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)
______________________________________________________
(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.
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1
AMERICAN ECOLOGY CORPORATION
[GRAPHIC OMITTED] 300 E. MALLARD, SUITE 300 [GRAPHIC OMITTED]
BOISE, IDAHO 83706
208-331-8400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME 10:00 a.m. Central Standard Time on
Thursday, May 20, 2004
PLACE The Chicago Club
Black Room
81 East Van Buren Street
Chicago, Illinois 60605
PROPOSALS (1) To elect seven directors of the Board of Directors to serve a one
year term.
(2) To ratify the selection of Moss Adams LLP as the Company's
independent auditors for the Company's fiscal year ending
December 31, 2004.
(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 March 31, 2004. 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
annual meeting of stockholders.
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
ROGER P. HICKEY
Chairman of the Board of Directors
Boise, Idaho
April 2, 2004
All Stockholders are cordially invited to attend the annual 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, BANK OR OTHER
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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 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 20, 2004
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
20, 2004, at 10:00 a.m., at the Chicago Club in the Black Room, 81 East Van
Buren Street, Chicago, Illinois 60605, 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 15, 2004. 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.
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, 2003 is being furnished with this Proxy Statement to stockholders of record
as of March 31, 2004. 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 March 31, 2004 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 17,175,150 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
3
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 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 their
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.
Roger P. Hickey is not standing for re-election to the Board of Directors.
Director nominees standing for election to serve until the Annual Meeting in
2005 are:
NAME AGE POSITION WITH COMPANY RESIDENCE DIRECTOR SINCE
------------------- --- ------------------------------------ --------------- ------------------
David B. Anderson 62 Independent Director Chicago, IL 2003
Rotchford L. Barker 67 Independent Director Cody, WY 1996
Roy C. Eliff 68 Independent Director Houston, TX 2002
Edward F. Heil 59 Independent Director Miami Beach, FL 1994
Stephen A. Romano 49 Chief Executive Officer and Director Boise, ID 2002
Jimmy D. Ross 67 Nominee for Independent Director Lake Forest, FL Initial nomination
Stephen M. Schutt 46 Independent Director Atlanta, GA 2003
DAVID B. ANDERSON
-----------------
Mr. Anderson joined the Board of Directors in 2003. Mr. Anderson is President of
Highland Capital Enterprises Corporation, in Highland Park, Illinois. He has
held senior executive positions with GATX Corporation and Inland Steel
Industries. An attorney, Anderson has extensive experience in corporate
strategy, compliance, acquisitions, legal affairs and business development.
4
ROTCHFORD L. BARKER
-------------------
Mr. Barker originally joined the Board of Directors in 1996. Mr. Barker did not
stand for re-election to the Board at its May 2002 annual meeting, but was asked
to return to the Board to fill a vacancy created by a director who resigned in
July of 2002. Mr. Barker is an independent businessperson 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, a public energy services holding company that owns
Idaho Power Company.
ROY C. ELIFF
------------
Mr. Eliff joined the Board of Directors in 2002. 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 Chief Financial Officer of
publicly held companies, including 20 years as Vice President of Corporate
Development/Acquisition for Browning Ferris Industries.
EDWARD F. HEIL
--------------
Mr. Heil joined the Board of Directors in 1994. Mr. Heil is a land developer and
private investor, and has owned and operated one of the largest solid waste
landfills in the midwestern United States. Mr. Heil has more than 40 years
experience in the construction and waste service industries.
STEPHEN A. ROMANO
-------------------
Mr. Romano joined the Board of Directors in 2002. Mr. Romano was appointed
President and Chief Operating Officer in October, 2001 and Chief Executive
Officer on March 15, 2002. Mr. Romano has served with the Company for more than
14 years in various positions of increasing responsibility. Prior to joining
the Company, Mr Romano held positions with the U.S. Nuclear Regulatory
Commission, the Wisconsin Department of Natural Resources, and EG&G Idaho, Inc.
Mr Romano holds a BA from the University of Massachusetts-Amherst and an MS from
the University of Wisconsin-Madison.
JIMMY D. ROSS
---------------
General Jimmy Ross has been nominated to serve on the Board of Directors.
General Ross was a U.S. Army military officer for 36 years and retired as a
four-star General in 1994. General Ross' last active duty assignment was
Commander of the United States Army Materiel Command, a worldwide command of
95,000 military and civilian personnel and 126 organizations. Following his
military retirement, General Ross served as an executive with the American Red
Cross (ARC),reporting to the president, Mrs. Elizabeth Dole. In 1999, General
Ross became chief operating officer of ARC, responsible for business operations
and a $2.5 billion budget, 33,000 paid staff, and 1.3 million volunteers at
2,000 locations across the nation and six U.S. territories. General Ross is
currently a consultant to Cypress International in Alexandria, VA and serves on
several public Boards.
STEPHEN M. SCHUTT
-------------------
Mr. Schutt joined the Board of Directors in 2003. Mr. Schutt is Vice President
of Nuclear Fuel Services, Inc., a primary contractor for the United States Navy.
Mr. Schutt has more than 25 years of experience developing and applying
technology to solve complex problems in the nuclear reactor, enriched uranium,
and hazardous and radioactive waste markets.
5
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES.
During the year ended December 31, 2003, the Board of Directors held seven
meetings. Each of the directors attended at least 75% of the meetings of the
Board and the Committees on which they served during the period for which they
were a Board or Committee member, respectively. While encouraged, Director
attendance at the Annual Meeting is not required. All Directors standing for
reelection attended the 2003 Annual Meeting.
The Committees of the Board of Directors during 2003 were the Nominating, Audit,
and Compensation Committees.
The members of the Nominating Committee are currently Messrs. Hickey, Barker,
and Heil. Mr. Hickey is chairman. The Nominating Committee searches for and
recommends to the Board of Directors, qualified and experienced individuals to
fill vacancies and any new director seats if the board is expanded. The
Nominating Committee met once during 2003, and once in 2004 to nominate the
seven directors standing for election at the annual shareholders meeting in
2004. The Board of Directors unanimously approved the seven nominees standing
for election.
The members of the Audit Committee are currently Messrs. Eliff, Anderson, and
Hickey. Mr. Eliff 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 and approves 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
four times in 2003, including a visit to the Company's corporate office in
Boise, Idaho and its Beatty, Nevada waste treatment and disposal facility.
The members of the Compensation Committee are currently Messrs. Barker, Hickey,
and Schutt. Mr. Barker 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 and contract matters, and performs
other functions regarding compensation as the Board may delegate. The
Compensation Committee met one time in 2003.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
During 2003, no member of the 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 402 or 404 of Securities and
Exchange Commission regulations.
During 2003, no executive officer of the Company served as:
6
- 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, which at the director's discretion is
payable in stock of the Company at its then market price or in cash. Directors
who are employees of the Company receive no additional compensation for their
service as directors. Mr. Romano is the only director employed by the Company.
All directors are reimbursed for their reasonable 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.
EXECUTIVE OFFICERS
------------------
NAME AND PRINCIPAL POSITION AGE CITY/STATE OFFICER
------------------------------------------------ --- --------------------------- -------
Stephen A. Romano 49 Boise, Idaho 1998
President, Chief Executive Officer
Chief Operating Officer
James R. Baumgardner 41 Boise, Idaho 1999
Senior Vice President, Treasurer,
Secretary, and Chief Financial Officer
Michael J. Gilberg 35 Boise, Idaho 2002
Vice President and Controller
Steven D. Welling 45 El Dorado Hills, California 2003
Vice President, Sales and Marketing
John M. Cooper 49 Boise, Idaho 2003
Vice President and Chief Information Officer
STEPHEN A. ROMANO was appointed President and Chief Operating Officer in
October, 2001 and Chief Executive Officer on March 15, 2002. Mr. Romano joined
the Board of Directors in 2002. He has served with the Company for more than 14
years in various positions of increasing responsibility. Prior to joining the
Company, Mr Romano held positions with the U.S. Nuclear Regulatory
Commission,the Wisconsin Department of Natural Resources, and EG&G Idaho, Inc.
Mr Romano holds a BA from the University of Massachusetts-Amherst and an MS from
the University of Wisconsin-Madison.
JAMES R. 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, he was
the Corporate Treasurer of WaferTech and Symbios Logic, Inc., both large
semiconductor manufacturing companies. From 1988 to 1995, Mr. Baumgardner was a
commercial banker, holding positions of increasing responsibility with Silicon
Valley Bank and First Interstate Bank. Mr. Baumgardner holds a BS and MBA from
Oregon State University.
7
MICHAEL J. GILBERG, CPA, joined the Company in February, 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., he was employed 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.
STEVE WELLING joined the Company in February 2001 as part of the Envirosafe
Services of Idaho (now US Ecology Idaho, Inc.) acquisition. He previously
served as National Accounts Manager for Envirosource Technologies and Western
Sales Manager for Envirosafe Services of Idaho. Prior to joining Envirosafe,
Welling managed new market development and sales for a national bulk chemical
transportation company. Mr. Welling holds a BS from California State
University-Stanislaus
JOHN M. COOPER is Vice President and Chief Information Officer. Previously, he
served as Vice President, Information Systems for BMC West Corporation, and was
Director of Business Development for the High Tech Industry at Oracle
Corporation. Mr. Cooper brings more than 20 years of computer industry
knowledge and experience to the Company and is responsible for all information
technology and telecommunications. Mr. Cooper holds a BS in Physics from Utah
State University.
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 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, 2003 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 following filings:
DIRECTOR OR OFFICER FORM FILED FILING DATE REQUIRED DATE
--------------------------------- ---------- ----------------- -----------------
Rotchford L. Barker, Director Form 4 August 12, 2003 August 5, 2003
John M. Cooper, Vice President Form 3 December 10, 2003 December 8, 2003
Steven D. Welling, Vice President Form 3 December 10, 2003 December 8, 2003
Roger P. Hickey, Director Form 4 January 6, 2004 December 30, 2003
Rotchford L. Barker, Director Form 4 March 25, 2004 July 10, 2000
CORPORATE GOVERNANCE RESPONSIBILITY
The Board of Directors is ultimately responsible for the Company's corporate
governance. Good corporate governance ensures that the Company complies with
federal securities laws and regulations, including those promulgated under the
Sarbanes-Oxley Act of 2002. Since 2002, the Company amended the Audit Committee
Charter, adopted a Nominating Committee Charter as well as adopted additional
policies and procedures as needed to further ensure good corporate governance.
8
The Board of Directors has adopted a Code of Ethics for the Chief Executive and
Senior Financial Officers ("Code of Ethics") which is attached as Exhibit A and
posted on the Company's website at www.americanecology.com. There have not been
-----------------------
any waivers or changes to the Code of Ethics. Any future waivers or changes
would be disclosed next to the Code of Ethics on this website.
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, 2003 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 2003 $204,278 $ 66,825 -0- 370,110 $ 5,693
President, Chief Executive, 2002 $171,160 $ 25,000 -0- -0- $ 5,196
and Chief Operating Officer 2001 $132,913 -0- -0- 40,000 $ 4,386
James R. Baumgardner 2003 $172,785 $ 37,125 -0- 148,043 $ 5,761
Senior Vice President, Treasurer, 2002 $158,481 $ 25,000 -0- -0- $ 4,586
Secretary, Chief Financial Officer 2001 $145,077 -0- -0- 10,000 $ 4,788
Michael J. Gilberg 2003 $104,876 $ 14,850 -0- 92,528 $ 3,806
Vice President and Controller 2002 $ 84,704 -0- -0- 10,000 -0-
Steven D. Welling 2003 $110,001 $154,939 -0- -0- $ 4,096
Vice President of Sales and 2002 $110,000 $ 99,963 -0- 10,000 $ 3,630
Marketing 2001 $ 88,011 $ 59,770 -0- -0- $ 2,326
John M. Cooper 2003 $103,811 $ 19,380 -0- -0- $ 3,834
Vice President and Chief 2002 $ 47,594 -0- -0- 7,500 -0-
Information Officer
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, 2003, options to purchase 775,281 shares were outstanding with
188,976 shares remaining available for grant. The following table provides
information concerning 2003 stock option grants to the Company's executive
officers.
2003 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 131,868 17% $ 3.00 2-11-13 -0- $240,201 $616,810
S. Romano 153,846 20% $ 4.50 2-11-13 -0- $ 49,466 $488,842
S. Romano 84,396 11% $ 6.50 2-11-13 -0- -0- $ 99,374
J. Baumgardner 52,747 7% $ 3.00 2-11-13 -0- $ 96,080 $246,723
J. Baumgardner 61,538 8% $ 4.50 2-11-13 -0- $ 19,786 $195,536
J. Baumgardner 33,758 4% $ 6.50 2-11-13 -0- -0- $ 39,749
M. Gilberg 32,967 4% $ 3.00 2-11-13 -0- $ 60,050 $154,202
M. Gilberg 38,462 5% $ 4.50 2-11-13 -0- $ 12,367 $122,212
M. Gilberg 21,099 3% $ 6.50 2-11-13 -0- -0- $ 24,844
9
_______________________________
1 Includes dollar value base salary earned by the named executive officer
during the fiscal year ending December 31, 2003 as permitted by rules
established by the SEC.
2 Includes the amount of the Company's matching contribution under the
Company's 401(k) Savings Plan.
3 All options granted were exercisable as of the option grant date, which was
February 11, 2003 and an additional exercisable on February 11, 2004, 2005,
and 2006.
The following table provides information concerning executive officers' stock
options exercised in 2003 and those remaining outstanding at the end of 2003.
AGGREGATED OPTION EXERCISES IN 2003 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 15,000 $ 28,950 132,528 277,583 $ 574,604 $ 1,048,813
James R. Baumgardner -0- -0- 97,011 111,032 $ 435,341 $ 419,523
Michael J. Gilberg -0- -0- 33,132 69,396 $ 145,405 $ 262,205
Steven D. Welling -0- -0- 10,000 -0- $ 53,000 -0-
John M. Cooper -0- -0- 7,500 -0- $ 33,375 -0-
The following table summarizes the number of common shares issuable under equity
compensation plans as of December 31, 2003:
(a) NUMBER OF (b) WEIGHTED- (c) NUMBER OF SECURITIES
SECURITIES TO BE AVERAGE EXERCISE REMAINING AVAILABLE FOR FUTURE
ISSUED UPON EXERCISE PRICE OF ISSUANCE UNDER EQUITY
OF OUTSTANDING OUTSTANDING COMPENSATION PLANS (EXCLUDING
OPTIONS, WARRANTS OPTIONS, WARRANTS SECURITIES REFLECTED IN COLUMN (a)
PLAN CATEGORY AND RIGHTS AND RIGHTS ----------------------------------
----------------------------- -------------------- -----------------
Equity compensation plans
approved by security holders 1,266,281 3.90 509,676
Equity compensation plans not
approved by security holders -- -- --
-------------------- ----------------- ----------------------------------
Total 1,266,281 3.90 509,676
COMPENSATION COMMITTEE REPORT.
The Compensation Committee of the Board of Directors is composed 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 1992 Employee Stock Option Plan. The following report
describes the basis on which the Compensation Committee made 2003 compensation
determinations for executive officers of the Company.
_______________________________
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 $8.20 per share on the
NASDAQ National Market at the close of business on December 31, 2003.
10
The Board of Directors 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.
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 2003 were established by the Committee at levels
believed to be competitive with amounts paid to executives of companies in the
environmental industry with comparable qualifications, experience,
responsibilities, and performance. During 2003, the base salary of Stephen A.
Romano was increased by the Committee to $205,000. The Committee believes this
to be consistent with the base salary of executive officers with comparable
qualifications, experience, responsibilities, and performance of other companies
in the environmental industry. In recognition of Mr. Romano's performance as
Chief Executive Officer, on February 11, 2003 the Committee approved an
employment contract for Mr. Romano providing for a minimum annual base salary of
$205,000 and an expiration date of December 31, 2005. On January 29, 2004 the
Company's Board of Directors increased Mr. Romano's annual base salary to
$230,000 effective January 1, 2004.
ANNUAL INCENTIVES -- Effective January 1, 2003, the Committee recommended and
the Board approved a Management Incentive Plan covering executive incentive
compensation for Company performance through 2005. The management incentive plan
in effect during 2003 allowed for direct financial incentives to certain
management in the form of a cash bonus for achieving specified operating income
goals. Based on the Company's financial performance in 2003, no cash bonuses
were awarded to executives under the Company's Management Incentive Plan.
Messrs. Cooper, Baumgardner and Gilberg received discretionary cash bonus for
2003 performance of $7,500, $5,000 and $3,000, respectively. Mr. Romano did not
receive a bonus for the Company's 2003 financial performance. Certain other
employees received discretionary bonuses for 2003 performance. Amounts
reflected in the above table reflect bonuses for 2002 performance paid in
calendar 2003.
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
11
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
common share performance. Stock options are generally granted at or greater 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 approved the grant of 758,724 options to certain executives and key
employees during 2003.
This report is respectfully submitted by the Compensation Committee of the Board
of Directors:
Rotchford L. Barker, Committee Chairman
Roger P. Hickey,
Stephen M. Schutt
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the Company's audited financial
statements with management. The Audit Committee has also discussed with Moss
Adams, the Company's independent auditors, the matters required to be discussed
by Statement on Auditing Standards 61. These include, among other items, matters
related to 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 relating 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, is compatible with
maintaining auditor independence.
Based on review and discussion of the Company's audited financial statements
with management and 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, 2003.
While the Audit Committee has provided board-level oversight, advice and
direction, management is responsible for the financial statements and internal
controls. Also, it is the responsibility of the independent auditor, not the
Audit Committee, to conduct the audit and opine on the conformity of the
financial statements with accounting principles generally accepted in the United
States.
The Board of Directors has determined that Mr. Eliff qualifies as a "Financial
Expert".
This report is respectfully submitted by the Audit Committee of the Board of
Directors:
Roy C. Eliff, Audit Committee Chairman
David B. Anderson
Roger P. Hickey
AUDIT COMMITTEE CHARTER
The Board of Directors has amended the written charter for the Audit Committee
which is attached as Exhibit B, and is also available on the Company's website
at www.americanecology.com.
12
AUDIT COMMITTEE INDEPENDENCE
The Board of Directors has determined that Messrs. Eliff, Anderson, and Hickey
all meet the requirements for independence set forth in the Listing Standards of
the National Association of Securities Dealers.
NOMINATING COMMITTEE REPORT
The Nominating Committee recommended the seven Directors who have consented to
stand for election to the Board of Directors. During the nominating process, the
Nominating Committee received input from multiple sources and evaluated a
variety of subjective criteria prior to recommending nominees to the Board of
Directors. Shareholders may submit recommendations to the Nominating Committee
by writing to corporatesecretary@americanecology.com. Shareholder
--------------------------------------
recommendations should be submitted by December 12, 2004 for consideration by
the Nominating Committee for the 2005 Annual Meeting.
During 2003 the Company did not pay a fee to any party to assist in identifying
or evaluating nominees. During 2004, General Ross was recommended for
nomination to the Board by a Governmental Affairs Consultant retained by the
Company for which $5,000 of additional compensation was paid to the Consultant.
During 2003 the Company did not receive any nominee recommendations from
shareholders owning more than 5% of the Company's common stock.
This report is submitted by the Nominating Committee of the Company's Board of
Directors:
Roger P. Hickey, Nominating Committee Chairman
Rotchford L. Barker
Edward F. Heil
NOMINATING COMMITTEE CHARTER
The Board of Directors has enacted a written charter for the Nominating
Committee which is attached as Exhibit C, and is also available on the Company's
website at www.americanecology.com.
NOMINATING COMMITTEE INDEPENDENCE
The Board of Directors has determined that Messrs. Hickey, Barker, and Heil 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 31, 2004, 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
13
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Class
------------------------- ------------------ -----------
Edward F. Heil(5) . . . . . . . . . . . . . . . 3,636,526 21.14%
8052 Fisher Island Drive
Fisher Island, FL 33109
Rotchford L. Barker(6). . . . . . . . . . . . . 3,501,583 20.32%
40 County Road 2AC
Cody, Wyoming 82414
Harry J. Phillips, Jr.(7) . . . . . . . . . . . 902,352 5.25%
917 Franklin, Suite 510
Houston, Texas 77002
Fayez Sarofim(8). . . . . . . . . . . . . . . . 859,581 5.00%
Fayez Sarofim & Co.
2907 Two Houston Center
Houston, Texas 77010
(b) DIRECTORS AND EXECUTIVE OFFICERS
Name Of Director Shares Owned Right to Acquire Total Percent Of Class
---------------------------- ------------ ---------------- --------- -----------------
DIRECTORS
David B. Anderson -0- 7,500 7,500 0.04%
Rotchford L. Barker 3,444,083 57,500 3,501,583 20.32
Roy C. Eliff 10,300 17,500 27,800 0.16
Edward F. Heil 3,613,026 23,500 3,636,526 21.14
Roger P. Hickey(9) 109,152 17,500 126,652 0.74
Stephen A. Romano(10) 26,800 225,055 251,855 1.45
______________________________
5 Mr. Heil's beneficial ownership includes 2,983,566 shares of common stock
owned individually by Mr. Heil, 629,460 shares beneficially owned by Mr.
Heil in his capacity as trustee of a trust, and 23,500 options subject to
exercise.
6 Mr. Barker's beneficial ownership includes 3,411,083 shares of common stock
owned individually by Mr. Barker, 33,000 shares beneficially owned by Mr.
Barker for his child and 57,500 options subject to exercise.
7 Pursuant to a Schedule 13-G filing on February 12, 2004, Mr. Phillips
reported that he may be deemed the beneficial owner of, 900,000 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 Schedule 13-G filing on February 11, 2004, Fayez Sarofim &
Co., a registered investment advisor, and Mr. Fayez Sarofim reported that
they may be deemed the beneficial owner of an aggregate 859,581 shares of
the Company, consisting of 826,656 shares held by Mr. Sarofim, 21,054
shares in investment advisory accounts at 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.
9 Mr. Hickey's beneficial ownership includes 52,052 shares of common stock
owned individually by Mr. Hickey, 57,100 shares beneficially owned by Mr.
Hickey in his capacity as trustee of a trust, and 17,500 options subject to
exercise.
10 Mr. Romano's beneficial ownership includes 26,800 shares of common stock
and 225,055 options currently exercisable. Mr. Romano also holds 185,055
options unexercisable as of March 31, 2004 that are not included in the
table.
14
Jimmy D. Ross -0- -0- -0- 0.00
Stephen M. Schutt -0- 7,500 7,500 0.04
Name Of Officer Shares Owned Right to Acquire Total Percent Of Class
---------------------------- ------------ ---------------- --------- -----------------
EXECUTIVE OFFICERS
Stephen A. Romano 26,800 225,055 251,855 1.45%
James R. Baumgardner(11) -0- 94,022 94,022 0.54
Michael J. Gilberg(12) 10,000 46,265 56,265 0.33
Steven D. Welling -0- 10,000 10,000 .06
John M. Cooper 3,000 -0- 3,000 .02
All directors and executive 7,216,361 506,342 7,722,703 40.81
officers as a group
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
During 2003 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.
POTENTIAL CONFLICTS OF INTEREST
----------------------------------
During 2003 the Board of Directors approved the following potential conflict of
interest involving members of the Board of Directors or Management:
The Company engaged KPMG LLP for advice and preparation of the Company's 2002
income tax returns. The Company paid KPMG $35,800 for these services. The spouse
of a member of Management was a Senior Manager with KPMG's audit practice until
her resignation from KPMG in November 2003.
STOCK PERFORMANCE(13)
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 2003 peer group(14) that the Company believes accurately reflects
its competitors for fiscal 2003. The graph assumes that the value of the
investment in the Company's common stock and each index was $100 at December 31,
1998.
________________________________________________________________________________
11 Mr. Baumgardner's beneficial ownership includes 94,022 options currently
exercisable. Mr. Baumgardner also holds 74,021 options unexercisable as of
March 31, 2004 that are not included in the table.
12 Mr. Gilberg's beneficial ownership includes 10,000 shares of common stock
and 46,265 options currently exercisable. Mr. Gilberg also holds 46,263
options unexercisable as of March 31, 2004 that are not included in the
table.
13 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.
14 The companies which make up the Company's 2003 peer group are: Clean
Harbors, Inc.; Duratek, Inc.; Perma-Fix Environmental Services, Inc; and
Waste Management Inc.
15
[GRAPHIC OMITTED]
PROPOSAL NO. 2
SELECTION OF AUDITORS
The Board of Directors has designated Moss Adams LLP as independent auditors for
the Company's 2004 fiscal year. Moss Adams has examined the financial statements
of the Company for its 2002 and 2003 fiscal year. A representative of Moss
Adams is expected to be present at the Annual Meeting and available to make a
statement and/or respond to questions.
Stockholder ratification of the selection of Moss Adams 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 Moss Adams 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, in conjunction with the Audit Committee will
reconsider whether or not to retain Moss Adams. 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 Moss Adams. 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.
AUDITOR FEES
-------------
The aggregate fees billed by Moss Adams for professional services were as
follows:
2003 2002
-------- -------
Audit Fees $125,000 $66,000
Audit-Related Fees -- --
Tax Fees -- --
All Other Fees -- --
-------- -------
Total Fees $125,000 $66,000
16
Moss Adams prepares an annual engagement letter that is submitted to the Audit
Committee for approval. The engagement letter is a contract between the Company
and Moss Adams that specifies the responsibilities of each party. It is signed
on behalf of the Company by the Chairman of the Audit Committee and the Chief
Financial Officer. One of the responsibilities of the Company is payment to
Moss Adams of a fixed amount for the annual audit and each quarterly review, as
well as any other services agreed to in the engagement letter.
17
STOCKHOLDER PROPOSALS AT THE NEXT
---------------------------------
ANNUAL MEETING OF STOCKHOLDERS
------------------------------
The Company must receive stockholder proposals submitted for inclusion in the
Company's proxy materials and for consideration at the annual meeting of
stockholders in 2005 no later than December 12, 2004. Stockholder proposals
should be submitted to James R. Baumgardner, Secretary of American Ecology
Corporation, 300 E. Mallard, Suite 300, Boise, Idaho 83706. Any such proposal
should comply with the Securities and Exchange Commission rules governing
stockholder proposals submitted for inclusion in proxy materials.
Other shareholder communications to the Board of Directors may be sent at any
time to corporatesecretary@americanecology.com. The Company intends to
--------------------------------------
summarize shareholder communications for presentation to the Board of Directors
at its next meeting, however, this is subject to change based upon the volume of
communications.
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, 2003, as filed with the SEC, excluding exhibits, may be obtained by
stockholders without charge by written request addressed to Investor Relations,
300 E. Mallard, Suite 300, Boise, Idaho 83706 or may be accessed on the Internet
at: http://www.americanecology.com.
-------------------------------
18
Exhibit A
---------
AMERICAN ECOLOGY CORPORATION
CODE OF ETHICS FOR CHIEF EXECUTIVE AND SENIOR
FINANCIAL OFFICERS
The Company's Board of Directors has adopted the following Code of Ethics for
its Chief Executive Officer, Chief Financial Officer and Controller ("the
Executives").
To the best of their knowledge and ability, the Executives shall:
1. Act with honesty and integrity, including the ethical handling of actual or
apparent conflicts of interest between personal and professional
relationships;
2. Comply with applicable governmental laws, rules and regulations;
3. Promote the prompt internal reporting of violations of this Code of Ethics
to the Audit Committee or Chairman of the Board of Directors;
4. Respect the confidentiality of information acquired in the course of
employment;
5. Proactively promote ethical and honest behavior within American Ecology and
its consolidated subsidiaries.
6. The Executives are responsible for full, fair, accurate, timely and
understandable financial disclosure in reports and documents filed by the
Company with the Securities and Exchange Commission and in other public
communications made by the Company. The Company's accounting records must
be maintained in accordance with all applicable laws and standards, must be
proper, supported and classified, and must not contain any false or
misleading entries.
7. The Executives are responsible for the Company's system of internal
financial controls. The Executives shall promptly bring to the attention of
the Audit Committee of the Board of Directors any information the
Executives may have concerning (a) significant deficiencies in the design
or operation of internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data,
or (b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's financial
reporting, disclosures or internal controls.
8. The Executives may not compete with the Company. The Executives shall
promptly bring to the attention of the Chairman of the Board and the Audit
Committee any information the Executives may have concerning any actual or
apparent conflicts of interest between personal and professional
relationships, involving any management or
19
other employees who have a significant role in the Company's financial
reporting, disclosures or internal controls.
9. The Company is committed to complying with both the letter and the spirit
of all applicable laws, rules and regulations. The Executives shall
promptly bring to the attention of the Chairman of the Board and the Audit
Committee any information the Executives may have concerning evidence of a
material violation of the securities or other laws, rules or regulations
applicable to the Company or its employees or agents.
10. The Executives shall promptly bring to the attention of the Chairman of the
Board and the Audit Committee any information the Executives may have
concerning any violation of this Code of Ethics. The Board of Directors may
determine, or designate appropriate persons to determine, appropriate
additional disciplinary or other actions to be taken in the event of
violations of this Code of Ethics by the Company's Chief Executive, Chief
Financial Officer, or Controller.
Agreed and Acknowledged
________________________________________ ________________
Date
20
Exhibit B
---------
AMERICAN ECOLOGY CORPORATION
AUDIT COMMITTEE CHARTER
PURPOSE
The Committee will provide assistance to the Board in fulfilling its oversight
responsibility to the shareholders and others relating to the integrity of the
Company's financial statements, the financial reporting process, the systems of
internal accounting and financial controls, the annual independent audit of the
Company's financial statements, the Company's compliance with legal and
regulatory requirements, and its ethics programs as established by management
and the Board. The Committee shall also oversee the independent auditors'
qualifications and independence. The Committee will evaluate the performance of
the Company's independent auditors, including a review and evaluation of the
engagement partner. In so doing, it is the responsibility of the Committee to
maintain free and open communication between the Committee, independent
auditors, and management of the Company.
COMMITTEE MEMBERSHIP
The Committee shall be appointed by the Board and shall comprise at least three
directors. Each Committee member shall meet the requirements of the Nasdaq
listing standards, and federal laws and regulations, with respect to audit
committees, as they may become applicable from time to time. No member may
receive compensation from the Company other than Board approved director's fees.
All Committee members will be financially literate, and at least one member of
the Committee will have accounting or related financial management expertise as
determined by the Board and shall be deemed the Committee's "financial expert."
COMMITTEE AUTHORITY AND RESPONSIBILITIES
The primary responsibility of the Committee is to oversee the Company's
financial reporting process on behalf of the full Board of Directors. The Board
will designate a Chairman for the Committee and the Committee shall have such
authority as determined and delegated by the Board. The Committee may delegate
authority to subcommittees, or to the Chairman of the Committee when
appropriate.
Management is responsible for preparing the Company's financial statements, and
the independent auditors are responsible for auditing those financial
statements. The Committee provides oversight and sets the overall corporate
standards for quality financial reporting, sound risk management, and ethical
behavior, but it is the role of management to perform the day-to-day
responsibilities associated with the preparation of the Company's financial
statements and reports.
21
The following shall be the principal recurring duties of the Committee in
carrying out its oversight responsibilities. The Committee may perform such
other duties and responsibilities as are consistent with its purpose and as the
Board or the Committee deems appropriate.
1. Independent auditors. The Committee shall have the sole authority and
-----------------------
responsibility to hire, evaluate and replace the independent auditors and, in
its capacity as a committee of the Board, shall be directly responsible for the
appointment, compensation and oversight of the work of the independent auditors.
The Committee shall discuss the auditors' independence from management and the
Company, including whether the auditors' performance of permissible non-audit
services is compatible with their independence. This process will include, at
least annually, the Committee's review of the independent auditors' internal
control and audit procedures, any material issues raised by the most recent
financial review or audit and (to assess the auditors' independence) all
relationships between the independent auditors and management. Annually, the
Committee will review the qualifications and performance of the Company's
current independent auditors and select the Company's independent auditors for
the next year.
2. Audit services. The Committee shall discuss with the independent auditors the
-----------------
overall scope and plans for their respective audits including their respective
responsibilities and the adequacy of staffing and compensation. The Committee
shall approve in advance all audit engagement fees and the terms of all audit
services to be provided by the independent auditors.
3. Permissible non-audit services. The auditors shall be engaged by the
---------------------------------
Committee for permissible non-audit services, as delineated by applicable
securities laws and regulation.
4. Review of interim financial statements; earnings releases. The Committee
------------------------------------------------------------
shall review the interim financial statements, and the Company's disclosures
under Management's Discussion and Analysis of Financial Condition and Results of
Operations, with management and the independent auditors prior to the filing of
the Company's Quarterly Report on Form 1O-Q. The Committee will review and
question management regarding the Company's quarterly financial statements,
earnings releases and Reports on Form 10-Q. The Committee will discuss the
results of the quarterly review and any other matters required to be
communicated to the Committee by the independent auditors under generally
accepted auditing standards.
5. Review of annual audited financial statements. The Committee shall review
------------------------------------------------
with management and the independent auditors the financial statements to be
included in the Company's Annual Report on Form 10-K, including (a) their
judgment about the quality, of the Company's accounting principles, including
significant financial reporting issues and judgments made in connection with the
preparation of the financial statements; (b) the clarity of the disclosures in
the financial statements; and (c) the Company's disclosures under Management's
Discussion and Analysis of Financial Condition and Results of Operations,
including critical accounting policies.
The Committee will also review with management and the independent auditors (a)
major issues regarding accounting principles and financial statement
presentations, including significant changes in the selection or application of
accounting principles; (b) major issues regarding the
22
adequacy of internal controls and steps taken in light of material deficiencies;
and (c) the effects of alternative accounting methods and regulatory and
accounting initiatives on the financial statements.
The Committee will discuss the results of the annual audit and any difficulties
the independent auditors encountered in the course of their audit work,
including any restrictions on the scope of the auditors' activities or on access
to requested information, and any significant disagreements with management. The
Committee will also discuss any other matters required to be communicated to the
Committee by the independent auditors under generally accepted auditing
standards.
Based on these reviews, the Committee will make a recommendation to the Board as
to whether the audited financial statements are adequate for inclusion in the
Company's Annual Report on Form 10-K.
6. Risk assessment and risk management. The Committee will review and discuss
--------------------------------------
with management and the independent auditors the Company's policies with respect
to risk assessment and risk management.
7. Internal controls; disclosure controls and procedures. The Committee will
--------------------------------------------------------
review and discuss with management and the independent auditors the Company's
internal controls. The Committee will review and discuss the Company's
disclosure controls and procedures, and the quarterly assessments of such
controls and procedures by the Chief Executive Officer and Chief Financial
Officer.
8. Complaint procedures. The Committee will establish and maintain procedures
-----------------------
for handling complaints regarding accounting, internal accounting controls, and
auditing matters, including procedures for confidential, anonymous submission of
concerns by employees regarding accounting and auditing matters.
9. Compliance programs. The Committee will review and discuss with management
----------------------
and the independent auditors the adequacy and effectiveness of the Company's
legal, regulatory and ethical compliance programs, including the Company's Code
of Ethics for Executive and Financial Officers.
10. Report for inclusion in proxy statement. The Committee shall prepare the
-------------------------------------------
Audit Committee report that SEC rules require to be included in the Company's
annual proxy statement.
11. Charter. The Committee shall periodically review and reassess the adequacy
-----------
of this Charter and recommend any proposed changes to the Board for approval.
12. Investigative authority. In discharging its oversight role, the Committee is
---------------------------
empowered to investigate any matter brought to its attention with full access to
all books, records, facilities and personnel of the Company. The Company shall
budget funds that enable the Committee to directly engage Outside Advisors, as
defined below.
23
OUTSIDE ADVISORS
The Committee shall have the authority to retain such outside counsel, experts,
investigators, and other advisors as it deems appropriate to assist the
Committee in the performance of its functions. The Committee shall have the
authority to set an annual budget for its use during the year regarding the
discharge of its duties, subject to approval by the full Board of Directors. The
Committee shall not engage or contact for review purposes outside accounting
firms without the approval of the full Board of Directors.
MEETINGS
The Committee will meet as often as may be deemed necessary or appropriate in
its judgment, but at least quarterly each year, and at such times and places as
the Committee shall determine. The majority of the members of the Committee
shall constitute a quorum. The Committee will meet separately, at least
quarterly, with the independent auditors and management to discuss any matters
that they wish to bring to the Board's attention.
The Committee shall report to the Board with respect to its meetings, including
any issues that arise with respect to the quality or integrity of the Company's
financial statements, the Company's compliance with legal or regulatory
requirements, and the performance and independence of the Company's independent
auditors.
24
Exhibit C
---------
AMERICAN ECOLOGY CORPORATION
NOMINATING COMMITTEE CHARTER
PURPOSE
The Nominating Committee ("the Committee") is appointed by the Board for the
primary purposes of:
A. Identifying individuals qualified to become members of the Board.
B. Recommending to the Board when new members should be added to the
Board.
C. Recommending to the Board individuals to fill vacant Board positions.
D. Recommending to the Board the director nominees for the next annual
meeting of shareholders.
E. Evaluation of the Board and its members in accordance with applicable
law.
COMMITTEE MEMBERSHIP
The Committee shall be appointed by the Board and shall consist of at least
three directors, each of whom is to be free of any relationship that, in the
opinion of the Board, would interfere with his or her exercise of independent
judgment. Each Committee member shall meet the requirements of the Nasdaq
listing standards, and federal laws and regulations, with respect to nominating
committees and their independence, as they may become applicable from time to
time. No Committee member may receive compensation from the Company other than
Board approved director's fees. The members of the Committee will be appointed
by and serve at the discretion of the Board.
COMMITTEE AUTHORITY AND RESPONSIBILITIES
The Committee believes that it is in the best interest of the Company and its
stockholders to obtain highly-qualified candidates to serve as members of the
Board of Directors and, accordingly, the primary responsibility of the Committee
is to oversee the selection of new Directors. The Board will designate a
Chairman for the Committee and the Committee shall have such authority as
determined and delegated by the Board. The Committee may delegate authority to
subcommittees, or to the Chairman of the Committee when appropriate. The
Committee shall have the following authority and responsibilities:
A. BOARD VACANCIES. When a vacancy occurs on the Board by reason of
disqualification, resignation, retirement, death, or an increase in
the size of the Board, to present its recommendation of a replacement
or additional member to the Board.
B. DIRECTOR CRITERIA. To consider, at a minimum, the following factors in
recommending to the Board potential new Board members, or the
continued service of existing members:
25
1. Strong personal characteristics including but not limited to
strong moral fiber and integrity; good business and personal
reputation, experience at a strategy/policy setting level;
high-level managerial experience, or experience dealing with
complex problems; an ability to work effectively with others;
sufficient time to devote to the affairs of the Company; and
freedom from conflicts or potential conflicts of interest.
2. Whether the member/potential member is subject to a disqualifying
factor including, but not limited to relationships with
competitors, customers, suppliers, contractors, counselors, or
consultants, or recent previous employment with the Company.
3. The member's/potential member's independence, as defined by
Nasdaq and the U.S. Securities and Exchange Commission.
4. Whether the member/potential member would be considered a
"financial expert" or "financially literate" as described in
applicable listing standards, legislation, or Audit Committee
guidelines
5. The extent of the member's/potential member's business
experience, technical expertise, or specialized skills or
experience.
6. Whether the member/potential member, by virtue of particular
experience relevant to the company's current or future business,
will add specific value as a Board member.
7. Any factors related to the ability and willingness of a new
member to serve, or an existing member to continue his/her
service.
C. BOARD SIZE. To make recommendations to the full Board about exercising
the Board's authority to determine the number of its members.
D. OVERSIGHT OF THE EVALUATION OF THE BOARD. To be responsible for
overseeing the evaluation of the Board in the following respects:
1. By annually reviewing the performance of the Board as a whole,
and reporting the results of its review to the Board.
2. By annually reviewing the performance of Board members who are
expected to stand for election at the next annual meeting.
E. DIRECTOR REMOVAL. To recommend to the Board the removal of a Director
where appropriate.
F. DIRECTOR INDEPENDENCE. To recommend to the Board standards for
Director independence.
26
G. OTHER ACTIVITIES. To perform any other activities as the Committee
deems appropriate, or as are requested by the Board, consistent with
this charter, the Company's bylaws and applicable law.
H. THIS CHARTER. To maintain and update, as appropriate, this charter,
which will be published on the Company's website.
OUTSIDE ADVISORS
The Committee shall have the authority to retain such outside counsel, experts,
investigators, and other advisors as it deems appropriate to assist the
Committee in the performance of its functions. The Committee shall have the
authority to set an annual budget for its use during the year regarding the
discharge of its duties, subject to approval by the full Board of Directors. The
Committee shall not engage or contact for review purposes outside accounting
firms or law firms without the approval of the full Board of Directors. Any
communications between the Committee and legal counsel in the course of
obtaining legal advice will be considered privileged communications of the
Company and the Committee will take all necessary steps to preserve the
privileged nature of those communications.
MEETINGS
The Committee will meet as often as may be deemed necessary or appropriate in
its judgment, but at least annually each year, and at such times and places as
the Committee shall determine. The majority of the members of the Committee
shall constitute a quorum.
The Committee shall report to the Board with respect to its meetings, including
any issues that arise with respect to the operations of the Board of Directors
and the selection of Board members. The Committee will maintain written minutes
of its meetings, which minutes will be filed with the minutes of the meetings of
the Board of Directors.
27
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Please [ ]
Mark Here
for Address
Change or
Comments
SEE REVERSE SIDE
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 David B. Anderson
listed to the right AUTHORITY 02 Rotchford L. Barker
(except as marked to vote for all nominees 03 Roy C. Eliff
to the contrary) listed to the right 04 Edward F. Heil
[ ] [ ] 05 Stephen A. Romano
06 Jimmy D. Ross
07 Stephen M. Schutt
2. To ratify the selection of Moss Adams LLP FOR AGAINST ABSTAIN
as the Company's independent auditors. [ ] [ ] [ ]
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 and Proxy Statement, and
the Annual Report accompany the same, dated April 2,
2004 and March 31, 2004 respectively.
Date: ___________________________________________, 2004
_______________________________________________________
SIGNATURE OF STOCKHOLDER
_______________________________________________________
SIGNATURE IF HELD JOINTLY
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^ FOLD AND DETACH HERE ^
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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
20, 2004, 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.
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ADDRESS CHANGE/COMMENTS (MARK THE CORRESPONDING BOX ON THE REVERSE SIDE)
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.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^ FOLD AND DETACH HERE ^
YOU CAN NOW ACCESS YOUR AMERICAN ECOLOGY ACCOUNT ONLINE.
Access your American Ecology shareholder account online via Investor
ServiceDirect(R) (ISD).
Mellon Investor Services LLC, Transfer Agent for American Ecology Corporation,
now makes it easy and convenient to get current information on your shareholder
account.
- 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
FOR TECHNICAL ASSISTANCE CALL 1-877-978-7778 BETWEEN 9AM-7PM
MONDAY-FRIDAY EASTERN TIME
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