Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is made as of the
1st day of June, 2009 (the "Effective Date") by and between
INDUSTRIAL SERVICES OF AMERICA, INC., a Florida corporation
located at 7100 Grade Lane, Building #1, Louisville, Kentucky 40213
(the "Company") and JEFFREY VALENTINE, an individual
residing at 15946 Keeney Drive, Fairhope, Alabama 36532 ("the
"Executive").
RECITALS
The Company desires to employ the Executive, and the Executive
desires to be employed by the Company upon the terms and conditions
set forth in this Agreement.
NOW THEREFORE, in consideration of (a) the Executive's
employment with the Company as its General Manager - ISA Alloys in
Mobile, Alabama, (b) the compensation paid to the Executive and the
benefits provided to the Executive in connection with such
employment, (c) the Executive's use of the equipment,
supplies, facilities and other resources of the Company and (d) the
opportunity provided to Executive by the Company to acquire or use
information relating to or based upon the Company's business and to
work and develop in the industry and lines of business engaged in
by the Company from time-to-time or for which the Executive is
hereby employed hereunder, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION OF
THIS AGREEMENT
Article 1.1 Defined
Terms . As used herein, capitalized terms when used in
this Agreement shall have the meanings set forth in Annex 1
attached hereto and made a part hereof and as defined in this
Agreement.
Article 1.2
Interpretation . The words "herein," "hereof,"
"hereunder" and other words of similar import refer to this
Agreement and not any particular section, paragraph, subparagraph
or clause contained in this Agreement. Wherever from the
context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and
pronouns stated in masculine, feminine or neuter gender shall
include the masculine, feminine and the neuter.
ARTICLE 2
TERM OF
EMPLOYMENT
ARTICLE 2.1
Duration . The Company agrees to employ the Executive,
and the Executive agrees to be so employed for an Initial Term
("Initial Term") commencing on the Effective Date of this
Agreement, and ending on the Termination Date (as defined below) or
May 31, 2011, whichever shall first occur. The Executive's
employment may be terminated earlier or renewed, as herein
provided, pursuant to this Article. At any time more than
ninety (90) days prior to the expiration of the Initial Term or any
Renewal Term, respectively, either the Company or Executive may
give notice of nonrenewal and this Agreement shall terminate at the
end of such term. If a notice of nonrenewal is not given or
the Agreement is not terminated as set forth in Article 2.2,
Executive's employment under the terms of this Agreement shall be
extended for an additional one year period. (The one year
period shall be defined as commencing on June 1, 2011 and
continuing for the next three hundred sixty-five (365)/three
hundred sixty-six (366) consecutive calendar days as
applicable.)
ARTICLE
2.2
Termination . The Executive's employment may be
terminated on any one or more of the following dates: (a) the
date specified in a Notice of Termination given by the Executive in
connection with his voluntary termination (which shall not be less
than thirty (30) days from the date such Notice of Termination is
given, unless a shorter period is subsequently requested by the
Company after receipt of such Notice of Termination); (b) the date
specified in a Notice of Termination given by the Board of
Directors of the Company to the Executive stating that the
Executive's employment is being Terminated for Cause; (c) the date
specified in a Notice of Termination given by the Board of
Directors to the Executive stating that the Executive's employment
with the Company is terminated without cause; (d) the date of the
Executive's death; or (e) the date specified in a Notice of
Termination given by the Company at a time after which the
Executive has become Incapacitated in connection with a termination
of the Executive's employment by reason of his Incapacity.
Except as provided in Article 2.4, all obligations of the
Company to Executive shall terminate as of the Termination
Date.
ARTICLE 2.3
Salary and Benefits. During the Employment Period
:
ARTICLE 2.3.1
The Company will pay the Executive a Base Salary at the rate of
$3,846.15 per week ("Base Salary"), payable in installments
consistent with the Company's normal payroll schedule, subject to
applicable withholding and other taxes and other required
deductions for welfare, fringe benefits and withholding and those
deductions requested by Executive.
ARTICLE 2.3.2
The Executive will be entitled to participate in all medical and
hospitalization, group life insurance, retirement, and any and all
other welfare and fringe plan benefits as are from time to time
provided by the Company to its executive employees, subject to the
provisions of such plans, including, without limitation,
eligibility criteria and contribution requirements, as the same may
be in effect from time to time. The Company shall provide
Executive with a term life insurance policy with a death benefit
not to exceed $50,000.00, with the Executive to name his
beneficiary(ies).
ARTICLE 2.3.3
The Executive will be entitled to a maximum of two (2) weeks paid
vacation during each calendar year (prorated for any partial year
during the term) commencing in 2009 to be taken at such times and
intervals as shall be determined by the Executive, and approved by
the President of the Company, which approval shall not be
unreasonably withheld and provided in the President's judgment that
the timing of such vacation shall not interfere with the
Executive's performance of his duties hereunder. Unused
vacation shall not be accrued or reimbursed to Executive.
ARTICLE 2.3.4
The Executive shall be entitled to reimbursement of reasonable
business expenses incurred by the Executive (subject to Executive's
submission of appropriate substantiation in accordance with the
rules in place for other executives of the Company). In
addition thereto, and not in substitution thereof, the Company
shall provide Executive with a monthly car payment allowance (the
amount of which shall not exceed $700.00 per month) which shall be
used by Executive to acquire an automobile selected by the
Executive, with the concurrence of the Company, for use by
the Executive during his employment by the Company. All
normal operating expenses incurred in connection with the operation
of the automobile shall be borne by the Executive. The
Executive shall, at his own expense, provide for comprehensive
insurance coverage for the vehicle, naming Company as a named
insured. Executive shall provide proof of said coverage to
Company, including existence of minimum underlying limits and
umbrella limits for bodily injury coverage in the total amount of
$1,500,000. Executive shall be responsible for any damage due
to neglect or misuse by Executive.
ARTICLE 2.3.5
During the Initial Term of this Agreement or any subsequent Renewal
Term Executive shall be entitled to receive no later than five (5)
business days after the filing of the applicable Annual Report on
Form 10-K with the Securities and Exchange Commission an annual
performance bonus in cash equal to seven and one-half percent
(7.5%) of the amount determined, for each fiscal year of the
Company during the Initial Term, by (i) the Segment profit of ISA
Alloys (the "Alloys Segment Profit") minus (ii) the product of (a)
the selling, general and administrative expenses under the Other
category, times (b) the percentage determined by dividing the
Alloys Segment Profit by the Segment profit under the Segment
Totals category, all as reflected in the Segment Information note
of the Notes to Consolidated Financial Statements as contained in
the most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission, commencing with the Annual
Report on Form 10-K to be filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 2009; provided
that the Executive has completed a minimum of eleven (11)
consecutive months of employment with the Company.
ARTICLE 2.4
Severance Pay .
ARTICLE 2.4.1
(a) If the Executive's employment ends as the result of a
Termination Without Cause, the Executive shall be entitled to
receive his Base Salary and Welfare Plan Benefits (as defined
below) through the Initial Term as defined in Annex 1 or Renewal
Term, as applicable;
(b) If the Executive's employment ends as the result of
Executive's Incapacity, Executive shall be entitled to receive
either available worker's compensation benefits or insured benefits
as provided by the Company's disability policy;
(c) If the Executive's employment ends as the result of the
death of Executive, Executive shall be entitled to receive his Base
Salary and Welfare Plan Benefits through the date of death;
(d) If the Executive's employment ends as the result of
Voluntary Termination, Executive shall be entitled to receive his
Base Salary and Welfare Plan Benefits through the Termination
Date. If Executive elects Voluntary Termination, the date it
shall become effective shall not be more than thirty (30) days
later unless Company agrees; or
(e) If the Executive's employment ends as the result of
Termination for Cause, Executive shall be entitled to receive his
Base Salary and Welfare Plan Benefits through the Termination
Date.
ARTICLE 2.4.2
In those instances where the Company owes Executive payments after
the Termination Date, the payments to be made by the Company to the
Executive under this Article 2.4 shall be made in installments, and
on the payment dates, during the Severance Period (as defined
below) on which Base Salary would have otherwise been paid had the
Executive's employment not been terminated. Upon the making
of the last of such payments, the Company will have no further
Severance Payment obligation to the Executive. All payments
shall be subject to applicable withholding and other taxes.
ARTICLE 2.4.3
For so long as the Company is required to make the severance
payments described in this Article 2.4 (the "Severance Period") and
subject to the provisions of Article 2.4.4 below, the Company will,
in addition to such payment, provide or arrange to provide the
Executive with its regular subsidy payments toward benefits
substantially similar to those which the Executive was receiving or
entitled to receive under the Company's life, accident, dental and
group health insurance plans, 401K, FSA or any similar health or
welfare plans in which the Executive was participating immediately
prior to the Termination Date ("Welfare Plan Benefits") at a cost
to the Company which is not greater than the cost it paid
immediately prior to the Termination Date. Provided, that to
the extent any such coverage is prohibited, whether by contract,
any judicial or legislative authority or otherwise, the Company
shall in its sole discretion make alternative arrangements to
provide the Executive with Welfare Plan Benefits or provide the
Executive with a payment in an amount equal to what the Company was
contributing toward purchasing the Welfare Plan Benefits for
Executive immediately prior to the Termination Date. Benefits
or payments otherwise receivable by the Executive pursuant to the
preceding sentence shall be reduced to the extent Company
determines comparable benefits are available from another employer
. Executive shall have the duty to fully and promptly advise
Company of any available benefits offered, whether accepted or not
no later than three (3) business days after any such benefits are
offered.
ARTICLE 3
PROPERTY AND BUSINESS
OF THE COMPANY
ARTICLE 3.1
Nondisclosure . During the Employment Period and
during the periods described in the last sentence of this Article
3.1, the Executive (a) will receive and hold all Company
information in trust and in strict confidence, (b) will not
disclose and will use commercially reasonable efforts to protect
Company information from disclosure, (c) will not, directly or
indirectly, use or assist others to use any Confidential
Information (as hereinafter defined), and (d) will not, directly or
indirectly, use, disseminate or otherwise disclose any Company
information or Confidential Information to any third party, except
in the case of each of (a) through (d) above, as required by the
Executive's duties in the course of his employment by the Company
or as required by applicable law. The provisions of this
Article 3.1 shall survive the Termination Date.
ARTICLE 3.2
Books and Records . All books, records, reports,
writings, notes, inventions, notebooks, computer programs,
sketches, drawings, blueprints, prototypes, formulas, patents,
photographs, negatives, models, equipment, chemicals,
reproductions, proposals, flow sheets, supply contracts, customer
lists and other documents and/or things relating to the business of
the Company, its affiliates or any of their respective subsidiaries
(including but not limited to any of the same embodying or relating
to any actual Confidential Information or trade secrets), whether
prepared by the Executive or otherwise coming into the Executive's
possession, shall be the exclusive property of the Company, its
affiliates or such possession shall be the exclusive property of
the Company, its affiliates or such subsidiary, as the case may be
(all of which is defined herein as "Confidential Information"), and
shall not be copied, duplicated, replicated, transformed, modified
or removed from the premises of the Company except pursuant to the
prior written authorization of the Company on the
