Exhibit 10.7


AMENDED
AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT


          This
Amended Executive Employment Agreement (“Agreement”) is made as of the 1st
day of April, 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 BRIAN DONAGHY, an individual residing at
18811 Weatherford Circle, Louisville, Kentucky 40245 (“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 President and Chief Operating Officer, (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 July 1, 2010, and ending on the Termination Date (as defined
below) or 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, 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
the fifth anniversary of the Effective Date and continuing for the next three
hundred and sixty five (365) consecutive calendar days.)


          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 $3,000.00
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. Effective the 1st day of
January in 2009 the Company shall pay the Executive a Base Salary of $3,846.15
per week and every subsequent year during the Initial Term, the Base Salary
shall be increased by the cost of living index increase for the Metropolitan
Louisville area. However, in no event shall Executive’s Base Salary be
decreased as a result of a decrease in said cost of living index.


          ARTICLE
2.3.2 The Executive shall be entitled to a bonus based as a Level 1 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 a bonus as a Level 1 employee
based on satisfaction of the criteria under the Executive Incentive Plan (the
“EIP”) dated July 1, 2010provided he remains employed by the
Company during the entirety of calendar year 2010. Such bonus shall be payable
(i) in the form of Company common stock in one delivery of a stock certificate,
(ii) cash, or (iii) cash and common stock, at the election of Executive in
accordance with the EIP, 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 EIP 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 B, attached hereto and
incorporated herein by reference, outlining the EIP.


          ARTICLE
2.3.4 The Executive
shall be entitled to receive as a bonus up to ten thousand (10,000) 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 fifty
thousand (50,000) shares of the Company common stock over the Initial Term (but
in no event greater than 10,000 shares in any one calendar year) based on
satisfaction of the return on net assets (“RONA”) criteria set forth in Exhibit
C 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
2.3.5 The Executive
shall be entitled to receive as a bonus up to one hundred and fifty thousand
(150,000) 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
2.3.6 The Executive will be entitled to participate in all medical and
hospitalization, group life insurance, retirement, and any and all other
welfare and fringe benefit plan 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
2.3.7 The Executive will be entitled to a maximum of three (3) weeks paid
vacation during each calendar year (prorated for any partial year during the
term) commencing in 2007 to be taken at such times and intervals as shall be
determined by the Executive, and approved by the Chief Executive Officer of the
Company, which approval shall not be unreasonably withheld and provided 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
2.3.8 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 $1,000.00 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 be
responsible for any damage due to neglect or misuse by Executive.


          ARTICLE
2.3.9 During the Initial Term of this Agreement Executive shall be entitled to
receive twenty thousand (20,000) shares of the Company’s common stock, delivery
by Company to the Executive no later than April 1, following the close of
Company’s books for the previous calendar year, provided that the following
conditions have been met: (i) the Executive has completed one (1) year of
employment; and, (ii) the Company’s EBIDTA (as determined by Generally Accepted
Accounting Principles) exceeds four million five hundred thousand dollars
($4,500,000.00) for the applicable Measurement Period, which shall also take
into account the effect the issuance of said shares shall have upon the
calculation of the Company’s EBIDTA. In no event whatsoever shall the
entitlement of the Executive to qualify for shares of the Company under this
Agreement provide for the Executive to receive more than one hundred forty
thousand (140,000) shares of the common stock of the Company (including the
shares received by Executive as his signing bonus in Article 2.3.2), all of
which shall be subject to the anti-dilution provisions set forth in Article
2.3.7 below. 


          ARTICLE
2.3.10 The Company represents and the Executive acknowledges that he shall be
receiving “restricted” Shares subject to a one (1) year holding period and
further subject to the provisions of Rule 144 under the Securities Act of 1933.


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 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 he is receiving the Shares 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 the 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.


          The
number of shares of Common Stock (the “Shares”) shall be proportionately
increased in the event that the Company causes to be issued additional Shares
in the form of a stock dividend, stock splits or other such reclassification;
or conversely, proportionately decreased in the event of a reverse split or
reclassification.


          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. In addition, Executive is entitled to receive the
Company’s common stock to which Executive would be otherwise entitled under and
upon satisfaction of the conditions set forth in Article 2.3.6 throughout the
Initial Term;





                    (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. In
addition, Executive is entitled to receive the Company’s common stock to which
Executive would be otherwise entitled under and upon satisfaction of the
conditions set forth in Article 2.3.6 for the year in which Executive’s employment
terminates as the result of Executive’s Incapacity (and shall not be entitled
to receive any additional common stock for any years after the year in which
Executive’s employment terminated as the result of Executive’s Incapacity);


                    (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. In addition, Executive (or his estate) is
entitled to receive the Company’s common stock to which Executive would be
otherwise entitled under and upon satisfaction of the conditions set forth in
Article 2.3.6 for the year in which Executive’s employment terminates as the
result of Executive’s death (and shall not be entitled to receive any
additional common stock for any years after the year in which Executive’s
employment terminated as the result of Executive’s 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. In addition, Executive is entitled to receive the
Company’s common stock to which Executive would be otherwise entitled under and
upon satisfaction of the conditions set forth in Article 2.3.6 for the year in
which Executive’s employment terminates as the result of Voluntary Termination
(and shall not be entitled to receive any additional common stock for any years
after the year in which Executive’s employment terminated as the result of
Voluntary Termination); 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. In addition, Executive is entitled to
receive the Company’s common stock to which Executive would be otherwise
entitled under and upon satisfaction of the conditions set forth in Article
2.3.6 for the year in which Executive’s employment terminates as the result of
Termination for Cause (and shall not be entitled to receive any additional
common stock for any years after the year in which Executive’s employment
terminated as the result of Termination for Cause).


          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 payment, the Company will have no further
Severance Payment obligation to the Executive. All payment 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 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 to him in effect 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 cost to the Company of purchasing the Welfare
Plan Benefits immediately prior to the Termination Date. Benefits otherwise
receivable by the Executive pursuant to the preceding sentence shall be reduced
to the extent comparable benefits are actually received from another employer
by the Executive’s participation in, or receipt of, any such comparable
benefits. 


          ARTICLE
2.4.4 The Executive’s right to receive, and the Company’s obligation to pay and
provide any of the payments and benefits provided for in this Article 2.4 shall
be subject to (a) the Executive’s compliance with, and observance of, all of
the Executive’s obligations under this Agreement that continue beyond the
Termination Date, and (b) the Executive’s execution, delivery, and
non-revocation of, and performance under, a general release in favor of the
Company and its Affiliates in a form attached hereto as Exhibit “B”.


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 other to use any Confidential Information, 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, proposal, flow sheets, supply contract, 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 Company on the termination Date
or on the Company’s 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, idea and discoveries to the Company.





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,
director, member, manager, partner, agent, security holder, consultant or
otherwise, that directly or indirectly is engaged in the Restricted Business,
within fifty (50) 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. Provided, that nothing in
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,
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





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, 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, 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 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.

 
	
  

 	
  

 	
  

 
	
 With a Copy
 to:

 	
  

 	
 Stuart L.
 Adams, Jr.

 8009 New LaGrange Road, Suite 1

 Louisville, KY 40222

 
	
  

 	
  

 	
  

 
	
 If to the
 Company:

 	
  

 	
 Industrial
 Services of America, Inc.

 7100 Grade Lane

 Louisville, KY 40213

 Attention: Alan Schroering

 
	
  

 	
  

 	
  

 
	
 With a copy
 to:

 	
  

 	
 Bruce D.
 Atherton

 Bruce D. Atherton & Associates, PLLC

 455 South Fourth Street

 Starks Building, Suite 1450

 Louisville, KY 40202

 



          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 here under 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 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 shall be deemed of Article 3
are held to be invalid, illegal or unenforceable, then such provision shall be
deemed amended in the manner and to the extent provided for 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 on 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 (a) Executive may not assign any of his rights or
delegate any of his obligations hereunder and (b) if this Agreement is assigned
by the Company in connection with the assignment of all or substantially all of
the Company’s assets, the terms “Restricted Business,” “Restricted Area”, “business”
and other terms that govern the scope of the restrictions on the Executive’s
conduct will be defined with reference to the business of the Company at the
time of such assignment or Termination Date, whichever shall first occur, and
will not be expanded by virtue of the assignment of this Agreement by the
Company.


          ARTICLE
4.6 Equitable Remedies. The Executive acknowledges and agrees that the
Company would not have an adequate remedy at law in the event of the provisions
of Article 3 set 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.


          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 Executive shall share equally in the administrative fees for
arbitration such as filing fees, hearing fees, and hearing room rental fees.


          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, State 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 formation 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 both be construed or operate as a waiver of any preceding or
succeeding breach of the same or any other term or provision 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.


[THE REMAINDER OF THIS PAGE

IS INTENTIONALLY LEFT BLANK]





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


	
  

 	
  

 	
  

 	
  

 
	
 EXECUTIVE

 	
  

 	
 INDUSTRIAL SERVICES OF AMERICA, INC.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 /s/ Brian
 Donaghy

 	
  

 	
 By:

 	
 /s/ Harry
 Kletter

 
	

 


 	
  

 	
  

 	

 


 
	
 Brian Donaghy

 	
  

 	
  

 	
 Harry Kletter

 
	
 COO

 	
  

 	
 Title:

 	
 CEO

 









ANNEX
1


1. Agreement: 


          Shall
mean the Amended Executive Employment Agreement executed by Industrial Services
of America, Inc. and Brian Donaghy effective July 1, 2010.


2. Company:


          Industrial
Services of America, Inc., a Florida corporation, with its principle 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:


          Brian
Donaghy.


6. Initial
Term:


          August
2, 2007 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
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. Measurement
Period:


          Shall
mean each calendar year commencing on January 1, 2008 and ending on December
31, 2008, and each calendar year thereafter through calendar year 2015.


9. 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.


10. Renewal
Term:


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


11. Termination
Date:


          The
date of termination designated in any Notice of Termination.


12.
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 Office 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
 branch of Executive’s duty of loyalty or fulfilling duty to the Company; or
 
	
  
 	
  
 
	
  
 	
 g. Failure
 of the Executive to act in accordance with the terms of the Company handbook
 in all material respects.
 



13.
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 12,
entitled Termination for Cause.


14. Voluntary
Termination:


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





EXHIBIT A

OUTLINE OF MANAGEMENT INCENTIVE PLAN


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Net Assets

 	
  

 	
 $29,000,000

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Level 1

 
	
 Salary

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 $200,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 CO BASED

 
	
 BONUS

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 100%

 
	
 TARGET
 BONUS

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 $200,000

 
	
 Profit
 Target

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 
	
 1%

 	
  

 	
  

 	
 $

 	
 290,000

 	
  

 	
 0.0

 	
 %

 	
 $

 	
 0

 
	
 2%

 	
  

 	
  

 	
 $

 	
 580,000

 	
  

 	
 1.316

 	
 %

 	
 $

 	
 2,632

 
	
 3%

 	
  

 	
  

 	
 $

 	
 870,000

 	
  

 	
 2.63

 	
 %

 	
 $

 	
 5,264

 
	
 4%

 	
  

 	
  

 	
 $

 	
 1,160,000

 	
  

 	
 3.95

 	
 %

 	
 $

 	
 7,896

 
	
 5%

 	
  

 	
  

 	
 $

 	
 1,450,000

 	
  

 	
 5.26

 	
 %

 	
 $

 	
 10,528

 
	
 6%

 	
  

 	
  

 	
 $

 	
 1,740,000

 	
  

 	
 6.58

 	
 %

 	
 $

 	
 13,160

 
	
 7%

 	
  

 	
  

 	
 $

 	
 2,030,000

 	
  

 	
 7.90

 	
 %

 	
 $

 	
 15,792

 
	
 8%

 	
  

 	
  

 	
 $

 	
 2,320,000

 	
  

 	
 9.21

 	
 %

 	
 $

 	
 18,424

 
	
 9%

 	
  

 	
  

 	
 $

 	
 2,610,000

 	
  

 	
 10.53

 	
 %

 	
 $

 	
 21,056

 
	
 10%

 	
  

 	
  

 	
 $

 	
 2,900,000

 	
  

 	
 11.84

 	
 %

 	
 $

 	
 23,688

 
	
 11%

 	
  

 	
  

 	
 $

 	
 3,190,000

 	
  

 	
 13.16

 	
 %

 	
 $

 	
 26,320

 
	
 12%

 	
  

 	
  

 	
 $

 	
 3,480,000

 	
  

 	
 14.48

 	
 %

 	
 $

 	
 28,952

 
	
 13%

 	
  

 	
  

 	
 $

 	
 3,770,000

 	
  

 	
 15.79

 	
 %

 	
 $

 	
 31,584

 
	
 14%

 	
  

 	
  

 	
 $

 	
 4,060,000

 	
  

 	
 17.11

 	
 %

 	
 $

 	
 34,216

 
	
 15%

 	
  

 	
  

 	
 $

 	
 4,350,000

 	
  

 	
 18.42

 	
 %

 	
 $

 	
 36,848

 
	
 16%

 	
  

 	
  

 	
 $

 	
 4,640,000

 	
  

 	
 19.74

 	
 %

 	
 $

 	
 39,480

 
	
 17%

 	
  

 	
  

 	
 $

 	
 4,930,000

 	
  

 	
 21.06

 	
 %

 	
 $

 	
 42,112

 
	
 18%

 	
  

 	
  

 	
 $

 	
 5,220,000

 	
  

 	
 22.37

 	
 %

 	
 $

 	
 44,744

 
	
 19%

 	
  

 	
  

 	
 $

 	
 5,510,000

 	
  

 	
 23.69

 	
 %

 	
 $

 	
 47,376

 
	
 20%

 	
  

 	
  

 	
 $

 	
 5,800,000

 	
  

 	
 25.00

 	
 %

 	
 $

 	
 50,008

 
	
 21%

 	
  

 	
  

 	
 $

 	
 6,090,000

 	
  

 	
 31

 	
 %

 	
 $

 	
 62,508

 
	
 22%

 	
  

 	
  

 	
 $

 	
 6,380,000

 	
  

 	
 37

 	
 %

 	
 $

 	
 74,000

 
	
 23%

 	
  

 	
  

 	
 $

 	
 6,670,000

 	
  

 	
 43

 	
 %

 	
 $

 	
 86,000

 
	
 24%

 	
  

 	
  

 	
 $

 	
 6,960,000

 	
  

 	
 50

 	
 %

 	
 $

 	
 100,000

 
	
 25%

 	
  

 	
  

 	
 $

 	
 7,250,000

 	
  

 	
 56

 	
 %

 	
 $

 	
 112,000

 
	
 26%

 	
  

 	
  

 	
 $

 	
 7,540,000

 	
  

 	
 62

 	
 %

 	
 $

 	
 124,000

 













	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 27%

 	
  

 	
  

 	
 $

 	
 7,830,000

 	
  

 	
 68

 	
 %

 	
$ 

 	
 136,000

 
	
 28%

 	
  

 	
  

 	
 $

 	
 8,120,000

 	
  

 	
 75

 	
 %

 	
$ 

 	
 150,000

 
	
 29%

 	
  

 	
  

 	
 $

 	
 8,410,000

 	
  

 	
 83

 	
 %

 	
$ 

 	
 166,000

 
	
 30%

 	
  

 	
  

 	
 $

 	
 8,700,000

 	
  

 	
 89

 	
 %

 	
$ 

 	
 178,000

 
	
 31%

 	
  

 	
  

 	
 $

 	
 8,990,000

 	
  

 	
 95

 	
 %

 	
$ 

 	
 190,000

 
	
 32%

 	
  

 	
  

 	
 $

 	
 9,280,000

 	
  

 	
 100

 	
 %

 	
$ 

 	
 200,000

 
	
 33%

 	
  

 	
  

 	
 $

 	
 9,570,000

 	
  

 	
 106

 	
 %

 	
$ 

 	
 212,000

 
	
 34%

 	
  

 	
  

 	
 $

 	
 9,860,000

 	
  

 	
 112

 	
 %

 	
$ 

 	
 224,000

 
	
 35%

 	
  

 	
  

 	
 $

 	
 10,150,000

 	
  

 	
 118

 	
 %

 	
$ 

 	
 236,000

 
	
 36%

 	
  

 	
  

 	
 $

 	
 10,440,000

 	
  

 	
 125

 	
 %

 	
$ 

 	
 250,000

 
	
 37%

 	
  

 	
  

 	
 $

 	
 10,730,000

 	
  

 	
 131

 	
 %

 	
$ 

 	
 262,000

 
	
 38%

 	
  

 	
  

 	
 $

 	
 11,020,000

 	
  

 	
 137

 	
 %

 	
$ 

 	
 274,000

 
	
 39%

 	
  

 	
  

 	
 $

 	
 11,310,000

 	
  

 	
 143

 	
 %

 	
$ 

 	
 286,000

 
	
 40%

 	
  

 	
  

 	
 $

 	
 11,600,000

 	
  

 	
 150

 	
 %

 	
$ 

 	
 300,000

 
	
 41%

 	
  

 	
  

 	
 $

 	
 11,890,000

 	
  

 	
 156

 	
 %

 	
$ 

 	
 312,000

 
	
 42%

 	
  

 	
  

 	
 $

 	
 12,180,000

 	
  

 	
 162

 	
 %

 	
$ 

 	
 324,000

 
	
 43%

 	
  

 	
  

 	
 $

 	
 12,470,000

 	
  

 	
 168

 	
 %

 	
$ 

 	
 336,000

 
	
 44%

 	
  

 	
  

 	
 $

 	
 12,760,000

 	
  

 	
 175

 	
 %

 	
$ 

 	
 350,000

 
	
 45%

 	
  

 	
  

 	
 $

 	
 13,050,000

 	
  

 	
 181

 	
 %

 	
$ 

 	
 362,000

 
	
 46%

 	
  

 	
  

 	
 $

 	
 13,340,000

 	
  

 	
 187

 	
 %

 	
$ 

 	
 374,000

 
	
 47%

 	
  

 	
  

 	
 $

 	
 13,630,000

 	
  

 	
 193

 	
 %

 	
$ 

 	
 386,000

 
	
 48%

 	
  

 	
  

 	
 $

 	
 13,920,000

 	
  

 	
 200

 	
 %

 	
$ 

 	
 400,000

 
	
 49%

 	
  

 	
  

 	
 $

 	
 14,210,000

 	
  

 	
 206

 	
 %

 	
$ 

 	
 412,500

 
	
 50%

 	
  

 	
  

 	
 $

 	
 14,500,000

 	
  

 	
 213

 	
 %

 	
$ 

 	
 425,000

 
	
 each 1% RONA equals 6.5% increase in bonus %

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 $

 	
 14,790,000

 	
  

 	
 219

 	
 %

 	
$ 

 	
 438,000

 









EXHIBIT B 

OUTLINE OF EXECUTIVE INCENTIVE PLAN


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 LTIP BONUS CALCULATION

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 


 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 2010-12 PLAN

 Executive Group

 Target 100%

 	
  

 	
 2011-13 PLAN

 Executive Group

 Target 100%

 	
  

 	
 2012-14 PLAN

 Executive Group

 Target 100%

 	
  

 	
 2013-15 PLAN

 Executive Group

 Target 100%

 	
  

 	
 2014-16 PLAN

 Executive Group

 Target 100%

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 
	
 RONA

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 200,000

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 200,000

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 200,000

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 200,000

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 200,000

 	
  

 
	
 Net Assets

 	
  

 	
 $

 	
 29,000,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Target

 	
  

 	
  

 	
 32

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 YR1

 	
  

 	
 $

 	
 9,280,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 YR2

 	
  

 	
 $

 	
 9,280,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 YR3

 	
  

 	
 $

 	
 9,280,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 

 	
 

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 $

 	
 27,840,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 175

 	
 %

 	
 $

 	
 350,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 100%

 	
  

 	
 $

 	
 27,840,000

 	
  

 	
  

 	
 93

 	
 %

 	
 $

 	
 185,345

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 200

 	
 %

 	
 $

 	
 400,000

 	
  

 
	
 125%

 	
  

 	
 $

 	
 34,800,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 103

 	
 %

 	
 $

 	
 205,460

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 150%

 	
  

 	
 $

 	
 41,760,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 100

 	
 %

 	
 $

 	
 200,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 175%

 	
  

 	
 $

 	
 48,720,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 200%

 	
  

 	
 $

 	
 55,680,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3 YEAR OPERATING INCOME - used
 to CALCULATE LTIP BONUS %

 
	
 ACTUAL OPERATING
 INCOME

 
	
 2010

 	
  

 	
 $

 	
 7,000,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2011

 	
  

 	
 $

 	
 9,000,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2012

 	
  

 	
 $

 	
 9,800,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 93

 	
 %

 	
 $

 	
 25,800,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2013

 	
  

 	
 $

 	
 9,800,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 103

 	
 %

 	
 $

 	
 28,600,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2014

 	
  

 	
 $

 	
 8,240,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 100

 	
 %

 	
 $

 	
 27,840,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2015

 	
  

 	
 $

 	
 30,680,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 175

 	
 %

 	
 $

 	
 48,720,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2015

 	
  

 	
 $

 	
 16,760,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 200

 	
 %

 	
 $

 	
 55,680,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 









EXHIBIT C

RONA RETURN FOR SHARE DISTRIBUTION


	
  

 	
  

 
	
 2010-2014
 Average RONA Return

 	
 150,000

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 RONA

 	
  

 	
  

 	
 AVG Operating

 Income

 	
  

 	
 %

 	
  

 	
 AWARD

 SHARES

 	
  

 
	

 


 	
  

 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 
	
 20%

 	
  

 	
  

 	
 $

 	
 5,800,000

 	
  

 	
  

 	
 25.00

 	
 %

 	
  

 	
 37,500

 	
  

 
	
 21%

 	
  

 	
  

 	
 $

 	
 6,090,000

 	
  

 	
  

 	
 31.25

 	
 %

 	
  

 	
 46,875

 	
  

 
	
 22%

 	
  

 	
  

 	
 $

 	
 6,380,000

 	
  

 	
  

 	
 37.50

 	
 %

 	
  

 	
 56,250

 	
  

 
	
 23%

 	
  

 	
  

 	
 $

 	
 6,670,000

 	
  

 	
  

 	
 43.75

 	
 %

 	
  

 	
 65,625

 	
  

 
	
 24%

 	
  

 	
  

 	
 $

 	
 6,960,000

 	
  

 	
  

 	
 50.00

 	
 %

 	
  

 	
 75,000

 	
  

 
	
 25%

 	
  

 	
  

 	
 $

 	
 7,250,000

 	
  

 	
  

 	
 56.25

 	
 %

 	
  

 	
 84,375

 	
  

 
	
 26%

 	
  

 	
  

 	
 $

 	
 7,540,000

 	
  

 	
  

 	
 62.50

 	
 %

 	
  

 	
 93,750

 	
  

 
	
 27%

 	
  

 	
  

 	
 $

 	
 7,830,000

 	
  

 	
  

 	
 68.75

 	
 %

 	
  

 	
 103,125

 	
  

 
	
 28%

 	
  

 	
  

 	
 $

 	
 8,120,000

 	
  

 	
  

 	
 75.00

 	
 %

 	
  

 	
 112,500

 	
  

 
	
 29%

 	
  

 	
  

 	
 $

 	
 8,410,000

 	
  

 	
  

 	
 81.25

 	
 %

 	
  

 	
 121,875

 	
  

 
	
 30%

 	
  

 	
  

 	
 $

 	
 8,700,000

 	
  

 	
  

 	
 87.50

 	
 %

 	
  

 	
 131,250

 	
  

 
	
 31%

 	
  

 	
  

 	
 $

 	
 8,990,000

 	
  

 	
  

 	
 93.75

 	
 %

 	
  

 	
 140,625

 	
  

 
	
 32%

 	
  

 	
  

 	
 $

 	
 9,280,000

 	
  

 	
  

 	
 100.00

 	
 %

 	
  

 	
 150,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ANNUAL STOCK AWARD
 (same schedule as above)

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 10,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 RONA

 	
  

 	
  

 	
 AVG Operating

 Income

 	
  

 	
 %

 	
  

 	
 AWARD

 SHARES

 	
  

 
	

 


 	
  

 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 
	
 20%

 	
  

 	
  

 	
 $

 	
 5,800,000

 	
  

 	
  

 	
 25.00

 	
 %

 	
  

 	
 2,500

 	
  

 
	
 21%

 	
  

 	
  

 	
 $

 	
 6,090,000

 	
  

 	
  

 	
 31.25

 	
 %

 	
  

 	
 3,125

 	
  

 
	
 22%

 	
  

 	
  

 	
 $

 	
 6,380,000

 	
  

 	
  

 	
 37.50

 	
 %

 	
  

 	
 3,750

 	
  

 
	
 23%

 	
  

 	
  

 	
 $

 	
 6,670,000

 	
  

 	
  

 	
 43.75

 	
 %

 	
  

 	
 4,375

 	
  

 
	
 24%

 	
  

 	
  

 	
 $

 	
 6,960,000

 	
  

 	
  

 	
 50.00

 	
 %

 	
  

 	
 5,000

 	
  

 
	
 25%

 	
  

 	
  

 	
 $

 	
 7,250,000

 	
  

 	
  

 	
 56.25

 	
 %

 	
  

 	
 5,625

 	
  

 
	
 26%

 	
  

 	
  

 	
 $

 	
 7,540,000

 	
  

 	
  

 	
 62.50

 	
 %

 	
  

 	
 6,250

 	
  

 
	
 27%

 	
  

 	
  

 	
 $

 	
 7,830,000

 	
  

 	
  

 	
 68.75

 	
 %

 	
  

 	
 6,875

 	
  

 
	
 28%

 	
  

 	
  

 	
 $

 	
 8,120,000

 	
  

 	
  

 	
 75.00

 	
 %

 	
  

 	
 7,500

 	
  

 
	
 29%

 	
  

 	
  

 	
 $

 	
 8,410,000

 	
  

 	
  

 	
 81.25

 	
 %

 	
  

 	
 8,125

 	
  

 
	
 30%

 	
  

 	
  

 	
 $

 	
 8,700,000

 	
  

 	
  

 	
 87.50

 	
 %

 	
  

 	
 8,750

 	
  

 
	
 31%

 	
  

 	
  

 	
 $

 	
 8,990,000

 	
  

 	
  

 	
 93.75

 	
 %

 	
  

 	
 9,375

 	
  

 
	
 32%

 	
  

 	
  

 	
 $

 	
 9,280,000

 	
  

 	
  

 	
 100.00

 	
 %

 	
  

 	
 10,000

 	
  

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 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

 	
  

 	
  

 	
  

 	
 150,000

 	
  

 	
  

 	
 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

 	
  

 	
  

 	
  

 	
 131,250

 	
  

 	
  

 	
 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

 	
  

 	
  

 	
  

 	
 150,000

 	
  

 	
  

 	
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