EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of the 1st day of October, 1997, by and between PERMA-FIX
ENVIRONMENTAL SERVICES, INC., a Delaware corporation (the
"Company"), and DR. LOUIS F. CENTOFANTI (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company believes that the services, knowledge,
and contributions of the Executive to the Company are of critical
importance to the Company; and
WHEREAS, the Company wishes to ensure that the Executive will
continue to provide his services, knowledge, and contributions to
the Company.
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations, and warranties set forth in this
Agreement, the Company and the Executive agree as follows:
1. Term. Unless sooner terminated pursuant to the terms hereof,
the term of this Agreement shall commence on the date hereof and
terminate three (3) years from the date hereof, subject to
extension by the mutual agreement of the parties (the "Term").
2. Position and Duties.
2.1 Position. The Company agrees to employ the Executive,
and the Executive agrees to such employment, as President
and Chief Executive Officer of the Company, or such other
position as the Executive indicates in writing as being
acceptable. The Executive's authority and duties,
including, but not limited to hierarchical standing in
the Company and reporting requirements within the
Company, shall be substantially similar in all material
respects with the most significant of those exercised by
the Executive during the 90-day period immediately
preceding the date of this Agreement.
2.2 Location. The Executive's duties and services shall be
performed in Atlanta, Georgia or any other office or
location satisfactory to the Executive.
2.3 Reasonable Attention. Excluding any periods of vacation
and sick leave to which the Executive is entitled, the
Executive agrees to faithfully perform the duties of his
office, and to devote reasonable attention and time to
the business and affairs of the Company, to the extent
consistent with Section 2.1 above.
2.4 Other Activities. It shall not be a violation of this
Agreement for the Executive to (i) serve on corporate,
civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at
educational institutes, (iii) manage personal
investments, and (iv) participate in other activities, so
long as such activities do not significantly interfere
with the performance of the Executive's responsibilities
as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that,
to the extent that any such activities have been
conducted by the Executive prior to the date of this
Agreement, the continued conduct of such activities, or
the conduct of activities similar in nature and scope
thereto subsequent to the date of this Agreement, shall
not be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
3. Compensation and Benefits.
3.1 Annual Base Salary. The Company shall pay to the
Executive an annual base salary of One Hundred Ten
Thousand Dollars ($110,000.00) per year ("Base Salary"),
payable to the Executive in equal semi-monthly
installments, less appropriate withholdings and
deductions in accordance with the Company's customary
payroll practices, subject to the adjustments listed
below.
3.1.1 Cost of Living Adjustment. Commencing October
1, 1998, and annually on each October 1 during
the Term of this Agreement, the Base Salary
shall be increased so that the Base Salary as
increased on October 1 bears the same ratio to
the Base Salary of the Executive on the
immediately preceding October 1 as the
Official Consumer Price Index published by the
Bureau of Labor Statistics, United States
Department of Labor for Urban Wage Earners and
Clerical Workers (1982-1984=100) for All
Items, United States City Average ("CPI"), in
effect on October 1 bears to the CPI on the
immediately preceding October 1, except that
no reductions in the Base Salary will be made
pursuant to this Section 3.1.1.
3.1.2 Board Adjustment. Notwithstanding the
language of Section 3.1.1 above, the Base
Salary may be increased from time to time as
determined by the Board of Directors of the
Company (the "Board"), or the Compensation
Committee of the Board, in an amount greater
than provided for in Section 3.1.1 above.
3.2 Bonus. In addition to payment of the Base Salary, as
adjusted, the Company may pay to the Executive an annual
bonus to be determined by the Board or by the
Compensation Committee of the Board on an annual basis.
3.3 Benefits. The Executive shall be entitled to participate
in all employee benefit plans as are generally made
available to other employees of the Company, subject to
the terms and conditions of such benefits and plans and,
as such benefits and plans may be changed by the Company
from time to time. Such benefits in existence as of the
date hereof are as follows: (i) group medical insurance
coverage, (ii) group life insurance coverage and (iii)
certain stock option plans.
3.4 Expenses. The Company shall pay directly, or reimburse
the Executive, for any reasonable and necessary expenses
and costs incurred by the Executive in connection with,
or arising out of, the performance of the Executive's
duties hereunder, provided that such expenses and costs
shall be paid or reimbursed subject to such rules,
regulations, and policies of the Company as established
from time to time by the Company. In the event the
Executive incurs legal fees and expenses to enforce this
Agreement, the Company shall reimburse the Executive such
fees and expenses in full.
3.5 Fringe Benefits. During the term, the Executive shall be
entitled to all fringe benefits including, but not
limited to, vacation in accordance with the most
favorable plans, practices, programs and policies of the
Company during the 12-month period immediately preceding
the date of this Agreement, or, if more favorable to the
Executive, as in effect at any time thereafter with
respect to other employees of the Company.
4. Options.
4.1 Grant of Options and Option Prices. Subject to the terms
and conditions of this Section 4, the Company hereby
grants to the Executive as of the date of this Agreement,
and according to the terms and conditions hereunder, the
right, privilege and option to purchase 100,000 shares of
the Company's common stock, par value $.001 ("Common
Stock"), at an option price of $2.25 per share ("$2.25
Option"), 100,000 shares of Common Stock at an option
price of $2.50 per share ("$2.50 Option"), and 100,000
shares of Common Stock at an option price of $3.00 per
share ("$3.00 Option"). Collectively, the $2.25 Option,
$2.50 Option, and $3.00 Option are referred to herein as
the "Options."
4.2 Time of Exercise of Options.
4.2.1 $2.25 Option. Subject to the terms and
conditions contained in this Section 4, the
$2.25 Option herein granted may be exercised
by the Executive, in whole or in part, and
from time to time, at any time after the date
one year after the date of this Agreement
until the expiration of the date ten years
after the date of this Agreement.
4.2.2 $2.50 Option. Subject to the terms and
conditions contained in this Section 4, the
$2.50 Option herein granted may be exercised
by the Executive, in whole or in part, and
from time to time, at any time after the date
two years after the date of this Agreement
until the expiration of the date ten years
after the date of this Agreement.
4.2.3 $3.00 Option. Subject to the terms and
conditions contained in this Section 4, the
$3.00 Option herein granted may be exercised
by the Executive, in whole or in part, and
from time to time, at any time after the date
three years after the date of this Agreement
until the expiration of the date ten years
after the date of this Agreement.
4.2.4 Change of Control. Upon a change in control
(as defined below) of the Company, the Options
shall become immediately exercisable in full,
notwithstanding the vesting schedule provided
herein. A "change in control" shall be deemed
to have occurred upon any of the following
events: (i) consummation of any of the
following transactions: any merger,
recapitalization, or other business
combination of the Company pursuant to which
the Company is the non-surviving corporation,
unless the majority of the holders of Common
Stock immediately prior to such transaction
will own at least fifty-one percent (51%) of
the total voting power of the then outstanding
securities of the surviving corporation
immediately after such transaction; (ii) a
transaction in which any person, corporation
or other entity (A) shall purchase any Common
Stock pursuant to a tender offer or exchange
offer, without the prior consent of the Board
or (B) shall become after the date of this
Agreement the "beneficial owner" (as such term
is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of
securities of the Company representing twenty-
five percent (25%) or more of the total voting
power of the then outstanding securities of
the Company; or (iii) if, during any period of
two (2) consecutive years, individuals who, at
the beginning of such period, constituted the
entire Board and any new director whose
election by the Board, or nomination for
election by the Company's stockholders was
approved by a vote of at least two-thirds of
the directors then still in office who either
were directors at the beginning of the period
or whose election or nomination for election
by the stockholders was previously so
approved, cease for any reason to constitute a
majority thereof.
4.2.5 Acceleration of Vesting. The Board may, in
its sole discretion, accelerate the vesting of
all or any part of the Options and/or waive
any limitations or restrictions, if any, for
all or any part of the Options.
4.3 Method of Exercise and Payment of Exercise Price.
4.3.1 Subject to the terms of this Section 4, the
Options granted under this Agreement may be
exercised by written notice directed to the
Company at its principal place of business
setting forth the exact number of shares under
each of the $2.25 Option, the $2.50 Option and
the $3.00 Option, as applicable, that the
Executive is purchasing, which may not exceed
the number of shares that the Executive is
eligible to purchase under this Agreement, and
enclosing with such written notice a certified
or cashier's check or cash, or the equivalent
thereof acceptable to the Company, in payment
of the full option price for the number of
shares specified in such written notice and
shall comply with such other reasonable
requirements as the Board may establish.
Subject to the terms and conditions of this
Agreement, the Company shall make delivery of
such shares within a reasonable period of time
after the giving of such notice.
4.3.2 The Executive understands that, on the
exercise of the Options (or at the time a sale
of the stock acquired by such exercise at a
profit would no longer subject Executive to
suit under Section 16(b) of the Securities
Exchange Act of 1934, as amended), the excess
of the fair market value of the Common Stock
over its option price is taxable remuneration
to him subject to federal income tax
withholding by the Company. To facilitate
withholding by the Company, if required,
Executive hereby agrees that the
exercisability of the Options is conditional
on Executive agreeing to such arrangements and
taking such actions as the Company determines
are appropriate to insure that the amount
required to be withheld will be available for
payment in money by the Company as required
withholding.
4.4 Termination of Options. The Options granted herein, to
the extent not theretofore exercised, shall terminate
forthwith upon the tenth anniversary of the date of this
Agreement. Notwithstanding anything herein to the
contrary, termination of this Agreement for any reason
whatsoever shall not affect or terminate the Executive's
rights under Sections 4 and 9.
4.5 Restrictions.
4.5.1 The Options granted herein are not
transferable by Executive, except by will or
laws of descent and distribution..
4.5.2 Executive shall have no right as a stockholder
with respect to any shares covered by the
Options until the date of issuance of a stock
certificate to him for such shares. No
adjustment shall be made for dividends or
other rights for which the record date is
prior to the date such stock certificate is
issued.
4.6 Stock Dividends, Reorganizations. If and to the extent
that the number of issued shares of Common Stock shall be
increased or reduced resulting from a subdivision or
consolidation of shares or the payment of a stock
dividend or any other increase or decrease in the number
of such shares of Common Stock of the Company effected
without receipt of consideration by the Company, the
number of shares of Common Stock subject to the Options
and the option price therefor shall be proportionately
adjusted.
If the Company is reorganized or consolidated or merged
with another corporation, in which the Company is the
non-surviving corporation, the Executive shall be
entitled to receive options covering shares of such
reorganized, consolidated or merged company in the same
proportion as optioned under this Agreement to Executive
prior to such reorganization, consolidation or merger, at
any equivalent price, and subject to the same terms and
conditions as contained herein. For purposes of the
preceding sentence, the excess of the aggregate fair
market value of the shares subject to the Options
immediately after the reorganization, consolidation or
merger over the aggregate option price of such shares
shall not be more than the excess of the aggregate fair
market value of all shares subject to the Options
immediately before such reorganization, consolidation or
merger over the aggregate option price of such shares,
and the new option or assumption of the Options shall not
give Executive additional benefits which he did not have
under the Options.
The grant of the Options 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.
4.7 Compliance with Law and Approval of Regulatory Bodies.
No shares will be issued, or, in the case of treasury
shares transferred, upon exercise of the Options granted
hereunder, except in compliance with all applicable
Federal and State laws and regulations and in compliance
with rules of stock exchanges on which the Company's
shares of Common Stock may be listed.
4.8 Binding Effect and Amendments. This Agreement shall be
binding upon the heirs, executors, administrators and
successors of the parties hereto. This Agreement may not
be amended except in writing signed by all of the parties
hereto.
4.9 Other Restrictions and Legends.
4.9.1 Acquisition for Own Account; Registration. The
Executive represents and warrants that if he acquires any
of the shares under the Options he will acquire such
shares for his own account and for the purpose of
investment and not with a view to the sale or
distribution thereof, except for sales pursuant to an
effective registration statement under the Securities Act
of 1933 (the "Act") or pursuant to an exemption from
registration under the Act. The Executive understands
that these shares have not and will not have been
registered under the Act (the Company being under no
obligation to effect such registration) and that such
shares must be held indefinitely unless a subsequent
disposition thereof is registered under the Act or is
exempt from registration. The Executive further
understands that the exemption from registration afforded
by Rule 144 under the Act depends upon the satisfaction
of various conditions and that, if applicable, Rule 144
affords the basis for sale of such shares only in limited
amounts.
4.9.2 Disposition of Shares. The Executive
represents, covenants, and agrees that he will not sell
or otherwise dispose of the shares acquired under this
Agreement in the absence of (a) an effective registration
statement under the Act, (b) an opinion acceptable in
form and substance to the Company from Executive's
counsel satisfactory to the Company, or an opinion of
counsel to the Company, to the effect that no
registration is required for such disposition, or (c) a
"no-action" letter from the staff of the Securities &
Exchange Commission ("SEC") to the effect that such staff
will not recommend any action to the SEC if such a
disposition takes place without registration.
4.9.3 Restrictive Legend. The certificates
representing shares covered by this Agreement shall upon
issuance thereof have stamped or imprinted thereon or
affixed thereto a legend to the following effect:
THE REGISTERED HOLDER HEREOF HAS ACQUIRED
THE SHARES REPRESENTED BY THIS
CERTIFICATE FOR INVESTMENT AND NOT FOR
RESALE IN CONNECTION WITH A DISTRIBUTION
THEREOF. ACCORDINGLY, SUCH SHARES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO A CURRENTLY EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR
OTHERWISE IN A TRANSACTION EXEMPT FROM
THE PROVISIONS OF SECTION 5 OF SAID ACT."
5. No Offset; Legal Fees and Expenses. The Company's obligation
to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right which the Company
may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment by way of
mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement. The Company agrees to pay, to the
full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company or others of the
validity or enforceability of, or liability under, any provision of
this Agreement, plus in each case interest, compounded quarterly,
on the total unpaid amount determined to be payable under this
Agreement, such interest to be calculated at a rate equal to the
prime commercial lending rate as published in the Wall Street
Journal from time to time during the period of such nonpayment.
6. Confidential Information.
6.1 Confidentiality. During the term of this Agreement and
for 12 months following termination of this Agreement,
the Executive agrees to hold in a fiduciary capacity for
the benefit of the Company all secret or confidential
information, knowledge or data ("Confidential
Information") relating to the Company or any of its
affiliated companies, and their respective businesses,
which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its
affiliated companies and which shall not be public
knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After
termination of the Executive's employment with the
Company, the Executive shall not, without the prior
written consent of the Company, communicate or divulge
such Confidential Information to anyone other than the
Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 6
constitute a basis for deferring or withholding any
amounts otherwise payable or issuable to the Executive
under this Agreement.
6.2 Exceptions. Notwithstanding the provisions of Sections
6.1 and 6.3 hereof, the Executive shall not be held
liable for disclosure of Confidential Information which
(i) was generally available to the public at the time of
its disclosure hereunder or becomes generally available
to the public subsequent to the time of disclosure
hereunder through means unrelated to the Executive's
disclosure hereunder; or (ii) is reasonably necessary to
perform the Executive's duties under this Agreement; or
(iii) is disclosed with the written approval of the
Company; or (iv) is required to be disclosed by law or by
any governmental authority or entity; or (v) is disclosed
as required by judicial or tribunal action after all
available legal remedies to maintain the Confidential
Information in secret shall have been exhausted; or (vi)
a party can demonstrate was already in its possession
prior to any disclosure thereof under this Agreement.
6.3 Equitable Relief. The Executive agrees that the remedy
at law for any breach or threatened breach of any
covenant contained in this Section 6 will be inadequate,
and that the Company, in addition to such other remedies
as may be available to it, in law or in equity, shall be
entitled to injunctive relief without bond or other
security.
7. Termination.
During the Term of this Agreement, the Executive's employment
and the Agreement may be terminated only for one of the following
reasons:
7.1 Death. Subject to Section 4.5.1, this Agreement and the
Term shall terminate automatically upon the Executive's
death.
7.2 Disability.
7.2.1 Definition. "Disability" of the Executive is
defined, for the purposes of this Agreement,
as physical or mental disability of the
Executive which after a continuous period of
at least 180 days is determined to be total
and permanent by a physician selected by the
Company and acceptable to the Executive or the
Executive's legal representative.
7.2.2 Application. The Company may terminate the
Agreement and the Term after establishing the
Executive's Disability as set forth in Section
7.2.1, and by giving written notice of its
intention to terminate the Executive's
employment with the Company ("Disability
Termination Notice"). In such a case, the
Executive's employment with the Company and
the Term shall terminate effective on the
earlier of the otherwise scheduled expiration
of the Term pursuant to Section 1 or on the
thirtieth (30th) day after receipt of the
Disability Termination Notice, provided that
the Executive has not resumed full-time
performance of his duties under this
Agreement.
7.3 Cause. The Company may terminate the Agreement and the
Term for "Cause," which for the purposes of this
Agreement is defined as (i) the ultimate conviction
(after all appeals have been decided) of the Executive of
a felony involving moral turpitude by a federal or state
court of competent jurisdiction; or (ii) willful, gross
misconduct or willful, gross neglect of duties by the
Executive if such has resulted in material damage to the
Company taken as a whole; provided that, (a) no action or
failure to act by the Executive will constitute a reason
for termination if the Executive believed in good faith
that such action or failure to act was in the Company's
best interests, and (b) failure of the Executive to
perform his duties hereunder due to a Disability shall
not be considered willful, gross misconduct or willful,
gross neglect of duties for any purpose.
7.4 Good Reason. The Executive may terminate the Agreement
for "Good Reason," which is defined for the purposes of
this Agreement as (i) the assignment to the Executive of
any duties inconsistent with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities that
he has had during the 90 day period immediately preceding
the date of this Agreement; or (ii) any other action by
the Company which results in a diminishment in such
position, authority, duties or responsibilities, other
than an insubstantial and inadvertent action which is
remedied by the Company after receipt of notice thereof
by the Executive; or (iii) the Company's requiring the
Executive to be based at any office or location other
than that at which the Executive is based at the date of
this Agreement, except for travel reasonably required in
the performance of the Executive's responsibilities; or
(iv) any purported termination by the Company of the
Executive's employment with the Company otherwise than as
permitted by this Agreement, it being understood that any
such purported termination shall not be effective for any
purpose of this Agreement.
8. Notice of Termination.
8.1 By Company. The Company shall not be deemed to have
terminated this Agreement pursuant to the terms of
Section 7 hereof, unless and until there shall have been
delivered to the Executive a copy of a resolution
("Notice of Termination for Cause") duly adopted by the
affirmative vote of not less than three-fourths of the
entire Board of Directors of the Company at a meeting of
the Board called and held for such purpose (after
reasonable notice to the Executive and an opportunity for
the Executive, together, with the Executive's counsel, to
be heard before the Board), finding that in the good
faith opinion of the Board, the Executive should be
terminated pursuant to Section 7, and specifying the
particulars thereof in detail.
8.2 By Executive. The Executive shall not be deemed to have
terminated this Agreement pursuant to the terms of
Section 7 hereof, unless and until there shall have been
delivered by the Executive to the Company a "Notice of
Termination for Good Reason" which shall state the
specific termination provision relied upon, and
specifying the particulars thereof in detail.
9. Company Obligations Upon Termination. If, during the Term of
this Agreement, the Company shall terminate this Agreement other
than for Cause, or the Executive shall terminate this Agreement for
Good Reason, the Company shall pay to the Executive in a lump sum
in cash on the date of such termination an amount equal to the
amount which would have been paid to Executive under the Agreement
if this Agreement had remained in effect through the Term using the
Base Salary in effect at the time of delivery date of the Notice of
Termination for Cause or the Notice of Termination for Good Reason,
as applicable, and without making any adjustments to Base Salary
pursuant to Section 3.1.1. Options shall become vested and fully
exercisable for the full ten-year period.
10. Successors.
10.1 This Agreement shall inure to the benefit of and be
enforceable by the Executive and the Executive's legal
representatives.
10.2 This Agreement shall inure to the benefit of and be
binding upon the Company and its successors.
11. Miscellaneous.
11.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties
hereto or their respective successors and legal
representatives.
11.2 Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery
to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Dr. Louis F. Centofanti
315 Wilderlake Court
Atlanta, Georgia 30328
If to the Company:
Perma-Fix Environmental Services, Inc.
1940 Northwest 67th Place
Gainesville, Florida 32653
Attn: Chief Financial Officer
or to such other address as either party shall have
furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when
actually received by the addressee.
11.3 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity
or enforceability of any other provision of this
Agreement.
11.4 Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject
matter hereof and supersedes any and all prior or
contemporaneous oral and prior written agreements and
understandings. There are no oral promises, conditions,
representations, understandings, interpretations or terms
of any kind as conditions or inducements to the execution
hereof or in effect among the parties. This Agreement
may not be amended, and no provision hereof shall be
waived, except by a writing signed by all the parties to
this Agreement, or, in the case of a waiver, by the party
waiving compliance therewith, which states that it is
intended to amend or waive a provision of this Agreement.
Any waiver of any rights or failure to act in a specific
instance shall relate only to such instance and shall not
be construed as an agreement to waive any rights or
failure to act in any other instance, whether or not
similar.
11.5 Modification. Should any provision of this Agreement be
unenforceable or prohibited by an applicable law, this
Agreement shall be considered divisible as to such
provision which shall be inoperative, and the remainder
of this Agreement shall be valid and binding as though
such provision were not included herein.
11.6 Counterparts. This Agreement may be executed in two or
more counterparts with the same effect as if the
signatures to all such counterparts were upon the same
instrument, and all such counterparts shall constitute
but one instrument.
11.7 Headings. All headings in this Agreement are for
convenience only and are not intended to affect the
meaning of any provision hereof.
IN WITNESS WHEREOF, the Executive has hereunto set his
hand and, pursuant to the authorization from its Board of
Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above
written.
"EXECUTIVE"
_______________________________
Dr. Louis F. Centofanti
"COMPANY"
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By: __________________________
Title ________________________
ISTE:\N-P\PESI\10Q\997\EXHIB10.9