CHIEF OPERATING OFFICER

Effective: January 1, 2008

 
 

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CHIEF OPERATING OFFICER

PURPOSE: To define the compensation plan for the CHIEF OPERATING OFFICER.

SCOPE: Perma-Fix Environmental Services, Inc.

POLICY: The Chief Operating Officer Officer Compensation Plan is designed to
retain, motivate and reward the incumbent to support and achieve the business,
operating and financial objectives of Perma-Fix Environmental Services, Inc.

BASE SALARY: The Base Salary indicated below is paid in equal periodic
installments per the regularly scheduled payroll.

PERFORMANCE INCENTIVE COMPENSATION: Performance Incentive Compensation is
available based on the Company’s financial results noted in Schedule A.
Performance incentive compensation prepayments are payable in the month
following each calendar year quarter and annual performance incentive pay is
payable in the month following the close of the company’s financial books.

SEPARATION: Upon voluntary or involuntary separation from the Company the
employee will be paid the base salary due to the last day of employment. If
employment is separated prior to a regularly scheduled quarterly or annual
incentive compensation payment period as noted above, no incentive compensation
is due to the incumbent.

ACKNOWLEDGEMENT: No Base Salary or Performance Incentive Compensation of any
type will be provided until the Human Resources Department has received a signed
acknowledgement of receipt of the Compensation Plan.

INTERPRETATIONS: The Compensation Committee of the Board of Directors retains
the right to modify, change or terminate the Compensation at any time and for
any reason. It also reserves the right to determine the final interpretation of
any provision contained in the Compensation Plan and it reserves the right to
modify or change the Revenue and Net Income Targets as defined herein in the
event of the sale or disposition of any of the assets of the Company. While the
plan is intended to represent all situations and circumstances some issues may
not easily be addressed. The Compensation Committee will endeavor to review all
standard and non-standard issues related to the Compensation Plan and will
provide quick interpretations that are in the best interest of the Company, its
shareholders and the incumbent.

 
 

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CHIEF OPERATING OFFICER
 
Base Pay and Performance Incentive Compensation Targets

The compensation for the below named individual as follows:

Annualized Base Pay:
 
$
216,320
 
Performance Incentive Compensation Target (at 100% of Plan):
 
$
108,160
 
Total Annual Target Compensation (at 100% of Plan):
 
$
324,480
 

The Performance Incentive Compensation Target is based on the schedule below.

Target Objectives
                                         
Performance Target Thresholds
     
Weights
 
85-100%
 
101-120%
 
121-130%
 
131-140%
 
141-150%
 
151-160%
 
161%+
                                     
Revenue
   
15
%
 
16,224
   
19,469
   
21,094
   
22,780
   
24,335
   
25,958
   
28,392
                                                     
Net Income
   
55
%
 
59,488
   
71,386
   
77,337
   
83,287
   
89,231
   
95,181
   
104,104
                                                     
Health & Safety
   
15
%
 
16,224
   
19,469
   
21,094
   
22,780
   
24,335
   
25,958
   
28,392
                                                     
Permit & License Violations
   
15
%
 
16,224
   
19,469
   
21,094
   
22,780
   
24,335
   
25,958
   
28,392
                                                     
Unbilled Receivables
 
* If criteria (Item #5) for reducing uniblled AR are not met bonus will be reduced by 15%.
                                                               
108,160
   
129,792
   
140,619
   
151,627
   
162,236
   
173,056
   
189,278
 

 
1)
Revenue is defined as the total consolidated third party top line revenue as
publicly reported in the Company’s financial statements. The percentage achieved
is determined by comparing the actual consolidated revenue to the Board approved
budgeted revenue. The Board reserves the right to modify or change the Revenue
Targets as defined herein in the event of the sale or disposition of any of the
assets of the Company or in the event of an acquisition.

 
2)
Net Income is defined as the total consolidated bottom line net income
applicable to Common Stock as publicly reported in the Company’s financial
statements. The net income will include all subsidiaries, corporate charges,
dividends and discounted operations. The percentage achieved is determined by
comparing the actual net income to the Board approved budgeted net income. The
Board reserves the right to make adjustments to net income so as not to penalize
the employee for actions in the current year which will contribute to net income
in future years and it reserves the right to modify or change the Net Income
Targets as defined herein in the event of the sale or disposition of any of the
assets of the Company or in the event of an acquisition. The Board further
reserves the right to adjust net income to reflect charges resulting from the
vesting of incentive stock options.

 
3)
The Health and Safety Incentive target is based upon the actual number of
Worker’s Compensation Lost Time Accidents, as provided by the Company’s Worker’s
Compensation carrier. The Corporate Treasurer will submit a report on a
quarterly basis documenting and confirming the number of Worker’s Compensation
Lost Time Accidents, supported by the AIG Worker’s Compensation Loss Report.
Such claims will be identified on the loss report as “indemnity claims.” The
following number of Worker’s Compensation Lost Time Accidents and corresponding
Performance Target Thresholds has been established for the annual Incentive
Compensation Plan calculation for 2008.

 
 

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Work Comp.
Claim Number
 
Performance
Target
 
7
   
85% - 100
%
6
   
101% - 120
%
5
   
121% - 130
%
4
   
131% - 140
%
3
   
141% - 150
%
2
   
151% - 160
%
1
   
161% Plus
 

 

 
4)
Permits or License Violations incentive is earned/determined according to the
scale set forth below:  An “official notice of non-compliance” is defined as an
official communication from a local, state, or federal regulatory authority
alleging one or more violations of an otherwise applicable Environmental, Health
or Safety requirement or permit provision, which results in a facility’s
implementation of corrective action(s).

 
Permit and
License Violations
 
Performance
Target
 
7
   
85% - 100
%
6
   
101% - 120
%
5
   
121% - 130
%
4
   
131% - 140
%
3
   
141% - 150
%
2
   
151% - 160
%
1
   
161% Plus
 

 
5)
Unbilled trade receivables is the amount of unbilled reported per 10Q or 10K
combining both the long term and current portion of unbilled. Unbilled trade
receivable balances older than 12/31/06 should be reduced by $3 million from
$7,543,708 as of 12/31/07 to $4,543,708 by 12/31/08.

 
6)
No performance incentive compensation will be payable for achieving the health
and safety and permit and license violation targets unless a minimum of 70% of
the net income target is achieved.

 
 

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Performance Incentive Compensation Prepayments

Performance incentive compensation will be prepaid each calendar to be applied
against the annual performance incentive compensation when payable. This
prepayment will be calculated as follows:

First Quarter – a prepayment of the performance incentive compensation will be
earned and payable by a comparison of the Board approved budget for the first
quarter to the actual result for the first quarter. With regard to the Health
and Safety and the Permit and License Violations incentive, the number of claims
or violations for the performance target shall be one quarter of the annual
number. The prepayment will be 15% of the performance incentive compensation
which will be earned for the full year if this percentage achievement of the
targets is maintained for the full year.

Second Quarter – a prepayment of the performance incentive compensation will be
earned and payable by a comparison of the Board approved budget for the first
and second quarters to the actual result for the first and second quarters. With
regard to the Health and Safety and the Permit and License Violations incentive,
the number of claims or violations for the performance target shall be two
quarters of the annual number. The prepayment will be 30% of the performance
incentive compensation which will be earned for the full year if this percentage
achievement of the targets is maintained for the full year less the amount of
the prepayment paid for the first quarter.

Third Quarter – a prepayment of the performance incentive compensation will be
earned and payable by a comparison of the Board approved budget for the first,
second and third quarters to the actual result for the first, second and third
quarters. With regard to the Health and Safety and the Permit and License
Violations incentive, the number of claims or violations for the performance
target shall be three quarters of the annual number. The prepayment will be 45%
of the performance incentive compensation which will be earned for the full year
if this percentage achievement of the targets is maintained for the full year
less the amount of the prepayment paid for the first and second quarters.

If at the conclusion of any calendar quarter, the performance incentive
compensation prepayment due to an employee is negative as a result of
subtracting the prepayments paid in previous quarters and the amount exceeds
$25,000, the company will recover this overpayment by deducting this amount from
payroll paid in accordance with the company’s normal payroll practices.

ACKNOWLEDGMENT:

I acknowledge receipt of the aforementioned Chief Operating Officer 2008 -
Compensation Plan. I have read and understand and accept employment under the
terms and conditions set forth therein.
 
/s/ Larry McNamara
 
8/6/08
 
/s/ Larry McNamara
 
Date
         
/s/ Jack Lahav
 
8/6/08
 
/s/Board of Directors
 
Date
 

 
 

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