PERMA-FIX ENVIRONMENTAL SERVICES, INC. (NASDAQ:PESI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Employment Agreement
On January 19, 2017, the Compensation and Stock Option Committee
(the Compensation Committee) and Board of Directors (the
Board) of Perma-Fix Environmental Services, Inc. (the
Company) approved, and the Company entered into, an
employment agreement (the EVP/COO Employment Agreement)
with Mark Duff, Executive Vice President/Chief Operating Officer
(the EVP/COO). The EVP/COO Employment Agreement is
effective June 11, 2016, Mr. Duffs date of employment as EVP/COO,
and has a term three years. to the EVP/COO Employment Agreement,
Mr. Duff will continue to serve as the Companys EVP/COO, with an
annual base salary of $267,000. In addition, Mr. Duff is entitled
to participate in the Company’s broad-based benefits plans and
to certain performance compensation payable under separate a
Management Incentive Plan (MIP) as approved by the
Companys Compensation Committee and Board. See MIPs approved by
the Compensation Committee for each of the EVP/COO, CEO, and CFO
below. The terms of each 2017 MIP, which are each effective as of
January 1, 2017, are described below under the heading Management
Incentive Plans.
The EVP/COO Employment Agreements is effective for three years,
unless earlier terminated by the Company with or without cause
(as defined in the agreement) or by the EVP/COO for good reason
(as defined in the agreement) or any other reason. If the
EVP/COOs employment is terminated due to death, disability or for
cause, the Company will pay to the EVP/COO or to his estate a
lump sum equal to the sum of any unpaid base salary through the
date of termination and any benefits due to the EVP/COO under any
employee benefit plan, excluding any severance program or policy
(the Accrued Amounts).
If the EVP/COO terminates his employment for good reason or is
terminated without cause, the Company will pay the EVP/COO a sum
equal to the total Accrued Amounts, plus one year of full base
salary. If the EVP/COO terminates his employment for a reason
other than for good reason, the Company will pay to the EVP/COO
the amount equal to the Accrued Amounts. If there is a Change in
Control (as defined in the employment agreement), all outstanding
stock options to purchase common stock held by the EVP/COO will
immediately become exercisable in full. Severance benefits
payable with respect to a termination (other than Accrued
Amounts) shall not be payable until the termination constitutes a
separation from service (as defined under Treasury Regulation
Section 1.409A-1(h)).
The summary of the terms of the EVP/COO Employment Agreement set
forth above is qualified in its entirety by reference to the full
text of the EVP/COO Employment Agreement, which is attached
hereto as Exhibit 99.1and incorporated herein by reference.
Management Incentive Plans
On January 19, 2017, the Companys Compensation Committee approved
individual MIPs for Dr. Louis F. Centofanti, our Chief Executive
Officer (the CEO); Mark Duff, our EVP/COO; and Ben
Naccarato, our Chief Financial Officer (the CFO). The MIPs
are effective January 1, 2017. Each MIP provides guidelines for
the calculation of annual cash incentive based compensation,
subject to Compensation Committee oversight and modification.
Each MIP awards cash compensation based on achievement of
performance thresholds, with the amount of such compensation
established as a percentage of base salary. The potential target
performance compensation ranges from 5% to 100% of the 2017 base
salary for the CEO ($13,962 to $279,248), 5% to 100% of the 2017
base salary for the EVP/COO ($13,350 to $267,000), and 5% to 100%
of the 2017 base salary for the CFO ($11,033 to $220,667).
The performance compensation payable under each MIP is based
upon meeting corporate revenue, earnings before interest,
taxes, depreciation and amortization (EBITDA), health
and safety, and environmental compliance (permit and license
violations) targets and objectives during fiscal year 2017 from
our continuing operations (excluding the financial results of
the Companys majority-owned Polish subsidiary, Perma-Fix
Medical S.A. (PF Medical)), with such targets and
objectives approved by the Companys Board. The Compensation
Committee believe performance compensation payable under each
of the MIPs should be based on achievement of EBITDA, a
non-GAAP (Generally Accepted Accounting Principles) financial
measurement, as this target provides a better indicator of
operating performance as it excludes certain non-cash items.
EBITDA has certain limitations as it does not reflect all items
of income or cash flows that affect the Companys financial
performance under GAAP.
Performance compensation is paid on or about 90 days after
year-end, or sooner, based on finalization of our audited
financial statements for 2017. If the MIP participants
employment with the Company is voluntarily or involuntarily
terminated prior to a regularly scheduled MIP compensation
payment date, no MIP payment will be payable for and after such
period.
The Compensation Committee retains the right to modify, change
or terminate each MIP and may adjust the various target amounts
described below, at any time and for any reason.
The total paid to the CEO, EVP/COO, and CFO will not exceed 50%
of the Companys pre-tax net income prior to the calculation of
performance compensation.
Each MIP is briefly described below, and the descriptions are
qualified by reference to the respective MIPs attached as
exhibits 99.2 to 99.4 to this Report.
CEO MIP:
2017 CEO performance compensation is based upon meeting
corporate revenue, EBITDA, health and safety, and environmental
compliance (permit and license violations) objectives during
fiscal year 2017 from our continuing operations (excluding PF
Medical). At achievement of 70% to 119% of the revenue and
EBITDA targets, the potential performance compensation is
payable at 5% to 50% of the CEOs 2017 base salary. For this
compensation, 60% is based on the EBITDA goal, 10% on the
revenue goal, 15% on the number of health and safety claim
incidents that occur during fiscal year 2017, and the remaining
15% on the number of notices alleging environmental, health, or
safety violations under our permits or licenses that occur
during the fiscal year 2017. At achievement of 120% to 160% of
the revenue and EBITDA targets, the potential performance
compensation is payable at 65% to 100% of the CEOs 2017 base
salary. For this compensation, the amount payable is based on
the four objectives noted above, with the payment of such
performance compensation being weighted more heavily toward the
EBITDA objective. No performance incentive compensation will be
payable to the CEO for achieving the health and safety, permit
and license violation, and revenue targets unless a minimum of
70% of the EBITDA target is achieved. Each of the revenue and
EBITDA components is based on our Board-approved revenue target
and EBITDA target. The 2017 target performance incentive
compensation for our CEO is as follows:
|
Annualized Base Pay: |
$ | 279,248 | ||
|
Performance Incentive Compensation Target (at 100% of |
$ | 139,624 | ||
|
Total Annual Target Compensation (at 100% of MIP): |
$ | 418,872 |
EVP/COO MIP:
2017 EVP/COO performance compensation is based upon meeting
corporate revenue, EBITDA, health and safety, and
environmental compliance (permit and license violations)
objectives during fiscal year 2017 from our continuing
operations (excluding PF Medical). At achievement of 70% to
119% of the revenue target and 60% to 119% of the EBITDA
target, the potential performance compensation is payable at
5% to 50% of the 2017 base salary. For this compensation, 60%
is based on EBITDA goal, 10% on revenue goal, 15% on the
number of health and safety claim incidents that occur during
fiscal year 2017, and the remaining 15% on the number of
notices alleging environmental, health or safety violations
under our permits or licenses that occur during the fiscal
year 2017. Upon achievement of 120% to 160% of the Revenue
and EBITDA targets, the potential performance compensation is
payable at 65% to 100% of the EVP/COOs 2017 base salary. For
this compensation, the amount payable is based on the four
objectives noted above, with the payment of such performance
compensation being weighted more heavily toward the EBITDA
objective. No performance incentive compensation will be
payable to the EVP/COO for achieving the health and safety,
permit and license violation, and revenue targets unless a
minimum of 60% of the EBITDA target is achieved. Each of the
revenue and EBITDA components is based on our board approved
revenue target and EBITDA target. The 2017 target performance
incentive compensation for our EVP/COO is as follows:
|
Annualized Base Pay: |
$ | 267,000 | ||
|
Performance Incentive Compensation Target (at 100% of |
$ | 133,500 | ||
|
Total Annual Target Compensation (at 100% of Plan): |
$ | 400,500 |
CFO MIP:
2017 CFO performance compensation is based upon meeting
corporate revenue, EBITDA, health and safety, and
environmental compliance (permit and license violations)
objectives during fiscal year 2017 from our continuing
operations (excluding PF Medical). At achievement of 70% to
119% of the Revenue and EBITDA targets, the potential
performance compensation is payable at 5% to 50% of the 2017
base salary. For this compensation, 60% is based on EBITDA
goal, 10% on revenue goal, 15% on the number of health and
safety claim incidents that occur during fiscal year 2017,
and the remaining 15% on the number of notices alleging
environmental, health or safety violations under our permits
or licenses that occur during the fiscal year 2017. Upon
achievement of 120% to 160% of the Revenue and EBITDA
targets, the CFOs potential performance compensation is
payable at 65% to 100% of the CFOs 2017 base salary. For this
compensation, the amount payable is based on the four
objectives noted above, with the payment of such performance
compensation being weighted more heavily toward the EBITDA
objective. No performance incentive compensation will be
payable to the CFO for achieving the health and safety,
permit and license violation, and revenue targets unless a
minimum of 70% of the EBITDA target is achieved. Each of the
revenue and EBITDA components is based on our board approved
revenue target and EBITDA target. The 2017 target performance
incentive compensation for our CFO is as follows:
|
Annualized Base Pay: |
$ | 220,667 | ||
|
Performance Incentive Compensation Target (at 100% of |
$ | 110,334 | ||
|
Total Annual Target Compensation (at 100% of Plan): |
$ | 331,001 |
Section 9 Financial Statements and
Exhibits
Item 9.01 Financial Statements and
Exhibits
(d)Exhibits
Exhibit Number
Description
|
99.1 |
Employment Agreement approved January 19, 2017, but |
|
99.2 |
2017 Management Incentive Plan for Chief Executive |
|
99.3 |
2017 Management Incentive Plan for Executive Vice |
|
99.4 |
2017 Management Incentive Plan for Chief Financial |
About PERMA-FIX ENVIRONMENTAL SERVICES, INC. (NASDAQ:PESI)
Perma-Fix Environmental Services, Inc. is an environmental and environmental technology know-how company. It operates in three segments: The Treatment Segment (Treatment), the Services Segment (Services) and the Medical Segment (Medical). Treatment includes nuclear, low-level radioactive, mixed (waste containing both hazardous and low-level radioactive waste), hazardous and non-hazardous waste treatment, processing and disposal services primarily through approximately four licensed and permitted treatment and storage facilities held by its subsidiaries. Services include on-site waste management services to commercial and government customers, technical services and nuclear services. The Medical segment includes research and development (R&D) of a new medical isotope production technology by its Polish subsidiary, Perma-Fix Medical S.A. (PF Medical). Its Treatment and Services provide services to research institutions, commercial companies, public utilities and governmental agencies. PERMA-FIX ENVIRONMENTAL SERVICES, INC. (NASDAQ:PESI) Recent Trading Information
PERMA-FIX ENVIRONMENTAL SERVICES, INC. (NASDAQ:PESI) closed its last trading session down -0.10 at 3.60 with 239 shares trading hands.