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EXHIBIT 10.6

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (“Agreement”), is made and entered into as of January 16, 2004, by
and between Harold J. Rouster (“Rouster”) and Metal Management, Inc., a Delaware corporation
(“MTLM”).

     NOW, THEREFORE, in consideration of the premises, promises, mutual covenants and mutual
agreements contained herein, Rouster and MTLM hereby agree as follows:

     1. Employment.

     (a) On the terms and subject to the conditions set forth in this Agreement, MTLM agrees
to employ Rouster as an employee of the following MTLM subsidiaries (the “Subsidiaries”) in
the following positions: President of Metal Management Midwest, Inc., an Illinois
corporation; President of Metal Management Memphis, LLC, a Tennessee limited liability
company; and President of Metal Management Ohio, Inc., an Ohio corporation. Rouster shall
perform such duties and responsibilities as are consistent with such positions and such
other positions as may be assigned to Rouster, from time to time, by MTLM. For as long as
Rouster is so employed, he shall devote his full business time, energy and ability to his
duties, except for incidental attention to the management of his personal affairs; provided,
however, that Rouster shall be permitted to complete promptly after the date of this
Agreement (but in no event more than 30 days after the date of this Agreement) incidental
matters required in the termination of Rouster’s prior employment.

     (b) Employee’s duties under this Agreement shall be performed for the Subsidiaries
principally in the Chicago, Illinois area, with periodic trips to MTLM’s operations and
customers and corporate meetings outside of the Chicago area, as may be required.

     2. Term. The term of Rouster’s employment with the Subsidiaries under this Agreement
shall commence as of January 16, 2004 (the “Commencement Date”) and shall continue through, and end
as of the close of business on March 31, 2008 (the “Employment Period”); provided, however, that on
March 31, 2008 and each anniversary thereof, the Employment Period shall be automatically extended
for successive one-year periods unless either MTLM or Rouster, as the case may be, notifies the
other not less than 60 days prior to the end of the then current Employment Period of its or his
desire not to extend the Employment Period; provided further that the Employment Period may
terminate sooner upon the occurrence of certain events as described in Sections 5, 6, 7, 8 and 10
of this Agreement. The date on which Rouster’s employment is terminated shall be referred to
herein as the “Termination Date” and such date shall also be the date upon which this Agreement
terminates except as to those terms of this Agreement that extend beyond the term of this Agreement
as provided herein.

     3. Compensation.

     (a) Base Compensation. The base compensation to be paid to Rouster for his
services under this Agreement shall be not less than $350,000 per year, subject to

 

 

applicable withholdings, payable in equal periodic installments in accordance with the
usual payroll practices of MTLM or the Subsidiaries, but no less frequently than monthly,
commencing on the Commencement Date. Rouster’s base compensation shall be subject to annual
review for cost of living and merit factors, with any adjustments approved by the
compensation committee of the Board of MTLM (the “Compensation Committee”). The foregoing
is hereafter referred to as Rouster’s “Base Compensation.”

     (b) Bonuses. During the Employment Period, Rouster shall also be eligible to
receive the following:

     (i) Signing Bonus. MTLM shall, subject to applicable withholdings, pay
Rouster $250,000 as a signing bonus, such amount to be payable no later than March
16, 2004, in accordance with the usual payroll practices of MTLM.

     (ii) Annual Bonus. For the period ending March 31, 2004, and for each
subsequent twelve-month period during the Employment Period ending March 31, Rouster
shall be eligible to receive an annual bonus in accordance with the terms of MTLM’s
annual bonus program as then in effect for MTLM’s senior executives or senior
executives of the Subsidiaries; provided, however, the Compensation Committee may
direct MTLM to pay Rouster an annual bonus that exceeds the annual bonus otherwise
payable under such program. Each annual bonus described in this Section 3(b)(ii)
shall be paid at the time called for under MTLM’s annual bonus program for senior
executives.

     (c) Options. Upon execution and delivery of this Agreement by MTLM and
Rouster, Rouster shall be granted the following incentive stock options (“ISOs”) and
non-incentive stock options (“non-ISOs” and, collectively with ISOs, “Options”) to purchase
            shares of MTLM Stock pursuant to the terms of the Metal Management, Inc. 2002 Incentive
Stock Plan (the “Plan”): (i) 2,541 shares of MTLM Stock at an exercise price per share equal
to the Fair Market Value, as defined in the Plan, on the date that the Compensation
Committee approves the grant (such price, the “Grant Date Exercise Share Price”), all such
stock options to be ISOs; (ii) 22,459 shares of MTLM Stock at an exercise price per share
equal to the Grant Date Exercise Share Price, all such stock options to be non-ISOs; (iii)
25,000 shares of MTLM Stock at an exercise price per share of $52.50, all such stock options
to be non-ISOs; and (iv) 25,000 shares of MTLM Stock at an exercise price per share of
$70.00, all such stock options to be non-ISOs. Rouster’s interest in one-third (1/3) of
each grant of ISOs and non-ISOs set forth in clauses (i), (ii), (iii), and (iv) of this
Section 3(c) shall vest on March 31, 2005, provided Rouster is still employed by the
Subsidiaries on such date, and his interest in an additional one-third (1/3) of each such
ISOs and non-ISOs set forth in clauses (i), (ii), (iii), and (iv) of this Section 3(c) shall
vest on each of the next two subsequent anniversaries of such date provided Rouster is still
employed by MTLM on such anniversary date. All the terms and conditions to such grants
shall be set forth for Rouster in certificates in accordance with the terms of the Plan.
Except as otherwise set forth in this Section 3(c), all or part of the ISOs and non-ISOs
that have vested by operation of this Agreement or otherwise shall be exercisable, at the
election of Rouster, at any time on or after the date hereof and on or prior to the tenth
anniversary of the date the Options are granted; provided,

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however, that if the Employment Period terminates for any reason (other than retirement
at or after the age of 65, termination of the Employment Period under Section 5 of this
Agreement, or termination for Cause (as defined below)), Rouster shall have three months
after the date of such termination in which to exercise such Options (but in no event shall
the Options be exercisable after the tenth anniversary of the date the Options are granted).
In the case of retirement at or after the age of 65, Rouster shall have (i) one year after
the date of such retirement in which to exercise any non-ISOs and (ii) three months after
the date of such retirement in which to exercise any ISOs, but in no event shall the
non-ISOs or the ISOs be exercisable after the tenth anniversary of the date the Options are
granted. In the case of termination of the Employment Period under Section 5 of this
Agreement, Rouster (or his estate) shall have (i) two years after the date of such
termination in which to exercise any non-ISOs, and (ii) one year after the date of such
termination in which to exercise any ISOs, but in no event shall the non-ISOs or the ISOs be
exercisable after the tenth anniversary of the date the Options are granted. If Rouster is
terminated for Cause (as defined below), the Options will expire immediately and
automatically at the time of such termination.

     (d) Restricted Stock. Upon execution and delivery of the this Agreement by
MTLM and Rouster, Rouster shall be granted 9,318 shares of restricted common stock, $0.01
par value per share (the “MTLM Restricted Stock”) pursuant to the terms of the Plan. Except
as otherwise provided in Section 8(b) of this Agreement, elsewhere in this Agreement, or the
Plan, Rouster’s interest in one-third (1/3) of such shares of common stock shall become
non-forfeitable on March 31, 2005, provided Rouster is still employed by the Subsidiaries on
such date, and his interest in an additional one-third (1/3) of such shares shall become
non-forfeitable on each of the next two subsequent anniversaries of such date provided
Rouster is still employed by the Subsidiaries on such anniversary date. All the terms and
conditions to such grant shall be set forth for Rouster in a certificate in accordance with
the terms of the Plan.

     (e) Relocation Expenses. Rouster’s normal and reasonable moving and
transportation expenses to Chicago, Illinois will be paid by MTLM. Moving expenses cover
the transportation of normal household articles from Rouster’s residence in Buffalo, New
York, but do not cover shipping automobiles. Additionally, MTLM will reimburse reasonable
expenses for termination of Rouster’s residential lease in Buffalo, New York, temporary
storage of personal and household belongings, and up to three house hunting trips for
Rouster’s spouse. Rouster will also receive a one-time tax gross-up of all moving expenses
reimbursed by MTLM that are taxed under federal or state tax laws.

     4. Fringe Benefits. MTLM shall furnish Rouster with accident, health and life
insurance and reimbursement of all documented reasonable and necessary out-of-pocket expenses
incurred by Rouster on behalf of MTLM by reason of the performance of Rouster’s duties and
responsibilities hereunder. Further, MTLM shall furnish Rouster with all of the additional fringe
benefits made generally available by MTLM to its executive officers and employees or those of its
Subsidiaries recognizing that such fringe benefits may be changed from time to time provided
Rouster shall be deemed immediately eligible for any such fringe benefits to the extent permissible
under the terms of applicable law and the terms of the underlying plans,

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programs and policies. Rouster shall be entitled to take four weeks of paid vacation per
calendar year, and shall be paid on all national and state holidays, during the Employment Period.
Vacation allowances shall not be cumulative from year to year; unused vacation at the end of a
calendar year shall expire. MTLM shall include Rouster as a covered person under MTLM’s and/or the
Subsidiaries’ directors and officers’ insurance policies. MTLM shall furnish Rouster with
appropriate office space, equipment, supplies, and such other facilities and personnel as necessary
or appropriate (de minimis use thereof by Rouster for personal reasons shall not be deemed a breach
of this Agreement). MTLM shall pay Rouster’s dues in such societies or organizations as MTLM deems
appropriate, and shall pay on behalf of Rouster (or reimburse Rouster for) documented reasonable
out-of-pocket expenses incurred by Rouster in attending conventions, seminars, trade shows and
other business meetings and business entertainment and promotional expenses. MTLM shall pay
Rouster an automobile allowance of $1,000.00 per month, subject to applicable withholdings.

     5. Severance Benefits in the Case of Termination by Death or Permanent Disability.
If, during the Employment Period, Rouster dies (as confirmed by a certificate of death) or Rouster
is permanently disabled such that, in the opinion of a physician selected by MTLM and Rouster,
Rouster is rendered incapable of performing the services contemplated under this Agreement for a
period of 12 consecutive months by reason of illness, accident, or other physical or mental
disability (“Permanent Disability”), this Agreement shall be deemed to be terminated as of the date
of such death or of the determination of Permanent Disability. Notwithstanding the foregoing,
Rouster or his estate shall be entitled to the severance and related listed benefits as set forth
in Section 8(b) of this Agreement (collectively, the “Severance Benefits”). Additionally, during
the period prior to a determination of Permanent Disability in which Roster is incapable of
performing the services contemplated under this Agreement, Rouster shall continue to receive the
Base Compensation he was receiving at the time as provided in Section 3 of this Agreement paid on a
pro rata basis to the date of any determination of Permanent Disability.

     6. Severance Benefits in the Case of Termination By MTLM Without Cause or By Rouster for
Good Reason. In the event MTLM terminates Rouster’s employment with the Subsidiaries without
Cause as defined in Section 7(b) of this Agreement, including as a result of a Change of Control as
defined in Section 10(a), or if Rouster terminates his employment with the Subsidiaries for Good
Reason as defined in Section 8(a)(ii), all of Rouster’s benefits under this Agreement shall cease
immediately to the extent allowed by applicable federal and state law upon the date of such
termination, provided that Rouster shall receive the Severance Benefits set forth in Section 8(b)
of this Agreement.

     7. No Severance Benefits in the Case of Termination By MTLM for Cause, By Rouster Without
Good Reason, or By Employee Due to Change in Control and in Accordance with Section 9(b) of this
Agreement.

     (a) No Severance Benefits. In the event: (i) MTLM terminates Rouster’s
employment with the Subsidiaries for Cause as defined in Section 7(b) below; (ii) Rouster
voluntarily terminates his employment with the Subsidiaries without Good Reason as defined
in Section 8(a)(ii); or (iii) Rouster terminates his employment with the Subsidiaries due to
a Change in Control in accordance with Section 9(b) of this

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Agreement; unless otherwise provided herein, all Rouster’s compensation and benefits
under this Agreement shall cease immediately to the extent allowed by applicable federal and
state law upon the date of such termination, provided that Rouster shall receive the Base
Compensation he was then receiving as provided in Section 3 of this Agreement paid on a pro
rata basis to the date of such termination except that in the case of a termination as
described above in Section 7(a)(iii) such compensation pursuant to Section 3 of this
Agreement shall be paid for the period of time so provided in Section 10(b) of this
Agreement.

     (b) Termination for Cause. Any of the following events shall be considered as
“Cause” for the immediate termination of the Employment Period by MTLM:

     (i) final and non-appealable conviction of Rouster for a felony or a nolo
contendere plea with respect to a felony; or

     (ii) final and non-appealable conviction of Rouster for (a) misappropriation by
Rouster of funds or property of MTLM or any Affiliated Entity as defined below or
(b) the commission of other acts of dishonesty relating to his employment; or

     (iii) (a) willful breach of this Agreement which is not cured by Rouster within
three days following receipt by Rouster of written notice of such breach from MTLM
or (b) material neglect by Rouster of any of his material duties or responsibilities
hereunder which is not cured by Rouster within 10 days following receipt by Rouster
of written notice of the acts that MTLM assert constitute such neglect by Rouster,
provided, however, that any such willful breach which is not curable shall be
considered Cause for the immediate termination of the Employment Period by MTLM; or

     (iv) conduct on the part of Rouster that is materially adverse to any known
interest of MTLM or any Affiliated Entity as defined below that continues unabated,
or uncured to the reasonable satisfaction of MTLM, after the expiration of 10 days
following receipt of written notice by Rouster from MTLM.

Notwithstanding the foregoing, Rouster shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a written termination notice signed
by the Chief Executive Officer of MTLM, Chairman of the Board, or another member of the
Board duly authorized to deliver such notice.

     8. Acceleration of Payments. 

     (a) For this Agreement, the following terms shall have the following meanings:

     (i) “Affiliated Entity” means, with respect to MTLM, any other entity or
entities, including but not limited to the Subsidiaries, directly or indirectly
controlling, controlled by, or under common control with MTLM, as well as any joint
venture involving MTLM and, for purposes of this definition,

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“control” means the power to direct or cause the direction of the management or
policies of the controlled entity.

     (ii) “Good Reason” shall mean the occurrence of any of the following events
without Rouster’s express written consent: (a) a reduction by MTLM of Rouster’s
compensation from any level provided for and attained pursuant to the terms of
Section 3 of this Agreement; (b) any material breach by MTLM of any provisions of
this Agreement that is not cured by MTLM within 10 days following receipt by MTLM of
written notice of such breach from Rouster; (c) an assignment without Rouster’s
consent by MTLM that Rouster perform his duties more than 100 miles outside of the
Chicago city limits, other than periodic trips to MTLM’s operations and customers
and corporate meetings outside of the Chicago area; (d) MTLM’s assignment of Rouster
to a position or MTLM’s assignment of responsibilities or duties to Rouster of a
materially lesser degree of status, duties and responsibility than the status,
duties and responsibilities as of the Commencement Date; (e) an action by the
committee appointed by the MTLM Board to administer the Plan that materially reduces
the value of the Options awarded in connection with Section 3(c) of this Agreement
and has the result of treating Rouster materially differently than other employees
and directors who received options, stock appreciation rights or stock grants under
the Plan.

     (iii) “Trigger Date” means the date on which a Triggering Event occurs.

     (iv) “Triggering Event” means: (a) a termination of Rouster’s employment with
the Subsidiaries under Section 5 of this Agreement; (b) a termination of Rouster’s
employment with the Subsidiaries by MTLM without Cause; or (c) a termination of
Rouster’s employment with the Subsidiaries by Rouster for Good Reason whether within
or without 120 days of a Change of Control.

     (b) Occurrence of Triggering Event. Upon the occurrence of a Triggering Event,
Rouster or his estate shall receive from MTLM a lump sum payment equal to the Base
Compensation Rouster was then receiving at the time of the Triggering Event as provided
under Section 3(a) of this Agreement that otherwise would have been payable to Rouster
through March 31, 2008, but for the occurrence of a Triggering Event. Furthermore, any
unvested stock options or stock grants or any unvested long term incentive plan
compensation, including, but not limited to the Options and the MTLM Restricted Stock shall
immediately become vested. Additionally, unless (i) MTLM terminates Rouster’s employment
with the Subsidiaries for Cause, (ii) Rouster terminates his employment with the
Subsidiaries without Good Reason, or (iii) Rouster’s employment is terminated as a result of
Rouster’s death, Rouster shall, at no cost to Rouster, be entitled to continue to
participate in the MTLM-provided health and medical insurance programs until March 31, 2008,
irrespective of any then pre-existing health conditions of Rouster or his spouse provided,
however, that, if this Agreement is terminated as a result of Rouster’s death, Rouster’s
then current spouse shall be entitled to continue to participate in the MTLM-provided health
and medical insurance programs

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for one year after Rouster’s death irrespective of any then pre-existing health
conditions, unless, in each case, such continued participation is prohibited by any
applicable laws or would otherwise jeopardize the tax qualified status of any such programs.
If MTLM is prohibited by applicable law or would otherwise jeopardize the tax qualified
status of any health or medical insurance plan and as a result MTLM terminates coverage, it
shall promptly reimburse Rouster (or Rouster’s spouse as the case may be) for the cost of
obtaining comparable third party coverage irrespective of any then preexisting health
conditions of Rouster and/or his spouse.

     (c) Time of Payment Following Triggering Event. All accelerated payments of
Base Compensation, bonuses, and long term incentive plan compensation due to Rouster
pursuant to this Section shall be paid promptly but in any event within 30 days after the
Trigger Date.

     (d) No Mitigation Obligation. Rouster shall not be required to mitigate
damages or the amount of any Severance Benefits provided to him pursuant to Section 8(b) of
this Agreement, or benefits provided to him pursuant to Section 10(b) of this Agreement, by
seeking other employment or otherwise, nor shall the amount of any Severance Benefits
provided to Rouster under Section 8(b) of this Agreement, or benefits provided to him
pursuant to Section 10(b) of this Agreement, be reduced by any compensation earned by
Rouster as the result of employment by another employer after the termination of Rouster’s
employment or otherwise.

     9. Non-Competition.

     (a) General. Subject to the provisions of Section 9(b) below, in addition to
any other obligations of Rouster under any other agreement with MTLM, in order to assure
that MTLM shall realize the benefits of this Agreement and in consideration of the
employment set forth in this Agreement, Rouster shall not:

     (i) during the period beginning on the date of this Agreement and ending
eighteen months after the Termination Date (the “Non-Competition Period”), directly
or indirectly, whether through an affiliate or otherwise, alone or as a partner,
joint venturer, member, officer, director, employee, consultant, agent, independent
contractor, stockholder, or in any other capacity of any company or business, engage
in any business activity in competition with MTLM or any subsidiary or affiliate of
MTLM (A) prior to the Termination Date, in any activity that is conducted by or
actively planned by MTLM management to be conducted by MTLM or any subsidiary or
affiliate of MTLM in any state in the United States in which MTLM or any subsidiary
or affiliate of MTLM conducts business or is actively planned by MTLM management to
conduct business and (B) on and after the Termination Date, in any activity that is,
on the Termination Date, conducted by or actively planned by MTLM management to be
conducted by MTLM or any subsidiary or affiliate of MTLM in any state of the United
States in which, on the Termination Date, MTLM or any subsidiary or affiliate of
MTLM conducts business or is actively planned by MTLM management to conduct
business; provided, however; that Rouster’s beneficial ownership of less than 5%

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of the shares of stock of any corporation having a class of equity securities
actively traded on a national securities exchange or over-the-counter market shall
not be deemed, in and of itself, to violate the prohibitions of this Section;
provided, however, that Rouster shall not be bound by the restrictions set forth in
this Section 9(a)(i) if MTLM shall not have cured the failure to make any material
payment to Rouster under this Agreement within 30 days following receipt by MTLM of
written notice from Rouster of such failure unless such failure to make such payment
is due to MTLM’s allegation of a material breach of the terms of this Agreement;

     (ii) during the Non-Competition Period, directly or indirectly (A) induce any
person which is a customer of MTLM or any subsidiary or affiliate of MTLM on the
Termination Date to patronize any business directly or indirectly in competition
with the business conducted by MTLM or any subsidiary or affiliate of MTLM on the
Termination Date; (B) canvass, solicit or accept from any person which is a customer
of MTLM or any subsidiary or affiliate of MTLM on the Termination Date, any such
competitive business, or (C) request or advise any person that is a customer of MTLM
or any subsidiary or affiliate of MTLM on the Termination Date to withdraw, curtail
or cancel any such customer’s business with MTLM or any subsidiary or affiliate of
MTLM;

     (iii) during the Non-Competition Period, directly or indirectly employ, or
knowingly permit any company or business directly or indirectly controlled by
Rouster, to employ, any person who was employed by MTLM or any then subsidiary or
affiliate of MTLM at or within six months prior to the Termination Date, or in any
manner seek to induce any such person to leave his or her employment; or

     (iv) directly or indirectly, at any time following the Termination Date, in any
way utilize, disclose, copy, reproduce or retain in his possession any of MTLM’s or
any subsidiary’s or affiliate’s proprietary rights or records, including, but not
limited to, any of their customer or price lists.

     (b) Rouster’s Right To Elect to End Non-Competition Period. In the event that
a Change in Control occurs, Rouster shall have the right to elect, within 120 days of such
Change of Control, to terminate his employment with the Subsidiaries, effective as of 90
days after such election. The Non-Competition Period shall terminate effective as of the
date of such termination. In the event of a termination under this clause (b), Rouster
shall not be entitled to Severance Benefits except for the benefits set forth in Section
10(b) of this Agreement.

     (c) Scope of Restriction. Rouster agrees and acknowledges that the
restrictions contained in this Section 9 are reasonable in scope and duration and are
necessary to protect MTLM after the Commencement Date. If any provision of this Section 9
as applied to any party or to any circumstance is adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other circumstance or the validity or
enforceability of this Agreement. If any such provision, or any part thereof, is

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held to be unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision, and/or to delete specific words or
phrases, and in its reduced form, such provision shall then be enforceable and shall be
enforced. The parties agree and acknowledge that the breach of this Section 9 shall cause
irreparable damage to MTLM and upon breach of any provision of this Section 9, MTLM shall be
entitled to injunctive relief, specific performance or other equitable relief; provided,
however, that this shall in no way limit any other remedies that MTLM may have (including,
but not limited to, the right to seek monetary damages).

     10. Change of Control.

     (a) General. For purposes of this Agreement and with respect to any options,
stock grants and stock appreciation rights issued under the Plan to Executive, “Change of
Control” shall be deemed to mean a “change in control” of the Company of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the “1934 Act”), as in
effect at the time of such “change in control,” provided that such a change in control shall
be deemed to have occurred at such time as (1) any “person” (as that term is used in
Sections 13(d) and 14(d)(2) of the 1934 Act) becomes after the effective date of this
Agreement the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) directly or
indirectly of securities representing 45% or more of the combined voting power of the then
outstanding securities for election of directors of the Company or any successor to the
Company, (2) during any period of two consecutive years or less, individuals who at the
beginning of such period constitute the MTLM Board cease, for any reason, to constitute at
least a majority of the MTLM Board, unless the election or nomination for election of each
person who was not a director at the beginning of such period was approved by vote of at
least two-thirds of the directors then in office who were directors at the beginning of such
period or who were directors previously so approved, (3) there is a dissolution or
liquidation of the Company or any sale or disposition of 50% or more of the assets or
business of the Company, or (4) there is a reorganization, merger, consolidation or share
exchange (other than a reorganization, merger, consolidation, or share exchange with a
wholly-owned subsidiary of the Company) of the Company unless (A) the persons who were the
beneficial owners of the outstanding shares of the common stock of the Company immediately
before the consummation of such transaction beneficially own more than 50% of the
outstanding shares of the common stock of the successor or survivor corporation in such
transaction immediately following the consummation of such transaction and (B) the shares of
the common stock of such successor or survivor corporation beneficially owned by the persons
described in clause (A) immediately following the consummation of such transaction are
beneficially owned by each such person in substantially the same proportion that each such
person had beneficially owned shares of Company common stock immediately before the
consummation of such transaction.

     (b) Occurrence of a Change of Control Termination Election. Upon the
occurrence of (i) a Change of Control and (ii) Rouster’s election to terminate this
employment with the Subsidiaries, as set forth in Section 9(b) of this Agreement, Rouster

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shall be entitled to receive an amount equal to one year of Base Compensation Rouster
was then receiving at the time of such termination and any unvested stock options or stock
grants or any unvested long term incentive plan compensation, including, but not limited to
the Options and the MTLM Restricted Stock, shall immediately become vested.

     11. Confidentiality of Information; Duty of Non-Disclosure. Rouster acknowledges and
agrees that his employment with the Subsidiaries under this Agreement necessarily involves his
understanding of and access to certain trade secrets and confidential information pertaining to the
business of MTLM or any subsidiary or affiliate of MTLM. Accordingly, during the Employment
Period, and until the expiration of the Non-Competition Period, Rouster shall not, directly or
indirectly, without the prior written consent of MTLM, disclose to or use for the benefit of any
person, corporation or other entity, or for himself any and all files, trade secrets or other
confidential information concerning the internal affairs of MTLM or any subsidiary or affiliate of
MTLM, including, but not limited to, confidential information pertaining to clients, services,
products, earnings, finances, operations, methods or other activities; provided, however, that the
foregoing shall not apply to information which is of public record or is generally known, disclosed
or available to the general public or the industry generally. Further, Rouster shall not, directly
or indirectly, remove or retain, without the express prior written consent of MTLM, and upon
termination of this Agreement for any reason shall return to MTLM, any confidential figures,
calculations, letters, papers, records, computer disks, computer print-outs, lists, documents,
instruments, drawings, designs, programs, brochures, sales literature, or any copies thereof, or
any information or instruments derived there from, or any other similar information of any type or
description, however such information might be obtained or recorded, arising out of or in any way
relating to the business of MTLM or any subsidiary or affiliate of MTLM or obtained as a result of
his employment with the Subsidiaries. Rouster acknowledges that all of the foregoing are
proprietary information, and are the exclusive property of MTLM. The covenants contained in this
Section 11 shall survive the termination of this Agreement.

     12. Authority; Enforceability. MTLM has full corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of
this Agreement, the performance by MTLM of its obligations hereunder have been duly and validly
authorized by all necessary corporate action on the part of MTLM. This Agreement has been duly
executed and delivered by MTLM and constitutes a valid and binding agreement of MTLM, enforceable
against MTLM in accordance with its terms, subject to applicable bankruptcy, insolvency and other
similar laws affecting the enforceability of creditors’ rights generally, general equitable
principles and the discretion of courts in granting equitable remedies.

     13. Goodwill. MTLM has invested substantial time and money in the development of its
products, services, territories, advertising and marketing thereof, soliciting clients and creating
goodwill. By accepting employment with MTLM, Rouster acknowledges that the customers are the
customers of MTLM and its subsidiaries and affiliates and that any goodwill created by Rouster
belongs to and shall insure to the benefit of MTLM.

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     14. Notices. Any notice or request to be given hereunder to either party hereto shall
be deemed effective only if in writing and either (a) delivered personally or (b) sent by certified
or registered mail, postage prepaid, to the following addresses or to such other address as either
party may hereafter specify to the other by notice similarly served:

If to Rouster:

Harold J. Rouster

5184 Creek Stone Court

Mason, Ohio 45040

with a copy to:

Dorsey & Whitney LLP

Clifford S. Anderson, Esq.

50 South Sixth Street, Suite 1500

Minneapolis, Minnesota 55402

If to MTLM:

Metal Management, Inc.

500 North Dearborn Street

Suite 600

Chicago, Illinois 60610

Attn:Daniel W. Dienst

with a copy to:

King & Spalding LLP

E. William Bates, II, Esq.

1185 Avenue of the Americas

New York, New York 10036

     15. Assignment. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of MTLM, whether by merger, sale of assets or otherwise. This Agreement
shall be binding upon and inure to the benefit of Rouster’s heirs.

     16. Attorneys’ Fees. (a) Upon receipt by MTLM of statement for legal services from
the attorneys representing Rouster, MTLM shall reimburse Rouster or pay on behalf of Rouster the
reasonable and necessary attorneys’ fees and associated expenses incurred by Rouster in connection
with the negotiation of this Agreement.

          (b) In the event suit or action is brought by any party under this Agreement to enforce or
construe any of its terms, the prevailing party shall be entitled to recover, in addition to all
other amounts and relief, its reasonable and necessary attorneys’ fees and associated expenses
incurred at and in preparation for arbitration, trial, appeal and review.

11

 

     17. Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of Illinois without reference to its choice-of-law principles.

     18. Venue. Any action at law, suit in equity or judicial proceeding arising directly,
indirectly or otherwise in connection with, out of, related to or from this Agreement or any
provision hereof shall be litigated only in the state courts of Illinois or the United States
District Court for the Northern District of Illinois.

     19. Modification. No modification or waiver of any provision hereof shall be made
unless it is in writing and signed by both of the parties hereto.

     20. Scope of Agreement. This Agreement constitutes the whole of the agreement between
the parties on the subject matter, superseding all prior oral and written conversations,
negotiations, understandings, and agreements in effect as of the date of this Agreement.

     21. Severability. To the extent that any provision of this Agreement may be deemed or
determined to be unenforceable for any reason, such unenforceability shall not impair or affect any
other provision, and this Agreement shall be interpreted so as to most fully give effect to its
terms and still be enforceable.

     22. Survival. The parties expressly acknowledge and agree that the provisions of this
Agreement that by their express or implied terms extend beyond the expiration of this Agreement or
the termination of Rouster’s employment under this Agreement shall continue in full force and
effect, notwithstanding Rouster’s termination of employment under this Agreement or the termination
of this Agreement.

     23. Waivers. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy under this Agreement shall operate as a waiver thereof; nor shall
any single or partial exercise of any right or remedy under this Agreement preclude any other or
further exercise thereof or the exercise of any other right or remedy granted hereby or by any
related document or by law.

     24. Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute one and the same
agreement.

12

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 
	 	METAL MANAGEMENT, INC.

 	 
	Dated:  February 25, 2004 	By  	/s/ Daniel W. Dienst	 
	 	 	Daniel W. Dienst 	 
	 	 	Chief Executive Officer 	 
	 
	 	 	 
	Dated:  February 24, 2004 	/s/ Harold J. Rouster	 
	 	 	Harold J. Rouster 	 
	 	 	 
	 

13exv10w7

 

EXHIBIT 10.7

EMPLOYMENT AND NON-COMPETE AGREEMENT

     THIS AGREEMENT is made and entered into as of the 20th day of May 2005, by and
between Metal Management, Inc., a Delaware corporation (“Company”), and Larry Snyder (“Employee”).

RECITALS

	A.	 	Company desires to enter into this Agreement with Employee and Employee desires to enter into
an employment agreement with Company, subject to and upon the terms and conditions set forth
below.
	 
	B.	 	During Employee’s employment by Company, Employee will receive and have access to proprietary
and confidential information, which is a highly valuable and unique asset of Company’s
business, and the disclosure by Employee of any proprietary and/or confidential information of
Company contrary to this Agreement would cause permanent, incalculable and irreparable injury
and damage to Company.
	 
	C.	 	Employee will also receive specialized knowledge and/or training in Company’s business, at
considerable time and expense to Company, and through such training Employee will have the
opportunity to gain close knowledge of and possible influence over customers of Company, and
will in such capacity possess the goodwill of Company, and this Agreement is necessary to
protect Company against unfair loss of said customers, employees and/or goodwill.
	 
	D.	 	Company has made a significant investment in its workforce, including valuable training, and
this Agreement is necessary to protect Company against unfair loss of its employees.

AGREEMENT

     THEREFORE, in consideration of the premises and the mutual covenants and provisions
hereinafter set forth, Company and Employee agree as follows:

	1.	 	Certain Definitions.

	 	1.1	 	Definition of Company. “Company” means Metal Management, Inc. and/or
any of its successors and assigns and any of its present or future subsidiaries or
organizations controlled by it, controlling it, or under common control with it.
	 
	 	1.2	 	Definition of Confidential Information. “Confidential Information”
includes, but is not limited to, information, data, media, records and documents
concerning (a) Company’s services, products, equipment, processes, systems, programs or
methods of operation; (b) Company’s financial affairs, its employees and/or the scope
of their work; (c) Company’s past, present or future clients, and/or the development,
business needs or activities of Company’s customers and/or suppliers and their dealings
with Company; and (d) any other proprietary and/or confidential information of Company.

 

 

	2.	 	Employment and Term.

	 	2.1	 	Nature of Employment. Company hereby agrees to employ Employee and
Employee hereby accepts such employment by Company, subject to and upon the terms and
conditions hereinafter set forth.
	 
	 	2.2	 	Location of Employment. Employee’s duties under this Agreement shall
be performed for Company principally in the Chicago, Illinois area, with periodic trips
to other operations, customers and corporate meetings of Company, as may be requested
by Company.

	3.	 	Duties and Responsibilities of Employee .

	 	3.1	 	Duties and Responsibilities. Employee shall serve as Director of
Non-Ferrous Marketing of Company, reporting to the President of Company, and shall
faithfully and diligently render such services and perform such related duties and
responsibilities as are customarily performed by a person holding such position and as
otherwise may from time to time be reasonably assigned to Employee by Company.
Employee shall not be authorized to enter into any agreement or contract on behalf of
Company, or to commit Company to any obligation, other than in the normal, usual and
ordinary course of Company’s business, without the prior approval of Company.
	 
	 	3.2	 	Efforts of Employee. Employee shall devote and use Employee’s best
skills and efforts and all of Employee’s working time to serve in and perform the
duties of the position for which Employee is hired and any other duties as directed or
assigned by Company. Employee’s position, job title and job duties may change
depending on the business circumstances of Company, as determined by Company. This
Agreement does not guarantee Employee continued employment for any specific period of
time, or any specific position and/or title with Company.

	4.	 	Compensation.

	 	4.1	 	Salary. During the term hereof, Company shall pay to Employee as an
annual salary the amount of $325,000.00 (“Salary”), subject to applicable withholdings.
The Salary shall be payable through and in accordance with Company’s normal payroll
practices during each year. The Salary may be increased annually in the sole
discretion of Company. Company would not have agreed to employ Employee but for
Employee’s agreeing to the terms and conditions of this Agreement. The consideration
set forth in this Agreement, including in this Section 4 and in Section 5.5, is
sufficient and valid consideration to support Employee’s obligations set forth in this
Agreement.

2

 

	 	4.2	 	Bonuses.

	 	(A)	 	Signing Bonus. Company shall, subject to applicable
withholdings, pay Employee a signing bonus promptly after the date hereof
equal to $150,000.00.
	 
	 	(B)	 	Annual Bonus. In addition to Salary, Employee shall
be entitled to participate, in Company’s sole discretion, in the “RONA Plan”,
which is Company’s current annual bonus program, and/or such other bonus
programs in place from time to time as Company, in its sole discretion, deems
appropriate. The bonus payment payable initially to Employee under the “RONA
Plan” will be based on payments equal to 25% (“threshold”), 50% (“target”) or
100% (“maximum”) of Salary, as provided under such “RONA Plan.”

	 	4.3	 	Medical, Life and Disability Insurance. Employee shall be eligible to
participate in the medical and disability insurance policies maintained by Company for
the benefit of full-time, salaried employees of Company, upon the terms and conditions
of such insurance policies. During the employment period, the Company shall reimburse
Employee for reasonable sums expended by Employee for a term life insurance policy,
with a face value of One Million Eight Hundred Thousand Dollars ($1,875,000.00), in
Employee’s name and for Employee’s benefit, with Employee’s designee as a beneficiary,
which policy shall be owned by and be the responsibility of Employee.
	 
	 	4.4	 	Benefits Plans. Employee shall be eligible to participate in any
retirement plan, 401k plan, profit-sharing plan and/or defined benefit plan maintained
by Company for the benefit of full-time, salaried employees of Company, upon the terms
and conditions of such plans.
	 
	 	4.5	 	Vacations. Employee shall be entitled to five (5) weeks paid vacation
per year. Unused vacation shall expire at the end of each calendar year.
	 
	 	4.6	 	Reimbursement of Expenses. Employee shall be entitled to be reimbursed
for all reasonable, documented, lawful expenses incurred by Employee in the performance
of Employee’s duties hereunder, within a reasonable time following the presentation by
Employee of appropriate invoices to Company.
	 
	 	4.7	 	Car Allowance. Company will provide Employee with a monthly car
allowance of $1,000.00 per month, subject to applicable withholdings.

3

 

	5.	 	Termination.

	 	5.1	 	Cause. Company may terminate Employee’s employment at any time prior
to this Agreement’s then scheduled expiration date for Cause. For purposes of this
Agreement, “Cause” shall include, but is not limited to, the following circumstances:

	 	(A)	 	Employee knowingly participates or engages in any act of
fraud, embezzlement or theft (regardless of whether any such act results in a
criminal prosecution or conviction);
	 
	 	(B)	 	Employee willfully damages the property of Company or acts in
any manner in conflict with the best interest’s of Company;
	 
	 	(C)	 	Employee is convicted of any misdemeanor involving an act of
dishonesty or breach of trust or any felony;
	 
	 	(D)	 	Employee has been insubordinate, refuses or fails to perform
the duties assigned to Employee or is negligent in the performance of such
duties; or
	 
	 	(E)	 	Employee has materially breached any provision of this
Agreement.
	 
	 	Any termination of Employee’s employment by Company for Cause shall not limit or
preclude any other right or remedy Company may have under this Agreement or
otherwise. In the event of termination of Employee’s employment by Company for
Cause, Employee shall be entitled to receive Employee’s accrued and unpaid Salary,
non-forfeitable Restricted Stock and unreimbursed business expenses through the date
of termination, but shall not be entitled to any further salary, additional
compensation or other payments, rights or benefits under or in connection with this
Agreement after the termination date.

	 	5.2	 	Death or Permanent Disability. In the event of Employee’s death or
Permanent Disability occurring during the term of this Agreement, this Agreement shall
be deemed terminated and Employee or Employee’s estate, as the case may be, shall be
entitled to receive Employee’s accrued and unpaid Salary, non-forfeitable Restricted
Stock and unreimbursed business expenses through the date of termination, but shall not
be entitled to any further salary, additional compensation or other payments, rights or
benefits under or in connection with this Agreement after the termination date. A
“Permanent Disability” shall be deemed to have occurred after 120 days in the aggregate
during any 12-month period or after 90 consecutive days during which Employee, by
reason of a physical or mental injury, disability or illness, shall have been unable to
discharge fully Employee’s duties under this Agreement. In the event Employee suffers
a physical or mental injury, disability or illness that results in Employee being
unable to discharge fully Employee’s duties under this Agreement, but such injury,
disability or illness is not of a duration sufficient to be considered a Permanent
Disability hereunder, any obligation of Company to make payments to

4

 

	 	 	 	Employee pursuant to this Agreement shall be offset by the amount of any payments
that Employee receives pursuant to any short-term disability plan of Company,
including but not limited to any payments received under a disability insurance
policy described in Section 4.4 above.

	 	5.3	 	Termination by Company. Subject to the provisions of Section 5.5
below, Company may terminate Employee’s employment at any time, with or without Cause.
	 
	 	5.4	 	Termination by Employee. Employee may terminate Employee’s employment
at any time. In the event of such termination by Employee, Employee shall be entitled
to receive Employee’s accrued and unpaid Salary, non-forfeitable Restricted Stock and
unreimbursed business expenses through the date of termination, but shall not be
entitled to any further salary, additional compensation or other payments, rights or
benefits under or in connection with this Agreement after the termination date.
	 
	 	5.5	 	Severance. In the event that Employee’s employment is terminated by
Company (other than for Cause), then Employee shall be entitled to severance by
continuing payment of Employee’s Salary (as in effect on the date of termination)
through Company’s existing payroll practices for a period equal to the 12 months, but
shall not be entitled to any further salary, additional compensation or other payments,
rights or benefits under or in connection with this Agreement after the termination
date. No severance shall be paid in the event that:

	 	(A)	 	Employment is terminated by Company for Cause;
	 
	 	(B)	 	Employment is terminated by the death or Permanent Disability
of Employee; or
	 
	 	(C)	 	Employment is terminated by Employee.

	6.	 	Employee’s Assurances.

	 	6.1	 	Employee is not under any contractual agreement, including any with a former
employer, that would conflict with or in any way prevent Employee from entering into
this Agreement or from performing any and all of Employee’s duties assigned by Company,
including contacting any customers or prospective customers.
	 
	 	6.2	 	Employee will not utilize any proprietary or confidential materials or
information of any former employer while performing Employee’s duties for Company.
Proprietary or confidential information does not include general skills or knowledge
generally known or available to others.

5

 

	7.	 	Non-Disclosure/Confidentiality.

	 	7.1	 	Employee will keep secret, confidential and inviolate and not disclose, either
during or after Employee’s employment by Company, any proprietary or confidential
information or business secret of Company including, without limitation those relating
to: (a) Company’s current, past or future business plans; (b) the business, conduct,
or operations of Company; (c) any methods or ways of doing business used in the
engineering, manufacturing, production and/or marketing of Company’s products or
services; (d) the existence or betterment of, or possible new uses or applications for,
any such products or services; or (e) Company’s customer lists, pricing formulas and
purchasing information or policies.
	 
	 	7.2	 	Upon leaving the employ of Company for any reason, Employee shall promptly
return to Company any and all manuals, notes, plans, computer files, and other media,
customer lists or other records, price sheets, reports, proposals, technical
information, and reproductions thereof, which relate in any way to Company’s
operations, business assets, employee files or records, or any of the foregoing items
covered by this paragraph.
	 
	 	7.3	 	Any and all confidential information which Employee will have access to, use or
create during Employee’s employment with Company is and shall at all times remain the
sole and exclusive property of Company. Employee shall and hereby does assign to
Company any right, title or interest Employee may have in such confidential information
and to all confidential information, inventions, improvements, and developments,
patentable or unpatentable (“Assignments”), which, during Employee’s employment with
Company, Employee has made or conceived or hereafter may make or conceive, either
solely or jointly with others (a) with the use of Company’s time, equipment, materials,
supplies, facilities, trade secrets or Confidential Information, (b) resulting from or
suggested by Employee’s work for Company or (c) in any way relating to any subject
matter within the existing or contemplated business of Company. All such inventions,
improvements and developments shall automatically and immediately be deemed to be the
property of Company as soon as made or conceived. This Assignment includes all rights
to sue for all infringements, including those which may have occurred before this
Assignment.
	 
	 	7.4	 	If Employee is asked by Company, Employee will (at Company’s expense) do all
things and sign all documents reasonably necessary in the opinion of Company to
eliminate any ambiguity as to the rights of Company in the Assignments, including but
not limited to providing Employee’s full cooperation to Company in the event of any
litigation to protect, establish, or obtain such rights of Company.
	 
	 	7.5	 	Employee agrees to disclose promptly to Company all inventions, improvements
and developments when made or conceived. Upon termination of Employee’s employment for
any reason, Employee shall immediately give to Company all written, computerized or
other records of such inventions, improvements, and

6

 

	 	 	 	developments, and make full disclosure thereof to Company, whether or not they have
been reduced to writing.

	 	7.6	 	This Section 7 does not waive or transfer Employee’s rights to any invention
for which no equipment, supplies, facility, or trade secret or confidential information
of Company was used and which was developed entirely on Employee’s own time, unless the
invention relates to the business of Company, or to Company’s actual or demonstrably
anticipated research or development, or the invention results from any work that
Employee performed for Company during the term of Employee’s employment relationship
with Company.

	8.	 	Business Preservation.

	 	8.1	 	Each of the provisions of this Agreement are reasonable and necessary to
preserve and protect the legitimate business interests of Company, including its
customer relationships, confidential information and the training which will be given
to Employee, its present and potential business activities, and the economic benefits
derived therefrom; they will not prevent Employee from earning a livelihood in
Employee’s chosen business and are not an undue restraint on the trade of Employee, or
any of the public interests which may be involved.
	 
	 	8.2	 	The relationships between Company and its customers, the confidential and
proprietary information to which Employee will have access, and the goodwill of Company
and its customer relationships that Employee will enjoy while employed by Company are
significant and valuable to Company.
	 
	 	8.3	 	Because of Company’s valuable interest in its customer relationships, during
Employee’s employment and for a period of 18 months following Employee’s termination of
employment with Company for any reason, Employee will not directly or indirectly
solicit scrap iron, steel and/or any other ferrous and/or non-ferrous metal and/or
metal alloy business, and/or directly or indirectly purchase, collect, deliver,
distribute, haul, process, toll, supply, broker, shred, shear, torch, cold briquette,
bundle, recycle and/or otherwise handle scrap iron, steel and/or other ferrous and/or
non-ferrous metal or metal alloy, from any person, company, partnership, corporation or
other entity that does business with Company or any of its divisions, subsidiaries,
parent, affiliates or successors, or any other person or entity that is, as of the time
of the termination of Employee’s employment or the immediate one-year period prior to
such termination, a customer or supplier of Company with or about whom Employee has had
any dealings, contact or knowledge through Employee’s employment with Company.
	 
	 	8.4	 	In order to protect Company’s relationships with its employees, during
Employee’s employment and for a period of 18 months thereafter, Employee will not
solicit, encourage or have contact with any of Company’s employees for the purpose of
encouraging them to end their employment with Company and/or to join Employee as a
partner, agent, employee or otherwise in a business venture or other business
relationship.

7

 

	 	8.5	 	During Employee’s employment and for an 18-month period following employee’s
termination of employment with Company for any reason, Employee will not in any
capacity related to Employee’s duties while employed by Company directly or indirectly,
provide services to or for any person or entity that collects processes, distributes or
otherwise handles items Company collects, processes, distributes or otherwise handles
(including as described in Section 8.3 above) or otherwise competes with Company in any
way. This restriction is limited to the geographic area that is within a 250 mile
radius of each facility of Company. Also, this restriction is specifically limited to
protect Company’s legitimate and protectible interests and this limited restriction
will not prevent Employee from obtaining employment in other aspects of the scrap iron,
steel or ferrous or non-ferrous metal industry.
	 
	 	8.6	 	In the event Employee breaches any portion of this Section 8, the 18-month
period contained herein shall be extended by the period of time in which Employee has
breached this Section.

	9.	 	Injunctive Relief. A breach of any of the covenants herein contained would cause
irreparable harm to Company’s business and monetary damages would be difficult or impossible
to ascertain and will not afford an adequate remedy. Therefore, in the event of any such
breach, or threatened breach, in addition to such other remedies which may be provided by law,
Company shall have the right to specific performance of the covenants herein contained by way
of temporary and/or permanent injunctive relief, all as it elects, without the need to post
any bond.

	10.	 	Modification or Waiver.

	 	10.1	 	No modification of this Compete Agreement or waiver of any terms or conditions
hereof shall be valid unless in writing and duly executed by the president of Company
or by Employee if Employee is the party to be charged therewith, and no evidence of any
waiver or modification shall be offered or received in evidence in any proceeding,
arbitration or litigation between the parties hereto arising out of or affecting this
Agreement or the rights or obligations of the parties hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid.
	 
	 	10.2	 	The failure in any one or more instances of a party to insist on performance of
any of the terms or conditions of this Agreement or to exercise any right or privilege
in this Agreement conferred, or the waiver by either party of a breach of any of the
terms or conditions of this Agreement shall not be construed as a subsequent waiver of
any such term, condition, right or privilege.

	11.	 	Advance Notice of Prospective Employment. Employee agrees that at least three weeks
prior to accepting employment with, or agreeing to perform services for, any entity that
competes with Company, Employee will notify Company in writing of Employee’s intentions so as
to provide Company with the opportunity to assess whether Employee’s employment or retention
may potentially violate any provisions of this Agreement.

8

 

	12.	 	Attorneys’ Fees and Costs. Employee agrees that in the event Company institutes or
becomes involved in any action to enforce or defend this Agreement, Company shall be entitled
to recover from Employee its attorney’s fees and costs related to such action.

	13.	 	Employee’s Sole Remedy. Employee expressly acknowledges and agrees that Employee’s
sole remedy for breach of this Agreement by Company shall be limited to recovering the salary,
bonus and benefits as provided in Sections 4 and 5.5 of this Agreement.

	14.	 	Employment. Nothing contained in this Agreement is intended to alter the fact that
Employee’s employment shall be at-will, and it is expressly understood that either Company or
Employee may terminate the employment relationship at any time for any reason.

	15.	 	Severability. The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning. The parties believe the time
restrictions herein to be reasonable to protect business activity. However, in the event that
a court of competent jurisdiction deems any provision hereof to be unreasonable, void or
unenforceable, such provision(s) shall be deemed severed from the remainder of the Agreement,
which at the sole discretion of Company shall continue in all other respects to be valid and
enforceable. Any such provision(s) of this Agreement declared void, unreasonable or
unenforceable shall at the sole discretion of Company be deemed revised to the minimum amount
necessary in order to be valid and enforceable.

	16.	 	Survival. The parties expressly acknowledge and agree that the provisions set froth
in Sections 6 through 22 of this Agreement that by their express or implied terms extend
beyond the expiration of this Agreement or the termination of Employee’s employment under this
Agreement shall continue in full force and effect, notwithstanding Employee’s termination of
employment under this Agreement or the termination of this Agreement.

	17.	 	Complete Agreement. This Agreement sets forth all of the terms and conditions of the
agreement between the Parties concerning the subject matter hereof and any prior oral
communications are superseded by this Agreement.

	18.	 	Binding Effect/Applicable Law. This Agreement and all of Employee’s obligations
arising under it shall be governed by, and construed under the law of the State of Illinois;
shall survive the termination of Employee’s employment regardless of the manner of such
termination; and shall be binding upon Employee’s heirs, executors and administrators. The
parties agree that any suit, action or proceeding with respect to this Agreement shall be
brought in the courts of Cook County of the State of Illinois or in the U.S. District Court
located in the Cook County of the State of Illinois. The parties hereto hereby accept the
exclusive jurisdiction of those courts for the purpose of any such suit, action or proceeding.
The parties hereto hereby irrevocably waive, to the fullest extent permitted by law, any
objection that any of them may now or hereafter have to delaying of venue of any suit, action
or proceeding arising out of or relating to this Agreement or any judgment entered by any
court in respect thereof brought in the State of Illinois and

9

 

	 	 	 	hereby further irrevocably waive any claim that any such suit, action or proceeding brought
in the State of Illinois has been brought in an inconvenient forum.

	19.	 	Amendment. This Agreement may not be altered, amended or modified except in writing
signed by the parties.

	20.	 	Benefit. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, personal representatives, successors and assigns.

	21.	 	Notice. Any notice or other communication required or permitted to be given to a
party pursuant to this Agreement shall be in writing and shall be determined to have been duly
given when delivered personally or sent by Unites States certified or registered mail, return
receipt requested, postage prepaid, as follows:

	 	 	 	 	 
	 

	 	As to Company:
	 	Metal Management, Inc.
	 

	 	 	 	500 North Dearborn
	 

	 	 	 	Chicago, Illinois 60610
	 

	 	 	 	Attention: President
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	King & Spalding LLP
	 

	 	 	 	1185 Avenue of the Americas
	 

	 	 	 	New York, New York 10036
	 

	 	 	 	Attention: E. William Bates, II
	 
	 	 	 	 
	 

	 	As to Employee:
	 	Larry Snyder

Either party may change such party’s address for the purpose of this Section 21 by written
notice given in the manner herein provided. In the event of notice by certified or
registered mail, such notice shall be effective upon receipt or refusal to receive.

	22.	 	Opportunity to Review. Employee was given this Agreement on May 20, 2005 and had the
opportunity to consult with an attorney regarding the restrictions in this Agreement and
Company and Employee have engaged in negotiations over the terms of this Agreement prior to
Employee’s execution of this Agreement. Employee shall not be hired unless Employee executes
and returns this Agreement to Company on or before May 31, 2005 (or such later date as may be
requested by Employee and agreed to by Company in its sole discretion).

10

 

     IN WITNESS WHEREOF, the parties have hereunto set their hands as of the date first above
written.

	 	 	 	 	 
	 	METAL MANAGEMENT, INC.

 	 
	 	By  	/s/ Daniel
W. Dienst	 
	 	 	Daniel W. Dienst 	 
	 	 	CEO, President & Chairman 	 
	 
	 	EMPLOYEE

 	 
	 	/s/
 Larry Snyder	 
	 	Larry Snyder  	 
	 	 	 
	 

11

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