EXHIBIT 10.1

INDUSTRIAL SERVICES OF AMERICA, INC.

 

FORM OF RESTRICTED STOCK UNIT

GRANT AGREEMENT

 

 

Name of Non-Employee Director:     PARTICIPANT NAME (“Director”)

Grant Date:                                         GRANT DATE           

Number of Restricted Stock Units:   NUMBER OF AWARDS GRANTED

 

This agreement (this “Agreement”) is subject to the following terms and to all
of the terms of the Industrial Services of America, Inc. 2009 Long Term
Incentive Plan, as amended (the “Plan”). In the case of any conflict between
this Agreement and the Plan, the Plan shall control. A copy of the Plan is
attached, and any capitalized terms used but not defined in this Agreement shall
have the meaning given them in the Plan.

 

1.        Grant of Restricted Stock Units.  Subject to the terms and conditions
of this Agreement and the Plan, as of the date noted above (the “Grant Date”),
the Compensation Committee of the Board of Directors (the “Compensation
Committee”) of Industrial Services of America, Inc. (the “Company”) hereby
grants to Director the number of restricted stock units set forth above (the
“RSUs”). Each RSU constitutes a right that Director (or, in the event of
Director’s death before payment, the executor, administrator, or other personal
representative of Director’s estate) will receive one share of Stock if Director
vests in the RSUs pursuant Section 4, 5, or 6 hereof.  There are no other rights
provided to Director (or Director’s estate or any other person) under any of the
RSUs. 

 

2.        Transfer Restriction. Until the delivery of shares of Stock with
respect to the RSUs in accordance with the terms of this Award, neither the RSUs
nor the Stock to be issued upon vesting of the RSUs may be sold, transferred,
pledged, exchanged, hypothecated or otherwise disposed of, other than by will or
pursuant to the applicable laws of descent and distribution (to the extent
permitted by applicable law and the Plan).  Any attempted sale, transfer,
pledge, exchange, hypothecation or other disposition of the RSUs or the Stock to
be issued upon vesting of the RSUs not specifically permitted by the Plan or
this Award shall be null and void and without effect. 

 

3.         Investment Representations.  Director understands that upon delivery
of shares of Stock with respect to the RSUs in accordance with the terms of this
Award, (i) the shares of Stock to be delivered have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”) and are
“restricted securities” within the meaning of Rule 144 under the Securities Act,
(ii) the shares of Stock to be delivered cannot be sold, transferred, or
otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available, and (iii) in
any event, the exemption from registration under Rule 144 will not be available
for at least six months from the issuance date of the Stock and unless the other
terms and conditions of Rule 144 are satisfied.

 

4.         Vesting and Payment. Except as provided in Sections 5 and 6 below
regarding Termination of Service or a Change of Control, and unless the RSUs are
previously forfeited pursuant to the Plan or this Agreement, the RSUs will fully
vest if and to the extent that Director is a member of the Board of Directors of
the Company continuously for the entire Service Period. The Company shall cause
its transfer agent to issue the shares of Stock with respect to the RSUs to
Director promptly upon vesting, but not later than 60 days after vesting of the
RSUs in accordance with this Section 4. For purposes of this Agreement, the
“Service Period” means the period that begins on the Grant Date and ends on the
first annual anniversary of the Grant Date.

 

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5.        Termination of Service Before the End of the Service Period.  For
purposes of this Agreement, “Termination of Service” shall be deemed to have
occurred on the date that Director no longer serves as a member of the Board of
Directors, except that no Termination of Service shall be deemed to have
occurred on the date of the next annual meeting of stockholders as a result of
Director’s absence from the slate of nominees proposed by the Company’s Board of
Directors for election at the next annual meeting (in which case the RSUs will
vest in accordance with the Plan and this Agreement on the first annual
anniversary of the Grant Date). In the event of Director’s Termination of
Service before the end of the Service Period, the following provisions shall
apply:

 

> 5.1       Except as expressly provided below in Section 5.2 or Section 6, in
> the event of Director's Termination of Service for any reason before the end
> of the Service Period, the RSUs held by Director and not yet vested shall be
> automatically forfeited by the Director as of the date of Director’s
> Termination of Service.  Neither the Director nor any of the Director’s
> successors, heirs, assigns or personal representatives shall have any rights
> or interests in any RSUs that are so forfeited.
> 
>  
> 
> 5.2       Notwithstanding Section 5.1, if Director experiences a Termination
> of Service during the Service Period as the result of Director’s death or
> Disability (as defined below) (a “Qualifying Termination”), a pro rata portion
> of Stock with respect to the RSUs shall be issued as set forth below:

 

> >   5.2.1    In the event of a Qualifying Termination before completion of the
> > Service Period, the number of RSUs to be settled and paid in Stock shall be
> > determined as follows: (i) the number of RSUs subject to the Award that have
> > not yet vested shall be multiplied by (ii) a service fraction, the numerator
> > of which is the number of full months the Director served as a member of the
> > Board of Directors following the Grant Date through the date of Director’s
> > Termination of Service, and the denominator of which is 12, the number of
> > months in the Service Period.  For purposes of calculating a “full month,”
> > Director shall be deemed to have provided services a “full month” if he or
> > she is rendering services on each successive monthly anniversary of the
> > Grant Date. The Company shall deliver the shares of Stock with respect to
> > the RSUs to Director (in the case of Director’s Disability) or to the
> > executor, administrator, or other personal representative of Director’s
> > estate (in the case of Director’s death) within 30 days of the date of the
> > Qualifying Termination. Any RSUs that do not vest in accordance with the
> > foregoing provisions of this Section 5.2.1 shall terminate and be forfeited
> > as of the date of the Qualifying Termination. 

>  

> >   5.2.2    “Disability” means a condition of Director which, by reason of
> > any medically determinable physical or mental impairment that can be
> > expected to result in death or to last for a continuous period of at least
> > 12 months: (a) makes Director unable to engage in any substantial gainful
> > activity; or (b) as a result of which Director is receiving income
> > replacement benefits for a period of not less than 3 months under an
> > accident and health plan. If at any time a physician appointed by the
> > Company or its agent or insurer, or the Social Security Administration,
> > makes a determination with respect to Director’s Disability, that
> > determination shall be final, conclusive, and binding upon the Company,
> > Director, and their successors in interest.

 

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6.      Change of Control.  In the event a Change of Control which also
constitutes a change in ownership or effective control or a change in ownership
of a substantial portion of the assets of the Company within the meaning of
Section 409A of the Code (a “409A Change”) occurs before both completion of the
Service Period and before a Termination of Service, the number of RSUs subject
to this Award that have not yet vested shall vest and become nonforfeitable on
the date of such 409A Change. Each such vested RSU shall be paid by delivery
within 45 days following such 409A Change of the same consideration that each
Company shareholder receives in connection with such 409A Change, or, at the
Compensation Committee’s option, in cash based on the Fair Market Value received
by shareholders of record for Stock in the 409A Change.

 

7.       Definitions.  Unless provided to the contrary in this Agreement, the
definitions contained in the Plan and any amendments thereto shall apply to this
Agreement.

 

8.       Restrictions Imposed by Law.  Notwithstanding any other provision of
this Agreement, Director agrees that the Company will not be obligated to
deliver any shares of Stock if counsel to the Company determines that such
exercise, delivery or payment would violate any law or regulation of any
governmental authority or any agreement between the Company and any national
securities exchange upon which the Stock is listed. As a condition to the
settlement of the RSUs, the Company may require Director to satisfy any
qualifications that may be necessary or appropriate to evidence compliance with
any applicable law or regulation.

 

9.       No Shareholder Status; No Dividends.  Director shall have no rights as
a shareholder with respect to any RSUs or shares of Stock under this Agreement
until such shares of Stock have been duly issued and delivered to Director.
Except for adjustments made as provided in subsection 4.2(e) of the Plan, no
adjustment shall be made for dividends of any kind or description whatsoever or
for distributions of other rights of any kind or description whatsoever
respecting the shares of Stock before such issuance.

 

10.      Provisions Consistent with Plan.  This Agreement is intended to be
construed to be consistent with all applicable provisions of the Plan, which is
incorporated herein by reference. Director acknowledges receipt
contemporaneously herewith of a copy of the Plan, and Director represents that
he is familiar with the terms and provisions thereof and hereby accepts the
Award herein subject to all the terms and provisions thereof.  In the event of a
conflict between the provisions of this Agreement and the Plan, the provisions
of the Plan shall prevail.

 

 

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date set forth in the preamble hereto, but actually on the dates set forth
below.

 

INDUSTRIAL SERVICES OF AMERICA, INC.
By:       ___________________________________            
Title:    ________________________ Date:    ________________________ DIRECTOR:
___________________________________ Name: (acknowledging receipt and conditions
set out above) Date:  _______________________________