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Exhibit 10.1
CHANGE IN CONTROL SEVERANCE
AGREEMENT
THIS AGREEMENT,
effective as of April 29, 2005 and as amended in certain
respects and restated as of July 24, 2007, is made by and
among CF Industries, Inc., a Delaware corporation, CF
Industries Holdings, Inc., a Delaware corporation
(collectively or individually, as the context requires, the
"Company"), and Stephen R. Wilson (the "Executive").
WHEREAS, the
Company considers it essential to the best interests of its
stockholders to foster the continued employment of key management
personnel; and
WHEREAS, the
Board recognizes that the possibility of a Change in Control exists
and that such possibility, and the uncertainty and questions which
it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company
and its stockholders; and
WHEREAS, the
Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility
of a Change in Control;
NOW, THEREFORE,
in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as
follows:
1.
Defined Terms.
The definitions of
capitalized terms used in this Agreement are provided in the last
Section hereof.
2.
Term of
Agreement. The
Term of this Agreement shall commence on the effective date hereof
and shall continue in effect through December 31, 2007;
provided ,
however , that
commencing on January 1, 2007 and each January 1
thereafter, the Term shall automatically be extended for one
additional year unless, not later than September 30 of the
preceding year, the Company or the Executive shall have given
notice not to extend the Term; and further
provided , however , that if a Change in
Control shall have occurred during the Term, the Term shall expire
no earlier than twenty-four (24) months beyond the month in
which such Change in Control occurred.
3.
Company's Covenants
Summarized. In
order to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants set forth
in Section 4 hereof, the Company agrees, under the conditions
described herein, to pay the Executive the Severance Payments and
the other payments and benefits described herein. Except as
provided in Section 9.1 hereof, no Severance Payments shall be
payable under this Agreement unless there shall have been (or,
under the terms of the second sentence of Section 6.1 hereof,
there shall be deemed to have been) a termination of the
Executive's employment with the Company following a Change in
Control and during the Term. This Agreement shall not be construed
as creating an express or implied contract of employment and,
except as otherwise agreed in writing between the Executive and the
Company, the Executive shall not have any right to be retained in
the employ of the Company.
4.
The Executive's
Covenants. The
Executive agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control during the
Term, the Executive will remain in the employ of the Company until
the earliest of (i) a date which is six (6) months from
the date of such Potential Change in Control, (ii) the date of
a Change in Control, (iii) the date of termination by the
Executive of the Executive's employment for Good Reason or by
reason of death, Disability or Retirement, or (iv) the
termination by the Company of the Executive's employment for any
reason.
5.
Compensation Other Than
Severance Payments.
5.1 Following
a Change in Control and during the Term, during any period that the
Executive fails to perform the Executive's full-time duties with
the Company as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full salary to the
Executive at the rate
in effect at the commencement of any such period,
together with all compensation and benefits payable to the
Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's employment
is terminated by the Company for Disability.
5.2 If
the Executive's employment shall be terminated for any reason
following a Change in Control and during the Term, the Company
shall pay the Executive's full salary to the Executive through the
Date of Termination at the rate in effect immediately prior to the
Date of Termination or, if higher, the rate in effect immediately
prior to the first occurrence of an event or circumstance
constituting Good Reason, together with all compensation and
benefits payable to the Executive through the Date of Termination
under the terms of the Company's compensation and benefit plans,
programs or arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason.
5.3 If
the Executive's employment shall be terminated for any reason
following a Change in Control and during the Term, the Company
shall pay to the Executive the Executive's normal post-termination
compensation and benefits as such payments become due. Such
post-termination compensation and benefits shall be determined
under, and paid in accordance with, the Company's retirement,
insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive, as in effect
immediately prior to the occurrence of the first event or
circumstance constituting Good Reason.
6.
Severance
Payments.
6.1 If
the Executive's employment is terminated following a Change in
Control and during the Term, other than (A) by the Company for
Cause, (B) by reason of death or Disability, or (C) by
the Executive without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the benefits,
described in this Section 6.1 ("Severance Payments") and
Section 6.2, in addition to any payments and benefits to which
the Executive is entitled under Section 5 hereof. For purposes
of this Agreement, the Executive's employment shall be deemed to
have been terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if (i) the
Executive's employment is terminated by the Company without Cause
prior to a Change in Control (whether or not a Change in Control
ever occurs) and such termination was at the request or direction
of a Person who has entered into an agreement with the Company the
consummation of which would constitute a Change in Control,
(ii) the Executive terminates his employment for Good Reason
prior to a Change in Control (whether or not a Change in Control
ever occurs) and the circumstance or event which constitutes Good
Reason occurs at the request or direction of such Person, or
(iii) the Executive's employment is terminated by the Company
without Cause or by the Executive for Good Reason and such
termination or the circumstance or event which constitutes Good
Reason is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control ever
occurs).
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(A) In
lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay
to the Executive a lump sum severance payment, in cash, equal to
three times the sum of (i) the Executive's base salary as in
effect immediately prior to the Date of Termination or, if higher,
in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, and (ii) the
Executive's target annual bonus pursuant to any annual bonus or
incentive plan maintained by the Company in respect of the fiscal
year in which the Date of Termination occurs or, if higher, the
fiscal year in which the first event or circumstance constituting
Good Reason occurs.
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(B) For
the thirty-six (36) month period immediately following the
Date of Termination, the Company shall arrange to provide the
Executive and his dependents life, disability, accident and health
insurance benefits substantially similar to those provided to the
Executive and his dependents immediately prior to the Date of
Termination or, if more favorable to the Executive, those provided
to the Executive and his dependents immediately prior to the first
occurrence of an event or circumstance constituting Good Reason, at
no greater after tax cost to the Executive than the after tax cost
to the Executive immediately prior to such date or
occurrence; provided
, however
, that, unless the Executive consents to a different
method, such health insurance benefits shall be provided through a
third-party insurer. Benefits otherwise receivable by the Executive
pursuant to this Section 6.1(B) shall be reduced to the extent
benefits of the same type are received by or made available to the
Executive during the thirty-six (36) month period following
the Executive's termination of employment (and any such benefits
received by or made available to the Executive shall be reported to
the Company by the Executive); provided , however , that the Company shall
reimburse the Executive for the excess, if any, of the after tax
cost of such benefits to the Executive over such cost immediately
prior to the Date of Termination or, if more favorable to the
Executive, the first occurrence of an event or circumstance
constituting Good Reason.
(C) The
Executive's aggregate accrued benefits under the Company's
non-qualified DB Plans will be calculated, and he will be treated
for all purposes, as if he was credited with three
(3) additional years of age and service as of the Date of
Termination under such plans with compensation equal to the
Executive's compensation (as defined in the DB Pension Plans)
during the twelve (12) months immediately preceding Date of
Termination or, if higher, during the twelve months immediately
prior to the first occurrence of an event or circumstance
constituting Good Reason (without regard to any amendment to any DB
Pension Plan made subsequent to a Change in Control and on or prior
to the Date of Termination, which amendment adversely affects in
any manner the computation of retirement benefits thereunder). The
Executive shall also be paid a lump sum amount, in cash, equal to
the excess of (i) the actuarial equivalent of the aggregate
retirement pension (taking into account any early retirement
subsidies associated therewith and determined as a straight life
annuity commencing at the date (but in no event earlier than the
third anniversary of the Date of Termination) as of which the
actuarial equivalent of such annuity is greatest) which the
Executive would have accrued under the terms of all tax-qualified
DB Pension Plans in which he was a participant (without regard to
any amendment to any DB Pension Plan made subsequent to a Change in
Control and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of retirement
benefits thereunder), determined as if the Executive were fully
vested thereunder and had accumulated (after the Date of
Termination) thirty-six (36) additional months of service
credit thereunder and had been credited under each such DB Pension
Plan during such period with compensation equal to the Executive's
compensation (as defined in such DB Pension Plan) during the twelve
(12) months immediately preceding Date of Termination or, if
higher, during the twelve months immediately prior to the first
occurrence of an event or circumstance constituting Good Reason,
over (ii) the actuarial equivalent of the aggregate retirement
pension (taking into account any early retirement subsidies
associated therewith and determined as a straight life annuity
commencing at the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of such annuity
is greatest) which the Executive had accrued pursuant to the
provisions of the DB Pension Plans as of the Date of Termination.
For purposes of this Section 6.1(D), "actuarial equivalent"
shall be determined using the same assumptions utilized under the
applicable DB Pension Plan immediately prior to the Date of
Termination or, if more favorable to the Executive, immediately
prior to the first occurrence of an event or circumstance
constituting Good Reason. In addition to the benefits to which the
Executive is entitled under each DC Pension Plan, the Company shall
pay the Executive a lump sum amount, in cash, equal to the sum of
(1) the amount that would have been contributed or allocated
to each DC Pension Plan by the Company on the
Executive's
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behalf (without regard to whether such amount
would be vested) during the three years immediately following the
Date of Termination, determined (x) as if the Executive made
the maximum permissible contributions thereto during such period,
(y) as if the Executive earned compensation during such period
at a rate equal to the Executive's compensation (as defined in the
DC Pension Plans) during the twelve (12) months immediately
preceding the Date of Termination or, if higher, during the twelve
months immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, and (z) without regard
to any amendment to the DC Pension Plans made subsequent to a
Change in Control and on or prior to the Date of Termination, which
amendment adversely affects in any manner the computation of
benefits thereunder and (2) all other amounts credited to the
Executive's account under each DC Pension Plan to the extent such
amounts were unvested on the Date of Termination.
(D) If
the Executive would have become entitled to benefits under the
Company's post-retirement health care or life insurance plans, as
in effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
first occurrence of an event or circumstance constituting Good
Reason, had the Executive's employment terminated at any time
during the period of thirty-six (36) months after the Date of
Termination, the Company shall provide such post-retirement health
care or life insurance benefits to the Executive and the
Executive's dependents commencing on the later of (i) the date
on which such coverage would have first become available and
(ii) the date on which benefits described in subsection
(B) of this Section 6.1 terminate. If the operation of
this Section 6.1(D) would result in adverse tax consequences
to the Executive as a result of the Executive's participation in
the Company's post-retirement health care or life insurance plans,
the Company shall instead provide substantially similar benefits
and coverage through a third party insurer.
(E) The
Company shall provide the Executive with outplacement services
suitable to the Executive's position for a period of two years or,
if earlier, until the first acceptance by the Executive of an offer
of employment.
(F) Notwithstanding
any provision of any annual or long-term incentive plan to the
contrary, the Company shall pay to the Executive a lump sum amount,
in cash, equal to the sum of (i) any unpaid incentive
compensation which has been allocated or awarded to the Executive
for a completed fiscal year or other measuring period preceding the
Date of Termination under any such plan and which, as of the Date
of Termination, is contingent only upon the continued employment of
the Executive to a subsequent date, and (ii) a pro rata
portion to the Date of Termination of the aggregate value of all
contingent incentive compensation awards to the Executive for all
then uncompleted periods under any such plan, calculated as to each
such award by multiplying the award that the Executive would have
earned on the last day of the performance award period, assuming
the achievement, at the target level (or, if greater, based on
actual results to Date of Termination), of the individual and
corporate performance goals established with respect to such award,
by the fraction obtained by dividing the number of full months and
any fractional portion of a month during such performance award
period through the Date of Termination by the total number of
months contained in such performance award period.
6.2 (A)
Whether or not the Executive becomes entitled to the Severance
Payments, if any of the payments or benefits received or to be
received by the Executive (including any payment or benefits
received in connection with a Change in Control or the Executive's
termination of employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement) (all such
payments and benefits, excluding the Gross-Up Payment, being
hereinafter referred to as the "Total Payments") will be subject to
the Excise Tax, the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the
Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, and
after taking into account the phase
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out of itemized deductions and personal
exemptions attributable to the Gross-Up Payment, shall be equal to
the Total Payments.
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(B) For
purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as "parachute
payments" (within the meaning of section 280G(b)(2) of the
Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the Change in
Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of
section 280G(b)(4)(A) of the Code, (ii) all "excess
parachute payments" within the meaning of section 280G(b)(l)
of the Code shall be treated as subject to the Excise Tax unless,
in the opinion of Tax Counsel, such excess parachute payments (in
whole or in part) represent reasonable compensation for services
actually rendered (within the meaning of section 280G(b)(4)(B)
of the Code) in excess of the Base Amount allocable to such
reasonable compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in
accordance with the principles of sections 280G(d)(3) and
(4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal
income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's residence on
the Date of Termination (or if there is no Date of Termination,
then the date on which the Gross-Up Payment is calculated for
purposes of this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes.
(C) In
the event that the Excise Tax is finally determined to be less than
the amount taken into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company, within five
(5) business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the portion of
the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and
federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Executive), to the extent that
such repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Executive's taxable income and
wages for purposes of federal, state and local income and
employment taxes, plus interest on the amount of such repayment at
120% of the rate provided in section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the
amount taken into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence or amount
of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) within five
(5) business days following the time that the amount of such
excess is finally determined. The Executive and the Company shall
each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total
Payments.
6.3 The
payments provided in subsections (A), (C) and (F) of
Section 6.1 hereof and in Section 6.2 hereof shall be
made not later than the fifth day following the date upon which the
revocation period for the release described in Section 6.6
expires (or, with respect to the payment described in
Section 6.2, if there is no Date of Termination, then the date
on which the Gross-Up Payment is calculated for purposes of
Section 6.2 hereof); provided, however, that if the amounts of
such payments cannot be finally determined on or before such day,
the Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Executive or, in the case of
payments under Section 6.2 hereof, in accordance with
Section 6.2 hereof, of the minimum amount of
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such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments (together
with interest on the unpaid remainder (or on all such payments to
the extent the Company fails to make such payments when due) at
120% of the rate provided in section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no
event later than the thirtieth (30th) day after the Date of
Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to the Executive,
payable on the fifth (5th) business day after demand by the Company
(together with interest at 120% of the rate provided in
section 1274(b)(2)(B) of the Code). At the time that payments
are made under this Agreement, the Company shall provide the
Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such
calculations including, without limitation, any opinions or other
advice the Company has received from Tax Counsel, the Auditor or
other advisors or consultants (and any such opinions or advice
which are in writing shall be attached to the statement). In the
event necessary to comply with the provisions of Section 409A
of the Code and the guidance issued thereunder,
(a) reimbursements to Executive as a result of the operation
of Section 6.1(B) hereof shall be made not later than the end
of the calendar year following the year in which the reimbursable
expense is incurred and (b) if Executive is a "specified
employee" (within the meaning of
Section 409A(a)(2)(B)(i) of the Code), any reimbursements
to Executive as a result of the operation of 6.1(B) hereof with
respect to a reimbur
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