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Exhibit 10.1
Stock Warrant Settlement Agreement
This Stock Warrant Settlement Agreement ("Agreement") is entered into with
the effective date of November 7, 1997, by and among METAL MANAGEMENT, INC., a
Delaware corporation ("MTLM"), EMCO RECYCLING CORP., MTLM's wholly owned
subsidiary ("EMCO"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇▇▇▇").
RECITALS
A. On April 11, 1996, MTLM, then operating under the corporate name of
GENERAL PARAMETRICS CORPORATION ("GPC"), and ▇▇. ▇▇▇▇▇▇▇▇▇ entered into an
Employment Agreement ("Employment Agreement") whereby GPC employed ▇▇.
▇▇▇▇▇▇▇▇▇ to serve as Executive Vice President of GPC and President of EMCO.
B. Section 2(b) of the Employment Agreement states that ▇▇. ▇▇▇▇▇▇▇▇▇
shall be entitled to participate in certain compensation plans.
C. MTLM has stated its intention to issue stock warrants to certain of its
executive officers without issuing ▇▇. ▇▇▇▇▇▇▇▇▇ any stock warrants and/or
options at the time.
D. ▇▇. ▇▇▇▇▇▇▇▇▇ claims that, pursuant to Section 2(b) of the Employment
Agreement, he is entitled to have stock warrants issued to him as a part of his
Employment Agreement rights ("Warrants") and that MTLM's failure to issue such
Warrants to him constitutes a breach of the Employment Agreement.
E. MTLM denies that its failure to issue Warrants to ▇▇. ▇▇▇▇▇▇▇▇▇
constitutes a breach of the Employment Agreement.
F. The parties wish to settle their dispute regarding ▇▇. ▇▇▇▇▇▇▇▇▇'▇
entitlement to the Warrants under the Employment Agreement as set forth in this
Agreement.
G. In consequence of their dispute regarding the Warrants, the parties
have further engaged in negotiations regarding the consensual termination of
their employment relationship.
COVENANTS
In consideration of the foregoing Recitals and the mutual promises and
provisions contained in this Agreement, as well as other consideration, receipt
of which is herewith confirmed, the parties agree as follows:
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1. In full and complete satisfaction of ▇▇. ▇▇▇▇▇▇▇▇▇'▇ claims to receive
Warrants under Section 2(b) of the Employment Agreement, ▇▇. ▇▇▇▇▇▇▇▇▇ shall
receive the following:
(a) Warrants ("Settlement Warrants"), subject to paragraph 3 below,
to purchase 200,000 shares of MTLM common stock at TWELVE DOLLARS ($12)
per share, exercisable for a period of five (5) years from the Issuance Date
(as defined below). These Settlement Warrants shall be vested on the Issuance
Date and shall not be transferable, except upon death.
(b) A payment of $207,500, subject to all applicable taxes, if any,
by December 31, 1997, or the Issuance Date as defined in paragraph 3 below,
whichever is later.
(c) A payment of $457,500, subject to all applicable taxes, if any, by
April 15, 1998, or the Issuance Date as defined in paragraph 3 below, whichever
is later.
2. ▇▇. ▇▇▇▇▇▇▇▇▇ shall have the continuing right to "net exercise" (i.e.,
cashless exercise) the Settlement Warrants; provided, however, that MTLM may
refuse to "net exercise" any of the Settlement Warrants 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 Settlement
Warrants because of Restrictions, ▇▇. ▇▇▇▇▇▇▇▇▇ may again request the "net
exercise" of the Settlement Warrants at such later time as he shall select
subject to the above refusal rights of MTLM during periods which Restrictions
exist.
3. The executed Settlement Warrants and the payments due pursuant to
paragraphs 1(b) and 1(c) above shall be delivered to ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇. who shall hold such on behalf of MTLM. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. shall
deliver the Settlement Warrants to ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ on the date (the
"Issuance Date") which is the earlier of: (i) the date on which T. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ enter into new employment agreements as 9 below;
or (ii) the date on which T. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ receive a
substantial warrant package which, in the sole and absolute discretion of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., is intended by the Board of Directors of MTLM to be
provided to T. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in lieu of such new
employment agreements. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. is hereby authorized to
insert the Issuance Date in the Settlement Warrants. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇. shall deliver the payments due pursuant to paragraphs 1(b) and 1(c) above
to ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ on the dates as provided in paragraphs 1(b) and
1(c) above.
4. ▇▇. ▇▇▇▇▇▇▇▇▇ hereby releases and forever discharges 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 this
Agreement with regard to ▇▇. ▇▇▇▇▇▇▇▇▇'▇ claims under Section 2(b) of the
Employment Agreement and his
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claims of MTLM's breach of the Employment Agreement due to MTLM's failure
to issue Warrants under Section 2(b) of the Employment Agreement (other than
the obligations undertaken by MTLM and/or EMCO in this Agreement), including
but not limited to any claims, liabilities, debts, contracts, covenants,
actions or causes of action arising out of or in connection with Section 2(b)
of the Employment Agreement.
5. MTLM and EMCO, their officers, directors, employees, agents,
affiliates, successors and assigns, hereby release and forever discharge ▇▇.
▇▇▇▇▇▇▇▇▇ from any and all claims, liabilities, debts, contracts, covenants,
actions or causes of action arising on or before the date of this Agreement
under Section 2(b) of the Employment Agreement and his claims of MTLM's breach
of the Employment Agreement due to MTLM's failure to issue Warrants under
Section 2(b) of the Employment Agreement (other than the obligations undertaken
by ▇▇. ▇▇▇▇▇▇▇▇▇ to in this Agreement), including but not limited to any
claims, liabilities, debts, contracts, covenants, actions or causes of action
arising out of or in connection with Section 2(b) of the Employment Agreement.
6. The parties agree that this Agreement is not to be construed as an
admission, by either, of any wrongdoing or liability by any party.
7. MTLM shall make such disclosure of the terms and conditions of this
Agreement as is deemed necessary by MTLM's securities counsel. ▇▇. ▇▇▇▇▇▇▇▇▇
will have a reasonable opportunity to provide comments to MTLM about any such
disclosure, but no right to approve or restrain any such disclosure.
8. ▇▇. ▇▇▇▇▇▇▇▇▇ agrees to refrain from making any press release, any
other public disclosure or any statements, disparaging or otherwise, regarding
this Agreement, MTLM, EMCO or any other affiliates, without the express prior
written consent of MTLM except as may be required by law.
9. ▇▇. ▇▇▇▇▇▇▇▇▇ acknowledges that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and T. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ will terminate their existing employment agreements 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. ▇▇. ▇▇▇▇▇▇▇▇▇ further
acknowledges that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. may also receive significant
warrants and/or options to acquire MTLM common stock in recognition for his
role as Vice-Chairman of MTLM.
10. MTLM shall pay all reasonable legal fees and expenses incurred by ▇▇.
▇▇▇▇▇▇▇▇▇ 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 Agreement. MTLM
authorizes ▇▇. ▇▇▇▇▇▇▇▇▇ to release the $9,000 EMCO retainer check to ▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ for this matter upon execution of this Letter Agreement.
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11. Each party executing this Agreement warrants to the other that they
have the full power and authority to enter into this Agreement and to bind the
applicable party thereto and that each party has been represented and advised
by his or its own legal counsel.
12. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., shall not be responsible or liable to any
person or entity, whether or not a party to this Agreement, for any act or
omission of any kind so long as he has acted in good faith pursuant to the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have set their names as of the date set
forth below.
METAL MANAGEMENT, INC. EMCO RECYCLING CORP.
By: By:
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Its: President Its:
Dated: November ___, 1997 Dated: November ___, 1997
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Dated: November ___, 1997
I hereby agree to act on behalf of MTLM in accordance with terms and
provisions of this Agreement.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Dated: November ___, 1997
