Edgar Filing: COMMODORE APPLIED TECHNOLOGIES INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14A INFORMATION

Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

COMMODORE APPLIED TECHNOLOGIES, INC.

(Name of Registrant as Specified in Its Charter)

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PROXY STATEMENT
AND NOTICE OF

2002

ANNUAL
STOCKHOLDERS
MEETING

COMMODORE APPLIED TECHNOLOGIES, INC.

NOTICE OF 2002 ANNUAL
MEETING OF STOCKHOLDERS

_____________________________________________________________________________

TIME: 11:00 a.m. on Friday, September 12, 2003

PLACE: The Fitzpatrick Hotel
687 Lexington Avenue
New York, NY 10022

ITEMS OF
BUSINESS:

1) To elect directors.

2) To amend the Certificate of Incorporation to increase
the number of authorized shares of common stock from
125,000,000 shares to 300,000,000 shares.

3) To approve the Company's Short Term Incentive Plan.

4) To ratify the Company's 1998 Stock Option Plan, as
amended.

5) To approve options issued to the Chief Executive
Officer outside the Company's 1998 Stock Option Plan,
as amended.

6) To approve options issued to the Chief Financial
Officer outside the Company's 1998 Stock Option
Plan, as amended.

7) To ratify the Company's selection of independent
auditors.

8) To transact other business properly coming before
the meeting.

WHO CAN VOTE: You can vote if you were a stockholder of
record on July 31, 2003.

ANNUAL REPORT: A copy of our 2002 Annual Report on Form 10K is enclosed.

DATE OF MAILING: This notice and the proxy statement are first being
mailed to stockholders on or about August 8, 2003.

By Order of the Board of Directors
James M. DeAngelis, Secretary

LETTER TO THE STOCKHOLDERS

To Our Stockholders:

It is our pleasure to invite you to attend our 2002 Annual
Meeting of Stockholders, which will be held this year on Friday,
September 12, 2003, at the Fitzpatrick Hotel, 687 Lexington
Avenue, New York, NY 10022. The meeting will start at 11:00 a.m.
local time.

On the ballot at this year's meeting are company proposals (1)
for the election of directors, (2) to increase the number of
authorized shares of stock, (3) to approve the Company's Short
Term Incentive Plan, (4) to ratify the Company's 1998 Stock
Option Plan, as amended; (5) to approve the issuance of stock
options to the Chief Executive Officer outside the Company's 1998
Stock Option Plan, as amended; (6) to approve the issuance of
stock options to the Chief Financial Officer outside the
Company's 1998 Stock Option Plan, as amended; and (7) to ratify
the Company's independent auditor. We also look forward to
answering your questions at the meeting in the manner discussed
in the proxy statement. If you will need special assistance at
the meeting because of a disability, please contact James M.
DeAngelis at 212-308-5800. We will not provide an interpreter
for the hearing impaired.

PLEASE NOTE THAT YOU WILL NEED TO SHOW THAT YOU ARE A STOCKHOLDER
OF COMMODORE TO ATTEND THE ANNUAL MEETING. If your shares are
registered in your name, your admission card is attached to your
proxy card, and you will need to bring this card with you to the
meeting. If your shares are in the name of your broker or bank
or you received your proxy materials electronically, you will
need to bring evidence of your stock ownership, such as your most
recent brokerage statement, and valid picture identification. IF
YOU DO NOT HAVE EITHER AN ADMISSION CARD OR PROOF THAT YOU OWN
COMMODORE APPLIED TECHNOLOGIES, INC. STOCK, YOU MAY NOT BE
ADMITTED INTO THE MEETING.

Whether or not you plan to attend, you can be sure your shares
are represented at the meeting by promptly voting and submitting
your proxy by phone or by completing, signing and returning the
enclosed proxy card.

Thank you for your support.

Sincerely,

Shelby T. Brewer
Chairman and CEO

ABOUT THE MEETING

What am I voting on?
____________________

You will be voting on the following:

* To elect seven directors;
* To increase the number of shares of authorized common
stock;
* To approve the Company's Short Term Incentive Plan;
* To ratify the Company's 1998 Stock Option Plan, as
amended;
* To approve the issuance of stock options to the Chief
Executive Officer outside of the Company's 1998 Stock Option
Plan, as amended;
* To approve the issuance of stock options to the Chief
Financial Officer outside of the Company's 1998 Stock Option
Plan, as amended; and
* To ratify Tanner + Co as the Company's independent
auditors.

Who is entitled to vote?
________________________

You may vote if you owned stock as of the close of business
on July 31, 2003. Each share of common stock is entitled to
one vote. As of July 24, 2003, we had 94,807,439 shares of
common stock outstanding.

How do I vote before the meeting?
_________________________________

You have two voting options:

* By facsimile through the number shown on your proxy
card; or
* By mail by completing, signing and returning the
enclosed proxy card.

If you hold your shares in the name of a bank or broker,
whether you can vote by facsimile depends on their voting
processes. Please follow the directions on your proxy card
carefully.

Can I vote at the meeting?
__________________________

You may vote your shares at the meeting if you attend in
person. Even if you plan to attend the meeting, we encourage
you to vote your shares by proxy. You may vote by proxy by
facsimile or by mail.

Can I change my mind after I vote?
__________________________________

You may change your vote at any time before the polls close
at the meeting. You may do this by (1) signing another proxy
with a later date and returning it to us prior to the
meeting, (2) voting again by telephone prior to 11:00a.m. on
September 12, 2003 or (3) voting again at the meeting.

What if I return my proxy card but do not provide voting
instructions?
________________________________________________________

Proxies that are signed and returned but do not contain
instructions will be voted (1) FOR the election of the
nominee directors named on page 3 of this proxy statement;
(2) FOR the increase in the number of authorized shares; (3)
FOR the approval of the Company's Short Term Incentive Plan;
(4) FOR the ratification of the Company's 1998 Stock Option
Plan, as amended; (5) FOR the approval of the issuance of
stock options to the Chief Executive Officer outside of the
Company's 1998 Stock Option Plan, as amended; (6) FOR the
approval of the issuance of stock options to the Chief
Financial Officer outside of the Company's 1998 Stock Option
Plan, as amended; and (7) FOR the ratification of Tanner +
Co. as the Company's independent auditors.

What does it mean if I receive more than one proxy card?
________________________________________________________

It means that you have multiple accounts with brokers and/or
our transfer agent. Please vote all of these shares. We
recommend that you contact your broker and/or our transfer
agent to consolidate as many accounts as possible under the
same name and address. Our transfer agent is Registrar and
Transfer Company, which may be reached at 1-800-866-1340.

Will my shares be voted if I do not provide my proxy?
_____________________________________________________

Your shares may be voted under certain circumstances if they
are held in the name of a brokerage firm. Brokerage firms
have the authority under the National Association of
Securities Dealers rules to vote customers' un-voted shares,
which are referred to as "broker

CXII 2002 Annual Meeting Proxy Page 1

non-votes," on certain "routine" matters, including the election
of directors. Shares represented by broker non-votes are counted for
purposes of establishing a quorum. At our meeting, shares
represented by broker non-votes will be counted as voted by
the brokerage firm in the election of directors and the
ratification of the auditors, but will not be counted for all
other matters to be voted on because these other matters are
not considered "routine" under the applicable rules. If you
hold your shares directly in your own name, they will not be
voted if you do not provide a proxy.

How can I attend the meeting?
_____________________________

The annual meeting is open to all holders of Commodore
Applied Technologies common stock. To attend the meeting,
you will need to bring evidence of your stock ownership. If
your shares are registered in your name, your admission card
is attached to your proxy card, and you will need to bring it
with you to the meeting. If your shares are in the name of
your broker or bank or you received your proxy materials
electronically, you will need to bring evidence of your stock
ownership, such as your most recent brokerage statement, and
valid picture identification. For directions to the annual
meeting, please call our Investor Relations department at 212-
308-5800. IF YOU DO NOT HAVE EITHER AN ADMISSION CARD OR
PROOF THAT YOU OWN COMMODORE APPLIED TECHNOLOGIES STOCK, YOU
MAY NOT BE ADMITTED INTO THE MEETING.

May stockholders ask questions at the meeting?
______________________________________________

Yes. Representatives of the Company will answer
stockholders' questions of general interest at the end of the
meeting. In order to give a greater number of stockholders
an opportunity to ask questions, individuals or groups will
be allowed to ask only one question and no repetitive or
follow-up questions will be permitted.

How many votes must be present to hold the meeting?
___________________________________________________

Your shares are counted as present at the meeting if you
attend the meeting and vote in person or if you properly
return a proxy by mail, or facsimile. In order for us to
conduct our meeting, a majority of our outstanding shares of
common stock as of July 31, 2003, must be present in person
or by proxy at the meeting. This is referred to as a quorum.

CXII 2002 Annual Meeting Proxy Page 2

ABOUT THE MEETING

How many votes are needed to elect directors?
_____________________________________________

The seven nominees receiving the highest number of "Yes"
votes will be elected as directors. This number is called a
plurality. Shares not voted, whether by marking "Abstain" on
your proxy card, by broker non-vote (which is described
above), or otherwise, will have no impact on the election of
directors, except that they will be counted for purposes of
establishing a quorum. Unless a properly executed proxy card
is marked "Withhold Authority," the proxy given will be voted
"For" the seven nominees for director.

How many votes are needed to approve the increase in the
number of authorized shares?
________________________________________________________

The amendment of the Certificate of Incorporation to increase
the number of authorized shares must receive the "Yes" vote
of a majority of our outstanding shares of common stock as of
July 31, 2003. A properly executed proxy card marked
"Abstain" with respect to these proposals will not be voted.
Accordingly, abstentions will have the effect of a vote
"Against" these proposals.

How many votes are needed to ratify the auditors?
_________________________________________________

The proposal to ratify the Company's selection of an
independent auditor must receive the "Yes" vote of a majority
of the shares present at the meeting in order to be approved.
Shares not voted, whether by marking "Abstain" on your proxy
card, by broker non-vote (which is described above), or
otherwise, will have no impact on the ratification of the
Company's independent auditor. Unless a properly executed
proxy card is marked "Withhold Authority," the proxy given
will be voted "For" ratification of the Company's independent
auditor.

How many votes are needed to ratify the Company's 1998 Stock
Option Plan, as amended?
____________________________________________________________

The proposal to ratify the Company's 1998 Stock Option Plan,
as amended, must receive the "Yes" vote of a majority of the
shares present at the meeting to be approved. A properly
executed proxy card marked "Abstain" with respect to these
proposals will not be voted. Accordingly, abstentions will
have the effect of a vote "Against" these proposals.

How many votes are needed to approve the issuance of stock
options to certain employees outside of the Company's 1998
Stock Option Plan, as amended?
___________________________________________________________

The approval of the issuance and vesting of stock options to
certain employees outside of the Company's 1998 Stock Option
Plan, as amended, must receive the "Yes" vote of a majority
of the shares present at the meeting. A properly executed
proxy card marked "Abstain" with respect to these proposals
will not be voted. Accordingly, abstentions will have the
effect of a vote "Against" these proposals.

How many votes are needed to approve the creation of a bonus
pool subject to certain milestones and metrics as outlined in
the Short Term Incentive Plan?
_____________________________________________________________

The approval of the Company's Short Term Incentive Plan must
receive the "Yes" vote of a majority of the shares present at
the meeting. A properly executed proxy card marked "Abstain"
with respect to these proposals will not be voted.
Accordingly, abstentions will have the effect of a vote
"Against" these proposals.

Can my shares be voted on matters other than those described
in this proxy statement?
____________________________________________________________

Yes. The Company has not received proper notice of, and is
not aware of, any business to be transacted at the meeting
other than as indicated in this proxy statement. If any
other item or proposal properly comes before the meeting, the
proxies received will be voted in accordance with the
discretion of the proxy holders.

Are appraisal rights applicable to any of the proposals?
________________________________________________________

No, appraisal rights do not apply to any of the proposals.

CXII 2002 Annual Meeting Proxy Page 3

ELECTION oF DIRECTORS &
DIRECTOR BIOGRAPHIES (PROPOSAL NUMBER 1)
____________________________________________________________________

Who are this year's nominees?
_____________________________

The directors standing for election this year are:

* Dr. Shelby T. Brewer - Chairman
* Bentley J. Blum
* Dr. Frank E. Coffman
* James M. DeAngelis
* Paul E. Hannesson
* VADM Michael P. Kalleres
* Ambassador William A. Wilson

WE RECOMMEND THAT YOU VOTE FOR THE ELECTION OF THESE DIRECTORS

How long will this year's nominees serve?
_________________________________________

Each director is elected to serve for a term of one year or
until his or her successor is duly elected and qualified.
The Company's officers are elected by, and serve at the
pleasure of, the Board of Directors, subject to the terms of
any employment agreements. Messrs. Hannesson and Blum are
brothers-in-law. No family relationship exists among any
other directors or executive officers of the Company.

Who are the directors who are nominated to serve?
__________________________________________________

SHELBY T. BREWER, 66, Director since January 2001,
* Chairman, CEO and President of the Company since January
2001.
* Since April 2000, Mr. Brewer served as Chairman and CEO
of Solutions, a wholly owned subsidiary of the Company.
* From 1996 to March 2000, Dr. Brewer was President of S.
Brewer Enterprises, a consulting firm he founded that is
engaged in supporting mergers and acquisitions, arranging
private and public financing, and forming joint ventures
abroad.
* Served as President and CEO of the nuclear power
businesses of ABB Combustion Engineering from 1985 to 1995.
* From 1981 to 1984, he served as Assistant Secretary of
Energy in the Reagan administration, holding the top nuclear
post in the US government.
* Dr. Brewer holds Ph.D. and M.S. degrees in nuclear
engineering from Massachusetts Institute of Technology; he
holds a B.S. degree in mechanical engineering and a B.A. in
humanities from Columbia University.

BENTLEY J. BLUM, 61, Director since March 1996,
* Served as a director of the Company since March 1996.
* Served as director of Environmental since 1984, Chairman
of the Board of Environmental from 1984 to November 1996 and
is its principal stockholder.
* Currently serves as a director of Separation, Solution
and CFC Technologies.
* Sole stockholder and director of a number of
corporations that hold real estate interests, oil drilling
and other corporate interests.
* Mr. Blum is the brother-in-law of Paul E. Hannesson, a
director of the Company.

DR. FRANK E. COFFMAN 61, Director since June 2002,
* Mr. Coffman also currently serves as Senior Vice
President, Corporate Development Officer of Holmes & Narver,
a construction and engineering firm (August 1997 - Present).
* Mr. Coffman served as Senior Vice President, Government
& Commercial Programs, IT Corporation, from January 1995 to
May 1997 and as Vice President, Government & Commercial
Programs, IT Corporation from 1984 to 1995.
* Mr. Coffman served as Deputy Assistant Secretary for
Waste Management for the Department of Energy ("DOE") from
1981 to 1984, Director of the Office of Advanced Nuclear
Systems, DOE from 1980 to 1981

CXII 2002 Annual Meeting Proxy Page 4

and as a Director of the Division of Fusion Development
and Technology, DOE from 1978 to 1980.
* Mr. Coffman served as Chief of the Energy Research
Development Agency, Fusion Systems and Applications Studies
Branch from 1970 to 1975.
* Mr. Coffman serves on the Board of Directors of Holmes
and Narver.
* Mr. Coffman holds a Ph.D. in nuclear physics and a MA
degree in plasma physics from Vanderbilt University. Mr.
Coffman holds a BS degree in physics from Western Kentucky
University.

JAMES M. DEANGELIS, 42, Director since June 2002,
* Mr. DeAngelis was appointed Vice President-Finance and
Treasurer of the Company in 1998 and promoted to Chief
Financial and Administrative Officer and Secretary in
December 1998.
* Mr. DeAngelis also served as Senior Vice President-Sales
& Marketing of Separation since July 1996.
* He also served as the President of CFC Technologies
since September 1994.
* He holds a MBA from the American Graduate School of
International Management. He holds B.S. degrees in Biology
and Physiology from the University of Connecticut.

PAUL E. HANNESSON, 62, Director since 1996,
* Mr. Hannesson served as CEO and President of the Company
from 1996 to January 2001.
* He served as Director and Officer of Environmental from
1996 to July 1998.
* He serves as Chairman of the Board and CEO of
Separation.
* Mr. Hannesson is the brother-in-law of Bentley Blum, a
director of the Company.

VADM MICHAEL P. KALLERES, 63, Director since June 2002,
* VADM Kalleres currently serves as President of Dare to
Excel Inc., a financial management and consulting firm (1998
to present). He also served as President and Chief Executive
Officer of Global Associates, Ltd., Technology Services Group
from 1994 to 1998.
* VADM Kalleres retired from active duty in September 1994
after 32 years as a naval officer.
* VADM Kalleres was awarded 18 personal/unit
military/combat decorations including the Defense
Distinguished Service Medal (2 awards) and the U.S. Navy
Distinguished Service Medal. He is also a recipient of the
Congressional, Ellis Island Medal of Honor.
* VADM Kalleres is a former member (1994-1998) of the
Defense Science Board, the Naval Studies Board of the
National Academy of Science. He is also a board member of
the Dean's Advisory Council at the Krannert School of
Management-Purdue University, and the National Board of the
Salvation Army.
* VADM Admiral Kalleres was awarded a BS degree in
Industrial Management and Engineering from the Krannert
School of Management-Purdue University, and a MS degree in
Political and International Affairs from George Washington
University.

AMBASSADOR WILLIAM A. WILSON, 88, Director since June 2002,
* Mr. Wilson has been active in ranching and farming in
California and Mexico from 1980 to the present.
* Mr. Wilson was active in real estate development in
California from 1961 through 1980.
* Mr. Wilson served as Chief Engineer of Wilson Oil Tools
from 1938 through 1955 and as Chairman from 1955 to 1961.
* Mr. Wilson served as the Presidential Envoy to the Holy
See from 1980 to 1984 and as Ambassador to the Holy See from
1984 to 1986.
* Mr. Wilson served on the Board of Directors of Jorgensen
Steel Co. from 1973 to 1984 and again from 1986 to 1991. Mr.
Wilson also served on the Board of Directors of Pennzoil
Company from 1983 to 1987.
* Mr. Wilson holds a BA in Mechanical Engineering from
Stanford University and a Doctor of Laws, Honoris Causa from
Assumption College, Barry University, and Pepperdine
University.

CXII 2002 Annual Meeting Proxy Page 5

BOARD OF DIRECTORS INFORMATION

What is the makeup of the Board of Directors?
_____________________________________________

Our Board of Directors currently has seven (7) members. All
current directors will be standing for election.

Is the Board currently divided into classes?
____________________________________________
No.

What if a nominee is unwilling or unable to serve?
__________________________________________________

This is not expected to occur. If it does, proxies will be
voted for a substitute nominated by the Board of Directors or
the Board of Directors may reduce the number of directors.

What happens if a Board member retires between the election
of directors?
___________________________________________________________

Under terms of our Certificate of Incorporation, any vacancy
on the Board may be filled by a majority vote of the
directors then in office.

How are directors compensated?
______________________________

Each director who is not an employee of Commodore Applied
Technologies, Inc. receives $375.00 for meetings they attend
other than by telephone and are reimbursed for reasonable
expenses in attending meetings. Directors who are also
employees of Commodore Applied Technologies, Inc. are not
separately compensated for their services as directors.
Directors are eligible to participate in the Company's 1998
Stock Option Plan, as amended. All non employee directors
were granted 140,000 options to purchase the Company's common
stock on October 2, 2002, at an exercise price equal to the
trading price of the common stock on the date of award
($0.07).

What are the committees of the Board?
_____________________________________

The Company's Board of Directors has (i) an Audit Committee
and (ii) a Compensation, Stock Option and Benefits Committee.
The Company does not have a nominating committee. The Company
no longer maintains an Executive and Finance Committee. On
August 30, 2000, the Board of Directors unanimously voted to
abolish the Executive & Finance Committee and determined that
the entire Board of Directors would perform its function.

As of December 31, 2002, and as of July 24, 2003 the Audit
Committee was composed of Michael P. Kalleres as Chairman,
Frank E. Coffman, James M. DeAngelis and William A. Wilson.
The responsibilities of the Audit Committee include
recommending to the Board of Directors the firm of
independent accountants to be retained by the Company,
reviewing with the Company's independent accountants the
scope and results of their audits, reviewing with the
independent accountants and management the Company's
accounting and reporting principles, policies and practices,
as well as the Company's accounting, financial and operating
controls and staff, supervising the Company's policies
relating to business conduct and dealing with conflicts of
interest relating to officers and directors of the Company.

As of December 31, 2002, and as of July 24, 2003 the
Compensation, Stock Option and Benefits Committee, was
composed of William A. Wilson, as Chairman, Shelby T. Brewer,
Frank E. Coffman and Michael P. Kalleres. The Compensation,
Stock Option, and Benefits Committee has responsibility for
establishing and reviewing employee and consultant/advisor
compensation, bonuses and incentive compensation awards,
administering and interpreting the Company's 1998 Stock
Option Plan, and determining the recipients, amounts and
other terms (subject to the requirements of the 1998 Stock
Option Plan) of options which may be granted under the 1998
Stock Option Plan from time to time and providing guidance to
management in connection with establishing additional benefit
plans.

How often did the Board meet in fiscal 2002?
____________________________________________

The Board met seven (7) times during 2002. Each director
attended at least 85% of the meetings of the board and of the
committees of which they were members.

CXII 2002 Annual Meeting Proxy Page 6

BOARD OF DIRECTORS INFORMATION

Our Board of Directors has the following committees:

EXECUTIVE & FINANCE:

On August 30, 2000, the Board of Directors unanimously
voted to abolish the Finance & Executive Committee and
determined that the entire Board of Directors would perform
its function.

AUDIT:

* Oversees auditing procedures
* Receives and accepts the report of independent auditors
* Oversees internal systems of accounting and management
control
* Makes recommendations regarding the selection of
independent auditors

VADM Michael P. Kalleres - Chair
James M. DeAngelis
Frank E. Coffman, PhD.
Ambassador William A. Wilson

The Audit Committee met three (3) times in 2002.

COMPENSATION, STOCK OPTION & BENEFITS:

* Administers stock incentive plans
* Makes grants of stock awards to employees pursuant to
stock incentive plans
* Reviews and recommends compensation of directors and
executive officers
* Makes grants of stock awards to directors and officers
pursuant to stock incentive plans

Ambassador William A. Wilson - Chair
Shelby T. Brewer, PhD.
Frank E. Coffman, PhD.
VADM Michael P. Kalleres

The Compensation, Stock Option & Benefits Committee met three
(3) times in 2002.

CXII 2002 Annual Meeting Proxy Page 7

PROPOSED AMMENDMENT TO
INCREASE AUTHORIZED SHARES (PROPOSAL NUMBER 2)
____________________________________________________________________

What am I voting on?
____________________

A proposal to amend our Certificate of Incorporation to
increase the number of authorized shares of our common stock
from 125,000,000 shares to 300,000,000 shares.

What is authorized stock?
_________________________

Our Certificate of Incorporation establishes the maximum number
of shares of common stock that we may issue without obtaining
additional stockholder approval. This is called authorized
stock.

For example, as of July 24, 2003, we had 125,000,000 shares
authorized and 94,807,439 shares issued. As a result, the
Company could have issued an additional 30,192,561 shares. If
the amendment to the Certificate of Incorporation had been
adopted prior to date, the Company could have issued an
additional 175,000,000 shares, for a total of 205,192,561
shares available for issuance.

In the interest of simplicity, in this example we have ignored
shares reserved for issuance upon exercise of stock options,
under our other employee benefit plans and for other purposes.
Approximately 10,000,000 shares are reserved for issuance under
such plans. As a result, the Company would have only 20, 192,
561 shares of common stock available for future use without
increasing the number of authorized shares.

What is the difference between authorized stock and issued
stock?
__________________________________________________________

Shares that have already been issued are referred to as
"issued" or "issued and outstanding." The difference between
the total number of authorized shares and the number of issued
shares is the number of shares that the Company may issue in
the future without amending the Certificate of Incorporation.
Delaware law and the rules and regulations of the National
Association of Securities Dealers may require stockholder
approval of issuances under certain circumstances.

What rights will the new authorized shares have?
________________________________________________

If approved, the additional shares of common stock will have the
same voting and other rights as all other shares of our common
stock. Holders of common stock are not now, and will not be
after this amendment, entitled to preemptive rights to purchase
shares of any authorized capital stock if additional shares are
later issued.

Could the authorization of additional shares have any adverse
effect on the Company's stockholders?
______________________________________________________________

Future issuances of shares of common stock or securities
convertible into common stock would have the effect of diluting
the voting rights and could have the effect of diluting
earnings per share and book value per share of existing
stockholders. In addition, the availability of additional
shares of common stock for issuance could discourage or make
more difficult efforts to obtain control of the Company.

Why does the Board want to increase the authorized stock?
_________________________________________________________

The Board of Directors believes it is in the best interest of
the Company to provide the Company with the flexibility to issue
additional shares of common stock for proper corporate purposes.
If the amendment is approved, the Company would be authorized to
issue the additional authorized capital stock for any valid
corporate purposes that the Board of Directors from time to time
deems necessary or advisable.

The Company continues to need capitalization. Although we have
no current plans to issue any of the additional shares,
increasing the number of authorized shares will help us to meet
future business and financial needs, as well as permit stock
splits and stock dividends should we determine that they are
advisable in the future.

When would this amendment become effective?
___________________________________________

The Board of Directors has unanimously authorized this amendment
and voted to recommend it to the Company's stockholders. If
approved by the stockholders, the amendment will become
effective upon filing an appropriate certificate with the
Delaware Secretary of State.

_____________________

WE RECOMMEND THAT YOU VOTE FOR THE ADOPTION OF THIS PROPOSAL

CXII 2002 Annual Meeting Proxy Page 8

PROPOSED APPROVAL OF THE COMPANY'S
SHORT TERM INCENTIVE PLAN (PROPOSAL NUMBER 3)

What am I voting on?
____________________

The Commodore Applied Short Term Incentive Plan (the "Short
Term Incentive Plan") was adopted by the Compensation, Stock
Options and Benefits Committee (the "CSOB Committee") of our
Board of Directors on April 10, 2003. The committee adopted
the Short Term Incentive Plan subject to shareholder approval
so that the payment of any bonus awards thereunder to our
Chief Executive Officer and our four other most highly
compensated executive officers (within the meaning of Section
162(m)) would be fully deductible as "performance-based"
compensation under Section 162(m), as further described
below. We are therefore submitting the Short Term Incentive
Plan for shareholder approval under Section 162(m).

The following summary of the material terms of the Short Term
Incentive Plan is qualified in its entirety by reference to
the full text of the Short Term Incentive Plan, a copy of
which is attached as Appendix A to this proxy statement and
incorporated herein by reference. Please refer to Appendix A
for more detailed information.

What is the purpose of the Short Term Incentive Plan?
_____________________________________________________

The primary purpose of the Short Term Incentive Plan is to
enhance our ability and the ability of our affiliates to
attract, motivate and retain individuals of exceptional
managerial talent upon whom, in large measure, our sustained
progress, growth and profitability depend.

Who will administer and monitor the Short Term Incentive Plan?
______________________________________________________________

The committee is responsible for administering the Short Term
Incentive Plan. The majority of the membership of the
committee are "outside directors" as defined for purpose of
Section 162(m).

Who is eligible to participate in the Short Term Incentive Plan?
________________________________________________________________

The employees who are eligible to participate in the Short
Term Incentive Plan are those individuals who were designated
as "officers" for purposes of Section 16 of the Securities
Exchange Act of 1934 at the beginning of the bonus year
(currently approximately four people), unless determined
otherwise by the committee for a particular bonus year. A
participant generally must be employed by us or one of our
affiliates throughout the entire bonus year as a condition to
receiving a bonus award, although if the participant is hired
or terminates employment during the bonus year, the committee
in its discretion may decide to make a pro rata bonus award
if a bonus award is otherwise payable under the terms of the
Short Term Incentive Plan.

What occurs to the Short Term Incentive Plan in
the event of a change of control of the Company?
________________________________________________

In the event of a "change in control", a participant will be
entitled to a minimum bonus equal to the product of (i) a pro
rata portion of the participant's target annual incentive
award, which will be set by the Company in advance and be
less than the maximum bonus award described below and (ii)
year-to-date actual performance with respect to the
performance goals established by the committee for that year.

What are the steps in establishing the Bonus Pool
and Performance-Based Compensation under
Section 162(m)?
_________________________________________________

For each bonus year, the committee will establish a bonus
pool of up to $4,000,000 and set performance goals, which
will determine whether the bonus pool is funded for the bonus
year. If none of the performance goals are satisfied, the
bonus pool for the bonus year will equal $0. The performance
goals may be based on the attainment of specified levels of
one or any combination of the following business criteria of
the Company, its affiliates or its business units, as
reported or calculated by the Company: cash flows (including,
but not limited

CXII 2002 Annual Meeting Proxy Page 9

to, operating cash flow, free cash flow or cash flow return
on capital); working capital; earnings per share; book value
per share; operating income (including or excluding depreciation,
amortization or other expenses); revenues; operating margins;
return on assets; return on equity; debt; debt plus equity; market
or economic value added; stock price appreciation; total shareholder
return; cost control; strategic initiatives; market share; net
income; return on invested capital; improvements in capital
structure; or customer satisfaction, employee satisfaction,
service performance, cash management or asset management
metrics. Such performance goals also may be based on the
achievement of specified levels of performance under one or
more of the measures described above relative to the
performance of other corporations. The committee will set
such performance goals prior to the beginning of each bonus
year or such later time as may be permitted by Section
162(m).

How is the bonus amount determined for each participant?
_________________________________________________________

At the beginning of each bonus year, the committee will
establish for each participant a maximum bonus award,
expressed as a percentage of the bonus pool for that year.
The maximum bonus award for an individual participant will
not exceed 40% of the bonus pool. The total awards for all
participants will not exceed 100% of the bonus pool.

How are the bonuses awarded?
____________________________

After the end of each bonus year, the committee will certify
in writing whether the stated performance goal has been
satisfied and determine the amount of bonus to be awarded to
each participant. In determining the amount, the committee
will consider the target bonus award established at the
beginning of the bonus year for the participant and any other
objective or subjective factors it deems appropriate. The
committee may reduce but not increase the maximum bonus award
for any individual participant.

How are the bonus awards paid?
______________________________

All bonus awards will be paid in cash at such times and on
such terms as are determined by the committee.

How long will the bonus plan remain in effect?
______________________________________________

The Short Term Incentive Plan will remain in effect until it
is terminated by the committee. The committee may generally
amend the Short Term Incentive Plan at any time, subject to
certain Section 162(m) limitations. In addition, a
participant must provide written consent to any amendment
that adversely affects the participant's right to or interest
in a bonus awarded prior to the date of an amendment.

Other Information
_________________

A new plan benefits table, as described in the federal proxy
rules, is provided in Appendix D.

What are the US Federal Income Tax Consequences?
________________________________________________

A participant will be taxed at ordinary income rates on a
bonus award, if any, in the year in which it is received. If
a participant elects to defer a portion of the bonus awards
to our Deferred Compensation Plan, the participant will be
entitled to defer the recognition of income. Generally, and
subject to the provisions of Section 162(m), we will receive
a federal income tax deduction corresponding to the amount of
income recognized by the participant.

If the Short Term Incentive Plan is not approved by our
shareholders, bonus awards for calendar year 2003 will be
discretionary but not paid under the Short Term Incentive
Plan, and any discretionary bonuses paid to each of our Chief
Executive Officer and our four other most highly compensated
executive officers (within the meaning of Section 162(m)) may
not be deductible under Section 162(m) to the extent that,
when combined with other nonexempt compensation, the
compensation exceeds the $1,000,000 limit for that
individual.

_____________________

WE RECOMMEND THAT YOU VOTE FOR THE ADOPTION OF THIS PROPOSAL

CXII 2002 Annual Meeting Proxy Page 10

PROPOSED APPROVAL OF THE COMPANY'S
1998 STOCK OPTION PLAN, AS AMENDED (PROPOSAL NUMBER 4)

What am I voting on?
____________________

The Company's 1998 Stock Option Plan, as amended (the "1998
Plan") was adopted by the Compensation, Stock Option and
Benefits Committee (the "CSOB Committee") of our Board of
Directors on December 14, 1998.

The following summary of the material terms of the 1998 Plan
is qualified in its entirety by reference to the full text of
the 1998 Plan, a copy of which is attached as Appendix B to
this proxy statement and incorporated herein by reference.
Please refer to Appendix B for more detailed information.

Why does the Company offer a stock option plan?
_______________________________________________

The Board of Directors recognizes the value of stock
incentives in assisting the Company in attracting, retaining
and motivating employees and in enhancing the long-term
mutuality of interest between Commodore Applied Technologies,
Inc. shareholders and its employees, officers and directors.

Who will administer and monitor the 1998 Plan?
______________________________________________

The CSOB Committee is responsible for administering the 1998
Plan. The majority of the membership of the committee are
"outside directors" as defined for purpose of Section 162(m).

Who may receive stock option grants?
____________________________________

The Board of Directors (the "Board") may grant stock options
to directors, officers and other employees of, and
consultants to, the Company and its subsidiaries. The number
of grantees may vary from year to year. The number of
employees who have participated in current stock plans is
estimated to be approximately 35. The CSOB Committee
administers the 1998 Plan and its determinations are binding
upon all participants in the 1998 Plan.

How many shares can be granted under the 1998 Plan?
___________________________________________________

The maximum number of shares of the Company's common stock
that may be issued under the 1998 Plan is 15,000,000. The
original number of shares of the Company's common stock
issuable under the 1998 Plan was 4,000,000. The Board of
Directors increased the maximum number of shares of the
Company's common stock that may be issued under the 1998 Plan
to 5,000,000 on November 10, 1999, to 10,000,000 on December
14, 2001 and to 15,000,000 on May 30, 2002. The market value
of the securities underlying the options was $236,675.00 as
of July 24, 2003. The market value represents the number of
available for issuance under the 1998 Plan multiplied by the
closing price of the underlying common stock as reported on
the OTC Bulletin Board as of July 24, 2003, without any
deduction for the exercise price payable upon exercise of the
options.

How many shares have been issued or reserved
for existing options under the 1998 Plan?
____________________________________________

The Board has currently issued, or reserved to be issued on
the exercise of current options 8,531,458 shares of the
Company's common stock under the 1998 Plan. Accordingly, a
total of 5,637,000 shares of the Company's common stock
remain available for issuance under the 1998 Plan.

What happens to cancelled or terminated stock options?
______________________________________________________

Any shares of common stock subject to an award, which for any
reason are canceled, terminated or otherwise settled without
the issuance of any common stock, are again available for
awards under the 1998 Plan. If payment for an award or the
satisfaction of related withholding tax liabilities is
effected through the surrender of common stock or the
withholding of common stock, the number of shares of common
stock available for awards under the 1998 Plan shall be
increased by the number of shares of common stock so
surrendered or withheld. The shares may be unissued shares or
treasury stock.

CXII 2002 Annual Meeting Proxy Page 11

What happens to the 1998 Plan in the event of
events effecting the Company's common stock?
_____________________________________________

If there is a stock split, stock dividend, recapitalization,
spin-off, exchange or other similar corporate transaction or
event affecting the Company's common stock, appropriate
adjustments may be made by the CSOB Committee in the number
of shares issuable in the future and in the number of shares
and price under all outstanding grants made before the event.
Unless the CSOB Committee shall determine otherwise, all
outstanding options become immediately exercisable in the
event of a change- in-control of the Company.

How are participants granted options under the 1998 Plan?
________________________________________________________

The Board may grant any participants nonqualified stock
options. The option price of either a nonqualified stock
option or an incentive stock option will be not less than the
fair market value of the common stock on the date of the
grant. To exercise an option, an employee may pay the option
price in cash, or if permitted by the CSOB Committee, by
withholding shares otherwise issuable on exercise of the
option or by delivering other shares of common stock, if such
shares have been owned by the optionee for at least six
months. The term of each option will be fixed by the CSOB
Committee but may not exceed ten years from the date of
grant. The CSOB Committee will determine the time or times
when each option is exercisable. Options may be made
exercisable in installments, and the CSOB Committee may
accelerate the exercisability of options.

Can Directors receive stock option grants?
__________________________________________

In the discretion of the Board, non-employee directors may
participate in the 1998 Plan.

Other Information
_________________

Except as permitted by the Board, awards under the 1998 Plan
are not transferable except by will or under the laws of
descent and distribution. The Board may terminate the 1998
Plan at any time but such termination shall not affect any
stock options then outstanding under the 1998 Plan. Unless
terminated by action of the Board, the 1998 Plan will
continue in effect until December 15, 2008, but awards
granted prior to such date will continue in effect until they
expire in accordance with their original terms. The Board
may also amend the 1998 Plan as it deems advisable.
Amendments which (1) materially modify the requirements for
participation in the 1998 Plan, (2) increase the number of
shares of the Company's common stock subject to issuance
under the 1998 Plan, or (3) change the minimum exercise price
for stock options as provided in the 1998 Plan, must be
submitted to shareholders for approval.

Federal Income Tax Consequences
_______________________________

With respect to the grant of non-qualified stock options, the
person receiving an option will recognize no income on
receipt thereof. Upon the exercise of the option, the
optionee will recognize ordinary income in the amount of the
difference between the option price and the fair market value
of the shares on the date the option is exercised. The
Company generally will receive an equivalent deduction at
that time.

How many options were granted in 2002 under the 1998 Plan?
__________________________________________________________

On October 2, 2002 the Board granted non-qualified stock
options under the 1998 Plan for 6,847,217 shares at the fair
market value and price of $0.07 per share to 21 employees,
including shares to three of our current officers, of which
O. Mack Jones received an award for 1,759,375 shares, Shelby
T. Brewer received an award for 865,200 shares and James M.
DeAngelis received an award for 841,688 shares. See
"Executive Compensation" for further information about our
officers. A new plan benefits table regarding the 1998 Plan
is set forth in Appendix D to this proxy statement.

What if the 1998 Plan is not ratified by the Shareholders?
__________________________________________________________

If the Shareholders do not ratify the 1998 Plan, all stock
options previously granted under the 1998 Plan will remain
outstanding in accordance with their terms. In addition, the
CSOB Committee may elect to issue new options in accordance
with the terms of the 1998 Plan.
_____________________

WE RECOMMEND THAT YOU VOTE FOR THE RATIFICATION OF THIS PROPOSAL

CXII 2002 Annual Meeting Proxy Page 12

PROPOSED APPROVAL OF THE PERFORMANCE GOALS AND INCENTIVE
COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER (PROPOSAL NUMBER 5)

What am I voting on?
____________________

At the annual meeting, you will be asked to approve the
material terms of the performance goals established by the
Compensation, Stock Option and Benefits Committee (the "CSOB
Committee") with respect to fiscal 2003 incentive
compensation awards outside of the Company's 1998 Stock
Option Plan, as amended (the "1998 Plan"), for the Company's
Chief Executive Officer (Mr. Shelby T. Brewer).

Why is the Company proposing to grant fiscal 2003 incentive
compensation awards to the CEO outside of the 1998 Plan?
___________________________________________________________

The Board of Directors of the Company has elected to award
performance based stock options outside of the 1998 Plan
subject to shareholder approval. The Board of Directors
recognizes the value of performance based stock incentives in
assisting the Company in attracting, retaining and motivating
executives and in enhancing the long-term mutuality of
interest between Commodore Applied Technologies, Inc.
shareholders and its employees, officers and directors. In
order to maintain a Company target of 50% of all Stock
Options listed to non-executives and directors under the 1998
Plan, the Company has elected to grant the incentive
compensation options to the Chief Executive Officer outside
of the 1998 Plan and subject to certain performance criteria.

Why set performance goals for this award?
_________________________________________

Section 162(m) of the Internal Revenue Code disallows
deductions for publicly-held corporations with respect to
compensation in excess of $1,000,000 paid to certain
executive officers. However, compensation payable solely on
account of attainment of one or more performance goals is not
subject to this deduction limitation if:

* the performance goals are objective, pre-established and
determined by a compensation committee comprised of a
majority of outside directors,

* the material terms of the performance goals under which
the compensation is to be paid are disclosed to the
shareholders and approved by a majority vote, and

* the compensation committee certifies that the
performance goals and other material terms were in fact
satisfied before the compensation is paid.

Why does this need shareholder approval?
________________________________________

The purpose of seeking shareholder approval of the Chief
Executive Officer's incentive compensation award is to meet
the requirements of Section 162(m).

What number of votes is required for approval of this proposal?
_______________________________________________________________

To be approved, this matter must receive the affirmative vote
of a majority of the shares present (in person or by proxy)
at the meeting and entitled to vote on such matter. Broker
non-votes will not be counted as present and shall not be
entitled to vote on this proposal.

What are the performance goals for this incentive awardment?
____________________________________________________________

On October 2, 2002, the Company's CSOB Committee established
performance goals for the Chief Executive Officer's fiscal
2003 incentive compensation award payable in the form of
stock options for shares of the Company's common stock to the
Chief Executive Officer if the goals are achieved. The
performance goals and the stock options payable outside of
the Company's 1998 Plan for fiscal 2003 are as follows:

CXII 2002 Annual Meeting Proxy Page 13

1.) The obtainment of a waste-processing contract in one or
all of the following locations: Idaho, Tennessee, Utah, and
Washington State, utilizing the Company's solvated electron
technology ("SET") technology in fiscal year 2003; or

2.) The obtainment of a radioactive sodium-processing
contract utilizing the Company's SET technology in fiscal
year 2003; or

3.) The obtainment of a multi-year engineering contract for
providing engineering services through the Company's
subsidiary, Commodore Advanced Sciences, Inc. in fiscal year
2003.

THE SATISFACTION OF ANY OF THE ABOVE MENTIONED PERFORMANCE
CRITERIA, SINGLY OR COLLECTIVELY, WILL RESULT IN THE
IMMEDIATE AWARD AND VESTING OF AN OPTION TO THE CHIEF
EXECUTIVE OFFICER TO PURCHASE 2,000,000 SHARES OF THE
COMPANY'S COMMON STOCK AT 100% OF CLOSING PRICE OF THE
COMMON STOCK AS TRADED ON THE OTCBB ON THE DATE OF THE AWARD.

What is the amount of the incentive award?
__________________________________________

The Compensation Committee has determined the actual amount
of incentive compensation to be awarded to the Chief
Executive Officer in fiscal 2003 based on his individual
contribution, and achievement of any of the foregoing goals
to be a non-qualifed stock option to purchase two million
(2,000,000) shares of the Company's common stock outside of
the Company's 1998 Plan. The market value of the securities
underlying the options was $50,000.00 as of July 24, 2003.
The market value represents the number of shares available
for issuance under the fiscal 2003 incentive compensation
award multiplied by the closing price of the underlying
common stock as reported on OTC Bulletin Board as of July 24,
2003, without any deduction for the exercise price payable
upon exercise of the option. A new plan benefits table with
respect to the proposed award is included in Appendix D.

What are the terms and conditions of the incentive award?
_________________________________________________________

The exercise price of the option will be 100% of the closing
price of the Company's common stock on the day of the CSOB
Committee's determination that the Chief Executive Officer
has met the goal(s). The option, once awarded, will be 100%
vested and exercisable.

Federal Income Tax Consequences
_______________________________

Assuming the shareholders approve the material terms of the
performance goals as described herein, the Company believes
that any such incentive compensation award to the Chief
Executive Officer will qualify as performance-based
compensation that will be deductible from the Company's gross
income for federal income tax purposes upon exercise by the
Chief Executive Officer. The Chief Executive Officer will
recognize no income on receipt of the option. Upon the
exercise of the option, the Chief Executive Officer will
recognize ordinary income in the amount of the difference
between the option price and the fair market value of the
shares on the date the option is exercised.

Who will administer and monitor the performance based stock
options?
______________________________________________________________

The CSOB Committee is responsible for administering the
performance based options issued outside the 1998 Plan. The
majority of the membership of the committee are "outside
directors" as defined for purpose of Section 162(m).

_____________________

WE RECOMMEND THAT YOU VOTE FOR THE APPROVAL OF THIS PROPOSAL

CXII 2002 Annual Meeting Proxy Page 14

PROPOSED APPROVAL OF THE PERFORMANCE GOALS AND INCENTIVE
COMPENSATION FOR THE CHIEF FINANCIAL OFFICER (PROPOSAL NUMBER 6)

What am I voting on?
____________________

Why is the Company proposing to grant fiscal 2003 incentive
compensation awards to the Chief Financial Officer outside of
the 1998 Plan?
_____________________________________________________________

The Board of Directors of the Company has elected to award
performance based stock options outside of the 1998 Plan
subject to shareholder approval. The Board of Directors
recognizes the value of performance based stock incentives in
assisting the Company in attracting, retaining and motivating
executives and in enhancing the long-term mutuality of
interest between Commodore Applied Technologies, Inc.
shareholders and its employees, officers and directors. In
order to maintain a Company target of 50% of all Stock
Options listed to non-executives and directors under the 1998
Plan, the Company has elected to grant the incentive
compensation options to the Chief Financial Officer outside
of the 1998 Plan and subject to certain performance criteria.

Why set performance goals for this award?
_________________________________________

* the performance goals are objective, pre-established and
determined by a compensation committee comprised of a
majority of outside directors,

* the material terms of the performance goals under which
the compensation is to be paid are disclosed to the
shareholders and approved by a majority vote, and

* the compensation committee certifies that the
performance goals and other material terms were in fact
satisfied before the compensation is paid.

Why does this need shareholder approval?
________________________________________

The purpose of seeking shareholder approval of the Chief
Financial Officer's incentive compensation award is to meet
the requirements of Section 162(m).

What number of votes is required for approval of
this proposal?
________________________________________________

What are the performance goals for this incentive awardment?
____________________________________________________________

On October 2, 2002, the Company's CSOB Committee established
performance goals for the Chief Financial Officer's fiscal
2003 incentive compensation award payable in the form of
stock options for shares of the Company's common stock to the
Chief Financial Officer if the goals are achieved. The
performance goals and the stock options payable outside of
the Company's 1998 Plan for fiscal 2003 are as follows:

CXII 2002 Annual Meeting Proxy Page 15

2.) The obtainment of a radioactive sodium-processing
contract utilizing the Company's SET technology in fiscal
year 2003; or

3.) The obtainment of a multi-year engineering contract for
providing engineering services through the Company's
subsidiary, Commodore Advanced Sciences, Inc. in fiscal year
2003.

THE SATISFACTION OF ANY OF THE ABOVE MENTIONED PERFORMANCE
CRITERIA, SINGLY OR COLLECTIVELY, WILL RESULT IN THE
IMMEDIATE AWARD AND VESTING OF AN OPTION TO THE CHIEF
FINANCIAL OFFICER TO PURCHASE 1,000,000 SHARES OF THE
COMPANY'S COMMON STOCK AT 100% OF CLOSING PRICE OF THE
COMMON STOCK AS TRADED ON THE OTCBB ON THE DATE OF THE AWARD.

What is the amount of the incentive award?
__________________________________________

The Compensation Committee has determined the actual amount
of incentive compensation to be awarded to the Chief
Financial Officer in fiscal 2003 based on his individual
contribution, achievement of any of the foregoing goals to be
a non-qualified stock option to purchase one million
(1,000,000) shares of the Company's common stock outside of
the Company's 1998 Plan. The market value of the securities
underlying the options was $25,000.00 as of July 24, 2003.
The market value represents the number of shares available
for issuance under the fiscal 2003 incentive compensation
award multiplied by the closing price of the underlying
common stock as reported on OTC Bulletin Board as of July 24,
2003, without any deduction for the exercise price payable
upon exercise of the option. A new plan benefits table with
respect to the proposed award is included in Appendix D.

What are the terms and conditions of the incentive award?
_________________________________________________________

The exercise price of the option will be 100% of the closing
price of the Company's common stock on the day of the CSOB
Committees determination that the Chief Financial Officer has
met the goal(s). The option, once awarded, will be 100%
vested and exercisable. The option will expire on December
14, 2008.

Federal Income Tax Consequences
_______________________________

Assuming the shareholders approve the material terms of the
performance goals as described herein, the Company believes
that any such incentive compensation award to the Chief
Financial Officer will qualify as performance-based
compensation that will be deductible from the Company's gross
income for federal income tax purposes upon exercise by the
Chief Financial Officer of the option. The Chief Financial
Officer will recognize no income on receipt of the Option.
Upon the exercise of the option, the Chief Financial Officer
will recognize ordinary income in the amount of the
difference between the option price and the fair market value
of the shares on the date the option is exercised.

Who will administer and monitor the performance based stock
options?
________________________________________________________________

_____________________

WE RECOMMEND THAT YOU VOTE FOR THE APPROVAL OF THIS PROPOSAL

CXII 2002 Annual Meeting Proxy Page 16

RATIFICATION OF APPOINTMENT
OF INDEPENDENT ACCOUNTANTS (PROPOSAL 7)

What am I voting on?
____________________

The board of directors recommends that stockholders vote
"for" ratification of the appointment of Tanner + Co. as the
company's independent accountants for fiscal 2003.

What services does the independent accountant provide?
______________________________________________________

The Audit Committee of the Company has appointed Tanner + Co.
as the Company's independent accountants for the fiscal year
ending December 31, 2003. Tanner + Co. has served as the
Company's independent accountants since 1999. Services
provided to the Company and its subsidiaries by Tanner + Co.
in fiscal 2002 included the examination of the Company's
consolidated financial statements, limited reviews of
quarterly reports, services related to filings with the
Securities and Exchange Commission and consultations on
various tax matters.

Will the independent auditors be present at the Annual
Meeting?
______________________________________________________

A representative(s) of Tanner + Co. will be present at the
annual meeting to respond to appropriate questions and to
make such statements as they may desire.

How many votes are necessary to ratify Tanner + Co. as the
Company's independent accountants for fiscal 2003?
__________________________________________________________

Ratification of the appointment of Tanner + Co. as the
Company's independent accountants for fiscal 2003 will
require the affirmative vote of a majority of the shares of
Common Stock represented in person or by proxy and entitled
to vote at the annual meeting. In the event stockholders do
not ratify the appointment of Tanner + Co., the appointment
will be reconsidered by the Audit Committee and the Board of
Directors.

What fees did the Company pay to Tanner + Co. for services
provided in fiscal 2002?
__________________________________________________________

Tanner + Co. has billed the Company the following amounts for
professional services rendered during 2002:

AUDIT FEES: $48,578, in the aggregate, for the audit of the
Company's and its subsidiaries' annual financial statements
for the fiscal 2002 and the reviews of the interim financial
statements included in the Company's Forms 10-Q filed during
the fiscal 2002; and

ALL OTHER FEES: $12,660, in the aggregate, for all services
other than those covered above under "Audit Fees". "All Other
Fees" consist primarily of tax compliance and consulting
services, benefit plan audits, assistance in the assessment
of impending accounting pronouncements, and due diligence
services for the fiscal year 2001. Tax services and the
associated billings have not been finalized for the year 2002
but are expected to be approximately the same amount as in
fiscal year 2001 ($11,600).

Additionally, the Company paid $5,602, in the aggregate, to
Tanner + Co. for services primarily related to the
dissolution of the Company's 81% ownership of Dispute
Resolution Management, Inc. in 2002.

Tanner + Co. did not bill any fees for any of the financial
information systems design and implementation services
described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation
S-X.

_____________________

WE RECOMMEND THAT YOU VOTE FOR THE RATIFICATION OF THIS PROPOSAL

CXII 2002 Annual Meeting Proxy Page 17

EXECUTIVE COMPENSATION
_________________________________________________________________

The following table sets forth the amount of all compensation
paid by the Company and/or its affiliates and allocated to the
Company's operations for services rendered during each of 2002,
2001, and 2000 to all persons serving as the Company's Chief
Executive Officer during 2002, and to each of the Company's four
most highly compensated Executive Officers other than the Chief
Executive Officer whose total salary and bonus compensation
exceeded $100,000 during any such year.

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term Compensation
__________________________________ ___________________________________________

Other Securities
Annual Restricted Under- LTIP All Other
Compen- Stock Lying Pay- Compen-
Name and Prinicpal Salary Bonus sation Award(s) Options outs sation
Position Year ($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (e) (g) (g) (h) (i)
__________________ ____ ______ _____ _______ __________ _______ ____ ________

Shelby T. 2002 69,677(2) -0- -0- -0- 2,865,200(3) -0- 30,000(4)
Brewer, Ph.D.(1) 2001 90,317(2) -0- -0- -0- 200,000(3) -0- -0-
Chief Executive 2000 58,707(2) -0- -0- -0- 640,000(3) -0- -0-
Officer

Paul E. 2002 -0- -0- -0- -0- 1,181,925(6) -0- -0-
Hannesson 2001 77,242(5) -0- -0- -0- -0- -0- -0-
Former Chief 2000 358,934(5) -0- -0- -0- -0- -0- -0-
Executive Officer

James M. 2002 114,175(8) -0- -0- -0- 1,841,688(9) -0- -0-
DeAngelis(7) 2001 164,368(8) -0- -0- -0- 300,000(9) -0- -0-
Senior Vice 2000 147,614(8) -0- -0- -0- -0- -0- -0-
President &
Chief Financial Officer

William E. 2002 -0- -0- -0- -0- -0- -0- -0-
Ingram 2001 20,645(10) -0- -0- -0- -0- -0- -0-
Former Vice 2000 147,842(10) -0- -0- -0- 100,000(11) -0- -0-
President & Controller

O. Mack 2002 110,019(13) -0- -0- -0- 1,759,375(14) -0- -0-
Jones(12) 2001 134,805(13) -0- -0- -0- 100,000(14) -0- -0-
President 2000 143,755(13) -0- -0- -0- -0- -0- -0-
Advanced Sciences

Peter E Harrod 2002 -0- -0- -0- -0- -0- -0- -0-
Former President 2001 49,460(15) -0- -0- -0- -0- -0- -0-
Advanced Sciences 2000 187,036(15) -0- -0- -0- 200,000(16)-0- -0-

(1) Mr. Brewer served as Chief Executive Officer and
President of Solutions and a director of the Company since
April 2000. Mr. Brewer assumed the positions of Chairman,
Chief Executive Officer and President of the Company as of
January 15, 2001.

Page 18

(2) Represents the amount of Mr. Brewer's base salary paid
by the Company. Mr. Brewer's base salary for 2002 was
$250,000 of which $184,231 was originally deferred until
December 31, 2002, and remains unpaid as of July 24, 2003.
Mr. Brewer's base salary for 2001was $250,000 of which
$160,000 was originally deferred until December 31, 2001, and
remains unpaid as of July 24, 2003. Mr. Brewer's base salary
for 2000 was $90,000.

(3) Represents shares of common stock underlying stock
options granted to Mr. Brewer by the Company in his capacity
as an officer and director of the Company. Mr. Brewer
canceled prior options for 840,000 shares of common stock
voluntarily on October 2, 2002.

(4) Represents a $1,000,000 Life Insurance Policy in the
name of Shelby T. Brewer paid on behalf of Mr. Brewer by the
Company.

(5) Represents the amount of Mr. Hannesson's base salary
paid by the Company. The Company previously recorded a
liability for $344,000 representing amounts owed to Mr.
Hannesson under his employment contract, but deferred per
agreement. The deferred salary amount was used by Mr.
Hannesson to offset a portion of the exercise price and taxes
with respect to Mr. Hannesson's stock option exercise of
830,000 stock options in July 2000. See "Certain
Relationships and Related Transactions-Services Agreement."
Mr. Hannesson was replaced by Shelby T. Brewer effective
January 15, 2001. Mr. Hannesson remains a director of the
Company.

(6) Represents shares of common stock underlying stock
options granted to Mr. Hannesson by the Company in his
capacity as an officer and director of the Company. Mr.
Hannesson canceled prior options for 2,147,500 shares of
common stock voluntarily on October 2, 2002.

(7) Mr. DeAngelis served as Vice President and Treasurer of
the Company from July 1998 to December 1999 and as Sr. Vice
President, Chief Financial and Administrative Officer,
Treasurer and Secretary from December 1999 to present.

(8) Represents the amount of Mr. DeAngelis' base salary paid
by the Company. Mr. DeAngelis' total base salary for 2002
was $165,000 of which $55,985 was originally deferred until
December 31, 2002, and remains unpaid as of July 24, 2003.
Mr. DeAngelis' total base salary for 2001 was $165,000 of
which $33,000 was originally deferred until December 31,
2002, and remains unpaid as of July 24, 2003. Mr. DeAngelis'
base salary for 2000 was $165,000.

(9) Represents shares of common stock underlying stock
options granted to Mr. DeAngelis by the Company in his
capacity as an officer of the Company. Mr. DeAngelis
canceled prior options for 681,250 shares of common stock
voluntarily on October 2, 2002.

(10) Represents the amount of Mr. Ingram's base salary paid
by the Company. Mr. Ingram's total annual base salary for
2001 and 2000 was $150,000. Mr. Ingram resigned his
management position effective January 12, 2001.

(11) Represents shares of common stock underlying stock
options granted to Mr. Ingram by the Company in his capacity
as an officer of the Company. Mr. Ingram resigned his
management position effective January 12, 2001.

(12) Mr. Jones served as Vice President and Field Operations
Manager of Solutions from April 1998 to January 2001 and as
President of Advanced Sciences from February 2001 to present.

(13) Represents the amount of Mr. Jones' base salary paid by
the Company. Mr. Jones' total base salary for 2002 was
$165,000 of which $60,581 originally deferred until December
31, 2002, and remains unpaid as of July 24, 2003. Mr. Jones'
total base salary for 2001 was $165,000 of which $33,000
originally deferred until December 31, 2001, and remains
unpaid as of July 24, 2003. Mr. Jones' base salary for 2000
was $150,000.

(14) Represents shares of common stock underlying stock
options granted to Mr. Jones the Company in his capacity as
an officer of the Company. Mr. Jones canceled prior options
for 437,500 shares of common stock voluntarily on October 2,
2002.

(15) Represents the amount of Mr. Harrod's base salary paid
by the Company, through its wholly owned subsidiary, Advanced
Sciences. Mr. Harrod's total base salary for 2001 and 2000
was $190,000. Mr. Harrod resigned his management position
effective February 28, 2001.

(16) Represents shares of common stock underlying stock
options granted to Mr. Harrod by the Company in his capacity
as an officer of the Company. Mr. Harrod resigned his
management position effective February 28, 2001.

CXII 2002 Annual Meeting Proxy Page 19

STOCK OPTIONS

The following table sets forth certain information concerning options
granted during the year ended December 31, 2002 to the individuals
listed in the Summary Compensation Table pursuant to the Company's
1998 Stock Option Plan, as amended, (the "1998 Plan") and to
certain individuals outside of the 1998 Plan. The Company has no
outstanding stock appreciation rights and granted no stock
appreciation rights during the year ended December 31, 2002.

OPTION GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS
__________________________________________________________
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS EXERCISE OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO BASE FOR
OPTIONS EMPLOYEES IN PRICE EXPIRATION OPTION TERM (6)
NAME GRANTED (#) FISCAL YEAR (5) ($/SHARE) DATE 5% ($) 10%($)
(a) (b) (c) (d) (e) (f) (g)
_____________ ____________ _______________ _________ __________ _______________________

Shelby T. Brewer 2,865,200(1) 29.10% 0.07 12/14/08 18,844 76,302

James M. DeAngelis 1,841,688(2) 18.70% 0.07 12/14/08 12,113 49,045

O. Mack Jones 1,759,375(3) 17.87% 0.07 12/14/08 11,571 46,853

Paul E. Hannesson 1,181,925(4) 12.00% 0.07 12/14/08 7,773 31,475

(1) Options to purchase 865,200 shares of common stock were
issued on October 2, 2002 as part of the 1998 Plan of which
100% vested upon issuance. Additionally, Options to purchase
2,000,000 shares of common stock may be issued, subject to
certain performance criteria, outside of the 1998 Plan of
which 100% will vest upon the achievement of any of certain
performance criteria established by the Company's
Compensation, Stock Options and Benefits Committee. Prior to
the issuance of new options on October 2, 2002, existing
options to purchase 840,000 shares of common stock were
voluntarily cancelled by the individual.

(2) Options to purchase 841,688 shares of common stock were
issued on October 2, 2002 of which 100% vested upon issuance.
Additionally, Options to purchase 1,000,000 shares of common
stock may be issued, subject to certain performance criteria,
outside of the 1998 Plan of which 100% will vest upon the
achievement of any of certain performance criteria
established by the Company's Compensation, Stock Options and
Benefits Committee. Prior to the issuance of new options on
October 2, 2002, existing options to purchase 681,250 shares
of common stock were voluntarily cancelled by the individual.

(3) Options to purchase 1,759,375 shares of common stock
were issued on October 2, 2002 of which 100% vested upon
issuance. Prior to the issuance of new options on October 2,
2002, existing options to purchase 437,500 shares of common
stock were voluntarily cancelled by the individual.

(4) Options to purchase 1,181,925 shares of common stock
were issued on October 2, 2002 of which 100% vested upon
issuance. Prior to the issuance of new options on October 2,
2002, existing options to purchase 2,147,500 shares of common
stock were voluntarily cancelled by the individual.

(5) Percentages based on 9,847,218 stock options granted
(the 1998 Plan and outside the 1998 Plan) during the year
ended December 31, 2002.

(6) The closing price for the Company's common stock on
December 31, 2002 was $0.06. The closing price is used for
all the subsequent stock appreciation calculations.

CXII 2002 Annual Meeting Proxy Page 20

The following table sets forth certain information concerning
the exercise of options and the value of unexercised options
held under the 1998 Plan and outside of the 1998 Plan at
December 31, 2002 by the individuals listed in the Summary
Compensation Table.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES VALUE AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) ($)(1) UNEXERCISABLE UNEXERCISABLE(2)
(a) (b) (c) (d) (e)
________________ _____________ ________ _______________________ ______________________

Shelby T. Brewer -0- -0- 865,200 / 2,000,000 -0- /-0-

Paul E. Hannesson -0- -0- 1,181,925 / -0- -0- /-0-

James M. DeAngelis -0- -0- 841,688 / 1,000,000 -0- /-0-

O. Mack Jones -0- -0- 1,759,375 / -0- -0- /-0-

(1) Represents the difference between the last reported sale
price of the Common Stock on December 31, 2002 ($0.06),
and the exercise price of the option ($0.07) multiplied
by the applicable number of options exercised.

(2) Represents the difference between the exercise price and
the closing price on December 31, 2002, multiplied by the
applicable number of securities.

CXII 2002 Annual Meeting Proxy Page 21

Securities Authorized for Issuance Under Equity Compensation Plans
___________________________________________________________________

The following table reflects the number of shares of our
common stock that, as of July 24, 2003, were outstanding and
available for issuance under compensation plans that have
previously been approved by our stockholders as well as
compensation plans that have not previously been approved by
our stockholders.

Number of Securities
Remaining Available
Number of Weighted- for
Securities to Average Future Issuance
be Exercise Price Under
Issued Upon of Equity Compensation
Exercise of Outstanding Plans (Excluding
Outstanding Options, Securities Reflected
Options, Warrants and in Column (a)
Warrants and Rights ($)
Rights

Plan Category (a) (b) (c)
Equity Compensation Plans
Approved by Security
Holders ...... 0 0.00 0

Equity
Compensation Plans
not Approved by
Security
Holders (1) (2)
(3).... 11,531,458 0.06 6,468,542

Total.......... 11,531,458 0.06 6,468,542

___________________________

1. Consists of options issuable under the 1998 Stock Option
Plan, as amended.

2. Includes options to purchase a total of 3,426,500 shares
issued to Mr. Brewer, Mr. DeAngelis, Mr. Jones, Mr. Hannesson
and Mr. Blum in October 2002 so long as they remain eligible
participants under the 1998 Stock Option Plan, as amended.
See Ten-Year Option Repricings in this Proxy Statement.

3. Consists of options issuable outside of the 1998 Stock
Option Plan, as amended, to the Chief Executive Officer and
the Chief Financial Officer, subject to certain performance
criteria. See Proposal Number 3 and Proposal Number 4 in this
Proxy Statement.

The following is a brief description of the material features
of the equity compensation plans not approved by our
stockholders that are reflected in the chart above.

On December 14, 1998, our Board of Directors approved the
adoption of the 1998 Stock Option Plan, as amended. The
purpose of this plan is to advance the interests of our
stockholders by enhancing our ability to attract, retain and
motivate persons who make important contributions to the
Company by providing them with equity ownership opportunities
and performance-based incentives that better align their
interests with those of our stockholders. A total of
15,000,000 shares of our common stock, subject to adjustment
in the event of a stock split or similar event, is issuable
to our consultants, advisors and employees, officers and
directors. A total of 10,000,000 shares of our common stock
have been duly registered under the Company's S-8 filings
under the Plan. The remaining 5,000,000 shares have been
approved by the directors for issuance under the Plan but
have yet to be registered under an S-8 filing. The plan
provides for the granting of non-qualified options.

CXII 2002 Annual Meeting Proxy Page 22

Ten Year Option Repricings
__________________________

The following table sets forth information regarding
options held by the Commodore Named Executive Officers
and Directors that were voluntarily surrendered by such
persons, after which the Company issued new options to such
persons at current fair market value. The Compensation
Committee approved the options exchanged in order to restore
the incentive value of such options.

Number of Length of
Securities Original
Underlying Exercise Price of Option Term
Options Market Price of Stock at Option at Time of New At Date of
Repriced or Time of Repricing Repriced or Exercise Repricing or Amendment
Date Amended (#) Amendment ($)(1) Amendment ($) Price ($)
_____ ____________ ________________________ _________________ _________ ______________________

Shelby T. Brewer 10/02/02 200,000 $0.07 $0.288 (2) 12/14/08
10/02/02 500,000 $0.07 $1.00 (2) 12/14/08
10/02/02 140,000 $0.07 $1.06 (2) 12/14/08
James M. DeAngelis 10/02/02 181,250 $0.07 $0.4375 (3) 12/14/08
10/02/02 300,000 $0.07 $0.288 (3) 12/14/08
10/02/02 200,000 $0.07 $0.688 (3) 12/14/08
O. Mack Jones 10/02/02 187,500 $0.07 $0.4375 (4) 12/14/08
10/02/02 100,000 $0.07 $0.288 (4) 12/14/08
10/02/02 150,000 $0.07 $0.688 (4) 12/14/08
Paul E. Hannesson 10/02/02 147,500 $0.07 $0.4375 (5) 12/14/08
10/02/02 1,000,000 $0.07 $0.50 (5) 12/14/08
Bentley J. Blum 10/02/02 70,000 $0.07 $0.4375 (6) 12/14/08
10/02/02 70,000 $0.07 $1.00 (6) 12/14/08

_________________________

(1) Represents the closing price of our common stock on
October 2, 2002 as reported by the AMEX Stock Market.

(2) In October 2002, Mr. Brewer, the Company's Chairman of
the Board and Chief Executive Officer, voluntarily
surrendered options to purchase 840,000 shares of our
common stock, after which the Company issued to him
options to purchase 840,000 shares of our common stock for
the issuance of options to purchase 840,200 shares of our
common stock so long as Mr. Brewer continues to be an
eligible participant under the 1998 Stock Option Plan, as
amended. The exercise price of the new options is equal to
100% of the fair market value of our common stock on the date
of grant of the new options, as determined by the last
reported sales price of our common stock as reported by the
AMEX Stock Market on the date we granted the new options.

(3) In October 2002, Mr. DeAngelis, the Company's Chief
Financial and Administrative Officer, Treasurer and
Secretary, voluntarily surrendered options to purchase 681,250
shares of our common stock, after which the Company issued
to him options to purchase 681,250 shares of our common
stock so long as Mr. DeAngelis continues to be an eligible
participant under the 1998 Stock Option Plan, as amended.
The exercise price of the new options is equal to 100%
of the fair market value of our common stock on the date
of grant of the new options, as determined by the last
reported sales price of our common stock as reported by
the AMEX Stock Market on the date we granted the new options.

(4) In October 2002, Mr. Jones, the Company's President and
Chief Operating Officer, voluntarily surrendered options to
purchase 437,500 shares of our common stock, after which the
Company issued to him options to purchase 437,500 shares of
our common stock so long as Mr. Jones continues to be an
eligible participant under the 1998 Stock Option Plan, as
amended. The exercise price of the new options is equal to
100% of the fair market value of our common stock on the
date of grant of the new options, as determined by the last
reported sales price of our common stock as reported by the
AMEX Stock Market on the date we granted the new options.

CXII 2002 Annual Meeting Proxy Page 23

(5) In October 2002, Mr. Hannesson, the Company's former
Chairman of the Board and Chief Executive Officer, voluntarily
surrendered options to purchase 1,147,500 shares of our common
stock, after which the Company issued to him options to purchase
1,147,500 shares of our common stock so long as Mr. Hannesson
continues to be an eligible participant under the 1998 Stock
Option Plan, as amended. The exercise price of the new options
is equal to 100% of the fair market value of our common stock on
the date of grant of the new options, as determined by the
last reported sales price of our common stock as reported by
the AMEX Stock Market on the date we granted the new options.

(6) In October 2002, Mr. Blum voluntarily surrendered options to
purchase 140,000 shares of our common stock, after which the
Company issued to him options to purchase 144,200 shares of
our common stock so long as Mr. Blum continues to be an
eligible participant under the 1998 Stock Option Plan, as
amended. The exercise price of the new options is equal to
100% of the fair market value of our common stock on the date
of grant of the new options, as determined by the last reported
sales price of our common stock as reported by the AMEX Stock
Market on the date we granted the new options.

CXII 2002 Annual Meeting Proxy Page 24

COMPENSATION COMMITTEE REPORT
______________________________

Filings made by companies with the Securities and Exchange
Commission sometimes "incorporate information by reference."
This means the Company is referring you to information that has
been previously filed with the SEC and that this information
should be considered as part of the filing you are reading. The
Compensation Committee Report and Stock Performance Graph in
this proxy statement are not incorporated by reference into any
other filings with the SEC.
_________________________________________________________________

What are the components of executive compensation?
__________________________________________________

Our compensation program for executives consists of three key
elements:

* Annual base salary
* Performance based annual bonus
* Long-term stock incentive compensation

What is the overview and philosophy of executives compensation?
______________________________________________________________

The Company's executive compensation program is designed to be
linked to corporate performance and returns to stockholders. Of
particular importance to the Company is its ability to grow and
enhance its competitiveness for the rest of the decade and
beyond. Shorter-term performance, although scrutinized by the
CSOB Committee, stands behind the issue of furthering the
Company's strategic goals. To this end, the Company has
developed an overall compensation strategy and specific
compensation plans that tie a significant portion of executive
compensation to the Company's success in meeting specified
performance goals.

The objectives of the Company's executive compensation program
are to:

* attract, motivate and retain the highest quality
executives;
* motivate them to achieve tactical and strategic
objectives in a manner consistent with the Company's
corporate values; and
* link executive and stockholder interests through equity-
based plans and provide a compensation package that
recognizes individual contributions as well as overall
business results.

To achieve these objectives, the Company's executive
compensation program is designed to:

* focus participants on high priority goals to increase
stockholder value;
* encourage behavior that exemplifies to Company's values
relating to customers, quality of performance, employees,
integrity, teamwork and good citizenship;
* assess performance based on results and pre-set goals
that link the business activities of each individual to the
goals of the Company; and
* increase stock ownership to promote a proprietary
interest in the success of the Company.

How are the Chairman of the Board and Chief Executive Officer
compensated?
_____________________________________________________________

Shelby T. Brewer, the Chairman of the Board and Chief Executive
Officer of the Company, received a base salary of $250,000 of
which all but $90,000 was deferred in fiscal year 2002. The
members of the CSOB Committee established the amount actually
received by Mr. Brewer this year as base salary for services
rendered to the Company and its affiliates. In determining Mr.
Brewer's salary, the CSOB Committee considered, without any
particular weighting, the salaries paid to chief executive
officers of comparable companies, the company's performance in
terms of stock price and key financial indices compared to its
peers, the performance of Mr. Brewer, and Mr. Brewer's extensive
industry knowledge.

Mr. Brewer received no cash bonus for fiscal 2002 under the
Officers Bonus Pool Plan. This plan pays total bonuses of up to
25% of a participant's salary. The CSOB Committee determined
that no bonus was to be paid in fiscal 2002.

How are other executive officers compensated?
____________________________________________

In setting all other executive officers annual salaries, the
CSOB Committee reviews an annual salary plan recommended by the
Chairman and CEO. The annual salary plan is based on numerous
subjective factors that include performance, merit increases and
responsibility levels.

CXII 2002 Annual Meeting Proxy Page 25

All executive officers are eligible to participate in the
officer's bonus plans. Under these plans, officers are eligible
to receive a bonus up to an established percent of their annual
base salary, depending on the Company's performance relative to
criteria established by the Compensation Committee. During
fiscal 2002, based upon these objective performance assessments,
no officer was awarded a bonus as reflected in the Summary
Compensation Table contained elsewhere in this proxy statement.

Job performance is based on reviews compiled by one or more of
the officers to whom the officer reports and such perceived
relative performance and abilities when compared with other
associates of the Company. Stock options are typically
exercisable at a rate of 25% per year commencing on the first
day of the date of the grant. Stock options are typically
exercisable for ten years after the date of the grant.

COMPENSATION, STOCK OPTION AND BENEFITS COMMITTEE
_________________________________________________

The Report of the Compensation Committee on Executive
Compensation shall not be deemed incorporated by reference by
any general statement incorporating by reference this Annual
Report into any filing under the Securities Act, or under the
Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not
otherwise be deemed filed under such acts.

Does the Compensation Committee compare Company salaries to
other companies?
________________________________________________________________

Salaries are based on the Compensation Committee assessment of
each officer's past performance and the expectation for future
contributions in leading the Company. In addition, the
Compensation Committee reviews compensation data for the retail
industry and other companies similar in size. This review is
not done scientifically. The Compensation Committee uses other
company compensation data for information purposes only, but
also considers subjective factors relating to the differences
between companies.

How are limitations on the deductibility of compensation
handled?
________________________________________________________________

Section 162(m) of the Internal Revenue Code limits the
deductibility of executive compensation paid by publicly held
corporations to $1 million per employee. The $1 million
limitation generally does not apply to compensation based on
performance goals if certain requirements are met. The Company
believes its Senior Officers' Bonus Pool Plan and Executive
Officers' Bonus Plan each satisfy Section 162(m). As a result,
the Company believes that the compensation paid under these
plans is not subject to limits on deductibility. However, there
can be no assurance that the Internal Revenue Service would
reach the same conclusion.

Who prepared this report?
_________________________

This report has been furnished by the members of the
Compensation, Stock Option and Benefits committee:

Ambassador William A. Wilson, Chair
Shelby T. Brewer, PhD.
Frank E. Coffman, PhD.
VADM Michael P. Kalleres

CXII 2002 Annual Meeting Proxy Page 26

AUDIT COMMITTEE REPORT
_______________________

Filings made by companies with the Securities and Exchange
Commission sometimes "incorporate information by reference."
This means the Company is referring you to information that has
been previously filed with the SEC and that this information
should be considered as part of the filing you are reading. The
Audit Committee Report in this proxy statement is not
incorporated by reference into any other filings with the SEC.

What are the responsibilities of the Audit Committee?
_____________________________________________________

The Audit Committee oversees the Company's financial
reporting process on behalf of the Board of Directors and is
governed by its Charter as set forth in Exhibit C, hereto,
which was adopted in March of 2000. Management has the
primary responsibility for the financial statements and the
reporting process including the systems of internal controls.
In fulfilling its oversight responsibilities, the committee
reviewed the audited financial statements in the Annual
Report with management, including a discussion of the
quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements. The
Audit Committee received the written disclosures and the
letter from the independent accountants required by
Independence Standards Board Standard No. 1 and discussed
with the independent accountants the independence of the
independent accountants. The Audit Committee also discussed
with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61.

What are the areas of focus of the Audit Committee?
____________________________________________________

The Audit Committee reviews with the independent auditors,
who are responsible for expressing an opinion on the
conformity of those audited financial statements with
generally accepted accounting principles:

* the overall scope and plans for their respective audits,

* their judgments as to the quality, not just the
acceptability, of the Company's accounting principles,

* their independence from management and the Company
including matters in the written disclosures and the letter
from the independent accountants required by the Independence
Standards Board No. 1,

* and such other matters as are required to be discussed
with the committee under generally accepted auditing
standards.

Who are the independent members of the Audit Committee?
_______________________________________________________

Messrs. Kalleres, Coffman, and Wilson are independent audit
committee members in accordance with the listing standards of
the American Stock Exchange. Mr. DeAngelis is an Executive
Officer of the Company, and as such, is not independent.
Having Mr. DeAngelis on the committee is in the best interest
of the Company because he can provide day-to-day supervision
to the internal audit staff, he is readily available to
address issues with management, and provides independent
members insight into audit and financial matters.

What financial statements does the Audit
Committee review?
__________________________________________

The audit committee, as part of its Charter, reviews
quarterly with management the Company's financial statements
prior to filing with the Securities and Exchange Commission
and discusses with the independent auditors matters required
to be discussed by Statement on Auditing Standards No. 61.
In addition, the committee in reliance on the reviews and
discussions referred to above, has recommended to the Board
of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2002.

CXII 2002 Annual Meeting Proxy Page 27

Who prepared this report?
_________________________

This report has been furnished by the members of the Audit
Committee:

VADM Michael P. Kalleres - Chair
Frank E. Coffman, PhD.
James M. DeAngelis
Ambassador William A. Wilson

What fees were paid to the Company's Principal Accountant?
__________________________________________________________

AUDIT FEES: We were billed a total of $48,578, in the
aggregate, by Tanner + Co., for the audit of the Company's
and its subsidiaries' annual financial statements for the
fiscal 2002 and the reviews of the interim financial
statements included in the Company's Forms 10-Q filed during
the fiscal 2002; and

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES:
There were no fees billed by Tanner + Co. for services
rendered in connection with financial information systems
design and implementation services described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X. during the fiscal
year ended December 31, 2002.

Additionally, the Company paid $5,602, in the aggregate, to
Tanner + Co. for services primarily related to the
dissolution of the Company 81% ownership of Dispute
Resolution Management, Inc. in 2002.

PRINCIPAL ACCOUNTANT INDEPENDENCE: The Audit Committee has
determined that the provision of all non-audit services
performed by the principal accountant were compatible with
maintaining their independence.

CXII 2002 Annual Meeting Proxy Page 28

STOCK PERFORMANCE GRAPH
________________________

This graph compares our total stockholder returns, the Standard
and Poor's 500 Composite Stock Index, the Standard and Poor's
Small Cap Composite Environmental Services Stock Index, the
Standard and Poor's 500 Composite Environmental Services Stock
Index, and the Standard and Poor's 500 Super Composite
Environmental Services Stock Index. The graph assumes $100
invested at the per share closing price of the common stock of
Commodore Applied Technologies, Inc. on the American Stock
Exchange, from June 28, 1996 through March 6, 2003, and then on
the Over the Counter Bulletin Board from that point forward.

COMMODORE ENVIRONMENTAL COMPARATIVE ANALYSIS SINCE INCEPTION
____________________________________________________________

[GRAPH]

06/28/1996 12/26/1997 12/25/1998 12/31/1999 12/29/2000 12/28/2001 12/27/2002
__________ __________ __________ __________ __________ __________ __________

CXII 100.00 53.93 5.62 14.61 4.49 2.34 1.26
S&P 500 100.00 139.64 182.85 219.09 196.87 173.12 130.53
S&P Small Cap 100.00 87.25 64.24 62.00 102.29 87.92 70.85
Environmental
Services
S&P 500
Environmental 100.00 100.82 107.49 49.05 79.42 90.87 63.69
Services
S&P Super
Composite
Environmental 100.00 102.84 106.11 52.62 85.52 95.02 70.92
Services

Comparison of initial $100 investment in various indices versus the
common stock of the Company.

CXII 2002 Annual Meeting Proxy Page 29

STOCK OWNERSHIP
_______________________________________________________________________

The following table sets forth certain information with respect
to the beneficial ownership of common stock as of December 31,
2002 by (i) each person known to the Company to be the beneficial
owner of more than 5% of the outstanding shares of common stock
of the Company, (ii) each Director, (iii) each individual listed
in the Summary Compensation Table herein, and (iv) all executive
officers and Directors of the Company as a group, as reported by
such persons. Unless otherwise indicated, the owners have sole
voting and investment power with respect to their respective
shares.

Percentage of
Name and Address of Number of Shares Outstanding
Beneficial Owner(1) Beneficially Owned(6) Shares of Common Stock
__________________________________________________________________________________

Commodore Environmental
Services, Inc. 8,382,302(7) 14.20%

Credit Agricole(2) 7,743,578(8) 13.12%

Bentley J. Blum 6,249,553(9) 10.59%

Robert S. Goldsmith(3) 5,000,000(10) 8.47%

Shelby T. Brewer, PhD(4) 4,359,313(11) 6.98%

Tamie P. Speciale(5) 3,145,000(12) 5.32%

Paul E. Hannesson 1,491,978(13) 4.35%

James M. DeAngelis 1,730,700(14) 3.16%

O. Mack Jones 1,708,452(15) 2.89%

Frank E. Coffman, PhD 139,669(16) *

Michael P. Kalleres, VADM 139,669(17) *

William A. Wilson 139,669(18) *

All executive officers 17,163,864 28.68%
and Directors as a group
(8 persons)

* Percentage ownership is less than 1%.

(1) Unless otherwise noted the address of each beneficial owner
is 150 East 58th Street, Suite 3238, New York, New York 10155.
Messrs. Blum and Hannesson are brothers-in-law.

(2) The address of Credit Agricole Deux Sevres is 4 Boulevard
Louis Tardy, 79000 Niort, France.

(3) The address of Robert S. Goldsmith is 117 East 77th Street,
Apartment 2A, New York, New York 10021.

(4) The address of Shelby T. Brewer is 2151 Jamieson Street,
Carlyle Towers, Suite 1607, Alexandria, Virginia 22314.

(5) The address of Tamie P. Speciale is 132 West Pierpoint
Avenue, Suite 400, Salt Lake City, Utah 84101.

CXII 2002 Annual Meeting Proxy Page 30

(6) As used herein, the term "beneficial ownership" with respect
to a security is defined by Rule 13d-3 under the Exchange Act as
consisting of sole or shared voting power (including the power to
vote or direct the disposition of) with respect to the security
through any contract, arrangement, understanding, relationship or
otherwise, including a right to acquire such power(s) during the
next 60 days. Unless otherwise noted, beneficial ownership
consists of sole ownership, voting and investment rights.

(7) Excludes warrants to purchase an aggregate of 19,188,009
shares of common stock at exercise prices ranging from $1.42 per
share to $2.15 per share. See "Market for Registrant's Common
Equity and Related Stockholder Matters-Recent Sales of
Unregistered Securities" and "Certain Relationships and Related
Transactions."

(8) Consists of (i) 6,000,000 shares of our common stock pledged
to Credit Agricole Deux Sevres from Environmental in connection
with Environmental's default on $4.0 million of convertible bonds
on February 06, 2001; and (ii) Credit Agricole Deux Sevres'
indirect beneficial ownership of our common stock based upon its
ownership of 16,800,000 shares of Environmental's common stock
pledged to Credit Agricole Deux Sevres from Environmental in
connection with Environmental's default on $4.0 million of
convertible bonds on February 06, 2001.

(9) Consists of: (i) 2,500,000 shares of our common stock
issued to Bentley J. Blum in exchange for $125,000 of debt owed
to Mr. Blum from the Company; (ii) 144,200 shares of the Company
common stock underlying currently exercisable options granted to
Mr. Blum by the Company under the Plan; and (iii) Mr. Blum's
indirect beneficial ownership of common stock based upon his
beneficial ownership of 28,479,737 shares and his spouse's
ownership of 2,000,000 shares of Environmental common stock,
representing together 37.74% of the outstanding shares of
Environmental common stock at April 15, 2003, and 4,500,000
shares of Environmental common stock underlying currently
exercisable stock options, representing together 41.02% of the
outstanding shares of Environmental. Does not include 450,400
shares of Environmental common stock owned by Simone Blum, the
mother of Mr. Blum, and 385,000 shares of Environmental common
stock owned by Samuel Blum, the father of Mr. Blum. Mr. Blum
disclaims any beneficial interest in the shares of Environmental
common stock owned by his spouse, mother and father.

(10) Consists of 5,000,000 shares of our common stock purchased
by Robert S. Goldsmith.

(11) Consists of: (i) 3,428 shares of common stock (ii) 490,695
shares of our common stock representing the balance held of the
common stock issued pursuant to the Restated Brewer Note, dated
as of March 15, 2001, between the Company and S.B. Enterprises
and a subsequent conversion notice for 50% of the outstanding
principal dated as of April 9, 2001; (iii) 865,200 shares of the
Company common stock underlying currently exercisable options
granted to Mr. Shelby T. Brewer by the Company under the 1998
Plan; (iv) 2,000,000 shares of the Company common stock
underlying options which are subject to certain performance
criteria before deemed exercisable, granted to Mr. Brewer by the
Company outside of the 1998 Plan; (v) 1,000,000 shares of our
common stock underlying a currently exercisable two year warrant
at an exercise price of $0.05 per share granted to S.B.
Enterprises in connection with the extension of the Brewer Note
until January 1, 2004; and (vi) does not include a conversion
notice issued on March 17, 2003, by Mr. Brewer for the remainder
of the principal and interest of the S.B. Enterprises loan, which
when converted will comprise an additional ownership of 13,189,842
shares of the Company's common stock. This conversion has not
occurred as of July 29, 2003.

(12) Consists of (i) 2,850,000 shares of our common stock issued
to Tamie P. Speciale and George H. Speciale with joint tenancy
and rights of survivorship, by the Company in connection with the
dissolution of the Company's ownership of 81.0% of DRM; and (ii)
340,000 shares of our common stock underlying a currently
exercisable five year warrant at an exercise price of $2.00 per
share granted to Ms. Tamie P. Speciale and George H. Speciale
with joint tenancy and rights of

CXII 2002 Annual Meeting Proxy Page 31

survivorship, by the Company in connection with the dissolution
of the Company's ownership of 81.0% of DRM.

(13) Consists of: (i) 750,000 shares of common stock; (ii)
1,181,925 shares of common stock underlying currently exercisable
stock options granted to Mr. Paul E. Hannesson by the Company
under the 1998 Plan; and (iii) Mr. Hannesson's indirect
beneficial ownership of common stock based upon his ownership of
an aggregate of (a) 2,650,000 shares of Environmental common
stock owned by Suzanne Hannesson, the spouse of Mr. Hannesson,
(b) 2,650,000 shares of Environmental common stock owned by the
Hannesson Family Trust (Suzanne Hannesson and John D. Hannesson,
trustees) for the benefit of Mr. Hannesson's spouse and (c)
500,000 shares of Environmental common stock in exchange for
options to purchase 950,000 shares of Environmental common stock,
issued to Hannesson Family Trust, representing together 7.18% of
the outstanding shares of Environmental common stock as of March
15, 2001, and (d) currently exercisable options to purchase
525,705 shares of Environmental common stock, representing
together 7.78% of the outstanding shares of Environmental common
stock. Does not include (i) 40,000 shares of the Company's
common stock owned by each of Jon Paul and Krista Hannesson, the
adult children of Mr. Hannesson; and (ii) 1,000,000 shares of
Environmental common stock owned by each of Jon Paul and Krista
Hannesson. Mr. Hannesson disclaims any beneficial interest in
the shares of Environmental common stock owned by or for the
benefit of his spouse and children. It also does not include
1,000,000 shares of common stock underlying stock options granted
to Mr. Hannesson by the Company that are not currently
exercisable.

(14) Consists of (i) 16,500 shares of common stock; (ii) 841,688
shares of common stock underlying currently exercisable stock
options granted to Mr. James M. DeAngelis by the Company under
the Company's 1998 Plan; (iii) 1,000,000 shares of common stock
underlying options which are subject to certain performance
criteria before deemed exercisable, granted to Mr. DeAngelis by
the Company outside of the Company's 1998 Plan; and (iv) Mr.
DeAngelis' indirect beneficial ownership of common stock based
upon his ownership of 580,000 shares of Environmental.

(15) Consists of 1,759,375 shares of common stock underlying
currently exercisable stock options granted to Mr. O. Mack Jones
by the Company under the Company's 1998 Plan.

(16) Consists of 140,000 shares of common stock underlying
currently exercisable stock options granted to Mr. Frank E.
Coffman by the Company under the Company's 1998 Plan.

(17) Consists of 140,000 shares of common stock underlying
currently exercisable stock options granted to Mr. Michael P.
Kalleres VADM by the Company under the Company's 1998 Plan.

(18) Consists of 140,000 shares of common stock underlying
currently exercisable stock options granted to Mr. William A.
Wilson by the Company under the Company's 1998 Plan.

Messrs. Blum and Hannesson are brothers-in-law.

The Shaar Fund holds certain shares of Series E Preferred Stock
and Series F Preferred Stock that are convertible into common
stock of the Company. If the Shaar Fund were to exercise this
conversion privilege and retain the shares of common stock
received on the conversion, such conversion might result in a
change in control of the Company.

EXECUTIVE OFFICERS AND KEY EMPLOYEES
____________________________________

The executive officers of the Company are Shelby T. Brewer,
Ph.D., who serves as Chairman of the Board, President and Chief
Executive Officer, O. Mack Jones, who serves as President and
Chief Operating Officer, and James M. DeAngelis, who serves as
Chief Financial and Administrative Officer and Secretary

CXII 2002 Annual Meeting Proxy Page 32

and Treasurer. Additional information regarding Dr. Brewer and Mr.
DeAngelis is included in this proxy statement under the heading
"Election of Directors and Director Biographies."

O. Mack Jones, age 62, serves as President and Chief
Operating Officer of the Company. O. Mack Jones has been serving
as Acting President of Advanced Sciences since February 2001.
Mr. Jones also has

served as Vice President of Field Operations
since April 1998, managing its field treatability studies and
commercial projects. On February 28, 2001, Mr. Jones was
appointed President of Advanced Sciences. Mr. Jones served as
consultant to the Company from June 1996 to April 1998, assisting
in the commercialization of the solvated electron technology.
From September 1994 to May 1996, he served as a consultant to
Environmental assisting in the development of the solvated
electron technology. From 1991 to May 1996, Mr. Jones served as
the founder and principal executive officer of an environmental
consulting company, Florida Vector Services, which provided both
consulting and hands-on remediation services primarily in TSCA-
related areas. From 1986 to 1991, Mr. Jones was Vice President-
Operations with Quadrex Environmental Company, managing the
company's field remediation businesses. Mr. Jones is a
professional mechanical engineer who held several managerial
operating positions in power generation and distribution arenas
during his twenty-six years of service to General Electric
Company. His experience includes commercial nuclear, fossil, and
hydro power construction and maintenance, industrial power
delivery systems, and industrial drives and controls.

CXII 2002 Annual Meeting Proxy Page 33

GENERAL
_______________________________________________________________

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
___________________________________________________________

None of the members of the Compensation, Stock Option and
Benefits Committee were officers or employees of the Company or
had any relationship with the Company requiring disclosure
under Securities and Exchange Commission regulations.

INSIDER TRANSACTIONS
____________________

Shelby T. Brewer sold 885,900 shares of the Company's common
stock from March 8, 2002 through January 24, 2003. On March
17, 2003, Mr. Brewer issued a conversion notice for the remainder
of the principal and interest of the S.B. Enterprises loan, which
when converted will comprise an additional ownership of
13,189,842 shares of the Company's common stock. This conversion
has not occurred as of July 29, 2003. Paul E. Hannesson sold
750,000 shares of the Company's common stock on January 27,
2003. All required disclosures were submitted to the Securities
and Exchange Commission with respect to the above-mentioned
transactions.

COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNER
______________________________________________

Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers and persons who
own more than ten percent of a registered class of the
Company's equity securities to file with the SEC reports of
ownership and changes in ownership of the Company's common
stock. Directors, executive officers and greater than ten
percent stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of these reports
furnished to the Company or written representations that no
other reports were required, with the exception of Shelby
Brewer who filed a Form 4 on a delayed basis, we believe that
during fiscal year 2002, all our directors, executive officers
and greater than ten percent beneficial owners complied with
these requirements.

INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
_____________________________________

Tanner + Co. was our auditor during fiscal 2002. The Board of
Directors has selected Tanner + Co. to serve as auditors for the
present fiscal year, subject to shareholder ratification. A
representative of that firm will be present at the annual
meeting, will be given an opportunity to make a statement and
will be available to respond to appropriate questions.

AVAILABILITY OF FORM 10-K AND ANNUAL REPORT TO STOCKHOLDERS
___________________________________________________________

SEC rules require us to provide an Annual Report on Form 10K to
stockholders who receive this Proxy Statement. We will also
provide copies of the Annual Report on Form 10K to brokers,
dealers, banks, voting trustees and their nominees for the
benefit of their beneficial owners of record. Additional copies
of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 (not including documents incorporated by
reference), are available without charge to stockholders upon
written request to Investor Relations, Commodore Applied
Technologies, Inc., 150 East 58th Street, Ste. 3238, New York,
NY 10155, by calling (212) 308-5800 or via the Internet at
www.commodore.com.

STOCKHOLDER PROPOSALS
_____________________

To be considered for inclusion in next year's proxy statement,
stockholder proposals must be submitted in writing by April 6,
2004. Any stockholder proposal, including nomination of a
director, to be considered at next year's meeting, but not
included in the proxy statement, must be submitted in writing by
June 20, 2004, or the persons appointed as proxies may exercise
their discretionary voting authority with respect to the
proposal. All written proposals should be submitted to James M.
DeAngelis, Corporate Secretary of the Company. Our by-laws,
which are publicly available through our SEC reports or may be
obtained upon request from our Corporate Secretary, state the
specific requirements that must be included in any notice of any
business to be brought before the meeting.

SOLICITATION BY BOARD; EXPENSES OF SOLICITATION
_______________________________________________

Our Board of Directors has sent you this Proxy Statement. Our
directors, officers and associates may solicit proxies. We will
also reimburse brokers, nominees and fiduciaries to send proxies
and proxy materials to our stockholders so they can vote their
shares.

CXII 2002 Annual Meeting Proxy Page 34

FORM OF PROXY

COMMODORE APPLIED TECHNOLOGIES, INC.

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

The undersigned, a stockholder of COMMODORE APPLIED
TECHNOLOGIES, INC., a Delaware corporation (the "Company"),
hereby appoints Shelby T. Brewer and James M. DeAngelis, and each
of them, as proxies for the undersigned, each with full power of
substitution, and hereby authorizes them to represent and to
vote, as designated below, all of the shares of Common Stock of
the Company held of record by the undersigned at the close of
business on July 31, 2003 at the Annual Meeting of Stockholders
of the Company to be held on Friday, September 12, 2003, at 11:00
a.m., local time, at The Fitzpatrick Hotel, 687 Lexington
Avenue, New York, New York 10022, and at any adjournment or
postponement thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS GIVEN, SUCH SHARES WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR
IDENTIFIED BELOW AND FOR PROPOSALS 2 THROUGH 8 SET FORTH BELOW.

IF YOU CHOOSE TO VOTE BY FACSIMILE, PLEASE FILL IN THE PROXY CARD
AS DIRECTED ABOVE AND FAX TO THE ATTENTION OF: JAMES M.
DEANGELIS, SECRETARY OF THE 2002 ANNUAL MEETING OF THE
SHAREHOLDERS OF COMMODORE APPLIED TECHNOLOGIES, INC. AT 212-355-
1371 ANYTIME PRIOR TO FRIDAY, SEPTEMBER 12, 2003, at 11:00 A.M.,
LOCAL TIME, NEW YORK, NY.

1. To elect the following nominees as Directors of the
Company to hold office until the Annual Meeting of Stockholders
to be held in 2004, and until their respective successors are
duly elected and have qualified: Bentley J. Blum, Shelby T.
Brewer, PhD., Frank E. Coffman, PhD., James M. DeAngelis, Paul E.
Hannesson, VADM Michael P. Kalleres, and Ambassador William A.
Wilson.

FOR ALL NOMINEES (except as WITHHOLD ALL NOMINEES
marked to the contrary)

( ) ( )

AUTHORITY TO WITHHOLD A VOTE FOR ANY OF THE ABOVE NAMED
INDIVIDUALS SHOULD BE INDICATED BY LINING THROUGH OR OTHERWISE
STRIKING OUT THE NAME OF THE NOMINEE.
__________________________________________________________________

Form of Porxy CXII 2003 Page 1

2. To amend the Certificate of Incorporation to increase
the number of authorized shares of common stock from 125,000,000
to 300,000,000 shares.

( ) FOR ( ) AGAINST ( ) ABSTAIN
_______________________________________________________________

3. To approve the Company's Short Term Incentive Plan.

( ) FOR ( ) AGAINST ( ) ABSTAIN
_______________________________________________________________

4. To ratify the Company's 1998 Stock Option Plan, as
amended.

( ) FOR ( ) AGAINST ( ) ABSTAIN
_______________________________________________________________

5. To approve the performance goals and incentive
compensation for the Chief Executive Officer outside of the
Company's 1998 Stock Option Plan, as amended.

( ) FOR ( ) AGAINST ( ) ABSTAIN
_______________________________________________________________

6. To approve the performance goals and incentive
compensation for the Chief Financial Officer outside of the
Company's 1998 Stock Option Plan, as amended.

( ) FOR ( ) AGAINST ( ) ABSTAIN
_______________________________________________________________

7. To ratify the appointment of Tanner + Co as the
Company's independent auditors for the year ending December 31,
2003.

( ) FOR ( ) AGAINST ( ) ABSTAIN
_______________________________________________________________

8. Upon such other matters as may properly come before
such Annual Meeting and any adjournments or postponement thereof.
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting and
any adjournment or postponement thereof.

Form of Proxy CXII 2003 Page 2

The undersigned hereby acknowledges receipt of (1) the
Notice of Annual Meeting for the 2002 Annual Meeting, (2) the
Proxy Statement and (3) the Company's 2002 Annual Report to
Stockholders on Form 10-K.

Dated: ______________________, 2003

________________________________
SIGNATURE

________________________________
Print Name

________________________________
Signature, if Jointly Held

________________________________
Print Name

PLEASE SIGN EXACTLY AS YOUR NAME APPEARS
________________________________________

HEREIN, if signing as attorney, executor, administrator, trustee
or guardian, indicate such capacity. All joint tenants must
sign. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please
sign in partnership name by authorized person. The Board of
Directors requests that you fill in the date and sign the proxy
and return it in the enclosed envelope.
__________________________________________________________________

IF THE PROXY IS NOT DATED IN THE ABOVE
SPACE, IT IS DEEMED TO BE DATED ON THE DAY
ON WHICH IT WAS MAILED BY THE CORPORATION.

__________________________________________

Form of Proxy CXII 2003 Page 3

APPENDIX A
__________
SHORT TERM INCENTIVE PLAN

COMMODORE APPLIED TECHNOLOGIES, INC.

SHORT TERM INCENTIVE PLAN

EFFECTIVE JANUARY 1, 2003

The Compensation, Stock Option and Benefits Committee (the
"Compensation Committee") of the Board of Directors of Commodore
Applied Technologies, Inc. (the "Company") hereby adopts this
Short Term Incentive Plan (the "Short Term Incentive Plan"),
subject to stockholder approval as described in Section 10.

1. PURPOSE. The primary purpose of the Short Term
Incentive Plan is to enhance the ability of the Company and its
affiliates to attract, motivate and retain individuals of
exceptional managerial talent on whom, in large measure, the
sustained progress, growth and profitability of the Company
depend. The bonus awards under the Short Term Incentive Plan are
intended to qualify as "performance-based" compensation under
Section 162(m) of the Internal Revenue Code of 1986, as amended
("Section 162(m)").

2. ADMINISTRATION. The Short Term Incentive Plan shall be
administered by the Compensation Committee, which shall have full
power and authority to construe, interpret and administer the
Short Term Incentive Plan. The Compensation Committee shall have
full authority to make all eligibility, bonus and other
determinations necessary or appropriate for the proper
administration of the Short Term Incentive Plan.

3. PARTICIPANTS.

(a) ELIGIBLE EMPLOYEES. For each bonus measurement period,
the CEO, four highest compensated officers (within the meaning of
Section 162(m) and any other employee who the Company has
designated as a Section 16 officer at the beginning of the bonus
measurement period shall be eligible to participate in the Short
Term Incentive Plan, unless determined otherwise by the
Compensation Committee in its discretion.

(b) PARTICIPATION. In general, to participate in the
Short Term Incentive Plan an eligible employee must be
continuously employed by the Company or its affiliates for the
entire bonus measurement period. However, for an eligible
employee who is hired or terminates employment during a bonus
measurement period, the Compensation Committee in its discretion
may award such employee a pro rata bonus in accordance with
Sections 4(c) and 5 and the performance-based compensation
requirements of Section 162(m). An eligible employee under this
Section 3(b) shall be referred to as a "Participant." A bonus
measurement period shall equal a calendar year, unless determined
otherwise by the Compensation Committee in its discretion.

Short Term Incentive Plan Page 1

(c) CHANGE IN CONTROL. In the event of a Change in
Control, a Participant shall be entitled to a minimum bonus award
for the bonus measurement period that contains the effective time
of the Change in Control. The minimum bonus award shall equal
the product of (i) the Participant's target annual incentive
award in effect as of the effective time of the Change in
Control, (ii) a fraction, the numerator of which is the number of
calendar days in the then-current bonus measurement period and
the denominator of which is 365, and (iii) year-to-date actual
performance with respect to the performance goals for such bonus
measurement period, as reasonably determined by the Compensation
Committee immediately prior to the effective time of the Change
in Control. A "Change in Control" for purposes of this Section
3(c) shall have the meaning set forth in the Company's 1998 Stock
Option Plan, as amended, as may be amended from time to time. A
"target annual incentive award" for purposes of this Section 3(c)
shall mean, for each Participant, the target annual incentive
award established by the Company's management and presented to
the Compensation Committee in connection with establishing the
maximum bonus award for the Participant under Section 4(a). The
target annual incentive award shall be less than the maximum
bonus award.

4. BONUS AWARDS. The following provisions shall apply to
bonus awards under the Short Term Incentive Plan:

(a) MAXIMUM BONUS AWARD. Prior to the beginning of
each bonus measurement period or such later time as may be
permitted by Section 162(m), the Compensation Committee shall
establish a maximum bonus award for each Participant, expressed
as a percentage of the bonus pool specified in Section 4(b);
provided, however, that the total of all such maximum percentages
shall not exceed 100% and the maximum percentage for any
individual Participant shall not exceed 40%.

(b) BONUS POOL. For each bonus measurement period,
the Compensation Committee shall establish a bonus pool of up to
$4,000,000 and set performance goals, which shall determine
whether the bonus pool is funded for the bonus measurement
period. If the performance goals are not satisfied in accordance
with Section 5, the bonus pool for the bonus measurement period
shall equal $0. The performance goals may be based on the
attainment of specified levels of one or any combination of the
following business criteria of the Company, its affiliates or its
business units, as reported or calculated by the Company; cash
flows (including, but not limited to, operating cash flow, free
cash flow or cash flow return on capital); working capital;
earnings per share; book value per share; operating income
(including or excluding depreciation, amortization or other
expenses); revenues; operating margins; return on assets; return
on equity; debt; debt plus equity; market or economic value
added; stock price appreciation; total stockholder return; cost
control; strategic initiatives; market share; net income; return
on invested capital; improvements in capital structure; or
customer satisfaction, employee satisfaction, service
performance, subscriber, cash management or asset management
metrics. Such performance goals also may be based on the
achievement of specified levels of Company performance (or
performance of an applicable affiliate or division of the
Company) under one or more of the measures described above
relative to the performance of other corporations. The
Compensation Committee shall set such performance goals prior to
the beginning of each bonus measurement period or such later time
as may be permitted by Section 162(m).

(c) INDIVIDUAL BONUS AWARDS. The bonus award to a
Participant shall not exceed the maximum bonus award specified in
Section 4(a). The aggregate amount of all bonus awards to all
Participants for any bonus measurement period shall not exceed
100% of the bonus pool specified in Section 4(b).

short Term incentive Plan Page 2

5. COMPENSATION COMMITTEE CERTIFICATION. The Compensation
Committee shall determine, in accordance with the minimum bonus
awards, performance goals and other elements established pursuant
to Sections 3 and 4, the amounts to be awarded to each
Participant under the Short Term Incentive Plan for each bonus
measurement period. The Compensation Committee's determinations
shall be final and binding on all Participants. These
determinations must be certified in writing after the completion
of the bonus measurement period and before bonuses for such
period are paid, which requirement may be satisfied by approved
minutes of the Compensation Committee meeting that set out the
determinations made. The Compensation Committee shall not have
discretion to increase the bonus awards that would otherwise be
due to Participants under the terms of the Short Term Incentive
Plan.

6. PAYMENT OF BONUS AWARDS. Payment of bonus awards
shall be made in cash at such times and on such terms as are
determined by the Compensation Committee in its discretion.

7. AMENDMENTS. The Compensation Committee may amend the
Short Term Incentive Plan at any time; provided, however, that to
the extent it would cause the Short Term Incentive Plan to fail
to qualify as "performance-based" compensation under Section
162(m) with respect to any Participant, the Compensation
Committee shall not have the power to change the material terms
of the performance goals unless (a) the modified performance
goals are established by the Compensation Committee no later than
the deadline established under Section 162(m) and (b) no bonuses
are paid under the modified performance goals until after the
material terms of the modified performance goals are disclosed to
and approved by the Company's stockholders to the extent required
by Section 162(m). No amendment that adversely affects a
Participant's right to or interest in a bonus awarded by the
Compensation Committee prior to the date of the amendment shall
be effective unless the Participant agrees to the amendment in
writing.

8. TERMINATION. The Compensation Committee may terminate
the Short Term Incentive Plan at any time and for any reason.
The Compensation Committee shall provide Participants with
written notice of the Short Term Incentive Plan's termination as
soon as practicable following such termination.

9. OTHER CONDITIONS.

(a) NO CLAIMS: NO ASSIGNMENT OR ALIENATION. No person
shall have any claim to a bonus award under the Short Term
Incentive Plan, and there is no obligation for uniformity of
treatment of Participants under the Short Term Incentive Plan.
Bonus awards under the Short Term Incentive Plan may not be
assigned, alienated, pledged, transferred, encumbered, attached,
garnished or subjected to any other disposition.

(b) UNFUNDED PLAN. The Company shall have no obligation to
reserve or otherwise fund in advance any bonus awards that are or
may in the future become payable under the Short Term Incentive
Plan. Any funds that the Company, acting in its sole and
absolute discretion, determines to reserve for future payments
under the Short Term Incentive Plan may be commingled with other
assets or funds of the Company and need not in any way be
segregated from other assets or funds held by the Company. A
Participant's rights to payment of a bonus award under the Short
Term Incentive Plan shall be limited to those of a general
creditor of the Company.

Short Term Incentive Plan Page 3

(c) NO RIGHT TO EMPLOYMENT. Neither the Short Term
Incentive Plan nor any action taken hereunder shall be construed
as giving any Participant the right to be retained in the employ
of the Company.

(d) TAX WITHHOLDING. The Company shall have the right to
withhold from the payment of any bonus award under the Short Term
Incentive Plan any federal, state or local taxes in accordance
with applicable law.

(e) OTHER PLANS. Bonus awards under the Short Term
Incentive Plan shall not constitute compensation for the purpose
of determining benefits under any other plan of the Company
unless expressly included in compensation under the terms of such
other plan.

(f) GOVERNING LAW. The Short Term Incentive Plan shall be
governed by the laws of the State of Delaware, other than its
choice of law rules, and applicable federal law.

10. EFFECTIVE DATE; STOCKHOLDER APPROVAL; PRIOR PLANS SUPERSEDED.
The Short Term Incentive Plan shall be effective for
bonus measurement periods beginning on or after January 1, 2003,
subject to approval of the Short Term Incentive Plan by the
Company's stockholders in accordance with Section 162(m). The
Short Term Incentive Plan shall replace and supersede all current
and prior bonus plans, programs and arrangements of a similar
annual incentive nature with respect to each Participant.

Short Term Incentive Plan Page 4

APPENDIX B
__________

COMMODORE APPLIED TECHNOLOGIES, INC.

1998 STOCK OPTION PLAN

_______________

AS AMENDED AND RESTATED EFFECTIVE AS OF DECEMBER 15, 1998

1998 Stock Option Plan, as amended Page 1

COMMODORE APPLIED TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN

INTRODUCTION

Commodore Applied Technologies, Inc., a Delaware
corporation (hereinafter referred to as the "Corporation"),
hereby establishes an incentive compensation plan to be known as
the "COMMODORE APPLIED TECHNOLOGIES, INC. 1988 STOCK OPTION PLAN"
(hereinafter referred to as the "Plan"), as set forth in this
document. The Plan permits the grant of Non-Qualified Stock
Options.

The Plan became effective on December 15, 1998 and was
Amended and Restated as of such date.

The purpose of the Plan is to promote the success and
enhance the value of the Corporation by linking the personal
interests of Participants to those of the Corporation's
stockholders by providing Participants with an incentive for
outstanding performance. The Plan is further intended to assist
the Corporation in its ability to motivate, and retain the
services of, Participants upon whose judgment, interest and
special effort the successful conduct of its and its
subsidiaries' operations is largely dependent.

DEFINITIONS

For purposes of this Plan, the following terms shall be
defined as follows unless the context clearly indicates
otherwise:

"Award Agreement" shall mean the written
agreement, executed by an appropriate officer of the Corporation,
pursuant to which a Plan Award is granted.

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

"Code" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations thereunder.

"Committee" shall mean the Board of Directors of
the Corporation or any committee of two or more persons
designated by the Board of Directors to serve as the Committee.

"Common Stock" shall mean the common stock, par
value $0.001 per share, of the Corporation.

"Consultant" shall mean an individual who is in a
Consulting Relationship with the Corporation or any Parent or
Subsidiary.

"Consulting Relationship" shall mean the
relationship that exists between an individual and the
Corporation (or any Parent or Subsidiary) if (i) such individual
or (ii) any entity of which such individual is an executive
officer or owns a substantial equity interest has entered into a
written consulting contract with the Corporation or any Parent or
Subsidiary.

1998 Stock Option Plan, as amended Page 2

"Corporation" shall mean Commodore Applied
Technologies, Inc., a Delaware corporation.

"Disability" shall have the same meaning as the
term "permanent and total disability" under Section 22(e)(3) of
the Code.

"Employee" shall mean a common-law employee of the
Corporation or of any Parent or Subsidiary.

"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations
thereunder.

"Fair Market Value" of the Corporation's Common
Stock on a Trading Day shall mean the last reported sale price
for Common Stock or, in case no such reported sale takes place on
such Trading Day, the average of the closing bid and asked prices
for the Common Stock for such Trading Day, in either case on the
principal national securities exchange on which the Common Stock
is listed or admitted to trading, or if the Common Stock is not
listed or admitted to trading on any national securities
exchange, but is traded in the over-the-counter market, the
closing sale price of the Common Stock or, if no sale is publicly
reported, the average of the closing bid and asked quotations for
the Common Stock, as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or any
comparable system or, if the Common Stock is not listed on NASDAQ
or a comparable system, the closing sale price of the Common
Stock or, if no sale is publicly reported, the average of the
closing bid and asked prices, as furnished by two members of the
National Association of Securities Dealers, Inc. who make a
market in the Common Stock selected from time to time by the
Corporation for that purpose. In addition, for purposes of this
definition, a "Trading Day" shall mean, if the Common Stock is
listed on any national securities exchange, a business day during
which such exchange was open for trading and at least one trade
of Common Stock was effected on such exchange on such business
day, or, if the Common Stock is not listed on any national
securities exchange but is traded in the over-the-counter market,
a business day during which the over-the-counter market was open
for trading and at least one "eligible dealer" quoted both a bid
and asked price for the Common Stock. An "eligible dealer" for
any day shall include any broker-dealer who quoted both a bid and
asked price for such day, but shall not include any broker-dealer
who quoted only a bid or only an asked price for such day. In
the event the Corporation's Common Stock is not publicly traded,
the Fair Market Value of such Common Stock shall be determined by
the Committee in good faith.

"Good Cause" shall have the equivalent meaning (or
the same meaning as "cause" or "for cause") set forth in any
employment agreement between the Participant and the Corporation
or Parent or Subsidiary or, in the absence of any such agreement,
such term shall mean (i) the Participant's willful or gross
misconduct or willful or gross negligence in the performance of
his duties for the Corporation or for any Parent or Subsidiary
after prior written notice of such misconduct or negligence and
the continuance thereof for a period of 30 days after receipt by
such Participant of such notice, (ii) the Participant's
intentional or habitual neglect of his duties for the Corporation
or for any Parent or Subsidiary after prior written notice of
such neglect, (iii) the Participant's theft or misappropriation
of funds of the Corporation or of any Parent or Subsidiary,
fraud, criminal misconduct, breach of fiduciary duty or
dishonesty in the performance of his duties on behalf of the
Corporation or any Parent or Subsidiary or commission of a
felony, or crime of moral turpitude or any other conduct
reflecting adversely upon the Corporation or any Parent or
Subsidiary, (iv) the Participant's violation of any covenant not
to compete or not to disclose confidential information with
respect to the Corporation or (v) the direct or indirect breach
by the Participant of the terms of a related consulting contract
with the Corporation or any Parent or Subsidiary.

1998 Stock Option Plan, as amended Page 3

"Good Reason" shall have the meaning set forth in
any employment contract between the Employee and the Corporation
(or any Parent or Subsidiary) of such term (or of Constructive
Termination, Constructive Discharge or similar term) or, in the
event there is no such contract (or no such term set forth in any
such contract), the definition (if any) set forth in the
appropriate Plan Award.

"Non-Qualified Option" shall mean a stock option
which does not satisfy the requirements for, or which is not
intended to be eligible for, tax-favored treatment under Section
422 of the Code.

"Option" shall mean a Non-Qualified Stock Option
granted pursuant to the provisions of Section VI hereof.

"Optionee" shall mean a Participant who is
granted an Option under the terms of this Plan.

"Parent" shall mean a corporation which directly
or indirectly owns more than fifty percent (50%) of the
Corporation's outstanding Common Stock.

"Participant" shall mean any Employee or other
person participating under the Plan.

"Plan Award" shall mean an Option granted pursuant
to the terms of this Plan.

"Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations thereunder.

"Subsidiary" shall mean a corporation of which
more than fifty percent (50%) of its outstanding voting common
stock is directly or indirectly owned by the Corporation.

"Termination of Consulting Relationship" shall
mean the cessation, abridgment or termination of a Consultant's
Consulting Relationship with the Corporation or any Parent or
Subsidiary as a result of (i) the Consultant's death or
Disability, (ii) the cancellation, annulment, expiration,
termination or breach of the written consulting contract between
the Corporation (or any Parent or Subsidiary) and the Consultant
(or any other entity) giving rise to the Consulting Relationship
or (iii) if the written consulting contract is not directly
between the Corporation (or any Parent or Subsidiary) and the
Consultant, the Consultant's termination of service with, or sale
of all or substantially all of his equity interest in, the entity
which has entered into the written consulting contract with the
Corporation, Parent or Subsidiary.

ADMINISTRATION

The Plan shall be administered by the Committee, which
shall be composed of the entire Board of Directors or of two or
more Non-Employee Directors, as defined in Rule 16b-3(b)(3)
promulgated under the Exchange Act. Subject to the provisions of
the Plan, the Committee may establish from time to time such
regulations, provisions, proceedings and conditions of awards
which, in its sole opinion, may be advisable in the
administration of the Plan. A majority of the Committee shall
constitute a quorum, and, subject to the provisions of Section V
of the Plan, the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing
by all of the members of the Committee, shall be the acts of the
Committee as a whole.

1998 Stock Option Plan, as amended Page 3

SHARES AVAILABLE

Subject to the adjustments provided in Section VII of
the Plan, the aggregate number of shares of the Common Stock
which may be granted for all purposes under the Plan shall be
fifteen million (15,000,000) shares. Shares of Common Stock
underlying awards of securities (derivative or not) shall be
counted against the limitation set forth in the immediately
preceding sentence and may be reused to the extent that the
related Plan Award to any individual is settled in cash, expires,
is terminated unexercised, or is forfeited. Common Stock granted
to satisfy Plan Awards under the Plan may be authorized and
unissued shares of the Common Stock, issued shares of such Common
Stock held in the Corporation's treasury or shares of Common
Stock acquired on the open market.

ELIGIBILITY

Officers and key employees of the Corporation, or of
any Parent or Subsidiary, who are regularly employed on a
salaried basis as common law employees, and Consultants and
directors of the Corporation or of any Parent or Subsidiary who
are not Employees, shall be eligible to participate in the Plan.
Where appropriate under this Plan, directors who are not
Employees shall be referred to as "employees" and their service
as directors as "employment".

AUTHORITY OF COMMITTEE

The Plan shall be administered by, or under the
direction of, the Committee, which shall administer the Plan so
as to comply at all times with Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder, to the extent
such compliance is required, and shall otherwise have plenary
authority to interpret the Plan and to make all determinations
specified in or permitted by the Plan or deemed necessary or
desirable for its administration or for the conduct of the
Committee's business. All interpretations and determinations of
the Committee may be made on an individual or group basis and
shall be final, conclusive and binding on all interested parties.
Subject to the express provisions of the Plan, the Committee
shall have authority, in its discretion, to determine the persons
to whom Plan Awards shall be granted, the times when such Plan
Awards shall be granted, the number of Plan Awards, the exercise
price of each Plan Award, the period(s) during which a Plan Award
shall be exercisable (whether in whole or in part), the
restrictions to be applicable to Plan Awards and the other terms
and provisions thereof (which need not be identical). In
addition, the authority of the Committee shall include, without
limitation, the following:

Financing. The arrangement of temporary financing
for an Optionee by registered broker-dealers, under the rules and
regulations of the Federal Reserve Board, for the purpose of
assisting an Optionee in the exercise of an Option, such
authority to include the payment by the Corporation of the
commissions of the broker-dealer;

Procedures for Exercise of Option. The
establishment of procedures for an Optionee (i) to exercise an
Option by payment of cash, (ii) to have withheld from the total
number of shares of Common Stock to be acquired upon the exercise
of an Option that number of shares having a Fair Market Value,
which, together with such cash as shall be paid in respect of
fractional shares, shall equal the Option exercise price of the
total number of shares of Common Stock to be acquired, (iii) to
exercise all or a portion of an Option by delivering that number
of shares of Common Stock already owned by him having a Fair
Market Value which shall equal the Option exercise price for the
portion exercised and, in cases where an Option is not exercised
in its entirety, and subject to the requirements of the Code, to
permit the Optionee to

1998 Stock Option Plan, as amended Page 5

deliver the shares of Common Stock thus
acquired by him in payment of shares of Common Stock to be
received pursuant to the exercise of additional portions of such
Option, the effect of which shall be that an Optionee can in
sequence utilize such newly acquired shares of Common Stock in
payment of the exercise price of the entire Option, together with
such cash as shall be paid in respect of fractional shares and
(iv) to engage in any form of "cashless" exercise. The Committee
may, in its sole discretion, require that an exercise described
under any one or more or the methods described under clauses
(ii), (iii) or (iv) of the immediately preceding sentence (to the
extent such exercise is, or is deemed to constitute, an exercise
effected by the tendering of Common Stock) be consummated with
Common Stock (i) held by the Optionee for at least six (6) months
or (ii) acquired by the Optionee other than under this Plan or a
similar program.

Withholding. The establishment of a procedure
whereby a number of shares of Common Stock may be withheld from
the total number of shares of Common Stock to be issued upon
exercise of an Option or for the tender of shares of Common Stock
owned by any Participant to meet any obligation of withholding
for taxes incurred by the Participant upon such exercise. The
Committee may, in its sole discretion, require that if any such
withholding is effected by the tendering of Common Stock, such
withholding shall be consummated with Common Stock (i) held by
the Optionee for at least six (6) months or (ii) acquired by the
Optionee other than under this Plan or a similar program.

STOCK OPTIONS

The Committee shall have the authority, in its
discretion, to grant Non-Qualified Stock Options. The terms and
conditions of the Options shall be determined from time to time
by the Committee; provided, however, that the Options granted
under the Plan shall be subject to the following:

Exercise Price. The Committee shall establish the
exercise price at the time any Option is granted at such amount
as the Committee shall determine. The exercise price will be
subject to adjustment in accordance with the provisions of
Section VII of the Plan.

Payment of Exercise Price. The exercise price per
share of Common Stock with respect to each Option shall be
payable at the time the Option is exercised. Such price shall be
payable in cash or pursuant to any of the other methods set forth
in Sections V(a) or (b) hereof, as determined by the Committee.
Shares of Common Stock delivered to the Corporation in payment of
the exercise price shall be valued at the Fair Market Value of
the Common Stock on the date preceding the date of the exercise
of the Option.

Exercisability of Options. Except as provided in
Section VI(e) hereof, each Option shall be exercisable in whole
or in installments, and at such time(s), and subject to the
fulfillment of any conditions on, and to any limitations on,
exercisability as may be determined by the Committee at the time
of the grant of such Options. The right to purchase shares of
Common Stock shall be cumulative so that when the right to
purchase any shares of Common Stock has accrued such shares of
Common Stock or any part thereof may be purchased at any time
thereafter until the expiration or termination of the Option.

Exercise Upon Optionee's Termination of Employment
or Termination of Consulting Relationship. For purposes of
determining whether any Optionee has incurred a termination of
employment (or a Termination of Consulting Relationship), an
Optionee who is both an employee (or a Consultant) and a director
of the Corporation and/or any Parent or Subsidiary shall be
considered to have incurred a termination of employment (or a
Termination of Consulting Relationship) only upon his termination
of service both as an employee (or as a Consultant) and as a
director. Furthermore, (i) if an

1998 Stock Option Plan, as amended Page 6

Optionee's employment (or Consulting Relationship) is terminated by
the Corporation or by any Parent or Subsidiary for Good Cause or
(ii) if an Optionee voluntarily terminates his employment other
than for Good Reason or Disability or without the written consent
of the Committee (or incurs a voluntary Termination of Consulting
Relationship other than for Disability), regardless of whether
such Optionee continues to serve as a director of the Corporation
or of any Parent or Subsidiary, then the Optionee shall, at the
time of such termination of employment (or Termination of Consulting
Relationship), forfeit his rights to exercise any and all of the
outstanding Option(s) theretofore granted to him.

Dividend Equivalents for Outstanding Options. The
Committee may, in its sole discretion, provide that amounts
equivalent to dividends shall be payable with respect to one or
more shares of Common Stock subject to vested but unexercised
Option(s) granted to a Participant. Subject to the terms
contained in the appropriate Plan Award, dividend equivalents
related to a Participant's Options(s) shall be credited to a
suspense account (and remain the property of the Corporation) at
such times (and in such amounts) as are dividends payable to the
then shareholders of record of the Corporation's Common Stock.
Dividend equivalents shall be payable to the Participant in cash
or in Common Stock, as set forth under the terms of the Plan
Award, if and at such time as the related Option(s) are
exercised.

ADJUSTMENT OF SHARES; MERGER OR
CONSOLIDATION, ETC. OF THE CORPORATION

Recapitalization, Etc. In the event there is any
change in the outstanding Common Stock of the Corporation by
reason of any reorganization, recapitalization, stock split,
stock dividend, combination of shares or otherwise, there shall
be substituted for or added to each share of Common Stock
theretofore appropriated or thereafter subject, or which may
become subject, to any Option, the number and kind of shares of
stock or other securities into which each outstanding share of
Common Stock shall be so changed or for which each such share
shall be exchanged, or to which each such share shall be
entitled, as the case may be, and the per share price thereof
also shall be appropriately adjusted.

(b) Merger, Consolidation or Change in Control of
Corporation. Upon (i) the merger or consolidation of the
Corporation with or into another corporation (pursuant to which
the stockholders of the Corporation immediately prior to such
merger or consolidation will not, as of the date of such merger
or consolidation, own a beneficial interest in shares of voting
securities of the corporation surviving such merger or
consolidation having at least a majority of the combined voting
power of such corporation's then outstanding securities), if the
agreement of merger or consolidation does not provide for (1) the
continuance of the Options granted hereunder or (2) the
substitution of new options for Options granted hereunder, or for
the assumption of such Options by the surviving corporation, (ii)
the dissolution, liquidation, or sale of all or substantially all
the assets of the Corporation to a person unrelated to the
Corporation or to a direct or indirect owner of a majority of the
voting power of the Corporation's then outstanding voting
securities (such sale of assets being referred to as an "Asset
Sale") or (iii) the Change in Control of the Corporation, then,
subject to the determination of the Board of Directors, the
holder of any such Option theretofore granted and still
outstanding (and not otherwise expired) shall have the right
immediately prior to the effective date of such merger,
consolidation, dissolution, liquidation, Asset Sale or Change in
Control of the Corporation to exercise such Option(s) in whole or
in part without regard to any installment provision that may have
been made part of the terms and conditions of such Option(s);
provided that all conditions precedent to the exercise of such
Option(s), other than the passage of time, have occurred. The
Corporation, to the extent practicable, shall give advance notice
to affected Optionees of such merger, consolidation, dissolution,
liquidation, Asset Sale or Change in Control of the Corporation.
Unless otherwise provided in the subject Award Agreement or
merger, consolidation or Asset Sale Agreement, all such Options
which are not so exercised shall be forfeited

1998 Stock Option Plan, as amended Page 7

as of the effective time of such merger, consolidation, dissolution,
liquidation or Asset Sale (but not in the case of a Change in
Control of the Corporation). In the event the Corporation becomes
a subsidiary of another corporation (the "New Parent Corporation")
with respect to which the stockholders of the Corporation (as
determined immediately before such transaction) own, immediately
after such transaction, a beneficial interest in shares of voting
securities of the New Parent Corporation having at least a
majority of the combined voting power of such New Parent
Corporation's then outstanding securities, there shall be
substituted for Options granted hereunder, options to purchase
common stock of the Parent Corporation.

(c) Definition of Change in Control of the
Corporation. As used herein, a "Change in Control of the
Corporation" shall be deemed to have occurred if any person
(including any individual, firm, partnership or other entity)
together with all Affiliates and Associates (as defined under
Rule 12b-2 of the General Rules and Regulations promulgated under
the Exchange Act) of such person (but excluding (i) a trustee or
other fiduciary holding securities under an employee benefit plan
of the Corporation or any subsidiary of the Corporation, (ii) a
corporation owned, directly or indirectly, by the stockholders of
the Corporation in substantially the same proportions as their
ownership of the Corporation, (iii) the Corporation or any
subsidiary of the Corporation or (iv) only as provided in the
immediately following sentence, a Participant together with all
Affiliates and Associates of the Participant) who is not a
stockholder or an Affiliate or Associate of a stockholder of the
Corporation on the date of stockholder approval of the Plan is or
becomes the Beneficial Owner (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 30% or more of the
combined voting power of the Corporation's then outstanding
securities. The provisions of clause (iv) of the immediately
preceding sentence shall apply only with respect to the Option(s)
held by the Participant who, together with his Affiliates or
Associates, if any, is or becomes the direct or indirect
Beneficial Owner of the percentage of securities set forth in
such clause.

MISCELLANEOUS PROVISIONS

Administrative Procedures. The Committee may
establish any procedures determined by it to be appropriate in
discharging its responsibilities under the Plan. All actions and
decisions of the Committee shall be final.

Assignment or Transfer. No grant or award of any
Plan Award or any rights or interests therein shall be assignable
or transferable by a Participant except (i) by will or the laws
of descent and distribution, (ii) pursuant to a domestic
relations order or (iii) to the Participant's spouse or children.

Investment Representation. With respect to shares
of Common Stock received pursuant to the exercise of an Option,
the Committee may require, as a condition of receiving such
securities, that the Participant furnish to the Corporation such
written representations and information as the Committee deems
appropriate to permit the Corporation, in light of the existence
or nonexistence of an effective registration statement under the
Securities Act, to deliver such securities in compliance with the
provisions of the Securities Act.

Withholding Taxes. In the case of the issuance or
distribution of Common Stock or other securities hereunder upon
the exercise of any Plan Award the Corporation, as a condition of
such issuance or distribution, may require the payment (through
withholding from the Participant's salary, reduction of the
number of shares of Common Stock or other securities to be
issued, or otherwise) of any federal, state, local or foreign
taxes required to be withheld. Each Participant may satisfy the
withholding

1998 Stock Option Plan, as amended Page 8

obligations by paying to the Corporation a cash
amount equal to the amount required to be withheld or, subject to
the Committee's consent thereto, by tendering to the Corporation
a number of shares of Common Stock having a value equivalent to
such cash amount, or by use of any available procedure approved
by the Committee as described under Section V(c) hereof.

Costs and Expenses. The costs and expenses of
administering the Plan shall be borne by the Corporation and
shall not be charged against any award nor to any employee
receiving a Plan Award.

Funding of Plan. The Plan shall be unfunded. The
Corporation shall not be required to segregate any of its assets
to assure the payment of any Plan Award under the Plan. Neither
the Participants nor any other persons shall have any interest in
any fund or in any specific asset or assets of the Corporation or
any other entity by reason of any Plan Award, except to the
extent expressly provided hereunder. The interests of each
Participant and former Participant hereunder are unsecured and
shall be subject to the general creditors of the Corporation.

Other Incentive Plans. The adoption of the Plan
does not preclude the adoption by appropriate means of any other
incentive plan for employees.

Plurals and Gender. Where appearing in this Plan,
masculine gender shall include the feminine and neuter genders,
and the singular shall include the plural, and vice versa, unless
the context clearly indicates a different meaning.

Headings. The headings and sub-headings in this
Plan are inserted for the convenience of reference only and are
to be ignored in any construction of the provisions hereof.

Severability. In case any provision of this Plan
shall be held illegal or void, such illegality or invalidity
shall not affect the remaining provisions of this Plan, but shall
be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provisions had never been inserted
herein.

Liability and Indemnification. (i) Neither the
Corporation nor any Parent or Subsidiary shall be responsible in
any way for any action or omission of the Committee, or any other
fiduciaries in the performance of their duties and obligations as
set forth in this Plan. Furthermore, neither the Corporation nor
any Parent or Subsidiary shall be responsible for any act or
omission of any of their agents, or with respect to reliance upon
advice of their counsel, provided that the Corporation and/or the
appropriate Parent or Subsidiary relied in good faith upon the
action of such agent or the advice of such counsel.

(ii) Neither the Corporation, any Parent or
Subsidiary, the Committee, nor any agents, employees, officers,
directors or shareholders of any of them, nor any other person
shall have any liability or responsibility with respect to this
Plan, except as expressly provided herein.

Incapacity. If the Committee shall receive
evidence satisfactory to it that a person entitled to receive
payment of, or exercise, any Plan Award is, at the time when such
benefit becomes payable or exercisable , a minor, or is
physically or mentally incompetent to receive such Plan Award and
to give a valid release thereof, and that another person or an
institution is then maintaining or has custody of such person and
that no guardian, committee or other representative of the estate
of such person shall have been duly appointed, the Committee may
make payment of such Plan Award otherwise payable to such person
to (or permit such Plan Award to be exercised by) such other
person or institution, including a

1998 Stock Option Plan, as amended Page 9

custodian under a Uniform Gifts to Minors Act, or corresponding
legislation (who shall be an adult, a guardian of the minor or a
trust company), and the release by such other person or institution
shall be a valid and complete discharge for the payment or exercise
of such Plan Award.

Cooperation of Parties. All parties to this Plan
and any person claiming any interest hereunder agree to perform
any and all acts and execute any and all documents and papers
which are necessary or desirable for carrying out this Plan or
any of its provisions.

Governing Law. All questions pertaining to the
validity, construction and administration of the Plan shall be
determined in accordance with the laws of the State of Delaware

Nonguarantee of Employment or Consulting
Relationship. Nothing contained in this Plan shall be construed
as a contract of employment (or as a consulting contract) between
the Corporation (or any Parent or Subsidiary), and any employee
or Participant, as a right of any employee or Participant to be
continued in the employment of (or in a Consulting Relationship
with) the Corporation (or any Parent or Subsidiary), or as a
limitation on the right of the Corporation or any Parent or
Subsidiary to discharge any of its employees (or Consultants), at
any time, with or without cause (but subject to the terms of any
applicable employment or consulting agreement).

Notices. Each notice relating to this Plan shall
be in writing and delivered in person, by recognized overnight
courier or by certified mail to the proper address. Except as
otherwise provided in any Award Agreement with respect to the
exercise thereunder, all notices to the Corporation or the
Committee shall be addressed to it at 150 East 58th Street, Suite
3238, New York, New York 10155, Attn: Chief Executive Officer.
All notices to Participants, former Participants, beneficiaries
or other persons acting for or on behalf of such persons shall be
addressed to such person at the last address for such person
maintained in the Committee's records.

Written Agreements. Each Plan Award shall be
evidenced by a signed written agreement (the "Award Agreements")
between the Corporation and the Participant containing the terms
and conditions of the award.

AMENDMENT OR TERMINATION OF PLAN

The Board of Directors of the Corporation shall have
the right to amend, suspend or terminate the Plan at any time;
provided, however that except as otherwise provided herein, no
amendment, suspension or termination of the Plan shall alter or
impair any Plan Award previously granted under the Plan without
the consent of the holder thereof.

TERM OF PLAN

The Plan shall automatically terminate on the day
immediately preceding the tenth (10th) anniversary of the date
the Plan was adopted by the Board of Directors of the
Corporation, unless sooner terminated by such Board of Directors.
No Plan Awards may be granted under the Plan subsequent to the
termination of the Plan.

1998 Stock Option Plan, as amended Page 10

APPENDIX C

AUDIT COMMITTEE CHARTER

Pursuant to the By-Laws of Commodore Applied Technologies,
Inc. (the "Corporation"), the Board of Directors (the "Board") of the
Corporation established an Audit Committee (the "Committee") on
June 28, 1996, to oversee the financial reporting process and
internal controls of the Corporation. The Board further adopts
this charter to establish the governing principles of the
Committee.

PURPOSES OF THE AUDIT COMMITTEE

The Committee has three primary purposes:

* To serve as an independent and objective party to monitor
the Corporation's financial reporting process and internal
control system;

* To review and appraise the audit efforts of the
Corporation's independent auditor and internal audit function;
and

* To provide avenues of candid and forthright communication
among the independent auditor, the Corporation's management (both
senior management and financial management), the internal audit
function and the Board.

MEMBERSHIP

* The Committee shall consist of at least three members.

* The majority of members of the Committee shall be directors
who are not employees of the Corporation or its affiliates, and
from and after any date on which the Corporation's securities are
publicly traded all members of the Committee shall in all
respects meet the then-prevailing standard of "independence" for
audit committee membership applicable under the rules of the
principal market or transaction reporting system on which the
Corporation's securities are traded or quoted. In all events,
each independent member of the Committee shall be free from any
relationship that, in the opinion of the Board, would interfere
with the exercise of the member's independent judgment as a
member of the Committee. (See Attached Guidelines for
Independence)

* In considering potential independent directors for
membership on the Committee, the Board intends to take into
account the financial literacy of the candidate.

* The Committee shall elect from its own members a
Chairperson, who shall preside over each meeting of the
Committee.

Audit Committee Charter Page 1

PRINCIPAL RESPONSIBILITIES

The principal responsibilities of the Committee shall
include:

* Reviewing (i) the results of each external audit, including
any qualifications in the independent auditor's opinion, (ii) any
related management letter, and (iii) management's responses to
recommendations made by the independent auditor in connection
with the audit.

* With respect to monitoring the Corporation's financial
reporting process:

* reviewing the Corporation's audited financial
statements and considering any significant
disputes between the Corporation's management and
the independent auditor that arose in connection
with the preparation of those financial
statements, and reviewing any unusual
circumstances reflected in the Corporation's
financial statements;

* reviewing the procedures employed by the
Corporation in preparing published financial
statements and related management commentaries;

* reviewing, in consultation with the Corporation's
independent auditor, major changes regarding
auditing and accounting principles and practices
to be followed when preparing the Corporation's
financial statements; and

* monitoring the advice solicited by management from
accounting professional services firms, both
formally and informally, and keeping current on
any possible disagreements with independent
accountants and the consequences thereof.

* With respect to monitoring the Corporation's internal
control process:

* reviewing periodically the internal controls of, and other
procedures adopted by, the Corporation, and considering, in
consultation with the independent auditor and the Corporation's
Chief Financial Officer and other executive officers, the
independent auditor's report on the adequacy of the Corporation's
internal financial controls; and

* reviewing the procedures established by the Corporation to
monitor compliance with loan and indenture covenants and
restrictions.

* With respect to reviewing and appraising the
Corporation's independent auditor:

* recommending to the Board which firm to engage as the
Corporation's independent auditor;

* reviewing the independent auditor's compensation, the
proposed scope and terms of its engagement and the firm's
independence, including all relationships (audit and non-
audit) between the independent auditor on the one hand and
the Corporation and its affiliates on the other;

Audit Committee Charter Page 2

* considering when and whether to recommend that the
relationship with an independent auditor be terminated; and

* With respect to providing avenues of communication:

* serving as a channel of communication between the
independent auditor on the one hand and the Board and
management on the other;

* serving as a resource for the Corporation's management
in considering questions of accounting policy, procedure and
practice; and

* facilitating candor and completeness in communication
through accessibility, integrity and the meeting procedures
described below.

MEETINGS

* The Committee will meet at least two times per year, and
ideally once per calendar quarter. Ideally, meetings will be
held prior to any public release of quarterly or annual
results of operations.

* The Committee will provide opportunities for
communications at its meetings, by holding separate sessions
with members of the Corporation's management and the
independent auditor, at which representatives of each can
discuss with the Committee topics germane to its purposes.

* The Chairperson of the Committee will report to the
Board on the Committee's activities at each meeting not later
than the immediately succeeding meeting of the Board.

GUIDELINES FOR RECOMMENDATION OF INDEPENDENT AUDITORS

In connection with the selection of the Corporation's
independent auditor, the Committee shall consider:

* the firm's basic approach and techniques;

* the firm's knowledge and experience in the Corporation's
industry and other companies in the industry serviced by the
firm;

* the procedures followed to assure the firm's
independence;

* the firm's policy regarding rotation of personnel
assigned to the engagement;

* the firm's other quality control procedures;

* the nature and quality of other services offered by the
firm;

Audit Committee Charter Page 3

* the firm's manner of communicating weaknesses noted in
the Corporation's internal control system;

* the firm's basis for determining fees; and

* the attitude of the Corporation's management toward the
firm.

#####

Audit Committee Charter Page 4

APPENDIX D
NEW PLAN BENEFITS TABLES

Short Term Incentive Plan (Proposal Number 3)
_____________________________________________

NEW PLAN BENEFITS

SHORT TERM
INCENTIVE
BONUS PLAN
DOLLAR VALUE

BASED ON BASED ON
NAMES 2001 2002
RESULTS RESULTS
___________________________________________________________

Shelby T. Brewer $0 $0
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
___________________________________________________________

James M. DeAngelis $0 $0
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL AND ADMINISTRATIVE
OFFICER, TREASURER AND
SECRETARY
___________________________________________________________

O. Mack Jones $0 $0
PRESIDENT AND CHIEF OPERATING
OFFICER

___________________________________________________________

Paul E. Hannesson $0 $0
FORMER CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
___________________________________________________________

All current executive officers, $0 $0
as a group (3 persons - 2002
Short Term Incentive Plan)
___________________________________________________________

All current directors who are N/A N/A
not executive officers, as a
group (4 persons)
___________________________________________________________

All current employees, other N/A N/A
than executive officers, as a
group
___________________________________________________________

The left side of each column identifies the amounts that
would have been payable under the Short Term Incentive Plan, for
2001, had the Short Term Incentive Plan then been in effect based
on the Company's 2001 pre-tax operating results. The right side
of each column identifies the amounts that would have been
payable under these plans for 2002, had the Short Term Incentive
Plan then been in effect, based on the Company's 2002 pre-tax
operating results. Further, in each case, the amount shown is
based on:

* the base salaries originally established for 2001 (rather
than the reduced salaries for 2001 shown in the "Summary
Compensation Table" on page 17).

* an assumption that the Compensation, Stock Option and
Benefits Committee used pre-tax operating results as the sole
performance measures in determining the amounts available for
payments of bonuses under the Short Term Incentive Plan.

New Plan Benefits Tables Page 1

1998 Stock Option Plan (Proposal Number 4)
__________________________________________

The following New Plan Benefits Table discloses the benefits
allocated to the persons listed in the table to the persons
designated in the table under the 1998 Stock Option Plan.

NEW PLAN BENEFITS TABLE

Class of Stock Name and Position Number of Securities
Underlying of Optionee Underlying Options Granted
Options

Common Shelby T. Brewer, CEO and 865,200
Chairman of the Board

Common James M. DeAngelis, CFO, CAO, 841,688
Treasurer & Secretary

Common O. Mack Jones, President & COO1, 759,375

Common All current executive officers as a
group 3,466,263

Common All current directors who are not
executive officers as a group 140,000

Common All employees as a group, excluding
executive officers and directors 4,780,995

New Plan Benefits Tables Page 2

Grant of Fiscal 2003 Incentive Compensation Awards outside of
1998 Stock Option Plan (Proposal Numbers 5 and 6)
_____________________________________________________________

The following table discloses the benefits to be allocated
to the persons listed in the table under the Fiscal 2003
Incentive Compensation Awards Outside the 1998 Stock Option Plan.

NEW PLAN BENEFITS TABLE

Class of Stock Name and Position Number of Securities
Underlying of Optionee Underlying Options Granted
Options (Subject to achievementof
certain performance criteria)
_______________ _________________ _____________________________

Common Shelby T. Brewer, CEO and 2,000,000
Chairman of the Board

Common James M. DeAngelis, CFO, CAO, 1,000,000
Treasurer & Secretary

Common All current executive officers as a
group 3,000,000

Common All current directors who are not
executive officers as a group N/A

Common All employees as a group, excluding
executive officers and directors N/A

New Plan Benefits Tables Page 3