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                                                                   EXHIBIT 10.42


                       DIRECTOR INDEMNIFICATION AGREEMENT
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     THIS DIRECTOR INDEMNIFICATION AGREEMENT (this "Agreement") is made and
entered into as of this _____ day of __________, 2000, by and between Metal
Management, Inc., a Delaware corporation (the "Company"), and ________________
(the "Indemnitee").

     WHEREAS, the Indemnitee has agreed to serve as a director of the Company,
in which capacity the Indemnitee will perform valuable services for the Company,
and, in order to induce the Indemnitee to continue to serve in such capacity,
the Company has determined to indemnify the Indemnitee against certain
liabilities incurred or to be incurred by the Indemnitee in connection with his
serving as a director of the Company.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:

     Section 1. Indemnity of Indemnitee. The Company hereby agrees to hold
harmless and indemnify the Indemnitee to the full extent authorized or permitted
by Delaware law, as in effect from time to time.

     Section 2. Insurance and Self-Insurance. In addition to the indemnities
contained herein, the Company shall maintain in full force and effect, in
reasonable amounts from reputable insurers, directors and officers liability
insurance to cover certain liabilities which may be incurred by its directors in
the performance of their services for the Company ("D & O Insurance") unless
such insurance becomes not reasonably available or if, in the reasonable
business judgment of the Company's Board of Directors (as comprised at the time)
either (a) the premium cost of such insurance is substantially disproportionate
to the amount of coverage, or (b) the coverage provided by such insurance is so
limited by exclusions that there is insufficient benefit from such insurance. If
the Company does not maintain D & O Insurance, the Company agrees to self insure
the Indemnitee to the full extent of the coverage which would have otherwise
been provided for the benefit of the Indemnitee pursuant to the D & O Insurance
policy in effect as of the date hereof. This Section is in no way limited by,
and in no way limits, the indemnities otherwise provided herein.

     Section 3. Additional Indemnity. Subject only to the exclusions set forth
in Section 4, the Company shall indemnify the Indemnitee:

     (a) against any and all expenses (including without limitation legal fees),
judgments, fines, penalties, ERISA excise taxes and amounts paid in settlement,
actually and reasonably incurred by the Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding (whether civil,
criminal, administrative or investigative, and including, without limitation, an
action by or in the right of the

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Company) to which the Indemnitee is, was or at any time becomes a party, or
is threatened to be made a party, as a result, directly or indirectly, of
serving at any time as a director of the Company or at the request of the
Company as a director of another corporation, partnership, limited liability
company, trust or other enterprise; and

     (b) otherwise to the fullest extent to which the Indemnitee may be
indemnified by the Company under Delaware law and the Company's By-laws.

     Section 4. Limitations on Indemnity. No indemnity pursuant to Section 1 or
Section 3 shall be paid by the Company:

     (a) on account of any suit in which judgment is rendered against the
Indemnitee for an accounting of profits made from the purchase or sale of
securities of the Company pursuant to the provisions of ss.16(b) of the
Securities Exchange Act of 1934, as amended, or similar provisions of any
federal, state or local statutory law;

     (b) in relation to any matter if it shall have been adjudicated that the
action or omission of the Indemnitee was material to the matter giving rise to
the proceeding and was committed in bad faith or was the result of active or
deliberate dishonesty or the Indemnitee actually received an improper personal
benefit, or in the case of criminal proceedings, the Indemnitee had reasonable
cause to believe that the act or omission was unlawful; or

     (c) if a final decision by a court having jurisdiction on the matter
determines that such indemnification is not lawful.

     Notwithstanding anything in this Agreement, the termination of any
proceeding by judgment, order or settlement does not create any presumption that
the indemnity provided to the Indemnitee hereunder is precluded under Delaware
law or by this Section 4.

     Section 5. Continuation of Obligations. All obligations of the Company
under this Agreement shall continue during the period that the Indemnitee is a
director of the Company or is, at the request of the Company, a director of
another corporation, partnership, limited liability company, trust or other
enterprise and shall continue thereafter as long as the Indemnitee may be
subject to any possible claim or any threatened, pending or completed action,
suit or proceeding (whether civil, criminal or investigative) as a result,
directly or indirectly, of being such a director.

     Section 6. Notification and Defense of Claim. After receipt by the
Indemnitee of notice of the commencement of any action, suit or proceeding, if a
claim is to be made against the Company under this Agreement, the Indemnitee
shall promptly notify the Company of the commencement thereof. The failure of
the Indemnitee to so notify the Company shall not relieve the Company from any
liability which it may have


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to the Indemnitee other than under this Agreement. With respect to any such
action, suit or proceeding of which the Indemnitee notifies the Company of the
commencement:

     (a) The Company shall be entitled to participate therein at its own
expense.

     (b) The Company shall be entitled to assume the defense thereof, jointly
with any other indemnifying party similarly notified, with counsel selected by
the Company and approved by the Indemnitee, which approval shall not be
unreasonably withheld. After notice from the Company to the Indemnitee of the
Company's election to assume such defense, the Company shall not be liable to
the Indemnitee under this agreement for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof other than the
reasonable costs of investigation or as otherwise provided below. The Indemnitee
shall have the right to employ his own counsel in such action, suit or
proceeding, but the fees and expenses of such counsel incurred after notice from
the Company or its assumption of such defense shall be the expense of the
Indemnitee, except in the case of any one of the following, in any of which
cases the reasonable fees and expenses of such counsel (but only one such
counsel) shall be borne by the Company:

          (i) the employment of such counsel by the Indemnitee has been
     authorized by the Company;

          (ii) the Indemnitee shall have reasonably concluded that there may be
     a conflict of interest between the Company and the Indemnitee in the
     conduct of such defense; or

          (iii) the Company has not in fact employed counsel to assume such
     defense.

The Company shall not be entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Company or as to which the Indemnitee
shall have made the conclusion described in subsection 6(b)(ii) hereof.

          (c) The Company shall not be required to indemnify the Indemnitee
     under this Agreement for any amounts paid in settlement of any action or
     claim without its written consent.

     Section 7. Consent to Settlement. Neither the Company nor the Indemnitee
will unreasonably withhold its consent to any proposed settlement. The Company
shall not settle any action or claim in any manner which would impose any
penalty or limitation on the Indemnitee without the Indemnitee's written
consent.

     Section 8. Payment of Expenses. The Company shall pay or reimburse all
reasonable expenses incurred by the Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding to which the
Indemnitee is, was or at any time becomes a party, or is threatened to be made a
party, as a result, directly or


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indirectly, of serving at any time as a director of the Company or at the
request of the Company as a director of another corporation, partnership,
limited liability company, trust or other enterprise in advance of the final
disposition of such action, suit or proceeding upon receipt by the Company of:

     (a) a written affirmation by the Indemnitee of the Indemnitee's good faith
belief that the standard of conduct necessary for indemnification by the Company
under Delaware law, the By-laws of the Company, this Agreement or otherwise have
been met; and

     (b) a written undertaking by or on behalf of the Indemnitee to repay the
amount if it shall ultimately be determined that such standard of conduct has
not been met, which written undertaking shall be an unlimited general obligation
of the Indemnitee, but need not be secured and shall be accepted without
reference to financial ability to make the repayment.

     Section 9. Repayment of Expenses. The Indemnitee shall reimburse the
Company for all reasonable expenses paid by the Company in defending any civil
or criminal action, suit or proceeding against the Indemnitee if and to the
extent that the Indemnitee shall ultimately be determined not to be entitled to
indemnification by the Company for such expenses under Delaware law, the By-laws
of the Company, this Agreement or otherwise.

     Section 10. Legal Fees and Expenses. The Company shall pay all reasonable
legal fees and expenses which the Indemnitee may incur to collect money due
under this Agreement or as a result of the Company's contesting the validity or
enforceability of this Agreement.

     Section 11. Notice. All notices and communications under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered in
person or mailed by United States certified or registered mail, postage prepaid,
if addressed as follows:

         If to the Company:         Metal Management, Inc.
                                    500 N. Dearborn Street
                                    Suite 400
                                    Chicago, IL  60610
                                    Attention:  General Counsel

         If to the Indemnitee:



or at such other address for either party as shall be specified by like notice
except that notice of change of address shall be effective only upon receipt.


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Section 12. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. In any
court proceeding pursuant to this Agreement, the Company shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable. The Company shall stipulate in any such court or in any
arbitration that the Company is bound by all the provisions of this Agreement
and is precluded from making any assertion to the contrary.

Section 13. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware.

Section 14. Successors. This Agreement shall be binding upon, and inure to the
benefit of, and be enforceable by and against, the Indemnitee and the Company
and the respective heirs, successors and assigns.

Section 15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.




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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.


                                    METAL MANAGEMENT, INC.



                                    By:
                                       ----------------------------------------
                                             David A. Carpenter

                                    Title:   Executive Vice President


                                    -------------------------------------------
                                             [DIRECTOR]





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