Exhibit 10.2.3
DR ACQUISITION CORP.
c/o THE DOE RUN RESOURCES CORPORATION
0000 Xxxx 000 Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
As of April 7, 1994
Xx. X. X. Xxxxxxxx
c/o The Doe Run Resources Corporation
0000 Xxxx 000 Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Re: Net Worth Appreciation Agreement
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Dear Xx. Xxxxxxxx:
This will confirm the understanding of this corporation, (the "Company")
with you, effective upon acquisition by this corporation of the capital stock of
The Doe Run Resources Corporation ("Doe Run"), with respect to your Net Worth
Appreciation benefit, intended to constitute additional incentive compensation
to you as an employee of Doe Run.
1. VESTING. On March 31, 1997, provided that you have been continuously
in the employ of Doe Run from the date hereof through that date, you shall
receive a net worth appreciation credit of 9/10ths of 1% and on March 31 in each
of the years 1998 and 1999 you shall receive an additional net worth
appreciation
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credit of 3/10th of 1%, provided that you have been continuously in the employ
of Doe Run from the date hereof to the applicable March 31, for a maximum
credit, if you remain in the employ of Doe Run continuously through March 31,
1999, of 1.5%. You shall not receive any credit unless you remain in the employ
of Doe Run from the date hereof continually until March 31, 1997, and thereafter
you shall not receive credit for any partial year, provided that (a) if your
employment terminates due to death or permanent disability preventing you from
performing your usual employment functions and duties ("disability") on or after
March 31, 1995 and prior to March 31, 1997, you shall receive a credit of 3/10th
of 1% if such termination is prior to March 31, 1996 and 6/10ths of 1% if such
termination is on or after March 31, 1996 and prior to March 31, 1997, and (b)
if your employment terminates after March 31, 1997 and before March 31, 1999,
due to death or disability, you shall receive a credit of 3/10th of 1% for the
partial year in which the termination takes place (in addition to all credits
previously accrued).
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2. NET WORTH APPRECIATION BENEFIT. Upon the termination of your
employment by Doe Run, other than for cause, you shall be entitled to a net
worth appreciation payment ("Payment") equal to the product of (a) the total
percentage credited to you under paragraph 1 (a maximum of 1.5%) multiplied by
(b) the "net worth increment." The "net worth increment" is the amount, if any,
by which the consolidated net worth of this Company and its subsidiaries, as at
the end of its fiscal quarter immediately preceding the date of your
termination, exceeds its consolidated net worth as of the date hereof, provided,
however, that any increase in net worth resulting from a capital contribution to
the Company or Doe Run or the sale of stock of the Company or Doe Run shall be
disregarded in calculating "net worth increment". The determination of the
independent public accountants for the Company as to the net worth increment,
made in accordance with generally accepted accounting principles, consistently
applied, shall be conclusive on each of us. If there is no "net worth
increment", no amount shall be payable. If your employment is terminated for
legal cause, you shall not be entitled to receive any payment.
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3. PAYMENT. The Payment shall be payable to you (or your designee or
estate) in 40 equal quarterly installments, without interest, commencing three
(3) months after the termination of your employment, and at 3 month intervals
thereafter.
4. DIVIDENDS; SALE OF SUBSTANTIALLY ALL OF THE COMPANY'S STOCK OR ASSETS.
(a) If and in the event either Doe Run or the Company shall pay
either a dividend or management fee or any other form of distribution in
excess of $1,200,000 annually to The Renco Group, Inc. ("Renco") or any
affiliate, other than a subsidiary of the Company, (this distribution shall
include any transfer of assets from the Company or Doe Run to Renco or any
other subsidiary company of Renco in any form whether as cash or other form
of value which shall have the effect of reducing the net worth of the
Company) while you shall be employed by Doe Run, then you shall be entitled
to receive, as additional compensation, an amount equal to 1.5% of such
cash dividend or distribution. This provision shall not
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apply to intercompany payments among the Company and its own wholly-owned
subsidiaries or among two wholly-owned subsidiaries of the Company, or to
reimbursement to Renco for a proportionate part of costs, such as audit
charges and insurance premiums, paid by Renco on behalf of itself and all
of its subsidiaries including the Company and Doe Run;
(b) If, while you shall be employed by Doe Run (and whether before or
after March 31, 1997), all or substantially all the stock or assets of the
Company or of Doe Run shall be sold to a person who is not an affiliate of
Xxx Xxxx Xxxxxxx, or if The Renco Group, Inc. sells a controlling interest
in the Company, then, upon the closing of such sale, your full 1.5% net
worth appreciation credit shall be deemed to be vested, and you shall be
entitled to receive as payment in full of your participation, your pro rata
share (1.5%) of the "net proceeds" of the sale, in kind, on the same terms
and conditions as the Company or its shareholder is being paid. "Net
proceeds", for purposes hereof, shall mean the amount if any, by which the
proceeds
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of the sale after deducting all expenses of the sale, all applicable
federal, state and local taxes, and all liabilities retained by the seller
exceeds the consolidated net worth of the Company on the date hereof.
Except for such payment, neither you nor this Company nor Doe Run have any
further rights or liabilities hereunder.
5. CONDITION PRECEDENT. The Company's obligation to make the Payment to
you shall be conditioned on your faithful adherence to your employment
arrangements with Doe Run and on your refraining from engaging directly or
indirectly in any activity competitive with the business of the Company or Doe
Run during the period over which such payments are to be made to you. If you
do engage in any such competitive activities, then we shall no longer be
obligated to make any payments to you hereunder.
6. NOTICE. Any notices to be sent pursuant hereto shall be sent by hand,
certified or registered mail or overnight service to you, at the address
indicated above and to the Company, c/o
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The Renco Group, Inc. at 00 Xxxxxxxxxxx Xxxxx (00xx Xxxxx), Xxx Xxxx, Xxx
Xxxx 00000 (after October 1, 1994: 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx -
42nd floor), to the attention of Xxx Xxxx Xxxxxxx, or to any other address which
any of us may designate by notice in writing.
Please confirm that the foregoing correctly sets forth our full agreement
with respect to your net worth appreciation benefit by signing and returning the
enclosed copy of this letter.
Very truly yours,
DR ACQUISITION CORP.
/s/ Xxx Xxxx Xxxxxxx
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Xxx Xxxx Xxxxxxx
Chairman of the Board
Accepted and Agreed to:
/s/ X. X. Xxxxxxxx
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X. X. Xxxxxxxx
FIRST AMENDMENT TO THE NET WORTH APPRECIATION AGREEMENT
MARCH 12, 1998
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This will confirm our agreement with you to amend your Net Worth
Appreciation Agreement as follows:
1) DR Acquisition Corp. hereby assigns the Net Worth Appreciation
Agreement to The Doe Run Resources Corporation ("Doe Run") and
Doe Run accepts such assignment.
2) The definition of net worth increment will be changed to a)
substitute Doe Run for the Company and b) exclude from
consolidated net worth all preferred stock.
The economic effect of such changes is that the redemption of the preferred
stock of Doe Run will not reduce net worth increment.
3) Paragraph 4(a) of the Agreement is amended by substituting
$2,400,000 for $1,200,000.
Please acknowledge the foregoing by signing below.
Very truly yours,
DR Acquisition Corp.
The Doe Run Resources Corporation
/s/ Xxx Xxxx Xxxxxxx
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Xxx Xxxx Xxxxxxx
Chairman of the Board
Accepted and agreed to:
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
