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EXHIBIT 10.5
SETTLEMENT AGREEMENT AND GENERAL RELEASE
THIS SETTLEMENT AGREEMENT and GENERAL RELEASE (hereinafter "Agreement")
is made and entered into by and between T. XXXXXXXX XXXXXXXX (hereinafter
"Xxxxxxxx") and METAL MANAGEMENT, INC., a Delaware corporation (hereinafter
"MTLM").
WHEREAS, the parties have engaged in discussions resulting in an
amicable and mutually satisfactory agreement concerning Xxxxxxxx' resignation
from his employment and directorships and management committee positions with
MTLM and any and all of its affiliates.
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth below, the parties hereby agree as follows:
1. The Employment Agreement. Xxxxxxxx and MTLM are parties to an
"Employment Agreement" dated December 15, 1997. Except for Xxxxxxxx' obligations
pursuant to Paragraphs 15, 18, 19, 23 and 26(a) thereof and MTLM's obligations
pursuant to Paragraphs 24 and 25 thereof, which shall continue, or except as
otherwise expressly provided in this Agreement, this Agreement shall supersede
the terms and provisions of the Employment Agreement, which is terminated
effective immediately and is hereby null and void and without further effect.
2. Xxxxxxxx' Resignation. Effective July 15, 1999, Xxxxxxxx hereby
resigns as Chairman of the Board, Chief Executive Officer and Chief Development
Officer of MTLM, as an officer of MTLM and any and all of its affiliates and as
a director and management committee
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member of MTLM and any and all of MTLM's affiliates (including his position on
the Executive Committee of the Board of Directors of MTLM) (July 15, 1999 being
sometimes referred to herein as the "Resignation Date").
3. The Obligations of MTLM. On and after Xxxxxxxx' execution of this
Agreement, and in consideration of Xxxxxxxx' promises as set forth herein, MTLM
shall be obligated to him as set forth herein. Except as expressly set forth in
this Agreement (including in Section 1 above), MTLM shall have no continuing
obligation to Xxxxxxxx of any kind or nature whatsoever.
x. Xxxxxxxxx Benefits. MTLM shall afford to Xxxxxxxx all of the
benefits set forth in Paragraph 17 of the Employment Agreement, as if Xxxxxxxx'
employment had been terminated by MTLM pursuant to Paragraph 14(a) of the
Employment Agreement. Such benefits shall be as set forth in such Paragraph 17
as if such Paragraph 17 were set forth fully herein, except that the lump sum
severance payment specified in Paragraph 17(a) of the Employment Agreement shall
be paid within one (1) business day of Xxxxxxxx' execution of this Agreement,
and shall be an amount equal to five (5) times the gross earnings specified in
Xxxxxxxx' 1998 W-2 tax statement, less applicable deductions and withholdings
for federal and state taxes. MTLM shall also pay for Xxxxxxxx' cell phone
service through July 15, 2000.
b. Loan. MTLM shall forgive, effective as of January 2, 2000, the
outstanding five hundred thousand dollar ($500,000) loan to Xxxxxxxx, plus any
accrued interest thereon, which loan is evidenced by a demand note dated July
22, 1998 and which shall not be called due unless Xxxxxxxx does not
substantially comply with the terms of this Agreement, and at that time shall
release the related pledge agreement, provided that as of such date Xx. Xxxxxxxx
has substantially
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complied with the terms of this Agreement; provided, however, that any failure
or alleged failure by Xxxxxxxx to comply with his obligations set forth in the
first sentence of Section 4(c) hereof shall not serve as the basis for any claim
by MTLM that such loan need not be forgiven.
c. Benefit Plans. It is understood and agreed that Xxxxxxxx' continuous
service under MTLM's 401(k) plan and its other benefit plans shall cease as of
his Resignation Date, except as may be set forth in Paragraph 17 of the
Employment Agreement.
d. Legal Fees. MTLM agrees to reimburse Xxxxxxxx in an amount not to
exceed $5,000 for the reasonable fees and disbursements of Xxxxxxxx' counsel
incurred in connection with the negotiation of this agreement, at such counsel's
customary rates.
4. The Obligation of Xxxxxxxx. In consideration of the promises of MTLM
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Xxxxxxxx agrees as
follows:
a. Mutual General Releases. Except for actions which
constitute or are alleged to constitute fraud or similar wrongdoing
and any obligations arising under this Agreement, (i) Xxxxxxxx, for
himself and for his estate, heirs, personal representatives,
executors, administrators and assigns, hereby releases and forever
discharges MTLM, its subsidiaries and related and affiliated
entities, and each of its and their directors, officers, employees,
attorneys, agents and representatives (hereinafter collectively and
individually the "MTLM Releasees"), and (ii) the MTLM Releasees
hereby release and forever discharge Xxxxxxxx, his estate, heirs,
personal representatives, executors, attorneys, successors,
administrators and assigns, from any and all rights, claims,
demands, debts, dues, sums of money,
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accounts, attorneys' fees, complaints, judgments, executions, actions
and causes of action of any nature whatsoever, cognizable at law or
equity, which either party now has or claims, or might hereafter have
or claim, against the other party, whether known or unknown, suspected
or unsuspected, accrued or unaccrued, based upon or arising out of any
matter or thing whatsoever through the date of this release,
including, without limitation, any claim, action or cause of action
which was or is related to or arises out of any acts, omissions,
representations, facts, events, matters, transactions or occurrences
during Xxxxxxxx' employment or directorship with, or his shareholding
in, MTLM, or his separation and/or resignation therefrom, or which is
based upon or arises under the Employment Agreement, the Restated
Stockholders Agreement (as defined below), or any local, state, or
federal law dealing with employment discrimination, including without
limitation Title VII of the Civil Rights Act of 1964 and the Americans
with Disabilities Act.
b. Stockholders' Agreement. Xxxxxxxx hereby releases, waives and
renounces his interest under and pursuant to the Amended and Restated
Stockholders' Agreement dated February 12, 1999 (the "Restated
Stockholders Agreement"). Upon the request of MTLM's Board of
Directors, Xxxxxxxx will execute such further documents as may be
necessary to effectuate the foregoing.
c. Availability. Xxxxxxxx agrees to cooperate reasonably with
MTLM in connection with the transition of his responsibilities.
Xxxxxxxx also agrees to assist in the transition of pending
transactions and/or discussions by making
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introductions to the principals of companies with whom discussions
have begun or with whom the prospect of discussions has been
discussed. Xxxxxxxx further agrees to make himself reasonably
available to MTLM and its attorneys and agents for interview,
deposition and testimony and agrees to appear as a witness at trial
and, at the election of MTLM, provide a sworn statement or deposition
of any matters in which MTLM is a party and/or for which Xxxxxxxx may
have knowledge of any relevant facts. In addition, upon the mutual
agreement of the parties, Xxxxxxxx will consult with MTLM from time to
time concerning acquisitions, potential acquisitions or any other
matter mutually agreed upon by the parties, on such terms, including
compensation, as shall be mutually agreed between Xxxxxxxx and the
Company. MTLM agrees to reimburse Xxxxxxxx for any reasonable,
pre-approved out-of-pocket expenses that he incurs in providing such
assistance and/or consulting, including the cost of travel or lost
compensation. Xxxxxxxx agrees not to withhold any information relevant
to such matters from the Company. Nothing in this Agreement is
intended to influence any such testimony that Xxxxxxxx may offer.
d. MTLM Property. Xxxxxxxx represents that he has turned over or
will turn over to MTLM all property of MTLM in his control or
possession by the Resignation Date, except the property described on
Schedule A hereto which Xxxxxxxx shall be entitled to retain as his
personal possessions. This includes all notes, memoranda, records,
documents and all other information, no matter how produced or
reproduced, all computer equipment and programs, all office keys
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and access cards, and all credit and charge cards kept by Xxxxxxxx
or in his possession or control used in or pertaining to the
business of MTLM, it being hereby acknowledged that all of said
items, and all copies of said items, are the sole and exclusive
property of MTLM. The obligations set forth herein are in addition
to the obligations of Xxxxxxxx pursuant to Paragraph 15 of the
Employment Agreement.
e. Confidentiality of Agreement. Except pursuant to valid
subpoena issued by a court or government agency of competent
jurisdiction, Xxxxxxxx shall not, directly or indirectly, discuss or
communicate the terms of this Agreement with any third party, except
members of his immediate family, his accountant and his attorney who
shall be advised of this confidentiality restriction. Except
pursuant to a valid subpoena, Xxxxxxxx will not communicate or
cooperate with any employee or director or former employee or
director of MTLM, or with any third party, concerning any claim
against MTLM.
5. Non-Disparagement. Form and after the date of presentment
of this Agreement, both parties represent that they have not and
will not, nor will they cause or assist another person to, disparage
or make critical, negative, derogatory or defamatory statements
about the other to any third party (including in the case of MTLM,
its employees), or make any other statement to a third party which
is intended to or would reasonably have the effect of harming the
other party to this Agreement. It is understood that Xxxxxxxx'
commitment hereunder extends to the Company's officers and
directors. MTLM agrees to promptly advise its senior officers and
directors in writing of the foregoing restriction.
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6. Effective Date. This Agreement shall be effective immediately
upon its execution by the parties.
7. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the heirs, assigns, administrators, executors,
and legal representatives of Xxxxxxxx and shall be binding upon and
inure to the benefit of the MTLM Releases.
8. Entire Agreement. This instrument constitutes the entire
Agreement between the parties. It may not be amended or modified
except by a subsequent written instrument signed by all parties
hereto.
9. Severability. If any provision, section, subsection or other
portion of this Agreement shall be determined by any court of
competent jurisdiction to be invalid, illegal or unenforceable in
whole or in part, and such determination shall become final, such
provision or portion shall be deemed to be severed or limited, but
only to the extent required to render the remaining provisions and
portions of this Agreement enforceable. This Agreement as thus amended
shall be enforced so as to give effect to the intention of the parties
insofar as that is possible. In addition, the parties hereby expressly
empower a court of competent jurisdiction to modify any term or
provision of this Agreement to the extent necessary to comply with
existing law and to enforce this Agreement as modified.
10. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Illinois.
11. Counterparts. This Agreement may be signed in multiple
counterparts, each of which shall be deemed to be an original for all
purposes.
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12. Acknowledgment. Xxxxxxxx acknowledges that he has carefully read
and fully understands the terms and provisions of this Settlement Agreement and
General Release, has had the opportunity to be represented in this matter by
counsel of his own choosing, and that his execution of this Settlement Agreement
and General Release is voluntary. The parties agree that the language used in
this Agreement is the language chosen by the parties to express their mutual
intent, and that no rule of strict construction is to be applied to or against
any party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date(s) set forth below.
METAL MANAGEMENT, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxx
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Title: Chairman
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Date: July 21, 1999
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/s/ T. Xxxxxxxx Xxxxxxxx
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T. Xxxxxxxx Xxxxxxxx
Date: July 21, 1999
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