LAIDLAW INTERNATIONAL INC
EX-10.2 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>6
<FILENAME>l01892aexv10w2.txt
<DESCRIPTION>EX-10.2 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2


                       THE LAIDLAW INC. U.S. SUPPLEMENTAL
                        EXECUTIVE RETIREMENT ARRANGEMENT

================================================================================

       Plan Text Adopted by the Board of Directors effective April 1, 1995

September 1, 1997(rev)

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                    PAGE
<S>                                                        <C>
1   Introduction                                             1

2   Definitions                                              2

3   Eligibility And Service                                  6

4   Supplemental Benefits                                    8

5   Normal And Optional Forms Of Benefits                   12

6   Death Benefits                                          13

7   Future Of The Arrangement                               15

8   General Provisions                                      16
</TABLE>

                                                                               2

<PAGE>

                                    ARTICLE 1

                                  INTRODUCTION

1.01     Laidlaw Inc. hereby establishes the Laidlaw Inc. U.S. Supplemental
         Executive Retirement Arrangement (the "Arrangement") for the purpose of
         providing supplemental benefits as hereinafter described.

1.02     Supplemental benefits payable under this Arrangement will be paid in
         addition to benefits paid under any other retirement arrangement
         sponsored by a participating employer.

1.03     The effective date of this Arrangement is April 1, 1995.

                                                                               1

<PAGE>

                                    ARTICLE 2

                                   DEFINITIONS

In this Arrangement, the following terms and expressions will have the following
meanings, unless a different meaning is required by the context:

2.01     ACTUARIAL EQUIVALENT means a supplemental benefit of an equivalent
         value where such equivalent benefit is established using actuarial
         tables, actuarial assumptions and methodology as may be selected by the
         Company on the recommendation of the Actuary.

2.02     ACTUARY means a Fellow of the Canadian Institute of Actuaries, as
         appointed by the Company.

2.03     AFFILIATED COMPANY means any subsidiary company of Laidlaw Inc. or any
         company related to or associated with Laidlaw Inc.

2.04     ARRANGEMENT means this Laidlaw Inc. U.S. Supplemental Executive
         Retirement Arrangement, as amended or restated from time to time.

2.05     BENEFICIARY means the person designated by a Member under Article 6 and
         means the Member's estate where there is no such person.

2.06     BOARD OF DIRECTORS means the board of directors of Laidlaw Inc., or
         such Committee to which such board of directors may delegate its
         authority in respect of this Arrangement.

2.07     CANADIAN ARRANGEMENT means the Laidlaw Inc. Canadian Supplemental
         Executive Retirement Arrangement, as amended or restated from time to
         time.

2.08     COMPANY means Laidlaw Inc. and any related, affiliated, associated or
         subsidiary company which may be designated as a participating employer
         by the Company and which has agreed to participate in the Arrangement.
         Where any reference in the Arrangement is made to any action to be
         taken, consent, approval or opinion to be given, discretion or decision
         to be exercised by the Company, "Company" means Laidlaw Inc. acting
         through the Board of Directors or any person authorized by the Board of
         Directors for purposes of the Arrangement.

                                                                               2

<PAGE>

2.09     CONTINUOUS SERVICE means the years and completed months of an
         Employee's uninterrupted period of employment with the Company since
         the Employee's last date of hire by the Company, except that where the
         Employee was previously employed by another unrelated company,
         Continuous Service shall mean the years and completed months of an
         Employee's uninterrupted period of employment with the Company since
         the date of acquisition of the shares of that unrelated company by the
         Company. Notwithstanding the foregoing, Continuous Service shall not
         include any notice period related to termination of employment
         (including pay in lieu of notice of termination of employment), unless
         required by law and only to the extent required by law.

2.10     CREDITED SERVICE of a Member means the aggregate of Credited Past
         Service and Credited Future Service as follows:

         (a)      CREDITED PAST SERVICE

                  Continuous Service prior to the effective date of an Employee
                  becoming a Member hereunder, provided the Human Resource and
                  Compensation Committee has consented to the granting of such
                  past service for the purposes of this Arrangement: and

         (b)      CREDITED FUTURE SERVICE

                  Continuous Service from the later of April 1, 1995 or the date
                  the Employee becomes eligible to participate in this
                  Arrangement in accordance with Article 3.

2.11     EARNINGS in respect of a month of service means one-twelfth of the
         aggregate of:

         (a)      the Employee's base salary received in a complete fiscal year
                  from the Company (exclusive of any allowances); and

         (b)      bonuses and other incentive payments received in cash that are
                  attributable to the fiscal year referred to in paragraph (a),
                  up to a maximum of the targeted bonus payable to the Member
                  (as determined in respect of a particular fiscal year under
                  the Company's annual incentive program).

                                                                               3

<PAGE>

         "Earnings" shall not include any severance payments (i.e. or pay in
         lieu of reasonable notice of termination of employment), unless
         required by law and only to the extent required by law.

         For the purposes of this paragraph, where, at the time of determination
         of an Employee's "Earnings", an Employee has not worked for the
         entirety of the most recent fiscal year, for the purposes of
         determining the Employee's Earnings for that period of service, the
         salary received and bonus attributable to that period of service under
         paragraphs (a) and (b) above shall be divided by the number of whole or
         partial months served in that fiscal year.

2.12     EMPLOYEE means any person in full-time employment with the Company who
         is a resident of Canada.

2.13     FINAL AVERAGE EARNINGS calculated on/after April 1, 2000 means the
         twelve times the highest average of the Member's Earnings during any 60
         consecutive months of service with the company and/or an Affiliated
         Company within the 10 year period preceding the Member's retirement,
         death or termination of employment. If a Member has not completed 60
         months of service, Final Average Earnings will be based on the average
         of the Member's Earnings during the Member's period of service.

         Final Average Earnings calculated prior to April 1, 2000 means the
         twelve times the highest average of the Member's earnings during any 60
         consecutive months of service with the Company and/or an Affiliated
         Company within the 5 year period preceding the Member's retirement,
         death or termination of employment. If a Member has not completed 60
         months of service, Final Average Earnings will be based on the average
         of the Member's Earnings during the Member's period of service.

2.14     HUMAN RESOURCE AND COMPENSATION COMMITTEE means the Human Resource and
         Compensation Committee of the Board of Directors.

                                                                               4

<PAGE>

2.15     INTERNAL REVENUE CODE MAXIMUM COMPENSATION LIMIT at a particular time
         means the "compensation limit" as defined under Section 415(d) of the
         Internal Revenue Code of 1986 and the Regulations thereunder, as
         amended from time to time. As at April 1, 1995, the "compensation
         limit" is $150,000.

2.16     MEMBER means an Employee or former Employee who has been designated as
         eligible to participate in the Arrangement under Article 3 and who
         continues to be eligible to receive supplemental benefits under this
         Arrangement.

2.17     RETIREMENT AGE at a particular time, means the age upon which an
         individual can claim an unreduced pension under the United States
         Social Security Act and Regulations thereunder.

2.18     STATUTORY BENEFIT OFFSET at a particular time means the maximum annual
         "primary insurance amount" under the United States Social Security Act
         and the Regulations thereunder, as amended from time to time, payable
         at the date the Member attains the Retirement Age. Where a Member
         demonstrates to the satisfaction of the Company that upon attaining the
         Retirement age he or she is entitled to a pension benefit under the
         Social Security Act and Regulations thereunder that is less than the
         maximum annual primary insurance amount as described above, the
         Statutory Benefit Offset in respect of that Member shall be that lesser
         amount.

2.19     TOTAL DISABILITY means a disability in respect of which the Member is
         entitled to benefits from the Company's long-term disability program.

2.20     VESTED CREDITED SERVICE has the meaning described in Section 4.04.

In this Arrangement, unless the context requires otherwise, reference to the
male gender will include the female gender and words importing the singular
number only include the plural number and vice versa.

                                                                               5

<PAGE>

                                    ARTICLE 3

                             ELIGIBILITY AND SERVICE

3.01     MEMBERSHIP

         An Employee will become a Member under this Arrangement upon being:

         (a)      recommended by the Chief Executive Officer of the Company for
                  participation in this Arrangement; and

         (b)      approved for participation by the Human Resource and
                  Compensation Committee,

         and such membership shall be effective on the date determined by the
         Human Resource and Compensation Committee in respect of such Member.

3.02     DISABILITY

         If the Member suffers from a Total Disability, such period of
         disability will be excluded from Credited Service. If the Member's
         Total Disability continues until he attains age 65, the Member will be
         deemed to have retired from employment and his supplemental benefits
         will be determined based on:

         (a)      the formula set out in Section 4.01;

         (b)      Credited Service accrued to the date the Total Disability
                  commenced;

         (c)      for the purposes of Article 4, Continuous Service accrued to
                  the date the Total Disability commenced; and

         (d)      Final Average Earnings at the date the Total Disability
                  commenced.

                                                                               6

<PAGE>

3.03     TRANSFERS

         (a)      TRANSFER TO THE UNITED STATES AND THIS ARRANGEMENT

                  If an employee of an Affiliated Company is transferred from
                  Canada to the United States such that the individual becomes
                  an Employee, such Employee will become a Member of this
                  Arrangement upon the date of transfer of employment, provided
                  the Employee was a "Member" as defined under the Canadian
                  Arrangement immediately prior to his transfer.

                  In such a case, supplemental benefits payable to a Member
                  under this Arrangement will be calculated on the basis of:

                  (i)      his Credited Service under this Arrangement,
                           including his "Credited Service" recognized, and as
                           defined, under the Canadian Arrangement;

                  (ii)     his Continuous Service under this Arrangement,
                           including "Continuous Service" as defined under the
                           Canadian Arrangement; and

                  (iii)    the Member's Final Average Earnings, which will
                           include earnings received by the Member from the
                           Affiliated Company as defined by the Canadian
                           Arrangement. Earnings previously received from the
                           Affiliated Company will be translated to Canadian
                           dollars based on the average exchange rates
                           applicable to each year of earnings.

         (b)      TRANSFERS OUT OF THE UNITED STATES AND THIS ARRANGEMENT

                  If a Member is transferred from the United States to Canada
                  and ceases to be an Employee, no supplemental benefits will be
                  payable under this Arrangement. Instead, any liability for the
                  payment of supplemental benefits accrued in respect of
                  Credited Service under this Arrangement will be assumed by the
                  applicable participating employer under the Canadian
                  Arrangement

                                                                               7

<PAGE>

                                    ARTICLE 4

                              SUPPLEMENTAL BENEFITS

4.01     BENEFIT FORMULA

         The annual supplemental benefit formula is equal to ({A + B} - C) x D
         as follows:

         where

         A        is 1% of the lesser of (i) the Member's Final Average
                  Earnings; and (ii) the Internal Revenue Code maximum
                  Compensation Limit;

         B        is 1.5% of the amount by which the member's Final Average
                  Earnings exceeds the Internal Revenue Code Maximum
                  Compensation Limit;

         C        is, assuming the Member has attained the Retirement Age,
                  1/35th of the Statutory Benefit Offset, determined on the date
                  of termination of employment, or death, as the case may be,
                  and prior to the Member attaining the Retirement Age, nil; and

         D        is the aggregate of the number of whole or partial years of
                  the Member's Vested Credited Service, as determined under
                  Section 4.04.

4.02     PENSION COMMENCEMENT

         A Member will be entitled to an annual supplemental benefit calculated
         according to the formula in Section 4.01 and based on Vested Credited
         Service and Final Average Earnings as at the date of termination of the
         Member's employment, commencing the first the first day of the month
         co-incident with or next following such Member attaining the age of 65.

4.03     EARLY RETIREMENT

         A Member who retires from employment with the Company before attainment
         of age 65 and who elects to have this provision apply to him will be
         entitled to an annual supplemental benefit, commencing on the first day
         of the month co-incident with or next following the later of such
         Member's actual retirement date and such other date selected by him
         that is prior to the

                                                                               8

<PAGE>

         Member's attainment of age 65 and on or after attainment of age 60,
         equal to the supplemental benefit calculated according to the formula
         in Section 4.01 and based on Vested Credited Service and the Member's
         Final Average Earnings at the Member's actual retirement date. Such
         supplemental benefits will be reduced by 0.1667% for each complete
         month that the date of commencement of payment of benefits precedes the
         Member's attainment of age 65. A Member can elect to have this
         provision apply to him by giving written notice to the Company of such
         election, which notice must be received by the Company prior to the
         date that the Member elects that supplemental benefits will commence to
         become payable to him.

4.04     VESTED CREDITED SERVICE

         For the purposes of this Arrangement, Vested Credited Service is the
         sum of Vested Credited Future Service and Vested Credited Past Service,
         as defined below:

         (a)      VESTED CREDITED FUTURE SERVICE

                  A Member's Vested Credited Future Service is equal to the
                  Member's Credited Future Service multiplied by the relevant
                  vesting percentage contained in the following chart, based on
                  the number of full years of the Member's Credited Future
                  Service rendered after becoming a Member of this Arrangement.

<TABLE>
<CAPTION>
==================================================================================
  YEARS OF CREDITED FUTURE SERVICE
  RENDERED AFTER BECOMING A MEMBER                     RELEVANT VESTING PERCENTAGE
==================================================================================
<S>                                                    <C>
less than 1 year                                                    0%
----------------------------------------------------------------------------------
1 or more years but less than 2 years                              20%
----------------------------------------------------------------------------------
2 or more years but less than 3 years                              40%
----------------------------------------------------------------------------------
3 or more years but less than 4 years                              60%
----------------------------------------------------------------------------------
4 or more years but less than 5 years                              80%
----------------------------------------------------------------------------------
5 or more years                                                   100%
==================================================================================
</TABLE>

                                                                               9

<PAGE>

                  Where a Member suffers from a Total Disability, such period of
                  Total Disability shall be considered to be Credited Future
                  Service rendered after becoming a Member for the purposes only
                  of determining the relevant vesting percentage in the above
                  chart.

         (b)      VESTED CREDITED PAST SERVICE

                  A Member's Vested Credited Past Service is equal to the
                  Member's Credited Past Service if the Member:

                  (i)      dies, at any age, and such death occurs prior to the
                           commencement of payment of supplemental benefits
                           under this Arrangement;or

                  (ii)     Retires from employment with the Company on or after
                           the attainment of age 60; or

                  (iii)    Terminates employment with the Company before age 60,
                           provided the Member neither voluntarily terminates
                           his employment with the Company nor is dismissed for
                           just cause.

                  A Member's Vested Credited Past Service is equal to the
                  Member's Credited Past Service multiplied by the relevant
                  vesting percentage as outlined in the following chart, based
                  on the Member's age at retirement if the Member retires from
                  employment with the Company on or after attainment of age 55
                  and before attainment of age 60 provided that the member
                  provides no services to any competitor of the Company after
                  retirement.

<TABLE>
<CAPTION>
-------------------------------------------------------------
RETIREMENT AGE                    RELEVANT VESTING PERCENTAGE
-------------------------------------------------------------
<S>                               <C>
55 years                                      50%
-------------------------------------------------------------
56 years                                      60%
-------------------------------------------------------------
57 years                                      70%
-------------------------------------------------------------
58 years                                      80%
-------------------------------------------------------------
59 years                                      90%
-------------------------------------------------------------
</TABLE>

                  For the purposes of this Section 4.04 (B), the Human Resource
                  and Compensation Committee will determine what constitutes
                  "just cause" and whether a particular Member has been
                  dismissed for just cause, has voluntarily terminated his
                  employment with the Company or has retired or provided
                  services to a competitor of the Company. In any other case, a
                  Member's Vested Credited Past Service is nil.

                                                                              10

<PAGE>

                                    ARTICLE 5

                      NORMAL AND OPTIONAL FORMS OF BENEFITS

5.01     NORMAL FORM

         The normal form of supplemental benefit payable under this Arrangement
         is an annuity payable in monthly installments for the life of the
         Member and, in any event, for a period of not less than 60 months. If
         the Member dies before receiving 60 monthly payments, the Member's
         Beneficiary will receive the remaining payments at the same time and in
         the same amount that the Member would have received, had he not died.

5.02     OPTIONAL FORMS

         In lieu of the normal form of supplemental benefit described in Section
         5.01, the Member may elect, before supplemental benefit payments
         commence, any other form of periodic lifetime annuity acceptable to the
         Human Resource and Compensation Committee (the "Optional Form"), which
         Optional From will be the Actuarial Equivalent of the normal form of
         supplemental benefit described in Section 5.01.

         Where the Member wishes to elect an Optional Form, the Member must so
         advise the Company, in writing, at least 30 days before the date
         benefit payments would otherwise have commenced under this Arrangement.
         Section 5.01 will apply where the Member has not provided such written
         notice to the Company in the specified time period.

                                                                              11

<PAGE>

                                    ARTICLE 6

                                 DEATH BENEFITS

6.01     BENEFICIARY DESIGNATION

         A Member may designate, by written notice delivered to the Company, a
         Beneficiary to receive any benefits payable on the death of the Member.
         A Member may revoke or amend such designation in the same manner at any
         time, subject to any applicable laws governing the designation of
         beneficiaries.

6.02     NO BENEFICIARY

         If a Member fails to validly designate a Beneficiary, or if the
         Beneficiary predeceases the Member, any benefits payable to the
         Member's Beneficiary will be paid to the estate of the Member in
         accordance with this Arrangement.

6.03     DEATH OF A BENEFICIARY

         If a Beneficiary, as a result of a Member's death, is entitled to
         payments under this Arrangement and the Beneficiary dies before
         receiving any or all of the payments due to him, any remaining
         guaranteed monthly payments will continue to be paid to the estate of
         the Beneficiary.

6.04     DEATH BEFORE SUPPLEMENTAL BENEFIT COMMENCEMENT

         Notwithstanding sections 4.02 and 4.03, if the Member dies before the
         payment of supplemental benefits have commenced, the Member will be
         deemed to have retired the day before his death and the Member's
         Beneficiary will receive a supplemental benefit equal to the benefit
         determined in accordance with Section 4.01, and payable for 60 months,
         commencing on the first day of the month co-incident with or next
         following the later of such Member's death.

                                                                              12

<PAGE>

6.05     DEATH AFTER SUPPLEMENTAL BENEFIT COMMENCEMENT

         If a Member dies after the Member's supplemental benefits have
         commenced being paid, any benefits payable under this Arrangement will
         be determined and payable in accordance with Article 5.

                                                                              13

<PAGE>

                                    ARTICLE 7

                            FUTURE OF THE ARRANGEMENT

7.01     RIGHT TO AMEND OR TERMINATE THE ARRANGEMENT

         The Human Resource and Compensation Committee reserves the right to
         amend or discontinue this Arrangement at any time, either in whole or
         in part, at its discretion, provided such amendment or termination, as
         applicable, does not reduce benefits under this Arrangement accrued to
         the date of amendment or termination of the Arrangement, as applicable,
         based on a Member's Final Average Earnings at the date of such
         amendment or termination, as applicable.

                                                                              14

<PAGE>

                                    ARTICLE 8

                               GENERAL PROVISIONS

8.01     ADMINISTRATION

         The Company will administer this Arrangement. The Company:

         (a)      will be responsible for all matters relating to the
                  administration of this Arrangement;

         (b)      may delegate such matters as it deems appropriate to be
                  performed by one or more agents;

         (c)      will decide conclusively all matters relating to the
                  operation, interpretation and application of the Arrangement;
                  and

         (d)      may enact rules and regulations relating to the administration
                  of the Arrangement to carry out the terms of this Arrangement
                  and may amend such rules and regulations from time to time.
                  Such rules and regulations will not conflict with any
                  provision of this Arrangement.

8.02     SUPPLEMENTAL BENEFITS PAYABLE BY THE COMPANY

         (a)      Supplemental benefits payable under this Arrangement will be
                  paid by the participating employer. The Company is not
                  required to establish or contribute to a trust fund, annuity
                  or other advance or current funding arrangement of any kind
                  for the provision of supplemental benefits which may become,
                  or are, payable under this Arrangement.

         (b)      Supplemental benefits payable under this Arrangement are to be
                  paid solely from the general assets of the participating
                  employer.

8.03     FREQUENCY AND TIMING OF SUPPLEMENTAL BENEFIT BENEFITS

         Unless specified otherwise, payments under this Arrangement will be
         payable monthly upon the first day of the month in which they fall due.
         Where such payments are subject to termination on death or loss of
         eligibility ("termination event"), the last monthly payment will be
         payable on the first day of the month in which the termination event
         occurs.

                                                                              15

<PAGE>

8.04     NON-ALIENATION

         Any transaction that purports to assign, charge, anticipate, surrender
         or grant as security a Member's right or interest under the
         Arrangement, or supplemental benefits payable under this Arrangement,
         is void.

8.05     NON-COMMUTATION OF BENEFITS

         A supplemental benefit payable under this Arrangement will not be
         capable of being commuted, unless the Human Resource and Compensation
         Committee decides it is in the best interests of the Company to do so.

8.06     RIGHTS OF EMPLOYEES

         (a)      No Member will have any right or interest, whatsoever, to
                  supplemental benefits under this Arrangement, except as
                  provided in this Arrangement.

         (b)      The establishment of this Arrangement will not constitute an
                  enlargement of any rights an Employee might otherwise have as
                  to tenure, retention of employment with the Company,
                  continuity of work, advancement in employment or any
                  particular job or position.

8.07     LIMITATION OF LIABILITIES

         Notwithstanding anything in this Arrangement to the contrary, the
         Company will not be liable to any person whatsoever because of any
         acts, omissions to act, mistakes, negligence or errors in judgment
         either by the Company or of any person appointed or employed by it or
         providing service to it in connection with its functions thereunder,
         except for any claims, demands and proceedings arising from any act or
         omission which is due to willful misconduct, fraud or lack of good
         faith by the Company or such persons or any one of them.

                                                                              16

<PAGE>

8.08     INFORMATION TO BE PROVIDED BEFORE BENEFITS ARE PAID

         Payment of supplemental benefits will not be made until the person
         entitled to payment of supplemental benefits delivers to the Company:

         (a)      satisfactory proof of age of the person and other persons who
                  may become entitled to payment of supplemental benefits; and

         (b)      any such other information as may be required to calculate and
                  pay supplemental benefits, including a signed declaration of
                  marital status, if applicable.

8.09     COMPANY RECORDS

         Whenever the records of the Company are used for the purposes of this
         Arrangement, such records will be conclusive as to the facts with which
         they are concerned.

8.10     SUCCESSOR COMPANIES

         If the Company (or participating employer contemplated by the
         definition of "Company") sells or exchanges all or substantially all of
         its assets or ceases, discontinues operation of its business or enters
         into a statutory or non-statutory merger, consolidation or
         re-organization with any other corporation, this Arrangement will be
         continued and the person, firm or corporation to which the Company (or
         participating employer, as the case may be) is sold or with which the
         Company (or participating employer, as the case may be) is merged,
         consolidated or re-organized will be deemed to be the successor of the
         Company (or participating employer, as the case may be) and will be
         substituted hereunder for the Company (or participating employer, as
         the case may be).

                                                                              17

<PAGE>

8.11     CONSTRUCTION

         This Arrangement will be governed and construed in accordance with the
         laws of Ontario.

8.12     CURRENCY

         All supplemental benefits payable under this Arrangement will be paid
         in the lawful currency of the United States.

8.13     SEVERABILITY

         If any provision of this Arrangement is held to be invalid or
         unenforceable by a court of competent jurisdiction, its invalidity or
         unenforceability will not affect any other provision of this
         Arrangement and the Arrangement will be construed and enforced as if
         such provision had not been included therein.

8.14     CAPTIONS AND HEADINGS

         The captions, headings and Table of Contents of this Arrangement are
         included for convenience of reference only and will not be used in
         interpreting the provisions of this Arrangement.

8.15     ARTICLES AND SECTIONS

         "Article" or "Articles" means an article or articles as defined in the
         Table of Contents and "Section" or "Sections" means a specific
         provision or provisions within an Article or Articles, as applicable.

8.16     WAIVER

         The Human Resource and Compensation Committee shall have the unfettered
         right and sole discretion to waive any provision of this Arrangement,
         if it deems such waiver to be in the best interests of the Company.

                                                                              18


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