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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-58635
PROSPECTUS
4,909,698 SHARES
METAL MANAGEMENT, INC.
COMMON STOCK
This Prospectus relates to the resale of up to an aggregate of 4,909,698
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of Metal Management, Inc., a Delaware corporation (the "Company" or
"Metal Management"), which may be offered (the "Offering") for sale by persons
(individually, a "Selling Stockholder," and collectively, the "Selling
Stockholders") described in this Prospectus. The Shares offered for resale
hereby were issued by the Company in respect of the following: (i) 4,839,698
Shares were issued by the Company in connection with business acquisitions
described herein; and (ii) 70,000 Shares are issuable upon the exercise of
warrants granted by the Company (the "Warrants") in connection with business
acquisitions or to employees of the Company.
The Shares may be offered for sale from time to time by or for the account
of the Selling Stockholders or their respective pledgees, donees, transferees or
other successors in interest in the open market, on the Nasdaq National Market,
in the over-the-counter market, in privately negotiated transactions, or a
combination of these methods, at market prices prevailing at the time of sale,
at prices related to the prevailing market prices or at negotiated prices. The
Shares are intended to be sold through one or more broker-dealers or directly to
purchasers. These broker-dealers may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholders or
purchasers of the Shares for whom the broker-dealer may act as agent, or to whom
the Selling Stockholders may sell as principal, or both (which compensation as
to a particular broker-dealer may be in excess of customary concessions). The
Selling Stockholders and any broker-dealers who act in connection with the sale
of the Shares hereunder may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended (the "Securities Act") and any
commissions received by them and the proceeds of any resale of the Shares may be
deemed to be underwriting discounts and commissions under the Securities Act.
If all of the Warrants are exercised, the Company will receive proceeds of
$903,750. The Company will receive no portion of the proceeds from the sale of
the Shares offered hereby and will bear certain expenses incident to their
registration. See "Selling Stockholders" and "Plan of Distribution."
The Common Stock is currently traded on The Nasdaq Stock Market ("Nasdaq")
under the symbol "MTLM." On August 13, 1998, the last reported price for the
Common Stock as reported by Nasdaq was $6.38 per share. As of August 13, 1998,
the Company had a total of 39,099,812 shares of Common Stock outstanding.
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PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "INVESTMENT CONSIDERATIONS" APPEARING IN THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 1998, AS THE SAME MAY BE
AMENDED FROM TIME TO TIME.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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August 14, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, and, in accordance therewith, files reports,
proxy and information statements and other information with the Securities and
Exchange Commission (the "Commission"). These reports, proxy and information
statements and other information concerning the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and at the Commission's
regional offices located at Citicorp Center, Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661 and at Seven World Trade Center, Suite 1300, New
York, New York, 10048. Copies of such material can also be obtained from the
Commission at prescribed rates through its Public Reference Section at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a site on
the World Wide Web at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The Common Stock is currently traded on
Nasdaq. Information filed by the Company with Nasdaq may be inspected through
EDGAR, the Commission's on-line filing service.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Shares offered hereby
(including all amendments and supplements thereto, the "Registration
Statement"). This Prospectus, which forms a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement,
certain parts of which have been omitted in accordance with the rules and
regulations of the Commission. Statements contained herein concerning the
provisions of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. The Registration
Statement and the exhibits thereto can be inspected and copied through EDGAR.
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THE COMPANY
GENERAL
Metal Management is one of the largest and fastest-growing full service
metals recyclers in the United States, with 59 recycling facilities in 14 states
as of August 14, 1998. The Company is a leading consolidator in the metals
recycling industry and has achieved this position primarily through the
implementation of its national strategy of completing and integrating regional
acquisitions. The Company believes that its consolidation strategy will enhance
the competitive position and profitability of the operations that it acquires
through improved managerial and financial resources and increased economies of
scale.
Metal Management is primarily engaged in the collection and processing of
ferrous and non-ferrous metals for resale to metals brokers, steel producers,
and producers and processors of other metals. The Company collects industrial
scrap and obsolete scrap, processes it into reusable forms, and supplies the
recycled metals to its customers, including mini-mills, integrated steel mills,
foundries and metals brokers. The Company believes that it provides one of the
most comprehensive offerings of both ferrous and non-ferrous scrap metals in the
industry. The Company's ferrous products primarily include shredded, sheared,
hot briquetted, cold briquetted and bundled scrap and broken furnace iron. The
Company also processes non-ferrous metals, including aluminum, copper, stainless
steel, brass, titanium and high-temperature alloys, using similar techniques and
through application of the Company's proprietary technologies. During the year
ended March 31, 1998, the Company sold or brokered approximately 3.1 million
tons of ferrous scrap and approximately 178.1 million pounds of non-ferrous
scrap.
The Company's predecessor was incorporated on September 24, 1981 as a
California corporation under the name General Parametrics Corporation, and was
re-incorporated as a Delaware corporation in June 1986 under the same name.
Prior to April 1996, the Company manufactured and marketed color thermal and dye
sublimation printers and related consumables, including ribbons, transparencies
and paper. The Company sold this business in two separate transactions in July
and December of 1996 for $1.3 million in cash and future royalty streams which
the Company does not anticipate will result in material payments to the Company.
On April 12, 1996, the Company changed its name to "Metal Management, Inc."
The Common Stock is traded on Nasdaq under the trading symbol "MTLM." The
Company's principal executive offices are located at 500 North Dearborn Street,
Suite 405, Chicago, Illinois 60610, and its telephone number is (312) 645-0700.
USE OF PROCEEDS
This Prospectus relates to Shares being offered and sold for the accounts
of the Selling Stockholders. The Company will not receive any proceeds from the
sale of the Shares (but will receive proceeds of $903,750 if all the Warrants
are exercised). There can be no assurance that any of the Warrants will be
exercised or that the Company will receive any proceeds on exercise thereof. The
Company has agreed to pay all expenses related to the registration of the
Shares. See "Plan of Distribution."
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SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder, the
aggregate number of Shares of Common Stock beneficially owned by each Selling
Stockholder as of August 14, 1998 (including Shares that are issuable on
exercise of options and warrants), and the aggregate number of Shares registered
hereby that each Selling Stockholder may offer and sell pursuant to this
Prospectus. Because the Selling Stockholders may offer all of a portion of the
Shares at any time and from time to time after the date hereof, no estimate can
be made of the number of Shares that each Selling Stockholder may retain upon
completion of the Offering. However, assuming all of the Shares offered
hereunder are sold by the Selling Stockholders, then unless otherwise noted,
after completion of the Offering, none of the Selling Stockholders will own more
than one percent (1%) of the shares of Common Stock outstanding. Of the
4,909,698 Shares offered hereby, 4,839,698 Shares were issued and outstanding as
of August 14, 1998, and an aggregate of 70,000 Shares have been reserved for
issuance by the Company to certain of the Selling Stockholders upon the exercise
of the Warrants. Based on information provided to the Company by the Selling
Stockholders, no Selling Stockholder owns one percent (1%) or more of the
Company's Common Stock, except as indicated below. Beneficial ownership after
the Offering will depend on the number of Shares sold by each Selling
Stockholder. The table set forth below does not include such additional number
of Shares which may be issuable upon exercise of warrants to prevent dilution
resulting from stock splits, stock dividends or similar events, all of which
Shares, to the extent permitted under Rule 416 of the Securities Act, are being
offered by this Prospectus.
<TABLE>
<CAPTION>
SHARES SHARES TO BE
BENEFICIALLY PERCENTAGE OFFERED FOR
OWNED PRIOR OWNED PRIOR THE SELLING
TO THE TO THE STOCKHOLDER'S
SELLING STOCKHOLDERS OFFERING OFFERING ACCOUNT
-------------------- ------------ ----------- -------------
<S> <C> <C> <C>
Paul I. and Rena F. Haveson............................... 1,077,065(1) 2.75% 1,027,065
Ryan A. Haveson........................................... 7,761(2) * 7,761
Ian Albert................................................ 173,335(3) * 173,335
Betty Albert.............................................. 442,000(4) 1.13% 442,000
Eric Albert............................................... 84,333(5) * 69,333
Brian Albert.............................................. 84,333(6) * 69,333
Lisa Albert............................................... 69,333(7) * 69,333
Alan Shumway.............................................. 43,333(8) * 43,333
Katrick, Inc. ............................................ 45,454(9) * 45,454
Charles R. Fritz.......................................... 50,000(10) * 50,000
Accurate Iron & Metal Co. ................................ 10,000(11) * 10,000
Judy Ferraro.............................................. 20,000(12) * 20,000
G. Robert Triesch, III.................................... 1,007,580(13) 1.14% 428,590
Andrew J. Naporano, Jr. .................................. 444,005(14) 2.38% 160,291
JANX Partners, L.P. ...................................... 929,090(15) 2.02% 790,295
McDonald & Company Securities, Inc. ...................... 37,709(16) * 18,854
Nicroloy Company.......................................... 203,692(17) * 203,692
M. Kimerling & Sons, Inc. ................................ 650,000(18) 1.66% 483,383
Jos. A. Schiavone Corp. .................................. 435,558(19) 1.11% 435,558
Midwest Metallics, L.P. .................................. 362,088(20) * 362,088
--------- ---------
Total................................................ 6,176,669 4,909,698
========= =========
</TABLE>
- -------------------------
* less than 1%
(1) Consists of 1,027,065 shares issued in connection with the Company's
acquisition of R&P Holdings, Inc., Charles Bluestone Company, and R&P Real
Estate, Inc. (collectively, "Bluestone"). Mr. and Mrs. Haveson own such
shares in joint tenancy. Also consists of options to purchase 50,000 shares
issued to Mr. Haveson in connection with the Employment Agreement between
the Company and Mr. Haveson.
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(2) Consists of 7,761 shares issued in connection with the Company's
acquisition of Bluestone.
(3) Consists of 173,335 shares issued in connection with the Company's
acquisition of Superior Forge, Inc. ("Superior Forge").
(4) Consists of 442,000 shares issued in connection with the Company's
acquisition of Superior Forge.
(5) Consists of (i) 69,333 shares issued in connection with the Company's
acquisition of Superior Forge; and (ii) options to purchase 15,000 shares
issued in connection with the Employment Agreement between the Company and
Mr. Albert.
(6) Consists of (i) 69,333 shares issued in connection with the Company's
acquisition of Superior Forge; and (ii) options to purchase 15,000 shares
issued in connection with the Employment Agreement between the Company and
Mr. Albert.
(7) Consists of 69,333 shares issued in connection with the Company's
acquisition of Superior Forge.
(8) Consists of 43,333 shares issued in connection with the Company's
acquisition of Superior Forge. Mr. Shumway has gifted 1500 shares each to
Denise Shumway, Kim Shumway and Brian Shumway.
(9) Consists of 45,454 shares issued in connection with the Company's
acquisition of substantially all of the assets of 138 Scrap, Inc. and
Katrick, Inc. (collectively, "138 Scrap").
(10) Consists of shares issuable upon the exercise of warrants to purchase
50,000 shares issued in connection with the Employment Agreement between
the Company and Mr. Fritz (the sole shareholder of 138 Scrap, Inc.),
pursuant to the acquisition by the Company of substantially all of the
assets of 138 Scrap. Twenty percent (20%) of such warrants vest (subject to
certain conditions) annually during the first five (5) years following the
commencement of the above-described Employment Agreement.
(11) Consists of 10,000 shares issued in connection with the Company's
acquisition of substantially all of the assets of Accurate Iron & Metal Co.
("Accurate Iron & Metal").
(12) Consists of shares issuable upon the exercise of warrants to purchase
20,000 shares issued in connection with the Employment Agreement between
the Company and Ms. Ferraro, pursuant to the acquisition of substantially
all of the assets of Accurate Iron & Metal. Twenty percent (20%) of such
warrants vest (subject to certain conditions) annually during the first
five (5) years following the commencement of the above-described Employment
Agreement.
(13) Consists of 857,180 shares and shares issuable upon the exercise of
warrants to purchase 150,000 shares issued in connection with the Company's
acquisition of Newell Recycling of Denver, Inc. ("Newell").
(14) Consists of 444,005 shares issued in connection with the Company's
acquisition of Naporano Iron & Metal Co. and Nimco Shredding Co.
(collectively, "Naporano").
(15) Consists of 929,090 shares issued in connection with the Company's
acquisition of Naporano.
(16) Consists of 37,709 shares issued in connection with the Company's
acquisition of Naporano.
(17) Consists of 203,692 shares issued in connection with the Company's
acquisition of substantially all of the assets of Nicroloy Company
("Nicroloy").
(18) Consists of 650,000 shares issued in connection with the Company's
acquisition of substantially all of the assets of M. Kimerling & Sons, Inc.
("Kimerling").
(19) Consists of 435,558 shares issued in connection with the Company's
acquisition of certain assets of Michael Schiavone & Sons, Inc. (and
related entities) ("Schiavone"). Subsequent to said acquisition, Michael
Schiavone & Sons, Inc. changed its name to "Jos. A. Schiavone Corp."
(20) Consists of 362,088 shares issued in connection with the Company's
acquisition of certain assets of Midwest Metallics, L.P. ("Metallics").
There are no material relationships between any of the Selling Stockholders
and the Company or any of its predecessors or affiliates, nor have any such
material relationships existed within the past three years, except as follows:
(a) On May 27, 1998, the Company and Paul I. Haveson entered into (i)
an Employment Agreement with respect to Mr. Haveson's position as President
of Charles Bluestone Company; and
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(ii) a Noncompetition Agreement which restricts Mr. Haveson's ability to
compete with the Company and its affiliates.
(b) On May 27, 1998, the Company and Rena F. Haveson entered into a
Noncompetition Agreement which restricts Ms. Haveson's ability to compete
with the Company and its affiliates.
(c) On March 17, 1998, the Company entered into three separate lease
agreements to lease (with an option to purchase) certain real property from
Ian and Betty Albert (each lease having an initial lease term of five
years). The monthly base rent for the property is based on a fair market
value determination.
(d) On March 17, 1998, the Company entered into an Employment
Agreement with Ian Albert with respect to his position as President and
Chief Executive Officer of Superior Forge.
(e) On March 17, 1998, the Company entered into an Employment
Agreement with Eric Albert with respect to his position as Vice President
of Sales of Superior Forge.
(f) On March 17, 1998, the Company entered into an Employment
Agreement with Brian Albert with respect to his position as Sales Engineer
of Superior Forge.
(g) On March 17, 1998, the Company entered into an Employment
Agreement with Alan Shumway with respect to his position as Finance Manager
of Superior Forge.
(h) Pursuant to the Merger Agreement, dated February 16, 1998, by and
between (among others) the Company and the Superior Forge shareholders, Ian
and Betty Albert have (under certain conditions) a right of first refusal
to purchase the stock or assets of Superior Forge.
(i) Pursuant to the Asset Purchase Agreement, dated April 29, 1998, by
and between (among others) the Company and Katrick, Inc. ("Katrick"),
Katrick's and Charles R. Fritz's ability to compete with the Company and
its affiliates is restricted.
(j) On April 29, 1998, the Company entered into a Lease Agreement with
Charles R. Fritz and a trust benefitting Mr. Fritz, for the leasing (with a
right of first refusal to purchase) of certain real estate to the Company.
The annual base rent is $60,000 and the initial lease term is one year.
(k) On April 29, 1998, the Company entered into an Option Agreement
with Charles R. Fritz and a trust benefitting Mr. Fritz for the granting of
an option to the Company to purchase the land subject to the lease
described in the immediately preceding paragraph.
(l) On April 29, 1998, the Company entered into an Employment
Agreement with Charles R. Fritz with respect to Mr. Fritz's position as
President of the 138 Scrap Division of Cozzi Iron & Metal, Inc. ("Cozzi"),
pursuant to the acquisition by the Company of substantially all of the
assets of 138 Scrap.
(m) Pursuant to the Asset Purchase Agreement, dated February 26, 1998,
by and between (among others) the Company and Accurate Iron & Metal,
Accurate Iron & Metal's and Judy Ferraro's ability to compete with the
Company and its affiliates is restricted.
(n) On February 26, 1998, the Company entered into an Employment
Agreement with Judy Ferraro with respect to Ms. Ferraro's position as
Senior Account Executive of Cozzi, pursuant to the acquisition by the
Company of substantially all of the assets of Accurate Iron & Metal.
(o) On July 1, 1998, the Company and Andrew J. Naporano, Jr. entered
into (i) an Employment Agreement with respect to Mr. Naporano's position as
a director and Senior Vice President of Naporano; and (ii) a Noncompetition
Agreement which restricts Mr. Naporano's ability to compete with the
Company and its affiliates.
(p) Pursuant to the Asset Purchase Agreement, dated July 9, 1998, by
and between (among others) the Company and Nicroloy, Nicroloy's ability to
compete with the Company and its affiliates is restricted.
(q) On July 9, 1998, the Company entered into an Employment Agreement
with Thomas S. Netzer (the sole shareholder of Nicroloy) with respect to
Mr. Netzer's position as President of Nicroloy
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Acquisition Corp. (the subsidiary of the Company which purchased the assets
of Nicroloy pursuant to the Asset Purchase Agreement described in paragraph
(p) above).
(r) Pursuant to the Asset Purchase Agreement, dated July 7, 1998, by
and between (among others) the Company and Kimerling, Kimerling's ability
to compete with the Company and its affiliates is restricted.
(s) On July 7, 1998, the Company entered into Employment Agreements
with Jonathan L. Kimerling and David B. Kimerling (each a 50% owner of the
voting common stock of Kimerling) with respect to their positions with
Kimerling Acquisition Corp. (the subsidiary of the Company which purchased
the assets of Kimerling pursuant to the Asset Purchase Agreement described
in paragraph (r) above).
(t) On July 1, 1998, the Company and Michael Schiavone & Sons, Inc.
(now known as "Jos. A. Schiavone Corp.") entered into a Noncompetition
Agreement which restricts Jos. A. Schiavone Corp.'s ability to compete with
the Company and its affiliates.
(u) On July 1, 1998, Michael Schiavone (majority shareholder of Jos.
A. Schiavone Corp.) entered into (i) a Noncompetition Agreement which
restricts Mr. Schiavone's ability to compete with the Company and its
affiliates; and (ii) an Employment Agreement with respect to Mr.
Schiavone's position as President of 1MS Acquisition, Inc. (the subsidiary
of the Company which purchased the assets of Schiavone (as described above
in footnote 19 to the "Selling Stockholders" table), and which, subsequent
to said purchase, changed its name to "Michael Schiavone & Sons, Inc.").
(v) Pursuant to the Asset Purchase Agreement, dated July 14, 1998, by
and between (among others) the Company and Metallics, Metallics' ability to
compete with the Company and its affiliates is restricted.
PLAN OF DISTRIBUTION
The Shares may be sold or distributed from time to time by the Selling
Stockholders, or by pledgees, donees or transferees of, or other successors in
interest to, the Selling Stockholders, directly to one or more purchasers
(including pledgees) or through brokers, dealers or underwriters who may act
solely as agents or may acquire Shares as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. The
distribution of the Shares may be effected by one or more of the following
methods: (i) ordinary brokers' transactions, which may include long or short
sales; (ii) transactions involving cross or block trades or otherwise on Nasdaq;
(iii) purchases by brokers, dealers or underwriters as principals and resale by
such purchasers for their own accounts pursuant to this Prospectus; (iv) "at the
market" to or through market makers or into an existing market for the Common
Stock; (v) in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected through agents;
(vi) through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or (vii) any combination of the foregoing, or by
any other legally available means. In addition, the Selling Stockholders or
their successors in interest may enter into hedging transactions with
broker-dealers who may engage in short sales of Common Stock in the course of
hedging the positions they assume with the Selling Stockholders. The Selling
Stockholders or their successors in interest may also enter into option or other
transactions with broker-dealers that require the delivery to such
broker-dealers of the Shares, which Shares may be resold thereafter pursuant to
this Prospectus.
Brokers, dealers, underwriters or agents participating in the distribution
of the Shares as agent may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders (and, if they act as
agent for the purchaser of such Shares, from such purchaser). Such discounts,
concessions or commissions as to a particular broker, dealer, underwriter or
agent might be greater or less than those customary in the type of transaction
involved.
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<PAGE> 8
The Selling Stockholders and any such brokers, dealers or other agents that
participate in such distribution may be deemed to be "underwriters" within the
meaning of the Securities Act, and any discounts, commissions or concessions
received by the Selling Stockholders and any such brokers, dealers or other
agents might be deemed to be underwriting discounts and commissions under the
Securities Act. Neither the Company nor the Selling Stockholders can presently
estimate the amount of any such compensation. The Company knows of no existing
arrangements between any Selling Stockholder and any other Selling Stockholder,
broker, dealer or other agent relating to the sale or distribution of the
Shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the Shares may not simultaneously engage in
market activities with respect to the Common Stock for the applicable period
under Regulation M prior to the commencement of such distribution. In addition
and without limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-5 and Regulation M, which
may limit the timing of purchases and sales of any of the Shares by the Selling
Stockholders. All of the foregoing may affect the marketability of the Common
Stock.
The Company will pay substantially all of the expenses incident to this
Offering of the Shares by the Selling Stockholders other than commissions,
concessions and discounts of brokers, dealers or other agents. Each Selling
Stockholder may indemnify any broker, dealer, or other agent that participates
in transactions involving sales of the Shares against certain liabilities,
including liabilities arising under the Securities Act. The Company has agreed
to indemnify certain Selling Stockholders and any such statutory "underwriter"
and controlling persons of such "underwriter" against certain liabilities,
including certain liabilities under the Securities Act.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers.
DESCRIPTION OF CAPITAL STOCK
The Certificate of Incorporation (as amended) of the Company (the
"Certificate of Incorporation") authorizes capital stock consisting of
80,000,000 shares of Common Stock, par value $.01 per share, and 4,000,000
shares of preferred stock without designation, par value $0.01 per share
("Preferred Stock"). There were 39,099,812 shares of Common Stock issued and
outstanding as of August 13, 1998. Additionally, the Board of Directors has
designated 36,000 shares of Preferred Stock as "Series A Preferred Stock," face
amount of $1,000 per share, 12,764 shares of which were outstanding as of August
13, 1998, and 23,000 shares of Preferred Stock as "Series B Preferred Stock,"
face amount of $1,000 per share, 19,726 shares of which were outstanding as of
August 13, 1998. The following summary description of the capital stock of the
Company is qualified in its entirety by reference to the Certificate of
Incorporation and Bylaws of the Company.
Common Stock. Each share of Common Stock is entitled to one vote. There are
no preemptive, subscription, conversion or redemption rights pertaining to the
shares of Common Stock. Stockholders are entitled to receive dividends as
declared by the Board of Directors out of assets legally available therefor and
to share ratably in the assets of the Company available upon liquidation.
Preferred Stock. The Company's certificate of incorporation grants the
Board of Directors the right to cause the Company to issue, from time to time,
all or part of the preferred stock remaining undesignated in one or more series,
and to fix the number of shares of preferred stock remaining undesignated and
determine or alter for each series, the voting powers, full, limited, or none,
and other designations, preferences, or relative, participating, optional or
other special rights and such qualifications, limitations, or restrictions
thereof. On August 8, 1997, the Company designated 36,000 shares of preferred
stock as "Series A Convertible Preferred Stock," par value $.01 per share
(Stated Value of $1,000 per share). On November 20, 1997, the Company designated
23,000 shares of preferred stock as "Series B Convertible Preferred Stock," par
value $.01 per share (Stated Value of $1,000 per share).
The Series A Preferred Stock has a "Liquidation Preference" equal to $1,000
per share plus any accrued and unpaid dividends. Upon the liquidation,
dissolution or winding up of the Company, holders of the Series A
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Preferred Stock are entitled to receive payment of the Liquidation Preference on
a pro rata basis based on the Liquidation Preference of the preferred stock held
by each holder before any payment is made to holders of Common Stock or any
stock of the Company junior to the Series A Preferred Stock.
Dividends on the Series A Preferred Stock accrue at an annual rate of 6% of
the Stated Value and are payable in cash or, at the Company's option, and upon
satisfaction of certain conditions, in additional shares of Series A Preferred
Stock. The holders of Series A Preferred Stock are able to convert the shares of
Series A Preferred Stock into Common Stock at a price equal to the lower of: (i)
$18.30 (to be adjusted to reflect stock splits, stock dividends or similar
events); or (ii) 85% of the average closing bid price for the common stock for
the five trading days prior to the conversion date.
If the conversion of the Series A Preferred Stock would result in the
holders receiving more than 2,500,000 shares of Common Stock, then the Company
may, in certain circumstances, redeem any shares of Series A Preferred Stock in
excess of 2,500,000 shares at a redemption price equal to: (i) 117% of the
Stated Value of the shares; plus (ii) any accrued and unpaid dividends on such
shares. Any shares of Series A Preferred Stock which have not been converted on
or before August 8, 2000 (the "Maturity Date") will automatically be converted
to shares of Common Stock at the Maturity Date. However, if, at the Maturity
Date any of the "Mandatory Conversion Conditions" are not satisfied, then the
Company will be required to pay the holders of Series A Preferred Stock cash in
an amount equal to the Liquidation Preference for each share of Series A
Preferred Stock owned by the holder. "Mandatory Conversion Conditions" include:
(i) a registration statement covering the resale of all of the shares of Common
Stock issuable upon conversion of the Series A Preferred Stock is effective, or
such resale may be made under Rule 144(k) under the Securities Act.
The Series A Preferred Stock does not grant holders voting rights except
that, so long as the Series A Preferred Stock is outstanding, without the prior
approval of the holders of at least a majority of all shares of the Series A
Preferred Stock outstanding at the time, the Company may not: (i) increase the
number of shares of Series A Preferred Stock which the Company is authorized to
issue; (ii) alter or change the rights, preferences or privileges of the Series
A Preferred Stock or any other capital stock of the Company so as to adversely
affect the Series A Preferred Stock; or (iii) create any new class or series of
capital stock having a preference over the Series A Preferred Stock as to
distribution of assets upon liquidation, dissolution or winding up of the
Company. Approval of holders of the Series A Preferred Stock as to actions
described in (ii) and (iii) above will not be required if the average closing
price for the Common Stock on the five trading days immediately preceding the
effective date of such a change is equal to or exceeds $27.45 per share.
The Series B Preferred Stock has a "Liquidation Preference" equal to $1,000
per share plus any accrued and unpaid dividends. Upon the liquidation,
dissolution or winding up of the Company, holders of the Series B Preferred
Stock are entitled to receive payment of the liquidation preference on a pro
rata basis based on the Liquidation Preference of the stock held by each holder
before any payment is made to holders of Common Stock or any stock of the
Company junior to the Series B Preferred Stock.
Dividends on the Series B Preferred Stock accrue, whether or not declared
by the Board of Directors, at an annual rate of 4.5% of the Stated Value of each
outstanding share of Series B Preferred Stock. Dividends are payable in cash or,
at the Company's option, and upon satisfaction of certain conditions, in
additional shares of Series B Preferred Stock.
The holders of Series B Preferred Stock may convert shares of Series B
Preferred Stock into Common Stock at a price equal to the lowest of: (i) 120% of
the closing bid price for the Common Stock on the date of purchase of the Series
B Preferred Stock (to be adjusted to reflect stock splits, stock dividends or
similar events) (the "Fixed Conversion Price"); (ii) 92.5% of the average
closing bid price for the Common Stock for the five trading days prior to the
date of the conversion notice; or (iii) if applicable, the lowest traded price
of the Common Stock during the time when the Common Stock is not listed on
Nasdaq or listed on the New York Stock Exchange or other national securities
exchange.
If the conversion of the Series B Stock would result in the holders
receiving more than 2,000,000 Shares of Common Stock, then the Company may, in
certain circumstances, redeem any shares of Series B Stock in
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<PAGE> 10
excess of 2,000,000 shares at a redemption price equal to: (i) 117% of the
Stated Value of the shares; plus (ii) any accrued and unpaid dividends on such
shares. Any shares of Series B Preferred Stock which have not been converted
within three years from the date of purchase will automatically be converted to
shares of Common Stock at the maturity date of the Series B Preferred Stock.
However, if, at the maturity date, a registration statement covering the resale
of all of the shares of Common Stock issuable upon conversion of the Series B
Preferred Stock is not effective, and resale may not be made under Rule 144(k)
under the Securities Act, then the Company will be required to pay to the
holders of Series B Preferred Stock cash in an amount equal to the liquidation
preference for the shares of Series B Preferred Stock owned by the holder.
The Series B Preferred Stock does not grant holders voting rights, except
that, so long as shares of Series B Preferred Stock are outstanding, without the
prior approval of the holders of at least a majority of all shares of the Series
B Preferred Stock outstanding at the time, the Company may not: (i) increase the
number of shares of Series B Preferred Stock which the Company is authorized to
issue; (ii) alter or change the rights, preferences or privileges of the Series
B Preferred Stock or any other capital stock of the Company so as to adversely
affect the Series B Preferred Stock; or (iii) create any new class or series of
capital stock having a preference over the Series B Preferred Stock as to
distribution of assets upon liquidation, dissolution or winding up of the
Company. Approval of holders of the Series B Preferred Stock as to actions
described in (ii) and (iii) above will not be required if the average closing
price for the Common Stock on the five trading days immediately preceding the
effective date of such a change is equal to or exceeds 150% of the Fixed
Conversion Price.
Certificate of Incorporation and Bylaws. The Company's Certificate of
Incorporation was amended on April 9, 1996 to change the Company's corporate
name to "Metal Management, Inc." The directors of the Company are elected each
year at the annual meeting of the stockholders for terms of one year and until
their successors are elected and qualified; existing directors may nominate and
elect qualified persons to fill vacancies on the Board of Directors.
Stockholders' Agreement. Albert A. Cozzi, Frank J. Cozzi and Gregory P.
Cozzi (collectively, the "Cozzi Stockholders"), Samstock, L.L.C. ("Samstock")
and Messrs. Jacobs and Jennings (collectively, the "MTLM Stockholders") and the
Company entered into a stockholders agreement dated as of December 19, 1997 and
having a term of ten years, unless renewed or extended (the "Stockholders
Agreement"). Under the Stockholders Agreement, the Cozzi Stockholders, Samstock
and the MTLM Stockholders have agreed that each group will act in a manner to
cause the nomination of the directors slated for election at each annual meeting
of the Company, five of whom shall be selected by the Cozzi Stockholders and
five of whom shall be selected by the MTLM Stockholders (provided that each
group has agreed to nominate one individual, independent and unaffiliated from
each group or the Company, as part of its slate) and one of whom shall be
selected by Samstock. The Stockholders Agreement further requires each group to
vote for the other group's nominees for election to the Board and 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.
Transfer Agent and Registrar. The Transfer Agent and Registrar for the
Common Stock is LaSalle National Bank of Chicago.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company and the Selling Stockholders by Mayer, Brown & Platt, Chicago, Illinois.
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EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended March 31, 1998, the supplementary consolidated financial statements of the
Company incorporated by reference to the Company's Form 8-K dated July 1, 1998,
the financial statements of Aerospace Metals, Inc. incorporated by reference to
the Company's Form 8-K dated May 1, 1998, and the combined financial statements
of Naporano Iron & Metal Co. and Nimco Shredding Co. incorporated by reference
to the Company's Form 8-K (and amendment thereto on Form 8-K/A) dated July 1,
1998, have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated balance sheets of Cozzi Iron & Metal, Inc. and
subsidiaries as of December 31, 1996 and 1995 and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 1996 incorporated in this Prospectus by
reference from the Company's Proxy Statement, dated November 20, 1997, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference (Commission File No. 0-14836):
(1) The Company's Annual Report on Form 10-K for the year ended March
31, 1998.
(2) The Company's Proxy Statement dated November 20, 1997 (relating to
the acquisition of Cozzi Iron & Metal, Inc. and including historical and
pro forma financial statements).
(3) The Company's Current Report on Form 8-K dated March 31, 1998
(relating to the Company's credit facility with BT Commercial Corporation).
(4) The Company's Quarterly Report on Form 10-Q/A for the quarter
ended December 31, 1997.
(5) The Company's Current Report on Form 8-K dated May 1, 1998
(relating to the acquisition of Aerospace Metals, Inc. and its consolidated
subsidiaries and including historical and pro forma financial statements).
(6) The Company's Current Report on Form 8-K dated May 1, 1998
(relating to risk factors that could affect the Company's future financial
condition).
(7) The Company's Current Report on Form 8-K dated May 13, 1998
(relating to the sale by the Company, in a Rule 144A private offering, of
$180 million of senior subordinated notes).
(8) The Company's Current Report on Form 8-K dated July 1, 1998 (filed
July 2, 1998) (providing supplementary consolidated financial statements of
the Company that give effect to the Company's acquisition of R&P Holdings,
Inc. as a pooling of interests).
(9) The Company's Current Report on Form 8-K dated July 1, 1998 (filed
July 7, 1998), and amendment thereto on Form 8-K/A dated July 1, 1998
(filed July 10, 1998) (relating to the acquisition of Naporano Iron & Metal
Co. and Nimco Shredding Co. and including historical and pro forma
financial statements).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document or information incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent
11
<PAGE> 12
that a statement contained herein or in any subsequently filed document that
also is, or is deemed to be, incorporated herein by reference, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The making of a modifying or superseding statement shall not be deemed an
admission that the modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an omission to
state a material fact that is required to be stated or that is necessary to make
a statement not misleading in light of the circumstances in which it was made.
The Company hereby undertakes to provide without charge to each person
including any beneficial owner to whom a copy of this Prospectus has been
delivered, upon written or oral request of the person, a copy of any or all of
the foregoing documents or information referred to above that has been
incorporated herein by reference in this Prospectus (other than exhibits to
documents, unless these exhibits are specifically incorporated by reference into
the documents). Requests for these documents should be made to Mr. Robert C.
Larry at the Company's principal executive offices located at 500 North Dearborn
Street, Suite 405, Chicago, Illinois 60610; telephone number (312) 645-0700.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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Available Information.................. 2
The Company............................ 3
Use of Proceeds........................ 3
Selling Stockholders................... 4
Plan of Distribution................... 7
Description of Capital Stock........... 8
Legal Matters.......................... 10
Experts................................ 11
Incorporation of Certain Documents by
Reference............................ 11
</TABLE>
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METAL MANAGEMENT, INC.
4,909,698 SHARES
COMMON STOCK
($.01 PAR VALUE)
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PROSPECTUS
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AUGUST 14, 1998
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