<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
TO
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Metal Management, Inc.
----------------------
(Name of Issuer)
Common Stock, $0.1 par value per share
--------------------------------------
(Title of Class of Securities)
591097100
--------------
(CUSIP Number)
Albert A. Cozzi, Frank J. Cozzi, Gregory P. Cozzi
T. Benjamin Jennings, Gerard M. Jacobs
c/o Metal Management, Inc.
500 North Dearborn Street
Suite 405
Chicago, IL 60610
(312) 645-0700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 1, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box: [ ]
<PAGE> 2
CUSIP NO. (591097100) Page 2 of 18 pages
================================================================================
1) Names of Reporting Persons
I.R.S. Identification No. of Above Persons (entities only)
Albert A. Cozzi
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds: OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: United States of America
- --------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power: -0-
Beneficially Owned
by Each Reporting (8) Shared Voting Power: 16,190,706(1)
Person With
(9) Sole Dispositive Power: 6,496,873(2)
- ---------------
(1) Includes the number of shares indicated in parentheses which
the following parties own or have the right to acquire upon
exercise of options or warrants or conversion of preferred
stock: Gerard M. Jacobs (1,642,978), T. Benjamin Jennings
(1,642,978), Albert A. Cozzi (6,496,873), Frank J. Cozzi
(5,013,570) and Gregory P. Cozzi (1,394,307).
(2) Consists of 5,741,701 shares owned directly by Mr. Cozzi,
warrants to purchase 377,586 shares at an exercise price of
$5.91 per share and warrants to purchase 377,586 shares at an
exercise price of $15.84 per share.
<PAGE> 3
CUSIP NO. (591097100) Page 3 of 18 pages
================================================================================
(10) Shared Dispositive Power: -0-
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
6,496,873(2)
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): [ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11): 22.55%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): IN
- --------------------------------------------------------------------------------
<PAGE> 4
CUSIP NO. (591097100) Page 4 of 18 pages
================================================================================
1) Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (entities only)
Frank J. Cozzi
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) [ X ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds: OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: United States of
America
- --------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power: -0-
Beneficially Owned
by Each Reporting (8) Shared Voting Power: 16,190,706(1)
Person With
(9) Sole Dispositive Power: 5,013,570(2)
- -----------
(1) Includes the number of shares indicated in parentheses which
the following parties own or have the right to acquire upon
exercise of options or warrants or conversion of preferred
stock: Gerard M. Jacobs (1,642,978), T. Benjamin Jennings
(1,642,978), Albert A. Cozzi (6,496,873), Frank J. Cozzi
(5,013,570) and Gregory P. Cozzi (1,394,307).
(2) Consists of 4,430,810 shares owned directly by Mr. Cozzi,
warrants to purchase 291,380 shares at an exercise price of
$5.91 per share and warrants to purchase 291,380 shares at an
exercise price of $15.84 per share.
<PAGE> 5
CUSIP NO. (591097100) Page 5 of 18 pages
================================================================================
(10) Shared Dispositive Power: -0-
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
5,013,570(2)
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): [ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11): 17.50%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): IN
- --------------------------------------------------------------------------------
<PAGE> 6
CUSIP NO. (591097100) Page 6 of 18 pages
================================================================================
1) Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (entities only)
Gregory P. Cozzi
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) [ X ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds: OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: United States of
America
- --------------------------------------------------------------------------------
<PAGE> 7
CUSIP NO. (591097100) Page 7 of 18 pages
================================================================================
Number of Shares (7) Sole Voting Power: -0-
Beneficially Owned
by Each Reporting (8) Shared Voting Power: 16,190,706(1)
Person With
(9) Sole Dispositive Power: 1,394,307(2)
10) Shared Dispositive Power: -0-
11) Aggregate Amount Beneficially Owned by Each Reporting
Person: 1,394,307(2)
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): [ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11): 4.94%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): IN
- --------------------------------------------------------------------------------
- -----------
(1) Includes the number of shares indicated in parentheses which
the following parties own or have the right to acquire upon
exercise of options or warrants or conversion of preferred
stock: Gerard M. Jacobs (1,642,978), T. Benjamin Jennings
(1,642,978), Albert A. Cozzi (6,496,873), Frank J. Cozzi
(5,013,570) and Gregory P. Cozzi (1,394,307).
(2) Consists of 1,232,237 shares owned directly by Mr. Cozzi,
warrants to purchase 81,035 shares at an exercise price of
$5.91 per share and warrants to purchase 81,035 shares at an
exercise price of $15.84 per share.
<PAGE> 8
CUSIP NO. (591097100) Page 8 of 18 pages
================================================================================
1) Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (entities only)
T. Benjamin Jennings
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) [ X ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds: OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: United States of
America
- --------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power: -0-
Beneficially Owned
by Each Reporting (8) Shared Voting Power: 16,190,706(1)
Person With
- -----------
(1) Includes the number of shares indicated in parentheses which
the following parties own or have the right to acquire upon
exercise of options or warrants or conversion of preferred
stock: Gerard M. Jacobs (1,642,978), T. Benjamin Jennings
(1,642,978), Albert A. Cozzi (6,496,873), Frank J. Cozzi
(5,013,570) and Gregory P. Cozzi (1,394,307).
<PAGE> 9
CUSIP NO. (591097100) Page 9 of 18 pages
================================================================================
(9) Sole Dispositive Power: 1,642,978(2)
(10) Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,642,978(2)
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): [ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11): 5.64%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): IN
- --------------------------------------------------------------------------------
- ------------
(2) Consists of 580,000 shares owned directly by Mr. Jennings,
options to purchase 200,000 shares at an exercise price of
$4.00 per share, warrants to purchase 83,333 shares at an
exercise price of $4.00 per share, warrants to purchase
375,000 shares at an exercise price of $5.91 per share,
warrants to purchase 350,000 shares at an exercise price of
$12.00 per share, and 54,645 shares issuable upon conversion
of Series A Convertible Preferred Stock (the "Series A
Stock"), assuming a conversion price of $18.30 per share.
<PAGE> 10
CUSIP NO. (591097100) Page 10 of 18 pages
================================================================================
1) Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (entities only)
Gerard M. Jacobs
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) [ X ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds: OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: United States of
America
- --------------------------------------------------------------------------------
<PAGE> 11
CUSIP NO. (591097100) Page 11 of 18 pages
================================================================================
Number of Shares (7) Sole Voting Power: -0-
Beneficially Owned
by Each Reporting (8) Shared Voting Power: 16,190,706(1)
Person With
(9) Sole Dispositive Power: 1,642,978(2)
(10) Shared Dispositive Power: -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,642,978(2)
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): [ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11): 5.64%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): IN
- --------------------------------------------------------------------------------
- -------------
(1) Includes the number of shares indicated in parentheses which
the following parties own or have the right to acquire upon
exercise of options or warrants or conversion of preferred
stock: Gerard M. Jacobs (1,642,978), T. Benjamin Jennings
(1,642,978), Albert A. Cozzi (6,496,873), Frank J. Cozzi
(5,013,570) and Gregory P. Cozzi (1,394,307).
(2) Consists of 580,000 shares owned directly by Mr. Jacobs,
options to purchase 200,000 shares at an exercise price of
$4.00 per share, warrants to purchase 83,333 shares at an
exercise price of $4.00 per share, warrants to purchase
375,000 shares at an exercise price of $5.91 per share,
warrants to purchase 350,000 shares at an exercise price of
$12.00 per share, and 54,645 shares issuable upon conversion
of Series A Convertible Preferred Stock (the "Series A
Stock"), assuming a conversion price of $18.30 per share.
<PAGE> 12
CUSIP NO. (591097100) Page 12 of 18 pages
================================================================================
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of common stock, $.01 par value per
share (the "Shares") of Metal Management, Inc., a Delaware corporation (the
"Company"). The principal executive offices of the Company are located at 500
North Dearborn Street, Suite 405, Chicago, Illinois 60610.
ITEM 2. IDENTITY AND BACKGROUND.
Messrs. Albert, Frank and Gregory Cozzi have acted together for the
purpose of acquiring the Shares which they own or have the right to acquire, as
set forth in Item 5 below. In addition, each of the following persons has
acted together for the purpose of the voting the Shares which they own or have
the right to acquire, as set forth in Item 5 below, on the conditions and
subject to the terms of the Stockholders' Agreement attached hereto as Exhibit
A. During the last five years none of them: (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); or (ii) was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws, or a finding
of any violation with respect to such laws. All of them are citizens of the
United States of America. The name, residence or business address and principal
occupation or employment of each is as follows:
(a) Albert A. Cozzi
Metal Management, Inc.
500 North Dearborn Street, Suite 405
Chicago, IL 60610
President and Chief Operating Officer
Metal Management, Inc.
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
(b) Frank J. Cozzi
Cozzi Iron & Metal, Inc.
2232 South Blue Island Avenue
Chicago, IL 60608
President
Cozzi Iron & Metal, Inc.
2232 South Blue Island Avenue
Chicago, Illinois 60608
<PAGE> 13
CUSIP NO. (591097100) Page 13 of 18 pages
================================================================================
(c) Gregory P. Cozzi
Metal Management, Inc.
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
Vice President
Cozzi Iron & Metal, Inc.
2232 South Blue Island Avenue
Chicago, Illinois 60608
(d) T. Benjamin Jennings
Metal Management, Inc.
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
Chairman of the Board and Chief Development Officer
Metal Management, Inc.
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
(e) Gerard M. Jacobs
Metal Management, Inc.
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
Chief Executive Officer
Metal Management, Inc.
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
Pursuant to an Agreement and Plan of Merger, dated May 16, 1997, a
wholly-owned subsidiary of the Company was merged with and into Cozzi Iron &
Metal, Inc. ("Cozzi") on December 1, 1997 (the "Merger"), resulting in Cozzi
becoming a wholly-owned subsidiary of the Company. In the Merger all of the
issued and outstanding shares of Cozzi common stock were converted into
11,499,986 newly-issued Shares, $6.0 million in cash and warrants to purchase
1,500,000 Shares. 95,238 shares and $1 million of the Merger Consideration were
issued or paid to Irene Cozzi, as executor of the Estate of James H. Cozzi.
<PAGE> 14
CUSIP NO. (591097100) Page 14 of 18 pages
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All of the Shares owned by Messrs. Albert, Frank and Gregory Cozzi were
acquired by them in the Merger or pursuant to Employment Agreements with the
Company. All of the Shares owned by Messrs. Jacobs and Jennings were acquired by
them pursuant to Employment Agreements with the Company or in previously
reported transactions.
ITEM 4. PURPOSE OF TRANSACTION.
The Shares which the persons named in Item 2 acquired as a result of
the consummation of the Merger or pursuant to Employment Agreements with the
Company were acquired for investment purposes only and not with a view towards
distribution. They have no present plans or proposals which relate to or would
result in any of the actions described in subparagraphs (a) through (j) of Item
4 of Schedule 13D.
However, each of the persons named in Item 2 is a director of the
Company and, as such, will be required to consider from time to time various
transactions proposed by the Company in connection with its previously
announced strategy of actively pursuing acquisitions and mergers in the scrap
metal recycling industry.
<PAGE> 15
CUSIP NO. (591097100) Page 15 of 18 pages
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The number of Shares, and the percentage thereof of the 28,060,065
Shares outstanding as of December 1, 1997, beneficially owned by each person
named in Item 2 is as follows:
<TABLE>
<CAPTION>
Gregory
T. Benjamin Gerard Albert A. Frank J. P.
Jennings % M. Jacobs % Cozzi % Cozzi % Cozzi %
----------- ---- --------- ---- ---------- ----- --------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) Shares owned 580,000 580,000 5,741,701 4,430,810 1,232,237
directly
(b) Shares which may be 1,062,978 1,062,978 755,172 582,760 162,070
acquired upon exercise
of warrants or options or
conversion of preferred
stock ----------- ---- --------- ---- --------- ----- --------- ----- --------- ----
(c) TOTAL 1,642,978 5.64 1,642,978 5.64 6,496,873 22.55 5,013,570 17.50 1,394,307 4.94
</TABLE>
Each such person has the sole power to dispose of the Shares which he
owns or is deemed to own, subject to certain rights of first refusal and
tag-along rights set forth in the Stockholders' Agreement attached hereto as
Exhibit A. Each such person has shared voting power with respect to the Shares
he owns or is deemed to own, on the conditions and subject to the terms of the
Stockholders' Agreement attached hereto as Exhibit A. Except for the Merger, the
Employment Agreements and the acquisition of shares of Series A Convertible
Preferred Stock by Messrs. Jacobs and Jennings, none of such persons has
engaged in any transaction in the Shares during the past sixty days.
ITEM 6. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO SECURITIES
OF THE ISSUER.
There are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 and between such persons
and any person with respect to any securities of the Company, including, but not
limited to, transfer or voting of any of the securities of the Company, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies,
or a pledge or contingency the occurrence of which would give another person
voting power or investment power over the securities of the Company, except for:
(i) the fact that the Cozzi Stockholders are brothers; (ii) the Stockholders'
Agreement dated as of December 1, 1997 (the "Stockholders Agreement") by and
among the Company, Messrs. Jacobs and Jennings, and Messrs. Albert, Frank and
Gregory Cozzi; (iii) a stockholders agreement dated as of August 28, 1997 among
T. Benjamin Jennings and the former equity owners of Proler Southwest Inc. and
Proler Steelworks L.L.C., pursuant to which each party to the agreement
agreed to vote their Shares in favor of William T. Proler (or, if he is unable
to serve, another individual chosen by the Proler Stockholders)
<PAGE> 16
CUSIP NO. (591097100) Page 16 of 18 pages
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as a Director of the Company; (iv) the pledge by Messrs. Albert, Frank and
Gregory Cozzi on December 1, 1997 of 605,671 Shares as collateral security for
payment of a promissory note made by Cozzi Iron & Metal, Inc. and
unconditionally guaranteed by the Company; (v) the pledge by Mr. Jacobs of
580,000 Shares owned by him as collateral security for loans from a commercial
bank and an investment bank; (vi) the pledge by Mr. Jennings of 480,000 Shares
owned by him as collateral security for loans from a commercial bank and an
investment bank; and (vii) the escrow of 1,150,000 Shares owned by Messrs.
Albert, Frank and Gregory Cozzi with an escrow agent as security for the
obligations of the Cozzis to indemnify the Company under certain circumstances,
as set forth in the Merger Agreement.
In connection with the Merger, Albert A. Cozzi, Frank J. Cozzi and
Gregory P. Cozzi (collectively, the "Cozzi Stockholders") and Gerard M. Jacobs
and T. Benjamin Jennings (collectively, the "MTLM Stockholders") entered into
the Stockholders Agreement which has a term of ten years from December 1, 1997,
unless renewed or extended. The Cozzi Stockholders and the MTLM Stockholders
together own approximately 45% of the Company's issued and outstanding stock
(without giving effect to the issuance of Common Stock issuable upon exercise of
warrants and options previously granted by the Company).
Under the Stockholders Agreement, the Cozzi Stockholders and the MTLM
Stockholders have agreed that each group will be able to nominate one-half of
the total number of directors slated for election at each annual meeting of the
Company, provided that each group must nominate one individual, independent and
unaffiliated from each group or the Company, as part of its slate. The
Stockholders Agreement further requires each group to vote for the other group's
nominees for election to the Board. The parties to the Stockholders Agreement
also have agreed to vote for proposals, if and when presented by the Company, to
amend the Company's organizational documents to require the approval of at least
two-thirds of the Board of Directors to, among other things: (i) amend the
Company's certificate of incorporation or bylaws; (ii) liquidate or merge the
Company; (iii) sell substantially all of the Company's assets; (iv) elect or
remove officers; (v) adopt an annual budget; (vi) borrow funds, sell assets or
make capital expenditures exceeding $5 million; (vii) issue or register the
Company's securities; or (viii) declare or pay any dividends or distributions.
Under the Stockholders Agreement, if any of the Cozzi Stockholders or
the MTLM Stockholders desire to sell their respective shares of Common Stock,
the selling stockholder must generally offer its shares to members of its own
stockholder group, members of the other stockholder group, and the Company, in
that order before selling to a third party. Also, if either group receives an
offer to buy its shares from a third party, it generally must offer the other
group's members the right to participate in the offer on the same terms and
conditions.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A Stockholders Agreement dated as of December 1, 1997, by and
among the Company, Albert A. Cozzi, Frank A. Cozzi, Gregory
P. Cozzi. Gerard M. Jacobs and T. Benjamin Jennings.
Exhibit B Stockholders Agreement dated as of August 27, 1997 among T.
Benjamin Jennings, the William T. Proler and Gaile Proler
Management Trust,
<PAGE> 17
CUSIP NO. (591097100) Page 17 of 18 pages
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Ronald J. Proler, David W. Sonnier, Joel D. Helton and Thomas O.
Whitman.
Exhibit C Agreement and Plan of Merger dated May 16, 1997 (as amended) among
Cozzi Iron & Metal, Inc., Albert A. Cozzi, Frank J. Cozzi,
Gregory P. Cozzi, the Company and CIM Acquisition, Co.
(incorporated by reference to Annex A to the Company's Proxy
Statement dated November 20, 1997).
<PAGE> 18
CUSIP NO. (591097100) Page 18 of 18 pages
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After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information set
forth in this Statement is true, complete and correct.
/s/ Albert A. Cozzi
December ____, 1997 -----------------------------------------------
Albert A. Cozzi
/s/ Frank J. Cozzi
December ____, 1997 -----------------------------------------------
Frank J. Cozzi
/s/ Gregory P. Cozzi
December ____, 1997 -----------------------------------------------
Gregory P. Cozzi
/s/ Gerard M. Jacobs
December ____, 1997 -----------------------------------------------
Gerard M. Jacobs
/s/ T. Benjamin Jennings
December ____, 1997 -----------------------------------------------
T. Benjamin Jennings
<PAGE> 1
EXHIBIT 99.1
EXHIBIT A
- --------------------------------------------------------------------------------
STOCKHOLDERS' AGREEMENT
FOR
METAL MANAGEMENT, INC.
Dated: December 1, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
CORPORATE STRUCTURE AND OPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) BOARD SIZE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(b) ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(c) REMOVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) VACANCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(e) SELECTION OF NOMINEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 MANAGEMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 ELECTION OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 AGREEMENT TO VOTE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
RESTRICTIONS UPON AND OBLIGATIONS WITHRESPECT TO DISPOSITION OF SHARES . . . . . . . . . . . . . . . . . . . 5
2.1 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 GENERAL RESTRICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 FIRST REFUSAL OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) RECEIPT OF OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) ORDER OF FIRST REFUSAL OPTIONS . . . . . . . . . . . . . . . . . . . . . . . 6
(c) PLACE OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) DATE OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) DELIVERIES AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) RIGHT TO ACCEPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 TAG ALONG RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 EFFECT OF GIVING OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 RESTRICTIVE LEGEND ON SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.7 PERMITTED TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.8 REQUIREMENTS FOR TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.9 RIGHTS AND OBLIGATIONS OF TRANSFEROR . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 TERM OF THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.4 LEGAL FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
3.7 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.8 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.9 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12 WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 GENDER REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE> 4
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT ("AGREEMENT"), made and entered into as
of the 1st day of December, 1997, by and among T. Benjamin Jennings ("TBJ"),
Gerard M. Jacobs ("GMJ"), Albert A. Cozzi ("AAC"), Frank J. Cozzi ("FJC") and
Gregory P. Cozzi ("GPC") (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., Cozzi Iron & Metal, Inc., AAC, FJC and GPC (AAC, FJC and GPC being
sometimes hereinafter referred to collectively as the "COZZI STOCKHOLDERS"),
the Cozzi Stockholders will receive 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 Stockholders desire to provide for the manner in which
they will vote their shares of Common Stock as to the management of the
Corporation and for the imposition of certain restrictions upon the disposition
of shares of Common Stock of the Corporation held by the Stockholders;
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, IT IS HEREBY AGREED as
follows:
ARTICLE I
CORPORATE STRUCTURE AND OPERATION
1.1 BOARD OF DIRECTORS.
(a) BOARD SIZE. The Board of Directors of the
Corporation shall at all times consist of an even number of directors,
which shall be not less than eight (8) nor more than sixteen (16).
(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 one-half of the
total number of directors
<PAGE> 5
of the Corporation; provided, that one of such
nominees shall be an Independent Director (as defined
below), who shall be reasonably acceptable to the
Cozzi Stockholders; and
(ii) The Cozzi Stockholders shall
have the right to nominate that number of persons
(each, a "COZZI DIRECTOR") constituting one-half of
the total number of directors of the Corporation;
provided, that one of such nominees shall be an
Independent Director (as defined below), who shall be
reasonably acceptable to the JJ Stockholders.
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.
(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,
and to remove a Cozzi Director upon request at any time by the holders
of a majority of the shares of Common Stock held by the Cozzi
Stockholders, 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 or Cozzi Director, with a nominee selected
by the JJ Stockholders or the Cozzi Stockholders, respectively;
provided, that if such nominee is to fill the vacancy of an
Independent Director, such nominee shall be reasonably acceptable to
the other group.
(e) SELECTION OF NOMINEES. Any person nominated
by the holders of a majority of the shares of Common Stock held by the
Cozzi Stockholders, as to the Cozzi 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.
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:
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<PAGE> 6
(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;
(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;
3
<PAGE> 7
(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.
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 Albert A. Cozzi, Frank J. Cozzi shall
assume Albert A. Cozzi's 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 Albert A. Cozzi, Gerard M. Jacobs and T.
Benjamin Jennings.
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) Albert A. Cozzi President, Chief Operating Officer
(b) Gerard M. Jacobs Chief Executive Officer
(c) T. Benjamin Jennings Chairman of the Board and Chief
Development Officer
(d) Frank J. Cozzi Vice President and President of
Cozzi 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.
4
<PAGE> 8
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. During the term of this Agreement, each
Stockholder 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 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 2.3 or
2.4, (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 Stockholders and
Chicago Title & Trust Company) and the 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 FIRST REFUSAL OPTIONS.
(a) RECEIPT OF OFFER. If at any time after the date
hereof any Stockholder 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 2.3, 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
5
<PAGE> 9
Offer. The fair market value of the Non-Cash Portion shall be
mutually 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 2.3(b) and (c), and 2.4 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 Cozzi Stockholder, each of the remaining Cozzi Stockholders
shall have the first option to purchase any Offered
Corporation Securities on a pro rata basis (determined by
reference to the remaining Cozzi Stockholders only) or in such
proportions as is otherwise agreed upon by the remaining Cozzi
Stockholders. The remaining Cozzi 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 Cozzi 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 Cozzi Stockholders, or if the Cozzi Stockholders fail to
give notice, fifteen (15) days after the expiration of the
first option period. If the remaining Cozzi 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
6
<PAGE> 10
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 Corporation Securities or fail to
exercise the options within such fifteen (15) day period, each
of the Cozzi Stockholders shall have the second option to
purchase any remaining Offered Corporation Securities on a pro
rata basis (determined by reference to the Cozzi Stockholders
only) or in such proportions as is otherwise agreed upon by
the remaining Cozzi Stockholders. The Cozzi 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 Cozzi 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
Cozzi Stockholders, or if the Cozzi 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 2.3 (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 2.3 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
7
<PAGE> 11
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 2.3 (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 purchase shall have expired, the Selling Stockholder, subject to
the provisions of Section 2.4, shall have the right to consummate the
sale of all of the Offered Corporation Securities, 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.
2.4 TAG ALONG RIGHTS. In addition to the options set forth in
Section 2.3, 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 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 2.3. 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 on 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.
2.5 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.
2.6 RESTRICTIVE LEGEND ON SECURITIES. Each stock certificate or
instrument representing any Corporation Securities shall be endorsed with the
following legend:
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<PAGE> 12
"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 disposition of the shares represented by this
Certificate is also restricted under the terms of a
Stockholders' Agreement dated December 1, 1997 by and among T.
Benjamin Jennings, Gerard M. Jacobs, Albert A. Cozzi, Frank
J. Cozzi and Gregory P. Cozzi, a copy of which is available in
the office of the Corporation."
2.7 PERMITTED TRANSFERS.
(a) Notwithstanding anything contained in Section 2.2 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 2.7.
(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 Cozzi Stockholder, to any
other Cozzi 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; and
(vi) 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
9
<PAGE> 13
to all of the rights and obligations hereunder of the party whose
Corporation 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 2.7(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.
2.8 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.
2.9 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.
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
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<PAGE> 14
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:
Cozzi Iron & Metal, Inc.
2232 South Blue Island Avenue
Chicago, Illinois 60608
Tel.: (773) 254-1200
Fax: (773) 254-8201
(B) If to TBJ, at:
12 Country Lane
Northfield, Illinois 60093
with a copy to:
Thomas V. Skinner, Esq.
Winston & Strawn
33 West Wacker Drive
Chicago, Illinois 60601
Tel.: (312) 558-5578
Fax: (312) 558-5700
11
<PAGE> 15
(C) If to GMJ, at:
7600 Augusta
River Forest, Illinois 60305
with a copy to:
Thomas V. Skinner, Esq.
Winston & Strawn
33 West Wacker Drive
Chicago, Illinois 60601
Tel.: (312) 558-5578
Fax: (312) 558-5700
(D) If to the Corporation, at:
500 North Dearborn Street
Suite 405
Chicago, Illinois 60610
Attn: Chief Financial Officer
Fax: (312) 645-0714
With a copy to:
SHEFSKY & FROELICH LTD.
444 North Michigan Avenue
Suite 2500
Chicago, Illinois 60611
Attn: Erhard R. Chorle
Fax: (312) 527-5921
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.
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.
12
<PAGE> 16
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, notwithstanding 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.
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.
13
<PAGE> 17
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: /s/ T. Benjamin Jennings
----------------------------------
T. Benjamin Jennings, Chairman and
Chief Development Officer
/s/ T. Benjamin Jennings
----------------------------------
T. Benjamin Jennings
/s/ Gerard M. Jacobs
----------------------------------
Gerard M. Jacobs
/s/ Albert A. Cozzi
----------------------------------
Albert A. Cozzi
/s/ Frank J. Cozzi
----------------------------------
Frank J. Cozzi
/s/ Gregory P. Cozzi
----------------------------------
Gregory P. Cozzi
14
<PAGE> 18
SCHEDULE 1.2
1. The board of directors of MTLM has authorized the Chairman and the CEO
of MTLM to negotiate an arrangement with Donald Moorehead whereby
Donald Moorehead would become Vice-Chairman of MTLM and Donald
Moorehead 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 Dan Burgess, 25,000 warrants and 15,000
options to purchase shares of common stock of MTLM to Xavier
Hermosillo, and 25,000 options to purchase shares of common stock of
MTLM to Robert Larry. 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 Xavier
Hermosillo and Robert Larry. The adjustment to annual compensation
for Mr. Larry and Mr. Hermosillo increased their annual base pay to
$135,000 and $100,000 respectively.
4. The Compensation Committee approved increases in annual base salary
for Mr. Jacobs and Mr. Jennings effective from and after June 1, 1997.
Mr. Jennings' adjusted annual salary is equal to the amount of
$275,000 and Mr. Jacobs' adjusted annual salary is equal to the
amount of $287,000. In addition, Mr. Jennings 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 Mr. Jennings, Mr. Jacobs, and Mr. Larry. On July
31, 1997, Mr. Jacobs and Mr. Jennings each received a bonus in the
amount of $50,000. On July 15, 1997, Mr. Larry received a bonus in
the amount of $25,000.
6. The Company plans to pay aggregate bonuses to Mr. Hermosillo 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 George Moorehead as more fully
described in MTLM's definitive Proxy Statement dated November 20,
1997.
<PAGE> 1
EXHIBIT 99.2
EXHIBIT B
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT ("Agreement") is made and entered into as
of the 27th day of August, 1997, by and among T. Benjamin Jennings
("Jennings"), The William T. Proler and Gaile Proler Management Trust
("Proler"), Ronald J. Proler, David W. Sonnier, Joel D. Helton and Thomas O.
Whitman (each a "Stockholder" and collectively the "Stockholders") and Metal
Management, Inc. (the "Corporation").
R E C I T A L S
A. Pursuant to that certain Agreement and Plan of Merger dated
August 27, 1997 (the "Merger Agreement") among the Corporation, the
Stockholders and Proler Southwest, Inc., the Stockholders will receive shares
of common stock of the Corporation (the "Common Stock").
B. Jennings currently owns shares of Common Stock of the
Corporation.
C. Jennings and the Stockholders desire to provide for the manner
in which they will vote their shares of Common Stock as to the election of
certain directors of the Corporation
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, IT IS HEREBY AGREED as
follows:
1. For a period of two (2) years from the date of this Agreement,
Jennings and the Stockholders agree to vote all of their
shares of Common Stock of the Corporation in favor of the
election of Proler as a director of the Corporation.
2. If during the term of this Agreement, William T. Proler is
unable for any reason to serve as a director of the
Corporation, then the Stockholders shall have the right to
designate another of the Stockholders to serve as a director
of the Corporation and Jennings and the Stockholders shall
vote their shares of Common Stock of the Corporation in favor
of the election of such newly designated person as a director
of the Corporation; provided that the Corporation, acting
through its Board of Directors, shall have the right to
withhold approval of up to two (2) of the selections of the
Stockholders for such newly designated directorship.
3. If, for any reason, William T. Proler or any other director
designated by the Stockholders is unable to attend any meeting
of the Board of Directors of the Corporation, then William T.
Proler or such other director, as the case may be, may
designate another of the Stockholders to attend such meeting
as a non-voting observer.
4. During the term of this Agreement, William T. Proler and/or
Ronald J. Proler or any of the other Stockholders, but not
more than two Stockholders, shall be invited to attend all
meetings of the Board of Directors of the Corporation and be
furnished with all information furnished to the other
attendees at each such meeting.
5. 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.
<PAGE> 2
6. This Agreement shall be controlled, construed and enforced in
accordance with the substantive laws of the United States and
the State of Delaware, notwithstanding any choice of law
conflicts.
7. 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 it
may be reasonably required to take, from time to time, in
order to effect the provisions and purposes hereof.
8. 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.
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.
By: /s/ Gerard M. Jacobs, President
---------------------------------------
Gerard M. Jacobs, President
/s/ T. Benjamin Jennings
-------------------------------------------
T. Benjamin Jennings
THE WILLIAM T. PROLER AND
GAILE PROLER MANAGEMENT TRUST
/s/ William T. Proler
-------------------------------------------
By: William T. Proler, Trustee
/s/ Ronald J. Proler
-------------------------------------------
Ronald J. Proler
/s/ David W. Sonnier
-------------------------------------------
David W. Sonnier
/s/ Joel D. Helton
-------------------------------------------
Joel D. Helton
/s/ Thomas O. Whitman
-------------------------------------------
Thomas O. Whitman
2
