ISOMEDIX INC, DEF 14A, 1996-04-01

ISOMEDIX INC
DEF 14A, 1996-04-01
BUSINESS SERVICES, NEC

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<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

ISOMEDIX INC.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Registrant as Specified In Its Charter)

Isomedix Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(1).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2) Form, Schedule or Registration Statement No.:
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3) Filing party:
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4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
ISOMEDIX INC.
____________________

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 1996
____________________

Whippany, New Jersey
March 29, 1996
To the Holders of Common Stock
of ISOMEDIX INC.:

The Annual Meeting of the Stockholders of ISOMEDIX INC. will be
held at The Parsippany Hilton, 1 Hilton Court, Parsippany, New Jersey, on
Friday, May 17, 1996 at 10:00 A.M. local time for the following purposes, as
more fully described in the accompanying Proxy Statement:

1. To elect two Class A directors of the Company for the
ensuing three years.

2. To consider and take action upon a proposal to approve
the Isomedix Inc. 1996 Long Term Incentive Plan.

3. To consider and take action upon a proposal to ratify
the Board of Directors' selection of Coopers & Lybrand L.L.P. to serve as the
Company's independent accountants for the Company's fiscal year ending December
31, 1996.

4. To transact such other business as may properly come
before the Meeting or any adjournment or adjournments thereof.

The close of business on March 25, 1996 has been fixed by the
Board of Directors as the record date for the determination of the stockholders
entitled to notice of, and to vote at, the Meeting. A list of the stockholders
entitled to vote at the Meeting may be examined at the Company's executive
offices located at 11 Apollo Drive, Whippany, New Jersey, during the ten- day
period preceding the Meeting.

By Order of the Board of Directors,

Thomas J. DeAngelo, Secretary

YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF
YOU DO NOT EXPECT TO BE PRESENT, PLEASE MARK, SIGN AND DATE THE ENCLOSED FORM
OF PROXY AND MAIL IT IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES, SO THAT YOUR VOTE CAN BE RECORDED.
<PAGE> 3
ISOMEDIX INC.
____________________

PROXY STATEMENT
____________________

This Proxy Statement, which will be mailed commencing on or
about March 29, 1996 to the persons entitled to receive the accompanying Notice
of Annual Meeting of Stockholders, is provided in connection with the
solicitation of Proxies on behalf of the Board of Directors of Isomedix Inc.
for use at the Annual Meeting of Stockholders to be held on May 17, 1996, and
at any adjournment or adjournments thereof, for the purposes set forth in such
Notice. The Company's executive offices are located at 11 Apollo Drive,
Whippany, New Jersey 07981.

At the close of business on March 25, 1996, the record date
stated in the accompanying Notice, the Company had issued and outstanding
6,996,213 shares of common stock, $.01 par value ("Common Stock"), each of
which is entitled to one vote with respect to each matter to be voted on at the
Meeting. The Company has no class or series of stock outstanding other than
the Common Stock.

A majority of the issued and outstanding shares of Common Stock
present in person or by proxy will constitute a quorum for the transaction of
business at the Meeting. Abstentions and broker non-votes (as hereinafter
defined) will be counted as present for the purpose of determining the presence
of a quorum.

Directors are elected by plurality vote. Adoption of proposals
2 and 3 will require the affirmative vote of a majority of the shares of Common
Stock present and entitled to vote thereon at the meeting. Shares held by
stockholders who abstain from voting will be treated as "present" and "entitled
to vote" on the matters and, thus, an abstention has the same legal effect as a
vote against the matters. However, in the case of a broker non-vote or where a
stockholder withholds authority from his proxy to vote the proxy as to a
particular matter, such shares will not be treated as "present" and "entitled
to vote" on the matter and, thus, a broker non-vote or the withholding of a
proxy's authority will have no effect on the outcome of the vote on the matter.
A "broker non-vote" refers to shares of Common Stock represented at the Meeting
in person or by proxy by a broker or nominee where (i) such broker or nominee
has not received voting instructions on a particular matter from the beneficial
owners or persons entitled to vote and (ii) such broker or nominee does not have
discretionary voting power on such matter.
<PAGE> 4
-2-

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The stockholders (including any "group," as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the knowledge
of the Board of Directors of the Company, owned beneficially more than five
percent of any class of the outstanding voting securities of the Company as of
February 29, 1996, and their respective shareholdings as of such date
(according to information furnished by them to the Company), are set forth in
the following table. Except as indicated in the footnotes to the table, all of
such shares are owned with sole voting and investment power.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT
NAME AND ADDRESS OWNED BENEFICIALLY OF CLASS
- ---------------- ---------------------- --------
<S> <C> <C>
The Bass Management Trust
Lee M. Bass
Sid R. Bass Management Trust . . . . . . . . . . . 465,200 (1) 6.6%
201 Main Street
Fort Worth, Texas 76102

Delaware Management Company, Inc.
Delaware Group Delcap Fund, Inc. . . . . . . . . . 553,200 (2) 7.9%
2005 Market Street
Philadelphia, Pennsylvania 19103
The Kaufmann Fund, Inc. . . . . . . . . . . . . . . 730,000 (3) 10.4%
140 East 45th Street
New York, New York 10017
Wellington Management Company . . . . . . . . . . . 369,160 (4) 5.3%
75 State Street
Boston, Massachusetts 02109
</TABLE>

- ----------

(1) This information is based upon a Report on Schedule 13D filed by these
stockholders with the Securities and Exchange Commission. Such
Schedule 13D indicates that each of The Bass Management Trust ("BMT")
and the Sid R. Bass Management Trust ("SRBMT") has sole voting power
and sole dispositive power with respect to 155,050 and 155,100 shares
respectively, and that Lee M. Bass has sole voting power and sole
dispositive power with respect to 155,050 shares. Such Schedule 13D
also indicates that Perry R. Bass, as Trustee and Trustor of BMT, and
Nancy L. Bass, as Trustor of BMT, may be deemed to beneficially own
the shares owned by BMT and that Sid R. Bass, as Trustee of SRBMT, may
be deemed to beneficially own the shares owned by SRBMT.

(2) This information is based upon a Report on Schedule 13G filed by these
stockholders with the Securities and Exchange Commission. Such
Schedule 13G indicates that Delaware Management Company, Inc. has sole
voting power with respect to 10,200 shares and sole dispositive power
with respect to 553,200 shares and that Delaware Group Delcap Fund,
Inc. has sole voting power with respect to 415,100 shares.

(3) This information is based upon a Report on Schedule 13G filed by The
Kaufmann Fund, Inc. with the Securities and Exchange Commission. Such
Schedule 13G indicates that such entity has sole voting power and sole
dispositive power with respect to 730,000 shares.
<PAGE> 5
-3-

(4) This information is based upon a Report on Schedule 13G filed by
Wellington Management Company with the Securities and Exchange
Commission. Such Schedule 13G indicates that such entity has shared
voting power with respect to 198,660 shares and shared dispositive
power with respect to 369,160 shares.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of February 29, 1996, the
number of shares of Common Stock of the Company beneficially owned by each of
the Company's directors and nominees for directors, each executive officer
named in the Summary Compensation Table, and all directors and executive
officers as a group, based upon information obtained from such persons.

<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT
NAME OWNED BENEFICIALLY OF CLASS
---- ----------------------- --------
<S> <C> <C>
John Masefield . . . . . . . . . . . . . . . 302,000 (1) 4.1%

George R. Dietz . . . . . . . . . . . . . . . 141,100 (2) 2.0%

David M. Lank . . . . . . . . . . . . . . . . 112,700 (3) 1.6%

H. Stuart Campbell . . . . . . . . . . . . . 36,633 (4) (9)

Thomas M. Haythe . . . . . . . . . . . . . . 22,500 (5) (9)

Elmer A. Sticco . . . . . . . . . . . . . . . 17,500 (6) (9)

Thomas J. DeAngelo . . . . . . . . . . . . . 49,200 (7) (9)

Peter Mayer . . . . . . . . . . . . . . . . . 0 (8) --

All Directors and Executive Officers as a 681,633 (1)(2)(3) 8.6%
Group (nine persons) . . . . . . . . . . . . (4)(5)(6)
(7)
</TABLE>

- ----------

(1) Includes 12,000 shares issuable upon exercise of currently exercisable
warrants held by Mr. Masefield, Chairman of the Board of
Directors and a Class C director of the Company, and 222,900 shares
issuable upon exercise of currently exercisable stock options held by
Mr. Masefield. Also includes 60,000 shares with respect to which Mr.
Masefield holds irrevocable proxies.

(2) Includes 87,500 shares issuable upon exercise of currently exercisable
warrants held by Mr. Dietz, Senior Vice President and a Class A
director of the Company, and 38,500 shares issuable upon exercise of
currently exercisable stock options.
<PAGE> 6
-4-

(3) Includes 30,000 shares issuable upon exercise of currently exercisable
warrants held by Mr. Lank, a Class C director of the Company, and
22,500 shares issuable upon exercise of currently exercisable stock
options. Includes 60,000 shares owned by Nanticoke Limited, of which
Mr. Lank is the President. Mr. Masefield has been granted an
irrevocable proxy with respect to the 60,000 shares owned by Nanticoke
Limited.

(4) Includes 14,000 shares issuable upon exercise of currently exercisable
warrants held by Mr. Campbell, a Class B director of the Company, and
22,500 shares issuable upon exercise of currently exercisable stock
options.

(5) Includes 22,500 shares issuable upon exercise of currently exercisable
stock options held by Mr. Haythe, a Class A director of the Company.

(6) Includes 17,500 shares issuable upon exercise of currently exercisable
stock options held by Mr. Sticco, a Class B director of the Company.

(7) Includes 49,200 shares issuable upon exercise of currently exercisable
stock options held by Mr. DeAngelo, Vice President- Finance and
Administration, Secretary, Treasurer and a Class A director of the
Company.

(8) Mr. Mayer became President and Chief Executive Officer and a Class B
Director of the Company in August 1995.

(9) Less than one percent.

To the Company's knowledge, there have been no significant
changes in stock ownership or control of the Company since February 29, 1996.

I. ELECTION OF DIRECTORS

Two Class A directors are to be elected at the Meeting, each
to serve for three years and until a successor shall have been chosen and
qualified. This is in accord with the Company's Certificate of Incorporation
which provides for the division of the Board of Directors into three classes.
The term of office for the Class A directors expires at the Meeting. Class B
directors and Class C directors will be elected at the Annual Meetings to be
held in 1997 and 1998, respectively.

It is the intention of each of the persons named in the
accompanying form of Proxy to vote the shares of Common Stock represented
thereby in favor of the two nominees listed below, unless otherwise instructed
in such Proxy. Each such nominee is presently serving as a Class A director.
In case any of the nominees is unable or declines to serve, such persons
reserve the right to vote the shares of Common Stock represented by such Proxy
for another person duly nominated by the Board of Directors in such nominee's
stead or, if no other person is so nominated, to vote such shares only for the
remaining nominee. The Board of Directors has no reason to believe that any
person named will be unable or will decline to serve.

Certain information concerning the nominees for election as
Class A directors and the other directors of the Company is set forth below.
Information
<PAGE> 7
-5-

concerning ownership of the Common Stock by such nominees and other directors
is set forth in the preceding table. All of such information was furnished by
them to the Company.

NOMINEES FOR ELECTION

THOMAS J. DEANGELO (Class A director), age 41; Vice President-Finance and
Administration of the Company since February 1992; Secretary and Treasurer
of the Company since April 1987; Chief Financial Officer of the Company
since 1992; Chief Operating Officer of the Company from September 1993 to
February 1994; Controller of the Company from April 1983 to April 1987;
Director of the Company since 1992.

THOMAS M. HAYTHE (Class A director), age 56; Partner, Haythe & Curley
(attorneys) since February 1982; Director: Novametrix Medical Systems, Inc.
(manufacturer of electronic medical instruments), Guest Supply, Inc.
(distributor of hotel guest room amenities and accessories), Westerbeke
Corporation (manufacturer of marine engine products), Ramsay Health Care,
Inc. (provider of psychiatric healthcare services) and Ramsay Managed Care,
Inc. (provider of managed mental health care services); Assistant Secretary
of the Company from 1983 to 1995; Director of the Company since 1983.

OTHER DIRECTORS WHOSE TERM OF OFFICE
WILL CONTINUE AFTER THE MEETING

H. STUART CAMPBELL (Class B director), age 66; Vice President and Owner,
Highland Packaging Labs, Inc. (contract packaging) since 1983; Group
Chairman, Johnson & Johnson Company (health care products) from prior to
1981 to 1982; Director: Mesa Laboratories, Inc. (designer and manufacturer
of pharmaceutical and medical instruments and systems), Biomatrix, Inc.
(manufacturer of specialty healthcare products based on biological material)
and Atrix Laboratories, Inc. (research and development activities relating
to new therapeutic products and drug delivery); Director of the Company
since 1984.

ELMER A. STICCO (Class B director), age 71; Vice Chairman of the Company
since 1986; Owner of E/S Investments (management and financial consulting)
since 1985; President, Chief Executive Officer and Director, International
Controls Corp. (engineering and manufacturing) from 1978 to 1985; Director
of the Company since 1977.

PETER MAYER (Class B director), age 52; President and Chief Executive
Officer of the Company since August 1995; Director of the Company since
August 1995.
<PAGE> 8
-6-

DAVID M. LANK (Class C director), age 58; Partner, Dorchester Investment
Management (investment counsel) since prior to 1981; Director of the Company
since 1972.

JOHN MASEFIELD (Class C director), age 62; Chairman of the Board of
Directors since 1972; President and Chief Executive Officer of the Company
from 1972 to August 1995; Director of the Company since 1972.

The Board of Directors of the Company has a Compensation and Stock
Option Committee whose members are Messrs. Campbell, Lank and Sticco, an Audit
Committee whose members are Messrs. Campbell, Haythe and Lank, a Nominating
Committee whose members are Messrs. Haythe, Lank and Masefield, and an
Acquisition Committee whose members are Messrs. Haythe, Masefield, Mayer and
DeAngelo.

The Compensation and Stock Option Committee determines the
compensation arrangements for executive officers of the Company. The
Compensation and Stock Option Committee also administers the Company's 1982
Stock Option Plan, 1992 Stock Option Plan and 1992 Supplemental Stock Option
Plan, and will administer the Company's 1996 Long Term Incentive Plan and
determines the persons who are eligible to receive options and other awards
thereunder, the number of shares to be subject to each option or award and the
other terms and conditions upon which options or awards under such plans are
granted and made exercisable. The Compensation and Stock Option Committee also
administers the Company's 1993 Employee Stock Purchase Plan, and reviews and
approves employee benefit plans in which officers and employees are eligible to
participate.

The Audit Committee is authorized to recommend to the Board of
Directors the engaging and discharging of the independent accountants, and to
review with the independent accountants the plans for and the results of the
auditing engagement, the scope and results of the Company's procedures for
internal auditing, the independence of the accountants and the adequacy of the
Company's system of internal accounting controls. The Nominating Committee is
authorized to review, approve and recommend persons for election as directors
and to fill management positions with the Company. The Acquisition Committee is
authorized to identify and recommend possible acquisition candidates for the
Company.
<PAGE> 9
-7-

The Nominating Committee will consider nominees for directors
recommended by stockholders or others. There is no specified formal procedure
for submitting such recommendations. Recommendations may be addressed to the
Secretary, Isomedix Inc., 11 Apollo Drive, Whippany, New Jersey 07981.

The Board of Directors met six times during the fiscal year ended
December 31, 1995. Each of the Audit Committee, the Nominating Committee and
the Acquisition Committee met one time during the fiscal year ended December 31,
1995. The Compensation and Stock Option Committee met six times during the
fiscal year ended December 31, 1995. Each of the persons named above attended at
least 75% of the meetings of the Board of Directors and meetings of any
Committees of the Board on which such person served which were held during the
time that such person served.

The Company's Certificate of Incorporation contains a provision,
authorized by Delaware law, which eliminates the personal liability of a
director of the Company to the Company or to any of its stockholders for
monetary damages for a breach of his fiduciary duty as a director, except in
the case where the director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a law,
authorized the payment of a dividend or approved a stock repurchase in
violation of Delaware corporate law, or obtained an improper personal benefit.

EXECUTIVE COMPENSATION

The following table sets forth information for the fiscal years ended
December 31, 1995, 1994 and 1993 concerning the compensation of the Chief
Executive Officer of the Company, and the four other most highly compensated
executive officers of the Company whose total annual salary and bonus exceeded
$100,000 during the fiscal year ended December 31, 1995.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------------ ------------- All Other
Name and Principal Fiscal Salary Bonus Options Compensation (1)
Position Year ($) ($) (#) ($)
----------------------------- ------ -------- ------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Peter Mayer 1995 $ 69,780 $ 13,800 100,000 $ 0
President and Chief 1994 - - - -
Executive Officer (2) 1993 - - - -

John Masefield 1995 219,855 110,100 365,000(5) 1,279
Chairman (3) 1994 213,451 150,000 0 1,478
1993 207,234 239,675 120,000 1,325

Charles P. Truby 1995 105,788 46,000 50,000 0
Executive Vice 1994 - - - -
President and Chief 1993 - - - -
Operating Officer (4)
</TABLE>
<PAGE> 10
-8-

<S> <C> <C> <C> <C> <C>
George R. Dietz 1995 128,660 25,760 31,500(5) 1,456
Senior Vice President 1994 120,000 48,000 0 2,073
1993 149,919 75,000 6,000 2,395

Thomas J. DeAngelo 1995 130,515 42,320 30,000(5) 1,358
Vice President- Finance 1994 130,731 52,000 0 2,299
and Administration, 1993 116,923 61,695 18,000 1,839
Secretary and
Treasurer
</TABLE>

(1) Includes contributions made by the Company on behalf of the executive
officers to the Company's 401(k) Plan.

(2) Mr. Mayer became President and Chief Executive Officer of the Company in
August 1995.

(3) Mr. Masefield also served as President and Chief Executive Officer of
the Company until August 1995.

(4) Mr. Truby became Executive Vice President and Chief Operating Officer of
the Company in March 1995.

(5) These options were granted in years prior to 1995 but were repriced in
1995. See the Ten Year Option Repricings table below.

The following table sets forth the grants of stock options to the
executive officers named in the Summary Compensation Table during the fiscal
year ended December 31, 1995. The Table also includes options which were
repriced during the fiscal year. The amounts shown for each of the named
executive officers as potential realizable values are based on arbitrarily
assumed annualized rates of stock price appreciation of five percent and ten
percent over the exercise price of the options during the full terms of he
options. No gain to the optionees is possible without an increase in stock
price which will benefit all stockholders proportionately. These potential
realizable values are based solely on arbitrarily assumed rates of appreciation
required by applicable Securities and Exchange Commission regulations. Actual
gains, if any, on option exercises and holdings of Common Stock are dependent on
the future performance of the Common Stock and overall stock market conditions.
There can be no assurance that the potential realizable values shown in this
table will be achieved.

OPTION GRANTS IN THE FISCAL YEAR ENDED
DECEMBER 31, 1995

Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
--------------------------------------------------------- ---------------------
% of Total
Options Granted
Options to Employees in Exercise or Expiration
Name Granted (#) Fiscal Year Base Price ($/Sh) Date 5%($) 10% ($)
- ---- ----------- --------------- ----------------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Peter Mayer 100,000(1) 10.5% $13.25 2005 835,000 2,107,000

John Masefield 65,000(2) 6.8 12.75 2003 397,800 945,100
55,000(3) 5.8 12.75 2002 287,650 666,050
95,000(4) 10.0 12.75 2002 496,050 1,150,450
150,000(2) 15.8 12.75 2002 784,500 1,816,500

Charles P. Truby 50,000(1) 5.25 14.75 2005 464,500 1,172,500

George R. Dietz 6,000(2) 0.6 12.75 2003 36,720 87,240
25,000(2) 2.6 12.75 2002 130,750 302,750

Thomas J. DeAngelo 18,000(2) 1.9 12.75 2003 110,160 261,720
12,000(2) 1.3 12.75 2002 62,760 145,320
</TABLE>

(1) These options become exercisable as to 20% of the number of shares
covered thereby on each of the first five anniversaries of the date of grant.

(2) These options were granted prior to 1995 but were repriced in 1995. See
the Ten Year Option Repricings table below.

(3) These options were granted prior to 1995 but were repriced in 1995. See
the Ten Year Option Repricings table below. These options become exercisable on
April 15, 2002, but will become exercisable prior to that date if at the time
of exercise the market price for the Common Stock shall have equalled or
exceeded $20.50 per share for at least twenty trading days subsequent to
February 27, 1995.

(4) These options were granted prior to 1995 but were repriced in 1995. See
the Ten Year Option Repricings table below. These options become exercisable on
April 15, 2002, but will become exercisable prior to that date, as to 20% of
the number of shares covered thereby on each of the first five anniversaries of
the original date of grant, May 15, 1992, if at the time of exercise the market
price for the Common Stock shall have equalled or exceeded $15.50 per share (as
to 50,000 shares) and $18.00 per share (as to the balance of the shares) for at
least twenty trading days subsequent to February 27, 1995.

The following table sets forth the number and value of options and
warrants held by the executive officers of the Company named in the Summary
Compensation Table at December 31, 1995. None of such executive officers
exercised options or warrants during the fiscal year ended December 31, 1995.

FISCAL YEAR END OPTION AND WARRANT VALUES

<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options and Warrants Options and Warrants
at 1995 Fiscal Year End (#) at 1995 Fiscal Year End ($)(1)
--------------------------- ------------------------------

Name Exercisable Unexercisable Exercisable Unexercisable
--------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Peter Mayer 0 100,000 $ 0 $ 62,500
John Masefield 234,900 150,000 447,811 243,750
Charles P. Truby 0 50,000 0 0
George R. Dietz 126,000 0 655,651 0
Thomas J. DeAngelo 49,200 0 145,206 0
</TABLE>

(1) In-the-money options and warrants are those where the fair market
value of the underlying Common Stock exceeds the exercise price of the option
or warrant. The value of in-the-money options and warrants is determined in
accordance with regulations of the Securities and Exchange Commission by
subtracting the aggregate exercise price of the option or warrant from the
aggregate year-end value of the underlying Common Stock.

During fiscal 1995, the Board of Directors authorized the repricing of
certain stock options outstanding under the Company's Stock Option Plans
whereby the
<PAGE> 11
-9-

exercise price of such options, ranging from $16.25 to $17.25 per share, was
reduced to $12.75 per share, the market price of the Common Stock on the date
of the Board's action. See the "Report of the Compensation and Stock Option
Committee" below for a discussion of the repricing. In accordance with
applicable Securities and Exchange Commission regulations, the following table
sets forth information as to the repricing of all options held by each
executive officer of the Company during the past ten fiscal years.

TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
Length of
Original
Option Term
Market Price Exercise Remaining
Number of of Stock at Price at at Date of
Options Time of Time of New Repricing
Repriced or Repricing or Repricing or Exercise or
Name Date Amended Amendment Amendment Price Amendment
------------------ ----------------- ----------- ------------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Peter Mayer - - - - - -

John Masefield February 27, 1995 65,000 $12.75 $16.25 $12.75 8 years
55,000 12.75 17.25 12.75 7 years
95,000 12.75 17.25 12.75 7 years
150,000 12.75 17.25 12.75 7 years
Charles P. Truby - - - - - -
Thomas J. DeAngelo February 27, 1995 18,000 12.75 16.25 12.75 8 years
12,000 12.75 17.25 12.75 7 years
George R. Dietz February 27, 1995 6,000 12.75 16.25 12.75 8 years
25,000 12.75 17.25 12.75 7 years
</TABLE>

The Company maintains a Retirement Plan (the "Retirement Plan") which
covers its salaried and hourly employees who have completed one year of service
and attained the age of 21. The Retirement Plan is a defined benefit plan
qualified under the Internal Revenue Code of 1986, as amended (the "Code").

The Retirement Plan provides an employee retiring at age 65 with 25 years
of plan participation with a pension beginning at age 65 in an annual amount
equal to 50% of his average compensation during the five consecutive plan years
in which he received the highest average compensation (the "Average Plan
Compensation"). A participant retiring with less than 25 years of service will
receive a reduced pension. An employee's interest in his retirement benefit
under the Retirement Plan vests over a period of years. An employee's annual
retirement benefit under the Retirement Plan is offset by 50% of his estimated
Social Security benefits.

Compensation taken into account in determining benefits under the
Retirement Plan includes salary, bonuses, overtime, commissions and salary
deferrals under the Company's Savings and Protection (401(k)) Plan. In the
case of executive officers of the Company named in the Summary Compensation
Table, compensation covered by the Retirement Plan includes the salary and
bonus reflected in the Summary
<PAGE> 12
-10-

Compensation Table, but not more than $150,000 for 1995, $150,000 for 1994 and
$235,840 for 1993. At December 31, 1995, for purposes of determining benefits
under the Retirement Plan, each of Messrs. Masefield, Dietz and DeAngelo had
fourteen years of plan participation.

The following table shows the estimated annual retirement benefit in the
form of a life annuity under the Retirement Plan for employees (including
officers and directors) retiring at age 65 whose Average Plan Compensation and
years of participation would be in the categories shown. The amounts shown in
the table do not reflect the amount of offset for Social Security benefits,
which cannot be ascertained at this time.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
Remuneration Years of Service
- ------------- ---------------------------------------------------------------
11 15 20 25
<S> <C> <C> <C> <C>
$ 25,000 $ 5,500 $ 7,500 $10,000 $ 12,500

50,000 11,000 15,000 20,000 25,000

100,000 22,000 30,000 40,000 50,000

150,000 33,000 45,000 60,000 75,000

200,000 44,000 60,000 80,000 100,000
</TABLE>

COMPENSATION OF DIRECTORS

The Company pays its directors an annual fee of $10,000, a fee of $500 for
attending each meeting of the Board of Directors of the Company and a fee of
$300 for attending each Committee meeting.

The Company has a consulting agreement with Elmer A. Sticco, a Class B
director of the Company, under which Mr. Sticco provides certain financial and
management advisory services to the Company for an annual consulting fee of
$16,000. The agreement expires on December 31, 1999.

Directors of the Company are eligible to receive stock options under the
Company's Stock Option Plans. Directors of the Company also participate in the
special bonus plan for directors and senior officers of the Company. The
purpose of the plan is to compensate participants for a portion of the
additional income tax, attributable to Federal income tax rate increases
enacted in 1993, payable by participants with respect to long-term
compensation awards, such as stock options and warrants for Common Stock of
the Company. No bonuses were paid under the special bonus plan during the
fiscal year ended December 31, 1995.
<PAGE> 13
-11-

EMPLOYMENT AGREEMENTS

The Company has entered into an employment agreement effective as of
August 21, 1995 with Peter Mayer, the President and Chief Executive Officer of
the Company, at an annual salary of $200,000, subject to increases at
the discretion of the Board of Directors. The agreement provides Mr. Mayer
with an annual bonus opportunity of up to 68% of his annual salary. The
agreement provides for an initial term of one year, with automatic one-year
extensions (subject to two months' notice of non-extension). The agreement
also provides for payment of 12 months' salary upon termination by the
Company of Mr. Mayer's employment for reasons other than for cause.

The Company has entered into an employment agreement effective as of March
27, 1995 with Charles P. Truby, the Executive Vice President and Chief
Operating Officer of the Company, at an annual salary of $140,000,
subject to increases at the discretion of the Board of Directors. The
agreement provides for an initial term of one year, with automatic one-year
extensions (subject to two months' notice of non-extension). The agreement
provides Mr. Truby with an annual bonus opportunity of up to 60% of his annual
salary. The agreement also provides for payment of 12 months' salary upon the
termination by the Company of Mr. Truby's employment for reasons other than for
cause and for payment of two years' salary upon Mr. Truby's voluntary
termination within one year following certain change of control events
involving the Company.

The Company has entered into employment agreements effective as of
February 1, 1988, with each of John Masefield--Chairman, George R. Dietz--Senior
Vice President, and Thomas J. DeAngelo--Vice President--Finance and
Administration, at current annual salaries of $242,050, $95,000 and $138,750,
respectively, subject to increases at the discretion of the Board of Directors.
These agreements provide for an initial term of three years, with automatic
one-year extensions (subject to two months' notice of non-extension). These
agreements were automatically renewed for a one-year term on February 1, 1996.
Each of these agreements also provides for payment of three years' annual
salary upon termination by the Company of the employee's employment for reasons
other than for cause or upon the employee's voluntary termination within one
year following certain change of control events involving the Company.

In order to retain and secure for itself the services of John Masefield,
the Company has entered into a new employment agreement with Mr. Masefield. The
agreement is for a term of seven years commencing as of April 1, 1996. Under
the agreement, Mr. Masefield will perform executive, administrative and
consultative services for the Company for not less than fifteen business days
per quarter. The agreement provides for an annual salary of $250,000 and for
bonus payments for exceptional contributions to the Company as determined by
the Board of Directors. The agreement provides for payment of the aggregate
salary payable through the expiration of the term of the agreement upon
termination by the Company of Mr. Masefield's employment for reasons other than
for cause or upon Mr. Masefield's voluntary termination within one year
following certain change of control events involving the Company, and provides
for continued payment of salary through the expiration of the term, but not
more than three years, to Mr. Masefield's beneficiaries in the event of his
death prior to the expiration of the term.
<PAGE> 14
-12-

COMPENSATION AND STOCK OPTION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION

The Compensation and Stock Option Committee of the Board of Directors
consists of H. Stuart Campbell, David M. Lank and Elmer A. Sticco, all of whom
are independent directors of the Company.

SECTION 16(a) REPORTING REQUIREMENTS

Under Section 16(a) of the Securities Exchange Act of 1934, directors and
executive officers of the Company, and persons who own more than ten percent of
the Common Stock, are required to file reports concerning their beneficial
ownership of securities of the Company with the Securities and Exchange
Commission. Directors, executive officers and greater than ten percent
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) reports they file.

To the Company's knowledge, based solely on a review of copies of such
reports furnished to the Company and confirmations that no other reports were
required during the fiscal year ended December 31, 1995, its directors,
executive officers and greater than ten percent stockholders complied with all
Section 16(a) filing requirements.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Thomas M. Haythe, a Class A director of the Company, is a partner in the
New York City law firm of Haythe & Curley, which firm has acted as legal
counsel to the Company for many years. It is expected that Haythe & Curley
will continue to render legal services to the Company in the future.

PERFORMANCE GRAPH

The following performance graph compares the cumulative total shareholder
return on the Company's Common Stock to the S&P 500 Index and to the S&P Midcap
400 Index for the Company's last five fiscal years. The S&P Midcap 400 Index
is included in the graph because of the absence of an appropriate published
industry or line of business index and the absence of public information with
respect to other companies in the contract sterilization business. The graph
assumes that $100 was invested in the Company's Common Stock and each Index on
December 31, 1990 and that all dividends were reinvested.
<PAGE> 15
-13-

FIVE YEAR CUMULATIVE TOTAL RETURN
COMPARISON GRAPH

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ISOMEDIX Inc. $100.00 $202.11 $229.47 $160.00 $132.63 $121.05
- ------------------------------------------------------------------------------------------------------
S&P Midcap 400 $100.00 $150.10 $168.01 $190.85 $184.01 $236.74
- ------------------------------------------------------------------------------------------------------
S&P 500 $100.00 $130.48 $140.46 $154.62 $156.66 $215.54
- ------------------------------------------------------------------------------------------------------
</TABLE>

REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE

The Compensation and Stock Option Committee of the Board of
Directors (the "Committee") determines the compensation arrangements for
executive officers of the Company. In formulating the Company's executive
compensation program, the Committee seeks to provide competitive levels of
compensation which will assist the Company in attracting and retaining
qualified executives, reward individual initiative and achievement and
integrate executive pay with the interests of the Company's stockholders in
achieving the Company's annual and long-term performance goals.

The compensation program for the Company's executives consists
of base salary, an annual incentive bonus plan, a special bonus plan and stock
options. The Company's salary levels are intended to be consistent with
competitive requirements and levels of responsibility. Salary levels are
largely determined through comparisons with companies of similar size and
complexity. Salary adjustments, which are normally made annually, are
determined by monitoring the competitive market place, the overall financial
performance of the Company, the performance of the individual executive and any
increased responsibilities assumed by the executive.

On the basis of the foregoing factors, the Committee
established a 1995 salary of $219,855 for Mr. Masefield, who served as Chief
Executive Officer of the
<PAGE> 16
-14-

Company until August 1995 and who continues in a full time executive capacity
as Chairman of the Company. For Mr. Mayer, who became Chief Executive Officer
of the Company in August 1995, the Company established an annual salary of
$200,000, based on the foregoing factors.

Awards under the annual incentive bonus plan are based upon a
combination of the level of achievement by the Company of its annual financial
plan as approved by the Board of Directors and achievement by executives of
individual objectives. The financial plan focuses on achievement of certain
levels of revenues and pre-tax income, which the Committee believes are primary
determinants of share price over time. The financial plan is established at
the beginning of each fiscal year by the Board of Directors after consultation
with management. Threshold and maximum levels of revenues and pre-tax income
are established around the target in order to create a range of pre-tax income
that will be used to measure the potential award opportunity for each executive
under the annual incentive bonus plan. A target bonus opportunity equal to a
percentage of annual salary is established for each executive based on his
level of responsibility, potential contribution to the success of the Company
and competitive considerations. Awards for senior executives are more highly
dependent on achievement of Company goals than are awards to lower-level
executives. To determine the actual award to an executive, a year-end
assessment is made of the executive's individual performance including
contributions in specific areas such as leadership, sound decision making,
financial and general management, creativity and achievement of assigned
projects. This individual assessment, combined with the Company's financial
results, insures that individual awards reflect an executive's specific
contribution to the success of the Company. In 1995 the executive officers of
the Company received the following bonuses under the annual incentive bonus
plan: Mr. Masefield -$110,100; Mr. Mayer -$13,800; Mr. Dietz - $25,760; Mr.
DeAngelo - $42,320 and Mr. Truby - $46,000.

The Company periodically grants stock options to its executive
officers and other key employees. Stock option grants are intended to provide
the Company's executives and other key employees with a significant incentive
to work to maximize stockholder value. The Committee strongly believes that by
providing its executives and key employees who have substantial responsibility
for the management and growth of the Company with an opportunity to profit from
increases in the value of the Company's stock, the interests of the Company's
stockholders and executives will be most closely aligned. The number of
options granted to executive officers is based on individual performance and
level of responsibility and must be sufficient in size to provide a strong
incentive for executives to work for the long term business interests of the
Company.

In the 1993 fiscal year the Company established a special
bonus plan for directors and senior officers of the Company. The purpose of
the plan is to compensate participants for a portion of the additional income
tax, attributable to Federal income tax rate increases enacted in 1993, payable
by participants with respect to long-term compensation awards, such as stock
options and warrants for Common Stock of the
<PAGE> 17
-15-

Company. Bonuses under the plan are awarded in the discretion of the Committee
and the Board of Directors. No bonuses were paid under the special bonus plan
during the 1995 fiscal year.

During fiscal 1995, the Board of Directors authorized and the
Committee approved the amendment of certain stock options outstanding under
the Company's Stock Option Plans, whereby the exercise price of such stock
options, ranging from $16.25 to $17.25 per share, was reduced to $12.75 per
share, the market price of the Common Stock on the date of the Board's action.
The purpose of the amendment was to restore the intended incentive of the
stock option element of the Company's compensation program for its executives
and other key personnel. In the opinion of the Committee, the amendment
provides the Company's executives with a financial opportunity consistent with
the returns expected to be generated by them on behalf of the Company's
stockholders.

Section 162(m) of the Code, which became effective January 1,
1994, limits the deductibility of compensation exceeding $1 million to each of
the Company's Chief Executive Officer and four other most highly compensated
executive officers. Qualifying performance-based compensation meeting the
requirements promulgated by the Internal Revenue Service under Section 162(m)
will not be subject to the deduction limit. The Company intends to qualify its
executive compensation arrangements to comply with such requirements.

The Committee believes that the compensation program for
executives of the Company is competitive with the compensation programs
provided by other companies with which the Company competes for executive
talent and by other companies of similar size in similar industries. The
Committee believes that amounts paid under the incentive and special bonus
plans are appropriately related to Company and individual performance, yielding
awards which are directly linked to the annual and longer term financial
results of the Company. The Committee also believes that the stock option
program provides opportunities to executives that are consistent with the
returns that are generated on behalf of the Company's stockholders.

THE COMPENSATION AND STOCK OPTION
COMMITTEE OF THE BOARD OF DIRECTORS

H. Stuart Campbell
David M. Lank
Elmer A. Sticco
<PAGE> 18
-16-

II. APPROVAL OF THE ISOMEDIX INC.
1996 LONG TERM INCENTIVE PLAN

The Board of Directors of the Company believes that attracting
and retaining key employees and directors of high quality is essential to the
Company's growth and success. The Board of Directors also believes that
important advantages to the Company are gained by a comprehensive compensation
program which includes different types of incentives for motivating such
individuals and rewards for outstanding service. In this regard, stock options
and other stock-related awards have been and will continue to be an important
element of the Company's compensation program because such awards enable
employees and directors to acquire or increase their proprietary interest in the
Company, thereby promoting a close identity of interests between such
individuals and the Company's stockholders. Such awards also provide to
employees and directors an increased incentive to expend their maximum efforts
for the success of the Company's business.

Stock options have been granted by the Company under its 1982
Stock Option Plan, 1992 Stock Option Plan and 1992 Supplemental Stock Option
Plan. The authority to grant options under the 1982 Stock Option Plan expired
in 1992, and only a limited number of shares remain available for stock option
grants under the 1992 Plans. Stock option grants have been an important aspect
of the Company's compensation program in attracting and retaining senior
executives and other key personnel. The Board of Directors believes that it is
in the interests of the Company and its stockholders that the ability of the
Company to grant stock options and other stock-based awards be continued.

Accordingly, on February 23, 1996 the Board of Directors
adopted, subject to shareholder approval at the Meeting, the Isomedix Inc.
1996 Long Term Incentive Plan (the "Incentive Plan"). In authorizing grants
of a range of awards, including options, stock appreciation rights ("SARs"),
restricted stock, performance awards and other stock-based awards, the Incentive
Plan is intended to give the Company greater flexibility to respond to rapidly
changing business, economic and regulatory requirements and conditions. In
addition, such flexibility will enhance the ability of the Company to closely
link compensation to performance. The Incentive Plan will not become effective
unless approved by the holders of a majority of the shares of Common Stock
present or represented and voting thereon at the Meeting. The text of the
Incentive Plan is set forth in Exhibit A hereto.

The following discussion of the material features of the
Incentive Plan is qualified by reference to the text of the Incentive Plan set
forth in Exhibit A hereto.

Shares Subject to the Plan. Under the Incentive Plan, 350,000
shares of Common Stock will be available for issuance of awards. Shares
distributed under the Incentive Plan may be either newly issued shares or
treasury shares. If any shares subject to an Incentive Plan award are forfeited
or the award is settled in cash or otherwise terminates without a distribution
of shares, the shares subject to such award will again be available for awards
under the Incentive Plan. Thus, for example, if an award is voluntarily
surrendered in exchange for a new award, the shares that were subject to the
surrendered award would be available for the new award (or other awards) under
the Incentive Plan. The maximum number of shares of Common Stock which may be
granted to any individual under the Incentive Plan in any one-year period shall
not exceed 100,000 shares, subject to the adjustments described in the next
paragraph.
<PAGE> 19
-17-

The Incentive Plan provides that, in the event of changes in
the corporate structure of the Company affecting the Common Stock, the
Compensation and Stock Option Committee (the "Stock Option Committee") may
adjust (i) the number and kind of shares which may be issued in connection with
awards, (ii) the number and kind of shares issued or issuable in respect of
outstanding awards, and (iii) the exercise price, grant price, or purchase price
relating to any award, and the Stock Option Committee may also provide for cash
payments relating to awards. The Stock Option Committee may also adjust
performance conditions and other terms of awards in response to these kinds of
events or to changes in applicable laws, regulations or accounting principles.
The Incentive Plan provides that, in connection with any merger or consolidation
in which the Company is not the surviving corporation or any sale or transfer by
the Company of all or substantially all its assets or any tender offer or
exchange offer for or the acquisition, directly or indirectly, by any person or
group of all or a majority of the then outstanding voting securities of the
Company, all outstanding options under the Incentive Plan will become
exercisable in full on and after (i) 15 days prior to the effective date of such
merger, consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case may be.

Eligibility. Any employee, including any officer or
employee-director, of the Company and its subsidiaries or affiliated companies
is eligible to receive awards under the Incentive Plan. Directors of the
Company who are not employees are eligible for grants of stock options under
the Incentive Plan.

Administration. The Incentive Plan will be administered by
the Stock Option Committee of the Board of Directors. Subject to the terms and
conditions of the Incentive Plan, the Stock Option Committee is authorized to
designate participants who are employees, directors or consultants of the
Company and its subsidiaries and affiliated companies, determine the type and
number of awards to be granted, set terms and conditions of such awards,
prescribe forms of award agreements, interpret the Incentive Plan, specify
rules and regulations relating to the Incentive Plan, and make all other
determinations which may be necessary or advisable for the administration of
the Incentive Plan.

The Incentive Plan provides that in the event that any member
of the Stock Option Committee is not a "disinterested person" as defined in
Rule 16b-3 under the Securities Exchange Act of 1934, as in effect at April 30,
1991, the maximum number of shares of Common Stock which may be subject to
options granted to all directors is 250,000 and the maximum number of shares of
Common Stock which may be subject to options granted to each director is
100,000.

Stock Options and SARs. The Stock Option Committee is
authorized to grant stock options, including both incentive stock options
("ISOs"), which can result in potentially favorable tax treatment to the
participant, and nonqualified stock options, and also to grant SARs entitling
the participant to receive the excess of the fair market value
<PAGE> 20
-18-

of a share on the date of exercise or other specified date over the grant price
of the SAR. The exercise price per share of Common Stock subject to an option
and the grant price of an SAR is determined by the Stock Option Committee,
provided that the exercise price may not be less than the fair market value of
the Common Stock on the date of grant. The term of each such option or SAR,
the times at which each such option or SAR shall be exercisable, and provisions
requiring forfeiture of unexercised options at or following termination of
employment, generally will be fixed by the Stock Option Committee, except no
ISO or SAR relating thereto will have a term exceeding ten years. Options may
be exercised by payment of the exercise price in cash, or in stock, outstanding
awards or other property (including notes or obligations to make payment on a
deferred basis, such as through "cashless exercises") having a fair market
value equal to the exercise price, as the Stock Option Committee may determine
from time to time. Methods of exercise and settlement and other terms of the
SARs will be determined by the Stock Option Committee.

Restricted Stock. The Incentive Plan also authorizes the
Stock Option Committee to grant restricted stock. Restricted stock is an award
of shares which may not be disposed of by participants and which may be
forfeited in the event of certain terminations of employment prior to the end
of a restriction period established by the Stock Option Committee. Such an
award would entitle the participant to all of the rights of a shareholder of
the Company, including the right to vote the shares and the right to receive
any dividends thereon, unless otherwise determined by the Stock Option
Committee.

Performance Awards. The Incentive Plan also authorizes the
Stock Option Committee to grant to eligible employees performance awards. A
performance award is an award which consists of a right (i) denominated or
payable in cash, Common Stock, other securities or other property (including,
without limitation, restricted securities), and (ii) which shall confer on the
holder thereof rights valued as determined by the Stock Option Committee and
payable to, or exercisable by, the holder of the performance award upon the
achievement of such performance goals during such performance periods as the
Stock Option Committee shall establish. Subject to the terms of the Incentive
Plan and any applicable award agreement, performance goals to be achieved
during any performance period, the length of any performance period, the amount
of any performance award granted and the amount of any payment or transfer to
be made pursuant to any performance award will be determined by the Stock
Option Committee and by the other terms and conditions of any performance
award.

Other Stock-Based Awards. In order to enable the Company to
respond to business, economic and regulatory developments, and to trends in
executive compensation practices, the Incentive Plan authorizes the Stock
Option Committee to grant awards that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to Common
Stock. The Stock Option Committee determines the terms and conditions of such
awards, including consideration to be paid
<PAGE> 21
-19-

to exercise awards in the nature of purchase rights, the period during which
awards will be outstanding, and forfeiture conditions and restrictions on
awards.

Other Terms of Awards. The flexible terms of the Incentive
Plan will permit the Stock Option Committee to impose performance conditions
with respect to any award. Such conditions may require that an award be
forfeited, in whole or in part, if performance objectives are not met, or
require that the time of exercisability or settlement of an award be linked to
achievement of performance conditions.

No awards may be granted under the Incentive Plan after
December 31, 2005.

Awards may be settled in cash, stock, other awards or other
property, in the discretion of the Stock Option Committee. The Stock Option
Committee may condition the payment of an award on the withholding of taxes and
may provide that a portion of the Common Stock or other property to be
distributed will be withheld (or previously acquired Common Stock or other
property surrendered by the participant) to satisfy withholding and other tax
obligations. Awards granted under the Incentive Plan may not be pledged or
otherwise encumbered and are not transferable except by will or by the laws of
descent and distribution to a guardian or legal representative designated to
exercise such person's rights and receive distributions under the Incentive
Plan upon such person's death, or otherwise if permitted under Rule 16b-3 and
by the Stock Option Committee.

The Stock Option Committee may, however, grant awards alone or
in addition to, in tandem with or in substitution for any other award under the
Incentive Plan, other awards under other Company plans, or other rights to
payment from the Company. Awards granted in addition to or in tandem with other
awards may be granted either at the same time or at different times. If an
award is granted in substitution for another award, the participant must
surrender such other award in consideration for the grant of the new award.

The Board may amend, modify or terminate the Incentive Plan at
any time provided that, unless required by law, (i) the number of shares of
Common Stock available under the Incentive Plan may not be amended without
shareholder approval (subject to certain provisions relating to adjustment as
discussed above) and (ii) no amendment or termination of the Incentive Plan
may, without a participant's consent, adversely affect any rights already
accrued under the Incentive Plan by the participant. In addition, no amendment
or modification shall, unless previously approved by the shareholders (where
such approval is necessary to satisfy then applicable requirements of federal
securities laws, the Internal Revenue Code of 1986, as amended (the "Code"), or
rules of any stock exchange on which the Common Stock is listed) (i) in any
manner affect the eligibility requirements of the Incentive Plan, (ii) increase
the number of shares
<PAGE> 22
-20-

of Common Stock subject to any option, (iii) change the purchase price of the
shares of Common Stock subject to any option, (iv) extend the period during
which awards may be granted under the Incentive Plan, or (v) materially
increase the benefits to participants under the Incentive Plan.

Unless earlier terminated by the Board of Directors, the
Incentive Plan will terminate when no shares remain available for issuance and
the Company has no further obligation with respect to any outstanding award.

Federal Income Tax Implications of the Plan. The following
description summarizes the material federal income tax consequences arising
with respect to the issuance and exercise of awards granted under the Incentive
Plan. The grant of an option or SAR (including a stock-based award in the
nature of a purchase right) will create no tax consequences for the participant
or the Company. A participant will not have taxable income upon exercising an
ISO (except that the alternative minimum tax may apply) and the Company will
receive no deduction at that time. Upon exercising an option other than an ISO
(including a stock-based award in the nature of a purchase right), the
participant must generally recognize ordinary income equal to the difference
between the exercise price and fair market value of the freely transferable and
nonforfeitable Common Stock acquired on the date of exercise, and upon
exercising an SAR, the participant must generally recognize ordinary income
equal to the cash or the fair market value of the freely transferable and
nonforfeitable Common Stock received. In each case, the Company will be
entitled to a deduction equal to the amount recognized as ordinary income by
the participant.

A participant's disposition of shares acquired upon the
exercise of an option, SAR or other stock-based award in the nature of a
purchase right generally will result in short-term or long-term capital gain or
loss measured by the difference between the sale price and the participant's
tax basis in such shares (or the exercise price of the option in the case of
shares acquired by exercise of an ISO and held for the applicable ISO holding
periods). Generally, there will be no tax consequences to the Company in
connection with a disposition of shares acquired under an option or other
award, except that the Company will be entitled to a deduction (and the
participant will recognize ordinary taxable income) if shares acquired upon
exercise of an ISO are disposed of before the applicable ISO holding periods
have been satisfied.

With respect to other awards granted under the Incentive Plan
that may be settled either in cash or in Common Stock or other property that is
either not restricted as to transferability or not subject to a substantial
risk of forfeiture, the participant must generally recognize ordinary income
equal to the cash or the fair market value of Common Stock or other property
received. The Company will be entitled to a deduction for the same amount.
With respect to awards involving stock or other property that is restricted as
to transferability and subject to a substantial risk of forfeiture, the
participant must generally recognize ordinary income equal to the fair market
value of the shares or
<PAGE> 23
-21-

other property received at the first time the shares or other property become
transferable or not subject to a substantial risk of forfeiture, whichever
occurs earlier. The Company will be entitled to a deduction in an amount equal
to the ordinary income recognized by the participant. A participant may elect
under Section 83(b) of the Code to be taxed at the time of receipt of shares or
other property rather than upon lapse of restrictions on transferability or the
substantial risk of forfeiture, but if the participant subsequently forfeits
such shares or property he would not be entitled to any tax deduction,
including as a capital loss, for the value of the shares or property on which
he previously paid tax. Such election must be made and filed with the Internal
Revenue Service within thirty days of the receipt of the shares or other
property.

Section 162(m) of the Code limits deductibility of certain
compensation for each of the Chief Executive Officer of the Company and the
additional four executive officers who are highest paid and employed at year
end to $1 million per year, effective for tax years beginning on or after
January 1, 1994. The Company anticipates that action will be taken with
respect to awards under the Incentive Plan to ensure deductibility.

The Stock Option Committee may condition the payment of an
award on the withholding of taxes and may provide that a portion of the stock
or other property to be distributed will be withheld (or previously acquired
stock or other property surrendered by the participant) to satisfy withholding
and other tax obligations.

The foregoing summarizes the material federal income tax
consequences arising with respect to the issuance and exercise of awards
granted under the Incentive Plan. Different tax rules may apply with respect to
participants who are subject to Section 16 of the Exchange Act, when they
acquire stock in a transaction deemed to be a nonexempt purchase under that
statute or within six months of an exempt grant of a derivative security under
the Incentive Plan. This summary does not address the effects of other federal
taxes or taxes imposed under state, local or foreign tax laws.

The Board of Directors recommends that the Company's
shareholders vote FOR approval of the Incentive Plan. It is the intention of
the persons named in the accompanying form of Proxy to vote the shares
represented thereby in favor of such approval unless otherwise instructed in
such Proxy.
<PAGE> 24
-22-

III. RATIFICATION OF SELECTION
OF INDEPENDENT ACCOUNTANTS

The Board of Directors of the Company has selected Coopers &
Lybrand L.L.P. to serve as independent accountants for the Company for the
fiscal year ending December 31, 1996. The Board of Directors considers Coopers
& Lybrand L.L.P. to be eminently qualified.

Although it is not required to do so, the Board of Directors
is submitting its selection of Coopers & Lybrand L.L.P. for ratification at the
Meeting, in order to ascertain the views of stockholders regarding such
selection. If the selection is not ratified, the Board of Directors will
reconsider its selection.

The Board of Directors recommends that stockholders vote FOR
ratification of the selection of Coopers & Lybrand L.L.P. to examine the
financial statements of the Company for the Company's fiscal year ending
December 31, 1996. It is the intention of the persons named in the
accompanying form of Proxy to vote the shares of Common Stock represented
thereby in favor of such ratification unless otherwise instructed in such
Proxy.

A representative of Coopers & Lybrand L.L.P. will be present
at the Meeting, with the opportunity to make a statement if such representative
desires to do so, and will be available to respond to appropriate questions.

IV. OTHER MATTERS

The Board of Directors of the Company does not know of any
other matters which may be brought before the Meeting. However, if any such
other matters are properly presented for action, it is the intention of the
persons named in the accompanying form of Proxy to vote the shares represented
thereby in accordance with their judgment on such matters.

MISCELLANEOUS

If the accompanying form of Proxy is executed and returned,
the shares of Common Stock represented thereby will be voted in accordance with
the terms of the Proxy, unless the Proxy is revoked. If no directions are
indicated in such Proxy, the shares represented thereby will be voted FOR the
nominees proposed by the Board of Directors in the election of directors and
FOR the ratification of the Board of Directors' selection of independent
accountants for the Company. Any Proxy may be revoked at any time before it is
exercised. The casting of a ballot at the Meeting by a stockholder who may
theretofore have given a Proxy or the subsequent delivery of a Proxy will have
the effect of revoking the initial Proxy.
<PAGE> 25
-23-

All costs relating to the solicitation of Proxies will be
borne by the Company. Proxies may be solicited by officers, directors and
regular employees of the Company and its subsidiaries personally, by mail or by
telephone, telecopier or telegraph, and the Company may pay brokers and other
persons holding shares of stock in their names or those of their nominees for
their reasonable expenses in sending soliciting material to their principals.
The Company has also engaged Corporate Investor Communications, Inc. to assist
in the solicitation and tabulation of Proxies. The Company estimates that
Corporate Investor Communications, Inc. will receive a fee of approximately
$2,500 in connection with these services.

It is important that Proxies be returned promptly.
Stockholders who do not expect to attend the Meeting in person are urged to
mark, sign and date the accompanying form of Proxy and mail it in the enclosed
return envelope, which requires no postage if mailed in the United States, so
that their votes can be recorded.

STOCKHOLDER PROPOSALS

Stockholder proposals intended to be presented at the 1997
Annual Meeting of Stockholders of the Company must be received by the Company
by November 30, 1996 in order to be considered for inclusion in the Company's
Proxy Statement relating to such Meeting.

THOMAS J. DEANGELO, SECRETARY

WHIPPANY, NEW JERSEY
MARCH 29, 1996
<PAGE> 26
EXHIBIT A
ISOMEDIX INC.
1996 LONG TERM INCENTIVE PLAN

SECTION 1. Purpose. The purposes of this Isomedix Inc. 1996
Long Term Incentive Plan (the "Plan") are to encourage selected employees,
officers, directors and consultants of, and other individuals providing
services to, Isomedix Inc. (together with any successor thereto, the
"Company") and its Affiliates (as defined below) to acquire a proprietary
interest in the growth and performance of the Company, to generate an increased
incentive to contribute to the Company's future success and prosperity thus
enhancing the value of the Company for the benefit of its shareholders, and to
enhance the ability of the Company and its Affiliates to attract and retain
exceptionally qualified individuals upon whom, in large measure, the sustained
progress, growth and profitability of the Company depend.

SECTION 2. Definitions. As used in the Plan, the following
terms shall have the meanings set forth below:

"Affiliate" shall mean (i) any entity that, directly or
through one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, as determined by
the Committee.

"Award" shall mean any Option, Stock Appreciation Right,
Restricted Security, Performance Award, or Other Stock-Based Award granted
under the Plan.

"Award Agreement" shall mean any written agreement, contract
or other instrument or document evidencing any Award granted under the Plan.

"Board" shall mean the Board of Directors of the Company.

"Cause", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company which agreement includes a definition of "cause," "cause" as
defined in such agreement or, if such agreement contains no such definition, a
material breach by the Participant of such agreement, or (ii) with respect to
any other Participant, the failure to perform adequately in carrying out such
Participant's employment responsibilities, including any directives from the
Board, or engaging in such behavior in his personal or business life as to lead
the Committee in its reasonable judgment to determine that it is in the best
interests of the Company to terminate his employment.

"Common Stock" shall mean the common stock of the Company,
$.01 par value.

"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.

"Committee" shall mean the Compensation and Stock Option
Committee or any other committee of the Board designated by the Board to
administer the Plan and composed of not less than three outside directors, as
described in Section 162(m) of the Code, each of whom, to the extent necessary
to comply with Rule 16b-3 only, is a "disinterested person" within the meaning
of Rule 16b-3 as in effect at April 30, 1991.
<PAGE> 27
A-2

"Common Shares" shall mean any or all, as applicable, of the
Common Stock and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 4(b) of the Plan and any other securities of the Company or any
Affiliate or any successor that may be so designated by the Committee.

"Employee" shall mean any employee of the Company or of any
Affiliate.

"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

"Fair Market Value" shall mean (A) with respect to any
property other than the Common Shares, the fair market value of such property
determined by such methods or procedures as shall be established from time to
time by the Committee; and (B) with respect to the Common Shares, the last sale
price regular way on the date of reference, or, in case no sale takes place on
such date, the average of the high bid and low asked prices, in either case on
the principal national securities exchange on which the Common Shares are
listed or admitted to trading, or if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last sale price
reported on the National Market System of the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") on such date, or the
average of the closing high bid and low asked prices in the over-the-counter
market reported on NASDAQ on such date, whichever is applicable, or if there
are no such prices reported on NASDAQ on such date, as furnished to the
Committee by any New York Stock Exchange member selected from time to time by
the Committee for such purpose. If there is no bid or asked price reported on
any such date, the Fair Market Value shall be determined by the Committee in
accordance with the regulations promulgated under Section 2031 of the Code, or
by any other appropriate method selected by the Committee.

"Good Reason", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company, "good reason" as defined in such written agreement or, if such
agreement contains no such definition, a material breach by the Company of such
agreement, or (ii) with respect to any other Participant, a failure by the
Company to pay such Participant any amount otherwise vested and due and a
continuation of such failure for 30 business days following notice to the
Company thereof.

"Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of Section
422 of the Code or any successor provision thereto.

"Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option. Any stock option granted by the Committee which is not designated an
Incentive Stock Option shall be deemed a Non-Qualified Stock Option.

"Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.

"Other Stock-Based Award" shall mean any right granted under
Section 6(e) of the Plan.

"Participant" shall mean any individual granted an Award under
the Plan.

"Performance Award" shall mean any right granted under Section
6(d) of the Plan.

"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
<PAGE> 28
A-3

"Released Securities" shall mean securities that were
Restricted Securities but with respect to which all applicable restrictions
have expired, lapsed or been waived in accordance with the terms of the Plan or
the applicable Award Agreement.

"Restricted Securities" shall mean any Common Shares granted
under Section 6(c) of the Plan, any right granted under Section 6(c) of the
Plan that is denominated in Common Shares or any other Award under which issued
and outstanding Common Shares are held subject to certain restrictions.

"Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act, or any successor
rule or regulation thereto as in effect from time to time.

"Securities Act" shall mean the Securities Act of 1933, as
amended.

"Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.

SECTION 3. Administration. The Plan shall be administered by
the Committee. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be
granted to an eligible Employee or other individual under the Plan; (iii)
determine the number and classification of Common Shares to be covered by (or
with respect to which payments, rights or other matters are to be calculated in
connection with) Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Common Shares, other securities, other Awards
or other property, or canceled, forfeited or suspended, and the method or
methods by which Awards may be settled, exercised, canceled, forfeited or
suspended; (vi) determine requirements for the vesting of Awards or performance
criteria to be achieved in order for Awards to vest; (vii) determine whether,
to what extent and under what circumstances cash, Common Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award under the Plan shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (viii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (ix) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (x) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of
the Committee, may be made at any time and shall be final, conclusive and
binding upon all Persons, including the Company, any Affiliate, any
Participant, any holder or beneficiary of any Award, any shareholder and any
Employee. Notwithstanding the foregoing, the maximum number of Awards which
may be granted to any one Participant under this Plan in any one-year period
shall not exceed 100,000 Common Shares, subject to the adjustments provided in
Section 4(b) hereof and no Awards under this Plan shall be granted after
December 31, 2005.

SECTION 4. Common Shares Available for Awards.

(a) Common Shares Available. Subject to adjustment as
provided in Section 4(b):

(i) Calculation of Number of Common Shares
Available. The number of Common Shares available for granting Awards
under the Plan shall be 350,000, any or all of which may be or may be
based on Common Stock, any other security which becomes the subject
<PAGE> 29
A-4

of Awards, or any combination thereof. Initially 350,000 shares of
Common Stock shall be reserved for Awards hereunder. Further, if,
after the effective date of the Plan, any Common Shares covered by an
Award granted under the Plan or to which such an Award relates, are
forfeited, or if an Award otherwise terminates or is canceled without
the delivery of Shares or of other consideration, then the Common
Shares covered by such Award or to which such Award relates, or the
number of Common Shares otherwise counted against the aggregate number
of Common Shares available under the Plan with respect to such Award,
to the extent of any such forfeiture, termination or cancellation,
shall again be, or shall become, available for granting Awards under
the Plan.

(ii) Accounting for Awards. For purposes of this
Section 4,

(A) if an Award is denominated in or based upon
Common Shares, the number of Common Shares covered by such
Award or to which such Award relates shall be counted on the
date of grant of such Award against the aggregate number of
Common Shares available for granting Awards under the Plan and
against the maximum number of Awards available to any
Participant; and

(B) Awards not denominated in Common Shares may be
counted against the aggregate number of Common Shares
available for granting Awards under the Plan and against the
maximum number of Awards available to any participant in such
amount and at such time as the Committee shall determine under
procedures adopted by the Committee consistent with the
purposes of the Plan;

provided, however, that Awards that operate in tandem with (whether
granted simultaneously with or at a different time from), or that are
substituted for, other Awards may be counted or not counted under
procedures adopted by the Committee in order to avoid double counting.
Any Common Shares that are delivered by the Company, and any Awards
that are granted by, or become obligations of, the Company, through
the assumption by the Company or an Affiliate of, or in substitution
for, outstanding awards previously granted by an acquired company
shall, in the case of Awards granted to Participants who are officers
or directors of the Company for purposes of Section 16 of the Exchange
Act, be counted against the Common Shares available for granting
Awards under the Plan.

(iii) Sources of Common Shares Deliverable Under
Awards. Any Common Shares delivered pursuant to an Award may consist,
in whole or in part, of authorized and unissued Common Shares or of
treasury Common Shares.

(b) Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Common Shares, other securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase or exchange of Common Shares or other
securities of the Company, issuance of warrants or other rights to purchase
Common Shares or other securities of the Company, or other similar corporate
transaction or event affects the Common Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of Common Shares (or
other securities or property) which thereafter may be made the subject of
Awards, (ii) the number and kind of Common Shares (or other securities or
property) subject to outstanding Awards, and (iii) the grant or exercise price
with respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding
<PAGE> 30
A-5

Award; provided, however, that the number of Common Shares subject to any Award
denominated in Common Shares shall always be a whole number.

In connection with any merger or consolidation in which the
Company is not the surviving corporation and which results in the holders of
the outstanding voting securities of the Company (determined immediately prior
to such merger or consolidation) owning less than a majority of the outstanding
voting securities of the surviving corporation (determined immediately
following such merger or consolidation), or any sale or transfer by the Company
of all or substantially all its assets or any tender offer or exchange offer
for or the acquisition, directly or indirectly, by any person or group of all
or a majority of the then outstanding voting securities of the Company, all
outstanding Options under the Plan shall become exercisable in full,
notwithstanding any other provision of the Plan or of any outstanding Options
granted thereunder, on and after (i) the fifteenth day prior to the effective
date of such merger, consolidation, sale, transfer or acquisition or (ii) the
date of commencement of such tender offer or exchange offer, as the case may
be. The provisions of the foregoing sentence shall apply to any outstanding
Options which are Incentive Stock Options to the extent permitted by Section
422(d) of the Code and such outstanding Options in excess thereof shall,
immediately upon the occurrence of the event described in clause (i) or (ii) of
the foregoing sentence, be treated for all purposes of the Plan as
Non-Qualified Stock Options and shall be immediately exercisable as such as
provided in the foregoing sentence.

SECTION 5. Eligibility. Any Employee, including any officer
or employee-director of the Company or of any Affiliate, and any consultant of,
or other individual providing services to, the Company or any Affiliate shall
be eligible to be designated a Participant. A non-employee director shall be
eligible to receive Non-Qualified Stock Options under the Plan.

SECTION 6. Awards.

(a) Options. The Committee is hereby authorized to grant
to eligible individuals options to purchase Common Shares (each, an "Option")
which shall contain the following terms and conditions and with such additional
terms and conditions, in either case not inconsistent with the provisions of
the Plan, as the Committee shall determine:

(i) Exercise Price. The purchase price per
Common Share purchasable under an Option shall be determined by the
Committee; provided, however, that such purchase price shall not be
less than one hundred percent (100%) of the Fair Market Value of a
Common Share on the date of grant of such Option, or such other price
as required under Subsection 6(a)(iv) hereof.

(ii) Time and Method of Exercise. Subject to the
terms of Section 6(a)(iii), the Committee shall determine the time or
times at which an Option may be exercised in whole or in part, and the
method or methods by which, and the form or forms (including, without
limitation, cash, Common Shares, outstanding Awards, or other
property, or any combination thereof, having a Fair Market Value on
the exercise date equal to the relevant exercise price) in which,
payment of the exercise price with respect thereto may be made or
deemed to have been made.

(iii) Exercisability Upon Death, Retirement and
Termination of Employment. Subject to the condition that no Option
may be exercised in whole or in part after the expiration of the
Option period specified in the applicable Award Agreement:
<PAGE> 31
A-6

(A) Subject to the terms of paragraph (D) below,
upon the death of a Participant while employed or within 3
months of retirement or disability as defined in paragraph (B)
below, the Person or Persons to whom such Participant's rights
with respect to any Option held by such Participant are
transferred by will or the laws of descent and distribution
may, prior to the expiration of the earlier of: (1) the
outside exercise date determined by the Committee at the time
of granting the Option, or (2) nine months after such
Participant's death, purchase any or all of the Common Shares
with respect to which such Participant was entitled to
exercise such Option immediately prior to such Participant's
death, and any Options not so exercisable will lapse on the
date of such Participant's death;

(B) Subject to the terms of paragraph (D) below,
upon termination of a Participant's employment with the
Company (x) as a result of retirement pursuant to a retirement
plan of the Company or an Affiliate or disability (as
determined by the Committee) of such Participant, (y) by the
Company other than for Cause, or (z) by the Participant with
Good Reason, such Participant may, prior to the expiration of
the earlier of: (1) the outside exercise date determined by
the Committee at the time of granting the Option, or (2) three
months after the date of such termination, purchase any or all
of the Common Shares with respect to which such Participant
was entitled to exercise any Options immediately prior to such
termination, and any Options not so exercisable will lapse on
such date of termination;

(C) Subject to the terms of paragraph (D) below,
upon termination of a Participant's employment with the
Company under any circumstances not described in paragraphs
(A) or (B) above, such Participant's Options shall be canceled
to the extent not theretofore exercised;

(D) Upon (i) the death of the Participant, or (ii)
termination of the Participant's employment with the Company
(x) by the Company other than for Cause (y) by the Participant
with Good Reason or (z) as a result of retirement or
disability as defined in paragraph (B) above, the Company
shall have the right to cancel all of the Options such
Participant was entitled to exercise at the time of such death
or termination (subject to the terms of paragraphs (A) or (B)
above) for a payment in cash equal to the excess, if any, of
the Fair Market Value of one Common Share on the date of death
or termination over the exercise price of such Option for one
Common Share times the number of Common Shares subject to the
Option and exercisable at the time of such death or
termination; and

(E) Upon expiration of the respective periods set
forth in each of paragraphs (A) through (C) above, the Options
of a Participant who has died or whose employment has been
terminated shall be canceled to the extent not theretofore
canceled or exercised.

(F) For purposes of paragraphs (A) through (D)
above, the period of service of an individual as a director or
consultant of the Company or an Affiliate shall be deemed the
period of employment.

(iv) Incentive Stock Options. The following
provisions shall apply only to Incentive Stock Options granted under
the Plan:
<PAGE> 32
A-7

(A) No Incentive Stock Option shall be granted to
any eligible Employee who, at the time such Option is granted,
owns securities possessing more than ten percent (10%) of the
total combined voting power of all classes of securities of
the Company or of any Affiliate, except that such an Option
may be granted to such an Employee if at the time the Option
is granted the option price is at least one hundred ten
percent (110%) of the Fair Market Value of the Common Shares
(determined in accordance with Section 2) subject to the
Option, and the Option by its terms is not exercisable after
the expiration of five (5) years from the date the Option is
granted; and

(B) To the extent that the aggregate Fair Market
Value of the Common Shares with respect to which Incentive
Stock Options (without regard to this subsection) are
exercisable for the first time by any individual during any
calendar year (under all plans of the Company and its
Affiliates) exceeds $100,000, such Options shall be treated as
Non-Qualified Stock Options. This subsection shall be applied
by taking Options into account in the order in which they were
granted. If some but not all Options granted on any one day
are subject to this subsection, then such Options shall be
apportioned between Incentive Stock Option and Non-Qualified
Stock Option treatment in such manner as the Committee shall
determine. For purposes of this subsection, the Fair Market
Value of any Common Shares shall be determined, in accordance
with Section 2, as of the date the Option with respect to such
Common Shares is granted.

(v) Terms and Conditions of Options Granted to
Directors. Notwithstanding any provision contained in the Plan to the
contrary, during any period when any member of the Committee shall not
be a "disinterested person" as defined in Rule 16b-3, as such Rule was
in effect at April 30, 1991, then, the terms and conditions of Options
granted under the Plan to any director of the Company during such
period shall be as follows:

(A) The price at which each Common Share subject to
an option may be purchased shall, subject to any adjustments
which may be made pursuant to Section 4, in no event be less
than the Fair Market Value of a Common Share on the date of
grant, and provided further that in the event the option is
intended to be an Incentive Stock Option and the optionee owns
on the date of grant securities possessing more than ten
percent (10%) of the total combined voting power of all
classes of securities of the Company or of any Affiliate, the
price per share shall not be less than one hundred ten percent
(110%) of the Fair Market Value per Common Share on the date
of grant.

(B) The Option may be exercised to purchase Common
Shares covered by the Option not sooner than six (6) months
following the date of grant. The Option shall terminate and
no Common Shares may be purchased thereunder more than ten
(10) years after the date of grant, provided that if the
Option is intended to be an Incentive Stock Option and the
Optionee owns on the date of grant securities possessing more
than ten percent (10%) of the total combined voting power of
all classes of securities of the Company or of any Affiliate,
the Option shall terminate and no Common Shares may be
purchased thereunder more than five (5) years after the date
of grant.

(C) The maximum number of Common Shares which may be
subject to options granted to all directors pursuant to this
Section 6(a)(v) shall be 250,000 shares in the aggregate. The
maximum number of Common Shares which may be subject to
options granted to any director of the Company shall be
100,000 shares.
<PAGE> 33
A-8

(b) Stock Appreciation Rights. The Committee is hereby
authorized to grant to eligible Employees "Stock Appreciation Rights." Each
Stock Appreciation Right shall consist of a right to receive the excess of (i)
the Fair Market Value of one Common Share on the date of exercise or, if the
Committee shall so determine in the case of any such right other than one
related to any Incentive Stock Option, at any time during a specified period
before or after the date of exercise over (ii) the grant price of the right as
specified by the Committee, which shall not be less than one hundred percent
(100%) of the Fair Market Value of one Common Share on the date of grant of the
Stock Appreciation Right (or, if the Committee so determines, in the case of
any Stock Appreciation Right retroactively granted in tandem with or in
substitution for another Award, on the date of grant of such other Award).
Subject to the terms of the Plan and any applicable Award Agreement, the grant
price, term, methods of exercise, methods of settlement, and any other terms
and conditions of any Stock Appreciation Right granted under the Plan shall be
as determined by the Committee. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.

(i) Issuance. The Committee is hereby authorized to
grant to eligible Employees "Restricted Securities" which shall
consist of the right to receive, by purchase or otherwise, Common
Shares which are subject to such restrictions as the Committee may
impose (including, without limitation, any limitation on the right to
vote such Common Shares or the right to receive any dividend or other
right or property), which restrictions may lapse separately or in
combination at such time or times, in such installments or otherwise,
as the Committee may deem appropriate.

(ii) Registration. Restricted Securities granted
under the Plan may be evidenced in such manner as the Committee may
deem appropriate, including, without limitation, book-entry
registration or issuance of a stock certificates or certificates. In
the event any stock certificate is issued in respect of Restricted
Securities granted under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Securities.

(iii) Forfeiture. Except as otherwise determined by
the Committee, upon termination of a Participant's employment for any
reason during the applicable restriction period, all of such
Participant's Restricted Securities which had not become Released
Securities by the date of termination of employment shall be forfeited
and reacquired by the Company; provided, however, that the Committee
may, when it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining restrictions
with respect to such Participant's Restricted Securities.
Unrestricted Common Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be issued to the holder of Restricted
Securities promptly after such Restricted Securities become Released
Securities.

(d) Performance Awards. The Committee is hereby
authorized to grant to eligible Employees "Performance Awards." Each
Performance Award shall consist of a right, (i) denominated or payable in cash,
Common Shares, other securities or other property (including, without
limitation, Restricted Securities), and (ii) which shall confer on the holder
thereof rights valued as determined by the Committee and payable to, or
exercisable by, the holder of the Performance Award, in whole or in part, upon
the achievement of such performance goals during such performance periods as
the Committee shall establish. Subject to the terms of the Plan and any
applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted, the termination of a Participant's employment and
the amount of any payment
<PAGE> 34
A-9

or transfer to be made pursuant to any Performance Award shall be determined by
the Committee and by the other terms and conditions of any Performance Award.
The Committee shall issue performance goals prior to the commencement of the
performance period to which such performance goals pertain.

(e) Other Stock-Based Awards. The Committee is hereby
authorized to grant to eligible Employees "Other Stock- Based Awards." Each
Other Stock-Based Award shall consist of a right (i) which is other than an
Award or right described in Section 6(a), (b), (c) or (d) above and (ii) which
is denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Common Shares (including, without limitation,
securities convertible into Common Shares) as are deemed by the Committee to be
consistent with the purposes of the Plan; provided, however, that such right
shall comply, to the extent deemed desirable by the Committee, with Rule 16b-3
and applicable law. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the terms and conditions of Other
Stock-Based Awards. Common Shares or other securities delivered pursuant to a
purchase right granted under this Section 6(e) shall be purchased for such
consideration, which may be paid by such method or methods and in such form or
forms, including, without limitation, cash, Common Shares, other securities,
other Awards, other property, or any combination thereof, as the Committee
shall determine.

(f) General.

(i) No Cash Consideration for Awards. Awards may be
granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law.

(ii) Awards May Be Granted Separately or Together.
Awards may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution for any
other Award, except that in no event shall an Incentive Stock Option
be granted together with a Non-Qualified Stock Option in such a manner
that the exercise of one Option affects the right to exercise the
other. Awards granted in addition to or in tandem with other Awards
may be granted either at the same time as or at a different time from
the grant of such other awards.

(iii) Forms of Payment Under Awards. Subject to the
terms of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation, cash,
Common Shares, other securities, other Awards, or other property, or
any combination thereof, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee.
Such rules and procedures may include, without limitation, provisions
for the payment or crediting of reasonable interest on installment or
deferred payments. In accordance with the above, the Committee may
elect (i) to pay a Participant (or such Participant's permitted
transferee) upon the exercise of an Option in whole or in part, in
lieu of the exercise thereof and the delivery of Common Shares
thereunder, an amount of cash equal to the excess, if any, of the Fair
Market Value of one Common Share on the date of such exercise over the
exercise price of such Option for one Common Share times the number of
Common Shares subject to the Option or portion thereof so exercised or
(ii) to settle other stock denominated Awards in cash.

(iv) Limits on Transfer of Awards.
<PAGE> 35
A-10

(A) No award (other than Released Securities), and
no right under any such Award, may be assigned, alienated,
pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the
laws of descent and distribution (or, in the case of
Restricted Securities, to the Company) and any such purported
assignment, alienation, pledge, attachment, sale or other
transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate.

(B) Each award, and each right under any Award,
shall be exercisable, during the Participant's lifetime only
by the Participant or if permissible under applicable law, by
the Participant's guardian or legal representative.

(v) Terms of Awards. The term of each Award shall
be for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any Option exceed a period
of ten years from the date of its grant.

(vi) Rule 16b-3 Six-Month Limitations. To the extent
required in order to maintain the exemption provided under Rule 16b-3
only, any equity security offered pursuant to the Plan must be held
for at least six months after the date of grant, and with respect to
any derivative security issued pursuant to the Plan, at least six
months must elapse from the date of acquisition of such derivative
security to the date of disposition of the derivative security (other
than upon exercise or conversion) or its underlying equity security.
Terms used in the preceding sentence shall, for the purposes of such
sentence only, have the meanings, if any, assigned or attributed to
them under Rule 16b-3.

(vii) Common Share Certificates. All certificates for
Common Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which such Common
Shares are then listed, and any applicable Federal or state securities
laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.

(viii) Delivery of Common Shares or Other Securities
and Payment by Participant of Consideration. No Common Shares or
other securities shall be delivered pursuant to any Award until
payment in full of any amount required to be paid pursuant to the Plan
or the applicable Award Agreement is received by the Company. Such
payment may be made by such method or methods and in such form or
forms as the Committee shall determine, including, without limitation,
cash, Common Shares, other securities, other Awards or other property,
or any combination thereof; provided that the combined value, as
determined by the Committee, of all cash and cash equivalents and the
Fair Market Value of any such Common Shares or other property so
tendered to the Company, as of the date of such tender, is at least
equal to the full amount required to be paid pursuant to the Plan or
the applicable Award Agreement to the Company.

SECTION 7. Amendments; Adjustments and Termination. Except
to the extent prohibited by applicable law and unless otherwise expressly
provided in an Award Agreement or in the Plan:

(a) Amendments to the Plan. The Board may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of any
shareholder, Participant, other holder or beneficiary of an Award, or other
Person; provided, however, that, subject to the Company's rights to adjust
Awards
<PAGE> 36
A-11

under Sections 7(c) and (d), any amendment, alteration, suspension,
discontinuation, or termination that would impair the rights of any
Participant, or any other holder or beneficiary of any Award theretofore
granted, shall not to that extent be effective without the consent of such
Participant, other holder or beneficiary of an Award, as the case may be; and
provided further, however, that notwithstanding any other provision of the Plan
or any Award Agreement, without the approval of the shareholders of the Company
no such amendment, alteration, suspension, discontinuation, or termination
shall be made that would:

(i) increase the total number of Common Shares
available for Awards under the Plan, except as provided in Section 4
hereof; or

(ii) otherwise cause the Plan to cease to comply with
any tax or regulatory requirement, including for these purposes any
approval or other requirement which is or would be a prerequisite for
exemptive relief from Section 16(b) of the Exchange Act.

(b) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, any Award theretofore granted, prospectively or
retroactively; provided, however, that, subject to the Company's rights to
adjust Awards under Sections 7(c) and (d), any amendment, alteration,
suspension, discontinuation, cancellation or termination that would impair the
rights of any Participant or holder or beneficiary of any Award theretofore
granted, shall not to that extent be effective without the consent of such
Participant or holder or beneficiary of an Award, as the case may be.

(c) Adjustment of Awards Upon Certain Acquisitions. In
the event the Company or any Affiliate shall assume outstanding employee awards
or the right or obligation to make future such awards in connection with the
acquisition of another business or another corporation or business entity, the
Committee may make such adjustments, not inconsistent with the terms of the
Plan, in the terms of Awards as it shall deem appropriate in order to achieve
reasonable comparability or other equitable relationship between the assumed
awards and the Awards granted under the Plan as so adjusted.

(d) Adjustments of Awards Upon the Occurrence of Certain
Unusual or Non- recurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or non-recurring events (including, without
limitation, the events described in Section 4(b) hereof) affecting the Company,
any Affiliate, or the financial statements of the Company or any Affiliate, or
of changes in applicable laws, regulations, or accounting principles, whenever
the Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan.

SECTION 8. General Provisions.

(a) No Right to Awards. No Employee or other Person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Employees, or holders or
beneficiaries of Awards under the Plan. The terms and conditions of Awards
need not be the same with respect to each recipient.

(b) Delegation. Subject to the terms of the Plan and
applicable law, the Committee may delegate to one or more officers or managers
of the Company or any Affiliate, or to a committee of such officers or
managers, the authority, subject to such terms and limitations as the Committee
shall determine, to grant Awards to, or to cancel, modify, waive rights with
respect to, alter, discontinue, suspend, or terminate Awards; provided,
however, that, no such delegation shall be permitted with respect
<PAGE> 37
A-12

to Awards held by Employees who are officers or directors of the Company for
purposes of Section 16 of the Exchange Act, or any successor section thereto or
who are otherwise subject to such Section.

(c) Correction of Defects, Omissions, and
Inconsistencies. The Committee may correct any defect, supply any omission, or
reconcile any inconsistency in the Plan or any Award in the manner and to the
extent it shall deem desirable to carry the Plan into effect.

(d) Withholding. The Company or any Affiliate shall be
authorized to withhold from any Award granted, from any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Common Shares, other securities,
other Awards, or other property) of withholding taxes due in respect of an
Award, its exercise, or any payment or transfer under such Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company or Affiliate to satisfy all obligations for the payment of such taxes.

(e) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

(f) No Right to Employment. The grant of an Award shall
not be construed as giving a Participant the right to be retained in the employ
of the Company or any Affiliate. Further, the Company or an Affiliate may at
any time dismiss a Participant from employment, free from any liability, or any
claim under the Plan, unless otherwise expressly provided in the Plan or in any
Award Agreement.

(g) Governing Law. The validity, construction, and effect
of the Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware and applicable
Federal law.

(h) Severability. If any provision of the Plan or any
Award is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person or Award under any law deemed applicable by
the Committee, such provision shall be construed or deemed amended to conform
to applicable laws, or if it cannot be construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan
or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award and the remainder of the Plan and any such Award shall remain in full
force and effect.

(i) No Trust or Fund Created. Neither the Plan nor any
Award shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any Affiliate and a
Participant or any other Person. To the extent that any Person acquires a
right to receive payments from the Company or any Affiliate pursuant to an
Award, such right shall be no greater than the right of any unsecured general
creditor of the Company or any Affiliate.

(j) No Fractional Common Shares. No fractional Common
Shares shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or other property
shall be paid or transferred in lieu of any fractional Common Shares or whether
such fractional Common Shares or any rights thereto shall be canceled,
terminated, or otherwise eliminated.
<PAGE> 38
A-13

(k) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.

SECTION 9. Adoption, Approval and Effective Date of the Plan.
The Plan shall be considered adopted and shall become effective on the date the
Plan is approved by the Board; provided, however, that the Plan and any Awards
granted under the Plan shall be void, if the shareholders of the Company shall
not have approved the adoption of the Plan within twelve (12) months after the
effective date, by a majority of votes cast thereon at a meeting of
shareholders duly called and held for such purpose.
<PAGE> 39
ISOMEDIX INC.

PROXY - ANNUAL MEETING OF STOCKHOLDERS - MAY 17, 1996

COMMON STOCK

The undersigned, a stockholder of ISOMEDIX INC., does hereby
appoint JOHN MASEFIELD and PETER MAYER, or either of them, each with full power
of substitution, the undersigned's proxies, to appear and vote at the Annual
Meeting of Stockholders to be held on Friday, May 17, 1996 at 10:00 A.M., local
time, or at any adjournments thereof, upon such matters as may come before the
Meeting.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby instructs said proxies or their
substitutes to vote as specified below on each of the following matters and in
accordance with their judgment on other matters which may properly come before
the Meeting.

1. Election of Class A Directors.

<TABLE>
<S> <C>
FOR both nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary below) to vote for both nominees listed below
</TABLE>
Thomas J. DeAngelo and Thomas M. Haythe

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
________________________________________________________________________________

2. Approval of the Isomedix Inc. 1996 Long Term Incentive Plan.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

_____________________________________________________________________________

3. Ratification of appointment of Coopers & Lybrand L.L.P. as independent
accountants for fiscal 1996.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

The Board of Directors favors a vote "FOR" each item.

(Continued and to be Completed on Reverse Side)
<PAGE> 40
-2-

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED AS TO ANY OF ITEMS 1, 2 OR 3 THEY WILL BE VOTED "FOR"
THE ITEM(S) AS TO WHICH NO DIRECTION IS INDICATED.

IMPORTANT: Before returning this Proxy, please sign your name or names on the
line(s) below exactly as shown hereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when signing.
Where shares are registered in the names of joint tenants or trustees, each
joint tenant or trustee should sign.

Dated ________________________, 1996

_______________________________(L.S.)

_______________________________(L.S.)
Stockholder(s) Sign Here

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.

(Continued From Other Side)