SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[x] Preliminary proxy statement [ ] Confidential, for Use of
the Commission Only
[ ] Definitive proxy statement
[ ] Definitive additional materials (as permitted by Rule
14a-6(e)(2))
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ERD WASTE CORP.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
[LETTERHEAD OF ERD WASTE CORP.]
September ___, 1997
Dear ERD Stockholder:
The Board of Directors of ERD Waste Corp. (the "Company") has proposed
to amend the Company's Certificate of Incorporation to increase the total number
of shares of the Company's Common Stock, par value $.001 ("Common Stock"), which
the Company shall have the authority to issue, from 15,000,000 to 30,000,000.
The Board has also proposed to amend the Company's 1994 Stock Option Plan (the
"Plan") to increase the number of shares of Common Stock available upon exercise
of options under the Plan from 500,000 to 1,300,000, to allow for administration
of the Plan by the Board of Directors and to give the Board of Directors greater
flexibility in substituting options under the Plan for options issued by an
acquired company. The Board, which has adopted the proposals, will be authorized
to implement them only if a majority of the holders of the outstanding shares of
common stock of the Company consent. Because this solicitation of written
consents is in lieu of a meeting of stockholders, there will be no meeting of
stockholders held in connection with the matters subject to this consent
solicitation.
The proposal to increase the authorized number of shares of common
stock has been made in order to enable the Company to have sufficient shares of
Common Stock available for issuance in connection with a private placement of up
to 10,000,000 shares of Common Stock for an aggregate purchase price of up to
$5,000,000.
The proposal to increase the number of shares available under the Plan
has been made in order to enable the Company to grant options that have been
promised to certain key employees and to have sufficient option shares available
to attract and retain qualified personnel. The proposal to allow the Board of
Directors to administer the Plan will bring the Plan into compliance with
certain changes to Rule 16b-3, promulgated by the Securities and Exchange
Commission. Lastly, the proposal allowing the Board to grant options in
substitution for options held by employees of an acquired company will clarify
to make clear that the terms of substitute options granted to employees of an
acquired company need not be identical to the terms of options they replace.
The above proposals are more fully described in the enclosed Consent
Solicitation Statement.
This consent solicitation is being sent to all stockholders of record
at the close of business on September 12, 1997. Only stockholders of record on
September 12, 1997 will be entitled to submit a written Consent Form.
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<PAGE>
The ability of the Company to successfully complete the contemplated
private placement is dependent upon it obtaining sufficient consents from the
Company's stockholders NOT LATER THAN SEPTEMBER 30, 1997. Accordingly, please
mark the box on the enclosed Written Consent Form to indicate how your shares
should be counted and return the marked form in the enclosed postage-paid
envelope.
Sincerely,
ERD WASTE CORP.
By /s/ Joseph J. Wisneski
----------------------
Joseph J. Wisneski
President
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<PAGE>
ERD WASTE CORP.
937 East Hazelwood Avenue
Rahway, New Jersey 07065
CONSENT SOLICITATION STATEMENT
SEPTEMBER ___, 1997
INFORMATION REGARDING CONSENTS
This consent solicitation statement and the accompanying written
consent form (the "Written Consent Form") are furnished in connection with the
solicitation of stockholder consents (the "Consent Solicitation") by the Board
of Directors of ERD Waste Corp. (the "Company"), in lieu of a meeting of
stockholders, in connection with (i) the proposed amendment of the Company's
Certificate of Incorporation (the "Certificate of Incorporation") and (ii) the
proposed amendment to the Company's 1994 Stock Option Plan (the "Plan"). Such
amendments are more fully described in the proposals set forth below. Only
stockholders of record on the books of the Company at the close of business on
September 12, 1997 (the "Record Date") will be entitled to submit a consent. It
is anticipated that these consent solicitation materials will be mailed to
stockholders on or about September 19, 1997.
The Company is incorporated in Delaware and is therefore subject to the
Delaware General Corporation Law (the "DGCL"). Section 228 of the DGCL permits
the stockholders of the Company to take action without a meeting upon obtaining
consents of the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted. The
DGCL also provides that the minimum necessary consents must be received by the
Company within 60 days of the date of the first such written consent.
Accordingly, if, within 60 days following its receipt of the first written
consent approving a proposed amendment, the Company receives consents from the
holders of a majority of the issued and outstanding shares of Common Stock, par
value $.001 (the "Common Stock"), and those consents have not been revoked, the
stockholders will be deemed to have approved such proposed amendment.
All written consents received by the Company, regardless of when dated,
will expire unless valid, written, unrevoked consents constituting the necessary
vote for approval of a proposed amendment are received by the Company within 60
days of the date of the first such consent.
ALTHOUGH THE DGCL PERMITS UP TO 60 DAYS FROM THE DATE OF RECEIPT OF THE
FIRST CONSENT TO RECEIVE SUFFICIENT CONSENTS, IT IS IMPERATIVE THAT THE COMPANY
RECEIVE SUFFICIENT CONSENTS NO LATER THAN SEPTEMBER 30, 1997 SO AS TO ENABLE THE
COMPANY TO SUCCESSFULLY COMPLETE ITS PRIVATE PLACEMENT OF SHARES OF COMMON STOCK
DESCRIBED BELOW (SEE PURPOSE AND EFFECT OF THE AMENDMENT OF THE CERTIFICATE OF
INCORPORATION).
As required by the DGCL, if a proposed amendment is approved by the
stockholders, the Company will promptly notify the stockholders from whom
consents have not been received.
A consent executed by a stockholder may be revoked at any time provided
that a written, dated revocation is executed and delivered to the Company on or
prior to the time at which the Company receives written consents sufficient to
approve the proposed amendment. The Company intends to amend the Certificate of
Incorporation and the Plan as soon as practicable following the receipt of the
necessary consents. A revocation may be in any written form validly signed by
the stockholder as long as it clearly states that the consent previously given
is no longer effective. The revocation should be addressed to ERD Waste Corp.,
937 East Hazelwood Avenue, Rahway, New Jersey 07065, Attn: Joseph Wisneski.
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<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS
Holders of record of the Company's Common Stock at the close of business
on September 12, 1997 will be entitled to submit a consent in the accompanying
form. On that date, the Company had outstanding 8,004,673 shares of Common
Stock. Each share of stock is entitled to one vote in the Consent Solicitation.
Consents evidencing a majority of the shares of Common Stock issued and
outstanding and entitled to vote are required to approve the proposed amendment
being submitted to the stockholders of the Company for approval in the Consent
Solicitation. To be counted toward the majority required for approval of the
proposed amendment to the Certificate of Incorporation and the Plan, a consent
must be delivered to the Company within 60 days of the delivery of the first
dated consent.
With respect to each of the proposed amendments, any action other than
the delivery of a properly executed consent within such 60 day period, including
abstentions and broker nonvotes, will have the practical effect of voting
against the amendment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 9, 1997, the ownership
of the Common Stock by (i) each person who is known by the Company to own of
record or beneficially more than 5% of the outstanding Common Stock, based on
reports filed with the Securities and Exchange Commission (the "Commission"),
(ii) each of the Company's directors and executive officers, and (iii) all
directors and executive officers of the Company as a group. Except as otherwise
indicated, the stockholders listed in the table have sole voting and investment
power with respect to the shares indicated.
<TABLE>
<CAPTION>
Name and Address Number
of Beneficial Owner of Shares Percent Owned(1)(2)
- ------------------- --------- -------------------
<S> <C> <C>
Robert M. Rubin (3) 1,718,348(4) 21.47%
Joseph J. Wisneski (3) 1,198,583(5) 14.97%
Marc McMenamin (3) 137,475(6) 1.72%
Carl Frischling 8,000(7) *
170 East 83rd Street
New York, New York 10028
Joseph T. Jacobsen (3)(8) -- *
All directors and executive officers of the Company 3,062,406 38.26%
as a group (five persons) (5)(6)(8)
Hampshire Securities Corporation and affiliates
(including one related person) (9)
640 Fifth Avenue
New York, New York 10019 397,620 4.97%
</TABLE>
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<PAGE>
- --------------------
* Indicates beneficial ownership of less than one (1%) percent.
(1) For purposes of computing the percentage of outstanding shares of
Common Stock held by each person or group of persons named above, any
security which such person or persons have or have the right to
acquire within 60 days is deemed to be outstanding but is not deemed
to be outstanding for the purpose of computing the percentage
ownership of any other person.
(2) Does not include (i) 1,750,000 shares of Common Stock issuable upon
exercise of certain warrants to be granted to Barron Chase Securities,
Inc. and M.S. Farrell & Co., Inc. in consideration of non-exclusive
investment banking services, (ii) 1,263,859 shares of Common Stock
issuable upon exercise of Unit Warrants issued pursuant to the Unit
Offering (as defined in Footnote 7 below), (iii) 445,000 shares of
Common Stock issuable pursuant to options granted under the Plan, (iv)
600,000 shares of Common Stock issuable pursuant to options granted
under the Plan subject to stockholder approval of the proposed
amendment of the Plan, of which 200,000, have been granted to Mr.
Wisneski, 300,000 have been granted to Mr. Jacobson and 100,000 have
been granted to Mr. McMenamin, (v) 200,000 shares of Common Stock
issuable upon exercise of Unit Warrants (as defined in Footnote 7
below) issued to Kramer, Levin, Naftalis & Frankel ("Kramer Levin"),
counsel to the Company, (vi) 126,385 shares of Common Stock issuable
upon exercise of the unit purchase warrants issued to M.S. Farrell &
Co., Inc. and Network 1 Financial Securities, Inc. (together, the
"Unit Agents") and 126,385 Shares of Common Stock issuable upon
exercise of the Unit Warrants underlying such Unit Purchase Warrants,
in connection with the Unit Offering, (vii) 120,000 shares of Common
Stock issuable upon exercise of the warrants originally issued to
Hampshire Securities Corporation in connection with the initial public
offering of the Company's Common Stock and (viii) 100,000 shares of
Common Stock issuable upon exercise of certain warrants granted to the
Unit Agents in consideration for investment banking services.
(3) The address of each of the referenced individuals is c/o ERD Waste
Corp., 937 East Hazelwood Avenue, Building 2, Rahway, New Jersey
07065.
(4) Does not include 100,000 shares issued to American United Global, Inc.
("AUGI"), of which shares Mr. Rubin disclaims beneficial ownership.
Mr. Rubin is the Chief Executive Officer and President of AUGI.
(5) Does not include options issued to Mr. Wisneski to purchase 125,000
shares under the Plan, of which 93,750 are presently exercisable, and
does not include options to purchase 200,000 shares under the Plan
granted to Mr. Wisneski subject to stockholder approval of the
proposed amendment of the Plan.
(6) Does not include options issued to Mr. McMenamin to purchase 190,000
shares, in the aggregate, granted under the Plan, of which 142,000 are
presently exercisable, and does not include options to purchase
100,000 shares under the Plan granted to Mr. McMenamin subject to
stockholder approval of the proposed amendment of the Plan.
(7) Does not include (i) 200,000 shares of Common Stock and (ii) 200,000
shares of Common Stock issuable upon the exercise of warrants
comprising units issued to Kramer Levin, of which shares Mr.
Frischling disclaims beneficial ownership. Shares of Common Stock and
warrants comprising the units issued to Kramer Levin and to purchasers
under the Company's private placement of Units comprised of Common
Stock and warrants, which closed on June 6, 1997 (the "Unit Offering")
are referred to as Unit Shares and Unit Warrants, respectively.
- 6 -
<PAGE>
(8) Does not include 26,500 shares issuable upon exercise of currently
exercisable options granted to Mr. Jacobson.
(9) Does not include warrants to purchase 101,059 shares of Common Stock.
Each individual disclaims beneficial ownership of the others' shares
of Common Stock.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
for services in all capacities to the Company for the eight months ended
September 30, 1996 and the fiscal years ended January 31, 1996 and 1995 of the
Chief Executive Officer of the Company and the other executive officers of the
Company (together, the "Named Executive Officers") who received over $100,000 in
annualized compensation in the form of salary and bonus for the eight months
ended September 30, 1996 ("Fiscal 1996").
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Other
Annual Restricted Long Term All Other
Name and Period Compen- Stock Options/ Incentive Compen-
Principal Position Ended Salary(1) Bonus sation(1) Awards SARs Plan Payouts sation
- ------------------ ----- --------- ----- -------- ------- ---- ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph J. Wisneski 9-30-96 $132,692(3) $55,000(4) $40,000(5) -- -- --
President & Chief 1-31-96 150,273 -- -- -- $125,000(4) --
Executive Officer 1-31-95 58,750 -- -- -- -- --
Robert M. Rubin 9-30-96 30,769(2) -- -- -- -- -- --
Chairman of the Board 1-31-96 103,000
1-31-95 56,250 -- -- -- -- -- --
Marc McMenamin 9-30-96 67,692(6) 25,000(4) 4,000(5) -- -- -- --
Chief Operations 1-31-96 93,320 15,000(4) -- -- 100,000(6)
Officer 1-31-95 44,596 -- -- -- -- -- --
Joseph T. Jacobsen 9-30-96 (7) -- -- 2,600 60,000 -- --
Executive Vice President
</TABLE>
(1) Data shown is for the eight months ended September 30, 1996, twelve months
ended January 31, 1996, and twelve months ended January 31, 1995.
(2) Effective January 1, 1997, Mr. Rubin is compensated at $160,000 per annum
(see "-- Employment Agreements"). During Fiscal 1996 Mr. Rubin voluntarily
deferred compensation payments totalling $107,692.
(3) Effective January 1, 1997, Mr. Wisneski is compensated at $275,000 per
annum. (see "-- Employment Agreements"). During Fiscal 1996 Mr. Wisneski
voluntarily deferred compensation payments of $80,769.
(4) Bonus relates to services rendered in the prior year fiscal period.
(5) Messrs. Wisneski, McMenamin and Jacobsen receive travel and entertainment
allowances of $5,000, $500, and $650 per month, respectively.
(6) Effective January 1997, Mr. McMenamin is compensated at $130,000 per annum
(see "-- Employment Agreements"). During Fiscal 1996, Mr. McMenamin
deferred compensation payments of $13,462.
(7) Effective June 1996, Mr. Jacobsen is compensated at $125,000 per annum (See
"-- Employment Agreements").
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<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock option
grants made during Fiscal 1996 to the Named Executive Officers. These grants are
also reflected in the Summary Compensation Table. The Company has not granted
any stock appreciation rights in Fiscal 1996.
<TABLE>
<CAPTION>
Number of Securities Percent of Total Options Exercise or
Underlying Options Granted to Employees in Base Price per
Name Granted Fiscal Year Share Expiration Date
- ---- ------- ----------- ----- ---------------
<S> <C> <C> <C> <C>
Joseph T. Jacobsen 60,000 40% $1.00 May, 2002
</TABLE>
AGGREGATED FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning the number of
unexercised options at the end of Fiscal 1996 and the Fiscal 1996 year-end value
of unexercised options on an aggregated basis held by the Named Executive
Officers. The Company has not granted any stock appreciation rights and no
options were exercised in Fiscal 1996.
<TABLE>
<CAPTION>
Number of Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired on Value Options at September 30, 1996 at September 30, 1996
Names Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ----- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Joseph J. Wisneski
President and Chief
Executive Officer 0 $0 125,000 (1)(2) N/A
Robert M. Rubin
Chairman of the
Board 0 $0 0 N/A
Marc McMenamin 0 $0 190,000 (1)(3) N/A
Joseph T. Jacobsen 0 $0 60,000 (1)(4) N/A
</TABLE>
(1) None of such options were exercisable at the end of Fiscal 1996.
(2) Options to purchase 93,750 shares of Common Stock are presently
exercisable.
(3) Options to purchase 142,000 shares of common stock are presently
exercisable.
(4) Options to purchase 26,500 shares of common stock are presently
exercisable.
COMPENSATION OF DIRECTORS
Outside Directors are entitled to a $1,500 quarterly fee. No fees were
paid as of September 30, 1996. During 1996, no Director of the Company received
any compensation for his services in such capacity. Outside directors are
reimbursed for expenses incurred by them in connection with their activities on
behalf of the Company.
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<PAGE>
PROPOSAL 1:
APPROVAL OF THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
The Certificate of Incorporation of the Company, as currently in
effect, provides that the Company is authorized to issue 15,000,000 shares of
Common Stock.
On August 25, 1997, the Board of Directors adopted, subject to
stockholder approval, an amendment to the Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 15,000,000 to
30,000,000. As proposed to be amended, the first sentence of Article FOURTH of
the Certificate of Incorporation will read as follows:
The aggregate number of shares which the Corporation shall
have authority to issue is 32,000,000 consisting of:
a) 30,000,000 shares of Common Stock, $.001 par value per
share (the "Common Stock"); and
b) 2,000,000 shares of Preferred Stock, $.001 par value per
share (the "Preferred Stock").
PURPOSE OF THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION
The Company is planning a private placement of shares of its Common
Stock on a "best efforts, 5,000,000 shares minimum-or-10,000,000 shares maximum"
basis (the "Offering"). Each share will be offered at a purchase price of $0.50.
The Offering is being conducted by Barron Chase Securities, Inc. and M.S.
Farrell & Co., Inc. as placement agents.
The Offering will terminate on September 30, 1997, unless extended by
the Company and the placement agents for a period not to exceed 60 days. An
initial closing will occur upon acceptance by the Company of subscriptions for a
minimum of $2,500,000.
After deducting the estimated expenses of the Offering, the net
proceeds from the Offering are estimated to be $2,250,000 under the minimum
offering and $4,525,000 under the maximum offering. The Company anticipates that
the net proceeds will be used substantially as follows:
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<PAGE>
Minimum Maximum
Offering Offering
-------- --------
Repayment of note payable to American
United Global, Inc. (1) $ 535,000 $ 535,000
Scheduled obligations (2) $ 648,000 $ 648,000
Legal Matters (3) $ 649,000 $ 1,049,000
Purchase of remaining ENSA shares (4) $ -- $ 520,000
Facility improvements and upgrades $ -- $ 500,000
Working Capital, including past due
payments to vendors $ 418,000 $ 1,273,000
----------- -----------
$ 2,250,000 $ 4,525,000
- -----------------
(1) Robert M. Rubin, the Chairman of the Board of the Company, is the Chief
Executive Officer and President of American United Global Inc.
(2) Including leases, notes and rents.
(3) Including settlement payments to Jon Colin (there is a 10% discount if paid
before December 31, 1997) and the law firm of Pirro, Collier, Cohen and
Halpern.
(4) In May 1996, the Company acquired over 90% of the Common Stock and
substantially all of the preferred stock of Environmental Services of
America, Inc. ("ENSA") pursuant to a tender offer and a related preferred
stock purchase agreement. The Company has stated its intention to acquire
the remaining shares of ENSA. The Company has not yet purchased the
remaining outstanding stock of ENSA.
The above amounts and categories for use of the net proceeds of the
Offering represent the Company's best estimates based upon current conditions
and assumptions. Although no material changes are contemplated in the proposed
use of such net proceeds, such amounts may be adjusted by reason of business
conditions existing at the time of expenditure.
Pending the use of the net proceeds from the Offering as described
above, such funds will be invested in short-term, interest-bearing securities or
deposited in short-term, interest-bearing bank accounts.
As of September 12, 1997 there were 8,004,673 shares of Common Stock
outstanding. Of the authorized but unissued shares of Common Stock, 2,381,629
shares are reserved for issuance upon exercise of outstanding options and
warrants issued at various times by the Company. The minimum number of shares to
be sold in the Offering is 5,000,000 shares. The Company will issue warrants to
the placement agents to purchase up to 1,750,000 shares of Common Stock. If the
minimum amount of 5,000,000 shares is sold in the Offering, the number of
outstanding shares of common stock and the number of shares which must be
reserved for issuance upon exercise of outstanding warrants and options would
exceed the 15,000,000 shares of Common Stock which are currently authorized.
Thus, it is necessary to amend the Certificate of Incorporation to authorize a
sufficient number of shares to permit the issuance of common stock pursuant to
the Offering.
It is important that the stockholders authorize the amendment of the
Certificate of Incorporation to increase the number of authorized shares of
common stock from 15,000,000 to 30,000,000 as soon as possible so as not to
delay a closing and jeopardize the success of the Offering. In any event, since
the Offering will terminate on September 30, 1997, unless the Company and the
placement agents agree to extend it, the Company must receive the sufficient
number of consents by September 30, 1997.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
The affirmative vote of a majority of the votes of Common Stock
outstanding is required to approve the proposed amendment to the Certificate of
Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 1.
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<PAGE>
PROPOSAL 2:
APPROVAL OF THE AMENDMENT OF THE
COMPANY'S 1994 STOCK OPTION PLAN
The stockholders of the Company are being asked to approve the
amendment and restatement of the Plan. The proposed amendment will (i) increase
the number of shares authorized for issuance on exercise of options granted
under the Plan from 500,000 to 1,300,000, (ii) allow for administration of the
Plan by the Board of Directors and (iii) give the Board of Directors greater
flexibility in substituting options under the Plan for options issued by an
acquired company. The principal features of the Plan are summarized below. The
summary is qualified in its entirety by reference to the Plan itself. A copy of
the Plan, as proposed to be amended, is annexed hereto as Appendix C.
SUMMARY OF STOCK OPTION PLAN
On March 2, 1994, the Board of Directors adopted the Plan which was
approved by the stockholders of the Company. As adopted, the Plan provided for
the grant of "incentive stock options" within the meaning of Section 422 of the
United States Internal Revenue Code of 1986, as amended, and nonqualified
options to purchase up to 500,000 shares of Common Stock to employees of the
Company.
The Plan, as proposed to be amended, will permit (i) the grant of
options to purchase up to 1,300,000 shares of Common Stock to employees and
consultants, (ii) administration by the full Board of Directors whether or not a
committee has been appointed and (iii) the Board to specify the terms of any
option granted under this Plan or substitution for options held by employees of
original companies.
The Plan currently provides for administration by a committee of the
Board of Directors. The administration of the Plan involves, among other things,
the determination of those individuals who shall receive options, the time
period during which the options may be exercised, the number of shares of Common
Stock issuable upon the exercise of each option, and the option exercise price.
Prior to the recent amendment of Rule 16b-3 of the Exchange Act of 1934 (the
"Exchange Act"), in order for issuances of options pursuant to a stock option
plan to qualify for exemption from restrictions on purchases and sales of
securities and reporting requirements under Section 16 of the Exchange Act,
stock option plans had to be administered by "disinterested members" (as defined
by Rule 16b-3 under the Exchange Act of 1934) of the Board of Directors. Rule
16b-3 now permits administration by the Board of Directors in addition to
administration by a committee of "non-employee directors" (as defined by amended
Rule 16b-3).
The exercise price per share of Common Stock is determined by the
Committee but for an incentive stock option may not be less than the fair market
value per share of Common Stock on the date the option is granted. The aggregate
fair market value (determined as of the date the option is granted) of Common
Stock for which any person may be granted incentive stock options which first
become exercisable in any calendar year may not exceed $100,000. No person who
owns, directly or indirectly, at the time of the granting of an incentive stock
option to such person, 10% or more of the total combined voting power of all
classes of stock of the Company (a "10% Stockholder") shall be eligible to
receive any incentive stock options under the Plan unless the exercise price is
at least 110% of the fair market value of the shares of Common Stock subject to
the option, determined on the date of grant and the option term is no more than
five years.
No stock option may be transferred by an optionee other than by will or
the laws of descent and distribution, and, during the lifetime of an optionee,
the option will be exercisable only by the optionee. In the event of termination
of employment other than by death or disability, the optionee will have no more
than three months after such termination during which the optionee shall be
entitled to exercise the option, unless otherwise determined by the Board of
Directors. Upon termination of employment of an optionee by reason of death or
permanent and total disability, such optionee's options remain exercisable for
one year thereafter (but not beyond the original term of the option) to the
extent such options were exercisable on the date of such termination.
Options under the Plan must be issued within ten years from the
effective date of the Plan. The effective date of the Plan is March 2, 1994.
Incentive stock options granted under the Plan cannot be exercised more than ten
years from the date of grant. Incentive stock options issued to a 10%
Stockholder are limited to five-year terms.
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<PAGE>
Options granted under the Plan generally provide for the payment of the exercise
price in cash and may provide for the payment of the exercise price by delivery
to the Company of shares of Common Stock already owned by the optionee having a
fair market value equal to the exercise price of the options being exercised, or
by a combination of such methods.
Shares subject to unexercised options that expire or that terminate
upon an employee's ceasing to be employed by the Company become available again
for issuance under the Plan.
In the case of "incentive stock options", no taxable income will be
recognized by the option holder at the time of the grant or exercise of the
option; however, the excess of the fair market value of the stock acquired over
the option price at the date of exercise of an incentive stock option is an
adjustment for purposes of computing the alternative minimum tax under Section
55 of the Code. If the requirements of section 422(a) of the Code are met by the
holder of an incentive stock option (including the requirement that no
disposition of such option shares is made by the option holder for more than two
years after the grant of the option and for more than one year after the
exercise of such option), then any gain or loss realized by the option holder
upon disposition of such shares will be treated as capital gain or loss
(assuming such shares are held as a capital asset by the option holder). If the
requirements of section 422(a) of the Code are met, the Company will not be
entitled to any deduction for Federal income tax purposes as a result of the
issuance of shares pursuant to the exercise of an incentive stock option. If
shares acquired on exercise of an incentive stock option are disposed of prior
to the expiration of either the required holding periods described above (a
"Disqualifying Disposition"), the option holder will recognize ordinary income
in the year in which the disposition of such shares occurs. The amount of such
ordinary income will be the excess of (a) the lower of the amount realized on
disposition of such shares or the fair market value of such shares on the date
of exercise of such option over (b) the option price, so long as the disposition
is by sale or exchange with respect to which a loss, if sustained, would be
recognized. In addition, capital gain will be recognized by the option holder in
an amount equal to the excess, if any, of the amount realized on the
Disqualifying Disposition over the sum of the option price and the ordinary
income recognized by the option holder. The Company will ordinarily be entitled
to a deduction for Federal income tax purposes at the time of the Disqualifying
Disposition in an amount equal to the ordinary income recognized by the option
holder.
No tax obligation will arise for the optionee or the Company upon the
granting of either incentive stock options or nonqualified stock options under
the Plan. Upon exercise of a nonqualified stock option, an optionee will
recognize ordinary income in an amount equal to the excess, if any, of the fair
market value, on the date of exercise, of the stock acquired over the exercise
price of the option. The Company will be entitled to a tax deduction in an
amount equal to the ordinary income recognized by the optionee. Any additional
gain or loss realized by an optionee on disposition of shares acquired under a
nonqualified stock option will be capital gain or loss to the optionee and will
not result in any additional tax deduction to the Company.
PURPOSE OF THE AMENDMENT OF THE PLAN
As of September 9, 1997 Options to purchase 445,000 shares of Common
Stock were issued under the Plan. Options to purchase an additional 635,000
shares of common stock have been granted subject to stockholder approval of the
proposed amendment of the Plan. The proposal to increase the number of shares
available under the Plan has been made in order to enable the Company to grant
the options that have been promised to certain key employees and to have
sufficient option shares available to attract and retain qualified personnel.
The proposal to allow the Board of Directors to administer the Plan will bring
the Plan into compliance with certain changes to Rule 16b-3, promulgated by the
Securities and Exchange Commission. Lastly, the provision allowing the Board to
grant options in substitution for options held by employees of an acquired
company is clarified to make clear that the terms of substitute options need not
be identical to the terms of the options they replace.
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VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
The affirmative vote of a majority of the votes of common stock
outstanding is required to approve the proposed amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
SOLICITATION EXPENSES
The Company will bear the cost of soliciting consents. Consents are
being solicited by mail and, in addition, directors, officers, and employees of
the Company may solicit consents personally or by telephone or facsimile
transmission. No additional compensation will be paid on account of any such
solicitations. Although there is no formal agreement to do so, the Company will
reimburse custodians, brokerage houses, nominees, and other fiduciaries for the
cost of sending Consent Solicitation material to their principals.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the United
States Securities Exchange Act of 1934, as amended, and in accordance therewith
files periodic reports, proxy and information statements and other information
with the Securities and Exchange Commission. Such reports, proxy and information
statements and other information can be inspected and copied at the Securities
and Exchange Commission's public reference rooms located at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the public reference facilities
in the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048, and at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such materials can be obtained at
prescribed rates by writing to the Securities and Exchange Commission, Public
Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 20549. Such materials
may also be accessed electronically by means of the Commission's site on the
World Wide Web at http://www.sec.gov.
By order of the Board of Directors
-----------------------------
Secretary
September 9, 1997
Rahway, New Jersey
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APPENDIX A
CONSENT RESOLUTION 1
RESOLVED, that pursuant to Section 242 of the General Corporation Law
of the State of Delaware, the Company is hereby authorized to amend article
Fourth to increase the number of authorized shares of Common Stock, par
value $.001 per share, from 15,000,000 to 30,000,000; and that the proper
officers of the Corporation, acting singly, be, and each of them hereby is,
authorized, empowered and directed to execute and file, or cause to be
filed, a Certificate of Amendment to the Certificate of Incorporation of
the Company to so increase the number of authorized shares of Common Stock
in such form as the Board of Director approves, as required by the laws of
the State of Delaware.
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APPENDIX B
CONSENT RESOLUTION 2
RESOLVED, that the amendment to the Corporation's 1994 Stock Option
Plan (the "1994 Plan") to (i) increase the number of shares authorized for
issuance on exercise of options granted under the Plan from 500,000 to
1,300,000, (ii) allow for administration of the Plan by the Board of
Directors and (iii) give the Board of Directors greater flexibility in
substituting options under the Plan for options issued by an acquired
company, as adopted by the Directors, is approved; and
RESOLVED, that the Corporation reserve out of its authorized and
unissued common stock 1,300,000 shares, inclusive of any shares previously
reserved for this purpose, for issuance upon exercise of options granted
pursuant to the 1994 Plan.
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APPENDIX C
ERD WASTE CORP.
1994 STOCK OPTION PLAN
As amended September 4, 1997
This plan amends and restates in its entirety the ERD Waste Corp.
(formerly Environmental Resources & Disposal, Inc.(together, the "Company"))
1994 Stock Option Plan (the "Plan").
1. PURPOSES.
The purposes of this Plan are to aid the Company (formerly
Environmental Resources & Disposal, Inc.) (the "Company") and any or all of its
subsidiaries from time to time in attracting and retaining capable management,
employees and consultants and to enable selected key employees of, and
consultants to, the Company (and any or all of its subsidiaries from time to
time) to acquire or increase ownership interest in the Company on a basis that
will encourage them to perform at increasing levels of effectiveness and use
their best efforts to promote the growth and profitability of the Company.
Consistent with these objectives, this Plan authorizes the granting to selected
key employees and consultants of options (collectively, "Options") to acquire
shares of the Company's common stock, $.001 par value per share ("Common
Stock"), pursuant to the terms and conditions hereinafter set forth. As used
herein, the term "subsidiary" has the same meaning as is ascribed to the term
"subsidiary corporation" under Section 425 of the Internal Revenue Code of 1986,
as amended (the "Code").
Options granted hereunder may be in the form of "incentive stock
options" within the meaning of Section 422 of the Code or in the form of
nonqualified stock options.
2. EFFECTIVE DATE.
This Plan, as amended and restated, was adopted by the Board of
Directors of the Company (the "Board") on September 4, 1997 and is subject to
the approval of the Stockholders within one year of such date.
3. ADMINISTRATION.
(a) This Plan shall be administered by a committee (the "Committee")
consisting of three members of the Board, who are selected by the Board and
authorized as a committee to administer this Plan. (In the event that, and for
so long as, the entire Board shall consist of only three members, then the
<PAGE>
Board shall constitute the Committee hereunder.) If, at any time, there are less
than three members of the Committee eligible to serve in such capacity, the
Board shall appoint one or more other eligible members of the Board to serve on
the Committee. All Committee members shall serve, and may be removed, at the
pleasure of the Board. To the extent required for transactions under the Plan to
qualify for the exemptions available under Rule 16b-3 ("Rule 16b-3") promulgated
under the Securities Exchange Act of 1934 (the "1934 Act"), all actions relating
to awards to persons subject to Section 16 of the 1934 Act shall be taken by the
Board unless each person who serves on the Committee is a "non-employee
director" within the meaning of Rule 16b-3 or such actions are taken by a
sub-committee of the Committee (or the Board) comprised solely of "non-employee
directors".
(b) A majority of the members of the Committee (but not less than two)
shall constitute a quorum, and any action taken by a majority of such members
present at any meeting at which a quorum is present, or acts approved in writing
by all such members, shall be the acts of the Committee.
(c) Subject to the other provisions of this Plan, the Committee shall
have full authority to decide the date or dates on which Options will be granted
under this Plan (in each instance, the "Date of Grant"), to select the key
employees to whom Options will be granted, to determine the number of shares of
Common Stock to be covered by each Option, the price at which such shares may be
purchased upon the exercise of such Option (the "Exercise Price") and other
terms and conditions of such purchase. In making such determinations, the
Committee shall solicit the recommendations of the Chairman and President of the
Company and may take into account each proposed optionee's present and potential
contributions to the Company's business and any other factors which the
Committee may deem relevant. Subject to the other provisions of this Plan, the
Committee shall also have full authority to (i) interpret this Plan and any
stock option agreements evidencing Options granted hereunder ("Option
Agreements"), (ii) issue rules for administering this Plan, (iii) change, alter,
amend or rescind such rules, and (iv) make all other determinations necessary or
appropriate for the administration of this Plan. All determinations,
interpretations and constructions made by the Committee pursuant to this Section
3 shall be final and conclusive. Notwithstanding anything to the contrary
contained herein (x) until the Board shall appoint the members of the Committee,
the Plan shall be administered by the Board; and (y) the Board may, in its sole
discretion, at any time and from time to time, grant awards or resolve to
administer the Plan. In either of the foregoing events, the Board shall have all
of the authority and responsibility granted to the Committee herein. No member
of the Board or the Committee shall be liable for any action, determination or
omission taken or made in good faith with respect to this Plan or any Option
granted hereunder.
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<PAGE>
4. ELIGIBILITY.
Subject to the provisions of Section 7 below, key employees of, and
consultants to, the Company and its subsidiaries (including officers and
directors who are employees) shall be eligible to receive Options under this
Plan, as determined by the Committee.
5. OPTION SHARES.
(a) The shares subject to Options granted under this Plan shall be
shares of Common Stock and, except as otherwise required or permitted by Section
5(b) below, the aggregate number of shares with respect to which options may be
granted hereunder shall not exceed 1,300,000 shares. If an Option expires,
terminates or is otherwise surrendered, in whole or in part, the shares
allocable to the unexercised portion of such Option shall again become available
for grants of options hereunder. As determined from time to time by the Board,
the shares available under this Plan for grants of Options may consist either in
whole or in part of authorized but unissued shares of Common Stock or shares of
Common Stock which have been reacquired by the Company or a subsidiary following
original issuance.
(b) The aggregate number of shares of Common Stock as to which options
may be granted hereunder (as provided in Section 5(a) above), the number of
shares covered by each outstanding option, and the Exercise Price applicable to
each outstanding Option shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, recapitalization or other subdivision or consolidation of shares or other
adjustment, or the payment of a stock dividend in respect of the Common Stock;
provided, however, that any fractional shares resulting from any such adjustment
shall be eliminated.
(c) To the extent that the aggregate fair market value, determined on
the Date of Grant, of the shares of stock with respect to which incentive stock
options are exercisable for the first time by an Optionee (as such term is
defined in Section 6 below) during any calendar year (under all incentive stock
option plans of the Company and its subsidiaries), shall exceed $100,000, or
such higher amount as may be permitted from time to time under section 422 of
the Code, such options shall be treated as nonqualified stock options.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to this Plan shall be evidenced by an
Option Agreement between the Company and the individual to whom the Option is
granted (the "Optionee") in such form or forms as the Committee, from time to
time, shall prescribe, which agreements may but need not be identical to each
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<PAGE>
other, but shall comply with and be subject to the following terms and
conditions:
(a) Exercise Price. The Exercise Price at which each share of Common
Stock may be purchased pursuant to an Option shall be determined by the
Committee, provided that, subject to Section 7 below, the Exercise Price of an
incentive stock option shall be not less than 100% of the fair market value for
each such share on the Date of Grant of such Option, as determined by the
Committee in good faith in accordance with Section 422 of the Code and
applicable regulations thereunder. Anything contained in this Section 6(a) to
the contrary notwithstanding, in the event that the number of shares of Common
Stock subject to any Option is adjusted pursuant to Section 5(b) above, a
corresponding adjustment shall be made in the Exercise Price per share.
(b) Duration of Options. The duration of each Option granted hereunder
shall be determined by the Committee, provided that, subject to Section 7 below,
each Option granted hereunder shall expire and all rights to purchase shares of
Common Stock pursuant thereto shall cease on an "Expiration Date" which is no
later than that date which is the day before the tenth anniversary of the Date
of Grant of such Option.
(c) Vesting of Options. The vesting of each Option granted hereunder
shall be determined by the Committee. Only the vested portion(s) of any Option
may be exercised. Anything contained in this Section 6 or in any Option
Agreement to the contrary notwithstanding, an Optionee shall become fully (100%)
vested in each of his or her Options upon his or her termination of employment
with the Company or any of its subsidiaries by reason of death, disability or
retirement at age 65 or older in accordance with the Company's standard
retirement procedures then in effect (with such retirement being hereinafter
referred to as "retirement"). The Committee shall, in its sole discretion,
determine whether or not disability or retirement has occurred.
(d) Merger, Consolidation, etc. In the event that the Company shall,
pursuant to action by the Board, at any time propose to merge into, consolidate
with, or sell or otherwise transfer all or substantially all of its assets to,
another corporation and provision is not made pursuant to the terms of such
transaction for (i) the assumption by the surviving, resulting or acquiring
corporation of all outstanding Options granted pursuant to this Plan, (ii) the
substitution of new Options therefor, or (iii) the payment of cash or other
consideration in respect thereof, then the Committee shall cause written notice
of the proposed transaction to be given to each optionee not less than thirty
(30) days prior to the anticipated effective date of the proposed transaction.
On a date which the Committee shall specify in such notice, which date shall be
not
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<PAGE>
less than ten (10) days prior to the anticipated effective date of the proposed
transaction, each Optionee's Options shall become fully (100%) vested and each
optionee shall have the right to exercise his or her Options to purchase any or
all shares then subject to such Options; and if the proposed transaction is
consummated, each Option, to the extent not previously exercised prior to the
effective date of the transaction, shall terminate on such effective date. If
the proposed transaction is abandoned or otherwise not consummated, then to the
extent that any Option not exercised prior to such abandonment shall have vested
solely by operation of this Section 6(d), such vesting shall be annulled and be
of no further force or effect and the vesting period otherwise established for
or applicable to such Option pursuant to Section 6(c) above shall be
reinstituted as of the date of such abandonment; provided, however, that nothing
herein contained shall be deemed to retroactively affect or impair any exercise
of any such vested Option prior to the date of such abandonment.
(e) Exercise of Options. A person entitled to exercise an Option, or
any portion thereof, may exercise it (or such vested portion thereof) in whole
at any time, or in part from time to time, by delivering to the Company at its
principal office, directed to the attention of the President of the Company or
such other duly elected officer as shall be designated in writing by the
Committee to the Optionee, written notice specifying the number of shares of
Common Stock with respect to which the Option is being exercised, together with
payment in full of the aggregate Exercise Price for such shares. Such payment
shall be made in cash or by certified check or bank draft to the order of the
Company; provided, however, that the Committee may, in its sole discretion,
authorize such payment, in whole or in part, in any other form, including
payment by personal check or by the exchange of shares of Common Stock owned of
record by the person entitled to exercise the Option and having a fair market
value on the date of exercise equal to the price for which the shares of Common
Stock may be purchased pursuant to the Option.
(f) Non-Transferability. No Option shall be transferable other than by
will or the laws of descent and distribution, and during the subject Optionee's
lifetime, no Option may be exercised by anyone other than such Optionee;
provided, however, that if the optionee dies or becomes incapacitated, the
Option may be exercised by his or her estate, legal representative or
beneficiary, as the case may be, subject to all other terms and conditions
contained in this Plan and the applicable Option Agreement.
(g) Termination of Employment; Competition. Except as may otherwise be
provided in any employment agreement, option agreement or other agreement
between the Company and any Optionee, the following provisions shall apply in
the event of an
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<PAGE>
Optionee's engaging in competition with the Company, or in the event of the
termination of an Optionee's employment with the Company or any of its
subsidiaries:
(i) In the event that an Optionee shall (A) commit or
suffer any breach or violation of any non-competition and/or
non-disclosure agreement (including, without limitation, any such
provisions contained in any employment agreement) with the Company or
any of its subsidiaries, or, (B) in the absence of any such express
agreement, shall engage or participate in, or become involved with, in
any manner or capacity (whether as employee, agent, consultant,
advisor, officer, director, manager, partner, joint venturer, investor,
shareholder (other than passive investments in less than 5% of the
outstanding securities of any company) or otherwise), any business
enterprise which derives any material amount of revenues from any
business or line of business conducted, engaged in or operated by the
Company on the date on which such Optionee first became involved with
such other business enterprise, or (C) in the event that an Optionee's
employment with the Company or any of its subsidiaries shall be
terminated either (1) by the Company or any of its subsidiaries "for
cause", as defined in any applicable employment agreement to which such
Optionee is a party or (2)in the absence of a definition of cause
contained in any applicable employment agreement, by the Company for
fraud, dishonesty, habitual drunkenness or drug use, for willful
disregard of assigned duties or instructions by such Optionee, or for
concrete actions causing substantial harm to the Company, or for other
material breach by the Optionee of any applicable employment agreement
to which the Optionee is a party, or (3) by the Optionee voluntarily
and without the written consent of the Company, then all outstanding
Options granted hereunder to such Optionee shall automatically and
immediately terminate at the time that notice of termination of
employment is given, and shall not then or thereafter be exercisable in
whole or in part; provided, however, that nothing herein contained
shall be deemed to modify or amend the terms and conditions of any
applicable employment agreement, including but not limited to the
grounds upon which any Optionee's employment may be terminated.
(ii) In the event that an Optionee's employment with
the Company or any of its subsidiaries shall terminate (A) by reason of
retirement, or (B) under circumstances other than those specified in
Section 6(g)(i) above and for other than death or disability, then all
outstanding Options granted hereunder to such Optionee shall terminate
three (3) months after the date of such termination of employment or on
the Expiration Date, whichever shall first occur; provided, however,
that if such Optionee dies within such
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<PAGE>
three (3) month period, then all outstanding Options granted hereunder
to such Optionee shall terminate on the first anniversary of such
Optionee's death or on the Expiration Date, whichever shall first
occur.
(iii) In the event of the death or disability of an
Optionee while such Optionee is employed by the Company or any of its
subsidiaries, all outstanding Options granted hereunder to such
Optionee shall terminate on the first anniversary of such death or
disability, as the case may be, or on the Expiration Date, whichever
shall first occur.
(iv) Anything contained in this Section 6 to the
contrary notwithstanding, an Option granted pursuant to this Plan may
be exercised following the subject Optionee's termination of employment
with the Company or any of its subsidiaries for reasons other than
death, disability or retirement only if, and to the extent that, such
Option was exercisable immediately prior to, or becomes exercisable as
a result of, such termination of employment.
(v) An Optionee's transfer of employment between the
Company and any of its subsidiaries or between subsidiaries shall not
constitute a termination of employment, and the Committee shall
determine in each case whether an authorized leave of absence for
professional education, military service or otherwise shall constitute
a termination of employment.
(vi) Nothing contained in this Section 6(g) shall be
deemed to modify or affect any vesting schedule provided in any Option
Agreement, which vesting schedule shall continue in effect and be
applied and enforced notwithstanding any modification of the exercise
period arising by reason of the application of this Section 6(g).
(h) No Rights as a Stockholder or to Continued Employment. No Optionee
shall have any rights as a stockholder of the Company with respect to any shares
covered by an Option prior to the date of issuance to such Optionee of the
certificate or certificates for such shares. Neither this Plan nor any Option
granted hereunder shall confer upon an Optionee any right to continued
employment by the Company or any of its subsidiaries or interfere in any way
with the right of the Company or its subsidiaries to terminate the employment of
such Optionee (subject to the terms and conditions of any applicable employment
agreement between the Company or any of its subsidiaries and the subject
Optionee).
(i) Other Terms and Conditions. Any Option Agreement entered into
pursuant to this Plan may contain such further terms and conditions (including a
right of first refusal in favor of the Company in the event that the Optionee
shall seek to transfer
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<PAGE>
any shares acquired upon exercise of the subject Option) as the Committee may
determine, provided that such other terms and conditions are not in violation
of, in conflict with or otherwise inconsistent with the requirements of this
Plan.
7. TEN PERCENT STOCKHOLDERS.
The Committee shall not grant an incentive stock option to an
individual who, at the time such Option is to be granted, owns (directly or by
attribution pursuant to Section 424(d) of the Code) shares of capital stock of
the Company possessing more than 10% of the voting power of all classes of
capital stock of the Company unless (a) the Exercise Price at which each share
of Common Stock may be purchased pursuant to such Option is at least 110% of the
fair market value of each such share on the Date of Grant (determined as
provided in Section 6(a) above), and (b) such Option, by its terms, is not
exercisable after the expiration of five years from the Date of Grant thereof.
8. ISSUANCE OF SHARES; RESTRICTIONS.
(a) Subject to the conditions, restrictions and other qualifications
provided in this Section 8, the Company shall, within thirty (30) business days
after an Option has been duly exercised in whole or in part, deliver to the
person who exercised the Option one or more certificates, registered in the name
of such person, for the number of shares of Common Stock with respect to which
the Option has been exercised. The Company may legend any stock certificate
issued hereunder to reflect any restrictions provided for in this Section 8,
including but not limited to a "stop transfer" legend pursuant to Section 8(b)
below.
(b) Unless the shares subject to Options granted under the Plan have
been registered under the Securities Act of 1933, as amended (the "Act") (and,
if the person exercising the Option may be deemed an "affiliate" of the Company
as such term is defined in Rule 405 under the Act, such shares have been
registered under the Act for resale by such person), or the Company has
determined that an exemption from registration under the Act is available, the
Company may require, prior to and as a condition of the issuance of any shares
of Common Stock upon exercise of any Option, that the person exercising such
Option hereunder furnish the Company with a written representation in a form
prescribed by the Committee to the effect that such person is acquiring such
shares solely with a view to investment for his or her own account and not with
a view to the resale or distribution of all or any part thereof, and that such
person will not dispose of any of such shares otherwise than in accordance with
the provisions of Rule 144 under the Act unless and until either the sale or
distribution of such shares is registered under the Act or the Company is
satisfied that an exemption from such registration is available.
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<PAGE>
(c) Anything herein contained to the contrary notwithstanding, the
Company shall not be obligated to sell or issue any shares of Common Stock
pursuant to the exercise of an option granted hereunder unless and until the
Company is satisfied that such sale or issuance complies with all applicable
provisions of the Act and all other laws and/or regulations by which the Company
is bound or to which the Company or such shares may be subject; and the Company
reserves the right to delay the issuance and/or delivery of shares of Common
Stock for such period of time as may be required in order to effect compliance
with the applicable provisions of the Act and all other applicable laws and/or
regulations as aforesaid.
9. SUBSTITUTE OPTIONS.
Anything herein contained to the contrary notwithstanding, Options may,
at the discretion of the Board, be granted under this Plan in substitution for
options to purchase shares of capital stock of another corporation which is
merged into, consolidated with or all or a substantial portion of the property
or stock of which is acquired by, the Company or a subsidiary, such options to
be on such terms and conditions, and to contain such provisions as the Board
shall determine.
10. TERM OF THIS PLAN.
Unless this Plan has been sooner terminated pursuant to Section 11
below, this Plan shall terminate on, and no Options hereunder shall be granted
after, March 2, 2004 (the tenth (10th) anniversary of the date of Board adoption
of this Plan). Notwithstanding any such Plan termination, the provisions of this
Plan shall nonetheless continue thereafter to govern all Options theretofore
granted until the exercise, expiration or cancellation of such Options.
11. AMENDMENT AND TERMINATION OF PLAN.
The Board may at any time terminate this Plan, or amend this Plan from
time to time in such respects as the Board deems desirable; provided, however,
that approval of the stockholders of the Company shall be obtained for any
amendment (a) which increases the aggregate number of shares of Common Stock
with respect to which stock options may be granted under this Plan or changes
the class of employees or consultants eligible to receive such options or (b)
for which such approval is required for compliance with Rule 16b-3 promulgated
under the Securities Exchange Act of 1934 and further provided, that, subject to
the provisions of Section 6 and 8 above, no termination hereof or amendment
hereto shall adversely affect the rights of an Optionee or other person holding
an Option theretofore granted hereunder without the consent of such Optionee or
other person, as the case may be.
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ERD WASTE CORP.
CONSENT FORM
CONSENT SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of record of ERD Waste Corp. (the "Company")
as of the close of business on September 12, 1997, hereby takes the following
action, with respect to all stock of the Company held by the undersigned, in
connection with the solicitation by the Board of Directors of the Company of
written consents, pursuant to Section 228 of the Delaware General Corporation
Law, to (i) the amendment of the Certificate of Incorporation of the Company and
(ii) the amendment of the Company's 1994 Stock Option Plan, as described in the
Company's Consent Solicitation Statement, dated September ___, 1997, without a
meeting:
(Place an "X" in the appropriate box)
1. Proposed Consent Resolution 1 approving amendment to the Certificate of
Incorporation of ERD Waste Corp.
For [ ] Against [ ] Abstain [ ]
2. Proposed Consent Resolution 2 approving amendment to the 1994 Stock Option
Plan of ERD Waste Corp.
For [ ] Against [ ] Abstain [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ABOVE PROPOSALS.
FAILURE TO CHECK ANY OF THE BOXES WITH RESPECT TO A PROPOSAL WILL, IF THIS
CONSENT CARD HAS BEEN SIGNED AND DATED, CONSTITUTE APPROVAL OF AND CORRESPONDING
CONSENT TO THE ADOPTION OF THE CONSENT RESOLUTION.
- ------------------------------------------
Print Name
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Signature(s)
Dated: ________________, 1997
Please sign as registered and return promptly in the enclosed envelope.
Executors, trustees and others signing in a representative capacity should
include their names and the capacity in which they sign.
