FORM OF PERFORMANCE SHARE UNIT AWARD AGREEMENT

Exhibit 10.1

PERFORMANCE SHARE UNIT AWARD AGREEMENT

     This Performance Share Unit Award Agreement (“Agreement”) is entered into effective as of March 3, 2008, (the “Grant Date”), by and between Waste Management, Inc., a Delaware corporation (together with its Subsidiaries and Affiliates, the “Company”), and you, (the “Employee”), pursuant to the Waste Management, Inc. 2004 Stock Incentive Plan (the “Plan”). Employee and the Company agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement. The terms and conditions of this Agreement as offered herein must be accepted by Employee prior to March 31, 2008. Failure to timely accept the terms by such time will result in the immediate and irrevocable cancellation of the Award offered.

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

     2.  Performance Vesting Requirement .

     (a) The “Performance Period” for this Award shall be the 36-month period commencing on January 1, 2008 and ending on December 31, 2010. The Award shall be subject to performance vesting requirements based upon the achievement of the Incentive Formula established under the Plan, reduced so that the Award that is paid to the Employee hereunder does not exceed the amount computed under the performance goals specified below, subject to certification of the degree of achievement of such performance goals by the Committee.

     (b) The measurement tools for determining level of achievement shall be the following two performance goals:

	(i)		Average Return on Invested Capital for the 36-month period beginning January 1, 2008 and ending December 31, 2010; and
	(ii)		cumulative Earnings Per Share for the Performance Period, as measured by the sum of Earnings Per Share for each of the 12-month periods ending December 31 of 2008, 2009 and 2010.

Each of the performance goals represents 50% of the Target Award under this Agreement. Each of these performance goals will be separately measured. Calculation of these measurement tools will be performed by the Committee, subject to all authority granted under the terms of the Plan.

     (c) Notwithstanding any other term of the Agreement to the contrary, in order to be eligible to vest in any portion of the Award, Employee must also

have entered into an agreement containing restrictive covenants concerning limitations on Employee’s behavior following termination of employment that is satisfactory to the Company and its affiliates.

     3.  Determining Number of Performance Share Units Earned .

     (a) The Target Award for Employee under this Agreement is the target number of Performance Share Units announced on March 3, 2008, with the Target Award relevant to each performance goal equal to one-half of this amount. The actual number of Performance Share Units earned by Employee will be determined as described below, based upon the actual achievement of each performance goal for the Performance Period. The “Threshold Performance” is the minimum level of performance that must be achieved to qualify for any Award; “Target Performance” is the expected level achievement for the relevant performance goal; and “Maximum Performance” is the maximum level of performance that could be achieved that would result in an increase in the number of Performance Share Units earned under the applicable performance goal. These performance goals will be announced to Employee by no later than March 15, 2008, following calculation of year-end financial reporting for 2007. Subject to adjustment pursuant to Subsection 3(b), 3(c) and 3(d), each such percentage correlates to a number of Performance Share Units that may be earned under this Award, as follows:

Level Achieved During		Resulting Performance Share Units
Performance Period		Earned
Threshold Performance		60% of applicable Target Award
Target Performance		100% of applicable Target Award
Maximum Performance		200% of applicable Target Award

     (b) In the event that the Company’s actual performance with respect to either of the performance goals, to be measured independently of each other, does not meet the level of Threshold Performance, no Performance Share Units shall be earned under this Award with respect to such performance goal. Failure to obtain Threshold Performance with respect to one performance goal will not preclude receipt of Performance Share Units with respect to another performance goal where Threshold Performance, or greater, has been achieved.

     (c) With respect to each performance goal, to be measured independently of each other, if the Company’s actual performance for the Performance Period is between Threshold Performance and Target Performance, the number of Performance Share Units earned shall be interpolated between Threshold Performance and Target Performance amounts.

     (d) With respect to each performance goal, to be measured independently of each other, if the Company’s actual performance for the Performance Period is between Target Performance and Maximum Performance,

the number of Performance Share Units earned shall be interpolated between Target Performance and Maximum Performance amounts.

     4.  Timing and Form of Payout . Except as hereinafter provided, after the end of the Performance Period, Employee shall be entitled to receive his total number of Performance Shares Units determined under Section 3 and Dividend Equivalents under Section 11. Unless timely deferred by Employee in accordance with Section 12, upon vesting, each Performance Share Unit will be settled by payment of one share of Common Stock, free of any restrictions. Payment of such shares of Common Stock shall be made as soon as administratively feasible after the Committee certifies the actual performance of the Company during the Performance Period.

     5.  Termination of Employment Due to Death or Disability . Upon Termination of Employment from the Company by reason of Employee’s death or disability (as determined by the Committee and within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”)), or upon Employee’s disability prior to a Termination of Employment (as determined by the Committee and within the meaning of Section 409A of the Internal Revenue Code), Employee (or in the case of Employee’s death, Employee’s beneficiary) shall be entitled to receive the Performance Share Units Employee would have been entitled to under Section 3 if he had remained employed until the last day of the Performance Period. Unless further deferred pursuant to Employee’s deferral election, the delivery of shares of Common Stock in satisfaction of such Performance Share Units shall be made as soon as administratively feasible after the end of the Performance Period.

     6.  Involuntary Termination of Employment Without Cause by the Company or Retirement by Employee . Upon either an involuntary Termination of Employment from the Company without Cause by the Company or a qualifying Retirement by Employee, Employee shall be entitled to receive the Performance Share Units and related Dividend Equivalents that Employee would have been entitled to under Section 3 if he or she had remained employed until the last day of the Performance Period, multiplied by the fraction which has as its numerator the total number of days that Employee was employed by the Company during the Performance Period and has as its denominator 1,096 (being the number of calendar days in the Performance Period). Unless further deferred pursuant to Employee’s deferral election, the delivery of shares of Common Stock in satisfaction of such Performance Share Units shall be made as soon as administratively feasible after the end of the Performance Period.

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

     8.  Repayment of Benefits Arising from Misconduct.

     (a) Notwithstanding any provision of this Agreement to the contrary, if it is determined by the Committee that Executive either engaged in or benefited from Misconduct, as defined below, then, to the extent permitted by law, Executive will refund to the Company any amounts, plus interest, received by Executive under this Agreement. For purposes of this Section, “Misconduct” means (i) any act or failure to act by any employee of the Company that (ii) caused or was intended to cause a violation of the Company’s policies, generally accepted accounting principles or any applicable laws in effect at the time of the act(s) or failure(s) to act in question and that (iii) materially increased the value of the payment or award received by Executive under this Agreement. Determination as to the existence of Misconduct shall be made by an independent third party (either a law firm or an accounting firm) appointed by the Committee.

     (b) Following finding of Misconduct by such a third party, if Executive has been accused engaging in Misconduct may dispute the occurrence of Misconduct pursuant to binding arbitration. Individuals determined to have benefited from, but not engaged in, Misconduct will have no right to challenge the finding of Misconduct through arbitration. The Company and Executive hereby agree that any dispute arising out of or relating to a finding that Executive engaged in Misconduct shall be settled exclusively by final and binding arbitration, as governed by the Federal Arbitration Act (9 U.S.C. 1 et seq .). The arbitration proceeding, including the rendering of an award, shall be administered by JAMS pursuant to its Employment Arbitration Rules and Procedures, which may be found on the JAMS web site www.jamsadr.com. All expenses associated with the arbitration shall be borne by Company. Such arbitration expenses will not include attorney fees incurred by the respective parties. The award of the arbitrator shall be final and binding upon the parties. Judgment on any arbitration award may be entered in any court having jurisdiction.

     (c) The Company must initiate any attempt at recovery pursuant to this Section within the earlier to occur of (i) one year after discovery of alleged Misconduct or (ii) the second anniversary of Executive’s termination of employment.

     (d) The provisions of this Section 8, without implication as to any other section hereof, shall survive the expiration or termination of this Agreement and of Executive’s employment.

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

     (a) the Performance Share Units that he would have otherwise received based upon achievement of each performance goal after reducing the

Performance Period so that it ends on the last day of the quarter preceding the Change in Control (the “Early Measurement Date”) and making adjustments to Target Performance so as to be equal to the performance budgeted for that period and appropriate adjustments to Threshold Performance and Maximum Performance so that they bear the same ratio to the Threshold Performance and Maximum Performance amounts above as the revised Target Performance amounts bear to the Target Performance amounts above, converted into a cash payment equivalent to the number of Performance Share Units earned under this Section 9 multiplied by the closing price of the Common Stock on the Early Measurement Date; and

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

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

		TAP x EMD x CP   1096-EMD

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

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

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

Any stock units in the successor entity awarded under this Section 9(b)(i) will vest completely on or before December 31, 2010, provided that Employee remain continuously employed with the successor entity until such date. The foregoing notwithstanding, if there is an involuntary Termination of Employee for reason other than Cause during the Window Period, Employee will become immediately vested in full in the stock units in the successor entity awarded pursuant to this Section 9(b)(i).

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

		TAP x EMD x CP   1096-EMD

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

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

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

Any cash payment calculated under this Section 9(b)(ii) will be paid to Employee on December 31, 2010, provided that Employee remain continuously employed with the successor entity until such date. The foregoing notwithstanding, if there is an involuntary Termination of Employee for reason other than Cause during the Window Period, Employee will be paid by the successor entity the amount determined pursuant to this Section 9(b)(ii).

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

     11.  Dividend Equivalents . No Dividend Equivalents will be paid on the Performance Share Units until such time as: (i) the Performance Period has ended; (ii) Employee has vested in the Award, and; (iii) the number of Performance Share Units earned unde