**EXHIBIT 10.2.2**

 

THE DOE RUN RESOURCES CORPORATION1801 PARK 270 DRIVEST. LOUIS, MISSOURI  63146

 

July 1, 2005

 

MarvinKaiser

c/o The Doe Run ResourcesCorporation1801 Park 270 DriveSt. Louis, Missouri  63146

 

Re:                               Amendedand Restated Net Worth Appreciation Agreement

 

Dear Mr. Kaiser:

 

This letter, sets forth theamended and restated agreement between you and The Doe Run ResourcesCorporation, (the “Company”) with respect toyour Net Worth Appreciation Benefit, intended to constitute additionalincentive compensation to you as an employee of the Company.  Upon your execution of this letter, any priorNet Worth Appreciation Agreement or amendments theretobetween you and DR Acquisition Corp or the Company (including the agreementdated November 1, 2002) shall terminate and all obligations pursuant tosuch agreement as amended shall cease. The base date of this Amended and Restated Net WorthAppreciation Agreement shall be November 1 (the “Base Date”), 2004 (the “BaseYear”).

 

# 1.               Vesting.  On the Base Date in 2005,provided that you have been continuously in the employ of the Company from theBase Date in 2002 through such date, you shall receive a Net Worth AppreciationCredit of .9% and on the Base Date in each of the years 2006 and 2007 you shallreceive an additional Net Worth Appreciation Credit of .3%, provided that youhave been continuously in the employ of the Company from the Base Date in 2002to the applicable Base Date, up to a maximum credit, if you remain in theemploy of the Company continuously through the Base Date in 2007, of 1.5% (the “MaximumCredit”).  The aggregate number of Net Worth Appreciation Credits received on or prior to a givendate shall be hereinafter referred to as “Vested Credits”.  You shall not receive any credit unless you haveremained in the employ of the Company from the Base Date in 2002 continuallyuntil the Base Date in 2005, and thereafter you shall not receive credit forany partial year, provided that (a) if your employment terminates due todeath or Disability (as defined below) preventing you from performing yourusual employment functions and duties prior to the Base Date in 2005, you shallreceive a credit of .6%, and (b) if your employment terminates after theBase Date in 2005 and before the Base Date in 2007, due to death or Disability(as defined below), you shall receive a credit of .3% for the partial year inwhich the termination takes place (in addition to all credits previouslyaccrued).  For purposes of this agreement,“Disability” shall mean a physical or mental impairment that can be expected toresult in death or to last for at least 12 months, and the impairment either: (1) preventsthe employee from engaging in any substantial gainful activity; or (2) entitlesthe employee to receive income replacement benefitsfor at least 3 months under an accident and health plan sponsored by theCompany.

 

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# 2.               Treatment of Matters in Calculation of Benefits.

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## (a)          For the purposes ofcalculating the benefits payable under this Agreement, the Company willcontinue to calculate Federal corporate income taxes and the corporate incometaxes for those jurisdictions in which the Company and its subsidiaries dobusiness, for the fiscal periods or portions thereof beginning on or after theBase Date in 2004, as if the Company had commenced operations on the Base Datein 2004 and as if the Company and its subsidiaries had continued to haveC corporation status under the Federal Internal Revenue Code and understate and local tax laws, in accordance with the provisions of generallyaccepted accounting principles and the Internal Revenue Code and regulationsthereunder and under state and local tax laws applicable to C corporationsas from time to time in effect (“C Status”).  Such tax calculations will includecalculations of current and deferred tax expense or benefit and current andnon-current tax assets and liabilities (“C Taxes”) and the differences (“TaxDifferences”) between the C Taxes and the taxes as recorded by the Companyand its subsidiaries while being designated a qualified subchapterS subsidiary (“S Taxes”).  Forclarity, the tax basis of the Company’s assets and liabilities will be deemedto be the tax basis as of the Base Date in 2004, except that no net operatingloss carryforward will be deemed to exist as of such date.

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## (b)         Cumulative IncomeStatement Tax Difference shall be the cumulative difference in income taxexpenses or benefit between the calculation of the C Taxes andS Taxes, in each case calculated for the tax periods or portions thereofbeginning on or after the Base Date in 2004, and through the end of thecalculation period.  Cumulative Cash FlowTax Difference shall be the cumulative difference in income tax payments, netof refunds, between the calculation of the C Taxes and S Taxes ineach case made after the Base Date in 2004 and applicable to earnings of theCompany on and after the Base Date in 2004, or which would be in the case ofC Taxes, or are in the case of S Taxes, immediately due and payable,contemporaneously with the payment of any Distributions, as defined below. A “Distribution”for purposes of this Agreement shall mean a dividend, management fee, or anyother form of distribution to The Renco Group, Inc. (“Renco”) or anaffiliate of Renco other than a subsidiary of the Company  (including a transfer to Renco of assets inany form whether as cash or other form of value which shall have the effect ofreducing the net worth of the Company), in excess of the Renco Amount (asdefined herein), provided that payments made in respect of any debt to Renco,including, but not limited to, principal interest and fees thereon, or thepreferred stock of the Company, including, but not limited to, dividendsthereon and redemptions thereof, shall not be a Distribution.  The “Renco Amount” shall be equal to$2,400,000 per annum, calculated cumulatively from the Base Date in 2002 sothat unused portions shall carry over to succeeding years.

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## (c)          In connection with theannual audit of the financial statements of the Company, the Company’s Board ofDirectors will require that the independent public accountants issue a specialreport indicating their agreement with the Tax Differences.

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# 3.               Net Worth AppreciationBenefit.  Upon the termination of your employment bythe Company, other than for cause, you shall be entitled to a net worthappreciation payment 

 

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# (“Payment”) equal to (A) the productof the Vested Credits and the Net Worth Increment, as defined below, less (B) theproduct of the Vested Credits and the Cumulative Income Statement TaxDifference (the calculation period shall end at the end of the Company’s fiscalquarter immediately preceding your date of termination) and excluding suchCumulative Income Statement Tax Difference to the extent equal to CumulativeCash Flow Tax Difference utilized in calculating amounts payable underParagraph 5(a). The “Net Worth Increment” is the amount, if any, by whichthe consolidated net worth of the Company and its subsidiaries, as at the endof its fiscal quarter immediately preceding the date of your termination,exceeds its consolidated net worth as of the Base Date in the Base Year,provided, however, that any increase in consolidated net worth resulting from acapital contribution to the Company or the sale of stock of the Company shallbe disregarded in calculating Net Worth Increment, and further provided thatpreferred stock of the Company and cash payments of dividends and payments inkind thereon shall be treated as debt of the Company for purposes ofcalculating consolidated net worth.  Forclarity, it is understood that the Net Worth Incrementwill not include charges for interest on the restructured debt of the Companyto the extent not included as interest expense under GAAP as accounted forunder FAS 15, nor will the Tax Differences include any benefit for suchinterest on such restructured debt. The determination of the independent publicaccountants for the Company as to the Net WorthIncrement, 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 cause,you shall not be entitled to receive any Payment.  Any termination referred to in this agreementshall mean separation from service from all members of The Renco Group, Inc.corporate controlled group (within the meaning of Internal Revenue Codesections 414(b), (c), (m), and (o)).

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# 4.               Payment.  The Payment shall be payable to you(or your designee or estate) in 40 equal quarterly installments, withoutinterest, commencing three months after the termination of your employment, andat 3 month intervals thereafter. Notwithstanding any provision in this Agreement, the Company shall notbe required to pay you (i) any Payment, where the making of such Paymentwould violate any agreement between the Company and any lender of the Company,or (ii) in the event that any agreement between the Company and any lenderof the Company limits the aggregate amount that the Company may pay as bonuses,net worth appreciation payments, profit sharing payments or other payments ofsimilar nature (“Restricted Payments”) during any period, any Payment in excessof your pro rata portion of the aggregate amount of applicable RestrictedPayments which the Company is permitted to pay. In the event that the Company is unable to make a Payment due to thepreceding sentence, the Company’s obligation to make such Payment shall bedeferred until such time that the Company is permitted to make such Paymentpursuant to the preceding sentence.

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# 5.               Dividends; Sale of Substantially All of theCompany’s Stock or Assets.

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## (a)          If and in the event thatthe Company shall make a Distribution while you shall be employed by theCompany, then you shall be entitled to receive, as additional compensation, (“AdditionalCompensation Benefit”) an amount equal to (A) the excess of  (i) the product of the Maximum Creditand the cumulative Distributions paid by the Company subsequent to the BaseDate in the Base Year over (ii) the product of the Maximum Credit and anypositive Cumulative Cash Flow Tax Difference less (B) the amount ofAdditional Compensation Benefit previously paid to you subsequent to the 

 

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## Base Date in the BaseYear.  Thisprovision shall not apply to intercompany payments among the Company and itsown wholly-owned subsidiaries or among two wholly-owned subsidiaries of theCompany, or to reimbursement to Renco for a proportionate part of costs, suchas audit charges and insurance premiums, paid by Renco on behalf of itself andits subsidiaries, including the Company;

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## (b)         If, while you shall beemployed by the Company (and whether before or after the Base Date in 2007),all or substantially all the stock or assets of the Company shall be sold to aperson who is not an affiliate of Ira Leon Rennert, or if The Renco Group, Inc.sells a controlling interest in the Company, then, upon the closing of suchsale, your full Maximum Credit shall be deemed to be vested, and you shall beentitled to receive, in kind and on the same terms and conditions as theCompany or its shareholder is being paid as payment in full of yourparticipation, an amount equal to (A) the product of the Maximum Creditand any Net Proceeds (as defined below) of the sale, plus (B) the productof the Maximum Credit and the cumulative Distributions paid by the Companysubsequent to the Base Date in the Base Year, less (C) the product of theMaximum Credit and the Cumulative Income Statement Tax Difference through thedate of sale, and less (D) the amount of any Additional CompensationBenefit previously paid to you subsequent to the Base Date in the BaseYear.  “Net Proceeds”, for purposeshereof, shall be equal to the amount, if any, of  the proceeds of the sale after deducting allexpenses of the sale, all applicable federal, state and local taxes, allliabilities retained by the seller, and all amounts paid or due to holders ofthe Company’s preferred stock. Except for such payment, neither you nor theCompany shall have any further rights or liabilities hereunder.

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# 6.               Condition Precedent. The Company’s obligation to make the Payment toyou shall be conditioned on your faithful adherence to your employment arrangementswith the Company and on your refraining from engaging, during the period overwhich such payments are to be made to you, directly or indirectly in anyactivity which is competitive with the business engaged in by the Company atthe date of termination of your employment. If you do engage in any such competitive activities, then we shall nolonger be obligated to make any payments to you hereunder.

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# 7.               Notice.  Any notices to be sent pursuanthereto shall be sent by hand, certified or registered mail or overnight serviceto you, at the address indicated above and a copy to The Renco Group, Inc.at 30 Rockefeller Plaza, New York, NY 10112, 42nd floor,to the attention of Ira Leon Rennert, or to any other address which the Companyor Renco may designate by notice in writing.

 

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Please confirm that the foregoing correctly sets forthour full agreement with respect to your net worth appreciation benefit bysigning and returning the enclosed copy of this letter.

 

 
|   | Very truly yours,                   |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | The Doe Run  Resources Corporation. |
|   |                                |
|   |                                |
|   | /s/ Ira Leon Rennert                |   |
|   | Ira Leon Rennert                    |
|   | Chairman of the Board               |

 

Accepted and Agreed to:

 

 
| /s/ Marvin Kaiser |   |
|-------------------|--------|
| Marvin Kaiser     |

 

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