Document:

EXHIBIT 10.2.2

 

THE DOE RUN RESOURCES CORPORATION

1801 PARK 270 DRIVE

ST. LOUIS, MISSOURI  63146

 

July 1, 2005

 

Marvin
Kaiser

c/o The Doe Run Resources
Corporation

1801 Park 270 Drive

St. Louis, Missouri  63146

 

Re:                               Amended
and Restated Net Worth Appreciation Agreement

 

Dear Mr. Kaiser:

 

This letter, sets forth the
amended and restated agreement between you and The Doe Run Resources
Corporation, (the “Company”) with respect to
your Net Worth Appreciation Benefit, intended to constitute additional
incentive compensation to you as an employee of the Company.  Upon your execution of this letter, any prior
Net Worth Appreciation Agreement or amendments thereto
between you and DR Acquisition Corp or the Company (including the agreement
dated November 1, 2002) shall terminate and all obligations pursuant to
such agreement as amended shall cease. 
The base date of this Amended and Restated Net Worth
Appreciation Agreement shall be November 1 (the “Base Date”), 2004 (the “Base
Year”).

 

1.               Vesting.  On the Base Date in 2005,
provided that you have been continuously in the employ of the Company from the
Base Date in 2002 through such date, you shall receive a Net Worth Appreciation
Credit of .9% and on the Base Date in each of the years 2006 and 2007 you shall
receive an additional Net Worth Appreciation Credit of .3%, provided that you
have been continuously in the employ of the Company from the Base Date in 2002
to the applicable Base Date, up to a maximum credit, if you remain in the
employ of the Company continuously through the Base Date in 2007, of 1.5% (the “Maximum
Credit”).  The aggregate number of Net Worth Appreciation Credits received on or prior to a given
date shall be hereinafter referred to as “Vested Credits”.  You shall not receive any credit unless you have
remained in the employ of the Company from the Base Date in 2002 continually
until the Base Date in 2005, and thereafter you shall not receive credit for
any partial year, provided that (a) if your employment terminates due to
death or Disability (as defined below) preventing you from performing your
usual employment functions and duties prior to the Base Date in 2005, you shall
receive a credit of .6%, and (b) if your employment terminates after the
Base 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 in
which the termination takes place (in addition to all credits previously
accrued).  For purposes of this agreement,
“Disability” shall mean a physical or mental impairment that can be expected to
result in death or to last for at least 12 months, and the impairment either: (1) prevents
the employee from engaging in any substantial gainful activity; or (2) entitles
the employee to receive income replacement benefits
for at least 3 months under an accident and health plan sponsored by the
Company.

 

 

2.               Treatment of Matters in Calculation of Benefits.

 

(a)          For the purposes of
calculating the benefits payable under this Agreement, the Company will
continue to calculate Federal corporate income taxes and the corporate income
taxes for those jurisdictions in which the Company and its subsidiaries do
business, for the fiscal periods or portions thereof beginning on or after the
Base Date in 2004, as if the Company had commenced operations on the Base Date
in 2004 and as if the Company and its subsidiaries had continued to have
C corporation status under the Federal Internal Revenue Code and under
state and local tax laws, in accordance with the provisions of generally
accepted accounting principles and the Internal Revenue Code and regulations
thereunder and under state and local tax laws applicable to C corporations
as from time to time in effect (“C Status”).  Such tax calculations will include
calculations of current and deferred tax expense or benefit and current and
non-current tax assets and liabilities (“C Taxes”) and the differences (“Tax
Differences”) between the C Taxes and the taxes as recorded by the Company
and its subsidiaries while being designated a qualified subchapter
S subsidiary (“S Taxes”).  For
clarity, the tax basis of the Company’s assets and liabilities will be deemed
to be the tax basis as of the Base Date in 2004, except that no net operating
loss carryforward will be deemed to exist as of such date.

 

(b)         Cumulative Income
Statement Tax Difference shall be the cumulative difference in income tax
expenses or benefit between the calculation of the C Taxes and
S Taxes, in each case calculated for the tax periods or portions thereof
beginning on or after the Base Date in 2004, and through the end of the
calculation period.  Cumulative Cash Flow
Tax Difference shall be the cumulative difference in income tax payments, net
of refunds, between the calculation of the C Taxes and S Taxes in
each case made after the Base Date in 2004 and applicable to earnings of the
Company on and after the Base Date in 2004, or which would be in the case of
C 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 any
other form of distribution to The Renco Group, Inc. (“Renco”) or an
affiliate of Renco other than a subsidiary of the Company  (including a transfer to Renco of assets in
any form whether as cash or other form of value which shall have the effect of
reducing the net worth of the Company), in excess of the Renco Amount (as
defined herein), provided that payments made in respect of any debt to Renco,
including, but not limited to, principal interest and fees thereon, or the
preferred stock of the Company, including, but not limited to, dividends
thereon 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 so
that unused portions shall carry over to succeeding years.

 

(c)          In connection with the
annual audit of the financial statements of the Company, the Company’s Board of
Directors will require that the independent public accountants issue a special
report indicating their agreement with the Tax Differences.

 

3.               Net Worth Appreciation
Benefit.  Upon the termination of your employment by
the Company, other than for cause, you shall be entitled to a net worth
appreciation payment 

 

2

 

(“Payment”) equal to (A) the product
of the Vested Credits and the Net Worth Increment, as defined below, less (B) the
product of the Vested Credits and the Cumulative Income Statement Tax
Difference (the calculation period shall end at the end of the Company’s fiscal
quarter immediately preceding your date of termination) and excluding such
Cumulative Income Statement Tax Difference to the extent equal to Cumulative
Cash Flow Tax Difference utilized in calculating amounts payable under
Paragraph 5(a). The “Net Worth Increment” is the amount, if any, by which
the consolidated net worth of the 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 Base Date in the Base Year,
provided, however, that any increase in consolidated net worth resulting from a
capital contribution to the Company or the sale of stock of the Company shall
be disregarded in calculating Net Worth Increment, and further provided that
preferred stock of the Company and cash payments of dividends and payments in
kind thereon shall be treated as debt of the Company for purposes of
calculating consolidated net worth.  For
clarity, it is understood that the Net Worth Increment
will not include charges for interest on the restructured debt of the Company
to the extent not included as interest expense under GAAP as accounted for
under FAS 15, nor will the Tax Differences include any benefit for such
interest on such restructured debt. 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 cause,
you shall not be entitled to receive any Payment.  Any termination referred to in this agreement
shall mean separation from service from all members of The Renco Group, Inc.
corporate controlled group (within the meaning of Internal Revenue Code
sections 414(b), (c), (m), and (o)).

 

4.               Payment.  The Payment shall be payable to you
(or your designee or estate) in 40 equal quarterly installments, without
interest, commencing three months after the termination of your employment, and
at 3 month intervals thereafter. 
Notwithstanding any provision in this Agreement, the Company shall not
be required to pay you (i) any Payment, where the making of such Payment
would 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 lender
of the Company limits the aggregate amount that the Company may pay as bonuses,
net worth appreciation payments, profit sharing payments or other payments of
similar nature (“Restricted Payments”) during any period, any Payment in excess
of your pro rata portion of the aggregate amount of applicable Restricted
Payments which the Company is permitted to pay. 
In the event that the Company is unable to make a Payment due to the
preceding sentence, the Company’s obligation to make such Payment shall be
deferred until such time that the Company is permitted to make such Payment
pursuant to the preceding sentence.

 

5.               Dividends; Sale of Substantially All of the
Company’s Stock or Assets.

 

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

 

3

 

Base Date in the Base
Year.  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 for a proportionate part of costs, such
as audit charges and insurance premiums, paid by Renco on behalf of itself and
its subsidiaries, including the Company;

 

(b)         If, while you shall be
employed 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 a
person 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 such
sale, your full Maximum Credit shall be deemed to be vested, and you shall be
entitled to receive, in kind and on the same terms and conditions as the
Company or its shareholder is being paid as payment in full of your
participation, an amount equal to (A) the product of the Maximum Credit
and any Net Proceeds (as defined below) of the sale, plus (B) the product
of the Maximum Credit and the cumulative Distributions paid by the Company
subsequent to the Base Date in the Base Year, less (C) the product of the
Maximum Credit and the Cumulative Income Statement Tax Difference through the
date of sale, and less (D) the amount of any Additional Compensation
Benefit previously paid to you subsequent to the Base Date in the Base
Year.  “Net Proceeds”, for purposes
hereof, shall be equal to the amount, if any, of  the proceeds of the sale after deducting all
expenses of the sale, all applicable federal, state and local taxes, all
liabilities retained by the seller, and all amounts paid or due to holders of
the Company’s preferred stock. Except for such payment, neither you nor the
Company shall have any further rights or liabilities hereunder.

 

6.               Condition Precedent. The Company’s obligation to make the Payment to
you shall be conditioned on your faithful adherence to your employment arrangements
with the Company 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 the Company 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.

 

7.               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 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 Company
or Renco may designate by notice in writing.

 

4

 

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,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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

  

 

5EXHIBIT 10.2.3

 

THE DOE RUN RESOURCES CORPORATION

1801 PARK 270 DRIVE

ST. LOUIS, MISSOURI  63146

 

July 1, 2005

 

Jerry
L. Pyatt

c/o The Doe Run Resources
Corporation

1801 Park 270 Drive

St. Louis, Missouri  63146

 

Re:                               Amended
and Restated Net Worth Appreciation Agreement

 

Dear Mr. Pyatt:

 

This letter, sets forth the
amended and restated agreement between you and The Doe Run Resources
Corporation, (the “Company”) with respect to
your Net Worth Appreciation Benefit, intended to constitute additional
incentive compensation to you as an employee of the Company.  Upon your execution of this letter, any prior
Net Worth Appreciation Agreement or amendments thereto
between you and DR Acquisition Corp or the Company (including the agreement
dated November 1, 2002) shall terminate and all obligations pursuant to
such agreement as amended shall cease. 
The base date of this Amended and Restated Net Worth
Appreciation Agreement shall be November 1 (the “Base Date”), 2004 (the “Base
Year”).

 

1.     Vesting.  On the Base Date in 2005, provided that you
have been continuously in the employ of the Company from the Base Date in 2002
through such date, you shall receive a Net Worth Appreciation Credit of .6% and
on the Base Date in each of the years 2006 and 2007 you shall receive an
additional Net Worth Appreciation Credit of .2%, provided that you have been
continuously in the employ of the Company from the Base Date in 2002 to the
applicable Base Date, up to a maximum credit, if you remain in the employ of
the Company continuously through the Base Date in 2007, of 1% (the “Maximum
Credit”).  The aggregate number of Net Worth Appreciation Credits received on or prior to a given
date shall be hereinafter referred to as “Vested Credits”.  You shall not receive any credit unless you
have remained in the employ of the Company from the Base Date in 2002
continually until the Base Date in 2005, and thereafter you shall not receive
credit for any partial year, provided that (a) if your employment
terminates due to death or Disability (as defined below) preventing you from
performing your usual employment functions and duties prior to the Base Date in
2005, you shall receive a credit of .4%, and (b) if your employment
terminates after the Base Date in 2005 and before the Base Date in 2007, due to
death or Disability (as defined below), you shall receive a credit of .2% for
the partial year in which the termination takes place (in addition to all
credits previously accrued).  For
purposes of this agreement, “Disability” shall mean a physical or mental
impairment that can be expected to result in death or to last for at least 12
months, and the impairment either: (1) prevents the employee from engaging
in any substantial gainful activity; or (2) entitles the employee to
receive income replacement benefits for at least 3
months under an accident and health plan sponsored by the Company.

 

 

2.     Treatment of Matters in Calculation of
Benefits.

 

(a)   For the purposes of calculating the benefits
payable under this Agreement, the Company will continue to calculate Federal
corporate income taxes and the corporate income taxes for those jurisdictions
in which the Company and its subsidiaries do business, for the fiscal periods
or portions thereof beginning on or after the Base Date in 2004, as if the Company
had commenced operations on the Base Date in 2004 and as if the Company and its
subsidiaries had continued to have C corporation status under the Federal
Internal Revenue Code and under state and local tax laws, in accordance with
the provisions of generally accepted accounting principles and the Internal
Revenue Code and regulations thereunder and under state and local tax laws
applicable to C corporations as from time to time in effect (“C Status”).  Such tax calculations will include
calculations of current and deferred tax expense or benefit and current and
non-current tax assets and liabilities (“C Taxes”) and the differences (“Tax
Differences”) between the C Taxes and the taxes as recorded by the Company
and its subsidiaries while being designated a qualified subchapter
S subsidiary (“S Taxes”).  For
clarity, the tax basis of the Company’s assets and liabilities will be deemed
to be the tax basis as of the Base Date in 2004, except that no net operating
loss carryforward will be deemed to exist as of such date.

 

(b)   Cumulative Income Statement Tax Difference
shall be the cumulative difference in income tax expenses or benefit between
the calculation of the C Taxes and S Taxes, in each case calculated
for the tax periods or portions thereof beginning on or after the Base Date in
2004, and through the end of the calculation period.  Cumulative Cash Flow Tax Difference shall be
the cumulative difference in income tax payments, net of refunds, between the
calculation of the C Taxes and S Taxes in each case made after the
Base Date in 2004 and applicable to earnings of the Company on and after the
Base Date in 2004, or which would be in the case of C 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 any other form of
distribution to The Renco Group, Inc. (“Renco”) or an affiliate of Renco
other than a subsidiary of the Company 
(including a transfer to Renco of assets in any form whether as cash or
other form of value which shall have the effect of reducing the net worth of
the Company), in excess of the Renco Amount (as defined herein), provided that
payments made in respect of any debt to Renco, including, but not limited to,
principal interest and fees thereon, or the preferred stock of the Company,
including, but not limited to, dividends thereon 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 so that unused portions shall carry over to succeeding years.

 

(c)   In connection with the annual audit of the
financial statements of the Company, the Company’s Board of Directors will
require that the independent public accountants issue a special report
indicating their agreement with the Tax Differences.

 

3.     Net Worth
Appreciation Benefit.  Upon the
termination of your employment by the Company, other than for cause, you shall
be entitled to a net worth appreciation payment 

 

2

 

(“Payment”) equal to (A) the product
of the Vested Credits and the Net Worth Increment, as defined below, less (B) the
product of the Vested Credits and the Cumulative Income Statement Tax
Difference (the calculation period shall end at the end of the Company’s fiscal
quarter immediately preceding your date of termination) and excluding such
Cumulative Income Statement Tax Difference to the extent equal to Cumulative
Cash Flow Tax Difference utilized in calculating amounts payable under
Paragraph 5(a). The “Net Worth Increment” is the amount, if any, by which
the consolidated net worth of the 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 Base Date in the Base Year,
provided, however, that any increase in consolidated net worth resulting from a
capital contribution to the Company or the sale of stock of the Company shall
be disregarded in calculating Net Worth Increment, and further provided that
preferred stock of the Company and cash payments of dividends and payments in
kind thereon shall be treated as debt of the Company for purposes of calculating
consolidated net worth.  For clarity, it
is understood that the Net Worth Increment will not
include charges for interest on the restructured debt of the Company to the
extent not included as interest expense under GAAP as accounted for under FAS
15, nor will the Tax Differences include any benefit for such interest on such
restructured debt. 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 cause, you shall not be entitled to
receive any Payment.  Any termination
referred to in this agreement shall mean separation from service from all
members of The Renco Group, Inc. corporate controlled group (within the
meaning of Internal Revenue Code sections 414(b), (c), (m), and (o)).

 

4.     Payment.  The Payment shall be payable to you (or your
designee or estate) in 40 equal quarterly installments, without interest,
commencing three months after the termination of your employment, and at 3
month intervals thereafter. 
Notwithstanding any provision in this Agreement, the Company shall not
be required to pay you (i) any Payment, where the making of such Payment
would 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 lender
of the Company limits the aggregate amount that the Company may pay as bonuses,
net worth appreciation payments, profit sharing payments or other payments of
similar nature (“Restricted Payments”) during any period, any Payment in excess
of your pro rata portion of the aggregate amount of applicable Restricted
Payments which the Company is permitted to pay. 
In the event that the Company is unable to make a Payment due to the
preceding sentence, the Company’s obligation to make such Payment shall be
deferred until such time that the Company is permitted to make such Payment
pursuant to the preceding sentence.

 

5.     Dividends; Sale of Substantially All of
the Company’s Stock or Assets.

 

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

 

3

 

Base Date in the Base
Year.  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 for a proportionate part of costs, such
as audit charges and insurance premiums, paid by Renco on behalf of itself and
its subsidiaries, including the Company;

 

(b)   If, while you shall be employed 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 a person
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 such
sale, your full Maximum Credit shall be deemed to be vested, and you shall be
entitled to receive, in kind and on the same terms and conditions as the
Company or its shareholder is being paid as payment in full of your
participation, an amount equal to (A) the product of the Maximum Credit
and any Net Proceeds (as defined below) of the sale, plus (B) the product
of the Maximum Credit and the cumulative Distributions paid by the Company
subsequent to the Base Date in the Base Year, less (C) the product of the
Maximum Credit and the Cumulative Income Statement Tax Difference through the
date of sale, and less (D) the amount of any Additional Compensation
Benefit previously paid to you subsequent to the Base Date in the Base
Year.  “Net Proceeds”, for purposes
hereof, shall be equal to the amount, if any, of  the proceeds of the sale after deducting all
expenses of the sale, all applicable federal, state and local taxes, all
liabilities retained by the seller, and all amounts paid or due to holders of
the Company’s preferred stock. Except for such payment, neither you nor the
Company shall have any further rights or liabilities hereunder.

 

6.     Condition Precedent. The Company’s
obligation to make the Payment to you shall be conditioned on your faithful
adherence to your employment arrangements with the Company 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 the Company 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.

 

7.     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 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
Company or Renco may designate by notice in writing.

 

4

 

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,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The Doe Run
  Resources Corporation.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ira Leon Rennert

  	
   

  
	
   

  	
  Ira Leon Rennert

  
	
   

  	
  Chairman of the Board

  

 

Accepted and Agreed to:

 

 

	
  /s/ Jerry L. Pyatt

  	
   

  
	
  Jerry L. Pyatt

  

 

5

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