EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Employment Agreement ”) is made and entered into as of the 10 day of December, 2008, by and between American Ecology Corporation, a Delaware corporation (the “ Company ”), and James R. Baumgardner (“ Employee ”).  The Company and Employee are sometimes collectively referred to herein as the “ Parties ,” and individually, as a “ Party .”

Whereas , the Company desires to employ the Employee pursuant to the terms and conditions of this Agreement, and the Employee desires to accept such employment on the terms and conditions hereinafter set forth.

Now, Therefore , in consideration of the premises, the mutual promises, covenants and conditions herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree as follows:

1.1            Employment .   The Company hereby employs Employee, and Employee hereby accepts employment with the Company, all upon the terms and subject to the conditions set forth in this Employment Agreement.  Employee’s first day of employment with the Company shall be January 5, 2009 (the “ Commencement Date ”).

1.2            Term of Employment .   The term of employment of Employee by the Company pursuant to this Employment Agreement shall be for the period commencing on the Commencement Date set forth above in Section 1.1 ( Employment ) and ending May 31, 2010 (the “ Term ”), or such earlier date that Employee’s employment is terminated in accordance with the provisions of this Employment Agreement.

1.3            Capacity and Duties .   Employee is and shall be employed in the capacity of President and Chief Operating Officer of the Company and its subsidiaries and shall have such other duties, responsibilities and authorities as may be assigned to him from time to time by the Chief Executive Officer of the Company (the “ CEO ”) and/or the Board of Directors of the Company (the “ Board ”), which are not materially inconsistent with Employee's positions with the Company.  Except as otherwise herein provided, Employee shall devote his entire business time, best efforts and attention to promote and advance the business of the Company and its subsidiaries and to perform diligently and faithfully all the duties, responsibilities and obligations of Employee to be performed by him under this Employment Agreement. Employee’s duties shall include, but shall not be limited to, the management of (i) operating and closed facilities for safety, compliance and efficiency, (ii) operating facility permitting to maintain adequate future capacity, (iii) sales and marketing functions to maximize revenue, and (iv) capital projects within time and budget parameters.  In addition, Employee shall support the CEO on merger, acquisition and other corporate development activities and shall execute the Company’s on-going strategy and financial plan as an executive team member.  Employee shall report to the CEO.

1.4            Place of Employment .   Employee’s principal place of work shall be the main corporate office of the Company, currently located in Boise, Idaho; provided, however , that the location of the Company and any of its offices may be moved from time to time in the discretion of the Board.

1.5            No Other Employment .   During the Term, Employee shall not be employed in any other business activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage; provided, however , that this restriction shall not be construed as preventing Employee from (i) participating in charitable, civic, educational, professional, community or industry affairs; and (ii) investing his personal assets in a business which does not compete with the Company or its subsidiaries or with any other company or entity affiliated with the Company, where the form or manner of such investment will not require services on the part of Employee in the operation of the affairs of the business in which such investment is made and in which his participation is solely that of a passive investor or advisor, so long as the activities in clauses (i) and (ii), above, do not materially interfere with the performance of Employee’s duties hereunder or create a potential business conflict or the appearance thereof.

1.6            Adherence to Standards .   Employee shall comply with the written policies, standards, rules and regulations of the Company from time to time established for all executive officers of the Company consistent with Employee’s position and level of authority.

1.7            Review of Performance .   The CEO   shall periodically review and evaluate with Employee his performance under this Employment Agreement.

2.             Compensation .   During the Term, subject to all the terms and conditions of this Employment Agreement and as compensation for all services to be rendered by Employee hereunder, the Company shall pay to or provide Employee with the following:

2.1            Base Salary .   During the Term, the Company shall pay to employee an annual base salary (“ Base Salary ”) in an amount not less than Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00).  Such Base Salary shall be payable in accordance with the regular payroll practices and procedures of the Company.

2.2            Bonus .   Employee shall be eligible to participate in any cash bonus plans of the Company which are in effect from time to time, including the annual cash bonus opportunity granted to Employee under the Company’s Management Incentive Program (“ MIP ”), subject to the terms and conditions thereof, at a 40% of salary target basis.  Anything to the contrary in this Agreement notwithstanding, the Company reserves the right to modify or eliminate any or all of its cash bonus plans at any time.  In the event of any consistency between the terms of this Employment Agreement and the terms of the MIP, the MIP shall govern and control.

2.3            Paid Time Off and Other Benefits .   Employee shall be entitled to five (5) weeks Paid Time Off (“ PTO ”), and shall have the right, on the same basis as other members of senior management of the Company, to participate in any and all employee benefit plans and programs of the Company, including medical plans, insurance plans and other benefit plans and programs as shall be, from time to time, in effect for executive employees and management personnel of the Company.  Such participation shall be subject to the terms of the applicable plan documents, generally applicable Company policies and the discretion of the Board or any administrative or other committee provided for in, or contemplated by, each such plan or program.  Anything to the contrary in this Agreement notwithstanding, the Company reserves the right to modify or terminate such benefit plans and programs at any time.

2.4            Other Benefits .   The Company may provide Employee with other or additional benefits not specifically described herein.  In such event, these other or additional benefits shall be specified in writing and attached hereto as Exhibit A ( Other Benefits ).

2.5            Expenses .   The Company shall reimburse Employee for all reasonable, ordinary and necessary expenses including, but not limited to, automobile and other business travel and customer and business entertainment expenses incurred by him in connection with his employment in accordance with the Company’s expense reimbursement policy; provided, however , Employee shall render to the Company a complete and accurate accounting of all such expenses in accordance with the substantiation requirements of the Internal Revenue Code of 1986, as amended (the “ Code ”).  Employee’s right to reimbursement hereunder may not be liquidated or exchanged for any other benefit, and Employee shall be reimbursed for eligible expenses no later than the close of the calendar year following the year in which Employee incurs the applicable expense.

3.           Termination of Employment.

3.1            Termination of Employment .   Employee’s employment and this Employment Agreement may be terminated prior to expiration of the Term as follows (with the date of termination of Employee’s employment hereunder being referred to hereinafter as the “ Termination Date ”):

A.            Without Cause.   Upon no less than thirty (30) days’ written notice from the Company to Employee at any time without Cause (as hereinafter defined) and other than due to Employee’s death or Disability.

B.            With Cause.   By the Company for Cause immediately upon written notice stating the basis for such termination.

C.            Death or Disability.   Due to the death or Disability (as hereinafter defined) of Employee.

D.            By Employee.   By Employee at any time with or without Good Reason (as hereinafter defined) upon thirty (30) days’ written notice from Employee to the Company (or such shorter period to which the Company may agree).

E.            Mutual Agreement.   Upon the mutual agreement of the Company and Employee.

3.2            Effect of Termination .   In the event of termination of Employee’s employment with the Company for any reason, or if Employee is required by the Board, Employee agrees to resign, and shall automatically be deemed to have resigned, from any offices (including any directorship) Employee holds with the Company or any of its subsidiaries effective as of the Termination Date or, if applicable, effective as of a date selected by the Board.

4.           Payments Upon Termination of Employment.

4.1            Termination by the Company For Cause or by the Employee Without Good Reason .   If Employee’s employment and this Employment Agreement are terminated by the Company for Cause (as hereinafter defined) or by Employee without Good Reason, the Company shall pay Employee the Accrued Obligations (as hereinafter defined) ( other than , however, any cash bonus payment which shall be forfeited), in a single, lump-sum payment within forty-five (45) days following such termination.

4.2            Termination by the Company Without Cause or by the Employee For Good Reason .   If Employee’s employment and this Employment Agreement are terminated by the Company without Cause or if Employee terminates his employment and this Employment Agreement for Good Reason, the Company shall pay Employee the Accrued Obligations in a single, lump-sum payment within forty-five (45) days following such termination.  In addition, Employee shall be entitled to receive the following:  (i) an amount equal to the greater of $20,800 for each month Employee served as President and Chief Operating Officer under this Agreement or one year’s Base Salary (“ Severance Payment ”), which shall be payable in accordance with the regular payroll practices and procedures of the Company; and (ii) continued medical, hospitalization, life insurance and disability benefits to which he was entitled at the Termination Date (any of which may, in the Company’s discretion, be structured as a reimbursement to the Employee of the after-tax cost thereof) for a period of twelve (12)   months following the Termination Date (or until Employee receives similar or comparable coverage from a new employer).  All such additional payments and benefits under this Section 4.2 shall be conditional on Employee’s continued compliance with Section 9 ( Return of Property ), Section 12 ( Confidentiality ), Section 13 ( Work Product Assignment ), and Section 14 ( Covenant Not to Compete ).

4.3            Termination Due to Death .   If Employee’s employment and this Employment Agreement are terminated due to Employee’s death, the Company shall pay the estate of Employee the Accrued Obligations in a single, lump-sum payment within forty-five (45) days following such termination.

4.4            Termination Due to Disability .   If Employee’s employment and this Employment Agreement are terminated due to his Disability, the Company shall pay Employee the Accrued Obligations in a single, lump-sum payment within forty-five (45) days following such termination; in addition, Employee will be eligible to participate in the Company’s Long-Term Disability Plan, on a basis no less favorable to Employee than other senior executives of the Company.

4.5            Retirement .   If Employee’s employment and this Employment Agreement are terminated by virtue of Employee’s Retirement, the Company shall pay Employee the Accrued Obligations in a single, lump-sum payment within forty-five (45) days following such termination.

5.             Payment Upon Change of Control .   Upon a Change of Control of the Company (as hereinafter defined), Employee shall receive a payment as set forth on Exhibit B attached hereto (the “ Change of Control Payment ”).   Such Change of Control Payment shall be paid in a single lump-sum payment, within forty-five (45) days following the date of the Change of Control.  The Change of Control Payment shall be in lieu of any Severance Payment that might otherwise be due and payable to Employee.

6.             Payment Upon Expiration of Employment Agreement .   In the event this Employment Agreement expires at the end of the Term, without the Company and Employee entering into a new, mutually agreed upon employment contract effective as of June 1, 2010, Employee shall be entitled to receive (i) the Accrued Obligations, and (ii) a payment equal to $20,800 for each month Employee served as President and Chief Operating Officer under this Employment Agreement.  Any payment under this Section 6 shall be paid in a single lump-sum payment within forty-five (45) days following the date of the expiration of the Term of this Employment Agreement.  Additionally, in such event the terms and conditions of Section 14.2 ( Non-Competition Covenant ) shall be void and of no effect.

7.             Compliance With Section 409A .   Any amount payable as a result of Employee’s termination of employment shall only be payable if such termination of employment constitutes a “separation from service” within the meaning of Section 409A of the Code.  In addition, in the event that (i) Employee is deemed at the time of his separation from service to be a “specified employee” under Section 409A(a)(2)(B)(i) of the Code, and (ii) the payment of any amounts to Employee as a result of such separation from service (an “ Agreement Payment ”) would result in penalty tax liability pursuant to Section 409A of the Code, then such Agreement Payment shall not be made or commence until the earlier of (a) the expiration of the six (6)-month period measured from the date of Employee’s separation from service with the Company or (b) such earlier time as may be permitted without the imposition of penalty taxes on Employee under Section 409A of the Code and the regulations or other authority promulgated thereunder.  During any period in which an Agreement Payment to Employee is deferred pursuant to the foregoing, Employee shall be entitled to interest on the deferred Agreement Payment at a per annum rate equal to the highest rate of interest applicable to six (6)-month non-callable certificates of deposit with daily compounding offered by the following institutions: Citibank N.A., Wells Fargo Bank, N.A. or Bank of America, on the date of such separation from service.  Upon the expiration of the applicable deferral period, any Agreement Payment which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 7 shall be paid to Employee or his beneficiary in one lump sum, including all accrued interest.

8.             Definitions .   In addition to the words and terms elsewhere defined in this Employment Agreement, certain capitalized words and terms used herein shall have the meanings given to them by the definitions and descriptions in this Section 8 , unless the context or use indicates another or different meaning or intent, and such definition shall be equally applicable to both the singular and plural forms of any of the capitalized words and terms herein defined.  The following words and terms are defined terms under this Employment Agreement:

8.1            Accrued Obligations .   The term “ Accrued Obligations ” shall include (i) any unpaid Base Salary through the Termination Date and any accrued PTO in accordance with the Company’s policy; (ii) any unpaid cash bonus earned with respect to any fiscal year ending on or prior to the Termination Date; (iii) reimbursement for any un-reimbursed business expenses incurred through the Termination Date; and (iv) all other payments, benefits or fringe benefits to which Employee may be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this Employment Agreement.

8.2            For Cause Termination .   A termination for “ Cause ” shall mean a termination of this Employment Agreement by reason of a determination by two-thirds (2/3) of the members of the Board voting that Employee:

A.           Has engaged in willful neglect (other than neglect resulting from his incapacity due to physical or mental illness) or willful misconduct in the performance of his duties for the Company under this Employment Agreement;

B.           Has engaged in willful conduct the consequences of which are materially adverse to the Company, monetarily or otherwise;

C.           Has materially breached the terms of this Employment Agreement, and such breach persisted after notice thereof from the Company and a reasonable opportunity to cure; or

D.           Has been convicted of (or has plead guilty or no contest to) any felony other than a traffic violation.

8.3            Change of Control .   A “ Change of Control ” shall be deemed to have occurred upon:

A.           The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more than fifty percent (50%) of the combined voting power of the continuing or surviving entity's securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization; provided, however , that a public offering of the Company’s securities shall not constitute a corporate reorganization;

B.           The sale, transfer, or other disposition of all or substantially all of the Company’s assets; or

C.           Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Section 8.3.C , the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act, but shall exclude (x) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a subsidiary and (y) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.

8.4            Disability .   The term “ Disability ” shall be as defined in the Company’s Long-Term Disability Plan.

8.5            Good Reason .   The term “ Good Reason ” shall mean the occurrence of any of the following without Employee’s prior written consent during the Employment Period, which occurrence continues for ten (10) days after written notice thereof from Employee to the Board:

A.           Any material diminution or adverse change in Employee’s position, status, title, authorities or responsibilities, office or duties under this Employment Agreement which represents a demotion from such position, status, title, authorities or responsibilities, office or duties which are materially inconsistent with his position, status, title, authorities or responsibilities, office or duties set forth in this Employment