive is not the prevailing party with respect to any dispute or
litigation arising under Sections 5c or 8 of this Agreement, or (b) regardless
of whether Executive is the prevailing party in a dispute or in litigation
involving any other provision of this Agreement, provided that the court in
which such litigation is first initiated determines with respect to this
obligation, upon application of either party hereto, Executive did not initiate
frivolously such litigation. Under no circumstances shall Executive be obligated
to pay or reimburse the Company for any attorneys' fees, costs or expenses
incurred by the Company. The provisions of this Section 10 shall survive the
expiration or termination of this Agreement and of Executive's employment
hereunder.

11.  WITHHOLDING OF TAXES.

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

12.  NON-DISCLOSURE OF AGREEMENT TERMS.

Executive agrees that Executive will not disclose the terms of this Agreement to
any third party other than Executive's immediate family, attorney, accountants,
or other consultants or advisors or except as may be required by any
governmental authority.

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.



                                 Page 11 of 13
   12

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, 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
(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 Colorado applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions.

17.  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.

18.  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 12 of 13
   13

(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/ Rodney R. Proto
   ------------------------------------

Name:
     ----------------------------------

Title:
      ---------------------------------

Date:            March 31, 1999
     ----------------------------------



EXECUTIVE


      /s/ Robert A. Damico
---------------------------------------

Address:    103 Falcon Hills Drive
        -------------------------------

            Highlands Ranch, CO  80126
---------------------------------------

Date:     March 22, 1999
     ----------------------------------



                                 Page 13 of 13