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EXHIBIT 10.2
November 7, 1997
Xx. Xxxxxx X. Xxxxxxxxx
0000 Xxxx XxXxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
RE: SEPARATION AGREEMENT
Dear Xx. Xxxxxxxxx:
This letter (the "Letter Agreement") will confirm our understanding with
respect to your separation, in each and every capacity, from Metal Management,
Inc. ("MTLM") and its wholly-owned subsidiary, EMCO Recycling Corporation
("EMCO"). We each acknowledge that this Letter Agreement is intended to
resolve all matters between you, MTLM and EMCO. This letter Agreement is not
an admission of fault or liability on your part, or on the part of MTLM and/or
EMCO. Subject to each party's continuing to comply with the terms of this
Letter Agreement, you, MTLM and EMCO agree as follows:
1. Effective immediately, you will allow MTLM to make any and all changes
to the business and operations of EMCO that MTLM, in its sole discretion, deems
appropriate. You will not be asked to implement any such changes. You will
not have any mandatory office hours or duties between the date of this Letter
Agreement and the date of your resignation. Your present duties will be
delegated by MTLM to other parties.
2. Contingent upon the closing of the merger of CIM Acquisition Co., an
Illinois corporation and a wholly-owned subsidiary of MTLM, with Xxxxx Iron &
Metal, Inc. (the "Xxxxx Merger"), the following actions shall occur:
(a) You acknowledge that you have not been nominated for re-election
to the board of directors of MTLM at the upcoming annual meeting of
stockholders of MTLM. MTLM, however, will reimburse you for your
reasonable
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expenses of attending such annual meeting. Also, effective
upon the closing of the Xxxxx Merger, you hereby resign from the board of
directors of EMCO and as an officer and employee of EMCO and MTLM.
(b) Upon closing of the Xxxxx Merger you will receive a payment of
$250,000, subject to all applicable taxes, as a termination payment;
(c) You shall have the continuing right to "net exercise" (i.e.,
cashless exercise) the MTLM options and/or warrants previously granted to
you; provided, however, that MTLM may refuse to "net exercise" any
warrants and/or options due to restrictions imposed by the rules and
regulations of the Securities Exchange Commission or the national
securities exchange upon which the stock of MTLM is then traded
("Restrictions"). In the event MTLM is unable to "net exercise" the
warrants and/or options because of Restrictions, you may again request
the "net exercise" of the warrants and/or options at such later times as
you shall select subject to the above refusal rights of MTLM during
periods which Restrictions exist.
(d) You will additionally receive the following fringe benefits for
a period of five (5) years from the date of this Letter Agreement,
subject, however, to off-set or elimination if the same or similar fringe
benefits are provided by another employer during such five (5) year
period:
(i) Medical Insurance consistent with that received by MTLM
Executive Committee members;
(ii) Dental Insurance consistent with that received by any
MTLM Executive Committee members (if any is provided);
(iii) $1,000-per-month car allowance, plus reimbursement for
reasonable gasoline, oil, repair and maintenance expanses; and
(iv) Reasonable reimbursement for your home office, home
office fax line, and cellular phone.
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(e) You will receive the following fringe benefits for twenty-four
(24) months from the date of this Letter Agreement subject to offset or
elimination if the same or similar benefits are provided by another
employer during such twenty-four (24) month period:
(i) Whole life insurance in the amount of $750,000 to be
owned by you with all such beneficiary designations subject to
your control;
(ii) Term life insurance in the amount of $750,000 to be
owned by you with all such beneficiary designations subject to
your control;
(f) Title to the furniture in your office at 3700 West Lower Buckeye
Road, Phoenix, Arizona, and title to your home office phone, home office
fax machine, and home office computer.
(i) You acknowledge that the consideration you are receiving
pursuant to this Letter Agreement is in addition to that to which
you might otherwise be entitled.
4. Simultaneous with the closing of the Xxxxx Merger, you will deliver to
MTLM a fully-executed original of the Non-Compete, Non-Solicitation and
Confidentiality Covenant and Agreement attached hereto as Exhibit A. The terms
and provisions of the Non-Compete, Non-Solicitation and Confidentiality
Covenant and Agreement are incorporated herein by reference as though fully set
forth herein.
5. MTLM shall make such disclosure of the terms and conditions of this
Letter Agreement as is deemed necessary by MTLM's securities counsel. You will
have a reasonable opportunity to provide comments to MTLM about any such
disclosure, but no right to approve or restrain any such disclosure.
6. You agree to refrain from making any press release, any other public
disclosure or any statements, disparaging or otherwise, regarding this Letter
Agreement, MTLM, EMCO or any of their affiliates, without the express prior
written consent of MTLM except as may be required by law.
7. You acknowledge that on or about the closing of the Xxxxx Merger,
Xxxxxx X. Xxxxxx and T. Xxxxxxxx Xxxxxxxx will terminate their existing
employment agreements
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with MTLM, and will enter into new employment agreements with MTLM, and that as
an inducement to enter into such new employment agreements they will receive
significant warrants and/or options to acquire MTLM common stock. You further
acknowledge that Xxxxxx X. Xxxxxxxxx, Xx. may also receive significant warrants
and/or options to acquire MTLM common stock in recognition for his role as
Vice-Chairman of MTLM.
8. Effective immediately upon the closing of the Xxxxx Merger set forth in
paragraph 2 above, and payment of the obligation required by sub-paragraph 2(b)
above, your employment agreement (the "Employment Agreement") dated April 11,
1996, by and between General Parametric Corporation (n/k/a MTLM) and you shall
terminate and shall thereafter be of no force or effect and neither party shall
have any further or continuing obligations thereunder except for the
obligations of indemnity to you contractually provided, if any, and as
otherwise are provided by MTLM or EMCO currently pursuant to its Articles of
Incorporation, Bylaws and policies adopted by the Board of Directors or statute
to officers and directors of MTLM and/or EMCO.
9. You hereby release and forever discharge MTLM and EMCO, their officers,
directors, shareholders, employees, agents, affiliates, and successors and
assigns, from any and all claims, liabilities, debts, contracts, covenants,
actions or causes of action arising on or before the date of execution of this
Letter Agreement (other than the obligations undertaken by MTLM and /or EMCO in
this Letter Agreement), including but not limited to any claims, liabilities,
debts, contracts, covenants. actions or causes of action arising out of or in
connection with your Employment Agreement, any claim you may have under the Age
Discrimination in Employment Act of 1967, as amended, your employment
relationship with MTLM or your position as an officer and/or director of EMCO
and/or MTLM.
10. MTLM and EMCO, their officers, directors, employees, agents,
affiliates, successors and assigns, hereby release and forever discharge you
from any and all claims, liabilities, debts, contracts, covenants, actions or
causes of action arising on or before the date of execution of this Letter
Agreement (other than the obligations undertaken by you in this Letter
Agreement).
11. Each party executing this Letter Agreement warrants to the other that
they have the full power and authority to enter into this Letter Agreement and
to bind the applicable party thereto and that each party has been represented
and advised by his or its own legal counsel.
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12. MTLM shall pay all reasonable legal fees and expenses incurred by you
with respect to the preparation, analysis and negotiation of this matter and
shall pay all such reasonable fees and expenses, if any, incurred in the
enforcement of any right or benefit provided by this Letter Agreement. MTLM
authorizes Xx. Xxxxxxxxx to release the $9,000 EMCO retainer check to Xxxxx,
Xxxxxxx & Xxxxxxx for this matter upon execution of this Letter Agreement.
13. If you choose, you have up to twenty-one (21) days to consider whether
to sign this Letter Agreement and seven (7) days after signing the Letter
Agreement to revoke your acceptance. Any such revocation must be in writing
and delivered to MTLM in care of T. Xxxxxxxx Xxxxxxxx.
14. MTLM shall deliver to Xxxxxx X. Xxxxxxxxx, Xx., the signed checks
which make up the payment described in paragraph 2(b) above to be held by
Xxxxxx X. Xxxxxxxxx, Xx., on behalf of MTLM and to be distributed by him
pursuant to the terms of this Letter Agreement.
15. Xxxxxx X. Xxxxxxxxx, Xx., shall not be responsible or liable to any
person or entity, whether or not a party to this Letter Agreement, for any act
or omission of any kind so long as he has acted in good faith pursuant to the
provisions of this Letter Agreement.
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This Letter Agreement sets forth all the terms of your separation from
MTLM and EMCO. Each party expressly acknowledges, by executing below, that the
obligations of the non-defaulting party shall terminate in the event a party
breaches his or its obligations under this Letter Agreement or the Non-Compete,
Non-Solicitation and Confidentiality Covenant and Agreement.
Very truly yours,
METAL MANAGEMENT, INC.
By:
Xxxxxx X. Xxxxxx, President
EMCO RECYCLING CORPORATION
By:
Its:
The undersigned has accepted and discussed with his legal counsel and
executed this Letter Agreement intending to be legally bound as of the day and
year first above written.
Xxxxxx X. Xxxxxxxxx
The undersigned hereby agrees to act on behalf of MTLM in accordance with
terms and provisions of this Agreement.
Xxxxxx X. Xxxxxxxxx, Xx.
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