RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related party transactions

RELATED PARTY TRANSACTIONS

In addition to the operating leases and consulting services noted below, the following related party transactions occurred during or subsequent to the third quarter of 2013:

Deposit on Seymour Property

On September 13, 2013, K & R, LLC (“K & R”) made a $500.0 thousand refundable, non-interest bearing deposit with the Company related to K & R's potential purchase of a piece of the Company's real property located at 1565 East 4th Street in Seymour, Indiana. The parties continue to negotiate the terms of the potential transaction. The Company was permitted and has used the deposited funds for general corporate purposes. If the parties are unable to agree to the terms of a transaction, the Company is obligated to refund the deposit to K & R. For the period ended September 30, 2013, this deposit is recorded as a current liability entitled "Deposit from related party" for $500.0 thousand.

K & R is wholly-owned by Kletter Holding, LLC which as of September 30, 2013 was wholly-owned by Harry Kletter, our former Chairman and Chief Executive Officer. As of September 30, 2013, Mr. Kletter beneficially owned approximately 1.8 million shares, or 25.9%, of the Company's issued and outstanding common stock.

The Company also leases certain real property and equipment from K & R as discussed in Note 9 - "Lease Commitments," and receives certain consulting services from K & R.

Retirement of and Consulting Agreement with James K. Wiseman

On October 29, 2013, James K. Wiseman notified the Company of his intent to retire as the Company’s Vice President and General Manager of Recycling and resign from all other positions he holds with the Company and its subsidiaries.

Because of Mr. Wiseman’s experience with the Company and in the scrap metal industry, on November 1, 2013, the Company and Mr. Wiseman entered into a Consulting Agreement (the “Consulting Agreement”) pursuant to which Mr. Wiseman provides consulting services to the Company with respect to that industry with a monthly consulting fee of $10.0 thousand.

The Consulting Agreement may not be terminated by either party until after October 31, 2014 after which time either party may terminate the Consulting Agreement by giving 30 days prior written notice of termination to the other party. During the consulting period, the Company will pay premiums for Mr. Wiseman’s COBRA coverage to the extent of the amount of coverage premiums paid by the Company immediately before Mr. Wiseman’s termination of employment.

In connection with the Consulting Agreement, Mr. Wiseman granted the Company a release of its obligations to pay any salary and welfare plan benefits under his Executive Employment Agreement. The Company granted Mr. Wiseman a release of his non-competition obligations under that agreement, but the Consulting Agreement provides that Mr. Wiseman may not solicit Company employees to leave the Company during the consulting period and for two years thereafter.