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EXHIBIT 10.10
June 7, 2001
Xxxxx Xxxxx
c/o Metal Management, Inc.
000 X. Xxxxxxxx Xx., Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Re: Employment Agreement
Dear Xxxxx:
As you may know, pursuant to the plan of reorganization of Metal
Management, Inc. and its subsidiaries ("MTLM") which will allow MTLM to emerge
from bankruptcy protection, the committee of noteholders with whom MTLM
negotiated its plan of reorganization (the "Noteholders") and the unsecured
creditors' committee appointed in MTLM's case (the "Unsecured Creditors'
Committee") has the right to approve the assumption by MTLM of all executory
contracts, including employment contracts.
As a condition to granting this approval for the assumption of
employment contracts, the Noteholders and the Unsecured Creditors' Committee
have established certain limitations on the maximum severance benefits that
would be payable by MTLM in the event of a termination of each employment
contract (i.e.: when the termination is other than "for cause"). I, myself, have
been required to substantially reduce the severance benefit to which I would be
entitled if I am terminated without cause. While agreeing to this limitation was
very difficult for me personally, I understand that the Noteholders, as the new
owners of MTLM, are concerned with the potential costs of terminating employment
contracts, if needed, to respond to future business conditions.
In your particular case, the Noteholders and Unsecured Creditors'
Committee have agreed that the severance benefit payable to you upon termination
without cause should not exceed two years of salary initially, amortizing (on a
straight line basis) down to one year of salary by the end of the first
anniversary of our exit from bankruptcy. Accordingly, I propose to amend your
employment contract to reduce the severance benefit payable to you in the event
of your termination, other than for cause, to the maximum amount approved by the
Noteholders and the Unsecured Creditors' Committee, which severance benefit
would otherwise be calculated in a manner consistent with your existing
contract. Except for that modification, your employment contract would remain in
full force and effect following our emergence from bankruptcy.
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Should you choose not to accept the proposed modification to your
contract set forth above, MTLM will be required to reject your employment
contract (thereby terminating the agreement). In that case, you will become an
at-will employee of MTLM. While I recognize that the proposed amendment is a
change from the agreement reached with you in prior negotiations, the
circumstances in which we currently find ourselves differ substantially from the
conditions in existence during the early days of the industry consolidation. I
hope you understand and can accept this reality.
Please indicate your acceptance of the proposed amendment to your
employment contract by signing the enclosed duplicate of this letter in the
space provided below. Please do not hesitate to contact me if you have any
questions.
Sincerely,
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
ACCEPTED:
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
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June 13, 2001
Xxxxx Xxxxx
c/o Metal Management, Inc.
000 X. Xxxxxxxx Xx., Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Re: Employment Agreement
Dear Xxxxx:
Per our discussion, this letter confirms that, in consideration for
your agreeing to the reduced severance period in your employment contract as
proposed in the letter, dated June 7, 2001 from Xxxxxx Xxxxx to you, the
post-employment non-competition period set forth in your employment contract
will be reduced commensurately with the reduced severance period in the event of
a termination without cause. In your particular case, this means that the term
during which you would be precluded from competing with Metal Management, Inc.
following termination without cause would be reduced initially to two years,
amortizing (on a straight line basis) down to one year by the end of the first
anniversary of our exit from bankruptcy (assuming you agree to the lesser
severance period).
Sincerely,
/s/ Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
