ABSOLUTE SHARE PRICE TARGET PERFORMANCE SHARE AWARD AGREEMENT
Exhibit 10.1
ABSOLUTE
SHARE PRICE TARGET
THIS ABSOLUTE SHARE PRICE TARGET
PERFORMANCE SHARE AWARD AGREEMENT (the “Award
Agreement”), dated as of _________ (the “Grant
Date”), is made by and between Rentech, Inc., a Colorado corporation (the
“Company”),
and _________, an employee of the Company or one or more of its Subsidiaries
(the “Participant”).
WHEREAS, the Company maintains
the Rentech, Inc. Amended and Restated 2006 Incentive Award Plan (the “Plan”);
WHEREAS, the Company wishes to
carry out the Plan (the terms of which are hereby incorporated by reference and
made a part of this Award Agreement);
WHEREAS, the Plan authorizes
the grant of awards that provide the grantee with a right to receive Stock, the
payment of which is contingent upon achieving specified performance-based
targets established by the Committee (“Performance
Shares”);
WHEREAS, the Committee has
determined to issue the award of Performance Shares provided for herein (the
“Performance Share
Award”) to the Participant as an inducement to enter into or remain in
the service of the Company and its Subsidiaries, and as an incentive for
increased or continued efforts during such service, and has advised the Company
thereof and instructed the undersigned officer to issue said Performance Share
Award;
NOW, THEREFORE, in consideration of
the mutual covenants herein contained and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
ARTICLE
I.
DEFINITIONS
Section
1.1 As used herein, the following terms shall have the
meanings specified below, unless the context clearly indicates
otherwise. All capitalized terms used herein without definition shall
have the meanings ascribed to such terms in the Plan.
(a) “Cause”
shall mean “cause” as defined in an applicable employment agreement between the
Participant and the Company or, if no such employment agreement exists or if an
applicable agreement contains no such definition, then “cause” shall mean (i)
any material failure by the Participant to perform the Participant’s duties and
responsibilities reasonably assigned to Participant by the Company (other than
due to the Participant’s Disability); (ii) any act of fraud, embezzlement, theft
or misappropriation by the Participant relating to the Company or its business
or assets; (iii) the Participant’s commission of a felony or a crime involving
moral turpitude; (iv) any gross negligence or intentional misconduct on the part
of the Participant in the conduct of the Participant’s duties and
responsibilities with the Company or which adversely affects the image,
reputation or business of the Company or its affiliates; or (v) any material
breach by the Participant of any agreement between the Company and the
Participant.
(b) “Good
Reason” shall mean “good reason” as defined in an applicable employment
agreement between the Participant and the Company or, if no such employment
agreement exists or if an applicable agreement contains no such definition, then
“good reason” shall mean the occurrence of any of the following without the
Participant’s consent: (i) a material reduction in the Participant’s annual base
salary, unless such reduction in annual base salary is part of a general
decrease in the base salary of similarly affected employees as part of a general
cost reduction exercise; or (ii) a material reduction in the Participant’s job
duties and responsibilities or the assignment to the Participant of any duties
inconsistent in any material respect with the Participant’s position with the
Company, provided, that
no resignation for Good Reason shall be effective unless and until (A) the
Participant has first provided the Company with written notice specifically
identifying the acts or omissions constituting the grounds for “Good Reason”
within thirty (30) days after the occurrence thereof, (B) the Company has not
cured such acts or omissions within thirty (30) days of its actual receipt of
such notice, and (C) the effective date of the Participant’s termination for
Good Reason occurs no later than ninety (90) days after the initial existence of
the facts or circumstances constituting Good Reason.
(c) “Measurement
Date” means _________.
(b) “Performance
Percentage” shall mean the percentage determined in accordance with the
Share Price Target Table contained in Exhibit A
hereto.
(c)
“Performance
Shares” shall mean up to _______ shares of Stock that will be issued to
the Participant under this Award Agreement if the Performance Targets or such
other criteria described hereunder are met during the applicable performance
period.
(d) “Performance
Targets” shall mean the specific target or targets determined by the
Committee, as specified in Section 2.2 and Exhibit A
hereto.
(e) “Rule
16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such
Rule may be amended from time to time.
(f) “Termination of
Service” shall mean the Participant’s termination of employment with the
Company for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death, or Disability, provided, that, if the
Participant continues to serve as a Director immediately following any such
termination of employment, the Committee may, in its sole discretion, determine
that a Termination of Service has not occurred until such time as the
Participant ceases to serve as a Director.
(g)
“Volume
Weighted Average Share Price” shall mean the trailing sixty-day volume
weighted average closing price of a share of Stock on the principal exchange on
which the Stock is then trading, as determined by the Committee.
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ARTICLE
II.
AWARD OF PERFORMANCE
SHARES
Section
2.1 Award of
Performance Shares. As of the Grant Date, the Company grants
to the Participant the Performance Share Award on the terms and conditions set
forth in this Award Agreement. The Performance Share Award represents
a potential right to receive shares of Stock that may become payable based upon
the Participant’s continued service and the achievement of the Performance
Targets. The actual number of Performance Shares, if any, payable to
the Participant will be based on the extent to which the Performance Targets are
attained. The Participant’s right and interest in the Performance
Share Award represents a mere unfunded and unsecured contingent promise to pay
by the Company. As a further condition to the Company’s obligations
under this Award Agreement, the Participant’s spouse, if any, shall execute and
deliver to the Company the Consent of Spouse attached hereto as Exhibit
B. Notwithstanding anything to the contrary anywhere else in
this Award Agreement, the Performance Share Award is subject to the terms,
definitions and provisions of the Plan, which is incorporated herein by
reference.
Section
2.2 Payment
of Performance Shares.
(a)
Subject to Section 2.2(b) below, in the event that (i) the Participant does not
incur a Termination of Service prior to the Measurement Date, and (ii) the
Volume Weighted Average Share Price on the Measurement Date exceeds $2.00, then
the Participant shall be entitled to receive a number of Performance Shares
equal to the product of (x) the maximum number of Performance Shares subject to
this Performance Share Award, multiplied by (y) the Performance Percentage
determined as of the Measurement Date in accordance with the Share Price Target
Table contained in Exhibit A
hereto. Any Performance Shares that become payable to the Participant
shall be paid in whole shares of Stock as soon as practicable after the
Measurement Date, but in no event later than the last day of the applicable two
and one-half (2 ½) month “short-term deferral” period with respect to such
payment, within the meaning of Treasury Regulation Section 1.409A-1(b)(4) (the
“Short-Term
Deferral Period”).
(b)
Notwithstanding Section 2.2(a) above:
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(i)
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In
the event that, prior to the Measurement Date, a Change in Control occurs
and the Participant has not experienced a Termination of Service prior to
such Change in Control, then, upon such Change in Control, the Participant
shall be entitled to receive the maximum number of Performance Shares
subject to this Performance Share Award as soon as practicable after the
Change in Control occurs, but in no event later than the last day of the
applicable Short-Term Deferral
Period;
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(ii)
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In
the event that, after the Grant Date, but prior to the Measurement Date,
the Participant experiences a Termination of Service by the Company
without Cause or by the Participant for Good Reason, then the Participant
shall be entitled to receive a number of Performance Shares determined by
multiplying (x) the maximum number of Performance Shares subject to this
Performance Share Award, times (y) the Performance Percentage applicable
as of the date of such Termination of Service determined in accordance
with the Share Price Target Table contained in Exhibit A
hereto, payable, in any event, as soon as practicable after such
Termination of Service, but in no event later than the last day of the
applicable Short-Term Deferral Period;
and
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(iii)
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In
the event that, prior to the Measurement Date, the Participant experiences
a Termination of Service due to the Participant’s death or Disability,
then the Participant shall be entitled to receive a number of Performance
Shares determined by multiplying (x) the maximum number of Performance
Shares subject to this Performance Share Award, times (y) the Performance
Percentage determined as of the date of such Termination of Service in
accordance with the Share Price Target Table contained in Exhibit A
hereto, payable as soon as practicable after such Termination of Service,
but in no event later than the last day of the applicable Short-Term
Deferral Period.
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Section
2.3 Forfeiture;
Transfer Restrictions. The right to receive the Performance Shares shall
be subject to forfeiture as provided in Section 3.1 of this Award Agreement, and
the Participant shall have no right to sell, assign, transfer, pledge, or
otherwise encumber or dispose of the Performance Share Award or the
Participant’s right to receive the Performance Shares.
Section
2.4 No Rights as
Stockholder. Neither the Participant nor any person claiming
under or through the Participant shall have any of the rights or privileges of a
stockholder of the Company in respect of any shares that may become deliverable
hereunder unless and until certificates representing such shares shall have been
issued or recorded in book entry form on the records of the Company or its
transfer agents or registrars, and delivered in certificate or book entry form
to the Participant or any person claiming under or through the
Participant.
ARTICLE
III.
RESTRICTIONS
Section
3.1 Forfeiture.
(a)
Termination of
Service. Except as expressly provided in Section 2.2(b) above,
in the event that the Participant incurs a Termination of Service for any reason
prior to the Measurement Date, the Performance Share Award and the Performance
Shares, to the extent not payable under Section 2.2 as of the date of such
Termination of Service (the “Termination
Date”), shall thereupon automatically and without further action be
cancelled and forfeited by the Participant, and the Participant shall have no
further right or interest in or with respect thereto. No portion of
the Performance Share Award and no portion of the Performance Shares which are
not payable to the Participant under Section 2.2 above as of the Termination
Date shall thereafter become payable.
(b)
Failure to Achieve Performance
Target. Any portion of the Performance Share Award and any
Performance Shares which do not become payable to the Participant as of the
Measurement Date as a result of the relevant Performance Targets not being fully
achieved shall automatically and without further action be cancelled and
forfeited by the Participant as of the Measurement Date, and the Participant
shall have no further right or interest in or with respect to such portion of
the Performance Share Award or Performance Shares. No portion of the
Performance Share Award and no portion of the Performance Shares which do not
become payable to the Participant as of the Measurement Date as a result of the
relevant Performance Targets not being fully achieved shall thereafter become
payable.
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Section
3.2 Distribution of
Stock. Notwithstanding anything herein to the contrary, the
Company shall not be required to issue or deliver any certificates evidencing
shares of Stock pursuant to this Award Agreement unless and until the Committee
has determined that the issuance and delivery of such certificates is in
compliance with all applicable laws, regulations of governmental authorities
and, if applicable, the requirements of any exchange on which the shares of
Stock are listed or traded. All Stock certificates delivered pursuant
to this Award Agreement shall be subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock. In addition to the terms and conditions
provided herein, the Committee may require that the Participant make such
reasonable covenants, agreements, and representations as the Committee, in its
discretion, deems advisable in order to comply with any such laws, regulations,
or requirements. The Committee shall have the right to require the
Participant to comply with any timing or other restrictions with respect to the
settlement of any Performance Shares, including a window-period limitation, as
may be imposed in the discretion of the Committee. Notwithstanding
any other provision of this Agreement, unless otherwise determined by the
Committee or required by any applicable law, rule or regulation, the Company
shall not deliver to the Participant any certificates evidencing shares of Stock
issued upon settlement of any Performance Shares under this Award Agreement and
instead such shares of Stock shall be recorded in the books of the Company (or,
as applicable, its transfer agent or stock plan administrator). No
fractional shares shall be issued and the Committee shall determine, in its sole
discretion, whether cash shall be given in lieu of any vested fractional
Performance Shares or whether such fractional shares shall be eliminated by
rounding up or down as appropriate.
ARTICLE
IV.
MISCELLANEOUS
Section
4.1 No Right
to Continued Employment. Nothing in the Plan or in this Award
Agreement shall confer upon the Participant any right to continue as an
Employee, Consultant, member of the Board, or other service provider of the
Company or any Subsidiary, or shall interfere with or restrict in any way the
rights of the Company or any Subsidiary, which are hereby expressly reserved, to
discharge the Participant at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written employment
agreement between the Participant and the Company or any
Subsidiary.
Section
4.2 Tax Withholding.
The Company shall have the authority and the right to deduct or withhold, or to
require the Participant to remit to the Company, an amount sufficient to satisfy
all applicable federal, state and local taxes (including the Participant’s
employment tax obligations) required by law to be withheld with respect to any
taxable event arising in connection with the Performance Shares. The
Committee may, in its sole discretion and in satisfaction of the foregoing
requirement, allow the Participant to elect to have the Company withhold
Performance Shares that become payable under this Performance Share Agreement
(or allow the return of such shares of Stock by the Participant) having a Fair
Market Value equal to the sums required to be withheld, provided, that the
number of shares which may be so withheld (or returned) with respect to a
taxable event arising in connection with the Performance Shares shall be limited
to the number of shares which have a Fair Market Value on the date of
withholding equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state and local income tax and
payroll tax purposes that are applicable to such supplemental taxable
income.
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Section
4.3 Section
409A. The Performance Share Award is not intended to
constitute or provide for “nonqualified deferred compensation” within the
meaning of Code Section 409A. Nevertheless, to the extent that the
Committee determines that the Performance Share Award may not be exempt from (or
compliant with) Code Section 409A, the Committee may amend this Award Agreement
in a manner intended to comply with the requirements of Code Section 409A or an
exemption therefrom (including amendments with retroactive effect), or take any
other actions as it deems necessary or appropriate to (a) exempt the Performance
Share Award from Code Section 409A and/or preserve the intended tax treatment of
the benefits provided with respect to the Performance Share Award, or (b) comply
with the requirements of Code Section 409A. To the extent applicable,
this Award Agreement shall be interpreted in accordance with the provisions of
Code Section 409A.
Section
4.4 Tax
Consultation. The Participant understands that he or she may
suffer adverse tax consequences in connection with the Performance Share Award
or the payment thereof. The Participant represents that the
Participant has consulted with any tax consultants that he or she deems
advisable in connection with the Performance Share Award and that the
Participant is not relying on the Company for tax advice.
Section
4.5 Conformity to Securities Laws.
This Award Agreement is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3. Notwithstanding anything
herein to the contrary, this Award Agreement shall be administered, and the
Performance Shares shall be issued, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, this
Award Agreement and the Performance Shares issued hereunder shall be deemed
amended to the extent necessary to conform to such laws, rules and
regulations.
Section
4.6 Amendment. This Award
Agreement may only be amended, modified or terminated by a writing executed by
the Participant and by a duly authorized representative of the
Company.
Section
4.7 Severability. In
the event that any provision in this Award Agreement is held invalid or
unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining
provisions of this Award Agreement, which shall remain in full force and
effect.
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Section
4.8 Notices. Any notice to be
given under the terms of this Award Agreement to the Company shall be addressed
to the Company in care of its Secretary, and any notice to be given to the
Participant shall be addressed to him at his then current address on the books
and records of the Company. By a notice given pursuant to this
Section 4.8, either party may hereafter designate a different address for
notices to be given to it or him. Any notice which is required to be given to
the Participant shall, if the Participant is then deceased, be given to the
Participant’s personal representative if such representative has previously
informed the Company of his status and address by written notice under this
Section 4.8.
Section
4.9 Captions. Captions provided
herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Award Agreement.
Section
4.10 Governing
Law. The laws of the State of Colorado shall govern the interpretation,
validity, administration, enforcement and performance of the terms of this Award
Agreement regardless of the law that might be applied under principles of
conflicts of laws.
IN
WITNESS WHEREOF, this Award Agreement has been executed and delivered by the
parties hereto.
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RENTECH,
INC.,
a
Colorado corporation
By:
Name:
Title:
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PARTICIPANT
[Name]
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EXHIBIT
A
SHARE
PRICE TARGETS
For purposes of this Award Agreement,
the Performance Percentage shall be determined as of any given date by matching
the Volume Weighted Average Share Price on such date with the corresponding
percentage listed in the Share Price Table below. To the extent that
the applicable Volume Weighted Average Share Price falls between the incremental
levels contained in this Share Price Target Table, the Performance Percentage
shall be determined based on a linear pro ration between the relevant increments
rounded to the nearest percentage point.
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SHARE
PRICE TARGET TABLE
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If
the Fair Market Value on the
determination
date equals:
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Then
the Performance
Percentage
shall be equal to:
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$2.00
per share or less
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0%
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$3.00
per share
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50%
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$4.00
per share or more
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100%
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EXHIBIT
B
CONSENT
OF SPOUSE
I, ____________________, spouse of
_______________, have read and approve the foregoing Award Agreement. In
consideration of granting of the right to my spouse to receive Performance
Shares of Rentech, Inc. as set forth in the Award Agreement if the Performance
Goals are met, I hereby appoint my spouse as my attorney-in-fact in respect to
the exercise of any rights under the Award Agreement and agree to be bound by
the provisions of the Award Agreement insofar as I may have any rights in said
Award Agreement or any shares issued pursuant thereto under the community
property laws or similar laws relating to marital property in effect in the
state of our residence as of the date of the signing of the foregoing Award
Agreement.
Dated:
_______________, ______
| Name: _____________________________ |
