Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On
November 15, 2017, US Ecology, Inc. (the “
Company
”) approved base salary, Management Incentive Plan and
related target percentages, and certain equity awards for each of the Named Executive Officers. Effective with the first
payroll of 2018, each of Messrs. Welling and Bell’s base salary was increased from $340,000 to $360,000. Each of
Messrs. Feeler and Gerratt declined the Company’s recommended increase in his base salary from his existing base salary
of $485,000 in the case of Mr. Feeler and $316,500 in the case of Mr. Gerratt.
2018 Management Incentive Plan
The Company approved the 2018 Management Incentive
Plan (“
2018 MIP
”) under which each Named Executive Officer (each a “
Participant
”) shall be
eligible to receive a cash incentive payment for fiscal year 2018 (“
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 75%
of base salary for each of Messrs. Welling, Bell, Gerratt and Marshall. 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 80% of the Base MIP
Target is not achieved. For every percentage point achievement over 79% of the Base MIP Target, up to and including 100%, a Participant
shall earn 4.76% 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.
2018 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, 2018. 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. Restricted
stock and options will vest in equal annual installments over three years. The exercise price for each option shall be the closing
market price of the Company’s common stock on January 2, 2018 and each option shall have a ten-year term. Mr. Feeler declined
the Company’s recommended increase in his stock option and restricted stock grant amounts from those granted in 2017.
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, 2018. 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. Mr. Feeler declined the Company’s recommended
increase in the value of the shares underlying his Target PSUs from those granted in 2017.
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
|
$80,000
|
$200,000
|
$120,000
|
Simon G. Bell
Executive Vice President and Chief Operating
Officer
|
$80,000
|
$200,000
|
$120,000
|
Eric L. Gerratt
Executive Vice President and Chief Financial
Officer
|
$80,000
|
$200,000
|
$120,000
|
Andrew Marshall
Executive Vice President of Regulatory Compliance
and Safety
|
$55,000
|
$137,500
|
$82,500
|