Terms of Metal Management, Inc. Fiscal 2008 RONA Incentive Compensation Plan
Applicable to
Executive Officers

Purpose

The purpose of the Fiscal 2008 RONA Incentive Compensation Plan (the “Plan”) is
to advance the interests of Metal Management, Inc. (the “Company”) by motivating
officers, managers and other key employees of the Company and its subsidiaries
to achieve the Company’s operating and financial goals through the opportunity
to earn bonus compensation.

The objective of the Plan is to maintain flexibility in the determination of
individual awards while providing guidelines for senior managers that are
financially sound and practical.

As in prior fiscal years, the Plan will measure performance based on each
subsidiary’s or region’s, or the Company’s return on net assets (“RONA”), as
specified below. The purpose of using RONA as a measure of performance is to
motivate senior management to effectively manage working capital and to maximize
asset utilization.

Administration

The Plan is administered by the Compensation Committee of the Board of Directors
(the “Compensation Committee”). The Compensation Committee consists of members
of the Board who are not employees and who are not eligible for participation in
this Plan. Awards under the Plan may be made, at the discretion of the
Compensation Committee, in the form of a cash bonus, stock options and
restricted stock, or any combination thereof

The Compensation Committee may establish such rules and regulations, as it deems
necessary for the Plan and its interpretation. The Compensation Committee may
delegate some or all of its administrative powers and responsibilities under the
Plan to the Chief Executive Officer for employees other than any ‘covered
employee’ (as defined in Section 162(m) of the Internal Revenue Code of 1986).

Eligibility

Employees eligible to participate in the Plan include those employees in the
following job categories. To be eligible for payment, employees must be actively
employed by the Company at the end of the fiscal year, March 31, 2008. Bonus
targets, expressed as a percentage of base salary at threshold, target and
maximum levels, for the Company’s senior management are as follows:

                              Bonuses as % of Base Salary Paid in Fiscal Year
Job Category   Threshold   Target   Maximum Senior Management                  
     
Chief Executive Officer
    50 %     100 %     200 %
CFO/Other Named Executive Officers
    25 %     50 %     100 %

The Threshold level indicates the minimum acceptable performance level that will
generate a bonus award. The award pools for achieving between the threshold and
maximum levels will be compensated using a linear method. Awards above the
maximum level of performance are subject to the discretion and determination of
the Compensation Committee.

Compensation Committee Discretion

When the Compensation Committee determines RONA performance, they may exclude
any or all “extraordinary items” as determined under U.S. generally accepted
accounting principles and any other unusual or non-recurring items, including,
without limitation, the charges or costs associated with restructurings of the
Company, discontinued operations, and the cumulative effects of accounting
changes. The Compensation Committee also may adjust RONA performance and
Adjusted Enterprise Value (as defined below) for the year as it deems equitable
in recognition of unusual or non-recurring events affecting the Company, region
or business unit (including, without limitation, mergers, acquisitions and
divestitures); changes in applicable tax laws or accounting principles; or such
other factors as the Compensation Committee may determine (including, without
limitation, any adjustments that would result in the Company paying
non-deductible compensation to a covered employee).

The Compensation Committee, in its discretion and for reasons sufficient to the
Compensation Committee, can adjust the bonus award payable to any participant up
or down, based upon his or her achievement of threshold, target or maximum
level; provided, however the Compensation Committee may not lower the bonus
award payable to a participant below threshold level, unless the Compensation
Committee determines, in its discretion, that the participant has (i) failed to
satisfactorily perform his or her duties and responsibilities, (ii) violated in
some material respect written Company policies or procedures, (iii) engaged in
fraud or conduct resulting or intending to result directly or indirectly in gain
or personal enrichment for the participant at the Company’s expense, or
(iv) otherwise acted, or failed to act, in a manner that warrants forfeiting all
or a part of his or her bonus.

Performance Measure

Senior management will be evaluated based on the Company’s and/or the regional
operating performance in accordance with the table set forth below.

      Job Category   Performance Measure
CEO/President/CFO
Senior Corporate Executives
 
100% Company Performance
 
   
 
   
Regional Presidents
  50% Company Performance / 50% Regional Performance
 
   

Other Conditions Underlying the RONA Program for Fiscal 2008

1.   The RONA program has a continuous payout process that operates on a linear
payout schedule. The payout schedule will begin for EBITDA levels that are over
the threshold level, but do not exceed the maximum level. Awards will be
determined by matching actual performance to the appropriate point on the linear
payout schedule.

2.   If the Company, a region or a subsidiary exceeds their maximum level of
EBITDA, the Compensation Committee has the discretion to provide additional
awards over and above the maximum level.

3.   Participants in the RONA Plan for which a part of their bonus is subject to
Company wide performance and/or regional performance cannot receive a RONA award
through Company wide and/or regional wide participation that is greater than the
RONA level earned through their own subsidiary. This means that if the Company
overall earns a target award and a RONA participant works for a subsidiary that
does not earn threshold level of performance, then that RONA plan participant
will not be eligible for any payment based on the overall performance of the
Company or the region.

4.   The allocation of corporate overhead will be based on each subsidiary’s
management of working capital (50%) and the Adjusted Enterprise Value (50%).

Calculation of RONA Returns

In order for bonus awards to be made under the Plan, each subsidiary, region,
and the Company must achieve a minimum RONA return of 16%, after the allocation
of corporate overhead expenses and after earning the bonus payout. Based on the
Company’s aggregate enterprise value before any Changes in Net Assets, this
would equate to EBITDA of approximately $119.0 million after deduction of
corporate overhead and bonus expense. The target and maximum RONA returns have
been established at 20% and 24%, respectively, for Fiscal 2008. The Compensation
Committee evaluated the performance requirements for each subsidiary or business
unit and region and modified certain performance thresholds accordingly. Bonus
awards are determined for each business on a stand-alone or region basis except
for Corporate for which awards will be determined on a Company-wide basis.

Award Distributions

At the end of the fiscal year, the program will be administered and awards
determined by the CEO and President subject to the approval of the Compensation
Committee. It is contemplated that payments under the RONA Plan will be
distributed in the last payroll of May 2008. Awards under the Plan will be made,
at the discretion of the Compensation Committee, in the form of a cash bonus,
stock options and restricted stock, or any combination thereof.