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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 0-11688
AMERICAN ECOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-3889638
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
805 W. IDAHO, SUITE #200, BOISE, IDAHO 83702-8916
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (208) 331-8400
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value per Share
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will be not contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /.
At June 30, 1996, Registrant had outstanding 7,904,172 shares of its Common
Stock.
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EXPLANATION OF AMENDMENT
On April 11, 1996, the Registrant, American Ecology Corporation (the
"Company") filed a preliminary proxy statement with the Securities and Exchange
Commission. Form 10-K was filed with the Securities and Exchange Commission May
21, 1996. Items 10, 11, 12 and 13 of Part III of Form 10-K as filed by the
Company were intended to be included in the definitive proxy statement and
incorporated by reference in the Form 10-K. A definitive proxy statement has not
yet been filed. Accordingly, the Company is hereby amending its Form 10-K to
include Items 10, 11, 12, and 13 of Part III. Items 10, 12 and 13 are stated as
of June 30, 1996 and Item 11 is stated as of December 31, 1995.
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
OFFICE HELD AS OF JUNE 30,
1996 NAME AGE CITY STATE DIRECTOR/OFFICER
- -------------------------- ------------------- ---- -------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Director, Chairman of the
Board, Chief Executive
Officer and President... Jack K. Lemley 61 Boise Idaho 1992
Vice President............ Richard F. Paton 46 Houston Texas 1995
Vice President............ Robert S. Thorn 73 Boise Idaho May 22, 1996
Treasurer................. Ian P. F. Dorling 48 Boise Idaho March 27, 1996
Director.................. Patricia N. Eckert 48 San Francisco California 1995
Director.................. Paul F. Schutt 63 Norcross Georgia 1994
Director.................. John S. Scoville 60 Santa Rosa California 1984
Director.................. Rotchford Barker 59 Golf Illinois April 19, 1996
Director.................. Edward F. Heil 51 Downers Grove Illinois 1994
Director.................. Paul O. Bergson 51 Washington D.C. February 13, 1996
</TABLE>
Jack K. Lemley is the Chairman of the Board and Chief Executive Officer of
the Company. Prior to February 1995, he was an independent business consultant.
From May 1989 through 1993, Mr. Lemley was Chief Executive Officer of
Transmanche-Link J.V., which designed and built the tunnel and related
transportation infrastructure to provide train service between England and
France. Prior to his position at Transmanche-Link, Mr. Lemley founded Lemley and
Associates, Inc. and was a management consultant to various clients in the
industry. Mr. Lemley is also a director of Idaho Power Company.
Patricia M. Eckert is Director, Competitive Issues -- Telecommunications
and Utilities Sectors for Deloitte & Touche LLP. Ms. Eckert formerly served as
the President of the California Public Utilities Commission and served as a
Commissioner from 1989 to 1994.
Paul F. Schutt has been the Chief Executive Officer and a director of
Nuclear Fuel Services Inc. for more than the past 5 years. Mr. Schutt also led
the formation of Advanced Recovery Systems, Inc., NFS Radiation Protection
Systems, Inc., and EcoTek Laboratory Services, Inc. and serves as a director on
the boards of those companies. Mr. Schutt was a founding director in 1968 and
President of Nuclear Assurance Corporation, Senior Planning Analyst for Union
Carbide (AECOP), Oak Ridge, Tennessee, and held management positions in
Marketing, Planning and Research and Development for Babcock Wilcox Co.
John J. Scoville is President of J.J. Scoville & Associates, Inc., a
nuclear consulting firm. He was President of US Ecology, Inc., a subsidiary of
the Company, from April 1981 to May 1990 and became a director of the Company in
March 1984. Mr. Scoville was also a Vice President of the Company from May 1986
to May 1990.
Rotchford Barker became a director in April 1996. Mr. Barker is an
independent business man and commodity trader. Mr. Barker has been a member of
the Chicago Board of Trade for more than thirty years and has served on the
board of directors of the exchange. Mr. Barker was the President of Agra
Trading, Inc. until that company was acquired by Gill & Duffus, a United Kingdom
holding company, in 1970. He has also served as a director of Agra Trading,
Inc., Colorado Beef, Inc. and the December Group.
Paul O. Bergson became a director of the Company in February 1996. Mr.
Bergson is a principal in Bergson & Company, a government relations consulting
firm serving a range of clients in tax, environmental and chemical matters. Mr.
Bergson is also a General in the U.S. Army Reserves, a member of the Board of
Advisers of the Far East Studies Institute and serves on the boards of several
philanthropic organizations.
Edward F. Heil has been the Chairman of the Board of American Environmental
Construction Company for more than the last five years. Mr. Heil is also a
director of Medi Net, Inc.
Richard F. Patton has been employed by the Company or its subsidiaries in
various positions since 1986.
3
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Ian P. F. Dorling accepted employment with the Company in February 1996,
and was appointed Treasurer in March 1996. Prior to that time, Mr. Dorling was
the manager of cash management of Morrison - Knudsen Corporation, a Boise, Idaho
based engineering and construction firm.
Robert S. Thorn served as a consultant to the Company from November 1995 to
May 1996 when he accepted the position of Vice President, Administration and
Chief Accounting Officer. Prior to that time, Mr. Thorn served as a consultant
with Lemley and Associates, Inc., a consulting engineering firm, from 1994 to
November 1995 and before that as U.K. Controls Director for Transmanche-Link,
J.V. which designed and built the tunnels and related transportation
infrastructure to provide train service between England and France.
There are no family relationships among the directors and executive
officers of the Company.
The Company is not aware of any involvement in certain legal proceedings by
its directors or executive officers during the past five years that are material
to an evaluation of the ability or integrity of such director or executive
officer.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and stockholders holding more than ten percent of the
Company's Common Stock are required by the regulation to furnish the Company
with copies of all Section 16(a) forms they filed.
Mr. Richard Paton did not timely file a Form 3 upon becoming an executive
officer of the Company.
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ITEM 11. EXECUTIVE COMPENSATION
Set forth below is information regarding the compensation of the Company's
Chief Executive Officer and the other four most highly compensated executive
officers of the Company in 1995 (together with the Chief Executive Officer, the
"named officers"). In addition, information is included regarding the
compensation of two individuals who would have been included in the named
officers but for the fact they were not executive officers of the Company at
December 31, 1995.
Summary Compensation Table. The summary compensation table set forth below
contains information regarding the compensation of each of the named officers
for services rendered in all capacities during 1993, 1994 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ---------------
NAME AND PRINCIPAL --------------------------- STOCK OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS (NO. OF SHARES) COMPENSATION(1)
- ------------------------------------ ---- -------- ------- --------------- ---------------
($) ($) (*) ($)
<S> <C> <C> <C> <C> <C>
Jack K. Lemley...................... 1995 $167,017 -0- 250,000 $ 4,588.63
Chairman & Chief Executive Officer 1994 -0- -0- 10,000 -0-
1993 -0- -0- 3,000 -0-
Larry G. Butler..................... 1995 $122,154 $ 7,000 5,000 $ 15,807.71
Vice President, US Ecology, Inc. 1994 $100,000 $26,783 5,000 $ 17,658.81
1993 10,000
Richard F. Paton.................... 1995 $ 96,828 1,500 $ 3,919.32
Vice President 1994 $ 94,853 $ 5,000 -0- $ 7,379.08
1993 3,500
Donald J. Brady..................... 1995 $ 96,057 -0- 10,000 $ 3,674.12
Vice President, US Ecology, Inc. 1994 -0- -0- -0- -0-
1993 -0- -0- -0- -0-
Amos J. Walker...................... 1995 $ 52,209 $ 2,500 2,500 $ 4,367.83
Treasurer 1994 $ 48,418 $ 2,000 -0- $ 1,585.42
1993 $ 31,153 -0- 2,500 -0-
Harry J. Phillips, Jr............... 1995 $338,878 -0- -0- $ 30,798.61
1994 $284,615 -0- -0- $ 21,181.00
1993 $275,000 $50,000 -0- $ 31,881.00
C. Clifford Wright, Jr.............. 1995 167,000 -0- -0- $ 25,633.00
1994 168,577 -0- 15,000 $ 25,649.00
1993 160,000 $22,400 -0- $ 26,226.00
</TABLE>
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(1) Includes the amount of premium paid by the Company for group term life
insurance for each named executive officer, car allowance and the amount of
the Company's matching contribution for each named executive officer under
the Company's 401(k) Savings Plan and the Company's Retirement Plan.
(2) Mr. Phillips and Mr. Wright resigned from the Company in 1995 and were paid
through the remainder of 1995 pursuant to their employment agreements.
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Option Grants. Shown below is further information on grants of stock
options during 1995 to the named officers which are reflected in the Summary
Compensation Table. Neither Mr. Lemley nor Mr. Wright were granted options in
1995.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENTAGE OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS EXERCISE APPRECIATION FOR 10-YEAR
UNDERLYING GRANTED TO PRICE OPTION TERM
OPTIONS EMPLOYEES IN (PER EXPIRATION ------------------------
NAME GRANTED(1) FISCAL YEAR SHARE(2) DATE(3) 5% 10%
- ------------------------ ---------- ------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jack K. Lemley.......... 250,000(4) 35.41% $ 4.00 5/24/05 $1,647,009 $2,707,041
Larry G. Butler......... 5,000(5) .71% $ 5.50 8/15/05 $ 45,293 $ 74,444
Richard F. Paton........ 1,500(5) .21% $ 6.58 2/28/05 $ 16,256 $ 26,718
Donald G. Brady......... 10,000(5) 1.42% $ 5.50 8/15/05 $ 90,586 $ 148,887
Amos J. Walker(6)....... 2,500(5) .35% $ 6.58 2/28/05 $ 0 $ 0
</TABLE>
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(1) There were no adjustments or amendments during 1995 to the exercise price of
stock options previously awarded to any of the named executive officers.
(2) The exercise price per share is a price determined by the Compensation
Committee but shall be no less than the par value of the Common Stock.
(3) The options permit the exercise price to be paid in cash or by tendering
shares of Common Stock. The option permits the withholding of shares to
satisfy tax obligations.
(4) See "Compensation Committee Report" for a description of the vesting of Mr.
Lemley's options.
(5) 20% of such options are exercisable on the first anniversary of such grant,
and the remaining 80% becomes exercisable in 20% increments on the next four
anniversary dates of the date of grant.
(6) All of Mr. Walker's options were forfeited upon his resignation.
Option Exercises and 1995 Year-End Option Holdings. Shown below is
information with respect to unexercised options to purchase Common Stock granted
in 1995 and prior years to the named officers and held by them at December 31,
1995. None of the named officers exercised any stock options in 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AT FISCAL YEAR END
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1995 AT DECEMBER 31, 1995
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- -------------------------- ----------------------------
<S> <C> <C>
Jack K. Lemley................................... 100,000/150,000 $ 0/$0
Larry G. Butler.................................. 9,000/ 11,000 $ 0/$0
Donald G. Brady.................................. 2,000/ 8,000 $ 0/$0
Amos J. Walker(2)................................ 2,000/ 3,000 $ 0/$0
Richard F. Paton................................. 2,400/ 2,600 $ 0/$0
Harry J. Phillips, Jr............................ 150,000/ 0 $ 0/$0
C. Clifford Wright, Jr........................... 37,000/ 13,000 $ 0/$0
</TABLE>
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(1) A stock option is considered to be "in-the-money" if price of the related
stock is higher than the exercise price of the option. The closed market
price of the Common Stock was $3.25 per share on the NASDAQ for December 31,
1995.
(2) All of Mr. Walker's Unexercisable options were forfeited upon termination.
6
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COMPENSATION COMMITTEE REPORT(1)
The Compensation Committee of the Board of Directors is composed entirely
of outside directors and is responsible for developing and making
recommendations to the Board with respect to the Company's executive
compensation policies. The Committee also approves the design of the Company's
compensation and benefit plans. This Compensation Committee Report sets forth
the components of the Company's executive officer compensation and describes the
basis on which the 1995 compensation determinations were made by the
Compensation Committee with respect to the executive officers of the Company.
In maintaining its executive compensation programs, the Company follows its
belief that executive compensation should reflect the value created for
stockholders together with supporting the Company's strategic goals. The
following objectives are among those utilized by the Compensation Committee:
1. Executive compensation should be meaningfully related to the
long-term and short-term value created for stockholders.
2. Executive compensation programs should support the long-term and
short-term strategic goals and objectives of the Company.
3. Executive compensation programs should reflect and promote the
Company's overall value, business standards and reward individuals for
outstanding contributions to the Company's success.
4. Short and long term executive compensation play a critical role in
attracting and retaining well qualified executives.
The Compensation Committee currently implements a compensation program
based on three components: a base salary, a related bonus program tied to
Company performance, and a stock option program. The Compensation Committee
regularly reviews the various components of the Company's executive compensation
to ensure that they are consistent with the Company's objectives.
BASE SALARY -- The Compensation Committee, in determining the appropriate
base salaries of its executive officers, generally considers the level of
executive compensation in similar companies in the industry. In addition, the
Compensation Committee takes into account (i) the performance of the Company and
the roles of the individual executive officers with respect to such performance,
and (ii) the particular executive officer's specific experience and
responsibilities, and the performance of such executive officer in those areas
of responsibility.
ANNUAL INCENTIVES -- The bonus program provides direct financial incentives
in the form of an annual cash bonus to executive officers to achieve and exceed
the Company's annual goals. The Committee awards cash bonuses based on the
performance of the Company relative to its budgeted net income for the fiscal
year and other pertinent absolute and relative criteria.
LONG-TERM INCENTIVES -- The stock option program is currently the Company's
primary long-term incentive plan for executive officers and key employees. The
Committee is reviewing other possible long-term incentive plans and may
implement such a plan as a supplement to the stock option program in the future.
The objectives of the stock option program are to align executive officer
compensation and shareholder return, and to enable executive officers to develop
and maintain a significant, long-term stock ownership position in the Company's
Common Stock. In addition, grants of stock options to the named executive
officers and others are intended to retain and motivate executives to improve
long-term corporate and stock market performance. Stock options are granted at
the prevailing market value and will only have value if the Company's stock
price increases. Generally, grants of stock options vest in equal amounts over
five years, and the executives must be employed by the Company at the time of
vesting in order to exercise the stock option.
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(1) Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference
other SEC filings (including this 10K/A) in their entirety, this
Compensation Committee Report shall not be incorporated by reference into
such filings and shall not be deemed to be "filed" with the SEC except as
specifically provided otherwise or to the extent required by Item 402 of
the Regulation S-K.
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<PAGE> 8
Consistent with the Company's compensation program outlined above,
compensation for each of the named officers, as well as other senior executives,
consists of a base salary, bonus and stock options. The base salaries for 1995
were established by the Committee at levels believed to be at or somewhat below
competitive amounts paid to executives of companies in the environmental
industry with comparable qualifications, experience and responsibilities. The
Compensation Committee determined, after the end of 1995, not to pay cash
bonuses to the named officers of the Company, given the financial performance of
the Company which was below expectations.
During 1995, Jack K. Lemley, the chief executive officer of the Company
received a base salary of $167,019, which the Committee believes to be below the
average of the base salary for chief executive officers with comparable
qualifications, experience and responsibilities of other companies in the
environmental industry. Due to the Company's 1995 financial performance, Mr.
Lemley received no bonus for 1995. In 1995, the Committee awarded Mr. Lemley a
stock option at the prevailing market value to purchase 250,000 shares of Common
Stock of the Company, 100,000 shares of which vested immediately, 50,000 shares
of which will vest on December 31, 1996, 50,000 shares of which will vest the
earlier of when the Company Common Stock trades at $8.00 per share for 20
consecutive days in 1996 or May 24, 2005 and 50,000 of which will vest the
earlier of when Company reports positive earnings in 1996 or May 24, 2005.
Members of Compensation Committee are: Paul F. Schutt, Edward F. Heil and
Jack A. Agresti; Chairman. Mr. Agresti resigned as a director of the Company
July 2, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of June 30, 1996 with respect
to the beneficial ownership of the Company's Common Stock by (i) each director
and nominee for director of the Company individually, (ii) each executive
officer of the Company, and (iii) all directors, nominees for director and
executive officers of the Company listed in the Summary Compensation Table as a
group. Unless otherwise indicated below, each of the named persons and members
of the group has sole voting and investment power with respect to the shares
shown.
<TABLE>
<CAPTION>
OPTIONS SHARES HELD
VOTING AND EXERCISABLE UNDER COMPANY TOTAL
INVESTMENT WITHIN 401(K) PLAN OR BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER POWER 60 DAYS RETIREMENT PLAN OWNERSHIP OF CLASS
- ---------------------------------- ----------- ----------- --------------- ----------- --------
<S> <C> <C> <C> <C> <C>
Rotchford Barker..................
Paul C. Bergson................... 0 0 0 0 *
Patricia M. Eckert................ 0 7,500(1) 0 7,500 *
Edward F. Heil.................... 1,971,884.4(2) 0 0 1,971,884.4 25.2%
Jack K. Lemley.................... 4,500 120,500(3) 0 125,000 1.6%
Paul F. Schutt, Jr................ 107,380 17,500(7) 0 124,880 1.6%
John J. Scoville.................. 2,000 30,500(4) 0 46,763.21 *
Donald G. Brady................... 0 2,000(5) 804.455 2,804.455 *
Richard F. Paton.................. 0 2,400(6) 229.67 3,269.67 *
Robert S. Thorn................... 600 0 0 0 0
Ian P.F. Dorling.................. 0 0 0 0 0
All directors, and executive
officers as a group (11
persons)........................
</TABLE>
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* Indicates less than one percent (1%)
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(1) Ms. Eckert was granted options to purchase 7,500 shares of Common Stock
under the Company's 1992 Outside Director Stock Option Plan. Such options
were exercisable as of May 24, 1995 and are included in the above table.
(2) Pursuant to a Schedule 13-D filing. Mr. Heil reported that 1,971,884.4
shares of Common Stock were beneficially owned individually by Mr. Heil and
314,730 shares of Common Stock were beneficially owned by Mr. Heil in his
capacity as trustee of a trust. Mr. Heil's Schedule 13-D also reported that
7,784 shares of Common Stock were beneficially owned individually by Thomas
W. McNamara, an attorney for Mr. Heil and 20,108 shares of Common Stock
were beneficially owned by Mr. McNamara in his capacity as trustee of a
trust. The Schedule 13-D stated that Mr. McNamara's shares are included in
the filing as a precautionary measure in the event that he and Mr. McNamara
were deemed to be a "group" under Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, but that such inclusion should not be
deemed an admission that they were acting as a group. Mr. McNamara's shares
are included in the total shown in the above table.
Mr. Heil was granted options to purchase 17,500 shares of Common Stock
under the Company's 1992 Outside Director Stock Option Plan. That plan
provides that options granted to a stockholder beneficially owning more
than 10% of the Company's Common Stock will not vest until such time as
approved by both the grantee and the Board of Directors of the Company or
until such stockholder no longer beneficially owns more than 10% of the
Company's Common Stock.
(3) Mr. Lemley was granted 100,000 share options by the Board of Directors on
May 24, 1995 and the other 25,000 share options were granted under the
Company's 1992 Director's Plan.
(4) Mr. John J. Scoville was granted options to purchase a total of 30,500
shares of Common Stock under the Company's 1992 Outside Director Stock
Option Plan. Mr. Harris resigned from the Board of Directors April 30,
1996.
(5) Mr. Brady was granted options to purchase 10,000 shares of Common Stock
under the Company's 1992 Stock Option Plan.
(6) Mr. Paton was granted options to purchase a total of 5,000 shares of Common
Stock under the Company's 1992 Stock Option Plan.
(7) Mr. Schutt is the sole general partner with a 33% partnership interest of a
limited partnership which owns 100% of the capital stock of Nuclear Fuel
Services, Inc. ("NFS"). Mr. Schutt is the Chief Executive Officer and a
director of NFS. NFS is the record owner of 107,380 shares of Common Stock
as to which Mr. Schutt disclaims beneficial ownership. Such shares are
included in the above table.
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SECURITY OWNERSHIP OF 5% BENEFICIAL OWNERS
The following information is given with respect to the persons known by the
Company to own beneficially more than 5% of the outstanding shares of the Common
Stock as of March 31, 1996. Unless otherwise noted, each shareholder listed
below has sole voting and investment power with respect to the shares listed.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- ------------------------------------------------------------------------------------ ----------
<S> <C> <C>
Edward F. Heil(1)................................................. 1,971,884.4 25.2%
2901 Centre Circle
Downers Grove, Illinois 60515
Harry J. Phillips, Jr.(2)......................................... 2,065,166 23.7%
3 Riverway, Suite 170
Houston, Texas 77056
FMR Corp.(3)...................................................... 708,500 9.05%
82 Devonshire Street
Boston, Massachusetts 02109
Fayez Sarofim(4).................................................. 514,074 6.6%
2900 Two Houston Center
Houston, Texas 77010
</TABLE>
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(1) Pursuant to a Schedule 13-D filing, Mr. Heil reported that 1,971,884.4
shares of Common Stock were beneficially owned individually by Mr. Heil and
314,730 shares of Common Stock were beneficially owned by Mr. Heil in his
capacity as trustee of a trust. Mr. Heil's Schedule 13-D also reported that
29,978 shares of Common Stock were beneficially owned individually by Thomas
W. McNamara, an attorney for Mr. Heil, and 20,108 shares of Common Stock
were beneficially owned by Mr. McNamara in his capacity as trustee of a
trust. The Schedule 13-D stated that Mr. McNamara's shares are included in
the filing as a precautionary measure in the event that he and Mr. Heil were
deemed to be a "group" under Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended, but that such inclusion should not be deemed an
admission that they were acting as a group. Mr. McNamara's shares are
included in the total shown in the above table.
(2) Mr. Phillips beneficially owns 350,536 shares of Common Stock, and 1,110,206
shares of Common Stock owned of record by ECOL Partners II, Ltd. ("Ecol
Partners II") and 2,352 shares owned of record by Phillips Investments, Inc.
As the sole shareholder of Phillips Investments, Inc., which is the
corporate general partner of ECOL Partners II, Mr. Phillips shares voting
and investment power over the Common Stock owned by Phillips Investments,
Inc. and ECOL Partners II.
(3) Pursuant to a Schedule 13-G filing, FMR Corp. reported that as of December
31, 1995 it may be deemed to be the beneficial owner of 708,500 shares of
Common Stock. FMR Corp. reported sole power to vote or direct the vote of
345,100 shares and sole power to dispose or direct the disposition of
708,500 shares.
(4) Pursuant to a Schedule 13-G filing, Mr. Fayez Sarofim reported that as of
December 31, 1995 he may be deemed to be the beneficial owner of 514,074
shares of Common Stock. Mr. Sarofim reported sole voting power with respect
to 413,328 such shares, shared voting power with respect to 70,961 of such
shares, sole dispositive power with respect to 413,328 shares and shared
dispositive power with respect to 100,746 such shares.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
John J. Scoville, a director of the Company, is President and beneficial
owner of J. J. Scoville and Associates, Inc., which received $59,649.83, as of
June 30, 1996, from the Company for consulting services. Such services were
provided upon terms substantially similar to those the Company would have
effected with unrelated parties.
In September 1995, the Company sold 71,579 shares of 8 3/8% Series D
Cumulative Convertible Preferred Stock (the "8 3/8% Preferred Stock") with
warrants in a private offering to a group comprised principally of members of
the Company's directors (the "Investing Group") and received cash proceeds net
of offering expenses of $3,322,000. The Investing Group included John Harris,
Jr., Edward Heil, Jack K. Lemley, Harry Phillips, Jr., and Paul Schutt and
Rotchford Barker. In October 1995, an additional 12,632 shares were issued with
warrants to the Investing Group for approximately $600,000, comprised of
$560,000 cash and $40,000 in settlement of a liability to the Investing Group.
Additionally, Harry J. Phillips, Jr., purchased an additional 21,053 shares with
warrants for $1,000,000 to be to comprised of approximately $865,000 cash and
$135,000 in settlement of an employment contract liability. Each 8 3/8%
Preferred Stock share is convertible at any time at the option of the holder
into 8.636 shares of the Company's Common Stock, equivalent to a conversion
price of $5.50 on the $47.50 total per share offering price. Dividends on the
8 3/8% Preferred Stock are cumulative from the date of issuance and payable
quarterly commencing on October 15, 1995. The 8 3/7% Preferred Stock shares are
not redeemable and the liquidation preference is $47.50 per share plus unpaid
dividends. Each share of the 8 3/8% Preferred Stock issued includes ten warrants
to purchase shares of the Company's Common Stock. Each warrant entitles the
holder to purchase one share of Common Stock for an exercise price of $4.75. The
$4.75 warrants are exercisable at any time and expire September 12, 1999.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN ECOLOGY CORPORATION
(Registrant)
<TABLE>
<S> <C>
Date: September 12, 1996 By: /s/ Jack K. Lemley
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Jack K. Lemley
Chief Executive Officer
Date: September 12, 1996 By: /s/ R. S. Thorn
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R. S. Thorn
Vice President of Administration
Chief Accounting Officer
</TABLE>
