EXHIBIT 10.18


                         RUSSELL-STANLEY HOLDINGS, INC.
                               230 HALF MILE ROAD
                               RED BANK, NJ 07701


                                                                   July 23, 1997

Mr. Mark Daniels
Container Management Services, Inc.
P.O. Box 1148
1071 Holland Road
Simpsonville, SC 29681


Dear Mark:

                  In order to provide you with  additional  incentive  to remain
President  of  Container  Management  Services,  Inc.  ("CMS"),  a wholly  owned
subsidiary of Russell-Stanley Holdings, Inc. (the "Company"), the Company hereby
agrees to provide you with the compensation  provided herein, in addition to the
benefits  provided in the Employment  Agreement between yourself and the Company
dated the date hereof (the "Employment Agreement").

                  The  Company  agrees to pay you the sum of $770,000 on each of
the first, second and third  anniversaries of this Agreement.  In the event that
your  employment is terminated  (i) by the Company  without Cause (as defined in
the  Employment  Agreement),  (ii)  as a  result  of  your  death  or  Permanent
Disability (as defined in the Employment  Agreement),  or (iii) by you within 30
days after the Company has substantially  reduced your base salary,  the Company
will continue to make the payments  provided herein so long as you do not breach
the covenants contained in Section 13 of the Employment Agreement.  In the event
that your employment is terminated  under any other  circumstances,  the Company
shall not be obligated to make any of the remaining  payments  contained in this
Agreement and this Agreement shall be null and void.

                  As consideration for the Company agreeing to make the payments
described above and subject to the provisions described above, you agree: (i) to
remain an employee of the  Company  and CMS until the third  anniversary  of the
date hereof,  (ii) to perform your duties for the Company and CMS to the best of
your  abilities,  and (iii) to abide by the terms of the  Employment  Agreement,
including, but not limited to, the provisions of Section 13 thereof.

                  Any money paid pursuant to this  Agreement  shall not be taken
into account as  compensation  for  purposes of any  retirement  plans,  be they
qualified or otherwise, of the Company or CMS.



                                                                               2

                  This   Agreement   shall  be  construed  and   interpreted  in
accordance  with the laws of the State of New York,  without  reference to rules
relating to  conflicts of law, and the parties  hereto  submit to the  exclusive
jurisdiction  of the  courts  of the  State of New York for the  purpose  of any
actions or  proceedings  that may be required to enforce any  provision  of this
Agreement.

                  This Agreement contains the entire  understanding  between the
parties hereto and  supersedes in all respects any prior or other  agreements or
understandings  between the Company or any of its affiliates,  and yourself with
respect to the subject-matter herein, other than the Employment Agreement.

                  This Agreement may only be amended by written agreement of the
parties hereto.

                  Two signed copies of this Agreement have been enclosed, please
sign them and return one to us as soon as possible for our records.

Russell-Stanley Holdings, Inc.


By: /s/ Daniel W. Miller                         /s/ Mark Daniels            
     Name: Daniel W. Miller                      Mark Daniels
     Title: Senior Vice President and CFO