<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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<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 13, 1999
The Annual Meeting of Stockholders of American Ecology Corporation (the
"Company") will be held on May 13, 1999, at 10:00 a.m., Mountain Daylight Time,
at Boise Centre on the Grove, The Perch Room, 850 West Front Street, 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 Employee Stock Option Plan and
increase the shares available for grant from 800,000 to 1,300,000;
3. To amend the Company's Restated Certificate of Incorporation to
increase authorized common stock from 25,000,000 to 50,000,000
shares;
4. To ratify the selection of Balukoff, Lindstrom & Co., P.A. as the
Company's independent auditors for fiscal year 1999; and
5. 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 March 23,
1999 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 12, 1999
<PAGE> 3
AMERICAN ECOLOGY CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1999
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 13, 1999, at 10:00 a.m., Mountain Daylight Time, at Boise Centre on the
Grove, The Perch Room, 850 West Front Street, 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 12, 1999. 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 therefor. 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, 1998 is being furnished with this Proxy Statement to stockholders
of record on March 23, 1999. 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.
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<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company fixed March 23, 1999 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 13,557,275
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 chooses. For a stockholder to exercise
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.
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<PAGE> 5
Director nominees standing for election to serve until the 2000 Annual Meeting
are:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH COMPANY RESIDENCE SINCE
- ---- --- --------------------- --------- -----
<S> <C> <C> <C> <C>
Rotchford L. Barker 62 Director Cody, WY. 1996
Paul C. Bergson 54 Director Washington, D.C. 1996
Keith D. Bronstein 49 Director Chicago, IL. 1997
Patricia M. Eckert 51 Director San Francisco, CA. 1995
Edward F. Heil 54 Director Chicago, IL. 1994
Jack K. Lemley 64 Director, Chairman and Boise, ID. 1992
Chief Executive Officer
Paul F. Schutt 66 Director Norcross, GA. 1994
John J. Scoville 63 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 is also a director of Idacorp, an
energy services holding company that owns Idaho Power Company.
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. Prior to his position at Transmanche-Link, Mr. Lemley founded Lemley and
Associates, Inc. and
3
<PAGE> 6
was a management consultant to various clients in the industry. Mr. Lemley is
also a director of Idacorp, an energy services holding company that owns 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.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES.
During 1998, the Board of Directors held eight meetings. All directors
except Ms. Eckert attended 75% or more of the meetings of the Board of Directors
and Committees of the Board on which they served.
The Committees of the Board of Directors during 1998 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 did not meet during 1998.
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 met once in 1998.
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,
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<PAGE> 7
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 1998.
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 1998.
The members of the Finance Committee are Messrs. Barker, Bronstein,
Heil and Lemley. Mr. Bronstein is chairman. The Finance Committee meets to
review and advise management with respect to the Company's financial
transactions, investments and 401(k) plan. The Finance Committee met five times
during 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
During 1998, 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 1998, 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 non-employee director is granted a stock option to
purchase 7,500 shares of the Company's common stock at the time of his or her
initial election to the Board, and upon each re-election to the Board is granted
a stock option to purchase 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 STOCK OPTION PLAN
TO INCREASE COMMON STOCK AVAILABLE FOR GRANT
The Company currently maintains one Stock Option Plan (the "Plan"),
first adopted in 1992 and amended in 1994, which provides employees of the
Company additional incentive for their service. There are currently only 81,928
options available for grant under the Plan.
In the past, the Company has used stock options to attract and retain
key employees, believing that employee stock ownership and stock-related
compensation encourage parallel interests between employees and shareholders.
Since only 81,928 options remain available for grant under the Plan, the Board
of Directors determined it is necessary and appropriate to amend the Plan.
Accordingly, the Board approved an amendment to make an additional 500,000
options available for issuance pursuant to the Plan and directed that the
amendment be submitted to stockholders for approval and ratification.
If approved, the amendment to the Plan will make an additional 500,000
options available for issuance. The following is a summary of the principal
features of the current Plan, a copy of which is attached hereto as Exhibit A.
Shares Subject to the Plan. Currently, up to an aggregate of 800,000
shares of the Company's Common Stock may be issued under the Plan. If amended,
the Plan will provide for an aggregate of 1,300,000 shares of Common Stock to be
issued (an increase of 500,000 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 Options. Two types of options may be granted under the Plan:
(1) options intended to qualify as incentive stock options under the Internal
Revenue Code, and (2) non-qualified stock options not specifically authorized or
qualified for preferential federal income tax consequences. Generally, gains on
the stock purchased through the exercise of incentive stock options are taxed to
the recipient upon the sale of the stock. Gains in respect of non-qualified
stock options are taxed upon the exercise of the option.
Administration. The Plan is administered by the Company's Directors'
Compensation Committee which is comprised of directors who are not eligible to
participate the Plan.
Eligibility and Participation. All employees, including employee
directors, of the Company are eligible to participate in the Plan.
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<PAGE> 9
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.
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
last restated and 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 30, 1999 the closing price for the Common Stock on the
NASDAQ National Market was $3.03 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. The Compensation Committee has discretion to set vesting schedules
for options. When vested, options are exercisable in whole or in part upon grant
until the option terminates or expires. Options expire within 10 years of grant
and terminate 3 months after termination of employment or one year following the
death of the holder.
The Board of Directors recommends that stockholders vote FOR the
proposed amendment to increase shares available for grant under the 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.
PROPOSAL NO. 3
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION TO INCREASE
AUTHORIZED COMMON STOCK
On April 1, 1999, the Board of Directors adopted a resolution approving
and submitting to a vote of the stockholders an amendment to Article Fourth of
the Company's Restated Certificate of Incorporation ("Certificate") to increase
its authorized common stock from 25,000,000 to 50,000,000 shares. The text of
Article Fourth as proposed to be amended is as follows:
"FOURTH: The total number of shares of stock which the corporation
shall have authority to issue is 50,000,000 shares of common stock, par
value $.01 per share (the "Stock") and 1,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock" or "Preferred
Shares")."
The proposed increase in the authorized common stock is recommended by
the Board of Directors to ensure the availability of an adequate supply of
authorized unissued shares for the
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<PAGE> 10
exercise of existing warrants and stock options and other corporate purposes as
may be decided by the Board of Directors. The Company has, as of March 23,
1999, 13,557,275 shares of common stock outstanding, warrants exercisable for
5,634,063 shares of common stock, stock options exercisable for 1,335,572
shares of common stock, and preferred stock convertible into 909,060 shares of
common stock. If all options, warrants and preferred stock are exercised, the
Company would have 21,435,970 shares of common stock outstanding. Presently,
the Company has no plans, commitments or other understanding with regard to the
additional shares proposed for authorization. Actual issuance of additional
shares requires approval of the Board of Directors.
The Board of Directors recommends that stockholders vote FOR the
proposed amendment to increase the Company's authorized common stock. The
proposed amendment will be adopted if a majority of the outstanding common stock
is voted in favor of the proposed amendment.
PROPOSAL NO. 4
SELECTION OF AUDITORS
The Board of Directors has selected Balukoff, Lindstrom & Co., P.A.
("Balukoff, Lindstrom"), as independent auditors for the Company's 1999 fiscal
year. Balukoff, Lindstrom examined the financial statements of the Company for
its 1996, 1997 and 1998 fiscal years. 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.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
OFFICE HELD AS OF
APRIL 1, 1999 NAME AGE CITY STATE DIRECTOR/OFFICER
- ------------- ---- --- ---- ----- ----------------
<S> <C> <C> <C> <C> <C>
Director, Chairman and Chief Jack K. Lemley 64 Boise Idaho 1992-Director
Executive Officer 1995-Chief Executive
Officer
President....................Joseph J. Nagel 56 Boise Idaho February 12, 1998
Vice President...............Richard F. Paton 49 Oak Ridge Tennessee October 12, 1995
Vice President...............Robert S. Thorn 76 Boise Idaho May 22, 1996
Treasurer....................Ian P.F. Dorling 51 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.
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<PAGE> 11
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 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 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 timely made.
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 1998.
The following summary compensation table contains information regarding
the compensation of each of the named executive officers for services rendered
in all capacities during 1996, 1997 and 1998.
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<PAGE> 12
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION ALL OTHER
NAME AND PRINCIPAL ------------------- ---------------------- COMPENSATION(1)
POSITION YEAR SALARY BONUS GRANT OPTIONS ---------------
-------- ---- ------ ----- ----- -------
(SHARES)
--------
<S> <C> <C> <C> <C> <C> <C>
Jack K. Lemley......................... 1998 $150,000 -0- -0- 424,922 $21,866
Chairman, Chief Executive 1997 $150,000 -0- $42,187(2) 150,000 $ 9,563
Officer 1996 $150,000 -0- -0- -0- $ 762
Joseph J. Nagel(3)..................... 1998 $118,654 -0- -0- 10,000 $ 4,539
President, Chief Operating 1997 $ 93,461 -0- -0- 10,000 $ 3,392
Officer 1996 $ 52,075 -0- -0- -0- $ 550
Richard F. Paton....................... 1998 $ 96,807 -0- -0- 3,000 $ 3,358
Vice President 1997 $ 96,900 -0- -0- -0- $ 3,361
1996 $ 96,890 -0- -0- -0- $ 3,198
Robert S. Thorn(4)..................... 1998 $ 95,000 -0- -0- 2,000 $ 2,030
Vice President 1997 $ 97,769 -0- -0- 10,000 $ 2,030
1996 $ 59,558 -0- -0- -0- $41,328
</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 and automobile
lease.
(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.
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<PAGE> 13
The following table provides information concerning 1998 stock option
grants to the Company's executive officers.
1998 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 424,922 87.27 $ 1.06 2/13/08 $ 1.73 $283,265 $ 2.75 $717,849
Joseph J. Nagel 10,000 2.05 $ 1.25 2/12/08 $ 2.04 $ 7,900 $ 3.24 $ 19,900
Richard F. Paton 3,000 0.62 $ 1.25 2/12/08 $ 2.04 $ 3,370 $ 3.24 $ 5,970
Robert S. Thorn 2,000 0.41 $ 1.25 2/12/08 $ 2.04 $ 1,580 $ 3.24 $ 3,980
</TABLE>
The following table provides information concerning executive officers'
stock options exercised in 1998 and those remaining outstanding at the end of
1998.
AGGREGATED OPTION EXERCISES IN 1998 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 -0- N/A 695,422 100,000 $ 78,058.17 -0-
Joseph J. Nagel -0- N/A 14,000 6,000 -0- -0-
Richard F. Paton -0- N/A 6,200 1,800 -0- -0-
Robert S. Thorn -0- N/A 11,300 1,200 -0- -0-
</TABLE>
- ----------------------------
(5) Options granted were exercisable as of the option grant date, which was
February 13, 1998 with respect to Mr. Lemley and February 12, 1998 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, 1998.
11
<PAGE> 14
COMPENSATION COMMITTEE REPORT.(7)
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
1998 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 1998 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 1998, Jack K. Lemley,
the chief executive officer of the Company received a base salary of $150,000,
which the Committee believes to be
- --------------------------
(7) 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 and key
employees 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. There were no cash bonuses paid to the executive officers of the
Company in 1998.
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. During 1998 the Company granted Mr. Lemley options to purchase
424,922 shares of the Company's common stock at $1.063 per share. Other
employees were granted options to purchase a total of 62,000 shares of the
Company's common stock at prices ranging between $1.25 and $1.69.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth, as of March 10, 1999, 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(8).................................... 5,475,539 35.11%
631 East Butterfield Road, Suite 302
Lombard, Illinois 60148
Harry J. Phillips, Jr.(9)............................ 2,957,739 20.47%
3 Riverway, Suite 170
Houston, Texas 77056
Rotchford L. Barker(10).............................. 3,163,805 20.66%
40 County Road 2AC
Cody, Wyoming 82414
Jack K. Lemley(11)................................... 968,220 6.74%
805 West Idaho, Suite 200
Boise, Idaho 83702
Fayez Sarofim(12).................................... 884,093 6.52%
Fayez Sarofim & Co.
2907 Two Houston Center
Houston, Texas 77010
</TABLE>
- -------------------------------
(8) Pursuant to a Schedule 13-D/A filing on February 10, 1999, Mr. Heil
reported that 2,808,874 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
47,500 shares subject to option; 559,705 shares of common stock if
35,245.90 Series D Preferred stock is converted; 430,000 shares of common
stock if Series D Warrants are exercised; and 1,000,000 shares of common
stock if Series E Warrants are exercised.
(9) 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.
(10) Pursuant to a Schedule 13-D filing on February 10, 1999, Mr. Barker
reported beneficial shares owned including 1,407,631 shares of common
stock and 1,756,174 derivative shares. The derivative shares include
50,147 shares if Series D preferred is converted, 38,526 shares if Series
D Warrants are exercised, 1,650,000 shares if Series E Warrants are
exercised, and 17,500 options.
(11) Mr. Lemley's beneficial shares include 160,000 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.
(12) Pursuant to a Schedule 13-G/A filing on February 12, 1999, Fayez Sarofim
& Co., a registered investment advisor and Mr. Fayez Sarofim reported
that they may be deemed the beneficial owner for reporting purposes of an
aggregate 844,093 shares of the Company's common stock.
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) 3,163,805 20.66
Paul C. Bergson(13) 234,513 1.71
Keith D. Bronstein(14) 559,961 4.05
Patricia M. Eckert(15) 37,500 *
Edward F. Heil(9) 5,475,539 35.11
Jack K. Lemley(12) 968,220 6.74
Paul F. Schutt(16) 220,032 1.61
John J. Scoville(17) 134,729 *
* indicates less than 1%
EXECUTIVE OFFICERS
Ian P.F. Dorling(18) 2,364 *
Joseph J. Nagel(19) 29,000 *
Richard F. Paton(20) 6,780 *
Robert S. Thorn(21) 16,900 *
All directors and executive officers
as a group 10,849,343 57.41%
</TABLE>
- --------------------------------
(13) Mr. Bergson's beneficial ownership includes 97,013 shares of common
stock, 37,500 options and Series E Warrants exercisable for 100,000
shares of common stock.
(14) Mr. Bronstein's beneficial ownership includes 282,461 shares of common
stock, 27,500 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 32,500 options.
(16) Mr. Schutt's beneficial ownership includes 94,447 shares of common stock,
27,500 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, 60,500 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 600 options exercisable within 60
days.
(19) Mr. Nagel's beneficial ownership is comprised of 29,000 options
exercisable within 60 days.
(20) Mr. Paton's beneficial ownership includes 1,780 shares of common stock
held in the Company's 401(k) plan and 5,000 options exercisable within 60
days.
(21) Mr. Thorn's beneficial ownership includes 5,600 shares of common stock
and 11,300 options exercisable within 60 days.
15
<PAGE> 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1998 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.
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 group23 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.
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
American Ecology Corporation 204.0 175.9 78.8 30.4 30.7 30.6
NASDAQ US & Foreign Stock 181.1 175.3 243.6 267.2 348.2 384.5
Peer Group 69.1 56.3 64.8 66.5 45.8 51.6
</TABLE>
[GRAPH]
- -------------------------------------
(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;
Clean Harbors Inc.; Laidlaw Environmental Services, Inc.; Metalclad
Corp.; Mobley Environmental Services, Inc.; Molten Metal Technology;
Perma-Fix Environmental Services, Inc.; Philip Services Corporation;
Safety Kleen Corp.; and Waste Masters, Inc.
16
<PAGE> 19
STOCKHOLDER PROPOSALS AT THE NEXT
ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals submitted for inclusion in the Company's 2000
proxy materials and consideration at the 2000 annual meeting of stockholders
must be received by the Company no later than December 13, 1999. 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 12, 1999
17
<PAGE> 20
AMERICAN ECOLOGY CORPORATION
AMENDED AND RESTATED 1992 STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of this Amended and Restated 1992 Stock Option Plan (the
"Plan") of American Ecology Corporation, a Delaware corporation (the "Company")
is to secure for the Company and its shareholders the benefits arising from
stock ownership by selected executive and other key employees of the Company or
its subsidiaries as the Board of Directors of the Company (the "Board"), or a
Committee constituted for such purpose, may from time to time determine. The
Plan will provide a means whereby (i) such employees may purchase shares of the
Common Stock of the Company pursuant to stock options which will qualify as
"incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") and (ii) such employees or other persons may
purchase shares of the Common Stock of the Company pursuant to "non-incentive"
or "non-qualified" stock options.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Compensation Committee. The
Committee shall at all times consist of not less than two members of the Board,
and shall not include any persons that are not members of the Board. All members
of the Committee shall be selected by (and serve at the pleasure of) the Board.
All members of the Committee shall be "disinterested persons" within the meaning
of Rule 16b-3 of the General Rules and Regulations under the Securities Act of
1934, as amended (the "1934 Act"). Subject to the express provisions of the Plan
and the policies of each stock exchange on which any of the Company's stock may
at any time be traded, the Committee shall have plenary authority, in its
discretion, to recommend to the Board the individuals within the class set forth
in Article IV to whom, and the time and price per share at which, stock options
shall be granted, the number of shares to be subject to each stock option and
the other terms and provisions of their respective Agreements (as defined
herein), which need not be identical. In making such recommendations and
determinations, the Committee may take into account the nature of the services
rendered by the respective employees, their present and potential contributions
to the Company's success and such other factors as the Committee in its
discretion shall deem relevant.
Subject to the express provisions of the Plan, the Committee shall have
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 (iv) to recommend to the Board the terms and provisions of the
respective stock options, (v) to approve and determine the duration of leaves of
absence which may be granted to participants without constituting a termination
of their employment for the purposes of the Plan, and (vi) to make all other
determinations necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Committee shall be
EXHIBIT A-1
<PAGE> 21
binding and conclusive on all participants in the Plan and their legal
representatives and beneficiaries. The Committee shall hold meetings at such
time and places as it may determine. Acts by the majority of the Committee or
acts reduced to or approved in writing by a majority of the members of the
Committee shall be the valid acts of the Committee. From time to time, the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause), and appoint new members in substitution
therefor, or fill vacancies however caused, subject to the requirements that the
members of the Committee shall be "disinterested persons" as described above and
that there always be at least two members of the Committee. No member of the
Committee 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.
ARTICLE III
SHARES SUBJECT TO PLAN AND DURATION OF PLAN
Under the Plan, the Board may, but only upon recommendation of the
Committee, grant to eligible persons incentive stock options (as defined in the
Code) and/or non-qualified stock options, to purchase up to but not exceeding an
aggregate amount of 800,000 shares of the Company's common stock, $0.01 per
share par value ("Common Stock"). Shares subject to stock options under the
Plan may be either authorized and unissued shares or issued shares that have
been acquired by the Company and held in its treasury, in the sole discretion of
the Board. When stock options have been granted under the Plan and have lapsed
unexercised or partially unexercised or have been surrendered for cancellation
by the optionee thereof, the unexercised shares which were subject thereto may
be reoptioned under the Plan. No stock options shall be granted more than ten
years after the effective date of the Plan.
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
To the fullest extent permitted by applicable laws, all executive and
other key employees of the Company or of any subsidiary corporation (as defined
in Section 424(f) of the Code) shall be eligible for selection to fully
participate in the Plan; provided, however, that no member of the Committee
shall be entitled to receive a stock option under this Plan while serving as a
member of the Committee. Directors of the Company who are not regular employees
of the Company are not eligible to participate in the Plan. An individual who
has been granted a stock option may, if such individual is otherwise eligible,
be granted an additional stock option or options if the Board or the Committee
shall so determine, subject to the other provisions of the Plan.
ARTICLE V
TERMS AND CONDITIONS OF STOCK OPTIONS
Each stock option granted under the Plan shall be evidenced by a stock
option agreement (the "Agreement"), the form of which shall have been approved
by the Committee. The Agreement
EXHIBIT A-2
<PAGE> 22
shall be executed by the Company and the optionee and shall set forth the terms
and conditions of the stock option, which terms and conditions shall include,
but not be limited to the following:
(a) Stock Option Price. The stock option price shall be
determined by the Committee, but shall not in any event be less than
the par value of the Common Stock.
(b) Term of Stock Option. The term of the stock option shall
be selected by the Committee, but in no event shall such term exceed
ten years from the date such stock option is granted. Each such stock
option shall be subject to earlier termination as hereinafter provided.
(c) Transferability. The stock options granted hereunder shall
not be transferable other than by will or operation of the laws of
descent and distribution or pursuant to a qualified domestic relations
order as defined in the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder. During the lifetime of
the optionee, stock options granted hereunder shall be exercisable only
by the optionee or the optionee's guardian or legal representative.
(d) Vesting. The Committee shall have complete discretion in
determining when stock options granted hereunder are to vest; provided,
however, that the sale of 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 XV 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 the stock option is granted.
(e) Termination of Employment. In the event of an optionee's
termination of employment with the Company for any reason other than
death, all stock options shall terminate to the extent they were not
exercisable at the date of the optionee's termination, but to the
extent they were then exercisable by the optionee, the optionee shall
be entitled to exercise such stock options for a period of 30 days from
the date of the optionee's termination. Upon the termination of an
optionee's employment by reason of death, the optionee's stock options
shall terminate to the extent they were not exercisable at the date of
the optionee's death, but to the extent they were then exercisable by
the optionee, the optionee's estate or the beneficiaries thereof shall
be entitled to exercise such stock options for a period of one year
from the date of the optionee's death but not thereafter.
Notwithstanding any other provisions of this subparagraph (e), no stock
option shall be exercised after the expiration of ten years from the
date such stock option is granted.
(f) Other Conditions. At its sole discretion, the Committee
may impose other conditions upon the stock options granted hereunder,
so long as those conditions do not conflict with any other provisions
of the Plan. Such conditions may include, by way of illustration, but
not by way of limitation, percentage limitations upon the
exercisability of stock options granted hereunder.
EXHIBIT A-3
<PAGE> 23
ARTICLE VI
INCENTIVE STOCK OPTIONS
The Committee and the Board, in recommending and granting stock options
hereunder, shall have the discretion to determine that certain stock options
shall be incentive stock options, as defined in Section 422 of the Code, while
other stock options shall be non-qualified stock options. Neither the members of
the Committee, the members of the Board nor the Company shall be under any
obligation or incur any liability to any person by reason of determination by
the Committee or the Board whether a stock option granted under the Plan shall
be an incentive stock option or a non-qualified stock option. The provisions of
this Article VI shall be applicable to all incentive stock options at any time
granted or outstanding under the Plan.
All incentive stock options granted or outstanding under the Plan shall
be granted and held subject and in compliance with terms and conditions
physically set forth in Articles II, III, IV and V hereof, and, in addition,
subject to and in compliance with the following further terms and conditions:
(a) The stock option price of all incentive stock options
shall not be less than 100% of the Fair Market Value (as defined below)
of one share of the Company's Common Stock at the time the stock option
is granted (not withstanding any provision of Article V hereof to the
contrary);
(b) No incentive stock option shall be granted to any person
who, at the time of the grant, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company
or any subsidiary corporation of the Company, provided, however, that
this ownership limitation will be waived if at the time the stock
option is granted the stock option price is at least 110% of the Fair
Market Value of one share of the Company's Common Stock and such stock
option by its terms is not exercisable after the expiration of five
years from the date such option is granted;
(c) An incentive stock option shall not be transferable other
than by will or by laws of descent and distribution, and shall be
exercisable during the lifetime of the optionee, only by the optionee;
and
(d) The aggregate Fair Market Value of all shares of Common
Stock (determined at the time of the grant of the stock option) with
respect to which incentive stock options are exercisable for the first
time by any optionee during any one calendar year shall not exceed
$100,000.
EXHIBIT A-4
<PAGE> 24
ARTICLE VII
EXERCISE OF STOCK OPTIONS
Each stock option granted hereunder may be exercised in such
installments during the period prior to its expiration date as the Board or the
Committee shall determine; provided that, unless otherwise determined by the
Board or Committee, if the optionee shall not in any given installment period
purchase all of the shares which the optionee is entitled to purchase in such
installment period, then the optionee's right to purchase any shares not
purchased in such installment period shall continue until the expiration date or
sooner termination of the optionee's stock option. No stock option may be
exercised for a fraction of a share and no partial exercise of any stock option
may be for less than 100 shares.
The purchase price of the shares of Common Stock acquired upon exercise
of a stock option shall be paid in full at the time of exercise in cash or by
certified or cashier's check payable to the order of the Company, or, upon
receipt of all required regulatory approvals, if any, by delivery of shares of
Common Stock of the Company already owned by, and in the possession of the stock
option holder having a Fair Market Value equal to such stock option price, or
any combination thereof. Shares of Common Stock used to satisfy the exercise
price of a stock option shall be valued at their Fair Market Value determined as
of the close of business on the date such stock option is exercised, or if such
date is not a business day, on the business day immediately preceding the date
of exercise. Deliveries of cash, shares and notices to the Company shall be
directed to the Secretary of the Company.
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 shall bear a legend to the foregoing
effect to the extent counsel for the Company deems it advisable.
ARTICLE VIII
FAIR MARKET VALUE OF COMMON STOCK
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
EXHIBIT A-5
<PAGE> 25
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.
ARTICLE IX
WITHHOLDING TAX
Upon (i) the disposition by an employee or other person of shares of
Common Stock acquired pursuant to the exercise of an incentive stock option
granted pursuant to the Plan within two years of the granting of the incentive
stock option or within one year after exercise of the incentive stock option, or
(ii) the exercise of "non-incentive" or "non-qualified" stock options, the
Company shall have the right to require such employee or such other person to
pay the Company the amount of any taxes which the Company may be required to
withhold with respect to such shares.
ARTICLE X
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 share 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.
EXHIBIT A-6
<PAGE> 26
(b) Significant Event. 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.
In consideration for this option of the Company to terminate outstanding stock
options, the Company, if it exercises its option, shall waive any and all
restrictions on the vesting of optionees' rights under stock options granted
pursuant to this Plan, and optionees' rights under their respective stock
options shall vest in full, subject to the actual occurrence of the Significant
Event. Any exercise by an optionee in these circumstances may be conditioned
upon the occurrence of the Significant Event. If the Company exercises its
option under this paragraph (b), upon the actual occurrence of the Significant
Event, each outstanding stock option shall terminate. 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 the
optionees' rights will be vested only to the extent that they would be vested 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 Committee 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.
ARTICLE XI
PRIVILEGES OF STOCK OWNERSHIP
No person entitled to exercise any stock option granted under the Plan
shall have any of the rights or privileges of a shareholder of the Company in
respect of any shares of stock issuable upon exercise of such stock option until
certificates representing such shares shall have been issued and delivered.
EXHIBIT A-7
<PAGE> 27
ARTICLE XII
ISSUANCE OF STOCK CERTIFICATES
Upon exercise of a stock option, the person exercising the stock option
shall be entitled to one stock certificate evidencing the shares acquired upon
such exercise; provided, however, that any person who tenders Common Stock of
the Company in payment of a portion or all of the purchase price of Common Stock
purchased upon exercise of the stock option shall be entitled to receive a
separate certificate representing the number of shares purchased in
consideration of the tender of such Common Stock.
ARTICLE XIII
CONTINUATION OF EMPLOYMENT
Nothing contained in the Plan (or in any stock option granted pursuant
to the Plan) shall confer upon any employee any right to continue in the employ
of the Company or any subsidiary corporation or constitute or any contract or
agreement of employment or interfere in any way with the right of the Company or
any subsidiary corporation to reduce any person's compensation from the rate in
existence at the time of the granting of a stock option or to terminate such
person's employment. Nothing contained herein or in any Agreement shall affect
any other contractual rights of an employee.
ARTICLE XIV
AMENDMENT OR DISCONTINUANCE
The Board or the Committee may at any time and from time to time amend,
rescind, suspend or terminate the Plan, as it shall deem advisable, provided
that the Plan may not be amended in any manner which would cause the Plan to no
longer comply with Rule 16b-3 of the General Rules and Regulations under the
1934 Act, or any successor rule, or the provision of the Code applicable to
incentive stock options, as such rule or provision shall read as of the time of
amendment. In addition to Board approval of any amendment to the Plan, if Rule
16b-3 of the General Rules and Regulations under the 1934 Act, or any successor
rule, or the provisions of the Code applicable to incentive stock options, as
such rule or provision shall read as of the time of amendment, requires
shareholder approval of such amendment, then such amendment shall be approved by
the holders of a majority of the voting stock of the Company (voting as a single
class) present, or represented, and entitled to vote at a meeting of such
shareholders duly held in accordance with the applicable laws of this state or
of the jurisdiction in which the Company is incorporated.
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.
EXHIBIT A-8
<PAGE> 28
ARTICLE XV
EFFECTIVE DATE OF PLAN; SHAREHOLDER APPROVAL
The Plan shall be effective as of March 3, 1994, the date on which it
received the approval of a majority of the disinterested members of the Board.
However, the Plan and all stock options granted under the Plan (but not the
previous 1992 Stock Option Plan of the Company) shall be void if the Plan is not
approved by the shareholders within 12 months from the date the Plan is approved
by the Board in which case, the previous 1992 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 duly held in
accordance with the applicable laws of the state or other jurisdiction in which
the Company is incorporated. Any stock options granted under the Plan (but not
the previous 1992 Stock Option Plan of the Company) prior to obtaining such
shareholder approval shall be granted under the conditions that the stock
options so granted (1) shall not be exercisable prior to such shareholder
approval, and (2) shall become null and void if such shareholder approval is not
obtained.
EXHIBIT A-9
<PAGE> 29
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 13, 1999, 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, 3 AND 4, AND IN ACCORDANCE WITH THE JUDGMENT OF THE
PROXY WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BEFORE THE MEETING.
(Continued and to be SIGNED on the reverse side)
FOLD AND DETACH HERE
<TABLE>
<S> <C>
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED "FOR" EACH OF THE MATTERS STATED.
PLEASE MARK
YOUR VOTE AS [X]
INDICATED IN
THIS EXAMPLE
1. Election of Directors (to withhold authority to vote for any individual members, strike through
the members name in the blank below).
FOR all nominees WITHHOLD Rotchford L. Barker, Paul C. Bergson, Keith D. Bronstein,
listed to the right AUTHORITY Patricia M. Eckart, Edward F. Heil, Jack K. Lemley,
(except as marked) to vote for all nominees Paul F. Schutt, John J. Scoville
to the contrary) listed to the right
[ ] [ ]
2. To amend the Company's 1992 Employee Stock
Option Plan and increase the shares available for
grant from 800,000 to 1,300,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To amend the Company's Restated Certificate of 4. To ratify the selection of Balukoff, Lindstrom & Co., P.A. as
Incorporation to increase authorized common the Company's independent auditors for fiscal year 1999.
stock from 25,000,000 to 50,000,000 shares.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ]
5. Such other business as may properly come
before the meeting or any adjournments thereof.
_ _ _ _ The undersigned acknowledges receipt of the Notice of the
| aforesaid Annual Meeting, the Proxy Statement and Annual
| Report accompany the same, each dated April 12, 1999.
Date: , 1999
-------------------------------------------
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SIGNATURE OF STOCKHOLDER
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SIGNATURE, IF HELD JOINTLY
</TABLE>
