VICE PRESIDENT, CHIEF FINANCIAL OFFICER

Effective: January 1, 2010

Vice President CFO 2010 Incentive Plan
3/3/2010

 
 

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VICE PRESIDENT, CHIEF FINANCIAL OFFICER

PURPOSE:  To define the compensation plan for the Vice President, Chief
Financial Officer.

SCOPE:  Perma-Fix Environmental Services, Inc.

POLICY:  The Vice President, Chief Financial 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 (the “Company”).

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.  Effective date of plan is January 1, 2010 and incentive will be for entire
year. Performance incentive compensation will be paid on or about 90 days after
year-end, or sooner, based on final 10K financial statement.

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 the annual incentive compensation payment
period as noted above, no incentive compensation is due to the incumbent.

ACKNOWLEDGEMENT:  Payment of Performance Incentive Compensation of any type will
be forfeited, unless the Human Resources Department has received a signed
acknowledgement of receipt of the Compensation Plan prior to the applicable
payment date.

INTERPRETATIONS:  The Compensation Committee of the Board of Directors retains
the right to modify, change or terminate the Compensation Plan 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 Net Income or other applicable
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.

Vice President CFO 2010 Incentive Plan
3/3/2010
 
 
 

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VICE PRESIDENT, CHIEF FINANCIAL OFFICER

Base Pay and Performance Incentive Compensation Targets

The compensation for the below named individual as follows:

Annualized Base Pay:
  $ 208,000  
Performance Incentive Compensation Target (at 100% of Plan):
    52,000  
Total Annual Target Compensation (at 100% of Plan):
  $ 260,000  

The Performance Incentive Compensation Target is based on the Schedule A below.

Target Objectives

         
Performance Target Thresholds
     
Weights
     
100%+
     
98-99%
     
96-97%
     
94-95%
     
92-93%
     
90-91%
     
88-89%
                                                                 
Administrative
    15 %     7,800       9,360       9,751       10,531       11,700      
12,480       13,650                                                            
                   
Performance Target Thresholds
     
Weights
     
85-100%
     
101-120%
     
121-130%
     
131-140%
     
141-150%
     
151-160%
     
161%+
                                                                   
Net Income
    25 %     13,000       15,600       16,900       18,200       19,500      
20,800       22,750                                                            
       
Accounting
    10 %     5,200       6,240       6,760       7,280       7,800       8,320  
    9,100                                                                    
Accounts Receivable
    10 %     5,200       6,240       6,760       7,280       7,800       8,320  
    9,100                                                                    
SOX Compliance
    10 %     5,200       6,240       6,760       7,280       7,800       8,320  
    9,100                                                                    
Centralization & IT Objectives
    30 %     15,600       18,720       20,280       21,840       23,400      
24,960       27,300                                                            
       
Unbilled Receivables
 
* If criteria (Item #5) for reducing unbilled AR are not met bonus will be
reduced by 15%
                                                                               
  52,000       62,400       67,211       72,411       78,000       83,200      
91,000  

 
1)
Administrative Expense is defined as the total consolidated administrative
expenses applicable as publicly reported in the Company’s financial
statements.  Administrative expenses will be inclusive of all subsidiaries, and
will exclude Marketing Expenses and Interest Expense. The Board reserves the
right to make adjustments to administrative expenses so as not to penalize the
employee for material unforeseen events outside of the employees responsibility
and it reserves the right to modify or change the Administrative Expense 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 Administrative Expenses to reflect charges resulting from
the vesting of incentive stock options.

 
2)
Net Income is defined as the total consolidated pre-tax 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.

Vice President CFO 2010 Incentive Plan
3/3/2010
 
 
 

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3)
Accounting objective should focus on meeting filing deadlines such as 10K, 10Q,
8K and press releases with complete and accurate information.

 
SEC Filings
 
Performance Target
 
10K – filed timely or
    3 %
10K – extension
    1.5 %
1st quarter 10Q – filed timely or
    2 %
1st quarter 10Q – extension
    1 %
2nd quarter 10Q – filed timely or
    2 %
2nd quarter 10Q – extension
    1 %
3rd quarter 10Q – filed timely or
    2 %
3rd quarter 10Q - extension
    1 %
All 8K’s Filed
    1 %          
Total Achievable
    10 %

 
4)
Accounts Receivable objective should focus on achieving certain AR targets.

 
Accounts Receivable
 
Performance Target
 
25% or less of AR > than 60 days
    5.0 %
30% or less of AR > than 60 days
    2.5 %
9% or less of AR > than 120 days
    5.0 %
10% or less of AR > than 120 days
    2.5 %
Total Achievable
    10.0 %

 
Accounts Receivable will be defined as outstanding accounts receivable, per
companies AR sub-ledger, collectable within the control of the financial and
operational staff.
 
Adjustments for this figure will include but not be limited to:
 
 
1.
Accounts fully reserved when calculating Bad Debt Allowance;

 
 
2.
Accounts that are in litigation; and

 
 
3.
Accounts not receivable due to a legitimate operational delay.  Note this will
only be excluded if invoicing was appropriate despite the operational delay.

 
5)
The SOX Incentive target is based maintaining good internal controls and
minimizing material weaknesses similar to “Permit and License” violations on CEO
Plan.

 
SOX Deficiencies
 
Performance Target
 
0
    10 %
1
    9 %
2
    8 %
3
    5 %
4
    2 %
> 4
    0 %

Vice President CFO 2010 Incentive Plan
3/3/2010

 
 

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6)
Centralization Objective - Completion of the following milestones related to the
planned centralization of the accounting function to the Corporate office.
Completion of each objective earns 3% with a maximum target achievable of 30%.

Accounting Centralization Objectives
 
Performance
Target
 
·  Complete Rollout of Solomon Accounting Purchase Order System at Facilities
    3.0 %          
·  Final Phase of AP transition integrating PO system and centralized AP system.
    3.0 %          
·  Rollout Image-link to remaining facilities (paperless filing of accounting
back-up)
    3.0 %          
·  Install Multi-Company Software at Corporate Office
    3.0 %          
·  Centralize all remaining JE’s at Corporate office (mostly revenue related)
    3.0 %          
·  Improved forecasting model from facilities including new software if cost
effective.
    3.0 %          
·  Payroll Processing Improvements – Improved time management systems if cost
effective.
    3.0 %          
·  Cost accounting initiatives to support Field Services initiative and DCAA
audit requirements.
    3.0 %          
·  Complete and make operational PFNW waste tracking system.
    3.0 %          
·  Plan for implementation of new waste tracking system at other nuclear
facilities and industrial facilities if cost effective.
    3.0 %          
·  System integration plan for the Southeast
    3.0 %          
·  Tele-Com Consolidation
    3.0 %

7)
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 12/31/07 should be reduced by $2.5 million from
$3,380,000 as of 12/31/09 to $880,000 by 12/31/10.

Performance Incentive Compensation Payment

Effective date of plan is January 1, 2010 and incentive will be for entire year.
Performance incentive compensation will be paid on or about 90 days after
year-end, or sooner, based on final 10K financial statement.

ACKNOWLEDGMENT:
I acknowledge receipt of the aforementioned Vice President, Chief Financial
Officer 2010 - Compensation Plan.  I have read and understand and accept
employment under the terms and conditions set forth therein.

/s/Ben Naccarato
 
3/2/2010
 
/s/Ben Naccarato
 
Date
         
/s/Mark Zwecker
 
3/2/2010
 
/s/ Board of Director
 
Date
 

Vice President CFO 2010 Incentive Plan
3/3/2010

 
 

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