PERMA-FIX ENVIRONMENTAL SERVICES, INC.
1940 N.W. 67th Place, Suite A
Gainesville, Florida 32653
NOTICE OF ANNUAL MEETING
To Be Held December 12, 1996
To the Stockholders of Perma-Fix Environmental Services, Inc.:
Notice is hereby given that the 1996 Annual Meeting of Stockholders
(the "Meeting") of Perma-Fix Environmental Services, Inc. (the
"Company") will be held at the offices of Perma-Fix Environmental
Services, Inc., 1940 N.W. 67th Place, Gainesville, Florida 32653,
Tuesday, December 12, 1996, at 2:00 p.m. (EST), for the following
purposes:
1. To elect four (4) Directors to serve until the next
Annual Meeting of Stockholders or until their
respective successors are duly elected and
qualified;
2. To approve the Third Amendment to the Company's 1992
Outside Directors Stock Option and Incentive Plan.
3. To approve the Company's 1996 Employee Stock
Purchase Plan.
4. To approve an amendment to the Company's Certificate
of Incorporation increasing the authorized shares of
the Company's Common Stock from 20,000,000 shares to
50,000,000 shares.
5. To ratify the appointment of Arthur Andersen LLP as
the independent auditors of the Company for fiscal
1996; and
6. To transact such other business as may properly come
before the meeting and at any adjournments thereof.
Only stockholders of record at the close of business on October 18,
1996 will be entitled to notice of, and to vote at, the Meeting and
at any adjournments thereof.
Perma-Fix Environmental Services, Inc.'s Annual Report for 1995 is
enclosed for your convenience.
By Order of the Board of Directors
Richard T. Kelecy
Secretary
Gainesville, Florida
November 8, 1996
Please complete, date, sign and return the accompanying Proxy
whether or not you plan to attend the meeting in person. The
enclosed return envelope requires no additional postage if mailed
in the United States. If a stockholder decides to attend the
meeting, he or she may, if so desired, revoke the Proxy and vote in
person.
<PAGE>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
1940 N.W. 67th Place, Suite A
Gainesville, Florida 32653
PROXY STATEMENT
FOR THE
1996 ANNUAL MEETING OF STOCKHOLDERS
Solicitation
This Proxy Statement is furnished to the holders of the Common Stock
(the "Common Stock") of Perma-Fix Environmental Services, Inc. (the
"Company") in connection with the solicitation on behalf of the
Board of Directors of the Company (the "Board of Directors" or the
"Board") of proxies to be used in voting at the 1996 Annual Meeting
of Stockholders to be held at the offices of the Company,
1940 N. W. 67th Place, Gainesville, Florida 32653, on Tuesday,
December 12, 1996, at 2:00 p.m. (EST), and any adjournments thereof
(the "Meeting"). The Company will pay the cost of preparing,
printing, assembling and mailing this Proxy Statement and the Proxy
Card and all of the costs of the solicitation of the proxies. In
addition to solicitation by use of the mails, certain officers and
employees of the Company may solicit the return of proxies by tele-
phone, telegram or personal interview. The Company has requested
that brokerage houses and custodians, nominees and fiduciaries
forward soliciting materials to their principals, the beneficial
owners of Common Stock and has agreed to reimburse them for
reasonable out-of-pocket expenses in connection therewith. The
Company has also retained the services of Corporate Investor
Communications, Inc. to aid in the solicitation of proxies for a fee
of approximately $1,000, plus reasonable out-of-pocket expenses
incurred by them.
Revocation of Proxy
The enclosed proxy is for use at the Meeting if the stockholder will
not be able to attend in person. Any stockholder who executes a
proxy may revoke it at any time before it is voted by delivering to
the Secretary of the Company either an instrument revoking the proxy
or a duly executed proxy bearing a later date. A proxy may also be
revoked by any stockholder present at the Meeting who expresses a
desire to vote his shares in person.
Mailing of Proxy Statement and Proxy Card
The Notice of Annual Meeting of Stockholders, this Proxy Statement
and the accompanying Proxy Card were first mailed to stockholders
on or about November 13, 1996.
Record Date and Voting Securities
Only the holders of Common Stock of record at the close of business
on October 18, 1996 (the "Record Date"), will have the right to
receive notice of, and be entitled to vote at, the Meeting. At the
close of business on the Record Date, 9,366,035 shares (excluding
920,000 treasury shares) of Common Stock were issued and
outstanding. Each stockholder of record, as of the Record Date, is
entitled to one vote for each share of Common Stock that the
stockholder owned as of the Record Date on each matter to be voted
upon at the Meeting. A majority of all of the outstanding shares
of Common Stock entitled to notice of, and to vote at, the Meeting,
represented in person or by proxy will constitute a quorum for the
holding of the Meeting. The failure of a quorum to be represented
at the Meeting will necessitate adjournment and will subject the
Company to additional expense.
Pursuant to the General Corporation Law of the State of Delaware,
only votes cast "FOR" a matter constitute affirmative votes, except
proxies in which the stockholder fails to make a specification as
to whether he votes "FOR", "AGAINST", "ABSTAINS" or "WITHHOLDs" as
to a particular matter shall be considered as a vote "For" that
matter. Votes will be tabulated by an inspector of election
appointed by the Board of Directors. Votes in which the stockholder
specifies that he is "WITHHOLDING" or "ABSTAINING" from voting are
counted for quorum purposes. Abstentions and broker non-votes are
not considered as votes "For" a particular matter.
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides that the Board
of Directors shall hold office until the next annual meeting of
stockholders and their successors have been elected and qualified
or until their earlier resignation or removal. Successors to those
Directors whose terms have expired are required to be elected by
stockholder vote; vacancies in unexpired terms and any additional
positions created by Board of Directors' action are filled by the
existing Board of Directors.
The Company's Bylaws provide that the number of directors of the
Company (the "Directors") shall be at least three (3), and that the
number of Directors may be increased or decreased by action of the
Board. The Board of Directors currently has determined that the
number of Directors shall be four (4).
The Company has agreed that for five (5) years after the effective
date of its Registration Statement on Form S-1, dated December 8,
1992, if requested by A. S. Goldmen & Company, Inc., the Underwriter
of the Company's initial public offering (the "Underwriter"), it
will use its best efforts to cause one (1) individual designated by
the Underwriter to be elected by the Company's Board of Directors,
which individual may be an officer, Director, employee or affiliate
of the Underwriter. As of the date of this Proxy Statement, the
Underwriter has not designated any particular individual to be
placed on the Company's Board of Directors.
At the Meeting, four (4) Directors are to be elected to serve until
the next annual meeting of the stockholders and until their
respective successors are elected and qualified. Dr. Centofanti and
Messrs. Zwecker and Gorlin are presently serving as Directors of the
Company and are being nominated for reelection to the Board of
Directors. Mr. Colin is not presently serving as a Director of the
Company, but has been nominated for election as a member of the
Board of Directors. Shares represented by the enclosed proxy will
be voted "FOR" the election as Directors of the four (4) nominees
named below unless authority is withheld. The proxies cannot be
voted for a greater number of persons than the number of nominees
named herein.
Although there is no formal procedure for stockholders to recommend
nominees for the Board of Directors, the Nominating Committee will
consider such recommendations if received one hundred twenty (120)
days in advance of the Annual Meeting of Stockholders. Such
recommendations should be addressed to the Nominating Committee at
the address of the Company and provide all information relating to
such person that the stockholder desires to nominate that is required
to be disclosed in solicitation of proxies pursuant to Regulation
14A under the Exchange Act.
<TABLE>
<CAPTION>
Nominees
The following sets forth, as of the date hereof, information
concerning the four (4) nominees for election as Directors of the
Company:
Principal Occupation and
Director/Nominee Other Information
______________________ _____________________________________
<S> <C>
Dr. Louis F. Centofanti Dr. Centofanti has served as Chairman
Chairman of the Board of the Board of the Company since he
and Director since 1991 joined the Company in February, 1991.
Age: 53 Dr. Centofanti also served as
President and Chief Executive
Officer of the Company from
February, 1991 until September,
1995, at which time Mr. Robert W.
Foster, Jr. was elected as Chief
Executive Officer. Upon the
resignation of Mr. Foster in March,
1996, as President and Chief
Executive Officer of the Company,
Dr. Centofanti was again elected to
serve as President and Chief
Executive Officer of the Company.
From 1985 until joining the Company,
Dr. Centofanti served as Senior Vice
President of USPCI, Inc. ("USPCI"),
a large integrated hazardous waste
management company, where he was
responsible for managing the
treatment, reclamation and technical
groups within the company. In 1981,
he founded PPM, Inc., a hazardous
waste management company
specializing in the treatment of PCB
contaminated oils, which was sold to
USPCI in 1985. From 1978 to 1981,
Dr. Centofanti served as Regional
Administrator of the Department of
Energy for the southeastern region
of the United States.
Dr. Centofanti has a Ph.D. and a
M.S. in Chemistry from the
University of Michigan, and a B.S.
in Chemistry from Youngstown State
University.
Mark A. Zwecker Mr. Zwecker has served as a Director
Director since 1990 of the Company since its inception in
Age: 45 December, 1990. Mr. Zwecker
resigned his position as Secretary
of the Corporation in June, 1996, at
which time Richard T. Kelecy was
appointed to this position.
Mr. Zwecker resigned his position as
Treasurer and Chief Financial
Officer of the Company in July, 1994
and is currently Vice President of
Finance and Administration for
American Combustion, Inc., a
position he previously held from
1986 to 1990. In 1983, Mr. Zwecker
participated as a founder with
Dr. Centofanti in the start up of
PPM, Inc. He remained with PPM,
Inc. until its acquisition in 1985
by USPCI. Mr. Zwecker has a B.S. in
Industrial and Systems Engineering
from the Georgia Institute of
Technology and an M.B.A. from
Harvard University.
Steve Gorlin Mr. Gorlin has served as a Director
Director since 1992 of the Company since October, 1992.
Age: 58 Mr. Gorlin is a private investor
working with several technology-
based companies. He is presently
Chairman of the Board of Directors
of EntreMed, Inc. Mr. Gorlin is a
co-founder and served as President
and Chairman of the Board of
Directors of CytRx Corporation until
1990.
Jon Colin Mr. Colin is a nominee for Director
Nominee of the Company. He is a financial
Age: 40 consultant for a variety of
technology-based companies. From
1990 to 1996, Mr. Colin served as
President and Chief Executive
Officer for Environmental Services
of America, Inc., an environmental
services company traded on the
NASDAQ. Mr. Colin has a B.S. degree
in Accounting from the University of
Maryland.
</TABLE>
Approval of each nominee for election to the Board of Directors will
require the affirmative vote of a plurality of the votes cast by the
holders of the Common Stock of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE ELECTION OF THE FOUR (4) NOMINEES AS DIRECTORS OF THE COMPANY.
Committees and Meetings of the Board of Directors
During 1995, the Board of Directors held eight (8) meetings. No
Director attended fewer than seventy-five percent (75%) of the
aggregate number of meetings held by the Board of Directors and the
committees on which he served during 1995. The Board of Directors
has an Audit Committee, a Compensation and Stock Option Committee
and a Nominating Committee.
The Audit Committee reviews proposals of the Company's independent
auditors regarding annual audits, recommends the engagement or
discharge of auditors, reviews recommendations of such auditors
concerning accounting principles and the adequacy of internal
controls and accounting procedures and practices, reviews the scope
of the annual audit, approves or disapproves each professional
service or type of service other than standard auditing services to
be provided by the auditors, and reviews and discusses the audited
financial statements with the auditors. The members of the Audit
Committee during a portion of 1995 were Mark A. Zwecker, John C.
Page and Gerald J. Gagner. Because Mr. Page did not stand for
reelection as a Director in 1995 and Mr. Gagner resigned from the
Board in December 1995, the Board of Directors appointed Mr. Gorlin
to the Audit Committee. The Board of Directors will appoint another
member of the Board after the Meeting. The Audit Committee held one
(1) meeting in 1995.
The Compensation and Stock Option Committee reviews and recommends
to the Board of Directors the compensation and benefits of all
officers of the Company and reviews general policy matters relating
to compensation and benefits of employees of the Company. The
members of the Compensation and Stock Option Committee during 1995
were Gerald J. Gagner and Steve Gorlin. However, Mr. Gagner
resigned from the Board in December 1995. After the Meeting, the
Board of Directors will appoint another member of the Board to
replace Mr. Gagner on this Committee. The Compensation and Stock
Option Committee held one (1) meeting in 1995.
In January, 1995, the Company created a Nominating Committee to
recommend to the Board of Directors the nominees for election as
Directors of the Company. Members of the Nominating Committee are
Steve Gorlin and Mark A. Zwecker. The Nominating Committee held one
(1) meeting in 1995.
<PAGE>
Compensation of Directors
In 1995, the four outside Directors of the Company, which were
subsequently reduced to two pursuant to the Annual Meeting in
November, 1995, received, in addition to reimbursement of their
expenses for attending meetings of the Board, annual fees for their
services rendered to the Company as Directors ("Director Fees") in
the aggregate amount of $45,000, with 65% of such Director Fees
payable in shares of Common Stock based on the fair market value of
such stock determined on the business day immediately preceding the
date that the fee is due and the balance payable in cash. The
Director Fees in 1995 were based on monthly payments of $1,000 for
each month of service. The outside Directors do not receive
additional compensation for committee participation or special
assignments other than reimbursement of expenses. During 1995, Mark
A. Zwecker, who is a Director of the Company, but not an employee,
also held the position of Secretary of the Company. Although Mr.
Zwecker was not an employee of the Company during 1995, he did not
receive compensation as an outside Director during 1995 because he
was serving as the Secretary of the Company. During June 1995, the
Company entered into a consulting arrangement ("Zwecker Consulting
Agreement") with Mr. Zwecker, and, under the terms thereof, paid him
$1,500 per month. Mr. Zwecker agreed to accept, in lieu of 65% of
the consulting fee due at any time, to be issued a number of shares
of Common Stock having a value equal to 65% of the fee based on the
fair market value of such stock determined on the business day
immediately preceding that date such fee is due. Under such
arrangements, during 1995, Mr. Zwecker received, or is to receive,
from the Company $3,675 and 3,046 shares of Common Stock for serving
as a Director, and pursuant to the terms of the Zwecker Consulting
Agreement. Effective June 30, 1996, Mr. Zwecker resigned as
Secretary, terminated the Zwecker Consulting Agreement and became
an outside Director. The Company does not compensate the Directors
who also serve as officers or employees of the Company or its
subsidiaries for their service as Directors.
The Company believes that it is important for Directors to have a
personal interest in the success and growth of the Company and for
their interests to be aligned with those of its stockholders.
Therefore, under the Company's 1992 Outside Directors Stock Option
and Incentive Plan ("Outside Directors Plan"), each outside Director
is granted an option to purchase up to 15,000 shares of Common Stock
on the date such Director is initially elected to the Board of
Directors and receives on an annual basis an option to purchase up
to another 5,000 shares of Common Stock, with the exercise price
being the fair market value of the Common Stock on the date that the
option is granted. No option granted under the Outside Directors
Plan is exercisable until after the expiration of six months from
the date the option was granted and no option shall be exercisable
after the expiration of ten (10) years from the date the option is
granted. As of December 31, 1994, options to purchase 90,000 shares
of Common Stock have been granted under the Outside Directors Plan.
During 1995, the Company granted options to purchase 20,000 shares
of Common Stock under the Outside Directors Plan. In addition,
under an amendment to the Outside Directors Plan, approved at the
Annual Meeting of Stockholders held in December, 1994, beginning
January, 1995, each outside Director will, in lieu of 65% of the
fees payable to the outside Director, be issued a number of shares
of Common Stock having a value equal to 65% of the fee payable to
each such Director based on the fair market value of such stock
determined on the business day immediately preceding the date that
the fee is due. The total shares of Common Stock issued, or to be
issued, for 1995 in lieu of fees totalled 12,000. The number of
shares of Common Stock which may be issued, in the aggregate, under
the Outside Directors Plan, either under options or stock awards,
is 250,000 shares, subject to adjustment. The Company is proposing
the adoption by the stockholders of the Third Amendment to the
Outside Directors Plan. This amendment would allow, at the option
of an outside Director, that he receive 100% of his Director Fee
instead of 65% of his Director Fee through the issuance of Common
Stock of the Company. Additionally, under the Third Amendment, the
Common Stock issued to an outside Director in lieu of cash for his
Director Fee or as a stock option would be based on 75% of its fair
market value as of the business day immediately preceding the date
the fee is due or the stock option is granted.
Although Dr. Centofanti is not compensated for his services provided
as a Director of the Company, Dr. Centofanti is compensated for his
services rendered to the Company as an officer of the Company. See
"Executive Compensation--Employment Contracts, Termination of
Employment and Change in Control Arrangements."
Compensation Committee Interlocks and Insider Participation
During 1995, the Compensation and Stock Option Committee for the
Company's Board of Directors was composed of Gerald J. Gagner and
Steve Gorlin. Neither Mr. Gagner nor Mr. Gorlin is or has been an
officer or employee of the Company. Mr. Gagner resigned from the
Board in December 1995.
<PAGE>
Certain Relationships
There are no family relationships between any existing Director,
executive officer, or person nominated or chosen by the Company to
become a Director or executive officer. Dr. Centofanti is the only
Director who is an employee of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the regulations promulgated thereunder
require the Company's executive officers and Directors and
beneficial owners of more than ten percent (10%) of any equity
security of the Company registered pursuant to Section 12 of the
Exchange Act to file reports of ownership and changes of ownership
of the Company's equity securities with the Securities and Exchange
Commission, and to furnish the Company with copies of all such
reports. Based solely on a review of the copies of such reports
furnished to the Company and information provided to the Company,
the Company believes that during 1995 none of the executive officers
and Directors of the Company and beneficial owners of more than ten
percent (10%) of the Company's Common Stock failed to timely file
reports under Section 16(a), except that (i) a Form 3 was not timely
filed for Jeffrey H. Sherman upon becoming an executive officer of
the Company; (ii) a Form 4 was not timely filed for Robert W.
Foster, Jr. upon the grant of an option to purchase 15,000 shares
of the Company's Common Stock in July 1995; and (iii) Forms 5 filed
in lieu of the Form 3 and Form 4 for Messrs. Foster and Sherman,
filed in 1996, were filed late.
EXECUTIVE COMPENSATION
Report for the Compensation and Stock Option Committee
The Compensation and Stock Option Committee of the Board of
Directors is responsible for reviewing and approving the Company's
compensation policies and the compensation paid to its executive
officers, including the executive officers named below. The
Company's compensation program for its executive officers, including
the Chief Executive Officer, is generally not formalized but is
designed to provide levels of compensation required to assist the
Company in attracting and retaining qualified executive officers.
The Compensation and Stock Option Committee attempts to set an
executive officer's compensation at a level which is similar to such
officer's peers in the Company's industry consistent with the size
of the Company. Generally, executive officer compensation,
including that of the Chief Executive Officer, is not directly
related to the Company's performance. Instead, the Compensation
Committee has a philosophy which recognizes individual initiative
and achievement in arriving at an officer's compensation. The
executive compensation program is comprised of salary, cash
incentives and stock options. The following is a discussion of each
of the elements of the executive compensation program.
Salary
Generally, base salary for each executive officer is similar to
levels within the industry and comparable to the level which could
be attained for equal positions elsewhere, but consistent with the
size of the Company. Also taken into account are benefits, years
of service, responsibilities, Company growth, future plans and the
Company's current ability to pay. Dr. Centofanti had a three (3)
year employment agreement with the Company that expired in June,
1995. The Company has not entered into a new employment agreement
with Dr. Centofanti as of October, 1996. Under the expired
contract, Dr. Centofanti received an annual salary of $75,000, which
was increased by the Board of Directors to an annual salary of
$125,000 in October, 1994, which salary continued following the
June, 1995, expiration of Dr. Centofanti's employment agreement
until December, 1995, when Dr. Centofanti's salary was reduced to
$65,000. See "--Employment Contracts, Termination of Employment and
Change in Control Arrangements." Robert W. Foster, Jr. was
compensated pursuant to the terms of an employment agreement prior
to his resignation from the Company, which compensation was
subsequently increased from $110,000 to $135,000 upon being elected
as Chief Executive Officer and President of the Company. Mr. Foster
resigned as an officer and Director of the Company in March, 1996.
See "--Employment Contracts, Termination of Employment and Change
in Control Arrangements."
<PAGE>
Cash Incentives
The cash incentive plan is a program through which cash bonuses may
be paid, on an annual basis, to reward significant corporate
accomplishments and individual initiatives demonstrated by executive
officers during the prior fiscal year. The amount of cash bonus is
determined by the Compensation Committee.
Stock Options
The Company's 1991 Performance Equity Plan and 1993 Nonqualified
Stock Option Plan were adopted for the purpose of promoting the
interests of the Company and its stockholders by attracting and
retaining executive officers and other key employees of outstanding
ability. Options are granted to eligible participants based upon
their potential impact on corporate results and on their individual
performance. Generally, options are granted at market value, vest
over a number of years, and are generally dependent upon continued
employment. The Compensation and Stock Option Committee believes
that the grant of time-vested options provides an incentive that
focuses the executive officers' attention on managing the Company
from the perspective of owners with an equity stake in the Company.
It further motivates executive officers to maximize long-term growth
and profitability because value is created in the options only as
the Company's stock price increases after the option is granted.
The Compensation and Stock Option Committee
Steve Gorlin
<TABLE>
<CAPTION>
Summary Compensation Table
The following table sets forth all compensation for services to the
Company and its subsidiaries for the fiscal years ended December 31,
1995, 1994 and 1993 earned by or awarded or paid to the persons who
were the Chairman and Chief Executive Officers of the Company during
1995.
Annual Compensation
_______________________________________
Other
Name and Annual
Principal Compen-
Position Year Salary($) Bonus ($) sation ($)
_____________ ______ __________ __________ ___________
<S> <C> <C> <C> <C>
Dr. Louis F. 1995 120,000 - -
Centofanti(1) 1994 80,000 - -
Chairman of 1993 75,000 - -
the Board and
Chief Execu-
tive Officer
Robert W. 1995 130,000 5,000 -
Foster, Jr.(2)
President and
Chief Execu-
tive Officer
Long-Term
Compensation
___________________________
Restricted All
Stock Options/ Other
Award(s) SARs Compen-
($) (#) sation ($)
____________ ________ __________
<C> <C> <C>
- 20,000 -
- - -
- - -
- 78,000(3) -
____________________
<FN>
(1) Dr. Centofanti, the Company's Chairman of the Board, Chief
Executive Officer and President received compensation pursuant
to an employment agreement, which provided for annual
compensation to Dr. Centofanti of $75,000 beginning June 1992
and expiring in June 1995. Effective October 1994, Dr.
Centofanti was awarded a salary increase to $125,000, which
was subsequently reduced to $65,000 in December 1995. Dr.
Centofanti's current annual salary is $65,000. Dr. Centofanti
also served as President and Chief Executive Officer of the
Company during 1994 and until September 1995, when Robert W.
Foster was elected as President and Chief Executive Officer of
the Company. At such time, Dr. Centofanti continued to serve
as Chairman of the Board of the Company. Upon Mr. Foster's
resignation, Dr. Centofanti resumed the positions of President
and Chief Executive Officer, Jr. effective March 15, 1996, and
continues as Chairman of the Board.
<PAGE>
(2) Mr. Foster resigned from his positions of President and Chief
Executive Officer of the Company effective March 15, 1996, and
the parties agreed to terminate his employment agreement
effective as of the date of such termination. The Company and
Mr. Foster simultaneously entered into a consulting agreement.
See "--Employment Contracts, Termination of Employment and
Change in Control Arrangements" and "--Certain Relationships
and Related Transactions."
(3) These options terminated upon Mr. Foster's resignation and are
no longer outstanding.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Options/SAR Grants in Last Fiscal Year
The following table sets forth the information concerning individual
grants of stock options and SARs made during the last completed
fiscal year to each of the executive officers named in the summary
compensation table.
Individual Grants
_________________________________________________________________
% of Total
Number of Options/
Securities SARs
Underlying Granted to Exercise
Options/ Employees or Base Expir-
SARs in Fiscal Price ation
Name Granted (#) Year ($/Sh) Date
________________________ ___________ ___________ ________ _______
<S> <C> <C> <C> <C>
Dr. Louis F. Centofanti 20,000 9.6% $2.88 1/10/05
Robert W. Foster, Jr.(1) 63,000 30.3% $2.88 1/10/05
15,000 7.2% $2.47 7/19/05
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Option Term
______________________
5% ($) 10% ($)
_______ _________
<C> <C>
$ 36,000 $ 92,000
$114,000 $289,000
23,000 59,000
_______________________
<FN>
(1) Mr. Foster's options terminated upon his resignation as
President and Chief Executive Officer of the Company,
effective March 15, 1996.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1995 and Fiscal Year-End Option
Values
The following table sets forth information concerning each exercise
of stock options during the last completed fiscal year by each of
the executive officers named in the Summary Compensation Table and
the fiscal year-end value of unexercised options:
Number of
Shares Unexercised
Acquired Options at
on Value Year-End($)(2)
Exercise Realized ___________________
(#)(1) ($)(1) Exer- Unexer-
cisable cisable
_________ _______ ________ _______
<S> <C> <C> <C> <C>
Dr. Louis F. Centofanti 0 $0 30,456 19,307
Robert W. Foster, Jr.(3) 0 $0 28,000 127,000
Value of Unexercised
in-the-Money Options
at Fiscal Year-End($)(2)
_______________________
Exer- Unexer-
cisable cisable
________ __________
<C> <C>
$0 $0
$0 $0
_______________________
<FN>
(1) No options were exercised during 1995.
(2) Values have been calculated based on the closing bid price
of the Company's Common Stock reported on the National
Association of Securities Dealers Automated Quotation System
("NASDAQ") on December 31, 1995, which was $1.188 per share.
The actual value realized by a named executive officer on
<PAGE>
the exercise of these options depends on the market value
of the Company's Common Stock on the date of exercise. As
of December 31, 1995, the unexercised options were not in
the money since the fair market value of the underlying
securities was less than the exercise price of such options,
and, as a result, were not in the money options.
(3) Mr. Foster's options terminated upon his resignation as
President and Chief Executive Officer of the Company,
effective March 15, 1996.
</FN>
</TABLE>
401(k) Plan
The Company has adopted the Perma-Fix Environmental Services, Inc.
401(k) Plan which is intended to comply under Section 401 of the
Internal Revenue Code and the provisions of the Employee Retirement
Security Act of 1974 (the "401(k) Plan"). All full-time employees
of the Company and its subsidiaries who have attained the age of
twenty-one (21) are eligible to participate in the 401(k) Plan.
Participating employees may make annual pre-tax contributions to
their accounts up to fifteen percent (15%) of their compensation,
up to a maximum amount as limited by law. The Company, at its
discretion, may make matching contributions based on full-time
employees' elective contributions. Company contributions vest
twenty percent (20%) after two (2) years, forty percent (40%) after
three (3) years, sixty percent (60%) after four (4) years, eighty
percent (80%) after five (5) years, and are one hundred percent
(100%) vested thereafter. As of December 31, 1995, the Company has
elected not to provide any matching contributions. Distributions
generally are payable in lump sums upon termination, retirement,
death or disability.
Employment Contracts, Termination of Employment and Change in
Control Arrangements
Dr. Centofanti had a three (3) year employment agreement with the
Company that expired in June, 1995. The Company has not entered
into a new employment agreement with Dr. Centofanti as of October,
1996. Under the expired contract, Dr. Centofanti received an annual
salary of $75,000, which was increased by the Board of Directors to
an annual salary of $125,000 in October, 1994, which salary
continued following the June, 1995, expiration of Dr. Centofanti's
employment agreement until December, 1995, when Dr. Centofanti's
salary was reduced to $65,000. For a period of one (1) year
following termination of his employment with the Company, Dr.
Centofanti is prohibited from engaging in activities or undertaking
employment with any company or business in competition with the
Company. Dr. Centofanti is entitled to participate in the Company's
1991 Performance Equity Plan and the Company's 1993 Nonqualified
Stock Option Plan, in addition to all other benefits and plans which
the Company may from time to time provide its employees.
In June, 1994, the Company entered into a three (3) year employment
agreement with Robert W. Foster, Jr. Under the Agreement, Mr.
Foster was to receive an annual salary of $110,000, which was
subsequently increased to $135,000 during 1995, as determined by the
Compensation and Stock Option Committee. However, in conjunction
with the Company's restructuring program, the Company and Mr. Robert
W. Foster, Jr. agreed to Mr. Foster's resignation as President,
Chief Executive Officer and Director of the Company, and to
termination of Mr. Foster's employment agreement with the Company,
effective March 15, 1996. The Company agreed to severance benefits
of $30,000 in cash plus continuation of certain employee benefits.
In addition, the Company and Mr. Foster entered into a consulting
agreement with a term of three (3) months and compensation of a
minimum of approximately $171,000 payable in the form of Common
Stock, par value $.001, of the Company. Based upon a stock price
at the close of business on April 1, 1996, the Company issued
approximately 152,000 shares of Common Stock to Mr. Foster relative
to this agreement. The fair market value of the 152,000 shares
exceeded $171,000 on the ninetieth (90th) day after March 15, 1996
and, as a result, Mr. Foster reimbursed to the Company approximately
$41,000 of such excess proceeds. Mr. Foster agreed to certain non-
competition conditions for a period of one (1) year following the
date of such consulting agreement.
The Company's 1991 Performance Equity Plan and the 1993 Nonqualified
Stock Option Plan (collectively, the "Plans") provide that in the
event of a change in control (as defined in the Plans) of the
Company, each outstanding option and award granted under the Plans
shall immediately become exercisable in full notwithstanding the
vesting or exercise provisions contained in the stock option
agreement. As a result, all outstanding stock options and awards
granted under the Plans to the executive officers of the Company
shall immediately become exercisable upon such a change in control
of the Company.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1994, the Company made a private offering to accredited
investors (the "Private Placement") of units ("Units"), each Unit
consisting of 10,000 shares of Common Stock and 20,000 Class B
Warrants to Purchase Common Stock (the "Class B Warrants"). The
Class B Warrants are for a term of five (5) years from June 17,
1994. Each Class B Warrant entitles the holder thereof to purchase
one (1) share of Common Stock for $5.00. The Class B Warrants are
subject to certain antidilution provisions. Under certain
conditions, the Class B Warrants are redeemable by the Company at
a redemption price of $0.05 per Class B Warrant, provided that the
market price of the Common Stock shall exceed an average price of
$8.00 per share. In connection with the Private Placement, the
Company issued to D. H. Blair Investment Banking Corporation ("Blair
Banking"), a beneficial owner of more than five percent (5%) of the
Common Stock, a warrant to purchase up to 202,500 shares of Common
Stock (the "Blair Warrant") as a result of Blair Banking having
provided names of accredited investors to the Company that resulted
in sales of more than $1,000,000 in Units in the Private Placement
and paid to Blair Banking $202,500 in connection with such sales under
the Private Placement. The Blair Warrant is for a term of five (5)
years and provides for an exercise price of $3.625 per share. The
Blair Warrant is subject to certain antidilution provisions. Also,
in connection with the Private Placement, Dr. Louis F. Centofanti,
Chairman of the Board and Chief Executive Officer of the Company,
purchased two Units from the Company, which consisted of 20,000
shares of Common Stock and Class B Warrants to purchase up to 40,000
shares of Common Stock. The purchase price paid for the two Units
was $60,000.
In September, 1996, the Company issued a warrant ("Gorlin Warrant")
to Steve Gorlin, a Director of the Company, for services rendered,
other than those rendered as a Director, to the Company. The Gorlin
Warrant allows the holder to purchase 200,000 shares of Common Stock
of the Company for $1.75 per share from January 1, 1997, until
September 15, 1999. The Gorlin Warrant is subject to certain
antidilution provisions.
In March, 1996, the Company entered into a Stock Purchase Agreement
with Dr. Centofanti, whereby the Company sold, and Dr. Centofanti
purchased, 133,333 shares of the Company's Common Stock for 75% of
the closing bid price of such Common Stock as quoted on the NASDAQ
on the date that Dr. Centofanti notified the Company of his desire
to purchase such stock, as authorized by the Board of Directors of
the Company. During February 1996, Dr. Centofanti tendered to the
Company $100,000 for such 133,333 shares by delivering to the
Company $86,028.51 and forgiving $13,971.49 that was owing to Dr.
Centofanti by the Company for expenses incurred by Dr. Centofanti
on behalf of the Company. On the date that Dr. Centofanti notified
the Company of his desire to purchase such shares, the closing bid
price as quoted on the NASDAQ for the Company's Common Stock was
$1.00 per share.
In June, 1996, the Company entered into a second Stock Purchase
Agreement with Dr. Centofanti, whereby the Company sold, and Dr.
Centofanti purchased, 76,190 shares of the Company's Common Stock
for 75% of the closing bid price of such Common Stock as quoted on
the NASDAQ on the date that Dr. Centofanti notified the Company of
his desire to purchase such stock (closing bid of $1.75 on June 11,
1996), as previously authorized by the Board of Directors of the
Company. Dr. Centofanti tendered to the Company $100,000 for such
76,190 shares of Common Stock.
In March, 1996, Robert W. Foster, Jr. resigned as President, Chief
Executive Officer and a Director of the Company, and as an officer
and Director of the Company's subsidiaries and terminated his
employment agreement with the Company pursuant to the terms of a
Termination and Severance Agreement (the "Termination Agreement")
between the Company and Mr. Foster, and effective as of the date of
such termination, the Company and Mr. Foster entered into a
consulting agreement dated March 15, 1996. See "Executive
Compensation--Employment Contracts, Termination of Employment and
Change in Control Arrangements" for further discussion.
In September, 1996, the Company issued a warrant to Blair Banking
("Blair Warrant Two") for investment banking services provided to
the Company. The Blair Warrant Two allows the holder to purchase
200,000 shares of Common Stock of the Company for $1.75 per share
from January 1, 1997, until September 15, 1999. The Blair Warrant
Two is subject to certain antidilution provisions.
<PAGE>
During February, 1996, the Company entered into two (2) different
offshore transactions with RBB Bank Aktiengesellschaft ("RBB Bank").
In the first transaction, the Company sold to RBB Bank 1,100 shares
of a newly created Series 1 Class A Preferred Stock, par value $.001
("Series 1 Preferred"), for $1,000 per share, for an aggregate
purchase price of $1,100,000, pursuant to an Offshore Securities
Subscription Agreement, dated February 9, 1996. In the second
transaction, the Company sold to RBB Bank 330 shares of a newly
created Series 2 Class B Preferred Stock, par value $.001 ("Series
2 Preferred"), for $1,000 per share for an aggregate sales price of
$330,000, pursuant to an Offshore Securities Subscription Agreement,
dated February 22, 1996. The Series 1 Preferred and the Series 2
Preferred are collectively referred to herein as "RBB Preferred
Stock." In connection with both transactions, the Company paid
placement fees totaling $209,000. The RBB Preferred Stock was
convertible at any time, commencing forty-five (45) days after
issuance, into shares of the Company's Common Stock at a conversion
price equal to the aggregate value of the shares of the RBB
Preferred Stock being converted, together with all accrued but
unpaid dividends thereon, divided by the "Average Stock Price" per
share (the "Conversion Price"). The Average Stock Price was defined
as the lesser of (i) seventy percent (70%) of the average daily
closing bid prices of the Common Stock for the period of five (5)
consecutive trading days immediately preceding the date of
subscription by the holder or (ii) seventy percent (70%) of the
average daily closing bid prices of the Common Stock for a period
of five (5) consecutive trading days immediately preceding the date
of conversion of the RBB Preferred Stock. The RBB Preferred Stock
entitled the holder thereof to receive dividends accruing at the
rate per share of five percent (5%) per annum of consideration paid
for each share of the RBB Preferred Stock, or $50.00 per annum,
payable in arrears at the rate of $12.50 for each full calendar
quarter. Dividends on the RBB Preferred Stock were paid at the
election of the Company by the issuance of shares of Common Stock.
During 1996, all outstanding shares of the RBB Preferred Stock were
converted into approximately 1,970,000 shares of Common Stock of the
Company, which includes approximately 17,000 shares issued by the
Company in satisfaction of accrued dividends. Pursuant to the
Subscription Agreement for the issuance of Series 3 Class C
Convertible Preferred Stock, as discussed below, 920,000 of these
shares of converted Common Stock were purchased by the Company at
a purchase price of $1,770,000. As a result of such conversions,
the RBB Preferred Stock is no longer outstanding.
During July, 1996, the Company issued 5,500 shares of newly-created
Series 3 Class C Convertible Preferred Stock, par value $.001 per
share ("Series 3 Preferred") at a price of $1,000 per share, for an
aggregate sales price of $5,500,000, and paid placement and closing
fees as a result of such transaction of approximately $360,000. The
transaction was pursuant to a Subscription and Purchase Agreement
("Subscription Agreement") between the Company and RBB Bank and
included the Company granting to RBB Bank two Warrants to purchase
up to 2,000,000 shares of the Company's Common Stock, with 1,000,000
shares of Common Stock exercisable at $2.00 per share and 1,000,000
shares of Common Stock exercisable at $3.50 per share (collectively,
the "RBB Warrants"). The RBB Warrants are for a term of five (5)
years and may be exercised at any time after December 31, 1996, and
until the end of the term of such Warrants. The Series 3 Preferred
is not entitled to any voting rights, except as required by law.
Dividends on the Series 3 Preferred accrue at a rate of six percent
(6%) per annum, payable semi-annually as and when declared by the
Board of Directors, and such dividends are cumulative. Dividends
shall be paid, at the option of the Company, in the form of cash or
Common Stock of the Company. If the Dividends are paid in Common
Stock, each share of outstanding Series 3 Preferred shall receive
shares of Common Stock equal to the quotient of (i) six percent (6%)
of $1,000 divided by (ii) the average closing bid quotation of the
Common Stock as reported on the over-the-counter market, or the
closing sale price if listed on a national securities exchange, for
the five (5) trading days immediately prior to the applicable
dividend declaration date.
RBB Bank may convert the Series 3 Preferred into Common Stock of the
Company as follows: (i) up to 1,833 shares on or after October 1,
1996; (ii) an additional 1,833 shares on or after November 1, 1996;
and (iii) the balance on or after December 1, 1996. The conversion
price shall be the product of (i) the average closing bid quotation
for the five (5) trading days immediately preceding the conversion
date multiplied by (ii) seventy-five percent (75%). The conversion
price shall be a minimum of $.75 per share or a maximum of $1.50 per
share, with the minimum conversion price to be reduced by $.25 per
share each time, if any, after July 1, 1996, the Company sustains
a net loss, on a consolidated basis, in each of two (2) consecutive
quarters ("Minimum Conversion Price Reduction"). For the purpose
of determining whether the Company has had a net loss in each of two
(2) consecutive quarters, at no time shall a quarter that has
already been considered in such determination be considered in any
subsequent determination. Subject to the closing bid price of the
Company's Common Stock at the time of conversion and the other
conditions which could increase the number of shares to be issued
upon conversion, the Series 3 Preferred, if all of the shares of
Series 3 Preferred were converted, such could be converted into
<PAGE>
between approximately 3,700,000 and approximately 7,300,000 shares
of Common Stock, or more pursuant to the Minimum Conversion Price
Reduction. See "Certain Beneficial Owners--Potential Change in
Control." The Common Stock issuable on the conversion of the Series
3 Preferred is subject to certain registration rights pursuant to
the Subscription Agreement, pursuant to which a Form S-3
Registration Statement was filed by the Company with the Securities
and Exchange Commission during October 21, 1996.
Under the terms of the Subscription Agreement, from the net proceeds
of the sale of the Series 3 Preferred (approximately $5,100,000)
received by the Company after payment of placement fees to brokers,
legal fees and other expenses, the Company purchased from RBB Bank
920,000 shares of Common Stock of the Company acquired by RBB Bank
upon conversion of the Company's Series 1 Preferred and Series 2
Preferred for $1,770,000.
In June, 1995, the Company entered into a consulting agreement
("Zwecker Consulting Agreement") with Mark A. Zwecker, a Director,
to provide certain financial consulting services to the Company.
Under this arrangement, the Company paid to Mr. Zwecker a consulting
fee of $1,500 per month. Mr. Zwecker agreed to accept, in lieu of
65% of the consulting fee due at any time, to be issued a number of
shares of Common Stock having a value equal to 65% of the fee based
on the fair market value of such stock determined on the business
day immediately preceding that date such fee is due. The consulting
agreement was terminated effective June 30, 1996, pursuant to Mr.
Zwecker's resignation as Secretary and the corresponding appointment
of Richard Kelecy as the Company's Secretary. As a result of the
above, Mr. Zwecker will receive compensation consistent with all
other outside Directors. From January, 1995, through September 30,
1996, Mr. Zwecker received, or is to receive, from the Company
$7,875.00 and 8,947 shares of Common Stock under the Zwecker
Consulting Agreement and the above-described arrangements.
In June, 1994, the Company acquired from Quadrex Corporation
("Quadrex") and its wholly-owned subsidiary, Quadrex Environmental
Company ("QEC"), three businesses ("Quadrex Acquisitions"). Quadrex
and QEC are collectively referred to as "Quadrex." As
consideration for the Quadrex Acquisitions, the Company assumed
certain debts of Quadrex and QEC and issued to Quadrex 575,659
shares of the Company's Common Stock and agreed to issue to Quadrex
up to an additional 1,479,413 shares of Common Stock upon certain
conditions being met, with such balance being subject to reductions
under certain conditions. Subsequent to the closing of the Quadrex
Acquisitions, the Company issued to Quadrex during 1995 an
additional 94,377 shares of Common Stock upon certain conditions
being met and certain disputes and disagreements had arisen among
the parties as to whether under the terms of the Quadrex
Acquisitions the conditions required for delivery of the balance of
such shares have been met, and, even if conditions had been met, the
amount of such shares subject to reduction. In February, 1995,
Quadrex filed for federal bankruptcy protection. During 1995 and
subsequent to Quadrex's bankruptcy, the Company and Quadrex entered
into a Settlement Agreement resolving their differences in
connection with the Quadrex Acquisitions without resorting to
litigation. Under the terms of the Settlement Agreement, the
Company issued to Quadrex in November 1995 an additional 1,041,000
shares of Common Stock, in full and complete settlement of any and
all claims which the parties may have against each other relating
to the Quadrex Acquisitions.
The Company believes that each of the transactions set forth above
involving affiliates, officers or Directors of the Company was or
is on terms at least as favorable to the Company as could have been
obtained from an unaffiliated third party. The Company has adopted
a policy that any transactions or loans between the Company and its
Directors, principal stockholders or affiliates must be approved by
a majority of the disinterested Directors of the Company and must
be on terms no less favorable to the Company than those obtainable
from unaffiliated third parties.
The Company acquired Perma-Fix of Memphis, Inc., a subsidiary of the
Company (f/k/a American Resource Recovery Corporation ["ARR"]),
located in Memphis, Tennessee ("PFM"), in December, 1993, from
Billie Kay Dowdy ("Dowdy"), who was the sole stockholder of PFM
immediately prior to such acquisition, and, in connection therewith,
issued to Dowdy 601,500 shares of Common Stock, which represented
more than five percent (5%) of the Company's outstanding shares of
Common Stock. During 1996, Dowdy ceased being the beneficial owner
of more than five percent (5%) of the Company's outstanding shares
of Common Stock. In connection with such acquisition, Ms. Dowdy
agreed to defend, indemnify and hold harmless the Company and PFM
under certain conditions. During September, 1994, PFM was sued by
Community First Bank ("Community First") to collect a note in the
principal sum of $341,000 that was allegedly made by ARR to CTC
Industrial Services, Inc. ("CTC") in February, 1987 (the "Note"),
and which was allegedly pledged by CTC to Community First in
<PAGE>
December, 1988, to secure certain loans to CTC. This lawsuit,
styled Community First Bank v. American Resource Recovery
Corporation, was instituted on September 14, 1994, and is pending
in the Circuit Court, Shelby County, Tennessee. The Company was not
aware of the Note nor its pledge to Community First at the time of
the Company's acquisition of PFM in December, 1993. The Company has
filed a third party complaint against Dowdy in the lawsuit to defend
and indemnify the Company and PFM from and against this action under
the terms of the agreement relating to the Company's acquisition of
PFM. Dowdy has agreed to indemnify and defend the Company and PFM
under certain conditions. The Company intends to vigorously defend
itself in connection with this lawsuit.
In May 1995, PFM became aware that the U.S. District Attorney for
the Western District of Tennessee and the Department of Justice were
investigating certain prior activities of W. R. Drum Company, its
successor, First Southern Container Company, and any other facility
owned or operated, in whole or in part, by Johnnie Williams, which
activities were generally prior to the time the Company acquired
PFM. PFM used W. R. Drum Company to dispose of certain of its used
drums. In May 1995, PFM received a Grand Jury Subpoena which
demanded the production of any documents in the possession of PFM
pertaining to W. R. Drum Company, First Southern Container Company,
or any other facility owned or operated, or held in part, by Johnnie
Williams. PFM complied with the Grand Jury Subpoena. Thereafter,
in September of 1995, PFM received another Grand Jury Subpoena for
documents from the Grand Jury investigating W. R. Drum Company,
First Southern Container Company and/or Johnnie Williams. PFM
complied with the Grand Jury Subpoena. In December 1995,
representatives of the Department of Justice advised PFM that it was
also currently a subject of the investigation involving W. R. Drum
Company, First Southern Container Company, and/or Johnnie Williams.
Since that time, however, PFM has had no contact with
representatives of either the United States District Attorney's
office for the Western District of Tennessee or the Department of
Justice, and is not aware of why it is also a subject of such
investigation. In accordance with certain provisions of the
Agreement and the Plan of Merger relating to the prior acquisition
of PFM, on or about January 2, 1996, PFM notified Ms. Billie K.
Dowdy of the foregoing, and advised Ms. Dowdy that the Company and
PFM would look to Ms. Dowdy to indemnify, defend and hold the
Company and PFM harmless from any liability, loss, damage or expense
incurred or suffered as a result of, or in connection with, this
matter.
CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to the shares of
voting securities beneficially owned as of the Record Date by each
person known by the Company to be the beneficial owner of more than
five percent (5%) of any class of the Company's voting securities.
Beneficial ownership by the Company's stockholders has been
determined in accordance with the rules promulgated under Section
13(d) of the Securities Exchange Act of 1934, as amended. A person
is deemed to be a beneficial owner of any securities of which that
person has the right to acquire beneficial ownership of such
securities within 60 days from the Record Date.
Nature of Percent
Name of Title Beneficial of
Beneficial Owner of Class Ownership Class(1)
_____________________________ ________ ___________ ________
<S> <C> <C> <C>
Steve Gorlin(2)(3) Common 608,024(3) 6.33%
D. H. Blair Investment
Banking Corporation(4) Common 498,117(4) 5.16%
Dr. Louis F. Centofanti(2)(5) Common 657,820(5) 6.96%
American Ecology Corporation(6) Common 795,000(6) 8.49%
RBB Bank Aktiengesellschaft(7) Common 4,860,728(7) 36.28%
Preferred 5,500(7) 100.00%
_______________________
<PAGE>
<FN>
(1) In computing the number of shares and the percentage of outstanding
Common Stock "beneficially owned" by a person, the calculations are
based upon 9,366,035 shares of Common Stock issued and outstanding
on the Record Date, plus the number of shares of Common Stock which
such person has the right to acquire beneficial ownership of within
(60) days.
(2) The business address of such person, for the purposes hereof, is c/o
Perma-Fix Environmental Services, Inc., 1940 N.W. 67th Place,
Gainesville, Florida 32653.
(3) Mr. Gorlin has sole voting and investment power over these shares
which include: (i) 363,793 shares held of record by Mr. Gorlin; (ii)
206,701 shares receivable upon exercise of warrants to purchase
Common Stock; and (iii) options to purchase 30,000 shares granted
pursuant to the 1992 Outside Directors Stock Option Plan which are
immediately exercisable; and (iv) 7,530 shares that are to be issued
to Mr. Gorlin within the next 60 days in lieu of 65% of the Director
Fees due to Mr. Gorlin for services as a Director (see "Executive
Compensation -- Compensation of Directors"). Does not include
200,000 shares which Mr. Gorlin has the right to acquire on and
after January 1, 1997, until September 15, 1999, under the terms of
a warrant granted by the Company to Mr. Gorlin in September, 1996.
See "Certain Relationships and Related Transactions."
(4) Includes the following shares: 206,701 shares owned of record by
Blair Banking and an additional 291,416 shares that Blair Banking
has the right to acquire under warrants which are immediately
exercisable. Does not include (i) 570,494 shares which are
beneficially owned by Steve Gorlin and are pledged to J. Morton
Davis and Blair Banking pursuant to a Pledge Agreement, dated June,
1992, or (ii) 200,000 shares which Blair Banking has the right to
acquire on or after January 1, 1997, until September 15, 1999, under
the terms of a warrant granted by the Company to Blair Banking in
September, 1996. See "Certain Relationships and Related
Transactions." Mr. Davis is the sole stockholder and a director of
an entity which is the sole stockholder of Blair Banking. As a
result, Blair Banking and Mr. Davis may be deemed to share the
voting and investment power over the shares owned by Blair Banking
or which Blair Banking has the right to acquire under the warrants.
The address of Blair Banking is 44 Wall Street, New York, New York
10005.
(5) These shares include (i) 571,744 shares held of record by Dr.
Centofanti; (ii) 45,000 shares receivable upon exercise of warrants
to purchase Common Stock; and (iii) options to purchase 33,763
shares granted pursuant to the 1991 Performance Equity Plan and the
1993 Nonqualified Stock Option Plan, which are immediately
exercisable. This amount does not include options to purchase
16,000 shares granted pursuant to the above referenced plans which
are not exercisable within sixty (60) days. Dr. Centofanti has sole
voting and investment power of these shares, except the following
shares for which Dr. Centofanti shares voting and investment power:
4,000 shares and 500 shares receivable upon the exercise of warrants
to purchase Common Stock held by the wife of Dr. Centofanti and
2,500 shares and 313 shares receivable upon the exercise of warrants
to purchase Common Stock held by the son of Dr. Centofanti's wife.
(6) American Ecology Corporation ("AEC") has sole voting and investment
power over these shares. The address for AEC is 5333 Westheimer,
Suite 1000, Houston, Texas 77056-5407.
(7) The outstanding shares of Preferred Stock consist of the Series 3
Preferred that RBB Bank acquired from the Company pursuant to the
Subscription Agreement. The holders of the Series 3 Preferred have
no voting rights, except as required by law. The shares of Common
Stock included as beneficially owned by RBB Bank in this table are
shares that RBB Bank would be entitled to receive upon conversion of
all of the Series 3 Preferred Stock held by RBB Bank (assuming that
the average of the closing bid prices of the Common Stock for the
five (5) trading days prior to conversion equals or exceeds $2.00
per share), and the number of shares of Common Stock noted is based
on the assumption that RBB Bank converted such shares of Series 3
Preferred into the maximum number possible. Does not include (i)
2,000,000 shares of Common Stock that RBB Bank has the right to
acquire upon exercise of the RBB Warrants, which entitle RBB Bank to
purchase 2,000,000 shares of Common Stock after December 31, 1996,
at an exercise price of $2.00 per share for 1,000,000 shares, and
$3.50 a share for 1,000,000 shares, or (ii) shares of Common Stock
that RBB Bank may receive in payment of the accrued dividends on the
Series 3 Preferred. See "Certain Relationships and Related
Transactions" and "--Potential Change in Control." RBB Bank has
advised the Company that it is holding the Preferred Stock on behalf
of 43 clients of RBB Bank and that no client is the beneficial owner
of more than 250 shares of such Preferred Stock. RBB Bank may be
considered to be the beneficial owner of these shares with such
clients. See "Certain Relationships and Related Transactions." RBB
Bank's address is Burgring 16, 8010 Graz, Austria.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Security Ownership of Management
The following table sets forth information as to the shares of
voting securities beneficially owned as of the Record Date by each
Director and nominee and Named Executive Officers of the Company
listed in the Summary Compensation table and all Directors and
executive officers of the Company as a group. Beneficial ownership
by the Company's stockholders has been determined in accordance with
the rules promulgated under Section 13(d) of the Exchange Act. A
person is deemed to be a beneficial owner of any voting securities
for which that person has the right to acquire beneficial ownership
within sixty (60) days from the Record Date. All voting securities
are owned both of record and beneficially unless otherwise
indicated.
Number of Shares
Name of of Common Stock Percentage of
Beneficial Owner Beneficially Owned Common Stock(1)
_____________________________ __________________ _______________
<S> <C> <C>
Dr. Louis F. Centofanti(2)(3) 657,820(3) 6.96%
Richard T. Kelecy(2)(4) 6,000(4) *
Mark A. Zwecker(2)(5) 198,575(5) 2.11%
Steve Gorlin(2)(6) 608,024(6) 6.33%
Jon Colin(7) - -
Directors and Executive 1,470,419(8) 15.10%
Officers as a Group
(4 persons)
* Indicates beneficial ownership of less than one percent (1%).
____________________
<FN>
(1) See footnote (1) of the table under "Security Ownership of Certain
Beneficial Owners."
(2) The business address of such person, for the purposes hereof, is c/o
Perma-Fix Environmental Services, Inc., 1940 N.W. 67th Place,
Gainesville, Florida 32653.
(3) See footnote (5) of the table under "Security Ownership of Certain
Beneficial Owners."
(4) Does not include options to purchase 84,000 shares of Common Stock
granted pursuant to the 1993 Nonqualified Stock Option Plan which
are not exercisable within sixty (60) days.
(5) Mr. Zwecker has sole voting and investment power over these shares
which include (i) 158,746 shares of Common Stock held of record by
Mr. Zwecker; (ii) 14,882 options to purchase Common Stock granted
pursuant to the 1991 Performance Equity Plan; (iii) 1,000 options to
purchase Common Stock pursuant to the 1993 Nonqualified Stock Option
Plan, which are immediately exercisable; (iv) options to purchase
15,000 shares granted pursuant to the 1992 Outside Directors Stock
Option Plan which are immediately exercisable; and (v) 8,947 shares
that are to be issued to Mr. Zwecker in the next 60 days in lieu of
65% of his consulting fee. See "Executive Compensation --
Compensation of Directors." Does not include options to purchase
4,000 shares of Common Stock granted pursuant to the 1993
Nonqualified Stock Option Plan which are not exercisable within
sixty (60) days.
<PAGE>
(6) See footnote (3) of the table under "Security Ownership of Certain
Beneficial Owners."
(7) Mr. Colin is a nominee for election as a Director of the Company.
As of the Record Date, Mr. Colin did not beneficially own any voting
securities of the Company. His address is 13 Meadow Lane, Old
Bridge, New Jersey 08857.
(8) Includes 252,514 shares receivable upon exercise of warrants to
purchase Common Stock and options to purchase 100,645 shares of
Common Stock which are immediately exercisable. Does not include
2,504,000 shares of Common Stock covered by options and warrants
which are not exercisable within sixty (60) days from the Record
Date.
</FN>
</TABLE>
Potential Change in Control
If RBB Bank were to acquire approximately 7,300,000 shares of Common
Stock upon conversion of the Series 3 Preferred, which is the
maximum number of shares of Common Stock that RBB Bank could acquire
upon conversion of the Series 3 Preferred assuming the conversion
price is based on the minimum conversion price of $.75 a share and
as a result of the average of fair market value of the Common Stock
being $1.00 or less within five (5) trading days immediately
preceding the conversion date and assuming such minimum conversion
price is not reduced pursuant to the terms of the Series 3 Preferred
and it exercised all of the RBB Warrants, RBB Bank would own
approximately 10,500,000 shares of Common Stock, or approximately
fifty-three percent (53%) of the outstanding shares of Common Stock
of the Company, assuming no other shares of Common Stock are issued
by the Company, no other warrants or options issued by the Company
are exercised, the Company does not acquire additional shares of
Common Stock as treasury shares and RBB Bank does not dispose of any
such shares. In such event, RBB Bank would have a sufficient number
of voting shares of the Company to result in a change in control of
the Company. See "--Security Ownership of Certain Beneficial
Owners" and "Certain Relationships and Related Transactions."
COMMON STOCK PRICE PERFORMANCE GRAPH
The following Common Stock price performance graph compares the
yearly change in the Company's cumulative total stockholders'
returns on its Common Stock during the years 1992 through 1995, with
the cumulative total return of the NASDAQ Market Index and the
published industry index prepared by Media General and known as
Media General Industry Group 095 Index ("Industry Index") assuming
the investment of $100 on December 31, 1991. Pursuant to Item
402(l)(2) of Regulation S-K, the price performance graph covers only
a four year period rather than a five year period because the Common
Stock was first registered under section 12 of the Exchange Act in 1992.
Due to the constraints of the EDGAR system, the performance graph
in a line graph format) has been omitted. The following table has
been provided to take its place in the EDGAR filing. The following
table compares the yearly percentage change in the cumulative total
stockholder return assuming reinvestment of dividends, if any, of
(i) the Company, (ii) the published industry index of Media General
Industry Group 095 ("Industry Index"), and (iii) the NASDAQ Market
Index ("Broad Market"). The table set forth covers the period from
year-end 1991 through year-end 1995.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
1991 1992 1993 1994 1995
_____ ______ ______ _____ _____
<S> <C> <C> <C> <C> <C>
Company 100 115.38 75.00 48.08 18.27
Industry Ind. 100 99.18 74.46 67.27 84.35
Broad Mkt. 100 102.56 123.02 129.17 167.54
</TABLE>
Assumes $100 invested at year-end 1991 in the Company, the Industry
Index and the Broad Market.
The above Five-Year Total Shareholder Return Graph shall not be
deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933 or the Securities Exchange Act of
1934 (collectively, the "Acts"), except to the extent that the
Company specifically incorporates this information by reference, and
shall not be deemed to be soliciting material or to be filed under
such Acts.
<PAGE>
PROPOSAL 2: APPROVAL OF THE THIRD AMENDMENT TO THE COMPANY'S 1992
OUTSIDE DIRECTORS STOCK OPTION AND INCENTIVE PLAN
General. The 1992 Outside Directors Stock Option and Incentive Plan
(the "Outside Directors Plan"), as adopted and first amended by the
Board of Directors of the Company, was approved by the Company's
stockholders on November 12, 1993. As originally adopted, the
Outside Directors Plan authorized the grant of nonqualified stock
options to each Director of the Company who is not an employee of
the Company ("Eligible Director"), with each Eligible Director
automatically receiving an initial option to purchase 15,000 shares
of Common Stock, and thereafter, on each anniversary of the granting
of the initial option, receiving an option to purchase 5,000 shares
of Common Stock. The exercise price for each such option was, and
will be, the fair market value of the Common Stock on the date of
issuance of the option and each such option will expire ten (10)
years after issuance. The first amendment to the Outside Directors
Plan added a provision requiring that no options granted under the
Outside Directors Plan may be exercised for a period of six (6) months
following the date the option is granted. The second amendment to
the Outside Directors Plan ("Second Amendment") amended a number of
aspects of the Outside Directors Plan, including (i) changing its
name to the "Outside Directors Stock Option and Incentive Plan";
(ii) increasing from 100,000 to 250,000 the number of shares
reserved for issuance under the Outside Directors Plan, and (iii)
providing for, in addition to the granting of options, automatic
issuance to each Eligible Director of a certain number of shares of
Common Stock determined as discussed below under "Grant of Stock
Awards" in lieu of sixty-five percent (65%) of the cash payment of
the fee payable to each Eligible Director for services rendered as
a Director of the Company ("Director Fees"). The Second Amendment
was approved by the Board of Directors on October 6, 1994, and the
stockholders on December 12, 1994. On September 19, 1996, the
Company's Board of Directors approved, subject to stockholder
approval, the third amendment to the Outside Directors Plan ("Third
Amendment") to, among other things, (i) provide that each Eligible
Director shall have the option of receiving one hundred percent
(100%), instead of sixty-five percent (65%), of his Director Fees
in the form of Common Stock of the Company; (ii) provide that the
number of shares of Common Stock to be issued to each Eligible
Director under the Outside Directors Plan ("Stock Award") in lieu of
a cash payment of fees due to an Eligible Director shall be determined
by valuing the Common Stock at seventy-five percent (75%) of the Fair
Market Value of the Common Stock; and (iii) eliminate the restriction
that the Outside Directors Plan may only be changed every six (6) months.
Principal features of the Third Amendment to the Outside Directors
Plan are summarized below, but such summary is qualified in its
entirety by reference to the terms of the Third Amendment, as set
forth in Exhibit "A" to this Proxy Statement. The maximum number
of shares of Common Stock of the Company that may be issued under
the Outside Directors Plan is 250,000 shares (subject to adjustment
as provided in the Outside Directors Plan). Shares of Common Stock
subject to options that are canceled or expired without the delivery
of shares of Common Stock will again be available for awards under
the Outside Directors Plan. The shares of Common Stock to be
delivered under the Outside Directors Plan will be made available
from the authorized and unissued shares of the Company or from
treasury shares.
Eligibility. Each Eligible Director is entitled to receive awards
under the Outside Directors Plan. As of the date of this Proxy
Statement, two (2) persons are eligible to participate in the
Outside Directors Plan. If additional Eligible Directors are added
to the Company's Board of Directors, they will be eligible to
participate in the Outside Directors Plan. In addition to the
current two (2) Eligible Directors, the Company has nominated one
(1) additional non-employee for election as a Director. See
"Election of Directors."
Grant of Options. The Outside Directors Plan provides for the
automatic grant by the Company to each Eligible Director an option
to purchase 10,000 shares of Common Stock on the date the Eligible
Director is initially elected to the Board of Directors. Further,
the Company shall grant to each Eligible Director an option to
acquire an additional 5,000 shares of Common Stock on an annual basis
thereafter. As of the date of this Proxy Statement, options covering
75,000 shares of Common Stock have been granted under the Outside
Directors Plan. The options to be granted, and to be granted, under
the Outside Directors Plan are nonqualified stock options, i.e., they
do not satisfy the requirements to be "incentive stock options" under
Section 422 of the Internal Revenue Code, as amended (the "Code").
The Outside Directors Plan provides that each option granted shall be
granted as follows:
a. Exercise Price. The exercise price of options granted
under the Outside Directors Plan will be the "Fair Market Value"
of the shares of Common Stock subject to the option on the date
the option is granted. Stock purchased upon the exercise of an
option granted under the Outside Directors Plan must be paid in
cash in full at the time of exercise and must be exercised for
not less than one thousand (1,000) shares of Stock unless the
remaining shares that are exercisable are less than one thousand
(1,000) shares.
<PAGE>
b. Terms of Options. No option shall be exercisable until
after the expiration of six (6) months from the date the option
was granted and no option shall be exercisable after the
expiration of ten (10) years from the date the option is granted.
Grant of Stock Awards. The Outside Directors Plan presently
provides for the issuance to each Eligible Director of a number of
shares of Common Stock of the Company having a value equal to sixty-
five percent (65%) of the Director Fee at the then fair market value
of such shares. The balance of the Director Fees are paid in cash.
Under the Third Amendment, an Eligible Director may elect to receive
either sixty-five percent (65%) of the Director Fee in Common
Stock of the Company with the balance paid in cash, or one hundred
percent (100%) of the Director Fee in Common Stock of the Company.
Also under the Third Amendment, the number of shares of Common Stock
of the Company issuable to the Eligible Directors shall be determined
by valuing the Common Stock at seventy-five percent (75%) of its fair
market value on the business day immediately preceding the date that
the Director Fee is due. Neither the provision allowing each Eligible
Director the option of taking one hundred percent (100%) of the
Director Fee in Common Stock, nor the provision valuing the Common
Stock issued to the Eligible Directors at seventy-five percent (75%)
of fair market value were part of the original Outside Directors Plan,
but both are proposed to be added to the Outside Directors Plan under
the Third Amendment. If the Third Amendment had been effective for the
full year of 1995, and each Eligible Director had opted to take sixty-
five percent (65%) of the Director Fee in Common Stock, the Eligible
Directors would have received 15,877 shares of Common Stock, representing
sixty-five percent (65%) of the Director Fees payable in 1995 and based on
seventy-five percent (75%) of the Fair Market Value of the Common
Stock on the day immediately preceding the date on which the
Director Fee was paid. If the Third Amendment had been effective
for the full year of 1995, and each Eligible Director had opted to
take one hundred percent (100%) of the Director Fee in Common Stock,
the Eligible Directors would have received 24,427 shares of Common
Stock, representing one hundred percent (100%) of the Director Fees
payable in 1995, based on seventy-five percent (75%) of the Fair
Market Value of the Common Stock on the day immediately preceding
the date on which the Director Fee was paid, and (ii) pursuant to
the terms of the Third Amendment, the cash amount of the Director
Fees in 1995 would have been reduced by one hundred percent (100%)
or $15,575. No shares of Common Stock received in lieu of Director
Fees may be transferred by an Eligible Director until after the
expiration of six (6) months from the date the shares are issued.
Amount or Termination. The Board of Directors may amend or modify
the Outside Directors Plan at any time (except as otherwise provided
in the Outside Directors Plan). No options may be granted and no
Stock Awards may be issued under the Outside Directors Plan more
than ten (10) years after the Outside Directors Plan was adopted.
Adjustments. Subject to any required action by the stockholders of
the Company, the number of shares of Common Stock for which options
may be granted or Stock Awards may be issued and the number of shares
of Common Stock subject to options previously granted shall be
proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock of the Company resulting from a merger,
consolidation, reorganization, recapitalization, reclassification,
combination of shares, stock split or stock dividend. Such adjustments
shall be made solely by the Board of Directors.
Fair Market Value. As provided in the Outside Directors Plan, the
"Fair Market Value" generally means the closing sales price, or the
mean between the closing high "bid" or low "asked" prices, of the
Common Stock on the day on which such value is to be determined, as
reported by the National Association of Securities Dealers Automated
Quotation System or successor national quotation service.
Federal Tax Consequences. An Eligible Director will realize no
taxable income at the time an option is granted under the Outside
Directors Plan. Ordinary income will generally be realized by the
Eligible Director at the time of his exercise of an option. The
amount of income will be equal to the amount by which the fair market
value of the shares on the date of exercise exceeds the exercise
price for such shares. When an Eligible Director disposes of shares
of Common Stock acquired upon the exercise of the option, any amount
received in excess of the fair market value of the shares on the date
of exercise will be treated as long or short-term capital gain,
depending upon the holding period of the shares, and if the amount
received is less than the fair market value of the shares on the
date of exercise, the loss will be treated as long or short-term
capital loss depending upon the holding period of the shares.
<PAGE>
The Company will be entitled to a deduction for federal income tax
purposes at the same time and in the same amount as the Eligible
Director is considered to have realized ordinary income on the
exercise of an option.
The Fair Market Value of the shares of Common Stock issued to an
Eligible Director pursuant to a Stock Award will generally be
includible as ordinary income in the Eligible Director's gross
income for the Eligible Director's taxable year in which the shares
of Common Stock are issued. In addition, the value of a Stock Award
will constitute earnings from self-employment in respect of which an
Eligible Director will be required to make FICA and/or Medicare
contributions. The Company will be entitled to a deduction for federal
income tax purposes at the same time and in the same amount as the
Eligible Director is considered to have realized ordinary income.
When an Eligible Director disposes of shares of Common Stock
acquired pursuant to a Stock Award, generally any amount received
in excess of the Fair Market Value of such shares on the date of the
Stock Award will be treated as long or short-term capital gain,
depending on the holding period of the shares, and if the amount
received is less than the Fair Market Value of the shares on the
date of the Stock Award, the loss will be treated as long or short-
term loss depending on the holding period of the shares.
The above-described tax consequences are based upon present federal
income tax laws, and thus, are subject to change when such laws
change.
Although the affirmative vote of the Common Stock present in person
or represented by proxy at the Meeting is not required for the
adoption of the Third Amendment to the 1992 Outside Directors Stock
Option and Incentive Plan, the Board of Directors of the Company has
determined that the Third Amendment will not be adopted unless such
is approved by a majority of the shares of Common Stock present, or
represented by proxy, and entitled to vote at the Meeting since only
one (1) of the three (3) members of the Board of Directors as of the
date of this proxy statement is a director that cannot participate
in the Outside Director Plan.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" THE THIRD AMENDMENT TO THE 1992 OUTSIDE
DIRECTORS STOCK OPTION AND INCENTIVE PLAN.
PROPOSAL 3 - APPROVAL OF THE 1996 EMPLOYEE STOCK PURCHASE PLAN
General. On September 19, 1996, the Board of Directors, subject to
approval by the stockholders, adopted the Perma-Fix Environmental
Services, Inc. 1996 Employee Stock Purchase Plan (the "Employee
Plan"). The Board of Directors believes that adoption and approval
of the Employee Plan will serve to attract and to retain key
personnel and other employees and to enhance their interests in the
Company's continued success by providing such persons with long-term
equity interests in the Company. Such equity interests will more
closely align the financial interests of such key employees and
personnel with the stockholders and create significant incentives
for increasing stockholder value. The Board of Directors
unanimously recommends that stockholders approve the Employee Plan.
Principal features of the Employee Plan, as adopted by the Board
of Directors, are summarized below, but such summary is qualified
in its entirety by reference to the terms of the Employee Plan, as
set forth in Exhibit "B" to this Proxy Statement.
Employee Plan. The Employee Plan is intended to constitute an
"employee stock purchase plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended. The Employee Plan
will provide eligible employees of the Company and its subsidiaries
who wish to become stockholders an opportunity to purchase Common
Stock of the Company, which the Board of Directors believes is in
the mutual best interests of the employees of the Company and its
subsidiaries and the Company itself. The maximum number of shares
of Common Stock of the Company that may be issued under the Employee
Plan will be 500,000 shares of Common Stock (subject to adjustment
as provided in the Employee Plan). As of the Record Date, the fair
market value of a share of Common Stock of the Company is $1.9375,
based on the closing price of such stock on the NASDAQ on such date
and, as a result, the aggregate fair market value of the 500,000
shares of Common Stock that may be granted under the Employee Plan
was $968,750 as of the Record Date. The shares of Common Stock to
be delivered under the Employee Plan will be made available from the
authorized and unissued or treasury shares of the Company, or a
combination of both.
<PAGE>
Administration. The Employee Plan will be administered by the Board
of Directors or a committee appointed by the Board of Directors to
administer the Plan (the "Committee"). The Board of Directors or
the Committee will have full power and authority under the Employee
Plan to operate and administer the Employee Plan within the confines
of Section 423 of the Internal Revenue Code of 1986, as amended,
which power and authority shall include, but not be limited to, that
of modifying the terms and conditions of awards to be granted and
establishing such rules and regulations as it shall deem appropriate
for proper administration of the Employee Plan.
Eligibility. An "Eligible Employee" is a person who, on an Offering
Date (as defined in the Employee Plan), is an employee of the
Employer (as defined in the Employee Plan), and has completed at least
six (6) months of continuous service for the Employer; and, the person
is not deemed, for purposes of Section 423(b)(3) of the Code, to own
stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company. As of the date of
this Proxy Statement, it is expected that approximately two-hundred
fifty (250) persons are eligible to participate in the Employee Plan.
Exercise Price and Stock Purchase Account. The exercise price shall
initially be the sum of (i) eighty-five percent (85%) of the market
value of each such share of Common Stock on the offering date on
which such offering commences or on the exercise date on which such
offering expires, whichever is lower, and (ii) any transfer, excise
or similar tax imposed on the transaction pursuant to which such
share of Common Stock is purchased. In no event shall the purchase
price per share be less than the par value per share of the stock.
Payment for the shares of stock purchased by a participant under the
Employee Plan shall be paid out of the participant's stock purchase
account, which shall be established by each participant, and which
shall be funded by authorized payroll deductions of from one percent
(1%) to five percent (5%) of the gross amount of each participant's
compensation during a purchase period. The stock purchase account
may be additionally funded by additional contributions made by the
participant, subject to the approval of the Company, and, provided
that: (a) all such additional contributions shall be made no later
than the first business day of the last month in the purchase
period; (b) only one such additional contribution shall be accepted
from any participant in any purchase period; and, (c) such
additional contributions shall be from $25 to $2,000 and shall be
in an amount which is in a multiple of $25 within such range.
Limitation on Shares to be Acquired by Any One Participant. The
maximum number of shares of Common Stock that may be purchased for
each participant on a purchase date is the least of (a) the number
of shares of Common Stock that can be purchased by applying the full
balance of the participant's stock purchase account to such purchase
of shares at the price such shares are purchased pursuant to the
Employee Plan, (b) the participant's proportionate part of the aggregate
number of such shares of Common Stock available within the limitation
established by the maximum aggregate number of such shares reserved for
the Plan, or (c) the number of whole shares determined by multiplying the
participant's annual rate of Compensation as of the Offering Date by .02,
and by adding the product so determined to the number one hundred (100);
provided, the purchase limitation described in the preceding subsection (c)
shall be the maximum number of shares of Common Stock that can be purchased
by a participant in a Plan Year (as defined in the Employee Plan). A
participant may not purchase shares of Common Stock having an aggregate
market value of more than Twenty-Five Thousand Dollars ($25,000.00) for
each calendar year in which one or more offering(s) is or are outstanding
at any time.
Amendment or Termination. The Board of Directors may amend or
terminate the Employee Plan at any time, except as otherwise
provided in the Employee Plan.
Adjustments. Subject to any required action by the stockholders of
the Company, the number of shares of stock reserved for purchase
under the Employee Plan, as hereinabove provided, and the calculation
of the purchase price per share may be appropriately adjusted to reflect
any increase or decrease in the number of issued shares of stock resulting
from a subdivision or consolidation of such shares or the payment of a
stock dividend (but only on the stock) or any other increase or decrease
in the number of outstanding shares of stock affected without receipt of
consideration by the Company.
Federal Tax Consequences. Under the Code as currently in effect,
there are no federal income tax consequences in connection with the
acquisition of Common Stock pursuant to the Employee Plan until the
year in which the participant sells or otherwise disposes of the
shares, or, if earlier, the year in which the participant dies. If
<PAGE>
the shares are sold or otherwise disposed of or the participant dies
while owning the shares, thenparticipant's death, then the participant
will recognize ordinary income in an amount equal to the lesser of (i)
fifteen percent (15%) of the fair market value of the shares on the
applicable Offering Date, or (ii) the amount by which the fair
market value of the shares at the time of such sale or disposition
exceeds the amount paid for the shares, and the Company will be
entitled to a corresponding income tax deduction.
In either case, the participant may also have a capital gain or loss
(long-term or short-term depending upon the length of time the
shares were held) in an amount equal to the difference between the
amount realized upon the sale and the participant's adjusted tax
basis in the shares (the amount paid for the shares plus the amount
of ordinary income which the participant must recognize at the time
of the sale).
For participants who are officers or Directors subject to the
restriction of Section 16(b) of the Securities Exchange Act of 1934,
as amended, the federal income tax consequences are generally the
same as described above.
The affirmative vote of a majority of the shares of Common Stock present,
or represented by proxy, and entitled to vote at the Meeting is required
for the adoption of the Employee Plan.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" APPROVAL OF THE 1996 EMPLOYEE STOCK
PURCHASE PLAN.
PROPOSAL 4 - AMENDMENT TO CERTIFICATE OF INCORPORATION INCREASING
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 20,000,000 TO
50,000,000.
The Board of Directors of the Company recommends that the
stockholders approve an amendment to the Company's Restated
Certificate of Incorporation, as amended, to increase from
20,000,000 to 50,000,000 shares the Company's authorized Common
Stock, par value $.001 per share (the "Common Stock"). As of the
Record Date, 9,366,035 shares (excluding 920,000 treasury shares)
of Common Stock were issued and outstanding. Of the remaining
10,633,965 shares of Common Stock that are presently either
authorized but unissued or held in treasury, approximately
17,462,060 shares are reserved, or are to be reserved, for issuance
as follows: (i) 500,000 shares for issuance under the Company's
1991 Performance Equity Plan; (ii) 250,000 shares for issuance
pursuant to the 1992 Outside Directors Stock Option and Incentive
Plan; (iii) approximately 400,000 shares for issuance pursuant to
the 1993 Nonqualified Stock Option Plan; (iv) 8,512,060 shares for
issuance under outstanding warrants granted by the Company, prior
to applicable anti-dilution adjustments; (v) up to 7,300,000 shares
for issuance upon conversion of 5,500 shares of Series 3 Preferred
(see "Certain Relationships and Related Transactions"), and (vi)
500,000 shares for issuance upon exercise of options to be issued
under the 1996 Employee Stock Purchase Plan, if such Plan is
approved by the stockholders at the Meeting (see "Proposal 3 -
Approval of the 1996 Employee Stock Purchase Plan"). As of the
Record Date, the Company has granted options under the various
incentive stock option plans for 1,118,838 shares of Common Stock
and anticipates that it will, from time to time, grant additional
options for the remaining balance of the shares of Common Stock
reserved for issuance under such plans.
The Series 3 Preferred is convertible into from approximately
3,700,000 to approximately 7,300,000 shares of Common Stock, or more
under certain limited circumstances. See "Certain Relationships and
Related Transactions." In the event all of the Series 3 Preferred
were converted into the maximum number of shares of Common Stock
possible (approximately 7,300,000 assuming that the fair market
value of the Common Stock at the time of conversion is $1.00 or less
and the minimum conversion price is not adjusted), and all of the
warrants granted by the Company that are outstanding currently are
exercised and such conversion and exercise occurs without the
amendment to the Certificate of Incorporation as described in this
Proposal No. 4 being approved by the stockholders of the Company,
the Company would be obligated to issue more shares of Common Stock
than are currently authorized and unissued under the Certificate of
Incorporation or which are held by the Company as treasury shares.
Therefore, if the stockholders do not approve this Proposal No. 4
amending the Certificate of Incorporation to authorize additional
shares of Common Stock, it is possible that the Company would be
able to fulfill some, but not all, of its obligations to issue
shares of Common Stock. Should the Company be unable to fulfill
<PAGE>
such obligations, it is possible that certain actions could be taken
against the Company, including, but not limited to, the filing of
lawsuits against the Company.
The Company's Restated Certificate of Incorporation, as amended,
presently authorizes 22,000,000 shares of capital stock of the
Company, of which 20,000,000 shares consist of Common Stock and
2,000,000 shares consist of preferred stock, par value $.001
("Preferred Stock"). If the proposed amendment is approved, the
additional authorized, but unissued shares of Common Stock will be
identical in all respects to presently authorized shares of Common
Stock. The Board of Directors believes that an increase in the
number of authorized shares of Common Stock is desirable in order
to provide the Company with shares which will be available for
issuance from time to time, without further action or authorization
by the stockholders, as needed for such proper corporate purposes
as may be determined by the Board of Directors. Such corporate
purposes might include, among other things, the Company's ability
to fulfill its current obligations under the Series 3 Preferred,
warrants presently outstanding and stock option plans presently
outstanding and proposed in this Proxy Statement, the raising of
capital funds through private or public offerings, the acquisition
by the Company of other companies, declaration of stock splits or
stock dividends, the issuance of stock under options granted or to
be granted under various stock incentive plans or other benefit
plans for the Company's employees and non-employee Directors and the
issuance of stock under warrants granted or to be granted in the
future.
It should be noted that the issuance of additional shares of Common
Stock could have a detrimental effect upon existing holders of the
Company's Common Stock since such issuance may, among other things,
have a dilutive effect on the earnings per share of Common Stock and
the voting rights of holders of the Common Stock. The issuance of
additional shares of Common Stock could also have a dilutive effect
on the voting rights of existing holders of the Preferred Stock to
the extent they have rights to vote as a class with the holders of
the Common Stock.
Although authorization of additional shares of Common Stock is
recommended by the Board of Directors for the reasons stated herein,
and not because of any possible anti-takeover effect, such
additional authorization of shares of Common Stock could be used by
incumbent management to make more difficult, and thereby discourage,
an attempt to acquire control of the Company, even though
stockholders of the Company may deem such an acquisition desirable.
For example, the shares could be privately placed with purchasers
who might support the Board of Directors in opposing a hostile
takeover bid. The issuance of new shares could also be used to
dilute the stock ownership and voting power of a third party seeking
to remove the Directors, replace incumbent Directors, accomplish
certain business combinations or alter, amend, or repeal portions
of the Certificate of Incorporation.
Under Delaware law, an amendment of a Certificate of Incorporation
to effectuate a change in the number of shares of the authorized
capital stock of a corporation requires the approval of a majority
of the outstanding stock entitled to vote thereon. In this
instance, the holders of Common Stock are entitled to vote on the
amendment and the holders of a majority of such Common Stock must
approve this amendment for its passage.
THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS A VOTE "FOR" THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION INCREASING
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 20,000,000 TO
50,000,000.
<PAGE>
PROPOSAL 5 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the Stockholders, the Board of Directors
has reappointed Arthur Andersen LLP ("Arthur Andersen") as
independent accountants to audit the consolidated financial
statements of the Company for the year 1996. Arthur Andersen has
been the independent accountant to the Company since 1994. It is
expected that representatives of Arthur Andersen LLP will be present
at the annual meeting, will have an opportunity to make a statement
if they desire to do so, and will be available to answer appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE REAPPOINTMENT OF ARTHUR ANDERSEN LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY.
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder who wishes to present a proposal for consideration
at the annual meeting of stockholders to be held in 1997 must submit
such proposal in accordance with the rules promulgated by the
Securities and Exchange Commission. In order for a proposal to be
included in the Company's proxy materials relating to the 1997
Annual Meeting of Stockholders, the stockholder must submit such
proposal in writing to the Company so that it is received not later
than July 11, 1997. Such proposals should be addressed to
Richard T. Kelecy, Perma-Fix Environmental Services, Inc.,
1940 N.W. 67th Place, Gainesville, Florida 32653.
OTHER MATTERS
Other Business
The Board of Directors has no knowledge of any business to be
presented for consideration at the Meeting other than as described
above. Should any such matters properly come before the Meeting or
any adjournment thereof, the persons named in the enclosed Proxy
Card will have discretionary authority to vote such proxy in
accordance with their best judgement on such matters and with
respect to matters incident to the conduct of the Meeting.
Additional copies of the Annual Report and the Notice of Annual
Meeting of Stockholders, Proxy Statement and accompanying Proxy Card
may be obtained from the Company.
In order to assure the presence of the necessary quorum at the
Meeting, please sign and mail the enclosed Proxy Card promptly in
the envelope provided. No postage is required if mailed within the
United States. The signing of the Proxy Card will not prevent your
attending the Meeting and voting in person, should you so desire.
<PAGE>
Annual Report on Form 10-K
The Company will provide, without charge, to each stockholder
solicited to vote at the Meeting, on the written request of the
stockholder, a copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 1995, including the financial statements
and schedules, as filed with the Securities and Exchange Commission.
Each written request must set forth a good faith representation
that, as of the record date, the person making the request was a
beneficial owner of the Company's Common Stock entitled to vote at
the Meeting. Stockholders should direct the written request to the
Company to the Chief Financial Officer, 1940 N.W. 67th Place, Suite
A, Gainesville, Florida 32653.
By Order of the Board of Directors
Richard T. Kelecy
Gainesville, Florida Secretary
November 8, 1996
BALL:\N-P\PESI\PROXY\EDGAR\PROXY.EDG
EXHIBIT "A"
THIRD AMENDMENT TO
1992 OUTSIDE DIRECTORS STOCK OPTION AND INCENTIVE PLAN
THIS THIRD AMENDMENT TO THE PERMA-FIX ENVIRONMENTAL SERVICES,
INC. OUTSIDE DIRECTORS STOCK OPTION AND INCENTIVE PLAN (the "Third
Amendment") was approved by the Board of Directors (the "Board") of
Perma-Fix Environmental Services, Inc. (the "Company") on
September 19, 1996.
WHEREAS, Article VII of the 1992 Outside Directors Stock Option
Plan, as amended (including, but not limited to the Second Amendment
approved by the stockholders on November 12, 1993) (the "Plan"),
provides that the Board may at any time, and from time to time, in
any respect amend or modify the Plan; provided, however, that the
provisions of Section 5.1 of the Plan may not be amended more than
once every six (6) months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act,
or the rules thereunder;
WHEREAS, in order to continue to attract and retain qualified
members of the Board who are not employees of the Company or any of
its subsidiaries ("Eligible Director") and to further enhance each
of the Eligible Director's interests in the Company's continued
success by further increasing each Eligible Director's proprietary
interest in the Company, the Board is of the opinion that the Plan
should be further amended, subject to shareholder approval, to allow
the Eligible Directors to have the option of receiving sixty-five
percent (65%) of the Director Fee (as defined below) in common
stock, par value $.001 per share of the Company ("Common Stock")
with the balance paid in cash or receiving one hundred percent
(100%) of the Director Fee in Common Stock of the Company and that
in either case the number of shares of Common Stock of the Company
issuable to the Eligible Director shall be determined by valuing the
Common Stock of the Company at seventy-five percent (75%) of its
Fair Market Value (as defined in the Plan), which Fair Market Value
is determined on the business day immediately preceding the date
that the Director Fee is due; and,
WHEREAS, the Plan should be further amended in order to modify
the terms of the Plan to comport with certain changes in the rules
promulgated regarding Section 16 of the Securities Exchange Act of
1934, as amended;
NOW, THEREFORE, the following amendments to the Plan are
unanimously adopted by the Board, subject to the approval of the
stockholders of the Company:
A. Section 5.1.3 of the Plan is hereby deleted in its entirety and
the following Section 5.1.3 is hereby substituted in lieu thereof:
5.1.3 Each Eligible Director shall receive, at such
Eligible Director's option, either sixty-five
percent (65%) or one hundred percent (100%) of
the fee payable to such Eligible Director for
services rendered to the Company as a member of
the board (the "Director's Fee") in Stock.
Fair Market Value as used in this Section
5.1.3, shall be determined on the business day
immediately preceding the date that the
Director Fee is due. If the Eligible Director
wishes to receive sixty-five percent (65%) of
his Director's Fee in Stock: (i) the Eligible
Director will receive the number of shares
obtained by dividing sixty-five percent (65%)
of the applicable Director Fee by seventy-five
percent (75%) of the Fair Market Value of the
Stock and (ii) the Eligible Director will
receive thirty-five (35%) of his Director's Fee
in cash or its equivalent. If the Eligible
Director wishes to receive one hundred percent
(100%) of his Director's Fee in Stock the
Eligible Director will receive the number of
shares obtained by dividing the applicable
Director's Fee by seventy-five percent (75%) of
the Fair Market Value of the Stock.
<PAGE>
B. Section 5.1 of the Plan is hereby amended by inserting the
following Section 5.1.6 at the end thereof:
5.1.6 The election of the Eligible Director, as described
in Section 5.1.3 hereof, shall be made in writing to the Company at
any time prior to the date on which the Director Fee is due. Should
an Eligible Director fail to make such election in a timely manner,
such Eligible Director shall be deemed to have elected to receive
one hundred percent (100%) of the Director's Fee payable to such
Eligible Director in Stock as described in Section 5.1.3.
C. Article VII of the Plan is hereby deleted in its entirety and
the following Article VII is hereby substituted in lieu thereof:
ARTICLE VII
The Board may at any time terminate the Plan,
and may at any time and from time to time and,
in any respect amend or modify the Plan.
The Plan is amended and modified only to the extent
specifically amended or modified by this Third Amendment to the 1992
Outside Directors Stock Option and Incentive Plan, and none of the
other terms, conditions or provisions of the Plan, as previously
amended, is amended or modified by this Third Amendment to the 1992
Outside Directors Stock Option and Incentive Plan.
BALL:\N-P\PESI\PROXY\EDGAR\EXHIBIT.A
EXHIBIT "B"
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I.
INTRODUCTION
A. Statement of Purpose. The purpose of the Perma-Fix
Environmental Services, Inc. 1996 Employee Stock Purchase Plan
is to provide eligible employees of the Company and its
Subsidiaries, who wish to become stockholders, an opportunity
to purchase Stock of the Company. The Board of Directors of
the Company believes that employee participation in ownership
will be to the mutual benefit of the employees of the Company
and its Subsidiaries.
B. Internal Revenue Code Considerations. The Plan is intended
to constitute an "employee stock purchase plan" within the
meaning of Section 423 of the Internal Revenue Code of 1986,
as amended.
ARTICLE II.
DEFINITIONS
A. Board of Directors. The term "Board of Directors" means the
Board of Directors of the Company or a committee of the Board
of Directors appointed by the Board of Directors to administer
the Plan ("Committee").
B. Code. The term "Code" means the Internal Revenue Code of
1986, as amended to the Effective Date hereof, as the same may
thereafter be amended, and any successor statute of similar
nature. References to specific sections of the Code shall be
taken to be references to corresponding sections of any
successor statute.
C. Company. The term "Company" means Perma-Fix Environmental
Services, Inc., a Delaware corporation, or any successor
thereto.
D. Compensation. The term "Compensation" means the total base
salary paid to an Employee by Employer during the applicable
payroll period, as reflected upon the payroll records of the
Employer.
E. Continuous Service. The term "Continuous Service" means the
period of time immediately preceding the Offering Date during
which the Employee has been employed by the Employer or a
predecessor business acquired by the Employer or a predecessor
company merged or consolidated with or into the Employer and
during which there has been no interruption of Employee's
employment by the Employer or such predecessor employer. For
this purpose, periods of Excused Absence shall not be
considered to be interruptions of Continuous Service.
F. Effective Date. The term "Effective Date" means September
19, 1996, if within twelve (12) months of that date, the Plan
is, or has been, approved at a meeting of the stockholders of
the Company by the affirmative vote of the holders of a
majority of the outstanding shares of Stock of the Company
present, by person or by proxy, and entitled to vote on the
approval of the Plan.
G. Eligible Employee. The term "Eligible Employee" means each
person who, on an Offering Date, meets all of the following
requirements:
1. Employee. The person is an Employee of the Employer;
2. Length of Service. The person has completed at least six
(6) months of Continuous Service; and
<PAGE>
3. 5% Owner Restriction. The person is not deemed, for
purposes of Section 423(b)(3) of the Code, to own stock
possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of
the Company.
H. Employee. The term "Employee" means each person customarily
employed by the Company on the Offering Date, except for those
whose customary employment is for either (a) not more than
twenty (20) hours per week, or (b) not more than five (5)
months during any calendar year.
I. Employer. The term "Employer" means the Company and each
Subsidiary of the Company that, with the consent of the Board
of Directors, has adopted the Plan.
J. Exchange Act. The term "Exchange Act" means the Securities
Exchange Act of 1934, as amended, and as the same may
hereafter be amended.
K. Excused Absence. The term "Excused Absence" means absence
pursuant to a leave of absence granted by the Company, absence
due to disability or illness, absence by reason of a layoff,
or absence by reason of active duty in the armed forces of the
United States. In no event may an Excused Absence exceed
ninety (90) days in length (or, if longer and if applicable,
the period of the individual's active duty in the armed forces
of the United States and such period thereafter such
individual's right to reemployment by Employer is protected by
law), and any absence shall cease to be an Excused Absence
upon the earlier of (a) the last day of the calendar month in
which the duration of the absence reaches ninety (90) days or
(b) the last day of the calendar month in which the leave
expires by its terms, the layoff ends by recall or permanent
separation from service, or recovery from illness or
disability occurs.
L. Exercise Date. The term "Exercise Date" means the last day
of each Purchase Period.
M. Market Value. The term "Market Value" means, as of any given
date, (i) the closing price of the Stock on the last day
preceding the date of reference as quoted on a national
securities exchange, or (ii) if the Stock is not traded on a
national securities exchange, the closing bid price on the
last day preceding the date of reference as reported by
Nasdaq; or (iii) if the Market Value of the Stock cannot be
determined pursuant to clauses (i) or (ii) hereof, such price
as the Board of Directors shall determine.
N. Offering. The term "Offering" means the offering made by the
Company in accordance with the terms and conditions of the
Plan permitting Eligible Employees to purchase Stock from the
Company under the Plan.
O. Offering Date. The term "Offering Date" means the first
business day of each January and July during which the Plan is
in effect, commencing with January 1, 1997.
P. Participant. The term "Participant" means each Eligible
Employee who, pursuant to Article 3 hereof, elects to
participate in the Plan, and has not withdrawn or been
terminated from participation under the Plan.
Q. Plan. The term "Plan" means this Perma-Fix Environmental
Services, Inc. 1996 Employee Stock Purchase Plan, as the same
may be amended, modified or supplemented from time to time.
R. Plan Year. The term "Plan Year" means the calendar year.
S. Purchase Agreement. The term "Purchase Agreement" means the
document prescribed by the Board of Directors from time to
time pursuant to which an Eligible Employee has enrolled to be
a Participant.
<PAGE>
T. Purchase Period. The term "Purchase Period" means the period
beginning on an Offering Date and ending on (i) the last
business day of June with respect to a January Offering Date,
and (ii) the last business day of December with respect to a
July Offering Date.
U. Purchase Price. The term "Purchase Price" means such term as
it is defined in Section 4.3 hereof.
V. Stock. The term "Stock" means the common stock, par value
$.001 per share, of Perma-Fix Environmental Services, Inc.
W. Stock Purchase Account. The term "Stock Purchase Account"
means a noninterest bearing account consisting of all amounts
withheld from an Employee's compensation (or otherwise paid
into the Plan) for the purpose of purchasing shares of Stock
for such Employee under the Plan, increased by any amounts
contributed by such Employee pursuant to Section 4.5.2 hereof,
and reduced by all amounts applied to the purchase of Stock
for such Employee under the Plan, provided, such account may
be monitored as an accounting entry on the books and records
of the Company, and no actual physical segregation of amounts
credited to such account, from the assets of the Company,
shall be required.
X. Subsidiaries. The term "Subsidiaries" means any corporation
more than fifty percent (50%) of whose outstanding voting
securities are owned by the Company or by one or more of the
Company's other Subsidiaries.
ARTICLE III.
ADMISSION TO PARTICIPATION
A. Initial Participation. Any Eligible Employee may elect to be
a Participant and may become a Participant by executing and
filing with the Board of Directors on or before the fifteenth
(15th) of the month preceding the next Offering Date a
Purchase Agreement prepared in such form as the Board of
Directors shall approve from time to time. The effective date
of an Eligible Employee's participation shall be the Offering
Date next following the date on which the Board of Directors
receives from the Eligible Employee a properly executed and
timely filed Purchase Agreement.
B. Discontinuance of Participation. Any Participant may
voluntarily withdraw from the Plan by filing a Notice of
Withdrawal with the Board of Directors prior to the fifteenth
(15th) day of the last month in a Purchase Period. Upon such
withdrawal, there shall be paid to the Participant the amount,
if any, standing to the Participant's credit in the
Participant's Stock Purchase Account.
C. Involuntary Withdrawal; Termination of Eligible Employee
Status. If a Participant's Continuous Service terminates for
any reason, or if a Participant ceases to be an Eligible
Employee, the entire amount standing to the Participant's
credit in the Participant's Stock Purchase Account on the
effective date of such occurrence shall be paid to the
Participant.
D. Readmission to Participation. Any Eligible Employee who has
previously been a Participant, who has discontinued
participation (whether by interruption of Continuous Service
or otherwise), and who wishes to be reinstated as a
Participant may again become a Participant by executing and
filing with the Board of Directors, not later than the
fifteenth (15th) of the month preceding the Offering Date of
any succeeding Purchase Period, a new Purchase Agreement on
forms prepared in such form as the Board of Directors shall
approve from time to time. Reinstatement to Participant
status shall be effective as of the Offering Date next
following the date on which the Board of Directors receives
from the Eligible Employee the properly executed and timely
filed Purchase Agreement. Notwithstanding the foregoing terms
of this Section 3.4, any officer of the Company who has
<PAGE>
discontinued participation in the Plan may not again become a
Participant in the Plan for at least six (6) months from the
date such officer discontinued participation in the Plan.
ARTICLE IV.
STOCK PURCHASE
A. Reservation of Shares. Purchases of shares of Stock under
the Plan shall be made from the authorized and unissued or
treasury shares of the Company. Subject to the limitations
set forth in this Section 4.1, the number of shares of Stock
available for purchase under the Plan shall be established as
of January 1 of each year that the Plan is in effect and the
number of shares of Stock available for purchase under the
Plan during that particular year shall be equal to three
percent (3%) of the outstanding shares of Stock on such date,
subject to adjustment in accordance with the antidilution
provisions hereinafter set forth; provided that, except for an
adjustment in accordance with the provisions of Section 5.2,
the number of shares of Stock available for purchase under the
Plan shall not be decreased as a result of a decrease in the
number of shares outstanding. Except as provided in Section
5.2 hereof, the aggregate maximum number of shares of Stock
that may be purchased under the Plan shall not exceed the
lesser of (i) the number of shares of Stock available for
purchase under the Plan or (ii) five hundred thousand
(500,000).
B. Limitation on Shares Available. The maximum number of shares
of Stock that may be purchased for each Participant on an
Exercise Date is the least of (a) the number of shares of
Stock that can be purchased by applying the full balance of
the Participant's Stock Purchase Account to such purchase of
shares at the Purchase Price (as hereinafter determined), (b)
the Participant's proportionate part of the aggregate number
of such shares of Stock available within the limitation
established by the maximum aggregate number of such shares
reserved for the Plan, as stated in Section 4.1 hereof, or (c)
the number of whole shares determined by multiplying the
Participant's annual rate of Compensation as of the Offering
Date by .02, and by adding the product so determined to the
number one hundred (100); provided, the purchase limitation
described in the preceding subsection (c) shall be the maximum
number of shares of Stock that can be purchased by a
Participant in a Plan Year. Notwithstanding the foregoing, if
any person entitled to purchase shares pursuant to any
offering hereunder would be deemed for the purposes of Section
423(b)(3) of the Code to own Stock (including any number of
shares that such person would be entitled to purchase
hereunder) possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the
Company, the maximum number of shares that such person shall
be entitled to purchase pursuant to the Plan shall be reduced
to that number which, when added to the number of shares of
Stock that such person is so deemed to own (excluding any
number of shares that such person would be entitled to
purchase hereunder) is one less than such five percent (5%).
Any portion of a Participant's Stock Purchase Account that
cannot be applied by reason of the limitations set forth in
this Section 4.2 shall remain in the Participant's Stock
Purchase Account for application to the purchase of Stock on
the next Offering Date (unless withdrawn by the Participant
before that Offering Date).
C. Purchase Price of Shares. The Purchase Price per share of
the Stock sold to Participants pursuant to any Offering under
this Plan shall be the sum of (a) eighty-five percent (85%) of
the Market Value of each such share on the Offering Date on
which such Offering commences or on the Exercise Date on which
such Offering expires, whichever is the lower, and (b) any
transfer, excise or similar tax imposed on the transaction
pursuant to which such share of Stock is purchased. If the
Exercise Date with respect to the purchase of Stock is a day
on which the stock is selling ex-dividend on or before the
record date of such dividend, then for Plan purposes the
Purchase Price per share will be increased by an amount equal
to the dividend per share. In no event shall the Purchase
Price per share be less than the par value per share of the
Stock.
<PAGE>
D. Exercise of Purchase Privilege.
1. Exercise. Subject to the provisions of Section 4.2 above
and of Section 4.4.2 below, if on the date of the last
paycheck of a Participant issued prior to any Exercise
Date of any Offering there is a credit balance in the
Participant's Stock Purchase Account, there shall be
purchased from the Company's authorized and unissued or
treasury shares of Stock for the Participant at the
Purchase Price for the Purchase Period that expires on
such Exercise Date the largest number of whole shares of
Stock as can be purchased with the entire amount in the
Participant's Stock Purchase Account on such paycheck
issue date. No fractional shares shall be purchased.
Each such purchase shall be deemed to have occurred on
the Exercise Date occurring at the close of the Offering
for which the purchase was made. Any credit balance in
a Participant's Stock Purchase Account following a
purchase of Stock for such Participant on an Exercise
Date shall be carried over to the next Purchase Period
2. Limitations on Purchase. A Participant may not purchase
shares of Stock having an aggregate Market Value of more
than twenty-five thousand dollars ($25,000.00),
determined at the time of the Offering(s), for each
calendar year in which one or more such Offering(s)
is/are outstanding at any time, and a Participant may not
purchase a share of Stock under any Offering after the
expiration of the Purchase Period for such Offering.
3. Restriction on Resale. There is no holding period
regarding Stock purchased under the Plan, however, in
order for a Participant to be entitled to the tax
treatment described in Section 423 of the Code with
respect to the Participant's sale of Stock purchased
under the Plan, such Stock must not be sold for at least
one (1) year after acquisition under the Plan, except in
the case of death.
E. Establishment of Stock Purchase Account.
1. Payroll Deductions. Each Participant shall authorize
payroll deductions from Compensation for the purposes of
funding the Participant's Stock Purchase Account
(effective for payroll periods beginning on or after
January 1, 1997). In the Purchase Agreement, each
Participant shall authorize a deduction from each payment
of the Participant's Compensation during a Purchase
Period, which deduction shall be not less than one
percent (1%) nor more than five percent (5%) of the gross
amount of such payment, calculated in multiples of $1.00.
The number of shares of Stock that may be purchased from
a Participant's Stock Purchase Account shall be subject
to the limitation of Section 4.2. Subject to the
provisions of Section 3.2, a Participant may not change
the Participant's payroll deduction rate during any
Purchase Period. However, a Participant may change the
deduction to any permissible level for any subsequent
Offering by filing notice thereof on or before the
fifteenth (15th) of the month preceding the Offering Date
on which such subsequent Offering commences.
2. Additional Contributions. Participants on whose behalf
payroll deductions are at the time being made for the
purpose of funding their respective Stock Purchase
Accounts may, subject to the approval of the Company,
make additional contributions to those Stock Purchase
Accounts, subject to the following rules:
a. All such additional contributions shall be made
with respect to any Offering no later than the
first business day of the last month in the
Purchase Period;
b. Only one such additional contribution shall be
accepted from any Participant in any Purchase
Period; and
c. Such additional contributions shall be in the
amount of twenty-five dollars ($25.00), or any
multiple thereof, to a maximum of two thousand
dollars ($2,000.00).
<PAGE>
F. Payment for Stock. The Purchase Price for all shares of
Stock purchased by a Participant under the Plan shall be paid
out of the Participant's Stock Purchase Account. As of each
Exercise Date, the entire amount standing to the credit of
each Participant in the Participant's Stock Purchase Account
on the date of the last paycheck issued to the Participant
prior to such Exercise Date in the Purchase Period that
expires on such Exercise Date shall be charged with the
aggregate Purchase Price of the shares of Stock purchased by
such Participant on the Exercise Date. No interest shall be
paid or payable with respect to any amount held in the
Participant's Stock Purchase Account.
<PAGE>
G. Share Ownership; Issuance of Certificates.
1. Rights as Stockholder. The shares of Stock purchased by
a Participant on an Exercise Date shall, for all
purposes, be deemed to have been issued and/or sold to
the Participant at the close of business on such Exercise
Date. Prior to that time, none of the rights or
privileges of a stockholder of the Company shall inure to
the Participant with respect to such shares. All the
shares of Stock purchased under the Plan shall be
delivered by the Company in a manner as determined by the
Board of Directors; provided, however, that all shares
acquired by Participants during any Plan Year shall be
delivered in such manner not later than one hundred
twenty (120) days following the last day of such Plan
Year.
2. Delivery of Shares. The shares of Stock shall be
delivered by the Company by issuing and delivering to the
Participant a certificate for the number of whole shares
of Stock purchased by such Participant on an Exercise
Date or during a Plan Year.
3. Fractional Shares. No fractional shares shall be issued
under the Plan.
ARTICLE V.
SPECIAL ADJUSTMENTS
A. Shares Unavailable. If, on any Exercise Date, the aggregate
funds available for the purchase of Stock would purchase a
number of shares in excess of the number of shares then
available for purchase under the Plan, the following events
shall occur: (i) the number of shares that would otherwise be
purchased by each Participant shall be proportionately reduced
on the Exercise Date in order to eliminate such excess; (ii)
the Plan shall automatically terminate immediately after the
Exercise Date as of which the supply of available shares of
Stock is exhausted, and (iii) any amount remaining in the
Stock Purchase Account of each of the Participants shall be
repaid to such Participants.
B. Adjustment Upon Change of Status. Subject to any required
action by the shareholders of the Company, the number of
shares of Stock reserved for purchase under the Plan, as
hereinabove provided, and the calculation of the Purchase
Price per share may be appropriately adjusted to reflect any
increase or decrease in the number of issued shares of Stock
resulting from a subdivision or consolidation of such shares
or the payment of a stock dividend (but only on the Stock) or
any other increase or decrease in the number of outstanding
shares of Stock effected without receipt of consideration by
the Company. To the extent that the foregoing adjustments
relate to the shares of the Company issued under the Plan,
such adjustments shall be made by the Board of Directors.
Except as hereinbefore expressly provided in this Section 5.2,
the terms of the Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business
or assets.
<PAGE>
C. Effect of Certain Transactions. Subject to any required
action by the stockholders, if the Company shall be the
surviving or resulting corporation in any merger or
consolidation, or if the Company shall be merged for the
purpose of changing the jurisdiction of its incorporation, any
Offering hereunder shall pertain and apply to the shares of
stock of the Company or the survivor. However, in the event
of a dissolution or liquidation of the Company, or of a merger
or consolidation in which the Company is not the surviving or
resulting corporation, the Plan and any Offering hereunder
shall terminate upon the effective date of such dissolution,
liquidation, merger or consolidation, and the balance then
standing to the credit of each Participant in the
Participant's Stock Purchase Account shall be returned to the
Participant.
ARTICLE VI.
MISCELLANEOUS
A. Nonalienation. The right to purchase shares of Stock under
the Plan is personal to the Participant, is exercisable only
by the Participant during the Participant's lifetime, except
as hereinafter set forth, and may not be assigned or otherwise
transferred by the Participant, other than by will or the laws
of descent and distribution or pursuant to a qualified
domestic relations order, as defined by the Code or Title I of
the Employee Retirement Security Act, or the rules and
regulations thereunder. There shall be delivered to the
executor, administrator or other personal representative of a
deceased Participant such shares of Stock and such residual
balance as may remain in the Participant's Stock Purchase
Account as of the Exercise Date occurring at the close of the
period in which the Participant's death occurs, including
shares of Stock purchased as of that date, or prior thereto,
with monies deposited by the Participant and/or withheld from
the Participant's Compensation.
B. Administrative Costs. The Company shall pay all
administrative expenses associated with the operation of the
Plan. No administrative charges shall be levied against the
Stock Purchase Accounts of the Participants.
C. Employee Stock Purchase Plan Administration. The Board of
Directors shall administer the Employee Stock Purchase Plan
and shall make, adopt, construe, and enforce rules and
regulations not inconsistent with the provisions of the Plan.
The Board of Directors shall adopt and prescribe the contents
of all forms required in connection with the administration of
the Plan, including, but not limited to, the Purchase
Agreement, payroll withholding authorizations, withdrawal
documents, and all other notices required hereunder. The
Board of Directors shall have the fullest discretion
permissible under law in the discharge of its duties. The
Board of Directors' interpretations and decisions in respect
of the Plan, the rules and regulations pursuant to which it is
operated, and the rights of Participants hereunder shall be
final and conclusive.
D. Amendments to the Plan. The Board of Directors may amend or
modify, from time to time, any of the provisions of the Plan;
provided, however, that no such amendment shall be effective
unless and until it has been duly approved by the shareholders
of the outstanding shares of Common Stock if (i) such amend-
ment materially increases the benefits accruing to
Participants under the Plan; (ii) such amendment materially
increases the number of securities which may be issued under
the Plan; (iii) such amendment materially modifies the
requirements as to eligibility for participation in the Plan;
or, (iv) the failure to obtain such approval would adversely
affect the compliance of the Plan with the requirements of
Rule 16b-3 under the Exchange Act, or with the requirements of
any other applicable law, rule or regulation.
E. Expiration and Termination of the Plan. The Plan shall
continue in effect until all shares of Stock reserved for
issuance under the Plan have been purchased, unless terminated
prior thereto pursuant to the provisions of the Plan or
pursuant to action by the Board of Directors, which shall have
the right to terminate or suspend the Plan at any time without
prior notice to any Participant and without liability to any
Participant. Upon the expiration, suspension or termination
<PAGE>
of the Plan, the balance, if any, then standing to the credit
of each Participant in the Participant's Stock Purchase
Account shall be refunded to the Participant.
F. Repurchase of Stock. The Company shall not be required to
purchase or repurchase from any Participant any of the shares
of Stock that the Participant acquired under the Plan.
G. Notice. A Purchase Agreement and any notice that a
Participant files pursuant to the Plan shall be on the form
prescribed by the Board of Directors and shall be effective
when received by the Board of Directors. Delivery of such
forms may be made by hand or by certified mail, sent postage
prepaid, to Perma-Fix Environmental Services, Inc., 1940
Northwest 67th Place, Gainesville, Florida 32653, Regarding:
Employee Stock Purchase Plan. Delivery by any other mechanism
shall be deemed effective at the option and discretion of the
Board of Directors.
H. Government Regulation. The Company's obligation to sell and
to deliver the Stock under the Plan is at all times subject to
all approvals of any governmental authority required in
connection with the authorization, issuance, sale or delivery
of such Stock.
I. Headings, Captions, Gender. The headings and captions herein
are for convenience of reference only and shall not be
considered as part of the text. The masculine shall include
the feminine, and vice versa.
J. Severability of Provisions; Prevailing Law. The provisions
of the Plan shall be deemed severable. In the event any such
provision is determined to be unlawful or unenforceable by a
court of competent jurisdiction or by reason of a change in an
applicable statute, the Plan shall continue to exist as though
such provision had never been included therein (or, in the
case of a change in an applicable statute, had been deleted as
of the date of such change). The Plan shall be governed by
the laws of the State of Delaware, to the extent such laws are
not in conflict with, or superseded by, federal law.
K. Implementation of the Plan. The Board of Directors may
implement the Plan at any time within twelve (12) months of
the date of approval of the Plan at a meeting of stockholders
by the affirmative vote of the holders of shares of Stock of
the Company present, by person or by proxy, and entitled to
vote on the approval of the Plan.
L. Investment Representations. The Board of Directors may
require each person acquiring shares of Common Stock pursuant
to an award under the Plan to represent to and agree with the
Company in writing that the Holder is acquiring the shares for
investment without a view to distribution thereof.
M. Additional Incentive Arrangements. Nothing contained in the
Plan shall prevent the Board of Directors from adopting such
other or additional incentive arrangements as it may deem
desirable, including, but not limited to, the granting of
stock options and the awarding of stock and cash otherwise
than under the Plan; and such arrangements may be either
generally applicable or applicable only in specific cases.
N. No Right of Employment. Nothing contained in the Plan or in
any Offering hereunder shall be deemed to confer upon any
employee of the Company or any Subsidiary any right to
continued employment with the Company or any Subsidiary, nor
shall it interfere in any way with the right of the Company or
any Subsidiary to terminate the employment of any of its
employees at any time.
O. Conflicts. If any of the terms or provisions of the Plan
conflict with the requirements of Rule 16b-3 under the
Exchange Act, or with the requirements of any other applicable
law, rule or regulation, then such terms or provisions shall
be deemed inoperative to the extent they so conflict with the
requirements of said Rule 16b-3.
<PAGE>
P. Indemnification of Committee. In addition to such other
rights of indemnification as they may have as directors or as
members of the Committee, the members of the Committee shall
be indemnified by the Company against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in
connection with the defense of any action, suit or proceeding,
or in connection with any appeal therein, to which they or any
of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any
award granted thereunder, and against all amounts paid by them
in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such
Committee member is liable for negligence or misconduct in the
performance of his duties; provided that within sixty (60)
days after institution of any such action, suit or proceeding
a Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the
same.
BALL:\N-P\PESI\PROXY\EDGAR\EXHIBIT.C
