Exhibit 10.4
WASTE INDUSTRIES, INC.
EMPLOYEE NON-QUALIFIED STOCK OPTION PLAN
The Waste Industries, Inc. Employee Non-Qualified Stock Option Plan
(the "Plan") is intended to provide a method whereby key executive employees of
Waste Industries, Inc. (the "Company"), who are largely responsible for the
management, growth, and success of the Company, may be offered incentives in
addition to those of current compensation, and may be encouraged by personal
involvement in the fortunes of the Company to continue in its service, thereby
advancing the interests of the Company and its stockholders. To such end, the
Company shall from time to time grant to such employees selected in the manner
herein provided options to purchase common stock of the Company on the terms and
conditions hereafter set forth.
ARTICLE I
Administration of the Plan
The Plan shall be administered by the Board of Directors of the
Company. The Board of Directors are authorized to interpret the Plan, to adopt
such rules and regulations for carrying out the Plan as it may deem advisable,
and to make all other determinations necessary or advisable for the
administration of the Plan. The Board's interpretations, determinations, and
decisions relating to the Plan shall be final, conclusive, and binding upon the
Company. The Plan shall be administered in a manner so that options granted
thereunder will be "non-qualified stock options" described in Treas. Reg. ss.
1.83-7, to which Section 421 of the Internal Revenue Code of 1986, as now in
effect or hereafter amended, does not apply.
ARTICLE II
Stock Subject to the Plan
(1) Subject to the provisions of paragraph (3) of this Article II, the
number of shares of common stock that may be the subject of options granted
under the Plan shall be determined from time to time by the Board of Directors
of the Company, but shall not exceed in the aggregate One Million Nine Hundred
Forty-Two Thousand Nine Hundred Seventy Two (1,942,972) shares.
(2) Shares issued to employees who have exercised an option granted
under the Plan shall be subject to such terms, conditions, and restrictions as
the Board of Directors in its discretion may provide at the time of the grant of
the respective option.
(3) If the issued and outstanding shares of the common stock of the
Company are hereafter increased or decreased or exchanged for a different number
or kind of shares or other securities of the Company or of another corporation,
by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, or dividend payable in
corporate shares, the Board of Directors of the Company shall make appropriate
adjustment in the number and kind of shares with respect to which options
outstanding under the Plan shall be exercisable, to the end that each optionee's
proportionate potential interest in the common stock of the Company shall be
maintained as before the occurrence of such event, and appropriate adjustment
shall be made by the Board in the number and kind of shares that are the subject
of options thereafter granted under the Plan. Such adjustment with respect to
outstanding options shall be made without change in the total price provided in
the respective option, but with a corresponding adjustment in the price for each
share or other unit of any security covered by the
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option. No fractional shares shall be issued under the Plan on account of any
adjustment specified above. In lieu of fractional shares, the Board shall make
such adjustment as it deems fair and equitable.
ARTICLE III
Issuance of Stock Under the Plan
Upon the exercise of an option granted under the Plan and the payment
of the purchase price required therein, the Company shall cause a certificate or
certificates for the shares of the common stock subject thereto to be issued in
the name of the optionee and delivered to him.
ARTICLE IV
Eligibility of Employees
(1) Stock options may be granted under the Plan only to persons who are
key executive employees of the Company. For purposes of the Plan, the term "key
executive employees" shall be defined as the officers of the Company and those
employees of the Company deemed by the Board of Directors to be responsible for
the management, growth, and success of the Company. Stock options may be granted
to the same employee under the Plan on more than one occasion.
(2) Subject to the terms, provisions, and conditions of the Plan, the
Board of Directors of the Company shall have sole authority to select the
employees to whom stock options shall be granted thereunder, to determine the
number of shares of common stock subject to such options, to determine the price
to be paid by the optionees for the shares of common stock subject to such
options, and to determine the time or times when stock options shall be granted.
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ARTICLE V
Restriction on Sale or Disposition of Options
Options granted under the Plan shall not be sold, transferred, pledged,
hypothecated, or otherwise disposed of, voluntarily or involuntarily, by
operation of law or otherwise, by an optionee.
ARTICLE VI
Successors and Assigns
The provisions of the Plan shall be binding upon each optionee granted
an option thereunder and his successors and assigns, including, without
limitation, the estate of any such optionee and the executors, administrators,
and trustees of such estate, and any receiver, trustee in bankruptcy, or
representative of the creditors of such optionee.
ARTICLE VII
Terms and Conditions of Options
Each option granted under the Plan shall be evidenced by a written
Stock Option Agreement in a form consistent with the Plan, which shall include
the following terms and provisions:
(1) Option price. The price to be paid by the respective optionee for
the shares of common stock that may be purchased under such Stock Option
Agreement shall be as provided therein, which price shall be established on a
case by case basis by the Board of Directors of the Company at the time of the
grant of the respective option.
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(2) Method of exercise. The option shall be exercised by the
transmittal of written notice thereof to the Company at its principal place of
business, and the tender therewith of the optionee's check in payment of the
purchase price provided therein. Upon receipt of such notice and negotiation of
said check, the Company shall make immediate delivery of a certificate or
certificates representing the shares of common stock purchased upon exercise of
the option, provided that if any law or regulation requires the Company to take
any action with respect to the shares specified in such notice before the
issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to take such action.
(3) Option term. Subject to the provisions of Article VIII hereafter,
the option shall be exercisable only during the period provided therein, which
shall be established on a case by case basis by the Board of Directors of the
Company at the time of the grant of the respective option.
(4) Exercise of option. The option may be exercised only in such manner
that the optionee acquires all shares of common stock subject thereto in a
single transaction.
(5) Conditions of exercise. The Board of Directors shall establish the
conditions, if any, for the exercise of each option granted hereunder.
(6) Nonassignability of Option Rights. No option shall be assignable or
transferable by the optionee, and each option shall be exercisable only by the
optionee named therein.
(7) Effect of termination of employment or death. If an optionee ceases
to be an employee of the Company, Waste Industries South, Inc., Waste Industries
West, Inc., Waste Enterprises, Inc., or KABCO, Inc., or of any parent or
subsidiary of such corporations, for any
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reason whatsoever, including, but not limited to, death, retirement,
resignation, disability, or termination of employment with or without cause, any
unexercised option granted to him under the Plan that is otherwise exercisable
shall terminate.
(8) Restriction on issuance of shares. The Company shall not be
obligated to sell or issue shares pursuant to an option unless such shares are
effectively registered or exempt from registration under the Securities Act of
1933, as amended (the "Act"). Upon exercise of an option granted under the Plan,
the respective optionee shall execute an investment letter warranting that he is
acquiring such shares (and any shares or securities that may be issued to him by
reason of his ownership of such shares) for investment only and not with a view
to a "distribution" as such term is used in the Act, and that he will not make a
sale or disposition of any such shares or securities in the absence of a
registration statement being on file with respect to such shares or securities
under the Act, without first obtaining and delivering to the Company an opinion
of counsel satisfactory to the counsel to the Company that such sale or
disposition will not constitute a violation of the Act. Appropriate notations of
such undertakings may be affixed to the certificates representing such shares or
securities. Such shares or securities shall also be subject to such other terms,
conditions, and restrictions on ownership, transfer, or disposition as shall be
established on a case by case basis by the Board of Directors at the time of the
grant of the respective option.
(9) Rights as shareholder. An optionee granted an option under the Plan
shall have no rights as a stockholder with respect to the shares subject thereto
until his exercise of the option and the issuance to him of a certificate or
certificates evidencing such shares. Except as provided in paragraph (3) of
Article II hereof, no adjustment shall be made for dividends or other rights for
which the record date precedes the date of issuance of such certificate or
certificates.
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ARTICLE VIII
Effective Date, Amendment, and Term of Plan
(1) The Plan shall be subject to approval by the stockholders of the
Company and shall be adopted by and for the Company upon the date of such
approval. Options may be granted under the Plan prior to such stockholder
approval, but these options shall be contingent upon such stockholder approval
being obtained and may not be exercised prior to that approval. The Board of
Directors of the Company may terminate the Plan at any time. However,
termination of the Plan will not affect rights and obligations under options
granted thereunder prior thereto and in effect at the time of such termination.
(2) The Board of Directors may at any time amend the Plan, provided
that without approval of the stockholders of the Company no such amendment shall
increase the total number of shares covered by the Plan or change the class of
employees eligible for the grant of options under the Plan. Further, no such
amendment shall affect the provisions of any option granted under the Plan prior
thereto.
(3) Use of proceeds. The proceeds from the sale of shares pursuant to
the exercise of options granted under the Plan shall constitute general funds of
the Company.
(4) Term of Plan. No options shall be granted under the Plan more than
ten (10) years after the date of the Plan's approval by the stockholders of the
Company.
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