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EXHIBIT 10.2
USA WASTE SERVICES, INC.
1993 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED)
APRIL 8, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE I. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Eligibility for Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4. Types of Awards Under Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5. Aggregate Limitation on Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6. Effective Date and Term of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II. STOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1. Award of Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2. Stock Option Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3. Stock Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4. Term and Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Manner of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Delivery of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.7. Death, Retirement and Termination of Employment of Optionee . . . . . . . . . . . . . . . . . . 5
Section 2.8. Tax Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.9. Effect of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III. INCENTIVE STOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.1. Award of Incentive Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.2. Incentive Stock Option Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.3. Incentive Stock Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4. Term and Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.5. Maximum Amount of Incentive Stock Option Grant . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.6. Death of Optionee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.7. Retirement or Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.8. Termination for Other Reasons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.9. Applicability of Stock Options Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. RELOAD OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1. Authorization of Reload Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2. Reload Option Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.3. Reload Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4. Term and Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.5. Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.6. Applicability of Stock Options Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V. ALTERNATE APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.1. Award of Alternate Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.2. Alternate Appreciation Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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Section 5.3. Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.4. Amount of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.5. Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.6. Effect of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.7. Termination of Employment, Retirement, Death or Disability . . . . . . . . . . . . . . . . . . 9
ARTICLE VI. LIMITED RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.1. Award of Limited Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.2. Limited Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.3. Exercise Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.4. Amount of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.5. Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.6. Effect of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.7. Retirement or Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.8. Death of Optionee or Termination for Other Reasons . . . . . . . . . . . . . . . . . . . . . 11
Section 6.9. Termination Related to a Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII. SUBSTITUTION AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII. BONUS STOCK AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.1. Award of Bonus Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.2. Stock Bonus Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9.1. General Restriction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9.2. Non-Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9.3. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.4. Right to Terminate Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.5. Non-Uniform Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.6. Rights as a Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.7. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.8. Leaves of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.9. Newly Eligible Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.10. Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.11. Changes in the Company's Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.12. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.13. Amendment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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USA WASTE SERVICES, INC.
1993 STOCK INCENTIVE PLAN
ARTICLE I. GENERAL
Section 1.1. Purpose. The purposes of this Stock Incentive Plan
(the "Plan") are to: (1) closely associate the interests of the employees and
consultants of USA Waste Services, Inc. and its Subsidiaries and Affiliates
(collectively referred to as the "Company") with the shareholders to generate
an increased incentive to contribute to the Company's future success and
prosperity, thus enhancing the value of the Company for the benefit of its
stockholders; (2) provide employees and consultants with a proprietary
ownership interest in the Company commensurate with Company performance, as
reflected in increased shareholder value; (3) maintain competitive compensation
levels thereby attracting and retaining highly competent and talented
employees and consultants; and (4) provide an incentive to employees and
consultants for continuous employment with or services to the Company.
Section 1.2. Administration.
(a) The Plan shall be administered by a committee of non-employee
directors appointed by the Board of Directors of USA Waste Services, Inc. (the
"Committee"), as constituted from time to time.
(b) The Committee shall have the authority, in its sole discretion
and from time to time to:
(i) designate the employees and consultants or classes of
employees of and consultants to the Company eligible to participate in
the Plan;
(ii) grant awards ("Awards") provided in the Plan in such
form and amount as the Committee shall determine;
(iii) impose such limitations, restrictions, and
conditions, not inconsistent with this Plan, upon any such Award as
the Committee shall deem appropriate; and
(iv) interpret the Plan and any agreement, instrument, or
other document executed in connection with the Plan; adopt, amend, and
rescind rules and regulations relating to the Plan; and make all other
determinations and take all other action necessary or advisable for
the implementation and administration of the Plan.
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(c) Decisions and determinations of the Committee on all matters
relating to the Plan shall be in its sole discretion and shall be final,
conclusive, and binding upon all persons, including the Company, any
participant, any stockholder of USA Waste Services, Inc., and any employee or
consultant. A majority of the members of the Committee may determine its
actions and fix the time and place of its meetings. No member of the Committee
shall be liable for any action taken or decision made in good faith relating to
the Plan or any Award thereunder.
Section 1.3. Eligibility for Participation. Participants in the
Plan ("Participants") shall be selected by the Committee from the employees of
and consultants to the Company who are responsible for or contribute to the
management, growth, success and, profitability of the Company. In making this
selection and in determining the form and amount of Awards, the Committee shall
consider any factors deemed relevant, including the individual's functions,
responsibilities, value of services to the Company, and past and potential
contributions to the Company's profitability and growth.
Section 1.4. Types of Awards Under Plan. Awards under the Plan
may be in the form of any one or more of the following:
(i) Stock Options, as described in Article II;
(ii) Incentive Stock Options, as described in Article III;
(iii) Reload Options, as described in Article IV;
(iv) Alternate Appreciation Rights, as described in
Article V;
(v) Limited Rights, as described in Article VI;
(vi) Alternate Stock Awards, as described in Article VII;
and/or
(vii) Stock Bonus Awards, as described in Article VIII.
Awards under the Plan shall be evidenced by an Award Agreement between the
Company and the recipient of the Award, in form and substance satisfactory to
the Committee, and not inconsistent with this Plan.
Section 1.5. Aggregate Limitation on Awards.
(a) Shares of stock which may be issued under the Plan shall be
authorized and unissued or treasury shares of Common Stock $.01 par value, of
USA Waste Services, Inc. ("Common Stock"). Subject to the further provisions
of this Section 1.5 and Section 9.10, the maximum number of shares of Common
Stock which may be issued under the Plan shall be 6,500,000.
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(b) For purposes of calculating the maximum number of shares of
Common Stock that may be issued under the Plan:
(i) all the shares issued (including the shares, if any,
withheld for tax withholding requirements) shall be counted when cash
is used as full payment for shares issued upon exercise of a Stock
Option, Incentive Stock Option, or Reload Option;
(ii) only the shares issued (including the shares, if any,
withheld for tax withholding requirements) as a result of an exercise
of Alternate Appreciation Rights shall be counted; and
(iii) only the net shares issued (including the shares, if
any, withheld for tax withholding requirements) shall be counted when
shares of Common Stock or another Award under the Plan are used or
withheld as full or partial payment for shares issued upon exercise of
a Stock Option, Incentive Stock Option, or Reload Option;
provided, however, in all events the maximum number of shares of Common Stock
that may be issued pursuant to Incentive Stock Options is 6,500,000.
(c) In addition to shares of Common Stock actually issued pursuant
to the exercise of Stock Options, Incentive Stock Options, Reload Options, or
Alternate Appreciation Rights, there shall be deemed to have been issued a
number of shares equal to the number of shares of Common Stock in respect of
which Limited Rights (as described in Article VI) shall have been exercised.
(d) Shares tendered by a Participant or withheld as payment for
shares issued upon exercise of a Stock Option, Incentive Stock Option, or
Reload Option shall be available for issuance under the Plan. Any shares of
Common Stock subject to a Stock Option, Incentive Stock Option, or Reload
Option that for any reason is terminated unexercised or expires shall again be
available for issuance under the Plan, but shares subject to a Stock Option,
Incentive Stock Option, or Reload Option that are not issued as a result of the
exercise of Limited Rights shall not again be available for issuance under the
Plan.
(e) The maximum number of shares of Common Stock with respect to
which any Participant may receive Awards in any calendar year is 1,500,000.
Section 1.6. Effective Date and Term of Plan.
(a) The Plan became effective on the date it was approved by the
holders of a majority of the shares of Common Stock present in person or by
proxy and entitled to vote at the 1993 Annual Meeting of shareholders of USA
Waste Services, Inc.
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(b) No Awards shall be made under the Plan after the tenth
anniversary of the effective date of this Plan; provided, however, that the
Plan and all Awards made under the Plan prior to such date shall remain in
effect until such Awards have been satisfied or terminated in accordance with
the Plan and the terms of such Awards.
ARTICLE II. STOCK OPTIONS
Section 2.1. Award of Stock Options. The Committee may from time to
time, and subject to the provisions of the Plan and such other terms and
conditions as the Committee may prescribe, grant to any Participant in the
Plan one or more options to purchase the number of shares of Common Stock
("Stock Options") allotted by the Committee. The date a Stock Option is
granted shall mean the date selected by the Committee as of which the Committee
allots a specific number of shares to a Participant pursuant to the Plan.
Section 2.2. Stock Option Agreements. The grant of a Stock Option
shall be evidenced by a written Award Agreement, executed by the Company and
the holder of the Stock Option (the "Optionee"), stating the number of shares
of Common Stock subject to the Stock Option evidenced thereby, and in such form
as the Committee may from time to time determine.
Section 2.3. Stock Option Price. The Option Price per share of
Common Stock deliverable upon the exercise of a Stock Option shall be an amount
selected by the Committee and shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date the Stock Option is granted.
Section 2.4. Term and Exercise. A Stock Option shall not be
exercisable prior to six months from the date of its grant unless a shorter
period is provided by the Committee or by another Section of this Plan, and may
be exercised during the period established by the Committee, but not after ten
years from the date of grant thereof (the "Option Term"). No Stock Option
shall be exercisable after the expiration of its Option Term.
Section 2.5. Manner of Payment. Each Award Agreement providing for
Stock Options shall set forth the procedure governing the exercise of the Stock
Option granted thereunder, and shall provide that, upon such exercise in
respect of any shares of Common Stock subject thereto, the Optionee shall pay
to the Company, in full, the Option Price for such shares with cash, which
may be pursuant to a "cashless-broker" exercise pursuant to procedures
established by the Committee from time to time, or with previously owned Common
Stock, or at the discretion of the Committee, in whole or in part with, the
surrender of another Award under the Plan, the withholding of shares of Common
Stock issuable upon exercise of such Stock Option, other property, or any
combination thereof (each based on the Fair Market Value of such Common Stock,
Award or other property on the date the Stock Option is exercised as determined
by the Committee).
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Section 2.6. Delivery of Shares. As soon as practicable after
receipt of payment, the Committee shall deliver to the Optionee a certificate
or certificates for such shares of Common Stock. The Optionee shall become a
shareholder of the Company with respect to Common Stock represented by share
certificates so issued and as such shall be fully entitled to receive
dividends, to vote and to exercise all other rights of a shareholder.
Section 2.7. Death, Retirement and Termination of Employment of
Optionee. Unless otherwise provided in an Award Agreement or otherwise agreed
to by the Committee:
(a) Upon the death of the Optionee, any rights to the extent
exercisable by the Optionee on the date of termination of employment or
consulting, as the case may be, may be exercised by the Optionee's estate, or
by a person who acquires the right to exercise such Stock Option by bequest or
inheritance or by reason of the death of the Optionee, provided that such
exercise occurs within both the remaining effective term of the Stock Option
and one year after the Optionee's death. The provisions of this Section shall
apply notwithstanding the fact that the Optionee's employment may have
terminated prior to death.
(b) Upon termination of the Optionee's employment by reason of
retirement or permanent disability (as each is determined by the Committee),
the Optionee may, within 36 months from the date of termination, exercise any
Stock Options to the extent such Stock Options are exercisable on the date of
such termination of employment.
(c) Except as provided in Subsections (a) and (b) of this Section
2.7, or except as otherwise determined by the Committee, all Stock Options
shall terminate three months after the date of the termination of the
Optionee's employment or consulting, as the case may be, and shall be
exercisable during such period only to the extent exercisable on the date of
termination of employment or consulting.
Section 2.8. Tax Election. Recipients of Stock Options who are
directors or executive officers of the Company or who own more than 10% of the
Common Stock of the Company ("Section 16(a) Option Holders") at the time of
exercise of a Stock Option may elect, in lieu of paying to the Company an
amount required to be withheld under applicable tax laws in connection with the
exercise of a Stock Option in whole or in part, to have the Company withhold
shares of Common Stock having a fair market value equal to the amount required
to be withheld. Such election may not be made prior to six months following
the grant of the Stock Option, except in the event of a Section 16(a) Option
Holders's death or disability. The election may be made at the time the Stock
Option is exercised by notifying the Company of the election, specifying the
amount of such withholding and the date on which the number of shares to be
withheld is to be determined ("Tax Date"), which shall be either (i) the date
the Stock Option is exercised or (ii) a date six months after the Stock Option
was granted, if later. The number of shares of Common Stock to be withheld to
satisfy the tax obligation shall be the amount
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of such tax liability divided by the fair market value of the Common Stock on
the Tax Date (or if not a business day, on the next closest business day). If
the Tax Date is not the exercise date, the Company may issue the full number of
shares of Common Stock to which the Section 16(a) Option Holders is entitled,
and such option holder shall be obligated to tender to the Company on the Tax
Date a number of such shares necessary to satisfy the withholding obligation.
Certificates representing such shares of Common Stock shall bear a legend
describing such Section 16(a) Option Holders obligation hereunder.
Section 2.9. Effect of Exercise. The exercise of any Stock Option
shall cancel that number of related Alternate Appreciation Rights and/or
Limited Rights, if any, that is equal to the number of shares of Common Stock
purchased pursuant to said option unless otherwise agreed by the Committee in
an Award Agreement or otherwise.
ARTICLE III. INCENTIVE STOCK OPTIONS
Section 3.1. Award of Incentive Stock Options. The Committee may,
from time to time and subject to the provisions of the Plan and such other
terms and conditions as the Committee may prescribe, grant to any employee of
USA Waste Services, Inc. or a Subsidiary one or more "incentive stock options"
(intended to qualify as such under the provisions of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") ("Incentive Stock
Options") to purchase the number of shares of Common Stock allotted by the
Committee. The date an Incentive Stock Option is granted shall mean the date
selected by the Committee as of which the Committee allots a specific number of
shares to a participant pursuant to the Plan.
Section 3.2. Incentive Stock Option Agreements. The grant of an
Incentive Stock Option shall be evidenced by a written Award Agreement,
executed by the Company and the holder of an Incentive Stock Option (the
"Optionee"), stating the number of shares of Common Stock subject to the
Incentive Stock Option evidenced thereby, and in such form as the Committee may
from time to time determine.
Section 3.3. Incentive Stock Option Price. The Option Price per
share of Common Stock deliverable upon the exercise of an Incentive Stock
Option shall be at least 100% of the Fair Market Value of a share of Common
Stock on the date the Incentive Stock Option is granted; provided, however, the
Option Price per share of Common Stock deliverable upon the exercise of an
Incentive Stock Option granted to any owner of 10% or more of the total
combined voting power of all classes of stock of the Company and its
subsidiaries shall be at least 110% of the fair market value of a share of
Common Stock on the date the Incentive Stock Option is granted.
Section 3.4. Term and Exercise. Each Incentive Stock Option shall
not be exercisable prior to six months from the date of its grant unless a
shorter period is provided by the Committee or another Section of this Plan,
and may be exercised during the period established by the Committee, but not
after ten years from the date of grant
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thereof (the "Option Term"). No Incentive Stock Option shall be exercisable
after the expiration of its Option Term.
Section 3.5. Maximum Amount of Incentive Stock Option Grant. To the
extent that the aggregate Fair Market Value (determined at the time the
respective Incentive Stock Option is granted) of Common Stock with respect to
which Incentive Stock Options granted are exercisable for the first time by an
individual during any calendar year under all incentive stock option plans of
USA Waste Services, Inc. and its parent and subsidiary corporations exceeds
$100,000, such Incentive Stock Options shall be treated as Options which do not
constitute Incentive Stock Options.
Section 3.6. Death of Optionee. Unless otherwise provided in an
Award Agreement:
(a) Upon the death of the Optionee, any Incentive Stock Option
exercisable by the Optionee on the date of termination of employment may be
exercised by the Optionee's estate or by a person who acquires the right to
exercise such Incentive Stock Option by bequest or inheritance or by reason of
the death of the Optionee, provided that such exercise occurs within both the
remaining option term of the Incentive Stock Option and one year after the
Optionee's death.
(b) The provisions of this Section shall apply notwithstanding the
fact that the Optionee's employment may have terminated prior to death.
Section 3.7. Retirement or Disability. Unless otherwise provided
in an Award Agreement, upon the termination of the Optionee's employment by
reason of permanent disability or retirement (as each is determined by the
Committee), the Optionee may, within 36 months from the date of such
termination of employment, exercise any Incentive Stock Options to the extent
such Incentive Stock Options were exercisable at the date of such termination
of employment. Notwithstanding the foregoing, the tax treatment available
pursuant to Section 422 of the Code upon the exercise of an Incentive Stock
Option will not be available to an Optionee who exercises any Incentive Stock
Options more than (i) 12 months after the date of termination of employment due
to permanent disability or (ii) three months after the date of termination of
employment due to retirement.
Section 3.8. Termination for Other Reasons. Except as provided in
Sections 3.6 and 3.7 or except as otherwise determined by the Committee, all
Incentive Stock Options shall terminate three months after the date of the
termination of the Optionee's employment and shall be exercisable during such
period only to the extent exercisable on the date of termination of employment.
Section 3.9. Applicability of Stock Options Sections. Sections 2.5,
Manner of Payment; 2.6, Delivery of Shares; 2.8, Tax Elections and 2.9, Effect
of Exercise,
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applicable to Stock Options, shall apply equally to Incentive Stock Options.
Such Sections are incorporated by reference in this Article III as though fully
set forth herein.
ARTICLE IV. RELOAD OPTIONS
Section 4.1. Authorization of Reload Options. Concurrently with or
subsequent to the award of Stock Options to any Participant in the Plan, the
Committee may authorize reload options ("Reload Options") to purchase shares of
Common Stock. The number of Reload Options shall equal (i) the number of
shares of Common Stock used to pay the exercise price of the underlying Stock
Options or Incentive Stock Options and (ii) to the extent authorized by the
Committee, the number of shares of Common Stock withheld by the Company in
payment of the exercise price underlying the Stock Option or Incentive Stock
Option or used to satisfy any tax withholding requirement incident to the
exercise of the underlying Stock Options or Incentive Stock Options. The grant
of a Reload Option will become effective upon the exercise of underlying Stock
Options, Incentive Stock Options, or Reload Options through the use of shares
of Common Stock held by the Optionee or the withholding of shares by the
Company in payment of the exercise price of the underlying Stock Option or
Incentive Stock Option held by the Optionee. Notwithstanding the fact that the
underlying option may be an Incentive Stock Option, a Reload Option is not
intended to qualify as an "incentive stock option" under Section 422 of the
Code.
Section 4.2. Reload Option Amendment. Each Award Agreement shall
state whether the Committee has authorized Reload Options with respect to the
Stock Options and/or Incentive Stock Options covered by such Award Agreement.
Upon the exercise of an underlying Stock Option, Incentive Stock Option, or
other Reload Option, the Reload Option will be evidenced by an amendment to the
underlying Award Agreement in such form as the Committee shall approve.
Section 4.3. Reload Option Price. The Option Price per share of
Common Stock deliverable upon the exercise of a Reload Option shall be the
Fair Market Value of a share of Common Stock on the date the grant of the
Reload Option becomes effective.
Section 4.4. Term and Exercise. Each Reload Option is fully
exercisable six months from the effective date of grant. The term of each
Reload Option shall be equal to the remaining option term of the underlying
Stock Option and/or Incentive Stock Option.
Section 4.5. Termination of Employment. Unless otherwise determined
by the Committee in an Award Agreement or otherwise, no additional Reload
Options shall be granted to Optionees when Stock Options, Incentive Stock
Options, and/or Reload Options are exercised pursuant to the terms of this Plan
following termination of the Optionee's employment.
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Section 4.6. Applicability of Stock Options Sections. Sections 2.5,
Manner of Payment; 2.6 Delivery of Shares; 2.7, Death, Retirement and
Termination of Employment of Optionee; 2.8, Tax Elections; and 2.9, Effect of
Exercise, applicable to Stock Options, shall apply equally to Reload Options.
Such Sections are incorporated by reference in this Article IV as though fully
set forth herein.
ARTICLE V. ALTERNATE APPRECIATION RIGHTS
Section 5.1. Award of Alternate Appreciation Rights. Concurrently
with or subsequent to the award of any Stock Option, Incentive Stock Option, or
Reload Option to purchase one or more shares of Common Stock, the Committee
may, subject to the provisions of the Plan and such other terms and conditions
as the Committee may prescribe, award to the Optionee with respect to each
share of Common Stock covered by an Option, a related alternate appreciation
right permitting the Optionee to be paid the appreciation on the Option in lieu
of exercising the Option ("Alternate Appreciation Right").
Section 5.2. Alternate Appreciation Rights Agreement. Alternate
Appreciation Rights shall be evidenced by written Award Agreements in such form
as the Committee may from time to time determine.
Section 5.3. Exercise. An Optionee who has been granted Alternate
Appreciation Rights may, from time to time, in lieu of the exercise of an equal
number of Options, elect to exercise one or more Alternate Appreciation Rights
and thereby become entitled to receive from the Company payment in Common Stock
of the number of shares determined pursuant to Section 5.4 and 5.5. Alternate
Appreciation Rights shall be exercisable only to the same extent and subject to
the same conditions as the Options related thereto are exercisable, as provided
in this Plan. The Committee may, in its discretion, prescribe additional
conditions to the exercise of any Alternate Appreciation Rights.
Section 5.4. Amount of Payment. The amount of payment to which an
Optionee shall be entitled upon the exercise of each Alternate Appreciation
Right shall be equal to 100% of the amount, if any, by which the Fair Market
Value of a share of Common Stock on the exercise date exceeds the Option Price
per share on the Option related to such Alternate Appreciation Right. A
Section 16(a) Option Holder may elect to withhold shares of Common Stock issued
under this Section to pay taxes as described in Section 2.8.
Section 5.5. Form of Payment. The number of shares to be paid shall
be determined by dividing the amount of payment determined pursuant to Section
5.4 by the Fair Market Value of a share of Common Stock on the exercise date
of such Alternate Appreciation Rights. As soon as practicable after exercise,
the Company shall deliver to the Optionee a certificate or certificates for
such shares of Common Stock.
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Section 5.6. Effect of Exercise. Unless otherwise provided in an
Award Agreement or agreed to by the Committee, the exercise of any Alternate
Appreciation Rights shall cancel an equal number of Stock Options, Incentive
Stock Options, Reload Options, and Limited Rights, if any, related to said
Alternate Appreciation Rights.
Section 5.7. Termination of Employment, Retirement, Death or
Disability. Unless otherwise provided in an Award Agreement or agreed to by
the Committee:
(a) Upon termination of the Optionee's employment
(including employment as a director of the Company after an Optionee
terminates employment as an employee of the Company) by reason of
permanent disability or retirement (as each is determined by the
Committee) or consulting, the Optionee may, within six months from the
date of such termination, exercise any Alternate Appreciation Rights
to the extent such Alternate Appreciation Rights are exercisable
during such six-month period.
(b) Except as provided in Section 5.7(a), all Alternate
Appreciation Rights shall terminate three months after the date of
the termination of the Optionee's employment, consulting or upon the
death of the Optionee.
ARTICLE VI. LIMITED RIGHTS
Section 6.1. Award of Limited Rights. Concurrently with or
subsequent to the award of any Stock Option, Incentive Stock Option, Reload
Option, or Alternate Appreciation Right, the Committee may, subject to the
provisions of the Plan and such other terms and conditions as the Committee may
prescribe, award to the Optionee with respect to each share of Common Stock
covered by an Option, a related limited right permitting the Optionee, during a
specified limited time period, to be paid the appreciation on the Option in
lieu of exercising the Option ("Limited Right").
Section 6.2. Limited Rights Agreement. Limited Rights granted under
the Plan shall be evidenced by written Award Agreements in such form as the
Committee may from time to time determine.
Section 6.3. Exercise Period. Limited Rights are exercisable in
full for a period of seven months following the date of a Change in Control of
USA Waste Services, Inc. (the "Exercise Period"); provided, however, that
Limited Rights may not be exercised under any circumstances until the
expiration of the six-month period following the date of grant.
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Section 6.4. Amount of Payment. The amount of payment to which an
Optionee shall be entitled upon the exercise of each Limited Right shall be
equal to 100% of the amount, if any, which is equal to the difference between
the Option Price per share of Common Stock covered by the related Option and
the Market Price of a share of such Common Stock. "Market Price" is defined to
be the greater of (i) the highest price per share of the Company's Common Stock
paid in connection with any Change in Control and (ii) the highest price per
share of the Company's Common Stock reflected in the consolidated trading
tables of The Wall Street Journal (presently the New York Stock Exchange -
Composite Transactions) during the 60-day period prior to the Change in
Control.
Section 6.5. Form of Payment. Payment of the amount to which an
Optionee is entitled upon the exercise of Limited Rights, as determined
pursuant to Section 6.4, shall be made solely in cash.
Section 6.6. Effect of Exercise. If Limited Rights are exercised,
the Stock Options, Incentive Stock Options, Reload Options, and Alternate
Appreciation Rights, if any, related to such Limited Rights shall cease to be
exercisable to the extent of the number of shares with respect to which the
Limited Rights were exercised. Upon the exercise or termination of the Stock
Options, Incentive Stock Options, Reload Options, and Alternate Appreciation
Rights, if any, related to such Limited Rights, the Limited Rights granted with
respect thereto terminate to the extent of the number of shares as to which the
related options and Alternate Appreciation Rights were exercised or terminated.
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Section 6.7. Retirement or Disability. Upon termination of the
Optionee's employment (including employment as a director of the Company after
an Optionee terminates employment as an employee of the Company) by reason of
permanent disability or retirement (as each is determined by the Committee) or
consulting, the Optionee may, within six months from the date of such
termination, exercise any Limited Right to the extent such Limited Right is
exercisable during such six-month period.
Section 6.8. Death of Optionee or Termination for Other Reasons.
Except as provided in Sections 6.7 and 6.9, or except as otherwise determined
by the Committee, all Limited Rights granted under the Plan shall terminate
upon the termination of the Optionee's employment, consulting or upon the death
of the Optionee.
Section 6.9. Termination Related to a Change in Control. The
requirement that an Optionee be terminated by reason of retirement or permanent
disability or be employed by the Company at the time of exercise pursuant to
Sections 6.7 and 6.8, respectively, is waived during the Exercise Period as to
an Optionee who (i) was employed by the Company at the time of the Change in
Control and (ii) is subsequently terminated by the Company other than for just
cause or who voluntarily terminates if such termination was the result of a
good faith determination by the Optionee that as a result of the Change in
Control he is unable to effectively discharge his present duties or the duties
of the position which he occupied just prior to the Change in Control. As used
herein "just cause" shall mean willful misconduct or dishonesty or conviction
of or failure to contest prosecution for a felony, or excessive absenteeism
unrelated to illness.
ARTICLE VII. SUBSTITUTION AWARDS
Section 7.1. Awards may be granted under the Plan from time to time
in substitution for stock options held by individuals employed by corporations
who become employees of the Company as a result of a merger or consolidation of
the employing corporation with the Company, or the acquisition by the Company
of the assets of the employing corporation, or the acquisition by the Company
of stock of the employing corporation with the result that such employing
corporation becomes a Subsidiary or an Affiliate.
ARTICLE VIII. BONUS STOCK AWARDS
Section 8.1. Award of Bonus Stock. The Committee may from time to
time, and subject to the provisions of this Plan and such other terms and
conditions as the Committee may prescribe, grant to any Participant in the
Plan shares of Common Stock ("Stock Bonus").
Section 8.2. Stock Bonus Agreements. The grant of a Stock Bonus
shall be evidenced by a written Award Agreement, executed by the Company and
the recipient of a Stock Bonus, in such form as the Committee may from time to
time determine,
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providing for the terms of such grant, including any vesting schedule,
restrictions on the transfer of such Common Stock or other matters.
ARTICLE IX. MISCELLANEOUS
Section 9.1. General Restriction. Each Award under the Plan shall
be subject to the requirement that, if at any time the Committee shall
determine that (i) the listing, registration, or qualification of the shares of
Common Stock subject to or related thereto upon any securities exchange or
under any state or federal law, or (ii) the consent or approval of any
government regulatory body, or (iii) an agreement by the grantee of an Award
with respect to the disposition of shares of Common Stock, is necessary or
desirable as a condition of, or in connection with, the granting of such Award
or the issue or purchase of shares of Common Stock thereunder, such Award may
not be consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
Section 9.2. Non-Assignability. Except as provided below, no Award
under the Plan shall be assignable or transferable by the recipient thereof,
except by will or by the laws of descent and distribution, and during the life
of the recipient, such Award shall be exercisable only by such person or by
such person's guardian or legal representative.
Notwithstanding the foregoing, as provided by the Committee in an
Award Agreement, Awards (other than Incentive Stock Options) may be transferred
(in whole or in part in a form approved by the Company) by a Participant to (i)
the spouse, children or grandchildren of the Participant ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of the Immediate
Family Members and, if applicable, the Participant, or (iii) a partnership in
which such Immediate Family Members and, if applicable, the Participant are the
only partners. Following any such transfer, the Award shall continue to be
subject to the same terms and conditions as were applicable to the Award
immediately prior to the transfer. A transferee of an Award may not transfer
the Award except to an Immediate Family Member or the Participant.
Section 9.3. Withholding Taxes. Whenever the Company proposes or is
required to issue or transfer shares of Common Stock under the Plan, the
Company shall have the right to require the grantee to remit to the Company an
amount sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery of any certificates for such shares.
Alternatively, the Company may issue or transfer such shares of the Company net
of the number of shares sufficient to satisfy the withholding tax requirements.
For withholding tax purposes, the shares of Common Stock shall be valued on the
date the withholding obligation is incurred.
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Section 9.4. Right to Terminate Employment. Nothing in the Plan or
in any agreement entered into pursuant to the Plan shall confer upon any
Participant the right to continue in the employment of, or consulting to, the
Company or effect any right which the Company may have to terminate the
employment or consulting relationship of such Participant.
Section 9.5. Non-Uniform Determination. The Committee's
determinations under the Plan (including without limitation determinations of
the persons to receive Awards, the form, amount and timing of such Awards, the
terms and provisions of such Awards and the agreements evidencing same) need
not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, awards under the Plan, whether or not such persons are
similarly situated.
Section 9.6. Rights as a Shareholder. The recipient of any Award
under the Plan shall have no right as a shareholder with respect thereto unless
and until certificates for shares of Common Stock are issued to him.
Section 9.7. Definitions. In this Plan the following definitions
shall apply:
(a) "Subsidiary" means any corporation of which, at the
time more than 50% of the shares entitled to vote generally in an
election of directors are owned directly or indirectly by the USA
Waste Services, Inc. or any subsidiary thereof.
(b) "Affiliate" means any person or entity which
directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with USA Waste Services,
Inc.
(c) "Fair Market Value" as of any date and in respect or
any share of Common Stock means the lowest reported trading price on
such date or on the next business day, if such date is not a business
day, of a share of Common Stock reflected in the consolidated trading
tables of The Wall Street Journal (presently the New York Stock
Exchange - Composite Transactions) or any other publication selected
by the Committee, provided that, if shares of Common Stock shall not
have been quoted on the New York Stock Exchange for more than 10 days
immediately preceding such date or if deemed appropriate by the
Committee for any other reason, the fair market value of shares of
Common Stock shall be as determined by the Committee in such other
manner as it may deem appropriate. In no event shall the Fair Market
Value of any share of Common Stock be less than its par value.
(d) "Option" means Stock Option, Incentive Stock Option,
or Reload Option.
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(e) "Option Price" means the purchase price per share of
the Common Stock deliverable upon the exercise of a Stock Option,
Incentive Stock Option, or Reload Option.
(f) "Change in Control" means the occurrence, at any time
during the specified term of an Option granted under the Plan, of any of
the following events:
(i) The Company is merged or consolidated or
reorganized into or with another corporation or other legal
person (an "Acquiror") and as a result of such merger,
consolidation or reorganization less than 75% of the outstanding
voting securities or other capital interests of the surviving,
resulting or acquiring corporation or other legal person are
owned in the aggregate by the stockholders of the Company,
directly or indirectly, immediately prior to such merger,
consolidation or reorganization, other than the Acquiror or any
corporation or other legal person controlling, controlled by or
under common control with the Acquiror;
(ii) The Company sells all or substantially all of its
business and/or assets to an Acquiror, of which less than 75% of
the outstanding voting securities or other capital interests are
owned in the aggregate by the stockholders of the Company,
directly or indirectly, immediately prior to such sale, other
than any corporation or other legal person controlling,
controlled by or under common control with the Acquiror;
(iii) There is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report), each as
promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act:), disclosing that any person or
group (as the terms "person" and "group" are used in Section
13(d)(3) or Section 14(d)(2) of the Exchange Act and the rules
and regulations promulgated thereunder) has become the
beneficial owner (as the term "beneficial owner" is defined
under Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act) of 20% or more of the issued and
outstanding shares of voting securities of the Company; or
(iv) During any period of two consecutive years,
individuals who at the beginning of any such period constitute
the directors of the Company cease for any reason to constitute
at least a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each
new director of the Company was approved by a vote of at least
two-thirds of such directors of the Company then still in office
who were directors of the Company at the beginning of any such
period.
Section 9.8. Leaves of Absence. The Committee shall be entitled to
make such rules, regulations, and determinations as it deems appropriate under
the Plan in respect of any leave of absence taken by the recipient of any Award.
Without limiting the generality of the foregoing, the Committee shall be
entitled to determine (i) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of the Plan and (ii)
the impact, if any, of any such leave of absence on Awards under the Plan
theretofore made to any recipient who takes such leave of absence.
Section 9.9. Newly Eligible Employees. The Committee shall be
entitled to make such rules, regulations, determinations and awards as it deems
appropriate in respect of any employee who becomes eligible to participate in
the Plan or any portion thereof after the commencement of an award or incentive
period.
Section 9.10. Adjustments. In any event of any change in the
outstanding Common Stock by reason of a stock dividend or distributions,
recapitalization, merger, consolidation, split-up, combination, exchange of
shares or the like, the Committee may appropriately adjust the number of shares
of Common Stock that may be issued under the Plan, the number of shares of
Common Stock subject to Options theretofore granted under the Plan, and any and
all other matters deemed appropriate by the Committee.
Section 9.11. Changes in the Company's Capital Structure.
(a) The existence of outstanding Options, Alternative
Appreciation Rights, or Limited Rights shall not affect in any way the
right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company's capital structure or its business, or any
merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part
of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
(b) If, while there are outstanding Options, USA Waste
Services, Inc. shall effect a subdivision or consolidation of shares
or other increase or reduction of the number of shares of the Common
Stock outstanding without receiving compensation therefor in money,
services or property, then (i) in the event of an increase in the
number of such shares outstanding, the number of shares of Common
Stock then subject to Options hereunder shall be proportionately
increased; and (ii) in the event of a decrease in the number of such
shares
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outstanding the number of shares then available for Option hereunder
shall be proportionately decreased.
(c) After a merger of one or more corporations into USA
Waste Services, Inc., or after a consolidation of USA Waste Services,
Inc. and one or more corporations in which USA Waste Services, Inc.
shall be the surviving corporation, each holder of an outstanding
Option shall, at no additional cost, be entitled upon exercise of such
Option to receive (subject to any required action by stockholders) in
lieu of the number of shares as to which such Option shall then be so
exercisable, the number and class of stock or other securities to
which such holder would have been entitled to receive pursuant to the
terms of the agreement of merger or consolidation if, immediately
prior to such merger or consolidation, such holder had been the holder
of record of a number of shares of USA Waste Services, Inc. equal to
the number of shares as to which such Option had been exercisable.
(d) If USA Waste Services, Inc. is merged into or
consolidated with another corporation or other entity under
circumstances where USA Waste Services, Inc. is not the surviving
corporation, or if USA Waste Services, Inc. sells or otherwise
disposes of substantially all of its assets to another corporation or
other entity while unexercised Options remain outstanding, then the
Committee may direct that any of the following shall occur:
(i) If the successor entity is willing to assume
the obligation to deliver shares of stock or securities after
the effective date of the merger, consolidation or sale of
assets, as the case may be, each holder of an outstanding
Option shall be entitled to receive, upon the exercise of such
Option and payment of the Option Price, in lieu of shares of
Common Stock, such shares of stock or other securities as the
holder of such Option would have been entitled to receive had
such Option been exercised immediately prior to the
consummation of such merger, consolidation or sale, and any
related Alternate Appreciation Right and Limited Right
associated with such Option shall apply as nearly as
practicable to the shares of stock or other securities
purchasable upon exercise of the Option following such merger,
consolidation or sale of assets.
(ii) The Committee may waive any limitations set
forth in or imposed pursuant to this Plan or any Award
Agreement with respect to such Option and any related
Alternate Appreciation Right or Limited Option such that such
Option and related Alternate Appreciation Right and Limited
Right shall become exercisable prior to the record or
effective date of such merger, consolidation or sale of
assets.
(iii) The Committee may cancel all outstanding
Options and Alternate Appreciation Rights (but not Limited
Rights) as of the effective
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date of any such merger, consolidation, or sale of assets
provided that prior notice of such cancellation shall be given
to each holder of an Option at least 30 days prior to the
effective date of such merger, consolidation, or sale of
assets, and each holder of an Option shall have the right to
exercise such Option and any related Alternate Appreciation
Right in full during a period of not less than 30 days prior
to the effective date of such merger, consolidation, or sale
of assets. No action taken by the Committee under this
subsection shall have the effect of terminating, and nothing
in this subsection shall permit the Committee to terminate,
any Limited Right held by an Optionee.
(c) Except as herein provided, the issuance by USA Waste
Services, Inc. of Common Stock or any other shares of capital stock or
services convertible into shares of capital stock, for cash property,
labor done or other consideration, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number or price
of shares of Common Stock then subject to outstanding Options.
Section 9.12. Change in Control. Any Award granted under the Plan
prior to the date of a Change in Control shall be immediately exercisable in
full on such date, without regard to any times of exercise established under
its Award Agreement; provided, however, in no event shall Stock Options or
Incentive Stock Options be exercisable after the tenth anniversary of their
respective grant dates.
Section 9.13. Amendment of the Plan.
(a) The Committees may without further action by the
shareholders and without receiving further consideration from the
Participants, amend this Plan or condition or modify Awards under this
Plan in response to changes in securities or other laws or rules,
regulations or regulatory interpretations thereof applicable to this
Plan or to comply with stock exchange rules or requirements.
(b) The Committee may at any time and from time to time
terminate or modify or amend the Plan in any respect, except that
without shareholder approval the Committee may not (i) increase the
maximum number of shares of Common Stock which may be issued under the
Plan (other than increases pursuant to Section 9.10), (ii) extend the
period during which any Award may be granted or exercised, or (iii)
extend the term of the Plan. The termination or any modification or
amendment of the Plan, except as provided in subsection (a), shall
not, without the consent of a Participant, affect his or her rights
under an Award previously granted to him or her.
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