CUSIP No. 456314103 | |||||
1. | Names of Reporting Persons. Harry Kletter | ||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) | ||||
(a) o | |||||
(b) o | |||||
3. | SEC Use Only | ||||
4. | Source of Funds | ||||
PF | |||||
5. | Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) o | ||||
6. | Citizenship or Place of Organization United States | ||||
Number of Shares Beneficially Owned by Each Reporting Person With | 7. | Sole Voting Power 0 shares of Common Stock | |||
8. | Shared Voting Power 140,100 shares of Common Stock | ||||
9. | Sole Dispositive Power 517,788 shares of Common Stock | ||||
10. | Shared Dispositive Power 1,957,055 shares of Common Stock | ||||
11. | Aggregate Amount Beneficially Owned by Each Reporting Person 1,957,055 shares of Common Stock | ||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o | ||||
13. | Percent of Class Represented by Amount in Row (11) 27.7% of Common Stock | ||||
14. | Type of Reporting Person (See Instructions) IN |
CUSIP No. 456314103 | |||||
1. | Names of Reporting Persons. Roberta Kletter | ||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) | ||||
(a) o | |||||
(b) o | |||||
3. | SEC Use Only | ||||
4. | Source of Funds | ||||
PF | |||||
5. | Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) o | ||||
6. | Citizenship or Place of Organization United States | ||||
Number of Shares Beneficially Owned by Each Reporting Person With | 7. | Sole Voting Power 140,100 shares of Common Stock | |||
8. | Shared Voting Power 657,888 shares of Common Stock | ||||
9. | Sole Dispositive Power 140,100 shares of Common Stock | ||||
10. | Shared Dispositive Power 657,888 shares of Common Stock | ||||
11. | Aggregate Amount Beneficially Owned by Each Reporting Person 657,888 shares of Common Stock | ||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o | ||||
13. | Percent of Class Represented by Amount in Row (11) 9.3% of Common Stock | ||||
14. | Type of Reporting Person (See Instructions) IN |
CUSIP No. 456314103 | |||||
1. | Names of Reporting Persons. The Harry Kletter Family Limited Partnership | ||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) | ||||
(a) o | |||||
(b) o | |||||
3. | SEC Use Only | ||||
4. | Source of Funds | ||||
OO | |||||
5. | Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) o | ||||
6. | Citizenship or Place of Organization Kentucky | ||||
Number of Shares Beneficially Owned by Each Reporting Person With | 7. | Sole Voting Power 0 shares of Common Stock | |||
8. | Shared Voting Power 750,000 shares of Common Stock | ||||
9. | Sole Dispositive Power 750,000 shares of Common Stock | ||||
10. | Shared Dispositive Power 0 shares of Common Stock | ||||
11. | Aggregate Amount Beneficially Owned by Each Reporting Person 750,000 shares of Common Stock | ||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o | ||||
13. | Percent of Class Represented by Amount in Row (11) 10.6% of Common Stock | ||||
14. | Type of Reporting Person (See Instructions) PN |
CUSIP No. 456314103 | |||||
1. | Names of Reporting Persons. K & R, LLC | ||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) | ||||
(a) o | |||||
(b) o | |||||
3. | SEC Use Only | ||||
4. | Source of Funds | ||||
WC | |||||
5. | Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) o | ||||
6. | Citizenship or Place of Organization Kentucky | ||||
Number of Shares Beneficially Owned by Each Reporting Person With | 7. | Sole Voting Power 0 shares of Common Stock | |||
8. | Shared Voting Power 549,167 shares of Common Stock | ||||
9. | Sole Dispositive Power 549,167 shares of Common Stock | ||||
10. | Shared Dispositive Power 0 shares of Common Stock | ||||
11. | Aggregate Amount Beneficially Owned by Each Reporting Person 549,167 shares of Common Stock | ||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o | ||||
13. | Percent of Class Represented by Amount in Row (11) 7.8% of Common Stock | ||||
14. | Type of Reporting Person (See Instructions) OO |
(a) | This Statement is filed by Harry Kletter (“Mr. Kletter”), Roberta Kletter (“Mrs. Kletter”), K & R, LLC, a Kentucky limited liability company (“K&R”) and The Harry Kletter Family Limited Partnership (the “Partnership”). Collectively, the filers are hereafter referred to as the “Group.” Mr. Kletter is the sole member of K&R and Orson Oliver is K&R's President. |
(b) | The residential address for each of Mr. and Mrs. Kletter is 1208 Park Hills Ct., Louisville, KY 40207. The principal business address for K&R and Mr. Oliver is 7100 Grade Lane, Louisville, Kentucky 40232. The principal business address of the Partnership is 1208 Park Hills Ct., Louisville, Kentucky 40207. |
(c) | Mr. Kletter is the sole member of K&R and as General Partner of the Partnership. Mr. Orson Oliver serves as the President of K&R and as the Issuer's Chairman and interim Chief Executive Officer. There are no other officers or directors of these entities. |
(d-e) | No member of the Group nor Mr. Oliver has (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding violations with respect to such laws during the past five years. |
(f) | Mr. and Mrs. Kletter and Mr. Oliver are all United States citizens. |
1. | They will cause the shares of Issuer common stock represented by the Proxies to be “present” and voted at any meeting of the stockholders of the Issuer. |
2. | It is in Issuer’s best interest to increase the number of directors on the Issuer’s Board to a total of seven directors, and that they would cooperate with one another in exercising or voting the Proxies in furtherance of that change. |
3. | It is in the respective best interests of the Issuer and Algar for Algar to have representation on the Issuer’s board of directors. |
4. | They will cooperate with one another in exercising or voting the Proxies in favor of up to three individuals to the Issuer’s board of directors who are nominated by Mr. Garber, up to three individuals who are nominated by and from the board of directors as comprised immediately before the date of the Oliver/Garber Agreement, and one director selected by mutual agreement of the other directors (who may be a member of the board of directors as comprised immediately before the date of the Oliver/Garber Agreement); provided, that provision will not apply and will be of no force or effect in the case of (i) any such nominee for whom the Issuer would be required to provide disclosure pursuant to Regulation S-K Item 401(f) in any filing with the Securities and Exchange Commission or (ii) any nominees, the election of which would result in the Issuer’s board not being comprised of a majority of “independent directors,” as such term is defined by NASDAQ Listing Rule 5605. |
5. | They will vote the Proxies in favor of any recommendation of the Issuer’s board of directors, as so comprised, requiring shareholder approval. |
6. | During the term of the Management Agreement it might become mutually beneficial for the Issuer and Algar to enter into discussions concerning the possibility of merging the two companies and/or for the Issuer to acquire substantially all of the assets of Algar. |
7. | In the event that a mutually beneficial arms length deal is reached for the merger or asset acquisition, they would cooperate in exercising or voting the Proxies in favor of such a transaction. |
8. | Subject to any fiduciary duties owed to the Issuer or its shareholders, they will use their best efforts to appoint Garber as Chairman and Chief Executive Officer of any surviving entity. |
(a) | The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; |
(b) | An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; |
(c) | A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; |
(d) | Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; |
(f) | Any other material change in the Issuer's business or corporate structure, including but not limited to, if the Issuer is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940; |
(g) | Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; |
(h) | Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; |
(i) | A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to section 12(g)(4) of the Act; or |
(a) | As of December 1, 2013, the Group may be deemed to beneficially own 1,957,055 shares of Issuer common stock, representing 27.7% of Issuer’s outstanding common stock as reported in Issuer’s Quarterly Report on Form 10-Q filed with the SEC on August 19, 2013. Percentage of class includes assumed exercise of options held. |
(b) | Due to the Proxies, neither of K&R or the Partnership has the current power (sole or shared) to vote or to direct the vote of any shares. Mr. and Mrs. Kletter share the power to vote and to dispose of 140,100 shares owned by Mrs. Kletter. In addition to those shares, Mr. and Mrs. Kletter share the power to dispose of 517,788 shares owned by Mr. Kletter. Mr. Kletter also shares the power to dispose of the 750,000 shares owned by the Partnership and the 549,167 shares owned by K&R with those entities, respectively. |
(d) | Not applicable. |
(e) | Not applicable. |
ITEM 6. | CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. |
ITEM 7. | MATERIAL TO BE FILED AS EXHIBITS. |
99.1 | Management Services Agreement dated as of December 1, 2013, between the Issuer and Algar, Inc, including the Stock Option Agreement attached thereto as Attachment A, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Issuer on December 4, 2013. |
99.3 | Irrevocable Proxy from Harry Kletter to Orson Oliver and Sean Garber dated as of November 19, 2013. |
99.4 | Irrevocable Proxy from The Harry Kletter Family Limited Partnership to Orson Oliver and Sean Garber dated as of November 19, 2013. |
99.5 | Irrevocable Proxy from K & R, LLC to Orson Oliver and Sean Garber dated as of November 19, 2013. |
99.6 | Joint Filing Agreement among the Reporting Persons dated as of December 11, 2013. |
December 11, 2013 | |
Date | |
/s/ Harry Kletter | |
Signature | |
Harry Kletter | |
Name |
/s/ Roberta Kletter | |
Signature | |
Roberta Kletter | |
Name |
A. | Oliver is the Interim Chief Executive Officer and Interim President of Industrial Services of America, Inc. (“ISA”). |
B. | Garber is the Chairman and Chief Executive Officer of Algar, Inc. (“Algar”). |
C. | Harry Kletter, The Harry Kletter Family Limited Partnership and K & R, LLC are collectively the registered owners of a significant amount of the outstanding and issued voting shares of capital stock of ISA. |
D. | On November 19, 2013, each of Harry Kletter, The Harry Kletter Family Limited Partnership and K & R, LLC gave an Irrevocable Proxy to Oliver and Garber, jointly, for the exercise of their respective shares of ISA stock (individually and collectively, the “Proxies”). |
E. | The Proxies were issued as a condition of that certain Management Services Agreement dated December 1, 2013, by and between ISA and Algar (the “Management Agreement”) wherein Algar will assume the duties and the responsibilities for the day to day operations of ISA. |
F. | Oliver believes that it is in ISA’s best interests to enter into the Management Agreement. |
G. | Garber believes that the Management Agreement is of significant benefit to Algar. |
H. | Oliver and Garber have agreed that certain changes to the structure of ISA, as more fully set forth in this Agreement, are required in order to improve the financial condition of ISA and to allow Algar to best accomplish its duties under the Management Agreement. |
I. | Oliver and Garber believe that the proposed changes set forth herein are in the best interests of their respective companies. |
J. | As an inducement, without which Garber would not consent to Algar entering in to the Management Agreement, Oliver has agreed to work with and cooperate with Garber in exercising or voting the Proxies in furtherance of effectuating the changes in the structure of the ISA Board of Directors described in this Agreement. |
1. | ISA Shareholder Meetings. During the Term of this Agreement, the parties will cause the shares of ISA common stock represented by the Proxies to be “present” and voted at any meeting of the stockholders of ISA. |
2. | ISA Board of Directors. The parties agree that it is in ISA’s best interest to increase the number of directors on ISA’s Board to a total of seven (7) directors. As such, Oliver and Garber agree to cooperate with one another in exercising or voting the Proxies in furtherance of this change. |
3. | Directors. Oliver and Garber agree that it is in the respective best interests of ISA and Algar for Algar to have representation on the ISA Board of Directors. As such, Oliver and Garber agree to cooperate with one another in exercising or voting the Proxies in favor of up to three (3) individuals to the ISA Board of Directors who are nominated by Garber, up to three (3) individuals who are nominated by and from the Board of Directors as comprised immediately before the date of this Agreement, and one director selected by mutual agreement of the other directors (who may be a member of the Board of Directors as comprised immediately before the date of this Agreement); provided, however, this provision shall not apply and shall be of no force or effect in the case of (i) any such nominee for whom ISA would be required to provide disclosure pursuant to Regulation S-K Item 401(f) in any filing with the Securities and Exchange Commission or (ii) any nominees, the election of which would result in ISA’s Board not being comprised of a majority of “independent directors,” as such term is defined by NASDAQ Listing Rule 5605. Oliver and Garber agree that they will vote the Proxies in favor of any recommendation of the ISA Board of Directors, as so comprised, requiring shareholder approval. |
4. | Succession Planning. Oliver and Garber agree that during the term of the Management Agreement that it might become mutually beneficial for ISA and Algar to enter into discussions concerning the possibility of merging the two companies and/or for ISA to acquire substantially all of the assets of Algar. In the event that a mutually beneficial arms length deal is reached for the merger or asset acquisition, Oliver and Garber agree to cooperate with one another in exercising or voting the Proxies in favor of such a transaction. Furthermore, subject to the limitations set forth at paragraph 9, Oliver and Garber agree to use their best efforts to appoint Garber as Chairman and Chief Executive Officer of the surviving entity. |
5. | Term. This Agreement will commence on the Effective Date and shall remain in full force and effect during the term of the Management Agreement. |
6. | Modification. This Agreement may not be modified or amended except in a writing signed by both of the parties hereto. |
7. | Successor and Assigns. This Agreement shall be binding upon and shall operate for the benefit of the respective heirs, executors, personal representatives and assigns of the parties hereto. |
8. | Remedies. It is mutually agreed that there is no adequate remedy at law in favor of either of the parties hereto in the event of a breach of the provisions hereof by any party hereto, and that any party, in addition to all other rights which may be available, shall have the right of specific performance in the event of any breach of or injunction in the event of any threatened breach. |
9. | Fiduciary Duties. The parties agree that the obligations set forth in this Agreement are subject to and limited in all respects by any fiduciary duties which either party owes to ISA or its shareholders, and that, if a party’s performance under this Agreement would require the party to breach a fiduciary duty to ISA or its shareholders, the party’s failure to perform shall not be a breach of this Agreement. |
/s/ Harry Kletter | |
Signature | |
Harry Kletter | |
Name |
/s/ Roberta Kletter | |
Signature | |
Roberta Kletter | |
Name |