Exhibit (d)(4)

              KTI, INC. NON-PLAN STOCK OPTION TERMS AND CONDITIONS

         1. PLAN INCORPORATED BY REFERENCE. This Option is issued outside of the
terms of the KTI, Inc. 1994 Long-Term Incentive Stock Option Plan (the "Plan").

         2. OPTION PRICE. The price to be paid for each share of Common Stock
issued upon exercise of the whole or any part of this Option is the Option Price
set forth on the face of this certificate.

         3. EXERCISABILITY SCHEDULE. This Option may be exercised at any time
and from time to time for the number of shares and in accordance with the
exercisability schedule set forth on the face of this certificate, but only for
the purchase of whole shares. This Option may not be exercised as to any shares
after the Expiration Date.

         4. METHOD OF EXERCISE. To exercise this Option, the Optionholder shall
deliver written notice of exercise to the Corporation specifying the number of
shares with respect to which the Option is being exercised accompanied by
payment of the Option Price for such shares in cash, by certified check or in
such other form, including shares of Common Stock of the Corporation valued at
their Fair Market Value on the date of delivery, as the Committee may at the
time of exercise approve. Promptly following such notice, the Corporation will
deliver to the Optionee a certificate representing the number of shares with
respect to which the Option is being exercised.

         5. RIGHTS AS A STOCKHOLDER OR EMPLOYEE. The Optionee shall not have any
rights in respect of shares as to which the Option shall not have been exercised
and payment made as provided above. The Optionee shall not have any rights to
continued employment by the Corporation or any Subsidiary by virtue of the grant
of this Option.

         6. RECAPITALIZATION, MERGERS, ETC. In the event of corporate
transactions affecting the Corporation's outstanding Common Stock, the Committee
shall equitably adjust the number and kind of shares subject to this Option and
the exercise price hereunder. If such transaction involves a consolidation or
merger of the Corporation with another entity, the sale or exchange of all or
substantially all of the assets of the Corporation or a reorganization or
liquidation of the Corporation, then in lieu of the foregoing, the Committee may
upon written notice to the Optionee provide that this Option shall terminate on
a date not less than 20 days after the date of such notice unless theretofore
exercised. In connection with such notice, the Committee may in its discretion
accelerate or waive any deferred exercise period.

         7. OPTION NOT TRANSFERABLE. This Option is transferable by the Optionee
to the same extent and effect that options issued pursuant to the Plan may be
transferred.

         8. EXERCISE OF OPTION AFTER TERMINATION OF EMPLOYMENT. If the
Optionee's status as an employee or officer of (a) the Corporation or (b) a
Subsidiary is terminated for any reason other than by disability (within the
meaning of section 22(e)(3) of the Code) or death, the Optionee may exercise the
rights which were available to the Optionee at the time of such termination only
within three months from the date of termination. If such status is terminated
as a result of disability, such rights may be exercised within twelve months
from the date of termination. Upon the death of the Optionee, his or her
personal representative shall have the right, at any time within twelve months
after the date of death, to exercise in whole or in part any rights that were
available to the Optionee at the time of death. Notwithstanding the foregoing,
no rights under this Option may be exercised after the Expiration Date.

         9. COMPLIANCE WITH SECURITY LAWS. It shall be a condition to the
Optionee's right to purchase shares of Common Stock hereunder that the
Corporation may, in its discretion, require (a) that the shares of Common Stock
reserved for issue upon the exercise of this Option shall have been duly listed,
upon official notice of issuance, upon any national securities exchange or
automated quotation system on which the Corporation's Common Stock may then be
listed or quoted, (b) that either (i) a registration statement under the
Securities Act of 1933 with respect to the shares shall be in effect or (ii) in
the opinion of counsel for the Company, the proposed purchase shall be exempt
from




registration under that Act and the Optionee shall have made such undertakings
and agreements with the Corporation as the Corporation may reasonably require,
and (c) that such other steps, if any, as counsel for the Corporation shall
consider necessary to comply with any law applicable to the issue of such shares
by the Corporation shall have been taken by the Corporation or the Optionee or
both. The certificates representing the shares purchased under this Option may
contain such legends as counsel for the Corporation shall consider necessary to
comply with any applicable law.

         10. PAYMENT OF TAXES. The Optionee shall pay to the Corporation, or
make provision satisfactory to the Corporation for payment of, any taxes
required by law to be withheld with respect to the exercise of this Option. The
Committee may, in its discretion, require any other Federal or state taxes
imposed on the sale of the shares to be paid by the Optionee. In the Committee's
discretion, such tax obligations may be paid in whole or in part in shares of
Common Stock, including shares returned from the exercise of this Option, valued
at their Fair Market Value on the date of delivery. The Corporation and its
Subsidiaries may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Optionee.