CASELLA WASTE SYSTEMS, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose.
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The purpose of this 1997 Non-Employee Director Stock Option Plan (the
"Plan") of Casella Waste Systems, Inc. (the "Company") is to encourage ownership
in the Company by non-employee directors of the Company whose continued services
are considered essential to the Company's future progress and to provide them
with a further incentive to remain as directors of the Company.
2. Administration.
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The Board of Directors shall supervise and administer the Plan. Grants of
stock options under the Plan and the amount and nature of the awards to be
granted shall be automatic in accordance with Section 5. However, all questions
concerning interpretation of the Plan or any options granted under it shall be
resolved by the Board of Directors and such resolution shall be final and
binding upon all persons having an interest in the Plan. The Board of Directors
may, to the full extent permitted by or consistent with applicable laws or
regulations, delegate any or all of its powers under the Plan to a committee
appointed by the Board of Directors, and if a committee is so appointed, all
references to the Board of Directors in the Plan shall mean and relate to such
committee.
3. Participation in the Plan.
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Directors of the Company who are not employees of the Company or any
subsidiary of the Company ("non-employee directors") shall be eligible to
receive options under the Plan.
4. Stock Subject to the Plan.
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(a) The maximum number of shares of the Company's Class A Common Stock, par
value $.01 per share ("Common Stock"), which may be issued under the Plan shall
be 50,000 shares, subject to adjustment as provided in Section 7.
(b) If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares covered by the
unexercised portion of such option shall again become available for issuance
pursuant to the Plan.
(c) All options granted under the Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
(d) Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
5. Terms, Conditions and Form of Options.
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Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) Option Grant Dates. Options shall automatically be granted to all
non-employee directors as follows:
(i) each person who first becomes a non-employee director after
the closing date (the "Closing Date") of the Company's initial public offering
of Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended shall be granted an option to purchase 5,000
shares of Common Stock on the date of his or her initial election to the Board
of Directors; and
(ii) each non-employee director shall be granted an option to purchase
2,000 shares of Common Stock on the date of each Annual Meeting of Stockholders
of the Company commencing with the 1998 Annual Meeting of Stockholders (other
than a director who was initially elected to the Board of Directors at any such
Annual Meeting or, if previously, at any time after the prior year's Annual
Meeting of Stockholders), provided that he or she is serving as a director
immediately following such Annual Meeting.
(b) Option Exercise Price. The option exercise price per share for each
option granted under the Plan shall equal (i) the last reported sales price per
share of the Company's Common Stock on the Nasdaq National Market (or if the
Common Stock is traded on a national securities exchange on the date of grant,
the reported closing sales price per share of the Company's Common Stock on such
exchange) on the date of grant (or if no such price is reported on such date
such price as reported on the nearest preceding day) or (ii) if the Common Stock
is not traded on the Nasdaq National Market or a national securities exchange,
the fair market value per share on the date of grant as most recently determined
by the Board of Directors.
(c) Transferability of Options. Except as the Board may otherwise determine
or provide in an option granted under the Plan, any option granted under the
Plan to an optionee shall not be transferable by the optionee other than by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, and shall be exercisable during
the optionee's lifetime only by the optionee or the optionee's guardian or legal
representative. References to an optionee, to the extent relevant in the
context, shall include references to authorized transferees.
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(d) Vesting Period.
(i) General. Each option granted under the Plan shall become
exercisable in three equal annual installments beginning on the first
anniversary of the Option Grant Date; provided, however, that the optionee has
continued to serve as a director until at least the Annual Meeting of
Stockholders immediately preceding such vesting date.
(ii) Acceleration Upon Change in Control. Notwithstanding the
foregoing, each outstanding option granted under the Plan shall immediately
become exercisable in full in the event a Change in Control (as defined in
Section 8) of the Company occurs.
(e) Termination. Each option shall terminate, and may no longer be
exercised, on the earlier of the (i) the date ten years after the grant date of
such option or (ii) the date 90 days after the optionee ceases to serve as a
director of the Company; provided that, in the event an optionee ceases to serve
as a director due to his or her death or disability (within the meaning of
Section 22(e)(3) of the Code or any successor provision), then the exercisable
portion of the option may be exercised, within the period of 180 days following
the date the optionee ceases to serve as a director (but in no event later than
ten years after the Option Grant Date), by the optionee or by the person to whom
the option is transferred in accordance with the terms of this Plan and the
applicable option agreement, or by written notice pursuant to Section 5(g).
(f) Exercise Procedure. An option may be exercised only by written notice
to the Company at its principal office accompanied by (i) payment in cash or by
certified or bank check of the full consideration for the shares as to which
they are exercised, (ii) delivery of outstanding shares of Common Stock (which,
in the case of shares acquired from the Company, have been outstanding for at
least six months) having a fair market value on the last business day preceding
the date of exercise equal to the option exercise price, or (iii) an irrevocable
undertaking by a broker (who is a member of the New York Stock Exchange) to
deliver promptly to the Company sufficient funds to pay the exercise price or
delivery of irrevocable instructions to a broker (who is a member of the New
York Stock Exchange) to deliver promptly to the Company cash or a check
sufficient to pay the exercise price.
(g) Exercise by Representative Following Death of Director. An optionee, by
written notice to the Company, may designate one or more persons (and from time
to time change such designation), including his or her legal representative,
who, by reason of the optionee's death, shall acquire the right to exercise all
or a portion of the option. If the person or persons so designated wish to
exercise any portion of the option, they must do so within the term of the
option as provided herein. Any exercise by a representative shall be subject to
the provisions of the Plan.
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6. Limitation of Rights.
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(a) No Right to Continue as a Director. Neither the Plan, nor the granting
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain the optionee as a director for any period of time.
(b) No Stockholders' Rights for Options. An optionee shall have no rights
as a stockholder with respect to the shares covered by his or her option until
the date of the issuance to him or her of a stock certificate therefor, and no
adjustment will be made for dividends or other rights (except as provided in
Section 7) for which the record date is prior to the date such certificate is
issued.
(c) Compliance with Securities Laws. Each option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
thereunder, such option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company to
apply for or obtain such listing, registration or qualification, or to satisfy
such condition.
7. Adjustment Provisions for Mergers, Recapitalizations and Related
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Transactions.
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If, through or as a result of any merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other similar transaction, (i) the outstanding shares of Common Stock
are exchanged for a different number or kind of securities of the Company or of
another entity, or (ii) additional shares or new or different shares or other
securities of the Company or of another entity are distributed with respect to
such shares of Common Stock, the Board of Directors shall make an appropriate
and proportionate adjustment in (x) the maximum number and kind of shares
reserved for issuance under the Plan, (y) the number and kind of shares or other
securities subject to then outstanding options under the Plan, and (z) the price
for each share subject to any then outstanding options under the Plan (without
changing the aggregate purchase price for such options), to the end that each
option shall be exercisable, for the same aggregate exercise price, for such
securities as such optionholder would have held immediately following such event
if he had exercised such option immediately prior to such event. No fractional
shares will be issued under the Plan on account of any such adjustments.
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8. Change in Control.
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For purposes of the Plan, a "Change in Control" shall be deemed to have
occurred only if any of the following events occurs: (i) any "person", as such
term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (other than by virtue of ownership of the Company's
Class B Common Stock) representing 50% or more of the combined voting power of
the Company's then outstanding securities; (ii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; (iii) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
or (iv) individuals who, on the date on which the Plan was adopted by the Board
of Directors, constituted the Board of Directors of the Company, together with
any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who were directors on the date on
which the Plan was adopted by the Board of Directors or whose election or
nomination was previously so approved (except for any individual whose election
as a director occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board of Directors), cease for any reason to constitute at least a
majority of the Board of Directors.
9. Termination and Amendment of the Plan.
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The Board of Directors may suspend or terminate the Plan or amend it in any
respect whatsoever.
10. Notice.
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Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the Treasurer of the Company and shall become
effective when it is received.
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11. Governing Law.
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The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the internal laws of the State of Delaware (without regard
to any applicable conflicts of laws or principles).
12. Effective Date.
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The Plan shall become effective on the Closing Date.
Adopted by the Board of Directors on
July 31, 1997.
Approved by the stockholders as of
September __, 1997.
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