Execution Copy
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (
“Agreement” ), is made and entered into as of
July 26, 2007, by and between Daniel W. Dienst (
“Executive” ) and Metal Management, Inc., a
Delaware corporation ( “MTLM” ).
NOW, THEREFORE, in consideration of
the premises, promises, mutual covenants and mutual agreements
contained herein, Executive and MTLM hereby agree as follows:
1. Employment .
(a) On the terms and subject to the
conditions set forth in this Agreement, MTLM employs Executive as
its President and Chief Executive Officer to perform such duties
and responsibilities as are consistent with such position and such
other positions as may be assigned to Executive, from time to time,
by the Board of Directors of MTLM (the “Board”
). As of the Commencement Date (as defined below), Executive is a
member of the Board and has been elected to serve as Chairman of
the Board. During the Employment Period (as defined below), MTLM
shall use best efforts to see that Executive while employed under
this Agreement continues to be nominated and elected to serve on
the Board. For as long as Executive is so employed, he shall devote
his full business time, energy and ability to his duties, except
for reasonably necessary attention to the management of his
personal affairs. If Executive is Chairman of the Board and/or a
director when his employment terminates under this Agreement,
whether pursuant to Section 6 or 7 of this Agreement, he shall
tender his resignation as Chairman and/or director effective as of
the Termination Date (as defined below) if so requested by the
Board.
(b) Executive’s worksites
during the Employment Period (as defined below) shall be 325 North
LaSalle Street, Suite 550, Chicago, Illinois 60610 and 127
East 69th Street, New York, New York 10021 or such other locations
as may be mutually agreed upon by MTLM and Executive, with
Executive’s time allocated between such sites as shall be
reasonably determined to be necessary and appropriate by Executive
to fulfill Executive’s duties and responsibilities and
exercise Executive’s powers under the terms of this
Agreement.
(c) Executive shall have the right to
continue to serve on the board of directors of those business,
civic and charitable organizations on which Executive is now
serving as of the date of this Agreement, and that are set forth on
Exhibit A attached hereto, as long as doing so has no
significant adverse affect on the performance of Executive’s
duties and responsibilities or the exercise of Executive’s
powers under this Agreement. Executive shall not serve on any other
boards of directors and shall not provide services (whether as an
employee or
independent
contractor) to any for-profit organization on or after the date of
this Agreement without the prior consent of the Board (which shall
not be unreasonably withheld in light of Executive’s duties
and responsibilities under this Agreement).
2. Term . The term of
employment under this Agreement shall commence on August 1,
2007 (the “Commencement Date” ) and shall
continue through, and end as of the close of business on
March 31, 2012 (the “Employment Period” );
provided, however, that on March 31, 2012 and each anniversary
thereof, the Employment Period shall be extended for an additional
year unless either MTLM or Executive, as the case may be, notifies
the other not less than 90 days prior to the end of the then
current Employment Period of its or his desire not to extend the
Employment Period; provided further that the Employment Period may
terminate sooner upon the occurrence of certain events as described
in Sections 5, 6, 7, 8 and 9 of this Agreement. The date on
which Executive’s employment is terminated shall be referred
to herein as the “Termination Date”.
3. Compensation .
(a) Base Compensation. The
base compensation to be paid to Executive for his services under
this Agreement shall be not less than $950,000 per year (
“Base Compensation” ), subject to applicable
withholdings, payable in equal periodic installments in accordance
with the usual payroll practices of MTLM, but no less frequently
than monthly, commencing on the Commencement Date.
Executive’s base compensation shall be subject to annual
review for cost of living and merit factors, with any adjustments
determined by the compensation committee of the Board.
Notwithstanding anything herein to the contrary, Base Compensation
may be reduced below $950,000 per year if such reduction is in the
same proportion as a reduction generally affecting other executive
officers of MTLM.
(b) Annual Bonus. For the
fiscal year ending March 31, 2008, and for each subsequent
fiscal year ending March 31 during the Employment Period,
Executive’s target annual bonus shall be not less than 100%
of Base Compensation (subject to applicable withholdings) (
“Target Bonus” ), and Executive’s maximum
bonus (as a percentage of Base Compensation) shall be not less than
that in effect under MTLM’s annual bonus program on the
Commencement Date ( “Maximum Bonus” ). Executive
shall be eligible to receive an annual bonus in accordance with the
terms of MTLM’s annual bonus program as then in effect for
MTLM’s senior executives as such program is modified by this
Section 3(b); provided, however, the compensation committee of
the Board may direct MTLM to pay Executive an annual bonus that
exceeds the annual bonus otherwise payable under such program.
Notwithstanding anything contained herein to the contrary,
Executive’s Target Bonus may be reduced below 100% of Base
Compensation if such reduction is in the same proportion as a
reduction affecting other executive officers of MTLM. Each annual
bonus
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described in
this Section 3(b) shall be paid at the time called for under
MTLM’s annual bonus program for senior executives.
(c) Annual Restricted Stock
Grant. For the fiscal year ending March 31, 2008 and for
each subsequent fiscal year ending March 31 during the
Employment period, Executive may, at the discretion of the
Compensation Committee of the Board, be granted a number of shares
of common stock, $0.01 par value per share (the “MTLM
Stock” ) pursuant to the terms of the Amended and
Restated Metal Management, Inc. 2002 Incentive Stock Plan or any
successor plan (the “Plan” ). All terms and
conditions to such grant shall be set forth for Executive in a
certificate in accordance with the terms of the Plan, including
that that all shares shall become non-forfeitable upon a Triggering
Event (as defined below); in addition to the foregoing, however,
such certificate shall provide that all shares shall become
non-forfeitable upon termination of Executive’s employment if
MTLM notifies Executive that it will not extend the Employment
Period as provided under Section 2 of this Agreement.
(d) Special Restricted Stock
Grant. Upon execution and delivery of the this Agreement by
MTLM and Executive, Executive shall be granted 196,532 MTLM Shares
pursuant to the Plan. Notwithstanding any provision in the Plan,
Executive’s interest in 117,920 shares shall become
non-forfeitable on July 26, 2010 provided Executive is still
employed by MTLM on such date, and his interest in an additional
39,306 shares shall become non-forfeitable on each of the next two
subsequent anniversaries of such date provided Executive is still
employed by MTLM on such anniversary date. All terms and conditions
to such grant shall be set forth for Executive in a certificate in
accordance with the terms of the Plan; provided, however, that such
certificate shall provide that all shares shall become
non-forfeitable upon (i) a Triggering Event or
(ii) termination of Executive’s employment if MTLM
notifies Executive that it will not extend the Employment Period as
provided under Section 2 of this Agreement, and such
certificate shall include a waiver signed by Executive with respect
to the provisions of Section 15 of the Plan that provide that
such shares would become non-forfeitable solely upon such Change of
Control (as defined in the Plan).
4. Fringe Benefits .
MTLM shall furnish Executive with accident, health and life
insurance ( “Welfare Benefits” ) and
reimbursement of all documented reasonable and necessary
out-of-pocket expenses incurred by Executive on behalf of MTLM by
reason of the performance of Executive’s duties and
responsibilities hereunder. Further, MTLM shall furnish Executive
with all of the additional fringe benefits made generally available
by MTLM to its executive officers recognizing that such fringe
benefits may be changed from time to time provided Executive shall
be deemed immediately eligible for any such fringe benefits to the
extent permissible under the terms of applicable law and the terms
of the underlying plans, programs and policies. Executive shall be
entitled to take five weeks of paid vacation per calendar year, and
shall be paid on all national and state holidays, during the
Employment Period. Vacation allowances shall not be cumulative from
year to year. MTLM shall include Executive as a covered person
under MTLM’s directors and officers’ insurance policy.
MTLM shall furnish Executive with appropriate
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office
space (as set forth in Section 1(b) of this Agreement), equipment,
supplies, and such other facilities and personnel as necessary or
appropriate (de minimis use thereof by Executive for personal
reasons shall not be deemed a breach of this Agreement). MTLM shall
pay Executive’s dues in such societies and organizations as
MTLM deems appropriate, and shall pay on behalf of Executive (or
reimburse Executive for) documented reasonable out-of-pocket
expenses incurred by Executive in attending conventions, seminars,
trade shows and other business meetings and business entertainment
and promotional expenses. MTLM shall pay Executive an automobile
allowance of $1,000.00 per month, subject to applicable
withholdings.
5. Death or Permanent
Disability . If, during the Employment Period, Executive dies
(as confirmed by a certificate of death) or Executive is
permanently disabled such that, in the opinion of a physician
selected by MTLM and Executive, Executive (or his spouse or legal
representative) is rendered incapable of performing the services
contemplated under this Agreement for 180 days in any 12
consecutive months by reason of illness, accident, or other
physical or mental disability (“Permanent
Disability” ), this Agreement shall be deemed to be
terminated as of the date of such death or of the determination of
Permanent Disability. Notwithstanding the foregoing, Executive
shall be entitled to the benefits as provided in Section 8 of
this Agreement. During any period prior to such time when Executive
has a Permanent Disability, as described above, MTLM shall be
obligated to perform its obligations under this Agreement in
accordance with its terms, including, but not limited to, its
obligations under Section 3 of this Agreement.
6. Involuntary
Termination . Except in the case of termination for Cause
pursuant to Section 7 of this Agreement, if MTLM terminates
Executive’s employment hereunder without Executive’s
consent, such termination shall be a Triggering Event, and
Executive shall be entitled to receive the benefits as provided in
Section 8(b) of this Agreement.
7. Termination Voluntary or
for Cause .
(a) In the event: (i) Executive
voluntarily terminates his employment hereunder without Good Reason
(as defined below) or (ii) Executive’s employment
hereunder is terminated for Cause, unless otherwise provided
herein, all of his compensation and benefits under this Agreement
shall cease immediately upon the date of such termination, provided
that Executive shall be entitled to receive the compensation
provided in Section 3 of this Agreement paid on a pro rata
basis to the date of such termination.
(b) Termination for Cause .
Any of the following events shall be considered as
“Cause” for the immediate termination of the Employment
Period by MTLM:
(i) conviction of Executive for a
felony, or a nolo contendere plea with respect to a the same;
or
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(ii) conviction of Executive for
misappropriation by Executive of funds or property of MTLM or the
commission of acts of fraud relating to his employment in each case
resulting in material harm to MTLM, or a nolo contendere plea with
respect to the same; or
(iii) (a) willful breach of this
Agreement that is not cured by Executive within 10 days
following receipt by Executive of written notice of such breach
from MTLM or (b) material neglect by Executive of any of his
material duties or responsibilities hereunder that is not cured by
Executive within 30 days following receipt by Executive of
written notice of the acts that MTLM assert constitute such neglect
by Executive, provided, however, that any such willful breach or
material neglect that is not curable shall be considered Cause for
the immediate termination of the Employment Period by MTLM;
or
(iv) conduct on the part of Executive
that is materially adverse to any known interest of MTLM that
continues unabated, or uncured to the reasonable satisfaction of
MTLM, after the expiration of 10 days following receipt of
written notice by Executive from MTLM.
Notwithstanding
the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to him a written termination notice signed by a member of
the Board duly authorized to deliver such notice.
8. Acceleration of
Payments .
(a) For this Agreement, the following
terms shall have the following meanings:
(i) “Good Reason” shall
mean the occurrence of any of the following events without
Executive’s express written consent: (a) a reduction by
MTLM of Executive’s Base Compensation, Target Bonus or
Maximum Bonus provided in Section 3 of this Agreement unless
such reduction is in the same proportion as a reduction
generally
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