EXHIBIT 10.3(e)
MAGNESIUM CORPORATION OF AMERICA
000 XXXXX 0000 XXXX
XXXX XXXX XXXX, XXXX 00000
June 11, 1996
Xx. Xxxxxx X. Xxxxxx
c/o Magnesium Corporation of America
000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Dear Sir:
Reference is made to your net worth appreciation participation
agreement with this Corporation (the "Agreement").
This will confirm our agreement with you as follows:
1. As you know, our parent company, Renco Metals, Inc. ("Renco
Metals") is contemplating a refinancing under which it will issue
$150,000,000 of Senior Notes due 2003 ("New Notes") and retire its
presently outstanding $75,000,000 of Senior Notes due 2000 (the
"Existing Notes"). On the issuance of the New Notes this company will
pay a dividend to Renco Metals. Concurrently with the payment of such
dividend this company will make a payment to you on account of the
dividend and the Agreement and you will accept same in full settlement
of all of your rights arising from the payment of the dividend. In
consideration of such payment and your agreement to the amendments to
the Agreement as outlined in paragraph 2 below, the Company agrees that
although after paying the above mentioned payment "Cumulative Net
Income" under the Agreement would be approximately negative
$50,000,000, nevertheless, your Cumulative Net Income will be deemed to
be zero as of July 31, 1996. Your Cumulative Net Income participation
shall be calculated on the company's Cumulative Net Income accruing
after that date.
2. Notwithstanding anything in the Agreement in the contrary,
you agree, effective upon your receipt of the payment referred to in
paragraph 1 of this letter, as follows:
(a) Should you voluntarily leave the employ of this
company before the earlier of the 15th anniversary of this
agreement or your attainment of age 62, then the payment of
the Payment (as defined in the "Agreement") to you shall not
commence until such anniversary or your attaining age 62.
Notwithstanding the foregoing, payments
shall commence immediately upon your death or upon your
continuing disability making it impossible for you to continue
to perform your normal business duties.
(b) You agree that, so long as you are entitled to
any part of the Payment, you will not, directly or indirectly,
whether as employee, consultant, proprietor, partner,
stockholder or other capacity, engage in any aspect of the
magnesium business (production, marketing, sales, use) in any
part of the world. In this respect, you and we acknowledge
that the primary magnesium industry is a worldwide industry,
that the participants therein compete against each other in
all parts of the world, and that therefore this restriction is
reasonable.
Should you engage in any activity proscribed
by the preceding paragraph then the company's obligation to
you to make the Payment (or any unpaid part thereof) shall
automatically and permanently cease, and you shall be deemed
to have irrevocably released you right to same.
(c) Should you voluntarily leave the company, you
shall give 30 days advance written notice, and the amount of
your Payment will be calculated as to the close of the fiscal
quarter in which such 30 day notice period ends.
3. The parties hereby reaffirm the Agreement as amended
hereby.
Please confirm your agreement to the foregoing by signing and
returning the enclosed copy.
Very truly yours,
MAGNESIUM CORPORATION
OF AMERICA
By /s/ Xxxxxxx X. Xxxxx
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CONFIRMED AND AGREED TO:
/s/ Xxxxxx X Xxxxxx
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Xxxxxx X. Xxxxxx
