SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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)
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(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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3) Filing Party:
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4) Date Filed:
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1
[GRAPHIC OMITTED] AMERICAN ECOLOGY CORPORATION [GRAPHIC OMITTED]
805 W. IDAHO, SUITE 200
BOISE, IDAHO 83702-8916
208-331-8400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME 10:00 a.m. Central Standard Time on
Thursday, May 30, 2002
PLACE The Standard Club
Chicago Room, 4th Floor
320 S. Plymouth Court
Chicago, Illinois 60604
PROPOSALS (1) To elect seven directors of the Board of
Directors to serve a one year term.
(2) To ratify the selection of Balukoff, Lindstrom &
Co., P.A. as the Company's independent auditors
for the Company's fiscal year ending December 31,
2002.
(3) To transact other business as may properly come
before the meeting or any adjournments or
postponements thereof.
RECORD DATE You are entitled to vote if you were a stockholder at
the close of business on April 1, 2002. A list of
shareholders 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.
VOTING BY PROXY Please submit a proxy as soon as possible so that your
shares can be voted at the meeting in accordance with
your instructions. For specific instructions on voting,
please refer to the instructions on the proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
EDWARD F. HEIL
For the Board of Directors
Boise, Idaho
April 25, 2002
All Stockholders are cordially invited to attend the meeting in person. Whether
or not you expect to attend the meeting, please complete, date, sign and return
the enclosed proxy as promptly as possible in order to ensure your
representation at the meeting. A return envelope (postage is prepaid if mailed
in the United States) is enclosed for that purpose. Even if you have given your
proxy, you may still vote in person if you attend the meeting and revoke your
proxy. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER,
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BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU WILL NOT BE
- --------------------------------------------------------------------------
PERMITTED TO VOTE IN PERSON AT THE MEETING UNLESS YOU FIRST OBTAIN A PROXY
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ISSUED IN YOUR NAME FROM THE RECORD HOLDER.
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2
AMERICAN ECOLOGY CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 30, 2002
PROXY STATEMENT
-------------------------------------------------
This Proxy Statement relates to the Annual Meeting of Stockholders of American
Ecology Corporation,(the "Company"), a Delaware corporation, to be held on May
30, 2002, at 10:00 a.m., at the Standard Club in the Chicago Room 4th Floor, 320
S. Plymouth Court, Chicago, Illinois 60604, 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 May 1, 2002. THEY ARE FURNISHED IN
CONNECTION WITH THE SOLICITATION BYTHE COMPANY OF PROXIES FROM THE HOLDERS OF
THE COMPANY'S COMMONSTOCK, 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. 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. Any stockholder present at the
Meeting who expresses a desire to vote their shares in person may also revoke
their proxy. 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, 2001 is being furnished with this Proxy Statement to stockholders of record
on April 1, 2002. The Annual Report to Stockholders does not constitute a part
of the proxy solicitation material except as otherwise provided by the rules of
the Securities and Exchange Commission, or as expressly provided for herein.
OUTSTANDING SHARES AND VOTING RIGHTS
------------------------------------
The Board of Directors of the Company fixed April 1, 2002 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 14,403,985 shares of
common stock issued, 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 (seven) 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,
3
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.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
DIRECTORS.
At the Meeting, seven 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 that 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 seven
nominees receiving the greatest number of votes cast will be elected directors,
if each nominee receives at least a majority of the votes cast.
In November 2001 Thomas A. Volini was appointed to replace a resigning Director.
Rotchford L. Barker, Paul C. Bergson, Keith D. Bronstein, and Dan Rostenkowski
have voluntarily chosen not to stand for reelection and the Board of Directors
has nominated John M. Couzens, Roy C. Eliff, Roger P. Hickey, and Stephen A.
Romano, to stand for election.
Director nominees standing for election to serve until the Annual Meeting in
2003 are:
DIRECTOR
--------
NAME AGE POSITION WITH COMPANY RESIDENCE SINCE
- ---- --- --------------------- --------- -----
John M. Couzens 41 Nominee for Director Denver, CO --
Roy C. Eliff 66 Nominee for Director Houston, TX --
Edward F. Heil 57 Director Miami Beach, FL 1994
Rodger P. Hickey 41 Nominee for Director Chicago, IL --
Stephen A. Romano 47 Nominee for Director, Boise, ID --
President and CEO
Paul F. Schutt 69 Director Norcross, GA 1994
Thomas A. Volini 56 Director, Appointed 2001 Chicago, IL 2001
4
JOHN M. COUZENS
- ---------------
Mr. Couzens has been nominated to serve on the Board of Directors of American
Ecology Corporation. Mr. Couzens is an executive with Anschutz Company where his
management expertise is currently utilized at subsidiary Qwest Digital Media,
LLC as President and Chief Executive Officer.
ROY C. ELIFF
- ------------
Mr. Eliff has been nominated to serve on the Board of Directors of American
Ecology Corporation. Mr. Eliff is a consultant to solid waste and environmental
companies in the area of acquisitions and mergers. Mr. Eliff has served as an
officer, director, or CEO of publicly held companies, including 20 years as Vice
President of Corporate Development/Acquisition for Browning Ferris Industries.
EDWARD F. HEIL
- ----------------
Mr. Heil became a director in 1994. Mr. Heil is the sole member of E. F. Heil,
LLC, an investment management and development company. Mr. Heil has been
involved in various capacities with waste management companies for over 30
years.
ROGER P. HICKEY
- -----------------
Mr. Hickey has been nominated to serve on the Board of Directors of American
Ecology Corporation. Mr. Hickey is President of Chicago Partners, a consulting
firm where he specializes in finance, intellectual property, and strategy
matters.
STEPHEN A. ROMANO
- -------------------
Mr. Romano has been nominated to serve on the Board of Directors of American
Ecology Corporation. Mr. Romano was appointed as President and Chief Operating
Officer in October of 2001 and Chief Executive Officer on March 15, 2002. Mr.
Romano has served with the Company for more than 12 years in various positions
of increasing responsibility.
PAUL F. SCHUTT
- ----------------
Mr. Schutt became a director in 1994. Mr. Schutt is the Chairman of the Board,
and was formerly Chief Executive Officer and a director of Nuclear Fuel
Services, Inc., a primary contractor for the United States Navy. 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 Company.
THOMAS A. VOLINI
- ------------------
Mr. Volini joined the Board in November 2001. Mr. Volini has served as a
director and in executive positions at other publicly held waste management
companies. Mr. Volini currently serves as Chairman, President and CEO of Town &
Country Utilities, Inc. and President of Midwest Electric, Inc.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES.
During the year ended December 31, 2001, the Board of Directors held six
meetings. Other than Mr. Bronstein and Mr. Schutt, each of the current directors
attended at least 75% of the meetings of the Board and Committees on which they
served, held during the period for which they were a Board or Committee member,
respectively. Mr. Bronstein attended 5 of 7 Executive Committee meetings, and
Mr. Schutt attended 4 of 6 Board Meetings.
5
The Committees of the Board of Directors during 2001 were the Nominating,
Executive, Audit and Compensation Committees.
The members of the Nominating Committee are currently Messrs. Barker, Bronstein,
and Heil. Mr. Bronstein 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 once during 2001, and once in March of 2002
recommending seven directors to stand for election at the annual shareholders
meeting in 2002. The Board of Directors initially accepted five of the nominees
and selected two other nominees to stand for election.
On April 15, 2002 Mr. Barker and Mr. Bronstein, as part of a group of
shareholders, filed Form 13D stating their intention to solicit proxies for the
election of individuals to the Board of Directors and Mr. Barker withdrew his
consent to be a nominee on the Company's slate of Directors. On April 23, 2002,
the Board of Directors met and unanimously selected the seven nominees standing
for election. Mr. Heil, Mr. Barker, and Mr. Bronstein have agreed to vote all
shares over which they have voting power for all the nominees and not to
solicitate or participate in the solicitation of votes for any other nominees at
the meeting. Mr. Barker has also agreed to amend his Form 13D to reflect his
agreement to vote for all the nominees.
Effective March 15, 2002, the Board of Directors disbanded the Executive
Committee. Except certain powers which, under Delaware law, may only be
exercised by the full Board of Directors, the Executive Committee exercised all
powers and authority of the Board of Directors in the management of Company
business. The Executive Committee met seven times in 2001 and twice in 2002.
The members of the Audit Committee are currently Messrs. Barker, Bergson,
Schutt, and Volini. Mr. Schutt is chairman. The Audit Committee reviews the
proposed plan and scope of the Company's annual audit as well as the results
when it is completed. The Committee reviews the services provided by the
Company's independent auditors and their fees. The Committee meets with the
Company's financial officers to assure the adequacy of the Company's accounting
principles, financial controls and policies. The Committee is also charged with
reviewing transactions that may present a conflict of interest on the part of
management or directors. The Audit Committee meets at least quarterly to review
the financial results, discuss the financial statements and make recommendations
to the Board. Other items of discussion include the independent auditors'
recommendations for internal controls, adequacy of staff, and management's
performance concerning audit and financial controls. The Audit Committee met six
times in 2001, including a visit to the Oak Ridge, Tennessee low-level
radioactive waste processing facility. The audit committee has met three times
in 2002.
The members of the Compensation Committee are currently Messrs. Bergson, Heil,
Rostenkowski, Schutt, and Volini. Mr. Volini is chairman. The Compensation
Committee makes recommendations concerning salaries and incentive compensation,
administers and approves stock options under the 1992 Employee and 1992
Directors stock option plans, determines executive compensation levels and
performs other functions regarding compensation as the Board may delegate. The
Compensation Committee met once in 2001.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
During 2001, no member of the Compensation Committee except Mr. Rostenkowski 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 402 or 404 of
Securities and Exchange Commission regulations. Mr. Rostenkowski received
compensation from the Company in the amount of $16,000 for 2001.
6
During 2001, no executive officer of the Company served as:
- - 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 Compensation Committee of the Company,
- - a director of an unrelated entity, one of whose executive officers served
on the Compensation Committee of the Company, or
- - 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. Rostenkowski is the only director 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. Upon each re-election to the Board, he or she is granted
a stock option to purchase 10,000 shares of the Company's common stock.
PROPOSAL NO. 2
SELECTION OF AUDITORS
The Board of Directors has selected Balukoff, Lindstrom & Co., P.A. ("Balukoff,
Lindstrom"), as independent auditors for the Company's 2002 fiscal year.
Balukoff, Lindstrom has examined the financial statements of the Company for
each of its 1996-2001 fiscal years. Representatives of Balukoff, Lindstrom are
not expected to be present at the Annual Meeting and are therefore not expected
to be available to make a statement or respond to questions.
Stockholder ratification of the selection of Balukoff, Lindstrom & Co., P.A. as
the Company's independent accountants is not required by the Company's Articles,
Bylaws or otherwise. However, the Board is submitting the selection of Balukoff,
Lindstrom to the stockholders for ratification as a matter of good corporate
practice, and recommends that the stockholders vote for approval. If the
stockholders fail to ratify the selection, the Board and the Audit Committee may
reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board and the Audit Committee in their discretion may direct the
appointment of a different independent accounting firm at any time during the
year if they determine that such a change would be in the best interests of the
Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the meeting is requested
to ratify the selection of Balukoff, Lindstrom & Co., P.A. Abstentions will be
counted toward the tabulation of votes cast on this Proposal No. 2 and will have
the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether this matter
has been ratified.
7
AUDITOR FEES
- ------------
The aggregate fees billed by Balukoff, Lindstrom & Co., P.A., for professional
services rendered for the audit of the Company's annual financial statements and
the reviews of the financial statements included in the Company's quarterly
reports on Form 10-Q, for the fiscal year ended December 31, 2001 were $157,000.
ALL OTHER FEES
- --------------
The aggregate fees billed for services rendered by Balukoff, Lindstrom & Co.,
P.A., other than the fees disclosed above, during the fiscal year ended December
31, 2001 were $137,000.
EXECUTIVE OFFICERS
------------------
NAME AND PRINCIPAL POSITION AGE CITY/STATE OFFICER
- --------------------------- --- ----------- -------
Stephen A. Romano 47 Boise, Idaho 1998
President, Chief Executive Officer
Chief Operating Officer
James Rbaumgardner 39 Boise, Idaho 1999
Senior Vice President, Treasurer,
Secretary, and Chief Financial Officer
Michael J. Gilberg 33 Boise, Idaho 2002
Vice President and Controller
STEPHEN A. ROMANO was appointed as President and Chief Operating Officer in
October of 2001, Chief Executive Officer on March 15, 2002 and is standing for
election to the Company's Board of Directors. Mr. Romano has served with the
Company for more than 12 years in various positions of increasing
responsibility. He originally joined the Company to site and license the Ward
Valley, California disposal site. Prior to joining the Company, Mr. Romano held
various positions with the U.S. Nuclear Regulatory Commission, the State of
Wisconsin and EG&G Idaho, Inc. Mr. Romano holds a BS from the University of
Massachusetts-Amherst and an MS from the University of Wisconsin-Madison.
JAMES R. BAUMGARDNER, Senior Vice-President, Treasurer, Chief Financial Officer
and Secretary. Mr. Baumgardner joined the Company in November 1999 as Senior
Vice President and Chief Financial Officer. Mr. Baumgardner was appointed
Treasurer and Secretary in October of 2001. From 1995 until joining the Company,
Mr. Baumgardner was the Corporate Treasurer of WaferTech and Symbios Logic,
Inc., both large manufacturing companies. From 1988 to 1995, Mr. Baumgardner was
a Vice President with Silicon Valley Bank and Commercial Lender with First
Interstate Bank, where he focused on commercial loans to high technology
start-ups and turn-arounds. Mr. Baumgardner holds a BS and MBA from Oregon State
University.
MICHAEL J. GILBERG, CPA, joined the Company on February 4, 2002 as Vice
President and Controller. From 1997 until joining the Company, Mr. Gilberg was
Vice President and Controller for T.J.T. Inc., a publicly-traded manufacturing
company in Emmett, Idaho. Prior to joining T.J.T., Mr. Gilberg served in
increasingly responsible accounting positions at Deloitte & Touche in Boise,
Idaho, and KPMG Peat Marwick in Midland, Texas where he audited a wide range of
corporate and governmental organizations. Mr. Gilberg holds a BS from the
University of Montana.
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
8
trusts of which reporting persons are trustees. The Company is required to
disclose in this proxy statement each reporting person whom it knows has 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 for the
year ended December 31, 2000 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 made timely throughout
the year except for the late filing by Robert Thorn and Zaki Naser, former
officers, of their Form 4 statements for the month of October 2001 filed
December 7, 2001 rather than November 10, 2001 as required and two Form 4
Statements filed by Rotchford Barker for the months of September 2001, and March
2001, filed April 2002, and May 9, 2001, respectively, rather than October 10,
2001 and April 10, 2001 as required. A Form 4 Statement filed by Rotchford
Barker for December 1998 was also amended in April 2002.
EXECUTIVE COMPENSATION
----------------------
The following table shows, for each of the three years ended, compensation
awarded or paid to, or earned by the Company's Chief Executive Officer and its
other four most highly compensated management employees at December 31, 2001 and
the prior two years in all capacities.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation(1) Compensation All Other
Name and Principal Position Year Salary Bonus Grant Options Compensation(2)
- ------------------------------------ ---- ------------ --------- ----- ------- ----------------
Stephen A. Romano 2001 $ 132,913 -0- -0- 40,000 $ 4,386
President, Chief Executive, 2000 $ 105,000 $ 10,000 -0- -0- -0-
and Chief Operating Officer 1999 $ 109,036 -0- -0- 1,500 -0-
James R. Baumgardner 2001 $ 145,077 -0- -0- 10,000 $ 4,788
Senior Vice President, Treasurer, 2000 $ 134,000 $ 7,000 -0- -0- $ 32,205
Secretary, Chief Financial Officer 1999 $ 20,615 -0- -0- 50,000 -0-
Jack K. Lemley, Former 2001 $ 216,730 -0- -0- -0- $ 25,479
Chairman, Chief Executive 2000 $ 215,539 -0- -0- -0- $ 19,875
Officer and President 1999 $ 155,769 -0- -0- -0- $ 23,174
Zaki K. Naser, Former 2001 $ 142,983 -0- -0- -0- $ 38,843
Executive Vice President 2000 $ 135,000 $ 10,200 -0- 50,000 $ 35,151
and Operations Manager 1999 $ 114,442 $ 21,662 -0- 4,500 $ 7,324
Steve Welling 2001 $ 88,011 $ 59,770 -0- -0- $ 2,326
National Sales Director
The Company, on a discretionary basis, may grant options to its executive
officers under the 1992 amended and restated employee stock option plan. As of
December 31, 2001, options to purchase 346,150 shares were outstanding with
1,045,850 shares remaining available for grant. Under the 1988 Employee Stock
Option Plan 260,000 shares were still outstanding at December 31, 2001. The
following table provides information concerning 2001 stock option grants to the
Company's executive officers.
- --------------------------------
1 Includes dollar value base salary earned by the named executive officer during
the fiscal year ending December 31, 2001 as permitted by rules established by
the SEC.
2 Includes the amount of premium paid by the Company for group term life
insurance with benefits for each named executive officer, the amount of the
Company's matching contribution under the Company's 401(k) Savings Plan, the
premium paid on a split benefit whole life insurance policy, an automobile
lease, and housing allowances.
9
2001 OPTION GRANTS
Potential Realizable Value at Assumed
Number of Annual Rates of Stock Price
Securities Individual Grants Appreciation for Option Term
Underlying Percent of all Options Exercise
Name Options(3) Granted to Employees Price Expires 0% 5% 10%
- -------------- ---------- ----------------------- --------- -------- ---------- -------- -------
S. Romano 20,000 40% $ 1.90 11/28/11 -0- $ 23,800 $ 60,600
S. Romano 10,000 20% $ 3.00 11/28/11 -0- $ 900 $ 19,300
S. Romano 10,000 20% $ 3.50 11/28/11 -0- -0- $ 14,300
J. Baumgardner 10,000 20% $ 1.90 11/28/11 -0- $ 11,900 $ 30,300
The following table provides information concerning executive officers' stock
options exercised in 2001 and those remaining outstanding at the end of 2001.
AGGREGATED OPTION EXERCISES IN 2001 AND YEAR-END VALUES
Shares Number of Shares Underlying Value of Unexercised In-the
Acquired on Value Unexercised Options Money Options(4) at FYE
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ----------- --------- ----------- ----------------- -------------- --------------
Stephen A. Romano 5,000 $ 2,500 52,500 2,500 -0- -0-
James R. Baumgardner -0- N/A 60,000 -0- $ 5,000 -0-
Jack K. Lemley -0- N/A 260,000 -0- $ 178,620 -0-
Zaki K. Naser 5,000 $ 2,140 -0- -0- -0- -0-
COMPENSATION COMMITTEE REPORT.
The Compensation Committee of the Board of Directors is composed of outside
directors and Mr. Rostenkowski, 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. Mr. Rostenkowski did not participate in any
matters involving the 1992 Stock Option Plan. The following report describes the
basis on which the Compensation Committee with respect to the executive officers
of the Company made the 2001 compensation determinations.
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 growth 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.
- --------------------------------
3 All options granted were exercisable as of the option grant date, which was
November 28, 2001.
4 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 $1.75 per share on the NASDAQ National Market
at the close of business on December 31, 2001.
10
Currently the Company has a compensation program based on three components: a
base salary, bonus payments 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. The Compensation Committee
also considers (i) the performance of the Company and contributing roles of the
individual executive officers, (ii) the particular executive officer's specific
experience and responsibilities, and (iii) the performance of each executive
officer. The base salaries for 2001 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 2001, Jack K. Lemley, the Chief
Executive Officer of the Company, received a base salary of $230,000, which the
Committee believes to be average for the base salary of chief executive officers
with comparable qualifications, experience and responsibilities of other
companies in the environmental industry. The base salary of Stephen A. Romano
was increased by the Committee to $162,000 reflecting his October, 2001
appointment as President and Chief Operating Officer upon Mr. Lemley's
resignation. The Committee believes this to be average for the base salary of
executive officers with comparable qualifications, experience and
responsibilities of other companies in the environmental industry.
ANNUAL INCENTIVES -- The bonus program in effect during 2001 allowed for direct
financial incentives to select individuals in the form of a cash bonus for
exceeding the Company's goals or for outstanding performance. Based on the
Company's financial performance in 2001, no cash bonuses were awarded by the
Committee. The Compensation Committee has not yet approved a management bonus
plan for 2002.
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 generally granted at no less than market value on
the grant date, and will only have value if the Company's stock price increases
above the grant price. In furtherance of these objectives, the Committee (other
than Mr. Rostenkowski) approved the grant of options to certain executives and
key employees in November 2001 and January 2002.
AUDIT COMMITTEE REPORT, CHARTER, INDEPENDENCE
The Audit Committee has reviewed and discussed the Company's audited financial
statements with management. The Audit Committee has discussed with Balukoff,
Lindstrom & Co., P.A., the Company's independent auditors, the matters required
to be discussed by Statement on Auditing Standards 61, which includes, among
other items, matters related to the conduct of the audit of the Company's
financial statements.
The Audit Committee has received written disclosures and the letter from the
auditors required by Independence Standards Board Standard No. 1, which relates
to the auditor's independence from the Company and its related entities, and has
discussed with the auditors the auditor's independence from the Company. The
Audit Committee has considered whether the provision of services by the
auditors, other than audit services and review of Forms 10-Q and audit of the
401(k) and pension plans, is compatible with maintaining the auditor's
independence.
11
Based on the review and discussions of the Company's audited financial
statements with management and discussion with the independent auditors, the
Audit Committee recommended to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2001.
This report is respectfully submitted by the Audit Committee of the Company's
Board of Directors:
Paul Schutt, Audit Committee Chairman
Rotchford Barker
Paul Bergson
Thomas Volini
AUDIT COMMITTEE CHARTER
The Board of Directors has adopted a written charter for the Audit Committee
that was filed with the 2001 annual meeting proxy.
AUDIT COMMITTEE INDEPENDENCE
The Board of Directors has determined that Mr. Paul Schutt, Mr. Paul Bergson,
Mr. Rotchford Barker and Mr. Thomas Volini all meet the requirements for
independence set forth in the Listing Standards of the National Association of
Securities Dealers.
SECURITY OWNERSHIP OF
---------------------
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
----------------------------------------
The following tables set forth, as of March 29, 2002, 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.
(a) BENEFICIAL OWNERS
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Class
-------------------- ------------------ -----
Edward F. Heil(5) . . . . . . . . . 5,086,180 31.73%
8052 Fisher Island Drive
Fisher Island, FL 33109
Rotchford L. Barker(6). . . . . . . 3,293,330 21.25%
- --------------------------------
5 Mr. Heil's beneficial ownership includes 2,830,794 shares of common stock
owned individually by Mr. Heil and 629,460 shares beneficially owned by Mr. Heil
in his capacity as trustee of a trust. Also included in the table are 77,500
shares subject to option, 548,426 shares of common stock if 35,245.90 Series D
Preferred stock is converted, and 1,000,000 shares of common stock if 1,000,000
Series E Warrants are exercised.
6 Mr. Barker's beneficial ownership includes 2,196,693 shares of common stock.
The shares in the table also include 49,137 common shares if 3,157.89 Series D
preferred is converted, 1,000,000 common shares if 1,000,000 Series E Warrants
are exercised, and 47,500 options.
12
40 County Road 2AC
Cody, Wyoming 82414
Harry J. Phillips, Jr.(7). . . . . . . 1,695,423 11.19%
917 Franklin, Suite 510
Houston, Texas 77002
JP Morgan Chase Bank(8). . . . . . . . 1,349,843 8.57%
712 Main Street
Houston, Texas, 77002
Fayez Sarofim(9) . . . . . . . . . . . . 859,451 5.97%
Fayez Sarofim & Co.
2907 Two Houston Center
Houston, Texas 77010
(b) DIRECTORS AND EXECUTIVE OFFICERS
Amount And Nature Of
Name Of Beneficial Owner Beneficial Ownership Percent Of Class
- ------------------------ -------------------- ----------------
DIRECTORS
Rotchford L. Barker 3,293,330 21.25%
Paul C. Bergson(10) 286,433 1.97
Keith D. Bronstein(11) 628,481 4.27
Edward F. Heil 5,086,180 31.73
Dan Rostenkowski(12) 100,000 0.69
Paul F. Schutt(13) 421,144 2.90
- --------------------------------
7 Pursuant to a Schedule 13-G filing on January 31, 2002, Mr. Phillips reported
that he may be deemed the beneficial owner of 48,403.90 shares of Series D
Preferred stock, which may be converted into 753,165 shares of common stock,
939,906 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. The
shares reported on Schedule 13-G are used above. As a 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.
8 Pursuant to a 1998 settlement agreement between the Company and Chase Bank of
Texas ("Chase"), the Company granted Chase 1,349,843 warrants to purchase one
share of common stock each at $1.50 per share, which replaced an earlier warrant
for a lesser number of shares.
9 Pursuant to a Schedule 13-G filing on February 14, 2002, Fayez Sarofim & Co.,
a registered investment advisor, and Mr. Fayez Sarofim reported that they may be
deemed the beneficial owner of an aggregate 859,451 shares of the Company,
consisting of 826,656 shares held by Mr. Sarofim, 25,155 shares in investment
advisory accounts of his firm of which he has dispositive power, 11,784 shares
held by Sarofim International Management Company, which he controls, and 87
shares as trustee over which he has shared voting power.
10 Mr. Bergson's beneficial ownership includes 118,933 shares of common stock,
67,500 options and 100,000 Series E Warrants exercisable for 100,000 shares of
common stock.
11 Mr. Bronstein's beneficial ownership includes 315,981 shares of common stock,
57,500 options and 250,000 Series E Warrants exercisable for 250,000 shares of
common stock.
12 Mr. Rostenkowski's beneficial ownership includes 100,000 options currently
exercisable. Mr Rostenkowski also holds 100,000 options exercisable as of July
31, 2002 which are not included in the table.
13
Thomas A. Volini 1,378 0.01
John M. Couzens -- --
Roy C. Eliff 12,000 0.08
Roger P. Hickey 43,100 0.30
Stephen A. Romano(14) 81,800 0.57
Amount And Nature Of
Name Of Beneficial Owner Beneficial Ownership Percent Of Class
- ------------------------ -------------------- ----------------
EXECUTIVE OFFICERS
Stephen A. Romano 81,800 0.57%
Jim R. Baumgardner(15) 75,000 0.52
Michael J. Gilberg(16) 10,000 0.07
All directors and executive
officers as a group 10,038,846 55.95%
----------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ----------------------------------------------
During 2001 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.
- --------------------------------------------------------------------------------
13 Mr. Schutt's beneficial ownership includes 116,367 shares of common stock and
57,500 options held by him and 183,066 shares held by Nuclear Fuel Services,
Inc., and 64,211 shares if 52,632 Series D warrants are exercised. Mr. Schutt,
as the Chairman of the Board of Nuclear Fuel Services, Inc., shares voting and
investment power over the securities held by it.
14 Mr. Romano's beneficial ownership includes 26,800 shares of common stock and
55,000 options.
15 Mr. Baumgardner's beneficial ownership includes 15,000 shares of common stock
and 60,000 options.
16 Mr. Gilberg's beneficial ownership includes 5,000 shares of common stock and
5,000 options.
14
STOCK PERFORMANCE(17)
The following graph compares the most recent five-year market-value performance
of the Company's common stock to the NASDAQ Composite Index, and a hazardous
waste industry 2001 peer group(18) that the Company believes accurately reflects
its competitors for fiscal 2001. The hazardous waste industry 2000 peer group is
included for comparison. The 2001 peer group is composed of the 2000 peer group
with one additional company added, and three companies removed(19). The Company
believes the 2001 peer group more adequately reflects the composition of it's
peers. The graph assumes that the value of the investment in the common stock
and each index was $100 at December 31, 1996.
[GRAPH OMITTED]
- --------------------------------
17 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.
18 The companies which make up the Company's 2001 peer group are: Allied Waste;
Clean Harbors, Inc.; Duratek, Perma-Fix Environmental Services, Inc; and Safety
Kleen Corp.
19 The companies which make up the Company's 2000 peer group are: 3CI Complete
Compliance Corp.; Allied Waste; Clean Harbors, Inc.; Metalclad Corp; Perma-Fix
Environmental Services, Inc; and Safety Kleen Corp.
15
STOCKHOLDER PROPOSALS AT THE NEXT
---------------------------------
ANNUAL MEETING OF STOCKHOLDERS
------------------------------
The Company must receive stockholder proposals submitted for inclusion in the
Company's 2003 proxy materials and consideration at the annual meeting of
stockholders in 2003 no later than December 12, 2002. 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 and Board of Directors of the Company know of no other matters
that 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.
A copy of the Company's Annual report on Form 10-K for the fiscal year ended
December 31, 2001, as filed with the SEC, excluding exhibits, may be obtained by
stockholders without charge by written request addressed to Investor Relations,
805 W. Idaho Street, Boise, Idaho 83702 or may be accessed on the Internet at:
http://www.americanecology.com.
-----------------------
16
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). This
proxy confers on the proxyholders the power of cumulative voting and the
power to vote cumulatively for less than all of the nominees as described
in the Proxy Statement.
FOR all nominees WITHHOLD 01 John A. Couzens,
listed to he right AUTHORITY 02 Roger P. Hickey
(except as marked to vote for all nominees 03 Roy C. Eliff,
to the contrary) listed to the right 04 Edward F. Heil
[ ] [ ] 05 Paul F. Schutt,
06 Steven A. Romano, and
07 Thomas A. Volini,
2. To ratify the selection of Balukoff, Lindstrom & Co., P.A. as the Companys
independent auditors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
In their discretion, the proxies are authorized to vote upon such other
matters as come before the meeting.
Please sign below exactly as your name appears on this Proxy Card. If shares are
registered in more than one name, the signature of all such persons are
required. A corporation should sign in its full corporate name by a duly
authorized officer, stating his/her title. Trustees, guardians, and
administrators should sign in their official capacity, giving their title as
such. Partnerships should sign in the partnership name by the authorized
person(s).
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 22, 2002.
Date: , 2002
------------------------
------------------------------------
SIGNATURE OF STOCKHOLDER
------------------------------------
SIGNATURE IF HELD JOINTLY
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
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 Stephen
A. Romano, James R. Baumgardner, and Michael J. Gilberg 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 30,
2002, 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 IN ACCORDANCE WITH THE JUDGMENT OF THE PROXY WITH RESPECT
TO ANY OTHER BUSINESS PROPERLY BEFORE THE MEETING.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOU CAN NOW ACCESS YOUR AMERICAN ECOLOGY ACCOUNT ONLINE.
Access your American Ecology shareholder account online via Investor
ServiceDirect(SM) (ISD).
Mellon Investor Services LLC, agent for American Ecology, now makes it easy and
convenient to get current information on your shareholder account. After a
simple, and secure process of establishing a Personal Identification Number
(PIN), you are ready to log in and access your account to:
- - View account status - View payment history for dividends
- - View certificate history - Make address changes
- - View book-entry information - Obtain a duplicate 1099 tax form
- Establish/change your PIN
VISIT US ON THE WEB AT HTTP://WWW.MELLONINVESTOR.COM
AND FOLLOW THE INSTRUCTIONS SHOWN ON THIS PAGE.
STEP 1: FIRST TIME USERS - ESTABLISH A PIN
You must first establish a Personal Identification Number (PIN) online by
following the directions provided in the upper right portion of the web screen
as follows. You will also need your Social Security Number (SSN) available to
establish a PIN.
INVESTOR SERVICEDIRECT(SM) IS CURRENTLY ONLY AVAILABLE FOR DOMESTIC INDIVIDUAL
AND JOINT ACCOUNTS.
- - SSN
- - PIN
- - Then click on the ESTABLISH PIN button
Please be sure to remember your PIN, or maintain it in a secure place for future
reference.
- --------------------------------------------------------------------------------
STEP 2: LOG IN FOR ACCOUNT ACCESS
You are now ready to log in. To access your account please enter your:
- - SSN
- - PIN
- - Then click on the SUBMIT button
If you have more than one account, you will now be asked to select the
appropriate account.
- --------------------------------------------------------------------------------
STEP 3: ACCOUNT STATUS SCREEN
You are now ready to access your account information. Click on the appropriate
button to view or initiate transactions.
- - Certificate History
- - Book-Entry Information
- - Issue Certificate
- - Payment History
- - Address Change
- - Duplicate 1099
FOR TECHNICAL ASSISTANCE CALL 1-877-978-7778 BETWEEN
9AM-7PM MONDAY-FRIDAY EASTERN TIME