Exhibit 5
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AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
for
METAL MANAGEMENT, INC.
Dated: December 19, 1997
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TABLE OF CONTENTS
ARTICLE I
CORPORATE STRUCTURE AND OPERATION....................................... 2
1.1 Board of Directors................................................. 2
(a) Board Size.................................................... 2
(b) Election of Directors......................................... 2
(c) Removal....................................................... 3
(d) Vacancies..................................................... 3
(e) Selection of Nominees......................................... 3
1.2 Management Provisions.............................................. 4
1.3 Committees......................................................... 5
1.4 Election of Officers............................................... 5
1.5 Agreement to Vote Shares........................................... 5
ARTICLE II
RESTRICTIONS UPON AND OBLIGATIONS WITH
RESPECT TO DISPOSITION OF SHARES.........................................6
2.1 Certain Definitions................................................ 6
2.2 General Restriction; Xxxxx Stockholders and JJ Stockholders........ 6
2.3 General Restriction; Purchaser..................................... 6
2.4 First Refusal Options.............................................. 7
(a) Receipt of Offer.............................................. 7
(b) Order of First Refusal Options................................ 7
(c) Place of Closing.............................................. 9
(d) Date of Closing............................................... 9
(e) Deliveries at Closing......................................... 9
(f) Right to Accept............................................... 9
2.5 Tag Along Rights................................................... 9
2.6 Effect of Giving of Notice.........................................10
2.7 Restrictive Legend on Securities...................................10
2.8 Permitted Transfers................................................10
2.9 Requirements for Transfer..........................................12
2.10 Rights and Obligations of Transferor...............................12
ARTICLE III
GENERAL PROVISIONS......................................................12
3.1 Term of This Agreement.............................................12
3.2 Remedies...........................................................12
3.3 Notices............................................................13
3.4 Legal Fees.........................................................15
3.5 Successors and Assigns.............................................15
3.6 Governing Law......................................................15
3.7 Further Assurances.................................................15
3.8 Counterparts.......................................................15
3.9 Headings...........................................................15
3.10 Entire Agreement...................................................15
3.11 Severability.......................................................15
3.12 Waivers............................................................16
3.13 Gender References..................................................16
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
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THIS AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT ("Agreement"), made and
entered into as of the 19th day of December, 1997, by and among T. Xxxxxxxx
Xxxxxxxx ("TBJ"), Xxxxxx X. Xxxxxx ("GMJ"), Xxxxxx X. Xxxxx ("AAC"), Xxxxx X.
Xxxxx ("FJC"), Xxxxxxx X. Xxxxx ("GPC") and Samstock, L.L.C., a Delaware limited
liability company ("Purchaser")(each a "Stockholder" and collectively the
"Stockholders") and Metal Management, Inc., a Delaware corporation (the
"Corporation").
R E C I T A L S
A. Pursuant to that certain Agreement and Plan of Merger dated May 16,
1997 (the "Merger Agreement") among the Corporation, CIM Acquisition, Co., Xxxxx
Iron & Metal, Inc., AAC, FJC and GPC (AAC, FJC and GPC being sometimes
hereinafter referred to collectively as the "Xxxxx Stockholders"), the Xxxxx
Stockholders received 11,404,748 shares of common stock, $.01 par value per
share, of the Corporation (the "Common Stock").
B. TBJ and GMJ (the "JJ Stockholders") currently own an aggregate of
1,020,000 shares of the Common Stock of the Corporation.
C. The Xxxxx Stockholders and the JJ Stockholders, together with the
Corporation, entered into a Stockholders' Agreement dated as of December 1, 1997
(the "Original Stockholders Agreement").
D. Pursuant to that certain Securities Purchase Agreement (the
"Securities Purchase Agreement") dated as of December 19, 1997, by and between
the Corporation and Purchaser, Purchaser acquired 1,470,588 shares of Common
Stock and a warrant to purchase an additional 600,000 shares of Common Stock
(the shares of Common Stock acquired by Purchaser pursuant to the Securities
Purchase Agreement, including the shares of Common Stock issuable upon exercise
of the warrant, the "Purchaser Shares").
E. The parties to the Original Stockholders' Agreement desire to amend
and restate the Original Stockholders' Agreement in its entirety to, among other
things, include Purchaser as a party to certain provisions of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and provisions
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the original Stockholders'
Agreement is amended and restated in its entirety to read as follows:
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ARTICLE I
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CORPORATE STRUCTURE AND OPERATION
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1.1 Board of Directors.
(a) Board Size. So long as the Purchaser Condition is satisfied, the
Board of Directors of the Corporation shall consist of an odd number of
Directors, which shall be not less than nine (9) nor more than seventeen (17).
At any time at which the Purchaser Condition is not satisfied, the Board of
Directors of the Corporation shall consist of an even number of directors, which
shall be not less than eight (8) nor more than sixteen (16). For purposes of
this Agreement, the "Purchaser Condition" shall be satisfied if both: (i) no
more than three (3) years have elapsed since the Closing Date under the
Securities Purchase Agreement; and (ii) Purchaser and its Permitted Transferees
have not sold or otherwise disposed of more than one-third (1/3) of the
Purchaser Shares.
(b) Election of Directors. At all meetings (and written actions in lieu of
meetings) of stockholders of the Corporation at which directors are to be
elected, each Stockholder shall vote all of such Stockholder's shares of Common
Stock to elect as directors of the Corporation the persons nominated in
accordance with the following provisions:
(i) The JJ Stockholders shall have the right to nominate that number
of persons (each, a "JJ Director") constituting: (A) at any time at which
the total number of Directors of the Corporation is an even number, one-
half (1/2) of such total; or (B) at any time at which the total number of
Directors of the Corporation is an odd number, one-half (1/2) of the next
lowest even number of Directors; provided, that one of such nominees shall
be an Independent Director (as defined below), who shall be reasonably
acceptable to the Xxxxx Stockholders;
(ii) The Xxxxx Stockholders shall have the right to nominate that
number of persons (each, a "Xxxxx Director") constituting: (A) at any time
at which the total number of Directors of the Corporation is an even
number, one-half (1/2) of such total; or (B) at any time at which the total
number of Directors of the Corporation is an odd number, one-half (1/2) of
the next lowest even number of Directors; provided, that one of such
nominees shall be an Independent Director (as defined below), who shall be
reasonably acceptable to the JJ Stockholders; and
(iii) At any time when the Purchaser Condition is satisfied, Purchaser
shall have the right to designate either Xxx Xxxx or Xxx X. Xxxxxxxx as a
nominee (the "Purchaser Director").
For purposes of this Agreement, an "Independent Director" shall mean a director
who is not an employee, officer or director of the Corporation or any of its
subsidiaries or a relative or an Associate of any of the Stockholders.
"Associate" shall have the meaning ascribed to it in Rule 12b-2 of the General
Rules and Regulations of the Securities Exchange Act of 1934, as amended.
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(c) Removal. Each Stockholder agrees to vote such Stockholder's
shares of Common Stock to remove a JJ Director upon request at any time by
the unanimous consent of the JJ Stockholders, to remove a Xxxxx Director
upon request at any time by the holders of a majority of the shares of
Common Stock held by the Xxxxx Stockholders, and to remove the Purchaser
Director upon request at any time by Purchaser; provided, that the
Stockholders making such request shall simultaneously designate a
replacement to fill any vacancy so created, which replacement, if such
replacement is an Independent Director, shall be reasonably acceptable to
the other group.
(d) Vacancies. Each Stockholder agrees to vote such Stockholder's
shares of Common Stock to fill any vacancy on the Board of Directors caused
by the death, disability, resignation or removal of any JJ Director, Xxxxx
Director, or Purchaser Director, with a nominee selected by the JJ
Stockholders, the Xxxxx Stockholders, or the Purchaser, respectively;
provided, that if such nominee is to fill the vacancy of an Independent
Director, such nominee shall be reasonably acceptable to either the JJ
Stockholders or the Xxxxx Stockholders, as applicable; and provided
further, that if such nominee is to fill the vacancy of the Purchaser
Director, such nominee shall be either Xxx Xxxx or Xxx X. Xxxxxxxx.
Notwithstanding any provision of this Agreement to the contrary, if at any
time the Purchaser Condition is not satisfied, Purchaser agrees to cause
the Purchaser Director, if any, to resign effective immediately upon such
failure to satisfy the Purchaser Condition, and the vacancy created by such
resignation shall not be filled.
(e) Selection of Nominees. Any person nominated by the holders of a
majority of the shares of Common Stock held by the Xxxxx Stockholders, as
to the Xxxxx Directors, and by the unanimous approval of the JJ
Stockholders, as to the JJ Directors, shall be deemed to be the nominee of
such group. Each group shall notify the Corporation of its nominees not
less than forty-five (45) days prior to the Corporation's annual meeting,
and not less than forty-five (45) days prior to any special meeting at
which directors are to be elected. Purchaser shall notify the Corporation
of the identity of the nominee for the Purchaser Director (whether Xx. Xxxx
or Xx. Xxxxxxxx) not less than forty-five (45) days prior to the
Corporation's annual meeting, and not less than forty-five (45) days prior
to any special meeting at which Directors are to be elected.
1.2 Management Provisions. Without limiting the actions that may be
required, by applicable law or otherwise, to be approved by the Board of
Directors, the parties expressly agree that, unless approved by a two-thirds
vote of the Board of Directors, neither the Corporation nor any of its
subsidiaries may take or agree to take, and no Stockholder shall cause the
Corporation or any subsidiary to take or agree to take, any of the following
actions:
(i) amend the Certificate of Incorporation or By-laws of the
Corporation;
(ii) wind-up, liquidate, dissolve or reorganize the Corporation
or adopt a plan or proposal contemplating any of the foregoing;
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(iii) approve the annual budget of the Corporation for any
fiscal year or approve any course of action which would cause the
Corporation to materially deviate from its budget;
(iv) elect or remove Officers;
(v) change the level of compensation of or modify or terminate
any written agreement with AAC, FJC, GPC, GMJ or TBJ;
(vi) issue securities of the Corporation including debt or
equity securities, options, rights or warrants, or any other
securities which are convertible into or exchangeable for shares of
Common Stock of the Corporation;
(vii) register any securities of the Corporation;
(viii) borrow funds in excess of $5,000,000 or provide a
guarantee in respect of the obligations of another person or request
any waiver from a lender to the Corporation;
(ix) merge, consolidate or combine the Corporation with any
person or sell substantially all of its assets;
(x) purchase, sell, lease, acquire or dispose of assets valued
at $5,000,000 or more, including acquiring another company, division
or line of business (other than matters provided for in the
Corporation's annual budget approved in accordance with this
Agreement);
(xi) declare or pay any dividends or any other distribution in
respect of any securities of the Corporation or redeem, acquire or
retire any securities of the Corporation;
(xii) make or commit to make during any fiscal year capital
expenditures (other than capital expenditures provided for in the
Corporation's annual budget approved in accordance with this
Agreement) which, in the aggregate, exceed $5,000,000;
(xiii) create any committee of the Board of Directors or change a
committee of the Board of Directors; and
(xiv) make any decision involving a matter referred to in (i)
through (xiii), inclusive, relating to any subsidiary of the
Corporation.
Notwithstanding the foregoing, no further action or approval of the Board of
Directors shall be required for, and the provisions of this Section 1.2 shall
not apply to, the matters set forth on Schedule 1.2, which matters have been
approved by the Board of Directors prior to the date of this Agreement and which
shall be acted upon by the Chairman and Chief Executive Officer of the
Corporation in their sole discretion.
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1.3 Committees. The Board of Directors shall establish and at all times
maintain an Executive Committee consisting of at least the Chairman of the
Board, the President, and the Chief Executive Officer; provided, that in the
event of the death or disability of Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx shall assume
Xxxxxx X. Xxxxx'x position on such Executive Committee. The Board of Directors
shall delegate to the Executive Committee all the power and authority of the
Board of Directors, including those matters set forth in Section 1.2, relating
to the management of the business and affairs of the Corporation to the extent
permitted under Section 141 (c) (i) of the General Corporation Law of the State
of Delaware. Any action to be taken by the Executive Committee shall require the
unanimous consent of Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx and T. Xxxxxxxx Xxxxxxxx.
1.4 Election of Officers. The Stockholders shall cause their designees on
the Board of Directors to elect the following persons to the offices set forth
opposite their names:
(a) Xxxxxx X. Xxxxx President, Chief Operating Officer
(b) Xxxxxx X. Xxxxxx Chief Executive Officer
(c) T. Xxxxxxxx Xxxxxxxx Chairman of the Board and Chief
Development Officer
(d) Xxxxx X. Xxxxx Vice President and President of
Xxxxx Iron & Metal, Inc.
1.5 Agreement to Vote Shares. Each Stockholder shall vote all of his
shares of Common Stock (or such other securities of the Corporation which
entitle such Stockholder to vote on such matters), execute and deliver such
further documents, take such further action and cause his designees on the Board
of Directors to vote in such a manner as may be necessary or desirable to carry
out the purposes and intent of this Agreement, including, without limitation,
any amendments to the Certificate of Incorporation or By-Laws which are required
by law or prudent business practices in order to make the terms of this
Agreement effective and binding on the Corporation and all of its stockholders
or otherwise to effectuate any of the terms, conditions, provisions or purposes
hereof.
ARTICLE II
RESTRICTIONS UPON AND OBLIGATIONS WITH
RESPECT TO DISPOSITION OF SHARES
2.1 Certain Definitions. The term "Corporation Securities" as used herein
shall mean any shares of capital stock of the Corporation at any time owned or
subscribed for by any party hereto, and any subscriptions, options, warrants,
calls, commitments, or rights of any kind whatsoever to purchase or otherwise
acquire any shares of capital stock of the Corporation.
2.2 General Restriction; Xxxxx Stockholders and JJ Stockholders. During
the term of this Agreement, each of the Xxxxx Stockholders and JJ Stockholders
covenants and agrees that such Stockholder will not, directly or indirectly,
voluntarily or involuntarily, sell, assign, transfer, pledge, hypothecate,
encumber or otherwise dispose (each, a "Transfer") of the Corporation Securities
at any time owned by such Stockholder, or any interest therein, except for (i)
Transfers of up to that amount of Corporation Securities that such Stockholder
is permitted (or would be
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permitted) to sell in reliance upon Rule 144 of the Securities Act of 1933, as
amended (the "Securities Act"), as specified in paragraph (c) of such Rule 144,
(ii) Transfers to Permitted Transferees (as hereinafter defined), (iii)
Transfers in accordance with the terms and conditions of the provisions of
Section 2.4 or 2.5, (iv) Transfers of Corporation Securities registered under
the Securities Act, or (v) Transfers between the Escrow Agent (as such term is
defined in that certain Escrow Agreement by and among the Corporation, the JJ
Stockholders, the Xxxxx Stockholders and Chicago Title & Trust Company) and the
Xxxxx Stockholders, JJ Stockholders or the Corporation pursuant to the terms of
the Escrow Agreement. Any attempted Transfer not in accordance with the terms
and conditions of this Agreement shall be void and of no force or effect.
2.3 General Restriction; Purchaser. For a period beginning on the date of
this Agreement and continuing for one year, Purchaser covenants and agrees that
it will not, directly or indirectly, voluntarily or involuntarily, sell, assign,
transfer, pledge, hypothecate, encumber or otherwise dispose (each, a
"Transfer") of the Corporation Securities at any time owned by Purchaser, or any
interest therein, except for (i) Transfers to Permitted Transferees (as
hereinafter defined), (ii) Transfers in accordance with the terms and conditions
of the provisions of Section 2.5 or (iii) Transfers of Corporation Securities
registered under the Securities Act. Any attempted Transfer not in accordance
with the terms and conditions of this Agreement shall be void and of no force or
effect. Notwithstanding anything to the contrary in this Agreement, Purchaser
shall be entitled to pledge or hypothecate any number of Corporation Securities
to any bank or other financial institution in connection with a bona fide
financing transaction involving Purchaser or its affiliates, and neither such
pledge or hypothecation, nor any exercise of rights or remedies pursuant
thereto, shall be subject to any of the provisions of this Agreement, and upon
any realization of such pledge or hypothecation, the pledgee shall take such
Corporation Securities free and clear of this Agreement.
2.4 First Refusal Options.
(a) Receipt of Offer. If at any time after the date hereof any of the
Xxxxx Stockholders and JJ Stockholders shall at any time desire to sell all
or a portion of the Corporation Securities owned by such Stockholder (the
"Offered Corporation Securities"), other than a Transfer of up to that
number of Corporation Securities that such Stockholder is permitted (or
would be permitted) to sell in reliance upon Rule 144 of the Securities Act
pursuant to Section 2.2(i) of this Agreement, a Transfer to a Permitted
Transferee pursuant to Section 2.2 (ii) of this Agreement, or a Transfer of
Corporation Securities registered under the Securities Act, and shall have
received a bona fide written offer for the purchase thereof, with a
proposed closing required within a reasonable time (an "Offer"), which such
Stockholder desires to accept, such Stockholder (the "Selling Stockholder")
shall within five (5) days thereafter transmit executed or true and correct
photostatic copies of the Offer to each of the other Stockholders (the
"Remaining Stockholders") and to the Corporation. For purposes of this
Section 2.4, if any portion of the purchase price for the Offered
Corporation Securities is payable in property other than in cash or a
promissory note (the "Non-Cash Portion") the Non-Cash Portion shall be
valued at its fair market value on the date of the Offer, and shall be
payable by the Remaining Stockholders in cash in accordance with the
payment terms set forth in the Offer. The fair market value of the Non-Cash
Portion shall be mutually
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determined by the Selling Stockholder on the one hand, and the Remaining
Stockholders, on the other. If the two sides cannot agree on the fair market
value of the Non-Cash Portion within a fifteen (15) day period, the two sides
shall mutually select an appraiser to value such property. The option periods
set forth in Section 2.4(b) and (c), and 2.5 shall not begin to run until the
parties have assigned a value to the Non-Cash Portion.
(b) Order of First Refusal Options. All of the Offered Corporation
Securities shall thereupon be subject to the following options to purchase from
the Selling Stockholder at the price and terms set forth in the Offer, in the
following order of priority:
(i) In the event that the Selling Stockholder is a Xxxxx Stockholder,
each of the remaining Xxxxx Stockholders shall have the first option to
purchase any Offered Corporation Securities on a pro rata basis (determined
by reference to the remaining Xxxxx Stockholders only) or in such
proportions as is otherwise agreed upon by the remaining Xxxxx
Stockholders. The remaining Xxxxx Stockholders shall exercise this option
by giving notice to the Corporation and the Selling Stockholder not later
than fifteen (15) days after the giving of the notice of Offer. If the
Xxxxx Stockholders exercise the first options with respect to less than all
of the Offered Corporation Securities or fail to exercise the options
within such fifteen (15) day period, each of the JJ Stockholders shall have
the second option to purchase any remaining Offered Corporation Securities
on a pro rata basis (determined by reference to the JJ Stockholders only)
or in such proportions as is otherwise agreed upon by the remaining JJ
Stockholders. The JJ Stockholders shall exercise their option by giving
notice to the Selling Stockholder and the Corporation not later than
fifteen (15) days after notice from the Xxxxx Stockholders, or if the Xxxxx
Stockholders fail to give notice, fifteen (15) days after the expiration of
the first option period. If the remaining Xxxxx Stockholders and the JJ
Stockholders have in the aggregate exercised their respective options with
respect to less than all of the Offered Corporation Securities, then the
Corporation shall have a third option to purchase any remaining Offered
Corporation Securities. The Corporation shall exercise its option by giving
notice to the Selling Stockholder not later than five (5) days after notice
from the JJ Stockholders, or if the JJ Stockholders fail to give notice,
five (5) days after the expiration of the second option period. If after
the exercise or expiration of the foregoing options there remain any
Offered Corporation Securities for sale, then no Offered Corporation
Securities may be purchased pursuant to such options and such options shall
be deemed to have expired without exercise.
(ii) In the event that the Selling Stockholder is a JJ Stockholder,
each of the remaining JJ Stockholders shall have the first option to
purchase any Offered Corporation Securities on a pro rata basis (determined
by reference to the remaining JJ Stockholders only) or in such proportions
as is otherwise agreed upon by the remaining JJ Stockholders. The remaining
JJ Stockholders shall exercise this option by giving notice to the
Corporation and the Selling Stockholder not later than fifteen (15) days
after the giving of the notice of Offer. If the JJ Stockholders exercise
the first options with respect to less than all of the Offered
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Corporation Securities or fail to exercise the options within such
fifteen (15) day period, each of the Xxxxx Stockholders shall have the
second option to purchase any remaining Offered Corporation Securities
on a pro rata basis (determined by reference to the Xxxxx Stockholders
only) or in such proportions as is otherwise agreed upon by the
remaining Xxxxx Stockholders. The Xxxxx Stockholders shall exercise
their option by giving notice to the Selling Stockholder and the
Corporation not later than fifteen (15) days after notice from the JJ
Stockholders, or if the JJ Stockholders fail to give notice, fifteen
(15) days after the expiration of the first option period. If the
remaining JJ Stockholders and the Xxxxx Stockholders have in the
aggregate exercised their respective options with respect to less than
all of the Offered Corporation Securities, then the Corporation shall
have a third option to purchase any remaining Offered Corporation
Securities. The Corporation shall exercise its option by giving notice
to the Selling Stockholder not later than five (5) days after notice
from the Xxxxx Stockholders, or if the Xxxxx Stockholders fail to give
notice, five (5) days after the expiration of the second option
period. If after the exercise or expiration of the foregoing options
there remain any Offered Corporation Securities for sale, then no
Offered Corporation Securities may be purchased pursuant to such
options and such options shall be deemed to have expired without
exercise.
(c) Place of Closing. Unless otherwise agreed by the parties, all
purchases pursuant to exercise of any options hereunder shall be consummated at
the offices of the Corporation, and the date of Closing shall be as provided in
Section 2.4 (d) below.
(d) Date of Closing. The purchase of Offered Corporation Securities
pursuant to the exercise of one or more of the options provided for in this
Section 2.4 shall be consummated on the date specified in the Offer or sixty
(60) days after the exercise or expiration of the last such option, whichever is
later (an "Option Closing Date").
(e) Deliveries at Closing. The cash portion of the purchase price of
any Corporation Securities purchased hereunder shall be paid on the Option
Closing Date by certified or bank cashier's check or by wire transfer as
designated by the Selling Stockholder. Simultaneously with such payment, the
Selling Stockholder shall deliver to the purchaser a certificate or certificates
representing all of the Corporation Securities so purchased, duly endorsed in
blank, or with separate assignments attached duly executed in blank, in either
case with signatures guaranteed and appropriate tax stamps, if any, affixed, in
form satisfactory to transfer such Corporation Securities to the order of such
purchaser, free and clear of any liens, claims or encumbrances thereon. Each
Selling Stockholder shall furnish to each purchaser such additional evidence and
executed documents as such purchaser may reasonably request to establish that
the transfer of such shares is valid and free and clear of any liens, claims or
encumbrances.
(f) Right to Accept. In the event that the options provided for in
Section 2.4 (b) hereof expire without exercise or the Offered Corporation
Securities are not purchased pursuant to exercise thereof, then within sixty
(60) days after all rights to make such pur chase shall have expired, the
Selling Stockholder, subject to the provisions of Section 2.5, shall have the
right to consummate the sale of all of the Offered Corporation Securities,
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upon terms and conditions no less favorable than those contained in the Offer,
to the offeror thereunder. If for any reason the sale is not consummated within
the period provided for herein, the Selling Stockholder shall not thereafter
dispose of the Offered Corporation Securities unless and until it has again
complied with all of the provisions hereof.
2.5 Tag Along Rights. In addition to the options set forth in Section
2.4, if a Selling Stockholder has given notice of an Offer to sell more than
that number of Corporation Securities that such Stockholder is permitted (or
would be permitted) to sell in reliance upon Rule 144 of the Securities Act
pursuant to Section 2.2(i) of this Agreement to any person other than the
Corporation or a Permitted Transferee (the "Proposed Transferee") other than an
offer of Corporation Securities registered under the Securities Act, the
Remaining Stockholders (which, for purposes of this Section 2.5 only, shall
include Purchaser, so long as the Purchaser and its Permitted Transferees have
not sold or otherwise disposed of more than fifty percent (50%) of the Purchaser
Shares) shall have the right to elect to participate in the contemplated
transaction by delivering a notice to the Selling Stockholder within five (5)
days of the expiration of all of the options set forth in Section 2.4. If any
Remaining Stockholder elects to participate in the proposed sale, he shall have
the right to sell, at the same price and on the same terms as set forth in the
Offer, that number of shares of Corporation Securities equal to the product of
(i) the number obtained by dividing (A) the number of shares of Corporation
Securities owned by such Remaining Stockholder, by (B) the aggregate number of
shares owned by the Selling Stockholder and all Remaining Stockholders electing
to participate in the sale, and (ii) the number of shares of Corporation
Securities to be sold to the Proposed Transferee pursuant to the Offer (the
"Tag-Along Shares"). The Tag-Along Shares shall either (i) be purchased by the
Proposed Transferee in addition to the Selling Stockholder's shares, or (ii) be
purchased by the Proposed Transferee in lieu (and reduction) of the number of
shares being sold by the Selling Stockholder. The Selling Stockholder will use
his best efforts to obtain the agreement of the Proposed Transferee to the
participation of the Remaining Stockholders in such sale. The Selling
Stockholder will be prohibited from transferring any of his shares of
Corporation Securities to the Proposed Transferee if the Proposed Transferee
declines to allow the participation of the Remaining Stockholders electing to
participate.
2.6 Effect of Giving of Notice. The giving of any notice of exercise of
any option to purchase, or to require any other party to sell, any Corporation
Securities shall, subject to revocation of such as herein expressly permitted,
create a binding contract for the sale and purchase of such Corporation
Securities on the Option Closing Date in accordance with the provisions hereof.
2.7 Restrictive Legend on Securities. Each stock certificate or
instrument representing any Corporation Securities shall be endorsed with the
following legend:
"The shares represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Act") or any state securities
law. This Certificate may not be transferred or otherwise disposed of
unless an effective registration statement under the Act and all
applicable state securities laws is then in effect or, in the opinion
of counsel for the Corporation, such registration is not necessary.
The transfer or other
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disposition of the shares represented by this Certificate is also
restricted under the terms of a Stockholders' Agreement dated December
19, 1997 by and among the Corporation, T. Xxxxxxxx Xxxxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxx, and
Samstock, L.L.C., a copy of which is available in the office of the
Corporation."
2.8 Permitted Transfers.
(a) Notwithstanding anything contained in Section 2.2 or 2.3 to the
contrary, a Stockholder may transfer any or all of his Corporation
Securities to a Permitted Transferee, as defined below, subject to the
terms and conditions contained in this Section 2.8.
(b) A "Permitted Transferee" of a Stockholder is hereby defined as
and construed to mean any one or more of the following:
(i) With respect to a Xxxxx Stockholder, to any other Xxxxx
Stockholder;
(ii) With respect to a JJ Stockholder, to any other JJ
Stockholder;
(iii) An executor(s), administrator(s) or conservator(s) of the
Stockholder;
(iv) A beneficiary of a deceased Stockholder's will or trust;
(v) A trustee or trustees of a trust or a beneficiary or
beneficiaries of a trust created by a Stockholder, but only if (A) the
beneficiary or beneficiaries of such trust are one or more of a group
consisting of the Stockholder, the spouse of the Stockholder and the
descendants and/or the adopted children of the Stockholder or the
Stockholder's parents, and (B) the trustee or other person exercising
dominion or control over such trust is a Stockholder or former
Stockholder;
(vi) With respect to Purchaser, any person or entity that
directly or indirectly controls, is controlled by, or is under common
control with, Purchaser; "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through
ownership of voting securities, by contract or otherwise; and
(vii) A Transferee of a Permitted Transferee if the transfer
would have been permissible under the provisions hereof if made by the
Stockholder who originally transferred the Corporation Securities to
the Permitted Transferee.
(c) All Permitted Transferees shall execute an appropriate supplement
to this Agreement pursuant to which the Permitted Transferee agrees to
assume and become subject to all of the rights and obligations hereunder of
the party whose Corporation
10
Securities it has acquired and upon such execution shall be deemed a
Stockholder hereunder; provided, however, that with respect to a Permitted
Transferee under Section 2.8(b)(iii) and (iv), the Permitted Transferee
shall further execute a proxy granting to the Remaining Stockholders of the
deceased Stockholder's group the right to vote the transferred Corporation
Securities with respect to the designation, nomination and/or election of
directors. The proxy shall be in a form acceptable to the Remaining
Stockholders. The Permitted Transferee shall assume and become subject to
all of the rights and obligations hereunder of the Stockholder whose
Corporation Securities it has acquired. Until a Permitted Transferee shall
execute such a supplement to this Agreement, and a proxy, if necessary, the
transfer and conveyance of the Corporation Securities to such Permitted
Transferee shall be void and of no effect and he or she shall not be deemed
a Stockholder hereunder and shall have none of the rights and benefits of a
Stockholder hereunder.
2.9 Requirements for Transfer. Other than Transfers permitted pursuant to
Section 2.2(i), (iii) and (iv) of this Agreement, no Corporation Securities
shall be transferred upon the books of the Corporation, nor shall any sale or
transfer or any other disposition thereof be effective, unless and until (a) all
of the terms and conditions of this Agreement and applicable law have been first
complied with and, with respect to compliance with applicable law, the
Corporation has been provided with an opinion of counsel in form and substance
satisfactory to the Corporation's counsel, and (b) the transferees shall have
executed an agreement in form and substance satisfactory to counsel for the
Corporation to assume and become subject to all of the rights and obligations
hereunder of the party whose Corporation Securities it has acquired, including,
without limitation, the obligation to make payment for any unpaid stock
subscriptions and the obligations and restrictions under Article II hereof with
respect to disposition of the Corporation Securities with the same full force
and effect as if originally a signatory hereto.
2.10 Rights and Obligations of Transferor. Following disposition of all of
his Corporation Securities in compliance with this Agreement, a party hereto
shall have no further rights or obligations hereunder.
ARTICLE III
GENERAL PROVISIONS
3.1 Term of This Agreement. This Agreement shall continue in full force
and effect for a period of ten (10) years unless sooner terminated by the
unanimous consent of the Stockholders. No termination of this Agreement, by
lapse of time or otherwise shall affect any rights or obligations created by
exercise of any option to purchase or sell the Corporation Securities in
accordance with any of the provisions of Article II hereof. In addition, this
Agreement shall continue in full force and effect with respect to Purchaser
until (a) the Purchaser Condition no longer remains satisfied, and (b) Purchaser
and its Permitted Transferees have sold or otherwise disposed of more than fifty
percent (50%) of the Purchaser Shares, and Purchaser agrees to take all actions
which may be reasonably requested by the other parties hereto to amend, restate,
terminate, or modify this Agreement to effect the foregoing.
11
3.2 Remedies. Each of the parties to this Agreement acknowledges that (a)
the rights of the Stockholders concerning the restrictions on the transfer of
the Corporation Securities, and in the management and affairs of the Corporation
are unique, and (b) any failure of any Stockholder to perform any of such
party's obligations under this Agreement will cause irreparable harm for which
any remedies at law would be inadequate. Accordingly, each of the parties
agrees that, in the event of any actual or threatened or attempted failure of
any party to perform any of his obligations hereunder, each of the other parties
shall, in addition to all other remedies, be entitled to a decree for specific
performance of the provisions of this Agreement and to temporary and permanent
injunctions restraining such failure or commanding performance of such
obligations, without being required to show actual damage or to furnish any bond
or other security.
3.3 Notices. All notices required or permitted hereunder shall be in
writing, signed by the party giving notice or an officer thereof, and shall be
deemed to have been given when delivered by personal delivery, by Federal
Express or similar courier service, by facsimile or three (3) days after deposit
in the United States mail, registered or certified, with postage prepaid,
addressed as follows:
(A) If to AAC, FJC or GPC at:
Xxxxx Iron & Metal, Inc.
0000 Xxxxx Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
(B) If to TBJ, at:
00 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
(C) If to GMJ, at:
0000 Xxxxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000
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with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
(D) If to the Corporation, at:
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax: 312) 000-0000
If to Purchaser:
Samstock, L.L.C.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxxxx & Xxxxxxxxxxx, P.C.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
or such other address as any party may designate for himself or itself by
notice given to the other parties from time to time in accordance with the
provisions hereof.
13
3.4 Legal Fees. In the event that any action is filed to enforce any of
the terms, covenants or provisions of this Agreement, the prevailing party in
such action shall be entitled to payment from the other party of all costs and
expenses, including reasonable attorney fees, court costs and ancillary expenses
incurred by such prevailing party in connection with such action.
3.5 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
personal representatives, successors and assigns.
3.6 Governing Law. This Agreement shall be controlled, construed and
enforced in accordance with the substantive laws of the United States and the
State of Illinois, notwithstand ing any conflict of law principles.
3.7 Further Assurances. Each party agrees to cooperate with the others,
and to execute and deliver, or cause to be executed and delivered, all such
other instruments, and to take all such other actions as he may be reasonably
required to take, from time to time, in order to effect the provisions and
purposes hereof.
3.8 Counterparts. This Agreement may be executed in any one or more
counterparts, each of which shall constitute an original, no other counterpart
needing to be produced and all of which, when taken together, shall constitute
but one and the same instrument.
3.9 Headings. The headings of Articles and subdivisions herein are merely
for convenience of reference and shall not affect the interpretation of any of
the provisions hereof.
3.10 Entire Agreement. This Agreement and the Merger Agreement contain the
entire understanding among the parties with respect to the subject matter of
this Agreement. Any modification hereof may be made only by an instrument in
writing signed by all of the parties hereto, except that Purchaser expressly
acknowledges that any modification to this Agreement made after the Purchaser
Condition is no longer satisfied need not be signed by Purchaser.
3.11 Severability. Whenever possible, each provision of this Agreement
shall be construed and interpreted in such a manner as to be effective and valid
under applicable law. If any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition without invalidating the remainder of such provision or any other
provision of this Agreement or the application of such provision to other
parties or circumstances.
3.12 Waivers. No delay on the part of any party in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by any party or any remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy.
3.13 Gender References. Whenever appropriate, the singular form of a word
shall be interpreted in the plural and vice versa. All words and phrases shall
be construed as masculine, feminine or neuter gender, according to the context.
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
METAL MANAGEMENT, INC.,
a Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
--------------------------------------------
T. Xxxxxxxx Xxxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
SAMSTOCK, L.L.C.,
a Delaware limited liability company
By: SZ Investments, L.L.C.,
its managing member
By: Xxxx General Partnership, Inc.,
its managing member
By: /s/ Xxx Xxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxx
---------------------------------
Title: Vice-President
--------------------------------
322233-3
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SCHEDULE 1.2
------------
1. The board of directors of MTLM has authorized the Chairman and the CEO of
MTLM to negotiate an arrangement with Xxxxxx Xxxxxxxxx whereby Xxxxxx
Xxxxxxxxx would become Vice-Chairman of MTLM and Xxxxxx Xxxxxxxxx and/or
his designees would receive a package of 150,000 warrants to purchase
common stock of MTLM in connection therewith.
2. The board of directors of MTLM has authorized the Chairman and the CEO of
MTLM to negotiate and grant 30,000 warrants to purchase shares of common
stock of MTLM to Xxx Xxxxxxx, 25,000 warrants and 15,000 options to
purchase shares of common stock of MTLM to Xxxxxx Xxxxxxxxxx, and 25,000
options to purchase shares of common stock of MTLM to Xxxxxx Xxxxx.
Additionally, the board of directors authorized the Chairman and CEO to
issue options to purchase 20,000 shares of common stock to employees of the
Company that are not officers or directors.
3. The board of directors of MTLM has authorized the Chairman and the CEO of
MTLM to negotiate and grant increases in the compensation of Xxxxxx
Xxxxxxxxxx and Xxxxxx Xxxxx. The adjustment to annual compensation for Mr.
Xxxxx and Xx. Xxxxxxxxxx increased their annual base pay to $135,000 and
$100,000 respectively.
4. The Compensation Committee approved increases in annual base salary for Xx.
Xxxxxx and Xx. Xxxxxxxx effective from and after June 1, 1997. Xx.
Xxxxxxxx' adjusted annual salary is equal to the amount of $275,000 and Xx.
Xxxxxx' adjusted annual salary is equal to the amount of $287,000. In
addition, Xx. Xxxxxxxx receives a travel allowance equal to $12,000 per
year.
5. The board of directors of MTLM has authorized the Chairman and CEO to grant
bonuses for Xx. Xxxxxxxx, Xx. Xxxxxx, and Mr. Xxxxx. On July 31, 1997, Xx.
Xxxxxx and Xx. Xxxxxxxx each received a bonus in the amount of $50,000. On
July 15, 1997, Mr. Xxxxx received a bonus in the amount of $25,000.
6. The Company plans to pay aggregate bonuses to Xx. Xxxxxxxxxx in an amount
equal to $102,332.
7. MTLM plans to issue 50,000 warrants to purchase common stock of MTLM to a
financial advisor of MTLM on terms and conditions being negotiated by the
Chairman and the CEO of MTLM.
8. MTLM plans to issues 70,000 warrants to purchase common stock of MTLM to a
governmental affairs advisor of MTLM on terms and conditions being
negotiated by the Chairman and CEO of MTLM.
9. The board of directors of MTLM has authorized the Chairman and the CEO to
negotiate certain agreements with Xxxxxx Xxxxxxxxx as more fully described
in MTLM's definitive Proxy Statement dated November 20, 1997.
16
