Exhibit 10.9

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT – VALENTINE

          This Executive Employment Agreement (“Agreement”) is made as of the
1st day of July, 2010 (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 and Executive currently are parties to an Executive
Employment Agreement (the “Original Agreement”) dated as of June 1, 2009. Both
parties desire to modify the terms and conditions of the Original Agreement by
entering into this Agreement in replacement of the Original Agreement.

          The Company desires to continue to employ the Executive, and the
Executive desires to continue 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 including applicable coverage under the
Company’s D&O policy, (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

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June 30, 2015 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 a 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 [July 1, 2015] 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 shall be entitled to a bonus based as a
Level 1A employee under the Management Incentive Plan (the “MIP”), dated July 1,
2010, for calendar year 2010 provided he remains employed by the Company during
the entirety of calendar year 2010. Such bonus shall be payable in a single lump
sum payment as soon as practicable following December 31, 2010 subject to
applicable withholding and other taxes and other required deductions for
welfare, fringe benefits and withholding and those deductions requested by
Executive. Beginning in 2011 and for the remainder of the Initial Term,
Executive shall participate in the MIP or such similar incentive arrangement as
may be mutually agreeable to Company and Executive with the timing for payment
being as soon as practicable following December 31st of the applicable year and
maintenance of employment by Executive during the entirety of the applicable
year. See Exhibit A, attached hereto and incorporated herein by reference,
outlining the MIP.

          ARTICLE 2.3.3 The Executive shall be entitled to receive as a bonus up
to thirty thousand (30,000) shares of the Company’s common stock per annum
commencing in 2011 for calendar year 2010, and thereafter in 2012, 2013, 2014,
2015 and 2016 for calendar years 2011, 2012, 2013, 2014 and 2015, respectively,
resulting in a maximum of one hundred and fifty thousand (150,000) shares of the
Company common stock over the Initial Term (but in no event greater than 30,000
shares in any one calendar year) based on satisfaction of the return on net

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assets (“RONA”) criteria set forth in Exhibit B attached hereto and incorporated
herein by reference. The RONA shall be calculated in the same manner as RONA is
determined under the MIP. Such bonus shall be payable in the form of Company
common stock in one delivery of a stock certificate, as soon as practicable
following December 31, 2010 subject to applicable withholding and other taxes
and other required deductions.

          ARTICLE 2.3.4 The Executive shall be entitled to receive as a bonus up
to fifty thousand (50,000) shares of the Company’s common stock over the Initial
Term based on satisfaction of the 5 year (2010-2014) average return on net
assets (“RONA”) criteria set forth in Exhibit B attached hereto and incorporated
herein by reference. The RONA shall be calculated in the same manner as RONA is
determined under the MIP. Such bonus shall be payable in the form of Company
common stock in one delivery of a stock certificate, as soon as practicable
following December 31, 2014 subject to applicable withholding and other taxes
and other required deductions.

          ARTICLE 2.3.5 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 will
provide the Executive with full medical coverage at no cost to the employee.

          ARTICLE 2.3.6 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 2010 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 2.3.7 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. 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 2.3.8 The Company represents and the Executive acknowledges
that he may receive shares of the Company common stock under this Agreement,
which shall be deemed “restricted” stock, subject to a six (6) month holding
period and further subject to the provisions of Rule 144 under the Securities
Act of 1933, as amended.

          Executive agrees that this Agreement and the rights, interests and
benefits under it shall not be assigned, transferred, pledged, or hypothecated
in any way by Executive or any other person claiming under Executive by virtue
hereof. Such rights, interest or benefits shall not be

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subject to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, or hypothecation, or other disposition of the shares granted
pursuant to this Agreement or of such rights, interest, and benefits contrary to
the preceding provision, or the levy or any attachment or similar process
thereupon, shall be null and void and without any legal effect.

          The Executive represents and warrants that any shares he receives
pursuant to the terms of this Agreement he will be receiving for investment and
not with a view to distribution thereof and understands and acknowledges that in
the absence of an effective Registration Statement as to the shares he receives
any Stock Certificate(s) representing the shares shall bear the following
legend:

 

 

 

 

The Shares represented by this certificate have not been registered or qualified
for sale under the Securities Act of 1933, as amended (the “Act”, or any state
securities or blue sky laws, and may not be sold, transferred or otherwise
disposed of except pursuant to an exemption from registration or qualification
there under. The Company may require, as a condition to the transfer of this
certificate, an opinion of counsel satisfactory to the Company to the effect
that such transfer will not be in violation of the Act or any such laws.

 

          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 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; 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

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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 the Company 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 the amount that the Company was
contributing toward the purchase of 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 Termination Date or on the Company’s written request at any time.

          ARTICLE 3.3 Inventions and Patents. The Executive agrees that all
inventions, innovations or improvements related to the Company’s or any of its
respective subsidiaries’ method of conducting its business (including new
contributions, improvements, ideas and discoveries, whether patentable or not)
conceived or made by him during the Employment Period with the Company belong to
the Company and the Executive hereby assigns all of such inventions, innovations
and improvements, contributions, ideas and discoveries to the Company.

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The Executive will promptly disclose such inventions, innovations and
improvements, contributions, ideas and discoveries to the Board and perform all
actions reasonably requested by the Board to establish and confirm such
ownership in the Company.

          ARTICLE 3.4 Non-Competition. During the Employment Period (which shall
be deemed to include the Severance Period, if any, for purposes of this Article
3) and for a period of twelve (12) months from and after the later of the last
payment made during the Severance Period or the Termination Date (collectively,
the “Non-Competition Period”), the Executive will not directly or indirectly,
(i) engage in any business which is the same or substantially the same as any
business of the Company (the “Restricted Business”) as of the date of the
Executive’s termination, or (ii) have any interest in any other business
venture, whether as a debt or equity holder, employee, officer, director,
member, manager, partner, agent, security holder, consultant or otherwise, that
directly or indirectly is engaged in the Restricted Business, within one hundred
(100) direct miles of any geographic area in which the Company, its affiliates
or any of their respective subsidiaries, engage in the Company’s business
operations as of the Termination Date. Nothing in this Article 3.4 shall be
deemed to prevent the Executive from acquiring and owning solely as a passive
investment, equity securities (including options to purchase equity securities)
in an aggregate of less than three percent (3%) in the aggregate of the equity
securities of any class of any issuer that are registered under Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended, and are listed or
admitted for trading on any United States national securities exchange or are
quoted on the National Association of Securities Dealer Automated Quotations
System or any similar system of automated dissemination of quotations of
securities prices in common use, or so long as the Executive is not a member of
any “control group” (within the meaning of the rules and regulation of the
United States Securities and Exchange Commission) of any such issuer.

          ARTICLE 3.5 Non-Solicitation of Employees. During the Non-Competition
Period, the Executive shall not, directly or indirectly, (a) solicit for
employment or employ (or attempt to solicit for employment or employ), for the
Executive or on behalf of any other Person (other than the Company or any of its
respective subsidiaries) provided that nothing shall prevent the Executive from
making a general solicitation not targeted at the Company’s or any of its
respective subsidiaries’ employees, any employee of the Company, its affiliates
or any of their respective subsidiaries, or any person who was such an employee
during a one year (1) period preceding or succeeding the Termination Date, or
(b) otherwise encourage any such employee to leave his or her employment with
the Company, its affiliates or any of their respective subsidiaries.

          ARTICLE 3.6 Non-Solicitations of Others. During the Non-Competition
Period, the Executive shall not, directly or indirectly, (a) solicit, call on,
or transact or engage in the Restricted Business with (or attempt to do any of
the foregoing with respect to) any customer, distributor, vendor, supplier or
agent with whom the Company, its affiliates or any of their respective
subsidiaries shall have dealt, or that the Company, its affiliates or any of
their respective subsidiaries shall have actively sought to deal, at any time
during a one year (1) period preceding or succeeding Executive’s Termination
Date for or on behalf of the Executive or any other person (other than the
Company, its affiliates or any of their respective subsidiaries) in connection
with a Restricted Business or (b) encourage any such customer, distributor,
vendor, supplier or agent to cease, in whole or in part, its business
relationship with the Company, its affiliates or any of their respective
subsidiaries.

          ARTICLE 3.7 Covenants Reasonable. The Executive acknowledges and
agrees

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that the covenants provided for in this Article 3 are reasonable and necessary
in terms of scope, duration, area, business and all other matters to protect the
Company’s and its respective subsidiaries’ legitimate business interests, which
include, among others, protecting (a) valuable confidential business
information, (b) substantial relationships with customers throughout the
Restricted Area and (c) goodwill with customers, employees, distributors,
suppliers and vendors associated with respective businesses.

          ARTICLE 3.8 Construction; Enforceability. To the extent that any
provision contained in this Article 3 may later be adjudicated by a court to be
too broad to be enforced with respect to such provision’s scope, duration, area,
line of business or any other matter, such area, line of business or other
matter, as the case may be, shall automatically be amended to satisfy the terms
of any court order so as to be valid and enforceable to the maximum extent
compatible with the applicable laws of such jurisdiction and this Article 3 as
drafted, however, such amendment is only to apply with respect to the operation
of such provision in the applicable jurisdiction in which such adjudication is
made.

ARTICLE 4
MISCELLANEOUS

          ARTICLE 4.1 Notices. Any notice, request, demand, claim or other
communication hereunder that is required to be made in writing shall be deemed
duly given on the fifth (5th) business day after if it is sent by registered or
certified mail, return receipt requested, postage prepaid, or, on the next
business day after it is sent by a reputable overnight courier such as Federal
Express, and addressed to the intended recipient as set forth below:

 

 

If to the Executive:

To the Executive’s last known address as set forth in the Company’s payroll
records.

 

If to the Company:

Industrial Services of America, Inc.
7100 Grade Lane
Louisville, KY 40213
Attention: Chief Financial Officer

          Either party hereto may send any notice, request demand, claim or
other communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice, request,
demand, claim or other communications shall be deemed to have been duly given
unless and until it actually is received by the intended recipient; provided,
that such communication is also sent by registered or certified mail or by
reputable overnight courier within five business days of the original
communication. Either party hereto may change the address to which notices,
requests, demand, claims, and other communications hereunder are to be delivered
by giving the other party notice in the manner herein set forth.

          ARTICLE 4.2 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner so as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or such application in any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein; provided, that if any of the provisions of Article 3 are held to be
invalid, illegal or unenforceable, then such provision

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shall be deemed amended in the manner and to the extent provided for in Article
3.8 above.

          ARTICLE 4.3 Complete Agreement. This Agreement and all exhibits and
annexes attached hereto embody the complete agreement and understanding among
the parties relating to the subject matter hereof and supersedes and preempts
any prior understanding, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.

          ARTICLE 4.4 Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement. Any telecopied signature shall
be deemed a manually executed and delivered original.

          ARTICLE 4.5 Successors and Assigns. This Agreement may not be assigned
by either the Company or the Executive, except that the Company may assign the
Agreement to a Person who purchases all or substantially all of the assets of
the Company, by merger or asset purchase or lease agreement. Subject to the
preceding sentence, this Agreement is intended to bind and inure to the benefit
of and be enforceable by the Executive and the Company and their respective
successors and assigns (and, in the case of the Executive, heirs and personal
representatives), except that Executive may not assign any of his rights or
delegate any of his obligations hereunder.

          ARTICLE 4.6 Equitable Remedies. The Executive acknowledges and agrees
that the Company would not have an adequate remedy at law in the event any of
the provisions of Article 3 set forth above are not performed in accordance with
their specific terms, or are breached or are threatened to be breached.
Accordingly, the Executive agrees that the Company shall be entitled, in
addition to any other rights and remedies which may be available to it, to an
injunction or injunctions to prevent breaches of Article 3 above and to enforce
specifically the terms and provisions thereof in any action instituted in any
court of competent jurisdiction, and without any requirement to post a bond or
other security. In the event Company is required to seek and is granted
injunctive relief against Executive for any breach of Article 3, Company shall
be entitled to an award of reasonable attorney fees and costs, including all
those fees and costs incurred in any appeals.

          ARTICLE 4.7 Choice of Law: Jurisdiction and Venue. This Agreement
shall be governed and construed in accordance with the law of the Commonwealth
of Kentucky without regard to conflicts of laws principles thereof and all
questions concerning the validity and construction hereof shall be determined in
accordance with the law of said state.

          ARTICLE 4.8 Dispute Resolution.

          Article 4.8.1 In consideration of the compensation and benefits paid
to Executive by the Company, the receipt and sufficiency of which is hereby
acknowledged, and for other good and valuable consideration, Executive agrees
that all legal claims or disputes arising out of or related to Executive’s
employment and/or termination with the Company must be submitted to binding
arbitration and that binding arbitration will be the sole and exclusive final
remedy for resolving any such claim or dispute. Executive also agrees that any
arbitration between the Company and Executive is of an individual claim and that
any claim subject to arbitration will not be arbitrated on a class-wide basis.
Executive agrees that the American Arbitration Association in accordance with
its National Rules for the resolution of Employment Disputes shall administer
any arbitration between the Company and Executive and judgment on the award
rendered by the Arbitrator may be entered in any court having jurisdiction
thereof. Such arbitration shall take place in the City of Louisville, in the
Commonwealth of Kentucky. The Company and the

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Executive shall share equally in the administrative fees for arbitration such as
filing fees, hearing fees, and hearing room rental fees. Each of the Company and
the Executive shall be responsible for its and his legal fees and expenses,
respectively.

          Legally protected rights covered by this Article 4.8, regarding
Dispute Resolution, are all legal claims arising out of or relating to
employment with the Company, including: claims for wages or other compensation;
claims for breach of any contract, covenant or warranty (expressed or implied);
tort claims (including, but not limited to, claims for physical, mental or
psychological injury, but excluding statutory workers compensation claims);
claims for wrongful termination; sexual harassment; discrimination (including,
but not limited to, claims based upon race, sex, religion, national origin, age,
medical condition or disability whether under federal, state or local law);
claims for benefits or claims for damages or other remedies under any employee
benefit program sponsored by the Company (after exhausting administrative
remedies under the terms of such plans); “whistleblower” claims under any
federal, state, or other governmental law, statute, regulation or ordinance; and
claims for retaliation under any law, statute, regulation or ordinance,
including retaliation under any worker compensation law or regulation; and
claims arising out of or relating to any employment contract (including this
Agreement), employment applications, the Company’s personnel manuals or policy
statements, or any other employment agreements.

          Executive understands and agrees that by entering into this Agreement,
Executive anticipates gaining the benefits of a speedy, impartial dispute
resolution procedure.

          4.8.2 Executive understands and agrees that the Company is engaged in
transactions involving interstate commerce and the Executive’s employment
involves such commerce. Executive agrees that the Federal Arbitration Act shall
govern the interpretation, enforcement, and proceeding under this Agreement. Any
decision of the arbitrator shall be enforceable in any federal or state court of
competent jurisdiction located in the County of Jefferson, Commonwealth of
Kentucky and each party irrevocably submits to the personal and exclusive
jurisdiction of such court.

          4.8.3 Executive understands and agrees that the provisions of the
Agreement are severable and, should any provision be held unenforceable, all
others will remain valid, binding and fully enforceable. Executive agrees that
the arbitrator, and not any federal, state, or local court or agency shall have
the exclusive authority to resolve any dispute relating to the interpretation,
arbitrability, applicability, enforceability or reformation of this Agreement,
including, but not limited to, any claim that all or any part of this Agreement
is void or voidable. If a court should determine that arbitration under this
Agreement is not the exclusive, final, and binding method for the Company and
the Executive to resolve disputes and/or that the decision and award of the
arbitrator is not final and binding as to some or all of the Executive’s claims,
the Executive must submit his claim to arbitration and pursue the arbitration to
conclusion before filing or pursuing any legal, equitable, or other legal
proceeding for any eligible claim in a court of competent jurisdiction.

          4.8.4 This Agreement to arbitrate shall survive the termination of
Executive’s employment. It can only be revoked or modified by mutual consent
evidenced by a writing signed by both parties that specifically state their
intent to revoke or modify this Agreement.

          ARTICLE 4.9 Amendment and Waivers. No provisions of this Agreement may
be amended or waived without the prior written consent of the parties hereto.
The waiver by either party to this Agreement of a breach of any provision of
this Agreement shall not be construed to operate as a waiver of any other breach
of the same or any other term or provision

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or as a waiver of any contemporaneous breach of any other term or provision or
as a continuing waiver of the same or any other term or provision.

          ARTICLE 4.10 Business Days. Whenever the terms of this Agreement call
for the performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance of such act
shall be postponed to the next succeeding regular business day following such
Saturday, Sunday or legal holiday.

          ARTICLE 4.11 No Third Party Beneficiary. Except for the parties to
this Agreement and their respective successors and assigns, heirs and personal
representatives nothing expressed or implied in this Agreement is intended, or
will be construed, to confer upon or give any person other than the parties
hereto and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.

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          IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.

 

 

 

 

EXECUTIVE

 

INDUSTRIAL SERVICES OF AMERICA, INC.

 

 

 

 

/s/ Jeffrey Valentine

 

By:

/s/ Harry Kletter

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Jeffrey Valentine

 

 

 

 

 

Title:

Chief Executive Officer

 

 

 

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ANNEX 1

1. Agreement:

          Shall mean the Amended and Restated Executive Employment Agreement
executed by Industrial Services of America, Inc. and Jeffrey Valentine effective
July 1, 2010, as it may be amended from time to time, hiring Jeffrey Valentine
as General Manager – ISA Alloys.

2. Company:

          Industrial Services of America, Inc., a Florida corporation, with its
principal place of business located at 7100 Grade Lane, Louisville Kentucky.

3. Effective Date:

          July 1, 2010

4. Employment Period:

          July 1, 2010, until June 30, 2015, unless otherwise terminated
pursuant to the terms and conditions of the Agreement.

5. Executive:

          Jeffrey Valentine.

6. Initial Term:

          July 1, 2010, until June 30, 2015, unless otherwise terminated
pursuant to the terms and conditions of the Agreement.

7. Incapacitation, Incapacitated, Incapacity:

          Shall mean that a qualified physician attending the Executive shall
have determined and provided written evidence of such determination to the
Company that said Executive is unable to attend to his personal affairs or the
business affairs of the Company on a day-to-day basis or a Court of Competent
jurisdiction determines the Executive is unable to fulfill his duties to the
Company under the Agreement.

8. Notice of Termination:

          A written notice from Executive (in the case of Voluntary Termination)
or Company (in the case of Termination due to Incapacity) to the other party
designating the basis for termination of Executive, the Termination Date as
provided and addressed in conformity with Articles 2.2 and 4.1 of the Agreement.

9. Renewal Term:

          All automatic renewals of the terms and conditions of the Agreement,
commencing on July 1, 2015, and ending June 30, 2016, and continuing each July 1
through June 30 thereafter until terminated by either party in conformity with
the Agreement.

10. Termination Date:

          The date of termination designated in any Notice of Termination.

11. Termination for Cause:

          Shall mean the termination of the Executive for:

          a. Failing or refusing to follow the legal instructions or resolutions
of the Board of Directors of the Company;

          b. Failing or refusing to follow the legal instructions of the Chief
Executive Officer or President of the Company;

          c. Absenteeism from the Company in violation of the terms and
conditions of the Agreement;

          d. Violation of any term or condition of this Agreement;

          e. Violation of any securities law (federal or state) during the term
of this Agreement;

          f. Any breach of Executive’s duty of loyalty or fulfilling duty to the
Company;

          g. Failure of the Executive to act in accordance with the terms of the
Company

--------------------------------------------------------------------------------

          handbook in all material respects; or

          h. Commission of any felony of misdemeanor involving moral turpitude.

12. Termination Without Cause:

          The Company’s issuances of a Notice of Termination of the Executive
for any reason other than any of those bases for termination set forth in
paragraph 11, entitled Termination for Cause.

13. Voluntary Termination:

          The Executive’s issuance of a Notice of Termination to the Company for
any reason.

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EXHIBIT A
OUTLINE OF MANAGEMENT INCENTIVE PLAN

 

 

 

 

 

 

 

 

 

 

 

Net Assets

 

 

 

$29,000,000

 

BONUS CALCULATION

 

 

 

 

 

 

 

 

 

 

Level 1A

 

 

 

Salary

 

 

 

 

 

 

 

 

 

$200,000

 

 

 

 

 

 

 

CO BASED

 

 

 

 

 

 

 

 

 

 

 

 

 

75%

BONUS

 

 

 

 

 

 

 

 

 

$150,000

TARGET
BONUS

 

 

 

 

 

 

 

 

 

 

Profit Target

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

1%

 

 

$

290,000

 

 

0

%

$

0

2%

 

 

$

580,000

 

 

1.316

%

$

1,974

3%

 

 

$

870,000

 

 

2.63

%

$

3,948

4%

 

 

$

1,160,000

 

 

3.95

%

$

5,922

5%

 

 

$

1,450,000

 

 

5.26

%

$

7,896

6%

 

 

$

1,740,000

 

 

6.58

%

$

9,870

7%

 

 

$

2,030,000

 

 

7.90

%

$

11,844

8%

 

 

$

2,320,000

 

 

9.21

%

$

13,818

9%

 

 

$

2,610,000

 

 

10.53

%

$

15,792

10%

 

 

$

2,900,000

 

 

11.84

%

$

17,766

11%

 

 

$

3,190,000

 

 

13.16

%

$

19,740

12%

 

 

$

3,480,000

 

 

14.48

%

$

21,714

13%

 

 

$

3,770,000

 

 

15.79

%

$

23,688

14%

 

 

$

4,060,000

 

 

17.11

%

$

25,662

15%

 

 

$

4,350,000

 

 

18.42

%

$

27,636

16%

 

 

$

4,640,000

 

 

19.74

%

$

29,610

17%

 

 

$

4,930,000

 

 

21.06

%

$

31,584

18%

 

 

$

5,220,000

 

 

22.37

%

$

33,558

19%

 

 

$

5,510,000

 

 

23.69

%

$

35,532

20%

 

 

$

5,800,000

 

 

25

%

$

37,500

21%

 

 

$

6,090,000

 

 

31.25

%

$

46,875

22%

 

 

$

6,380,000

 

 

37

%

$

55,500

23%

 

 

$

6,670,000

 

 

43

%

$

64,500

24%

 

 

$

6,960,000

 

 

50

%

$

75,000

25%

 

 

$

7,250,000

 

 

56

%

$

84,000

26%

 

 

$

7,540,000

 

 

62

%

$

93,000

27%

 

 

$

7,830,000

 

 

68

%

$

102,000

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

28%

 

 

$

8,120,000

 

 

75

%

$

112,500

29%

 

 

$

8,410,000

 

 

83

%

$

124,500

30%

 

 

$

8,700,000

 

 

89

%

$

133,500

31%

 

 

$

8,990,000

 

 

95

%

$

142,500

32%

 

 

$

9,280,000

 

 

100

%

$

150,000

33%

 

 

$

9,570,000

 

 

106

%

$

159,000

34%

 

 

$

9,860,000

 

 

112

%

$

168,000

35%

 

 

$

10,150,000

 

 

118

%

$

177,000

36%

 

 

$

10,440,000

 

 

125

%

$

187,500

37%

 

 

$

10,730,000

 

 

131

%

$

196,500

38%

 

 

$

11,020,000

 

 

137

%

$

205,500

39%

 

 

$

11,310,000

 

 

143

%

$

214,500

40%

 

 

$

11,600,000

 

 

150

%

$

225,000

41%

 

 

$

11,890,000

 

 

156

%

$

234,000

42%

 

 

$

12,180,000

 

 

162

%

$

243,000

43%

 

 

$

12,470,000

 

 

168

%

$

252,000

44%

 

 

$

12,760,000

 

 

175

%

$

262,500

45%

 

 

$

13,050,000

 

 

181

%

$

271,500

46%

 

 

$

13,340,000

 

 

187

%

$

280,500

47%

 

 

$

13,630,000

 

 

193

%

$

289,500

48%

 

 

$

13,920,000

 

 

200

%

$

300,000

49%

 

 

$

14,210,000

 

 

206

%

$

309,375

50%

 

 

$

14,500,000

 

 

213

%

$

318,750

each 1% RONA equals 6.5% increase in bonus %

 

 

 

 

 

 

51%

 

 

$

14,790,000

 

 

219

%

$

328,500

--------------------------------------------------------------------------------

EXHIBIT B
RONA RETURN FOR SHARE DISTRIBUTION

 

 

 

 

 

 

 

 

 

 

 

 

5 YEAR STOCK AWARD PLAN
2010-2014 Average RONA Return

 

 

 

50,000

 

 

RONA

 

 

AVG Operating
Income

 

%

 

AWARD
SHARES

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

20%

 

 

$

5,800,000

 

 

25.00

%

 

12,500

 

21%

 

 

$

6,090,000

 

 

31.25

%

 

15,625

 

22%

 

 

$

6,380,000

 

 

37.50

%

 

18,750

 

23%

 

 

$

6,670,000

 

 

43.75

%

 

21,875

 

24%

 

 

$

6,960,000

 

 

50.00

%

 

25,000

 

25%

 

 

$

7,250,000

 

 

56.25

%

 

28,125

 

26%

 

 

$

7,540,000

 

 

62.50

%

 

31,250

 

27%

 

 

$

7,830,000

 

 

68.75

%

 

34,375

 

28%

 

 

$

8,120,000

 

 

75.00

%

 

37,500

 

29%

 

 

$

8,410,000

 

 

81.25

%

 

40,625

 

30%

 

 

$

8,700,000

 

 

87.50

%

 

43,750

 

31%

 

 

$

8,990,000

 

 

93.75

%

 

46,875

 

32%

 

 

$

9,280,000

 

 

100.00

%

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

ANNUAL STOCK AWARD
(Same schedule as above)

 

 

 

 

 

 

 

 

30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

RONA

 

 

AVG Operating
Income

 

%

 

AWARD
SHARES

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

20%

 

 

$

5,800,000

 

 

25.00

%

 

7,500

 

21%

 

 

$

6,090,000

 

 

31.25

%

 

9,375

 

22%

 

 

$

6,380,000

 

 

37.50

%

 

11,250

 

23%

 

 

$

6,670,000

 

 

43.75

%

 

13,125

 

24%

 

 

$

6,960,000

 

 

50.00

%

 

15,000

 

25%

 

 

$

7,250,000

 

 

56.25

%

 

16,875

 

26%

 

 

$

7,540,000

 

 

62.50

%

 

18,750

 

27%

 

 

$

7,830,000

 

 

68.75

%

 

20,625

 

28%

 

 

$

8,120,000

 

 

75.00

%

 

22,500

 

29%

 

 

$

8,410,000

 

 

81.25

%

 

24,375

 

30%

 

 

$

8,700,000

 

 

87.50

%

 

26,250

 

31%

 

 

$

8,990,000

 

 

93.75

%

 

28,125

 

32%

 

 

$

9,280,000

 

 

100.00

%

 

30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXAMPLE: 100% Award

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

Average Net
Assets

 

Operating
Income

 

%

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

 

 

2010

 

 

 

29,000,000

 

$

9,280,000

 

 

32

%

2011

 

 

 

28,000,000

 

$

8,960,000

 

 

32

%

2012

 

 

 

27,000,000

 

$

8,640,000

 

 

32

%

2013

 

 

 

28,000,000

 

$

8,960,000

 

 

32

%

2014

 

 

 

29,000,000

 

$

9,280,000

 

 

32

%

 

 

 

 

141,000,000

 

$

45,120,000

 

 

 

 

5yr AVG

 

 

 

28,200,000

 

$

9,024,000

 

 

32

%

 

 

 

 

 

 

 

 

 

 

 

 

AWARD

 

 

 

50,000

 

shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXAMPLE: short of 32% RONA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

Average Net
Assets

 

Operating
Income

 

%

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

 

 

2010

 

 

 

29,000,000

 

$

9,280,000

 

 

32

%

2011

 

 

 

28,000,000

 

$

8,000,000

 

 

29

%

2012

 

 

 

27,000,000

 

$

5,000,000

 

 

19

%

2013

 

 

 

28,000,000

 

$

10,000,000

 

 

36

%

2014

 

 

 

29,000,000

 

$

10,000,000

 

 

34

%

 

 

 

 

141,000,000

 

$

42,280,000

 

 

 

 

5yr AVG

 

 

 

28,200,000

 

$

8,456,000

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

AWARD

 

 

 

43,750

 

shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXAMPLE: over of 32% RONA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

Average Net
Assets

 

Operating
Income

 

 

%

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

 

 

2010

 

 

 

29,000,000

 

$

12,000,000

 

 

41

%

2011

 

 

 

28,000,000

 

$

14,000,000

 

 

50

%

2012

 

 

 

27,000,000

 

$

5,000,000

 

 

19

%

2013

 

 

 

28,000,000

 

$

6,000,000

 

 

21

%

2014

 

 

 

29,000,000

 

$

12,000,000

 

 

41

%

 

 

 

 

141,000,000

 

$

49,000,000

 

 

 

 

5yr AVG

 

 

 

28,200,000

 

$

9,800,000

 

 

35

%

 

 

 

 

 

 

 

 

 

 

 

 

AWARD

 

 

 

50,000

 

shares

 

 

 

 

--------------------------------------------------------------------------------