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EXHIBIT 10.4
 
THIRD AMENDMENT TO
1992 OUTSIDE DIRECTORS STOCK OPTION AND INCENTIVE PLAN
 
          THIS THIRD AMENDMENT TO THE PERMA-FIX ENVIRONMENTAL SERVICES, INC.
OUTSIDE DIRECTORS STOCK OPTION AND INCENTIVE PLAN (the “Third Amendment”) was
approved by the Board of Directors (the “Board”) of Perma-Fix Environmental
Services, Inc. (the “Company”) on September 19, 1996.
 
          WHEREAS, Article VII of the 1992 Outside Directors Stock Option Plan,
as amended (including, but not limited to the Second Amendment approved by the
stockholders on November 12, 1993) (the “Plan”), provides that the Board may at
any time, and from time to time, in any respect amend or modify the Plan;
provided, however, that the provisions of Section 5.1 of the Plan may not be
amended more than once every six (6) months, other than to comport with changes
in the Internal Revenue Code, the Employee Retirement Income Security Act, or
the rules thereunder;
 
          WHEREAS, in order to continue to attract and retain qualified members
of the Board who are not employees of the Company or any of its subsidiaries
(“Eligible Director”) and to further enhance each of the Eligible Director’s
interests in the Company’s continued success by further increasing each Eligible
Director’s proprietary interest in the Company, the Board is of the opinion that
the Plan should be further amended, subject to shareholder approval, to allow
the Eligible Directors to have the option of receiving sixty-five percent (65%)
of the Director Fee (as defined below) in common stock, par value $.001 per
share of the Company (“Common Stock”) with the balance paid in cash or receiving
one hundred percent (100%) of the Director Fee in Common Stock of the Company
and that in either case the number of shares of Common Stock of the Company
issuable to the Eligible Director shall be determined by valuing the Common
Stock of the Company at seventy-five percent (75%) of its Fair Market Value (as
defined in the Plan), which Fair Market Value is determined on the business day
immediately preceding the date that the Director Fee is due; and,
 
          WHEREAS, the Plan should be further amended in order to modify the
terms of the Plan to comport with certain changes in the rules promulgated
regarding Section 16 of the Securities Exchange Act of 1934, as amended;
 
          NOW, THEREFORE, the following amendments to the Plan are unanimously
adopted by the Board, subject to the approval of the stockholders of the
Company:
 
A.      Section 5.1.3 of the Plan is hereby deleted in its entirety and the
following Section 5.1.3 is hereby substituted in lieu thereof:

       
5.1.3
Each Eligible Director shall receive, at such Eligible Director’s option, either
sixty-five percent (65%) or one hundred percent (100%) of the fee payable to
such Eligible Director for services rendered to the Company as a member of the
board (the “Director’s Fee”) in Stock. Fair Market Value as used in this Section
5.1.3, shall be determined on the business day immediately preceding the date
that the Director Fee is due. If the Eligible Director wishes to receive
sixty-five percent (65%) of his Director’s Fee in Stock: (i) the Eligible
Director will receive the number of shares obtained by dividing sixty-five
percent (65%) of the applicable Director Fee by seventy-five percent (75%) of
the Fair Market Value of the Stock and (ii) the Eligible Director will receive
thirty-five (35%) of his Director’s Fee in cash or its equivalent. If the
Eligible Director wishes to receive one hundred percent (100%) of his Director’s
Fee in Stock the Eligible Director will receive the number of shares obtained by
dividing the applicable Director’s Fee by seventy-five percent (75%) of the Fair
Market Value of the Stock.

 
 
 

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B.        Section 5.1 of the Plan is hereby amended by inserting the following
Section 5.1.6 at the end thereof:
 
            5.1.6     The election of the Eligible Director, as described in
Section 5.1.3 hereof, shall be made in writing to the Company at any time prior
to the date on which the Director Fee is due. Should an Eligible Director fail
to make such election in a timely manner, such Eligible Director shall be deemed
to have elected to receive one hundred percent (100%) of the Director’s Fee
payable to such Eligible Director in Stock as described in Section 5.1.3.
 
C.        Article VII of the Plan is hereby deleted in its entirety and the
following Article VII is hereby substituted in lieu thereof:
 
ARTICLE VII

       
The Board may at any time terminate the Plan, and may at any time and from time
to time and, in any respect amend or modify the Plan.
 

 
          The Plan is amended and modified only to the extent specifically
amended or modified by this Third Amendement to the 1992 Outside Directors Stock
Option and Incentive Plan, and none of the other terms, conditions or provisions
of the Plan, as previously amended, is amended or modified by this Third
Amendment to the 1992 Outside Directors Stock Option and Incentive Plan.
 
 
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