<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [XX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[XX] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
AMERICAN ECOLOGY CORPORATION
----------------------------------------------
(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):
[XX] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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
(Set forth the amount on which the filing fee is calculated and state how
it was determined):
.................................................................
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> 2
AMERICAN ECOLOGY CORPORATION
805 W. IDAHO, SUITE 200
BOISE, IDAHO 83702-8916
(208) 331-8400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
The Annual Meeting of Stockholders of American Ecology Corporation (the
"Company") will be held on May 14, 1998, at 10:00 a.m., Mountain Standard Time,
at The Grove Hotel, The Rapids Room, 245 South Capitol Boulevard, Boise, Idaho.
The meeting is being held to consider and act upon the following
matters:
1. To elect eight directors of the Board of Directors;
2. To amend the Company's 1992 directors' Stock Option Plan and
increase the shares available for grant from 350,000 to 650,000;
3. To ratify the selection of Balukoff, Lindstrom & Co., P.A. as the
Company's independent auditors for fiscal year 1998; and
4. Such other business as may properly come before the meeting or any
adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 7, 1998
as the record date for determining those stockholders who will be entitled to
vote at the meeting and any adjournments or postponements thereof. A list of
stockholders will be available for inspection for a period of 10 days prior to
the meeting at the Company's principal office identified above and will also be
available for inspection at the meeting.
Please sign and date the enclosed proxy and return it promptly in the
enclosed self-addressed pre-paid envelope. If you attend the meeting, you may
withdraw your proxy and vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
PHILLIP K. CHATTIN
Secretary
Boise, Idaho
April 8, 1998
<PAGE> 3
AMERICAN ECOLOGY CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1998
PROXY STATEMENT
----------------------------------
This Proxy Statement relates to the Annual Meeting of Stockholders of
American Ecology Corporation, a Delaware corporation (the "Company"), to be held
on May 14, 1998, at 10:00 a.m., Mountain Standard Time, at The Grove Hotel, The
Rapids Room, 245 South Capitol Boulevard, Boise, Idaho, including any
adjournments or postponements thereof (the "Meeting"). This Proxy Statement, the
accompanying proxy card and the Company's Annual Report are first being mailed
to stockholders of the Company on or about April 17, 1998. THEY ARE FURNISHED IN
CONNECTION WITH THE SOLICITATION BY THE COMPANY OF PROXIES FROM THE HOLDERS OF
THE COMPANY'S COMMON STOCK, PAR VALUE $.01 PER SHARE ( "COMMON STOCK"), FOR USE
AT THE MEETING. Holders of preferred stock of the Company do not have voting
rights with respect to the matters to be considered at the meeting.
The principal solicitation of proxies is being made by mail; however,
additional solicitation may be made by telephone, facsimile or personal visits
by directors, officers and regular employees of the Company and its
subsidiaries, who will not receive additional compensation therefore. The
Company has retained ChaseMellon Shareholder Services, L.L.C. to aid in the
solicitation of proxies. Estimated fees expected to be incurred by the Company
in this connection should not exceed $10,000. The Company will reimburse
brokerage firms and others for their reasonable expenses in forwarding
soliciting material.
All shares represented by duly executed proxies in the accompanying
form received prior to the Meeting will be voted in the manner specified
therein. Any stockholder granting a proxy may revoke it at any time before it is
voted by filing with the Secretary of the Company either an instrument revoking
the proxy or a duly executed proxy bearing a later date. Proxies may also be
revoked by any stockholder present at the Meeting who expresses a desire to vote
his shares in person. As to any matter for which no choice has been specified in
a duly executed proxy, the shares represented thereby will be voted FOR each
proposal listed herein and, in the discretion of the persons named in the proxy
in any other business that may properly come before the Meeting.
STOCKHOLDERS ARE URGED, WHETHER OR NOT THEY EXPECT TO ATTEND THE
MEETING TO COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1997 is being furnished with this Proxy Statement to stockholders
of record on April 7, 1998. The Annual Report to Stockholders does not
constitute a part of the proxy soliciting material except as otherwise provided
by the rules of the Securities and Exchange Commission, or as expressly provided
for herein.
1
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed April 7, 1998 as the
record date ("Record Date") for the determination of stockholders entitled to
notice of and to vote at the Meeting. On the Record Date there were 13,498,429
shares of common stock issued and outstanding and entitled to vote. The Company
has no other voting securities outstanding. Each stockholder of record is
entitled to one vote per share held on all matters submitted to a vote of
stockholders, except that in electing directors, each stockholder is entitled to
cumulate his or her votes and give any one candidate an aggregate number of
votes equal to the number of directors to be elected (eight) multiplied by the
number of his or her shares, or to distribute such aggregate number of votes
among as many candidates as he or she wishes. For a stockholder to exercise his
or her cumulative voting rights, the stockholder must give notice of his or her
intention to cumulatively vote prior to the Meeting, or at the Meeting in
person, prior to voting. If any stockholder has given such notice, all
stockholders may cumulatively vote. The holders of proxies will have authority
to cumulatively vote and allocate such votes in their discretion to one or more
of the director nominees. The holders of the proxies solicited hereby do not, at
this time, intend to cumulatively vote the shares they represent, unless a
stockholder indicates his intent to do so, in which instance the proxy holders
intend to cumulatively vote all the shares they hold by proxy in favor of some
or all of the director nominees identified herein.
The holders of a majority of the outstanding shares of common stock on
the Record Date present at the Meeting in person or by proxy will constitute a
quorum for the transaction of business at the meeting. An affirmative vote of a
majority of the shares present and voting at the Meeting is required for
approval of all matters. Abstentions and broker non-votes are each included in
the determination of the number of shares present. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders, and thus,
have the effect of voting against a proposal, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved, and
thus, have no effect.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
DIRECTORS. At the Meeting, eight directors are to be elected to
hold office until the next Annual Meeting of Stockholders or until the election
and qualification of his or her respective successor. It is the intention of the
persons named in the proxy to vote the proxies which are not marked to the
contrary for the election as directors of the persons named below as nominees.
If any such nominee refuses or is unable to serve as a director, the persons
named as proxies may in their discretion vote for any or all other persons who
may be nominated. The eight nominees receiving the greatest number of votes cast
will be elected directors, provided that each nominee receives at least a
majority of the votes cast.
2
<PAGE> 5
Director nominees standing for election to serve until the 1999 Annual Meeting
are:
<TABLE>
<CAPTION>
DIRECTOR
--------
NAME AGE POSITION WITH COMPANY RESIDENCE SINCE
- ---- --- --------------------- --------- -----
<S> <C> <C> <C> <C>
Rotchford L. Barker 61 Director Cody, WY. 1996
Paul C. Bergson 53 Director Washington, D.C. 1996
Keith D. Bronstein 48 Director Chicago, IL. 1997
Patricia M. Eckert 50 Director San Francisco, CA. 1995
Edward F. Heil 53 Director Chicago, IL. 1994
Jack K. Lemley 63 Director, Chairman and Boise, ID. 1992
Chief Executive Officer
Paul F. Schutt 65 Director Norcross, GA. 1994
John J. Scoville 62 Director Sebastopol, CA. 1984
</TABLE>
Rotchford L. Barker became a director in April 1996. Mr. Barker is an
independent businessman 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 C. 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.
Keith D. Bronstein, a member of the Chicago Board of Trade and
President of Tradelink LLC, became a director in January 1997. Previously he has
served as a board member of the American Cancer Society, as lay board member of
The University of Wisconsin Medical School, as a member of the Wisconsin Health
Policy Board, and is a trustee member of Highland Park Hospital & Lakeland
Health Service. Mr. Bronstein was a co-founder of S'Lil Pharmaceuticals, a
bio-technology company involved in early-stage discovery and development of
pharmaceutical drugs.
Patricia M. Eckert currently practices law in California and is the
owner of a telecommunications and energy consulting firm. Ms. Eckert formerly
served as the President of the California Public Utilities Commission and as a
Commissioner from 1989 to 1994.
Edward F. Heil has been the Chairman of the Board of American
Environmental Construction Company for more than the last five years.
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.
3
<PAGE> 6
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.
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., and NFS Radiation Protection
Systems, 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.
The Company is not aware of any involvement in 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.
There are no family relationships among the directors and executive officers of
the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS.
The Committees of the Board of Directors during 1997 were the
Nominating, Executive, Audit, Compensation and Finance Committees.
The members of the Nominating Committee are Messrs. Lemley, Heil and
Scoville. Mr. Scoville is chairman. The Nominating Committee searches for and
recommends to the Board of Directors, qualified and experienced individuals to
fill vacancies and new director seats, upon expansion of the board. The
Nominating Committee met two times during 1997.
The members of the Executive Committee are Messrs. Lemley, Barker, Heil
and Scoville. Mr. Lemley is chairman. Except certain powers which, under
Delaware law, may only be exercised by the full Board of Directors, the
Executive Committee may exercise all powers and authority of the Board of
Directors in the management of the business of the Company. The Executive
Committee did not meet in 1997.
The members of the Audit Committee are Messrs. Bergson, Schutt and Ms.
Eckert. Mr. Schutt is chairman. The Audit Committee reviews the proposed plan
and scope of the Company's annual audit as well as the result when it is
completed. The Committee reviews the services provided by the Company's
independent auditors and their fees. The Committee also meets with the Company's
financial personnel to assure the adequacy of the Company's accounting
principles, financial controls and policies. The Committee is also charged with
reviewing transactions which may present a conflict of interest on the part of
management or directors. The Audit Committee met three times in 1997.
4
<PAGE> 7
The members of the Compensation Committee are Messrs. Barker, Bergson,
Heil and Schutt. Mr. Barker is chairman. The Compensation Committee reviews and
approves executive officer and key employee compensation and benefits. It also
administers the Company's employee stock option plan, approving the grant and
terms of stock options to executives and key employees of the Company. The
Compensation Committee met three times in 1997.
During 1997, the Board of Directors held six meetings. All directors
attended 80% or more of the meetings of the Board of Directors and Committees of
the Board on which they served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
During 1997, no member of the Directors Compensation Committee was an
officer or employee of the Company or any of its subsidiaries, or had any other
relationship requiring disclosure by the Company under Item 404 of Securities
and Exchange Commission regulations.
During 1996, no executive officer of the Company served as: (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of an unrelated entity, one of whose executive officers
served on the Directors Compensation Committee of the Company, (ii) a director
of an unrelated entity, one of whose executive officers served on the Directors
Compensation Committee of the Company, or (iii) a member of the Compensation
Committee (or other board committee performing equivalent functions) of another
entity, one of whose executive officers served as a director of the Company.
DIRECTORS' COMPENSATION.
Directors who are not employees of the Company or its subsidiaries
receive an annual fee of $16,000 payable quarterly, plus $1,333 for each special
meeting attended in person, which at the director's discretion is payable
quarterly in stock of the Company at its then market price. Directors who are
employees of the Company receive no additional compensation for their service as
directors. Mr. Lemley is the only director who is employed by the Company. All
directors are reimbursed for their travel and other expenses involved in
attendance at Board and committee meetings.
In addition, each director who at the time of his or her initial
election to the Board is not an employee of the Company is granted a stock
option to purchase from the Company 7,500 shares of the Company's common stock.
Each director who is not an employee of the Company at the time of each
re-election to the Board is also granted a stock option to purchase from the
Company 10,000 shares of the Company's common stock. The grants are made in
accordance with the terms of the directors' 1992 Stock Option Plan.
5
<PAGE> 8
PROPOSAL NO. 2
AMENDMENT OF DIRECTORS' 1992 STOCK OPTION PLAN
AND TO INCREASE COMMON STOCK AVAILABLE FOR GRANT
On March 12, 1997, the Board of Directors by unanimous vote of those
present, adopted a resolution approving and submitting to a vote of the
stockholders an amendment to the Company's director stock option plan.
The Company currently maintains a 1992 Outside Director Stock Option
Plan (the "Plan"), which provides the outside Directors of the Company
additional incentive for their service as Directors. The Company is dependent
for the successful conduct of its business on the incentive, effort and judgment
of its Directors. There are currently only 17,500 options available for grant
under the Plan.
If approved by stockholders, the amendment to the Plan will make an
additional 300,00 options available for issuance and permit quarterly director
fees to be paid in stock from the Plan. The following is a summary of the
principal features of the current Plan and proposed amendments. A copy of the
Plan, as proposed to be amended, it attached hereto as Exhibit A.
Shares Subject to the Plan. Currently, up to an aggregate of 350,000
shares of the Company's Common Stock may be issued under the Plan. If amended,
the Plan will provide for an aggregate of 650,000 shares of Common Stock to be
issued (an increase of 300,000 shares). Shares which are not issued prior to
expiration or termination of an option will be available for future option
grants and do not increase the aggregate number of shares available under the
Plan. The Plan provides for appropriate adjustment of shares available under the
Plan and of shares subject to outstanding options in the event of any changes in
the outstanding Common Stock of the Company by reason of recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction.
Type of Option. Options granted are not intended to qualify as
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended.
Eligibility and Participation. All Directors of the Company who are not
officers or employees of the Company are eligible to participate in the Plan.
Under the Plan, options to purchase 7,500 shares of Common Stock are granted
upon each eligible director's initial election to the Board, and options to
purchase 10,000 shares of Common Stock are granted upon re-election. If the
amendment is approved, each eligible director will be paid quarterly director's
fees from the Plan if the director so elects.
Rights as a Stockholder. Except as expressly provided in the Plan, the
recipient of an option has no rights as a stockholder (such as voting or
dividends) with respect to shares covered by the recipient's option until the
date of issuance of a stock certificate for such shares.
6
<PAGE> 9
Transferability. During the life of the option holder, any stock option
will be exercisable only by the recipient, and will be transferable only by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order.
Duration of the Plan. The Plan is effective until all options have been
granted under the Plan or ten years from March 3, 1994, the date the Plan was
approved.
Purchase Price. The purchase price payable to exercise an option is set
at the fair market value of the Common Stock on the date the option is granted.
Payment in full for the number of shares purchased upon the exercise of options
is required. On March 31, 1998 the closing price for the Common Stock on the
NASDAQ National Market was $2.00 per share.
Basic Terms of Options. Each option is evidenced by a stock option
agreement containing terms and conditions not inconsistent with the provisions
of the Plan in substantially the form attached as Exhibit A to the Plan. The
options are exercisable in whole or in part upon grant until the option shall
terminate or expire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT AND INCREASE OF SHARES AVAILABLE FOR GRANT UNDER THE
DIRECTORS' 1992 STOCK OPTION PLAN. Proposal No. 2 will be adopted if a majority
of the outstanding common stock represented at the Meeting is voted in favor. If
the proposal is not adopted, the Company will be unable to fulfill its
obligation to appropriately compensate its directors with options.
PROPOSAL NO. 3
SELECTION OF AUDITORS
The Board of Directors has selected Balukoff, Lindstrom & Co., P.A.
("Balukoff, Lindstrom"), as independent auditors for the Company's 1998 fiscal
year. Balukoff, Lindstrom examined the financial statements of the Company for
its 1996 and 1997 fiscal years. It is expected that representatives of Balukoff,
Lindstrom will be present at the Meeting, will have the opportunity to make a
statement if they so desire, and will be available to respond to appropriate
questions.
Although selection of auditors is not required to be submitted to a
vote of the stockholders, THE BOARD OF DIRECTORS HAS DECIDED TO ASK THE
STOCKHOLDERS TO APPROVE THE SELECTION AND RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR APPROVAL. If a majority of shares of common stock voting on this proposal at
the Meeting does not vote to approve the selection, the Board of Directors will
reconsider the selection.
7
<PAGE> 10
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
OFFICE HELD AS OF
APRIL 7, 1998 NAME AGE CITY STATE DIRECTOR/OFFICER
- ------------- ---- --- ---- ----- ----------------
<S> <C> <C> <C> <C> <C>
Director, Chairman and Jack K. Lemley 63 Boise Idaho 1992-Director
Chief Executive Officer 1995-Chief
Executive Officer
President................. Joseph J. Nagel 55 Boise Idaho February 12, 1998
Vice President............ Richard F. Paton 48 Oak Ridge Tennessee October 12, 1995
Vice President............ Robert S. Thorn 75 Boise Idaho May 22, 1996
Treasurer................. Ian P.F. Dorling 50 Boise Idaho March 27, 1996
</TABLE>
Mr. Lemley's business biography is located in the section concerning
election of directors.
Joseph J. Nagel joined the Company in 1996 as Vice President for
Governmental and Regulatory Affairs. In February 1997, Mr. Nagel was appointed
Executive Vice President and Chief Operating Officer of the Company's US Ecology
subsidiary, and in February 1998 Mr. Nagel was appointed President and Chief
Operating Officer of the Company. Prior to 1996, Mr. Nagel was the Administrator
of the Idaho Division of Environmental Quality for six years.
Richard F. Paton has been employed by the Company or its subsidiaries
in various positions since 1986.
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.
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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16 of the Securities Exchange Act of 1934 ("Section 16")
requires that reports of beneficial ownership of common stock and preferred
stock and changes in such ownership be filed with the Securities and Exchange
Commission by Section 16 "reporting persons" including directors, certain
officers, holders of more than 10% of the outstanding common stock or preferred
stock, and certain trusts of which certain reporting persons are trustees. The
Company is required to disclose in this proxy statement each reporting person
whom it knows to have failed to file any required reports under Section 16 on a
timely basis. Based solely upon a review of copies of Section
8
<PAGE> 11
16 reports furnished to the Company and written statements confirming that no
other reports were required, to the Company's knowledge, all Section 16
reporting requirements applicable to known reporting persons were complied with,
except that Mr. Bronstein reported three February 1997 open market purchases of
the Company's common stock in May 1997 rather than March 1997, as required.
EXECUTIVE COMPENSATION
Set forth below is information regarding the compensation of the
Company's Chief Executive Officer and the other most highly compensated
executive officers for 1997.
The following summary compensation table contains information regarding
the compensation of each of the named executive officers for services rendered
in all capacities during 1995, 1996 and 1997.
9
<PAGE> 12
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
--------- All Other
Name and Principal Annual Compensation Compensation Compensation(1)
------------------- ------------ ------------
Position Year Salary Bonus Grant Options
-------- ---- ------ ----- ----- -------
(shares)
------
<S> <C> <C> <C> <C> <C> <C>
Jack K. Lemley ................... 1997 $150,000 -0- $42,187(2) 150,000 $ 9,563
Chairman, Chief Executive 1996 $150,000 -0- -0- -0- $ 762
Officer 1995 $167,017 -0- -0- 250,000 $ 4,589
Joseph J. Nagel(3) ............... 1997 $ 93,461 -0- -0- 10,000 $ 3,392
President, Chief Operating 1996 $ 52,075 -0- -0- -0- $ 550
Officer 1995 -0- -0- -0- -0- -0-
Richard F. Paton ................. 1997 $ 96,900 -0- -0- -0- $ 3,361
Vice President 1996 $ 96,890 -0- -0- -0- $ 3,198
1995 $ 96,828 -0- -0- 1,500 $ 3,919
Robert S. Thorn(4) ............... 1997 $ 97,769 -0- -0- 10,000 $ 2,030
Vice President 1996 $ 59,558 -0- -0- -0- $ 41,328
1995 -0- -0- -0- -0- $ 12,880
</TABLE>
- -----------------
(1) Includes the amount of premium paid by the Company for group term life
insurance with benefits for each named executive officer, and the amount of
the Company's matching contribution under the Company's 401(k) Savings Plan
and the Company's Retirement Plan, and in the case of Mr. Lemley, the premium
paid on a split benefit whole life insurance policy.
(2) On September 11, 1997 Mr. Lemley was granted 25,000 shares of the Company's
common stock by the Board of Directors upon recommendation of the Compensation
Committee. The market value of the stock at the time of the grant is stated.
(3) Mr. Nagel joined the Company on April 15, 1996.
(4) Mr. Thorn became an employee May 1, 1996 with an annual salary of $95,000.
Prior to becoming an employee (November 26, 1995 - April 30, 1996), he was paid
$10,000 per month as a consultant.
10
<PAGE> 13
The following table provides information concerning 1997 stock option
grants to the Company's executive officers.
1997 OPTION GRANTS
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value at Assumed
------------------------------------------------------ Annual Rates of Stock Price
Appreciation for Option Term
-----------------------------------------------
Number of Percent of 5% 10%
Securities all Options ---------------------- ------------------------
Underlying Granted to Exercise Stock Stock
Name Options(5) Employees Price Expires Price Value Price Value
- ----------------------- -------------- ------------- ------------ ------------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack K. Lemley 150,000 88.2 $ 1.81 8/12/07 $ 2.95 $ 171,000 $ 4.69 $ 432,000
Joseph J. Nagel 10,000 5.9 $ 2.00 9/04/07 $ 3.26 $ 12,600 $ 5.19 $ 31,900
Robert S. Thorn 10,000 5.9 $ 2.00 9/04/07 $ 3.26 $ 12,600 $ 5.19 $ 31,900
</TABLE>
The following table provides information concerning executive officers'
stock options exercised in 1997 and those remaining outstanding at the end of
1997.
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR-END VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised in-the-Money Options(6)
Shares Options at Fiscal Year-End
Acquired on Value ----------------------------------- -----------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ----------------- ------------- ---------------- ------------------ --------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Jack K. Lemley 50,000 None(7) 270,500 100,000 -0- -0-
Joseph J. Nagel -0- N/A 10,000 -0- -0- -0-
Richard F. Paton -0- N/A 4,000 1,000 -0- -0-
Robert S. Thorn 2,500 None(7) 7,500 -0- -0- -0-
</TABLE>
- ---------------
(5) All options granted were exercisable as of the option grant date, which was
August 12, 1997 with respect to Mr. Lemley and September 4, 1997 with respect
to Messrs. Nagel and Thorn.
(6) A stock option is considered to be "in-the-money" if the price of the
related stock is higher than the exercise price of the option. The closing
market price of the Company's common stock was $1.25 per share on the NASDAQ
National Market on December 31, 1997.
(7) Neither Mr. Lemley nor Mr. Thorn disposed of any shares acquired on
exercise of options.
11
<PAGE> 14
COMPENSATION COMMITTEE REPORT.(8)
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 reviews and approves the Company's
compensation and benefit plans and administers the key employee and executive
officer 1992 Stock Option Plan. This Report describes the basis on which the
1997 compensation determinations were made by the Compensation Committee with
respect to the executive officers of the Company.
The Company believes that executive compensation should reflect value
created for stockholders in furtherance of the Company's strategic goals. The
following objectives are among those utilized by the Compensation Committee:
1. Executive compensation should be meaningfully related to 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.
4. Short and long term executive compensation are critical factors in
attracting and retaining well qualified executives.
Currently the Company has 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 compensation program 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. The base salaries for 1997 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. During 1997, Jack K. Lemley,
the chief executive officer of the Company received a base salary of $150,000,
which the Committee believes to be
- -------------
(8) Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference other
SEC filings 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 Regulation S-K.
12
<PAGE> 15
below the average of the base salary for chief executive officers with
comparable qualifications, experience and responsibilities of other companies in
the environmental industry.
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. The Compensation
Committee determined, after the end of 1997, not to pay cash bonuses to the
executive officers of the Company, given the financial performance of the
Company which was below expectations. Mr. Lemley received a grant of 25,000
shares of common stock in 1997.
LONG-TERM INCENTIVES -- The stock option program is the Company's
long-term incentive plan for executive officers and key employees. 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 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 market
value on the grant date 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.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth, as of March 9, 1998, the beneficial
ownership (as defined in the rules of the Securities and Exchange Commission) of
the Company's common stock by (a) beneficial owners of more than five percent;
and (b) beneficial ownership of management. Unless otherwise noted, each
beneficial owner identified has sole voting and investment power with respect to
the shares indicated.
13
<PAGE> 16
(a) BENEFICIAL OWNERS
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Class
------------------- ------------------ ------
<S> <C> <C>
Edward F. Heil(9).................................... 5,138,409.59 33.82%
8550 West Bryn Mawr
Chicago, Illinois 60631
Harry J. Phillips, Jr.(10)........................... 2,957,739.46 20.55%
3 Riverway, Suite 170
Houston, Texas 77056
Rotchford L. Barker(11).............................. 3,068,866.44 20.17%
40 County Road 2AC
Cody, Wyoming 82414
Jack K. Lemley(12)................................... 967,220.30 6.76%
805 West Idaho, Suite 200
Boise, Idaho 83702
</TABLE>
- -----------------
(9) Pursuant to a Section 16 Form 4 filed on March 9, 1998, Mr. Heil reported
that 2,814,607 shares of common stock are beneficially owned individually by Mr.
Heil and 629,460 shares are beneficially owned by Mr. Heil in his capacity as
trustee of a trust. Also included in the table are 37,500 shares subject to
option; common stock if 35,245.90 Series D Preferred stock is converted; 352,459
Series D Warrants are exercised; and 1,000,000 Series E Warrants are exercised.
(10) Pursuant to a Schedule 13-D/A filing on February 16, 1996, Mr. Phillips
reported that he may be deemed the beneficial owner of 952,608 shares of common
stock, 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 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. In addition, Mr. Phillips owns 47,895.12 shares of Series D
Preferred which may be converted into 413,622.26 shares of common stock and
Series D Warrants for 478,951.2 shares of common stock.
(11) Mr. Barker's beneficial shares include 1,352,516 shares of common stock and
1,716,350.44 derivative shares. The derivative shares include 27,271.54 shares
if Series D preferred is converted, 31,578.90 shares if Series D Warrants are
exercised, 1,650,000 shares if Series E Warrants are exercised, and 7,500
options.
(12) Mr. Lemley's beneficial shares include 159,000 shares of common stock, and
808,220.30 derivative shares. The derivative shares include 52,271.20 shares if
Series D preferred is converted, 60,527.10 shares if Series D Warrants are
exercised and 695,422 options exercisable within 60 days.
14
<PAGE> 17
(b) DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Of Beneficial Owner Amount And Nature Of Beneficial Percent Of Class
------------------------ ------------------------------- ----------------
Ownership
---------
<S> <C> <C>
DIRECTORS
Rotchford L. Barker(11) 3,068,866 20.17
Paul C. Bergson(13) 205,294 1.51
Keith D. Bronstein(14) 528,194 3.84
Patricia M. Eckert(15) 27,500 *
Edward F. Heil(9) 5,138,409 33.82
Jack K. Lemley(12) 967,220 6.76
Paul F. Schutt(16) 198,265 1.46
John J. Scoville(17) 80,518 *
* indicates less than 1%
EXECUTIVE OFFICERS
Ian P.F. Dorling(18) 2,764 *
Joseph J. Nagel(19) 12,000 *
Richard F. Paton(20) 6,380 *
Robert S. Thorn(21) 13,500 *
All directors and executive officers
as a group 10,248,210 55.87%
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------
(13) Mr. Bergson's beneficial ownership includes 77,794 shares of common stock,
27,500 options and Series E Warrants exercisable for 100,000 shares of common
stock.
(14) Mr. Bronstein's beneficial ownership includes 260,694 shares of common
stock, 17,500 options and Series E Warrants exercisable for 250,000 shares of
common stock.
(15) Ms. Eckert's beneficial ownership includes 5,000 shares of
common stock and 22,500 options.
(16) Mr. Schutt's beneficial ownership includes 82,680 shares of common stock,
17,500 options, 45,453 shares if 5,263 Series D preferred shares are converted
and Series D Warrants exercisable for 52,632 shares of common stock.
(17) Mr. Scoville's beneficial ownership includes 14,325 shares of common stock,
50,500 options, 7,272 shares if 842 Series D preferred shares are converted and
Series D Warrants exercisable for 52,632 shares of common stock.
(18) Mr. Dorling's beneficial ownership includes 1764 shares of common stock
held in the Company's 401(k) plan and 300 options exercisable within 60 days.
(19) Mr. Nagel's beneficial ownership is comprised of 12,000 options exercisable
within 60 days.
(20) Mr. Paton's beneficial ownership includes 1780 shares of common stock held
in the Company's 401(k) plan and 4,600 options exercisable within 60 days.
(21) Mr. Thorn's beneficial ownership includes 5,600 shares of common stock and
7,900 options exercisable within 60 days.
15
<PAGE> 18
During 1997 the Company had no relationships or related transactions
with its officers, directors or securities holders of more than five percent
that would require disclosure under Securities and Exchange Commission
Regulation S-K, Item 404, 17 C.F.R. ss. 229.404.
STOCK PERFORMANCE(22)
The following graph compares the most recent five year market-value
performance of the Company's common stock to the NASDAQ US and Foreign Stock
Index, and a hazardous waste industry peer group(23) which the Company believes
accurately reflects its competitors. The graph assumes that the value of the
investment in the common stock and each index was $100 at December 31, 1989.
- -------------------
(22) Notwithstanding filings by the Company with the SEC that have incorporated
or may incorporate by reference other SEC filings (including this proxy
statement) in their entirety, this performance graph 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 Regulation S-K.
(23) The companies which make up the Company's peer group are: 3CI Complete
Compliance Corp.; American Medical Tech, Inc.; American Waste Services; Ametech;
Biomedical Waste Systems, Inc.; Chemical Waste Management; WMX Technologies,
Inc.; Clean Harbors Inc.; Environmental Services of America, Inc.; GNI Group;
Metalclad Corp.; Mobley Environmental Services, Inc.; Molten Metal Technology;
Perma-Fix Environmental Services, Inc.; Rollins Environmental Services; Safety
Kleen Corp.; and Security Environmental Systems.
16
<PAGE> 19
STOCKHOLDER PROPOSALS AT THE NEXT
ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals submitted for inclusion in the Company's 1999
proxy materials and consideration at the 1999 annual meeting of stockholders
must be received by the Company no later than December 17, 1998. Stockholder
proposals should be submitted to the Secretary of American Ecology Corporation,
805 W. Idaho, Suite 200, Boise, Idaho 83702. Any such proposal should comply
with the Securities and Exchange Commission rules governing stockholder
proposals submitted for inclusion in proxy materials.
OTHER MATTERS
The management of the Company knows of no other matters which may come
before the Meeting. However, if any matters other than those referred to above
should properly come before the Meeting, it is the intention of the persons
named in the enclosed proxy to vote all proxies in accordance with their best
judgment.
AMERICAN ECOLOGY CORPORATION
April 17, 1998
17
<PAGE> 20
EXHIBIT "A"
AMERICAN ECOLOGY CORPORATION
AMENDED AND RESTATED
1992 OUTSIDE DIRECTOR STOCK OPTION PLAN
ARTICLE I
PURPOSE
American Ecology Corporation, a Delaware corporation (the "Company"),
is dependent for the successful conduct of its business on the initiative,
effort and judgment of its directors. This Amended and Restated 1992 Outside
Director Stock Option Plan (the "Plan") is intended to provide the outside
directors of the Company additional compensation for their service as directors
and an incentive, through options to acquire stock in the Company, to increase
the value of the Company's Common Stock, par value $0.01 per share ("Common
Stock").
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company
(the "Board"). Subject to the express provisions of the Plan and the policies of
each stock exchange on which any of the Company's stock at any time may be
traded, the Board shall have plenary authority (i) to construe and interpret the
Plan, (ii) to define the terms used therein, (iii) to prescribe, amend and
rescind rules and regulations relating to the Plan, and (iv) to make all other
determinations necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Board shall be binding and
conclusive on all participants in the Plan and their legal representatives and
beneficiaries. No member of the Board shall be liable for any action, failure to
act, determination or interpretation made in good faith with respect to the Plan
or any transaction under the Plan.
A-1
<PAGE> 21
ARTICLE III
ELIGIBILITY AND PARTICIPATION
Under the Plan each director who at the time of his initial election to
the Board is not an employee of the Company shall, effective as of the date of
his initial election to the Board, be granted a stock option to purchase from
the Company 7,500 shares of the Company's common stock, par value $0.01 per
share ("Common Stock") at a price determined as set forth in Article IV below.
Under the Plan each director who at the time of each re-election to the
Board is not an employee of the Company, shall, effective as of the date of his
reelection to the Board, be granted a stock option to purchase from the Company
10,000 shares of the Company's Common Stock at a price determined as set forth
in Article IV below.
Under the Plan, each director who is not an employee of the Company may
elect to receive annual directors' fees in common stock of the Company issued on
a quarterly basis from the Plan. The fair market value of the stock and
corresponding number of shares to be issued shall be determined as of the last
stock exchange trading day of the relevant calendar quarter for which the
directors' fees are to be paid, in accordance with Article IV (e) below.
Each director described in the preceding three paragraphs is referred
to herein as an "Eligible Outside Director".
ARTICLE IV
TERMS AND CONDITIONS OF STOCK OPTIONS;
STOCK OPTION PRICE; TRANSFERABILITY
(a) Each stock option granted under the Plan shall be evidenced by a
Director Stock Option Agreement (the "Agreement") in substantially the form
attached hereto as Exhibit A, or such other form as may be hereafter approved by
the Board on the advice of counsel to the Company. The Agreement shall be
executed by the Company and the optionee. The sale of the shares issued on the
exercise of a stock option by any person subject to Section 16 of the 1934 Act
shall not be allowed until at least six months after the later of (i) the
approval of this Plan by the shareholders of the Company in accordance with
Article VIII hereof or (ii) the grant of the stock option. Such determination
for each stock option is to be made prior to or at the time that stock option is
granted.
A-2
<PAGE> 22
(b) The per share stock option price shall be an amount equal to the
Fair Market Value (as defined below) of the Common Stock on the date of grant of
the stock option. In no event shall the stock option price be less than the par
value of the Company's Common Stock.
(c) Stock options granted hereunder shall not be transferable otherwise
than by will or operation of the laws of descent and distribution or pursuant to
a qualified domestic relations order as defined in the Internal Revenue Code of
1986, as amended (the "Code"), or Title I of the Employee Retirement Income
Security Act of 1974 ("ERISA"), or the rules thereunder.
(d) No stock option granted hereunder shall be exercisable unless the
Plan and all shares issuable on the exercise thereof have been registered under
the Securities Act of 1933, as amended (the "1933 Act") and all other applicable
securities laws, and there is available for delivery a prospectus meeting the
requirements of Section 10 of the 1933 Act, or the Company shall have first
received the opinion of its counsel that registration under the 1933 Act and all
other applicable securities laws is not required in connection with such
issuance. At the time of exercise, if the shares with respect to which the stock
option is being exercised have not been registered under the 1933 Act and all
other applicable securities laws, the Company may require the optionee to
provide the Company whatever written assurance counsel for the Company may
require that the shares are being acquired for investment and not with a view to
the distribution thereof, and that the shares will not be disposed of without
the written opinion of such counsel that registration under the 1933 Act and all
other applicable securities laws is not required. Share certificates issued to
the optionee upon exercise of the stock option shall bear a legend to the
foregoing effect to the extent counsel for the Company deems it advisable.
(e) For purposes of the Plan, the term "Fair Market Value" on any date
shall mean (i) if the Common Stock is listed or admitted to trade on a national
securities exchange or national market system, the closing price of the Common
Stock, as published in the Wall Street Journal, so listed or admitted to trade
on such date or, if there is no trading of the Common Stock on such date, then
the closing price of the Common Stock on the next preceding date on which there
was trading in such shares; (ii) if the Common Stock is not listed or admitted
to trade on a national securities exchange or national market system, the mean
between the bid and asked price for the Common Stock on such date, as furnished
by the National Association of Securities Dealers, Inc. through NASDAQ or a
similar organization if NASDAQ is no longer reporting such information; or (iii)
if the Common Stock is not listed or admitted to trade on a national securities
exchange and if bid and asked prices for the Common Stock are not so furnished
through NASDAQ or a similar organization, the value established by the Board for
purposes of the Plan. In addition to the above rules, Fair Market Value shall be
determined without regard to any restriction other than a restriction which, by
its terms, will never lapse.
A-3
<PAGE> 23
ARTICLE V
SHARES SUBJECT TO PLAN AND DURATION OF PLAN
The Plan shall expire and terminate on the earlier of (i) the date ten
years from the effective date of this Plan, or (ii) the date on which there have
been granted to Eligible Outside Directors pursuant to the Plan stock options to
purchase an aggregate of 650,000 shares of the Common Stock. Shares subject to
stock options under the Plan may be either authorized and unissued shares or
issued shares which have been acquired by the Company and are being held in its
treasury, in the sole discretion of the Board.
ARTICLE VI
ADJUSTMENTS
(a) Adjustments Upon Changes in Capitalization. Subject to any required
action by the Company's directors and shareholders, the number of shares
provided for in each outstanding stock option and the price per share thereof,
and the number of shares provided for in the Plan, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of the
Company's Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend (but only on the Common Stock), a stock
split, a reverse stock split, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company, and shall
also be proportionately adjusted in the event of a spin-off, spin-out, or other
distribution of assets to shareholders of the Company, to the extent necessary
to prevent dilution of the interests of grantees pursuant to the Plan or of the
other shareholders of the Company, as applicable. If the Company shall engage in
a merger, consolidation, reorganization or recapitalization, each outstanding
stock option (or if such transaction involves less than all of the shares of the
Company's Common Stock, then a number of stock options proportionate to the
number of such involved shares), shall become exercisable for the securities and
other consideration to which a holder of the number of shares of the Company's
Common Stock subject to each such stock option would have been entitled to
receive in any such merger, consolidation, reorganization or recapitalization.
A-4
<PAGE> 24
(b) Acceleration. In the event of a potential merger or consolidation
involving the Company regardless of whether the Company is the surviving entity
of such merger or consolidation, a potential liquidation or dissolution of the
Company, a potential sale or other disposition by the Company of all or
substantially all of its assets, or a potential sale or other disposition by the
shareholders of the Company of all or substantially all of the outstanding
Common Stock to one purchaser (any such merger, consolidation, liquidation,
dissolution, or sale being referred to herein as a "Significant Event"), then
the Company shall have the option of terminating all outstanding stock options
upon the actual occurrence of the Significant Event, by notice to all optionees
at least 15 days before the occurrence of the Significant Event. Any exercise by
an optionee in these circumstances may be conditioned upon the occurrence of the
Significant Event. Upon the actual occurrence of the Significant Event, each
outstanding stock option shall terminate if the Company exercises its option
under this paragraph (b). If the potential Significant Event does not in fact
occur for any reason, then the Company's exercise of its option under this
paragraph (b) shall have no effect and his or her rights will be the same as if
the Company had never exercised its option under this paragraph (b).
(c) Change of Par Value. In the event of a change in the Company's
Common Stock which is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be
Common Stock within the meaning of the Plan.
(d) Miscellaneous. The adjustments provided for in this Article shall
be made by the Board whose determination in that respect shall be final, binding
and conclusive. Except as hereinbefore expressly provided in this Article, the
holder of a stock option shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock or other stock not actually issued
and delivered to the holder. Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect and no adjustment by reason thereof shall be made with respect to the
number or price of shares of the Company's Common Stock subject to any stock
option. The grant of a stock option pursuant to the Plan shall not affect in any
way the right or power of the Company to, among other things, make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve or liquidate or sell or
transfer all or any part of its business or assets.
A-5
<PAGE> 25
ARTICLE VII
AMENDMENT OR DISCONTINUANCE
The Board may at any time and from time to time amend the Plan, as it
shall deem advisable, provided that the Plan may not be amended more than once
every six months, other than to comport with changes in the Code, ERISA, or the
rules thereunder. In addition to Board approval of any amendment to the Plan, if
the Board further determines on advice of counsel that it is necessary or
desirable to obtain shareholder approval of any amendment to the Plan in order
to comply with Rule 16b-3 of the General Rules and Regulations under the
Securities Exchange Act of 1934, or any successor rule, as it shall read as of
the time of amendment, or for any other reason, then the effectiveness of any
such amendment may be conditioned upon its approval by the holders of a majority
of the outstanding voting stock of the Company (voting as a single class), and
entitled to vote on, and voted for or against approval of, the amendment at a
meeting of such shareholders duly held in accordance with the applicable laws of
the state or other jurisdiction in which the Company is incorporated, or such
other shareholder approval as may be specified by the Board.
No change may be made in, and no amendment, rescission, suspension or
termination of the Plan shall have an effect on, stock options previously
granted under the Plan which may impair or alter the rights or obligations of
the holders thereof, except that any change may be made in stock options
previously granted with the consent of the optionees.
ARTICLE VIII
EFFECTIVE DATE; SHAREHOLDER APPROVAL
The amendments to the Plan shall be effective as of March 12, 1998, the
date on which it received the approval of the Company's Board of Directors.
However, the Plan amendments and all stock options granted under the Plan after
March 12, 1998 (but not the previous 1992 Outside Director Stock Option Plan of
the Company) shall be void if the Plan is not approved by the shareholders, in
which case, the previous 1992 Outside Director Stock Option Plan of the Company
shall remain in full force and effect. The Plan shall be deemed approved by the
holders of the outstanding voting stock of the Company by the affirmative votes
of the holders of a majority of the outstanding voting stock of the Company
present, or represented, and entitled to vote at a meeting of such shareholders
duly held in accordance with the applicable laws of the state of Delaware, in
which the Company is incorporated. No stock option granted under the Plan (but
not the previous 1992 Outside Director Stock Option Plan of the Company) shall
be exercisable in whole or in part unless and until such shareholder approval is
obtained.
A-6
<PAGE> 26
EXHIBIT "A"
- -------------------------------------------------------------------------------
AMERICAN ECOLOGY CORPORATION
DIRECTOR STOCK OPTION AGREEMENT
- -------------------------------------------------------------------------------
10,000 SHARES
(DATE OF ELECTION)
As additional incentive for services to be rendered to American Ecology
Corporation (the "Company") as a member of the Board of Directors of the Company
(the "Board"), and in order to induce ____________________ ("Optionee") to
continue rendering such services to the Company, the Company hereby grants to
Optionee this Director Stock option (the "Option") to purchase from the Company
_________ shares of the Company's Common Stock, par value $0.01 per share
("Common Stock"), at a price of $______ per share, subject, however, to the
provisions of the Company's Amended and Restated 1992 Outside Director Stock
Option Plan (the "Plan"), a copy of which is attached hereto as Exhibit A, and
to the following terms and conditions:
1. Subject to the Plan. The terms and provisions of the Plan and any
amendments thereto, are incorporated herein and made a part hereof. If any
provision of this Option conflicts with any provision of the Plan, the
provisions of the Plan shall govern.
2. Term. This Option shall expire ten (10) years after the effective
date of this Agreement (the "Expiration Date"). This Option may be exercised at
any time after the Plan is approved by the Company's shareholders and on or
before the Expiration Date.
3. Limitation Upon Transfer. During the lifetime of Optionee, this
Option and all rights granted hereunder shall not be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
except by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Internal Revenue Code of
1986, as amended, or Title I of the Employee Retirement Income Security Act, or
the rules thereunder, and shall not be subject to execution, attachment or
similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this Option or any of such rights contrary to the
provisions hereof, or upon the levy of any attachment or similar process upon
this Option or such rights, this Option and such rights shall immediately become
null and void.
A-7
<PAGE> 27
4. Method of Exercise. This Option may be exercised in whole or in part
at any time or from time to time during its term by tendering to the Company
written notice of exercise accompanied by the aggregate purchase price for the
shares with respect to which this Option is being exercised. The purchase price
of shares of Common Stock of the Company acquired upon the exercise of this
Option shall be paid by the Optionee by the delivery of cash or certified or
cashier's check payable to the order of the Company, or upon receipt of all
required regulatory approvals, if any, by the delivery to the Company of shares
of the Company's Common Stock theretofore owned by the Optionee having a fair
Market Value (as defined in the Plan) equal to such notice to the Optionee as
soon as practicable after receipt of such notice and payment. Upon exercise of
this Option in full, this Option shall be surrendered to the Company. Upon
exercise of this Option in part, the Company shall be entitled to make a
notation on the face of this Option reflecting such partial exercise and the
extent of which this Option remains exercisable, but the failure of the Company
to make any such notation shall not increase or otherwise affect the obligations
or rights of the Company thereunder.
5. Successors of the Company. This Option shall inure to the benefit of
and be binding upon the Company, and its successors and assigns, as well as upon
the Optionee and his legal representatives, heirs, legatees and distributees.
IN WITNESS WHEREOF, this Option has been executed effective
------------.
COMPANY ADDRESS: AMERICAN ECOLOGY CORPORATION
805 W. Idaho, Suite 200
Boise ID 83702
---------------------------------------
By: Phillip K. Chattin
Its: Secretary
OPTIONEE
---------------------------------------
By:
-----------------------------------
A-8
<PAGE> 28
AMERICAN ECOLOGY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, hereby revoking all prior proxies, hereby appoints Jack
K. Lemley, Robert S. Thorn and Joseph J. Nagel, and each of them, proxies with
full and several power of substitution, to represent and to vote all the shares
of Common Stock of AMERICAN ECOLOGY CORPORATION that the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
AMERICAN ECOLOGY CORPORATION to be held on May 14, 1998, and at any
adjournment(s) thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INDICATIONS ON
THE REVERSE SIDE. IN THE ABSENCE OF SUCH INDICATIONS, A SIGNED PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3, AND IN ACCORDANCE WITH THE JUDGMENT OF THE
PROXY WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BEFORE THE MEETING.
<PAGE> 29
Please mark
your votes as [X]
indicated in
this example
1. Election of Directors (to withhold authority to vote for any individual
members, strike a line through the members name in the list below)
FOR all nominees WITHHOLD AUTHORITY Rotchford L. Barker,
listed to the right to vote for all nominees Paul Bergson, Keith D.
(except as marked to the listed to the right Bronstein, Patricia M.
contrary) Eckert, Edward F.Heil,
Jack K. Lemley, Paul
[ ] [ ] F. Schutt, John J.
Scoville
2. To amend the 1992 directors' Stock Option Plan and increase the shares
available for grant.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the selection of Balukoff, Lindstrom & Co., P.A. as independent
auditors for American Ecology Corporation
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
The undersigned acknowledge(s)
receipt of the Notice of the
aforesaid Annual Meeting, the Proxy
Statement and Annual Report
accompany the same, each dated
April 17, 1998.
Date___________________________,1998
____________________________________
SIGNATURE OF STOCKHOLDER
____________________________________
SIGNATURE IF HELD JOINTLY
