CHIEF
OPERATING OFFICER

    


    Effective:
January 1, 2009


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    CHIEF
OPERATING OFFICER

    


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

    


    SCOPE:
Perma-Fix Environmental Services, Inc.

    


    POLICY:  The
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.  Performance
Incentive Compensation in the nature of prepayments are payable in the month
following each calendar year quarter in a lump sum.  Annual
performance incentive pay is payable in the month following the close of the
Company’s financial books, but in any event no later than March 15,
2010.  If the financial books are not closed as of March 15, the
annual performance incentive pay will be based on a good faith estimate of the
Company’s financial results for the applicable year.

    


    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:  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 and Stock Option Committee (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 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.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    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
  2009.

            


    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      
        
          
            	
                    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
      $4million from $5,109,963 as of 12/31/08 to $1,109,963 by
      12/31/09.

            


    

    


    
      	
               
      

            	
              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.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    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 2009 -
Compensation Plan.  I have read and understand and accept employment
under the terms and conditions set forth therein.

      

      
        	
                /s/Larry
      McNamara

              	 
      	
                5/6/2009

              	 
      
	
                /s/
      Larry McNamara

              	 
      	
                Date

              	 
      
	 
      	 
      	 
      	 
      
	
                /s/Lou
      Centofanti

              	 
      	
                5/6/2009

              	 
      
	
                /s/
      Board of Directors

              	 
      	
                Date