Exhibit 10.10
APEX SILVER MINES LIMITED
Caledonian House
Mary Street, P.O. Box 1043
George Town, Grand Cayman
Cayman Islands
September 26, 1996
Mr. Gregory G. Marlier
6237 South Locust Street
Englewood, CO 80111
Re: Apex Silver Mines Limited
Offer Of Employment
Dear Greg,
In line with our recent discussions, we are pleased to present herein the terms
of our employment offer with Apex Silver Mines Limited or its United States
affiliate as applicable (collectively the "Company").
I. THE POSITION
The principal responsibilities of this position involve:
. Formulate, with the approval of the CEO, the company's financial
policies.
. Develop and manage the company's financial controls.
. Administer and manage the company's accounting structure, systems, and
processes.
. Prepare, issue and explain the company's financial statements.
. Administer the company's budgetary process.
. Manage the company's cash.
. Be responsible for all internal audit activities.
. Be responsible for all tax activities, to include policies and
execution.
. Take the lead in structuring the financial aspects of mining deals.
. Play a hands-on-role in preparation and management of all financial
structures for financings.
. Play a hands-on role in selecting the company's offices in Denver and
negotiating the deal for the space and furnishings.
Mr. Gregory G. Marlier
September 26, 1996
Page 2
. Supervise the company's administration functions to include the
administrative aspects of its human resource activities.
. Handle the company's SEC filings (when the company becomes public).
Naturally, you agree that all information concerning the Company's business
will be treated as confidential.
You will be based in Denver, Colorado, and travel will be based upon the
requirements of the position. You agree to devote your full working time
to the Apex Silver Mines Group of companies.
II. TITLE AND REPORTING RELATIONSHIPS
1. TITLE
Your title will be Vice President Finance & Controller.
2. REPORTING RELATIONSHIPS
You will report directly to the CEO.
III. START DATE
You may start employment with us at a mutually agreed upon date. Your
compensation and benefits will commence on your first day of employment.
IV. COMPENSATION
1. BASE COMPENSATION
You will be paid an annual base compensation of US$125,000, payable
monthly. Your first review of base compensation will be in 18 months of
your joining the company.
2. BONUS
I plan to install a Performance Bonus Plan at Apex covering the
Calendar Year 1998 to be paid out according to the provisions of the
Performance Bonus Plan when it is adopted which will undoubtedly occur
after 1998.
Mr. Gregory G. Marlier
September 26, 1996
Page 3
3. BENEFITS
Quite obviously a mining junior does not compete with a major mining
company in terms of providing a complete comprehensive and top of the
line benefit plan. However, I plan to install an appropriate personnel
benefit plan for Apex's U.S. based executives at the earliest possible
time.
In that regard, as you may know, I recently commissioned Anderson &
Schwab to conduct a compensation and benefit survey comprising juniors,
intermediate and senior mining companies. I then asked A&S to recommend
what they considered to be relevant competitive benefit plans that
would be suitable for Apex.
These plans, which are discussed below represent our present thinking
on benefits that we plan to adopt for Apex. Although these plans are
likely to be adopted, they have not yet been finalized.
Apex' intent with regard to each benefit plan is as follows:
Title of Plan Likely Apex Plan
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Medical Plan HMO or PPO.
If PPO: 80/20 coverage, deductible
$200 per person, $400 per family,
annual maximum $1,000 per person,
$2,000 per family, $1,000,000 lifetime
maximum.
Dental Plan Either a plan with a $150 family
deductible and $1,250 maximum annual
benefit or a Dental HMO.
Vision Plan None, but a Medical Reimbursement
Account is contemplated, funded by the
Company, that can be used for certain
health care expenditures such as
vision.
Short-Term Disability 6 months full pay based on service.
Mr. Gregory G. Marlier
September 26, 1996
Page 4
Long-Term Disability 66% of pay up to $12K per month.
Survivor Benefit Plan Probably won't have one
Life Insurance Plan 2 x salary at $500K maximum
AD&D Insurance Plan 2 x salary at $500K maximum
Travel Accident Insurance Plan Covered by life insurance and AD&D
insurance
Savings Plan 401K plan or equivalent savings plan
with company matching 50% of
individual's contribution up to 6% of
individual's salary up to a federally
mandated cap, which is currently
$150K. Increase in Apex's
contributions to be considered when
company is in production and has a
positive cash flow.
Pension Plan Some form of pension to be considered
in the long-term future.
Should you accept this offer of employment, it is our intent to work
with you regarding your being covered under these plans in a timely
way. This work will be done by A&S' Dick Hinkel, who is a career long
human resources specialist whose prior assignment (for fifteen years)
was as Vice President, Human Resources, for Homestake Mining. Dick took
the lead in doing the compensation and benefits survey described above.
4. STOCK OPTIONS
You will be eligible for participation in the Company's stock option
plan. Thus, we will provide you with options on approximately $225,000
of stock of Apex Silver Mines Limited. The price of Apex's stock is
based on the value of the company (US $160 million) as was determined
by the recent successful completion of our private placement.
. You will vest in these options over a four year period at 25 percent
per year.
Mr. Gregory G. Marlier
September 26, 1996
Page 5
. You will be eligible to vest 25% immediately upon joining the
Company, at which time you will be subject to the same shareholders'
agreement entered into by all Apex's shareholders.
V. OTHER
1. VACATION
Four weeks vacation per year.
2. REIMBURSABLE EXPENSES
. You will be reimbursed in accordance with company policy and
guidelines for all reasonable expenses incurred in connection with
travel on company business.
. The company is considering and probably will adopt the policy of
providing corporate credit cards to cover travel, hotel, etc.
However, a final judgment on this point has not been made.
. As to class of travel, domestic travel will be coach and all
international travel will be business class.
. Frequent flyer miles will be the property of the user.
3. YOUR PAY
Upon joining, and until Apex establishes a Denver office, you will be
paid by wire to your bank account.
4. COMPANY OFFICE
The company will establish a Denver office but it will take a while to
do so. Until then the company will require that you work out of your
home when you are in Denver. This, of course, means that if it will
take a month or even longer before an office is established, that the
company would expect you to put in a separate business telephone line
and a fax machine for which they would reimburse you fully for both
installation and use.
If you find for this interim period your home to be an unacceptable
place to work, then the company will arrange some type of interim
office arrangements.
Mr. Gregory G. Marlier
September 26, 1996
Page 6
VI. SEVERANCE AGREEMENT
In the event the Company should desire to terminate your employment, except
for cause, within three years after your employment starting date, you will
be entitled to severance pay for a twelve-month period at your existing
salary, as well as a continuation of your benefits. Upon such an
occurrence, bonus awards and stock options will be suspended.
You agree that in the event you leave Apex that for a period of two years
you will not join any company whose primary business is the acquisition and
development of silver mines.
* * * *
I have enjoyed getting acquainted with you over the last several months. As a
result of getting to know you, I believe that you can make a major contribution
to our business and that you will find the work interesting and challenging. I
hope you will find these terms of employment attractive.
If you accept our offer of employment, please sign in the space indicated below
and return the designated copy to us.
Sincerely,
/s/ Thomas S. Kaplan
--------------------------------
Thomas S. Kaplan
Chairman
AGREED TO AND ACCEPTED:
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/s/ Gregory G. Marlier
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Gregory G. Marlier
October 2, 1996
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Date