EXHIBIT 10.2.4
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. XxxxXxxxxxx
c/o The Doe Run Resources Corporation 0000 Xxxx 000 Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Re: NET WORTH APPRECIATION AGREEMENT
Dear Xx. XxxxXxxxxxx:
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 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 3/5ths of 1% and on March 31 in each of the
years 1998 and 1999 you shall receive an additional net worth appreciation
credit of 1/5th 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%. 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 1/5th of 1% if
such termination is prior to March 31, 1996 and 2/5ths of 1% if such termination
is on or after March 31, 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 1/5th of 1% for the partial year in
which the termination takes place (in addition to all credits previously
accrued)
2. NET WORTH APPRECIATION BENEFIT.
Upon the termination of your employment by Doe Run, other than for
legal 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%) 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
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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.
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% of such cash dividend or distribution. This provision shall
not 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 a proportionate part of costs, such as audit charges and
insurance premiums, paid by Renco on behalf of itself and 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% 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%) 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 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, during the period over which such
payments are to be made to you, directly or indirectly in any activity which is
competitive with the business engaged in by Company or Doe Run at the date of
termination of your employment. 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.
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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 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 10/21/94
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Xxx Xxxx Xxxxxxx
Chairman of the Board
Accepted and Agreed to:
/s/ X. X. XxxxXxxxxxx 8/11/94
------------------------------
X. X. XxxxXxxxxxx
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FIRST AMENDMENT TO THE NET WORTH APPRECIATION AGREEMENT
MARCH 12, 1998
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
Chairman of the Board
Accepted and agreed to:
/s/Xxxx X. XxxxXxxxxxx
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