Item 5.02 Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On
November 17, 2016, US Ecology, Inc. (the “
Company
”) approved a Management Incentive Plan and related
target percentages, and certain equity awards for each of the Named Executive Officers. On the same day,
Simon G. Bell
was promoted from Executive Vice President of Operations to Executive Vice President and Chief Operating Officer. Mr. Bell
joined the Company in 2001 as Environmental Manager at its Grand View, Idaho facility and later served as the Idaho
facility's General Manager prior to being appointed Vice President of Operations in 2005 and Executive Vice President of
Operations in 2014. Mr. Bell’s base salary was increased from $316,500 to $340,000 to reflect his added
responsibilities. All other terms of Mr. Bell’s Executive Employment Agreement, as described in the Company’s
2015 Annual Report on Form 10-K, shall continue without amendment.
2017 Management Incentive Plan
The Company approved the 2017 Management
Incentive Plan (“
2017 MIP
”) under which each Named Executive Officer (each a “
Participant
”)
shall be eligible to receive a cash incentive payment for fiscal year 2017 (“
Plan Year
”) based upon the achievement
of four independent objectives: (1) financial; (2) individual performance; (3) health and safety; and (4) compliance (each a “
Plan
Objective
”). The payout available for achievement of 100% of each Plan Objective is a percentage of a Participant’s
annual base salary (“
Target Incentive
”). The Target Incentive is 100% of base salary for Mr. Feeler and 70%
of base salary for each of Messrs. Welling, Bell and Gerratt. The amount available for achievement of a Plan Objective is weighted
as a percentage of a Participant’s Target Incentive and may be earned even if the threshold performance is not met for another
Plan Objective.
The portion of a Participant’s Target
Incentive based on
financial
performance (“
Finance Target Incentive
”) increases with every
percentage point over 79% of the Company’s Board approved consolidated operating income target (“
Base MIP Target
”)
and is weighted at 50% of a Participant’s Target Incentive. No Finance Target Incentive will be awarded if 79% of the Base
MIP Target is not achieved. For every percentage point achievement over 79% of the Base MIP Target, up to and including 89%, a
Participant shall earn 2.33% of the Finance Target Incentive. For every percentage point achievement over 89% of the Base MIP Target,
up to and including 100%, a Participant shall earn 6.98% of the Finance Target Incentive. Upon 100% achievement of the Base MIP
Target, 100% of the Finance Target Incentive shall be available to a Participant. In the event the Company exceeds the Base MIP
Target, the Participants shall be eligible for an additional incentive payment in an amount calculated by multiplying their respective
salaries by an additional 4.5% for every 1% increase over the Base MIP Target and multiplying the resulting product by 50%. The
additional incentive payment based on exceeding the Base MIP Target is capped at one times the Participant’s Target Incentive
for an aggregate potential incentive payment of two times the Participant’s Target Incentive.
Up to 30% of a Participant’s Target
Incentive shall be awarded, at the sole discretion of the Compensation Committee of the Board (“
Administrator
”),
based on the Participant’s individual performance, including team work, achievement of established annual priorities, effective
use of Company resources and other evaluative factors as determined by the Administrator.
Metrics for the
health and safety
objective
are weighted cumulatively at 10% of a Participant’s Target Incentive. The Company-wide metrics, as set and approved by the
Compensation Committee, include Total Recordable Incident Rate (2%), Days Away Restricted Time (3%) and Lost Time Incident (5%).
The metric for the
compliance
objective
is the avoidance of Notices of Violation or Enforcement with monetary penalties during the Plan Year and is weighted at 10% of
a Participant’s Target Incentive. The Target Incentive related to compliance shall be earned based on a determination by
the Administrator, taking into consideration, among other things, the dollar amount of a monetary penalty paid (or accrued under
generally accepted accounting principles) in the Plan Year, severity of the Notices of Violation or Enforcement, regulatory basis
for penalty and respective fact patterns.
2017 Equity Awards
The Company approved the award of stock
options and restricted stock to the Named Executive Officers with a grant date of January 2, 2017. The value of the shares underlying
each award of options and restricted stock shall be equal to the amounts set forth in the table below as of the grant date. Options
will vest in equal annual installments over three years and restricted shares will “cliff” vest upon the third
anniversary of the grant date. The exercise price for each option shall be the closing market price of the Company’s common
stock on January 2, 2017 and each option shall have a ten-year term.
The Company also approved the award of
Performance Stock Units, with each Named Executive Officer eligible to receive 0% to 200% of the target number of PSUs granted
(“
Target PSUs
”), based on the Company’s Total Stockholder Return (“
TSR
”) relative to
the TSR of the S&P 600 (50% of Target PSUs) and the TSR of certain companies in the environmental and facilities services industry
(50% of Target PSUs) over the three-year performance period beginning January 1, 2017. The value of the shares underlying the Target
PSUs shall be equal to the amounts set forth in the table below as of the grant date.
Named Executive Officer
|
Stock Options
|
Restricted
Stock
|
Performance Stock Units
|
Jeffrey R. Feeler
President and Chief Executive Officer
|
$180,000
|
$450,000
|
$270,000
|
Steven D. Welling
Executive Vice President of Sales and
Marketing
|
$65,000
|
$162,500
|
$97,500
|
Simon G. Bell
Executive Vice President and Chief Operating
Officer
|
$65,000
|
$162,500
|
$97,500
|
Eric L. Gerratt
Executive Vice President and Chief Financial
Officer
|
$65,000
|
$162,500
|
$97,500
|