<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended March 31, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
COMMISSION FILE NO. 0-14836
METAL MANAGEMENT, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-2835068
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
500 N. DEARBORN ST., SUITE 405
CHICAGO, IL 60610
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (312) 645-0700
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.01 PAR VALUE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ____
The aggregate market value for the Registrant's voting stock held by
non-affiliates of the Registrant based upon the closing sale price of the
Common Stock on June 18, 1997 as reported on the NASDAQ National Market System,
was approximately $86,194,000. Shares of Common Stock held by each officer and
director and by each person who owns 5% or more of the outstanding Common Stock
have been excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.
As of June 18, 1997, the Registrant had 12,857,222 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997 is incorporated into this Form 10-K/A Parts I, II and IV by
reference.
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TABLE OF CONTENTS
FORM 10K/A (AMENDMENT NO. 1)
REPORT INDEX
PAGE
PART III
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
Item 10: Directors and Executive Officers of the Registrant 1
Item 11: Executive Compensation 3
Item 12: Security Ownership of Certain Beneficial Owners and Management 7
Item 13: Certain Relationships and Related Transactions 8
</TABLE>
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EXPLANATORY NOTE:
Metal Management, Inc. (herein "MTLM" or "Company") is filing this Form
10-K/A to include the information required by Part III of Form 10-K pursuant to
General Instruction G(3) of Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company, their ages as of June
18, 1997, and certain other information about them are set forth below. All
directors hold office until the Company's next Annual Meeting of Stockholders
or until their successors are duly elected and qualified.
<TABLE>
<CAPTION>
Name Age Position Since
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
T. Benjamin Jennings (1) (3) 33 Chairman of the Board and Chief 1995
Development Officer
Gerard M. Jacobs (3) 42 President, Chief Executive 1995
Officer and Director
Donald F. Moorehead, Jr.(1) (2) 46 Director 1996
George O. Moorehead 44 Director, Executive Vice President 1996
and President of EMCO
Robert C. Larry 36 Vice President of Finance, Treasurer 1996
and Chief Financial Officer
Daniel B. Burgess 33 Executive Vice President 1995
Xavier Hermosillo (1) (2) (3) 46 Director and Secretary 1995
Harold Rubenstein (2) 69 Director 1996
Ian MacLeod 57 Director 1997
Mike Melnik 45 Director and President of HouTex 1997
Paul D. Joseph 55 Director and President of Reserve 1997
- -----------------------------------
</TABLE>
(1) Member of the Audit Committee.
(2) Member of the Executive Compensation Committee.
(3) Member of the Nominating Committee.
T. Benjamin Jennings has served as Chairman of the Board and Chief
Development Officer of MTLM and its predecessor, GPC, since August 30, 1995.
From 1993 to 1995, Mr. Jennings was a Director of First Southwest Company, a
private investment banking firm based in Dallas, Texas. From 1992 to 1993,
Mr. Jennings was a Vice President of investment banking at Kidder Peabody & Co.
Inc., where he concentrated on investment banking, private debt and equity
placements, and related financing activities. Mr. Jennings is a graduate of
Rice University.
Gerard M. Jacobs has served as President and Chief Executive Officer of
MTLM and its predecessor, GPC, since August 30, 1995. Mr. Jacobs is a Director
of Crown Casino Corporation, a publicly traded gaming company. From 1983 to
1995, Mr. Jacobs developed resource recovery, landfill and hydroelectric
projects for his own account and for the investment banking firm of Russell,
Rea & Zappala, Inc., Pittsburgh, Pennsylvania. From 1978 to 1983, Mr. Jacobs
practiced securities, corporate, and banking law with the firms of Reed, Smith,
Shaw & McClay and Manion, Alder & Cohen, both in Pittsburgh, Pennsylvania.
Mr. Jacobs is a graduate of Harvard University and The University of Chicago
School of Law.
Donald F. Moorehead, Jr. joined the Board of Directors of the Company in
1996 following the Company's merger with EMCO. He has served as Chief
Development Officer of U.S.A. Waste, a national waste management company, since
1994 and served as Chairman of the Board of U.S.A. Waste from May 1994 through
June 1995. Mr. Moorehead is currently Co-Chairman of the Board of U.S.A. Waste
and a Director of FYI Inc. From 1985 through 1990, Mr. Moorehead served as
Chairman of the Board and Chief Executive Officer of MidAmerica Waste Systems,
Inc. Mr. Moorehead received a B.S. in 1972 from the University of Tulsa.
1
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George O. Moorehead joined the Board of Directors of the Company in 1996
following the Company's merger with EMCO. Since 1995, he has served and
continues to serve, as President and Chief Executive Officer of EMCO. Mr.
Moorehead also is a director of Eastern Environmental Services, Inc., a
publicly-traded solid waste company engaged in hauling and disposal. From 1990
through 1995, Mr. Moorehead was a private investor in the waste management and
scrap processing industries.
Robert C. Larry has served as Vice President, Finance, Treasurer and Chief
Financial Officer of MTLM since August 1996. He served as Director of Finance
and Investments for Caremark International, Inc., a diversified,
publicly-traded company engaged in providing health care services, from March
1995 to August 1996. In 1991, Mr. Larry co-founded The Grabscheid Group, Ltd.,
a professional services firm which specialized in financial restructuring and
recapitalization services for private and publicly-held firms. Mr. Larry
served as an accountant and consultant at Ernst & Young, an international
professional services firm from 1983 to 1991. He has a B.S. in Accounting from
Purdue University and a Masters in Business Administration from the University
of Chicago. Mr. Larry is a certified public accountant.
Daniel B. Burgess has served as Executive Vice President since September,
1995. Prior to the sale of the Spectra*Star business in July 1996, Mr. Burgess
was the Executive Vice President responsible for the operations. Mr. Burgess
is currently devoting substantial efforts in the area of mergers and
acquisitions. From June 1992 until September 1995, Mr. Burgess served as
Global Account and Marketing Manager for AT&T. Mr. Burgess has a B.S. in
Mechanical Engineering from Rice University and a Masters in Business
Administration from Southern Methodist University.
Xavier Hermosillo joined the Board of Directors of the Company and became
Secretary in August 1995. Since August 1995, he also has provided investor and
public relations services to the Company through Xavier Hermosillo &
Associates, a public relations, marketing and government affairs firm which he
founded in 1985. Mr. Hermosillo has served as a radio talk show host for
KABC-AM, and he has hosted a nightly talk show on 710-TALK-KMPC in Los Angeles
since May 1994. Mr. Hermosillo has also been a television news commentator on
KCOP-13 Los Angeles since May 1993.
Harold Rubenstein joined the Board of Directors in 1996 following the
Company's merger with EMCO. Mr. Rubenstein has served as President and Chief
Executive Officer of Empire Scrap Metals, Inc., a scrap processing operation
since 1970.
Ian MacLeod joined the Board of Directors in 1997 following the Company's
acquisition of MacLeod. Since 1969, he has served as President and Chief
Executive Officer of the MacLeod group of companies.
Mike Melnik joined the Board of Directors in 1997 following the Company's
acquisition of HouTex. Mr. Melnik founded HouTex in 1979 and has served as
President and Chief Executive Officer since that time.
Paul D. Joseph joined the Board of Directors in 1997 following the
Company's acquisition of Reserve. Since 1990 he served, and continues to
serve, as Chief Executive Officer of Reserve. Mr. Joseph is a director of
Reserve's general partner and is a director of Reserve FTL, Inc., Reserve
Recycling, Inc., Hoogewerff/Reserve, Inc. and Joseph & Sons International Inc.
DIRECTOR COMPENSATION
Directors are paid a fee of $1,000 for each board or committee meeting
attended in person or by telephone (other than board and committee meetings
held on the same day) and are reimbursed for their reasonable expenses in
attending such meetings.
Directors who are not employed by the Company receive a grant of options
to purchase 10,000 shares of common stock on the date on which such person
first becomes an director. Thereafter, each non-employee director is
automatically granted an option to purchase 2,500 shares on January 15th of
each year, as long as such non-employee director has served on the Board of
Directors for at least one month.
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COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Forms 4 or 5 with the
Securities and Exchange Commission (the "SEC") and the NASDAQ. These officers,
directors and ten percent shareholders are also required by SEC rules to
furnish the Company with copies of all forms they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons, the Company
believes that all Section 16(a) filing requirements applicable to its officers,
directors and ten percent shareholders were complied with except that Mike
Melnik submitted late a report on Form 3 in connection with shares issued in
the HouTex acquisition and Donald F. Moorehead, Jr. submitted late a report on
Form 4 relating to a single transaction that occurred on April 29, 1997.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of six meetings during
the fiscal year ended March 31, 1997. During fiscal 1997, no Director attended
fewer than 75% of the aggregate of all meetings of the Board of Directors. The
Board of Directors has three standing committees: an Audit Committee, an
Executive Compensation Committee and a Nominating Committee.
The Audit Committee is comprised of Xavier Hermosillo, T. Benjamin
Jennings and Donald F. Moorehead, Jr. This committee recommends engagement of
the Company's independent accountants, approves services performed by these
accountants, and reviews and evaluates the Company's accounting system and its
system of internal accounting controls. This committee did not meet during
fiscal 1997.
The Executive Compensation Committee is comprised of Xavier Hermosillo,
Donald F. Moorehead, Jr. and Harold Rubenstein. This committee reviews and
administers the compensation of officers of the Company. This committee did
not meet during fiscal 1997.
The Nominating Committee is comprised of Gerard M. Jacobs, T. Benjamin
Jennings and Xavier Hermosillo. This committee nominates candidates for the
Board and will consider nominees recommended by Stockholders. This committee
did not meet during fiscal 1997.
Under the bylaws of the Company, nominations for the election of Directors
may be made by any Stockholder entitled to vote in the election of directors,
but only if written notice of such Stockholder's intent to make such
nominations has been received by the Company at its principal executive office
not less than 60 days nor more than 90 days prior to the meeting at which
Directors are to be elected; provided, however, that in the event that less
than 50 days notice or prior public disclosure of the date of the meeting is
given or made to Stockholders, notice by the Stockholder to be timely must be
so received not later than the close of business on the tenth day following the
day on which notice of the date of the meeting was mailed or public disclosure
was made. The Stockholder's notice must set forth: (1) with respect to each
proposed nominee, the name, age, business and residence address, principal
occupation or employment, class, and number of shares of stock of the Company
owned and any other information that is required to be disclosed in
solicitations of proxies for election of Directors pursuant to Regulation 14A
of the Securities Exchange Act of 1934; and (2) with respect to the Stockholder
giving the notice, name, address and class and number of shares of the Company
that are beneficially owned by such Stockholder. The presiding officer of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
ITEM 11. EXECUTIVE COMPENSATION
The following tables set forth information with respect to those persons
who: (i) served as the chief executive officer of the Company during the
fiscal year ended March 31, 1997; and (ii) were the most highly compensated
executive officers of the Company at March 31, 1997 whose total annual salary
and bonus exceeded $100,000 for the year ("named executive officers").
Compensation paid to the named executive officers of the
3
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Company for the year ended March 31, 1997, the five months ended March 31, 1996
and the year ended October 31, 1995 is as follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
RESTRICTED SECURITIES ALL
NAME AND STOCK UNDERLYING LTIP OTHER
PRINCIPAL AWARDS OPTIONS PAYOUTS COMPENSATION
POSITION YEAR SALARY BONUS OTHER ($) (#) ($) ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T. Benjamin Jennings (1) 1997 $177,500 $ - $ - $ - - $ - $ 9,841 (4)
Chairman and Chief 1996 $ 30,000 $75,000 $ - $ - 200,000 $ - $ 1,623 (4)
Development Officer 1995 $ - $ - $ - $ - - $ - $ -
Gerard M. Jacobs (1) 1997 $177,500 $ - $ - $ - - $ - $ 8,450 (5)
President and Chief 1996 $ 30,000 $75,000 $ - $ - 200,000 $ - $ 1,623 (5)
Executive Officer 1995 $ - $ - $ - $ - - $ - $ -
Daniel B. Burgess (3) 1997 $105,000 $17,750 $ - $ - - $ - $ 4,296 (7)
Executive Vice President 1996 $ 42,500 $ - $ - $ - 30,000 $ - $ 1,790 (7)
1995 $ 12,750 $25,000 $ - $ - 50,000 $ - $ 537 (7)
George O. Moorehead (2) 1997 $173,089 $ - $ - $ - 150,000 $ - $ 6,819 (6)
Executive Vice President 1996 $ - $ - $ - $ - - $ - $ -
and President of EMCO 1995 $ - $ - $ - $ - - $ - $ -
- ---------------------------------
</TABLE>
(1) Messrs. Jacobs and Jennings served without compensation from the Company
during the time from their appointment to their respective positions in
August 1995 through December 31, 1995. During the five months ended March
31, 1996, Messrs. Jacobs and Jennings each received a $75,000 bonus for
their services during the period August 1995 through December 31, 1995.
(2) Mr. Moorehead was appointed Vice President of the Company and the
President of EMCO following the Company's merger with EMCO.
(3) Mr. Burgess joined the Company on September 11, 1995 and was appointed
Executive Vice President.
(4) During fiscal 1997, Mr. Jennings received the following payments: $945 in
parking reimbursement, $5,574 of health insurance premiums, $2,902 of
other health benefits and $420 of long-term disability insurance premiums.
During fiscal 1996, Mr. Jennings received $1,623 of health insurance
premiums.
(5) During fiscal 1997, Mr. Jacobs received the following payments: $945 in
parking reimbursement, $6,941 of health insurance premiums, and $564 of
long-term disability insurance premiums. During fiscal 1996, Mr. Jacobs
received $1,623 of health insurance premiums.
(6) During fiscal 1997, Mr. Moorehead received $5,323 of health insurance
premiums and $1,496 of matching contributions under EMCO's 401(k) Plan.
(7) During fiscal 1997, 1996 and 1995, Mr. Burgess received health insurance
premiums of $3,744, $1,560 and $468, respectively, and long-term
disability premiums of $552, $230 and $69, respectively.
The following table sets forth information concerning grant of stock
options during Fiscal 1996 and Fiscal 1997 to the named executive officers.
4
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<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN FISCAL 1996 AND 1997
NUMBER OF PERCENT OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO STOCK PRICE APPRECIATION FOR
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION OPTION TERM (2)
NAME GRANTED (1) FISCAL YEAR PRICE DATE 5% 10%
- ---- ----------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Fiscal 1997: None
Fiscal 1996:
T. Benjamin Jennings 200,000 30.0% $4.00 1/4/06 $503,116 $1,274,994
Gerard M. Jacobs 200,000 30.0% $4.00 1/4/06 $503,116 $1,274,994
Daniel B. Burgess 30,000 4.5% $4.00 11/1/05 $ 75,467 $ 191,249
George O. Moorehead 150,000 22.5% $4.00 1/4/06 $377,337 $ 956,245
- -----------------------------------
</TABLE>
(1) All options are 100% vested.
(2) The potential realizable value is calculated based on the term of the
option at its time of grant (ten years) assuming that the stock price on
the date of grant appreciates at the indicated annual rate compounded
annually for the entire term of the option and that the option is
exercised and sold on the last day of its term for the appreciated stock
price. No gain to the optionee is possible unless the stock price
increases over the option term.
The following table sets forth the employee stock options exercised during
fiscal year 1997 by the executive officers listed below and the number and
value of securities underlying unexercised options held by the executive
officers at March 31, 1997.
<TABLE>
<CAPTION>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
SHARES UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END FISCAL YEAR END
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
(1) (2)
T. Benjamin Jennings 0 $ -- 200,000/0 $ 950,000/0
Gerard M. Jacobs 0 $ -- 200,000/0 $ 950,000/0
Daniel B. Burgess 0 $ -- 80,000/0 $ 417,500/0
George O. Moorehead 0 $ -- 150,000/0 $ 831,250/0
- -----------------------------
</TABLE>
(1) Value Realized is determined by multiplying the number of shares by the
difference between the closing price on the trade date and the exercise
price.
(2) Based on March 31, 1997 closing price of Common Stock of $8.75.
STOCK PERFORMANCE GRAPH
The following graph compares total return of the Company's Common Stock
during the five year period beginning March 31, 1992, with the NASDAQ Composite
Index and the Russell 200 Index. Each index assumes $100 invested at the close
of trading on March 31, 1992, and reinvestment of dividends.
5
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<TABLE>
<CAPTION>
RUSSELL
MTLM NASDAQ 2000
----- ------- --------
<S> <C> <C> <C>
March 31, 1992 100.00 100.00 100.00
March 31, 1993 95.85 114.30 112.52
March 31, 1994 90.73 123.14 123.25
March 31, 1995 69.34 135.35 128.02
March 31, 1996 194.40 182.86 162.38
March 31, 1997 372.82 202.35 171.31
</TABLE>
EMPLOYMENT AGREEMENTS
The Company currently has employment agreements, each dated April 9, 1996
(or April 11, 1996, in the case of Mr. George O. Moorehead), with certain of
the executive officers named above. Under these agreements, Mr. Jacobs serves
as President and Chief Executive Officer, Mr. Jennings serves as Chairman of
the Board and Chief Development Officer and Mr. George O. Moorehead serves as
Executive Vice President of the Company and President of EMCO. Each employment
agreement contains substantially identical terms. In particular, each
agreement: (1) has a term of five years, which is automatically extended each
year for an additional year unless either the Company or the individual elects
not to extend the term; and (2) provides for an annual base salary of $168,000
per year. Each agreement restricts the employee from competing, directly or
indirectly, with the Company for five years following termination of
employment. In the event of a "change of control" (defined in each employment
agreement) the term of the employment agreement will be extended for an
additional two years, and each employee will receive, in addition to other
benefits, a cash payment equal to: (1) the employee's current annual base
salary plus the highest annual bonus for the previous three years; times (2)
the number of years remaining until the employee would reach the age of 65, but
no more than five.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
In establishing and monitoring executive compensation, the Committee
focuses on the Company's mission to continually improve its position in the
scrap metal industry, with a strong focus on improving cashflow and increasing
shareholder value. The Company's executive compensation policy is designed to
enable the Company to attract, retain and motivate the high caliber executives
which the Board and the Committee believe are required in order to achieve the
Company's objective. Each executive officer's compensation, including that of
Messrs. Jacobs and Jennings, is comprised of three elements: (1) base salary;
(2) annual bonus; and (3) incentive compensation. Executive compensation
levels are established based on the Committee's evaluation of market terms and
conditions coupled with the Board's view of what is necessary to attract and
retain key executive officers. Adjustments are made to each executive
officer's total compensation package based on changes in the market factors as
well as each individual's contribution to the Company's performance. Further,
the Company grants stock options as an additional element of compensation.
These stock options are designed to closely align each executive officer's
future compensation to the Company's long-term financial success, as measured
by stock performance. The total number of options awarded each executive is
based on a subjective evaluation of the performance of each executive under
consideration without regard to the number of options held by or previously
granted to each executive. At no point during the last completed fiscal year
did the Company's board modify or reject in any material way any action or
recommendation of the Compensation Committee.
The Compensation Committee:
Xavier Hermosillo
Donald F. Moorehead, Jr.
Harold Rubenstein
6
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of June 18, 1997 by: (i) each
person who is known by the Company to own more than 5% of the Company's Common
Stock (together with such person's address); (ii) the directors, the chief
executive officer and each of the named executive officers of the Company; and
(iii) all current officers and directors as a group. Share amounts and
percentages shown for each person or entity are adjusted to give effect to
shares of the Company's Common Stock that are not outstanding but may be
acquired by a person or entity upon exercise of all options and warrants
exercisable by such entity or person within 60 days of June 18, 1997. However,
those shares of Common Stock are not deemed to be outstanding for the purpose
of computing the percentage of outstanding shares beneficially owned by any
other person.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1) PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES TOTAL SHARES
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Harold Rubenstein
2010 W. Lower Buckeye Dr.
Phoenix, AZ 85009 2,758,883 (2) 17.7%
Robert F. Smith
2211 York Rd.
Oak Brook, IL 60521 1,280,000 9.1%
Ian MacLeod
9309 Rayo Avenue
South Gate, CA 90280 1,074,700 (3) 7.7%
Gerard M. Jacobs
500 North Dearborn, Suite 405
Chicago, IL 60610 863,333 (4) 6.3%
T. Benjamin Jennings
500 North Dearborn, Suite 405
Chicago, IL 60610 863,333 (4) 6.3%
Donald F. Moorehead, Jr.
1001 Fannin, Suite 400
Houston, TX 77002 769,513 (5) 5.6%
Clend Investment Holdings Limited
P.O. Box 173
Road Town, Tortola
British Virgin Islands 735,259 5.4%
George O. Moorehead
2010 W. Lower Buckeye Dr.
Phoenix, AZ 85009 671,016 (6) 5.0%
Mike Melnik 146,289 1.1%
Daniel B. Burgess 85,056 (7) *
Xavier Hermosillo 15,000 (8) *
All current officers and directors as a group (10 persons) 7,272,123 56.6%
</TABLE>
7
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_____________________________
* Less than 1%
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws where applicable and the information
contained in the footnotes to this table.
(2) Consists of 2,112,650 shares owned directly by Mr. Rubenstein and
warrants to purchase 646,233 shares of Common Stock at exercise prices
ranging from $4.00 to $6.48 per share.
(3) Consists of 899,700 shares owned directly by Mr. MacLeod and warrants to
purchase 175,000 shares of Common Stock at exercise prices ranging from
$3.96 to $4.75 per share.
(4) Consists of 580,000 shares owned directly by each of Messrs. Jacobs and
Jennings, options to purchase 200,000 shares of Common Stock and warrants
to purchase 83,333 shares of Common Stock at an exercise price of $4.00
per share, held by each of Messrs. Jacobs and Jennings..
(5) Consists of 605,100 shares owned directly by Mr. Donald F. Moorehead,
Jr., options to purchase 12,500 shares of Common Stock, and warrants to
purchase 151,913 shares of Common Stock at exercise prices ranging from
$4.00 to $6.48 per share.
(6) Consists of 369,163 shares owned directly by Mr. George O. Moorehead,
options to purchase 150,000 shares of Common Stock, and warrants to
purchase 151,853 shares of Common Stock at exercise prices ranging from
$4.00 to $6.48 per share.
(7) Consists of 5,056 shares owned directly by Mr. Burgess and options to
purchase 80,000 shares of Common Stock.
(8) Consists entirely of options to purchase 15,000 shares of Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For a description of agreements entered into with certain Directors and
related parties, see Note 14 to the Company's Consolidated Financial
Statements.
In Fiscal 1997, the Company purchased two parcels of real estate from
Harold Rubenstein and H&S Broadway, a company principally owned by Harold
Rubenstein, for consideration of $150,000 in cash and a $950,000, 9% note
payable due on April 11, 1999. During fiscal 1997, the Company paid $78,000 of
interest, collectively, to H&S Broadway and Harold Rubenstein. The Company
leased the two parcels of real estate to Ellis Metals, Inc. ("Ellis Metals"),
which is principally owned by Harold Rubenstein. During fiscal 1997, the
Company received $78,000 in rent payments from Ellis Metals. The Company also
has a five year option, beginning June 1, 1999, to purchase certain assets of
Ellis Metals for $1.364 million, subject to certain adjustments.
On April 11, 1996, the Company and Harold Rubenstein, entered into a five-year
consulting agreement. The services provided include consultation and direct
management assistance with respect to operations, strategic planning and other
aspects of the Company's business. Fees paid for these services amounted to
$84,000 for fiscal 1997.
On April 11, 1996, the Company entered into a five year exclusive supply
agreement with Ellis Metals, which requires Ellis Metals to sell all of its
inventory to the Company's EMCO subsidiary or to EMCO's customers through a
direct shipment arrangement. In consideration for entering into this
agreement, Ellis Metals receives a monthly exclusivity fee of $2,500 during the
term of the agreement. During fiscal 1997, the Company paid Ellis Metals
$30,000 under terms of the agreement. The Company also advanced $300,000 to
Ellis Metals in exchange for an unsecured noted issued by Ellis Metals. During
fiscal 1997, the Company purchased $3.9 million of inventory from Ellis Metals
and sold $.3 million of inventory to Ellis Metals.
The Company also purchases inventory from Empire Metals, Inc., which is
principally owned by Harold Rubenstein, at prices equivalent to market value.
During the 1997 fiscal year, the Company purchased $.3 million of inventory
from Empire Metals, Inc.
Harold Rubenstein also is a 9.91% shareholder of Waste Manufacturing and
Leasing, a company that leases equipment to EMCO and from which EMCO purchases
manufactured containers. The Company paid $42,000 to Waste Manufacturing and
Leasing during fiscal 1997.
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MacLeod leases land on which certain of its operations are conducted from
Ian MacLeod, a Director of the Company. Rent paid by the Company for fiscal
1997 was $13,200. This lease expires on January 31, 1998. The Company owns
the real property on which MacLeod's principal activities are performed.
Since August 1995, Xavier Hermosillo has provided investor and public
relations services for the Company, through his firm, Xavier Hermosillo &
Associates. The Company has entered into an agreement with Mr. Hermosillo for
the continuation of such services which provides for payments of up to $4,000
per month to Mr. Hermosillo. The Company paid fees of $15,000 and $36,000 for
the five months ended March 31, 1996 and the year ended March 31, 1997,
respectively, for these services.
In conjunction with a loan obtained from a commercial bank on January 7,
1997, personal guarantees were provided by Gerard M. Jacobs, T. Benjamin
Jennings, Donald F. Moorehead, Jr., George O. Moorehead, Harold Rubenstein and
Raymond F. Zack, each of whom is a Director (or former Director) of the
Company. These individuals received warrants to purchase an aggregate of
500,000 shares of restricted Common Stock of the Company at $4.00 per share
(subject to certain restrictions) on or about January 7, 2002 in consideration
for providing the guarantees.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
METAL MANAGEMENT, INC.
By:
------------------------
Gerard M. Jacobs
Director, President and
Chief Executive Officer
By:
------------------------
T. Benjamin Jennings
Director, Chairman of
the Board and Chief
Development Officer
Date: July 29, 1997
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