PERFORMANCE SHARE UNIT AWARD AGREEMENT

Exhibit 10.11

PERFORMANCE SHARE UNIT AWARD AGREEMENT

     This Performance Share Unit Award Agreement (“Agreement”) is entered into effective as of January 27, 2006 the “Grant Date”), by and between Waste Management, Inc., a Delaware corporation (together with its Subsidiaries and Affiliates, the “Company”), and << Full_NameFirst>> (the “Employee”), pursuant to the Waste Management, Inc. 2004 Stock Incentive Plan (the “Plan”). Employee and the Company agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

     1.  Grant. In accordance with the terms of the Plan, the Company hereby grants to 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, 2006 and ending on December 31, 2008. The Award shall be subject to performance vesting requirements based upon the achievement of the Performance Target specified below, subject to certification of the degree of achievement of such Performance Target by the Committee pursuant to Section 7 of the Plan.

     (b) The measurement tool for determining level of achievement shall be the average Return on Invested Capital (“ROIC”) for the 36-month period beginning January 1, 2006 and ending December 31, 2008. ROIC is defined to mean (i) the Company’s average “as reported” Net Operating Profit After Taxes (“NOPAT”) for the Performance Period, divided by (ii) the Company’s average Invested Capital for the Performance Period. For purposes of this Agreement, the average ROIC for the Performance Period will be calculated using the following equation:

(2006 NOPAT + 2007 NOPAT + 2008 NOPAT)

     3.  Determining Number of Performance Share Units Earned .

     (a) The “Target Award” for Employee under this Agreement is <<M_Units>> Performance Share Units. The actual number of Performance Share Units earned by Employee will be determined as described below, based upon the actual achievement of ROIC for the Performance Period. The “Threshold ROIC” is the minimum ROIC that must be achieved to qualify for any Award; “Target

ROIC” is the expected achievement in ROIC; and “Maximum ROIC” is the maximum ROIC that could be achieved that would result in an increase in the number of Performance Share Units earned under this Award. These targets will be announced to Employee by March 15, 2006, following calculation of year-end financial reporting for 2005. 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:

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

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

TAS = Performance Share Units earned for achievement of the Target ROIC.
TS = Performance Share Units earned for achievement of the Threshold ROIC.
AP = The percent payment earned based on actual ROIC performance.
TP = The percent payment earned based on Threshold ROIC performance.
TAP = The percent payment earned based on Target ROIC performance.

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

MS = Performance Share Units earned for achievement of the Maximum ROIC.
TAS = Performance Share Units earned for achievement of the Target ROIC.
AP = The percent payment earned based on actual ROIC performance

TAP = The percent payment earned based on Target ROIC performance.
MP = The percent payment earned based on Maximum ROIC performance.

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

     5.  Termination of Employment Due to Death or Disability . Upon Termination of Employment from the Company by reason of Employee’s death or disability (as determined by the Committee), 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 directed otherwise pursuant to Employee’s deferral election, the delivery of shares of Common Stock in satisfaction of such Performance Share Units shall be made as soon as administratively feasible after the end of the Performance Period.

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

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

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

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

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

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

TAP = the number of Performance Share Units that could be earned for achievement of the original Target ROIC specified in Section 3(a)
EMD = the number of days occurring from the Grant Date to the Early Measurement Date
CP = the closing price of a share of Common Stock of Waste Management, Inc. on the Early Measurement Date

Any restricted stock units in the successor entity awarded under this Section 8(b)(i) will vest completely on or before December 31, 2008, provided that Employee remain continuously employed with the successor entity until such date. The foregoing notwithstanding, if there is an involuntary Termination of Employee for reason other than Cause during the Window Period, Employee will become immediately vested in full in the restricted stock units in the successor entity awarded pursuant to this Section 8(b)(i).

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

TAP = the number of Performance Share Units that could be earned for achievement of the original Target ROIC specified in Section 3(a)
EMD = the number of days occurring from the Grant Date to the Early Measurement Date
CP = the closing price of a share of Common Stock of Waste Management, Inc. on the Early Measurement Date

Any cash payment calculated under this Section 8(b)(ii) will be paid to Employee on December 31, 2008, 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 8(b)(ii).

     9.  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.

     10.  Elective Deferrals .

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

     (b) Notwithstanding any provision to the contrary in this Agreement, if deferral of Performance Share Units is permitted, each provision of this Agreement shall be interpreted to permit the deferral of compensation only as allowed in compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, (the “Internal Revenue Code”) and any

provision that would conflict with such requirements shall not be valid or enforceable. Employee acknowledges, without limitation, and consents that application of Section 409A of the Internal Revenue Code to this Agreement may require additional delay of payments otherwise payable under this Agreement. Employee and the Company further hereby agree to execute such further instruments and take such further action as reasonably may be necessary to comply with Section 409A of the Internal Revenue Code.

11. Restrictions on Transfer.

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