TERRA INDUSTRIES INC. EXCESS BENEFIT PLAN

Exhibit 10.1

TERRA INDUSTRIES INC.
EXCESS BENEFIT PLAN
(As Amended and Restated Effective as of January 1, 2008)

SECTION 1

General

1.1. Purpose and Effective Date . Terra Industries Inc. (the “Company”) maintains the Terra Industries Inc. Excess Benefit Plan (the “Plan”) for the purpose of providing eligible employees who participate in the Terra Industries Inc. Employees’ Retirement Plan, as amended from time to time (the “Qualified Plan”), with additional benefits not payable under the Qualified Plan solely by reason of the compensation limitation of section 401(a)(17) or the benefit limitations of section 415 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), or by reason of elective deferrals made under the Supplemental Deferred Compensation Plan. The provisions set forth herein constitute an amendment, restatement and continuation of the Plan as in effect immediately prior to January 1, 2008 (the “Effective Date”), subject to the following:

	(a)		The Plan as set forth herein shall apply to benefits under the Plan, the payment of which commences on or after the Effective Date. Benefits for which payments commenced prior to the Effective Date will be determined in accordance with and be subject to the terms and conditions of the Plan as in effect prior to the Effective Date.
	(b)		It is the intention that all amounts deferred under the Plan will be subject to the provisions of section 409A of the Code and applicable guidance issued thereunder (“Section 409A”), regardless of whether such amounts were deferred (within the meaning of Section 409A) on, prior to, or after January 1, 2005; provided, however, that amounts deferred as of December 31, 2004 with respect to Participants who terminated employment on or before December 31, 2004 and for whom no amounts are deferred after December 31, 2004 are not intended to be subject to the provisions of Section 409A, and such amounts shall continue to be subject to the terms and conditions of the Plan as in effect prior to January 1, 2005.

1.2. No Funding . The Plan is intended to constitute an unfunded “excess benefit plan” within the meaning of section 3(36) of the Employee Retirement Income Security Act of 1974 as amended (“ERISA”); provided, however, that, to the extent, if any, that the Plan provides benefits which cannot be provided by an excess benefit plan, the Plan shall constitute an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of section 301(a)(3) of ERISA. The amount of any benefit payable under the Plan shall be paid from the general revenues of the Company; provided, however, that the Company’s obligations under the Plan shall be reduced to the extent that any amounts due under the Plan are paid from one or more trusts, the assets of which are subject to the claims of general creditors of the Company or any affiliate thereof. Nothing in the Plan shall require the Company to establish any trust to provide benefits under the Plan, and no Participant shall have any interest in or claim to any assets of any such trust as the Company may, from time to time, establish or maintain for such purpose.

1.3. Administration . The Plan shall be administered, interpreted and construed by the Committee established to administer the Qualified Plan. All decisions and interpretations of the Committee shall be conclusive and binding on the Company and Participants and their eligible spouses, contingent annuitants and beneficiaries, and on all persons claiming under or through any of them.

1.4. Definitions . Terms used frequently with the same meaning are indicated by initial capital letters, and are defined throughout the Plan. Unless the context clearly requires otherwise, or except as otherwise provided by the Committee from time to time, any word, term or phrase used in the Plan shall have the same meaning as is assigned to it under the Qualified Plan.

1.5. Gender and Number . Where the context admits, words in one gender shall include the other gender, words in the singular shall include the plural and the plural shall include the singular.

1.6. Applicable Laws . The Plan shall be construed and administered in accordance with the laws of the State of Iowa to the extent that such laws are not preempted by the laws of the United States of America.

1.7. Claims and Review Procedures . The claims procedure applicable to claims and appeals of denied claims under the Qualified Plan shall apply to any claims for benefits under the Plan and appeals of any such denied claims.

SECTION 2

Participation

2.1. Participation . Subject to the terms and conditions of the Plan, each person who was a “Participant” in the Plan immediately prior to the Effective Date shall continue as a Participant in the Plan from and after the Effective Date. Subject to the terms and conditions of the Plan, an employee of an Employer shall become a “Participant” in the Plan when he has satisfied the following conditions:

	(a)		he is a participant in the Qualified Plan; and
	(b)		either (i) he is an officer or director of the Company or of Terra International, Inc. or the president of any other subsidiary or affiliate of the Company and his benefits under the Qualified Plan are limited by provisions of the Qualified Plan adopted pursuant to section 401(a)(17) or 415(b) of the Code (the “Code Limitations”); or (ii) he is a participant in the Terra Industries Inc. Supplemental Deferred Compensation Plan.

Each Participant shall be entitled to receive the Excess Retirement Benefit, if any, determined in accordance with Section 3 hereof and the surviving Spouse of a Participant may be entitled to a Survivor Benefit in accordance with Section 4 hereof.

2.2. Plan Not Contract of Employment . The Plan does not constitute a contract of employment, and participation in the Plan will not give any employee the right to be retained in the employ of an Employer nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan.

SECTION 3

Amount and Payment of Excess Retirement Benefit

3.1. Amount of Excess Retirement Benefit . Subject to the terms and conditions of the Plan, each Participant (other than a Participant whose benefits are determined pursuant to subsection 1.1 above in accordance with the terms and conditions of the Plan as in effect prior to the Effective Date or prior to January 1, 2005) will be entitled to an “Excess Retirement Benefit” under the Plan commencing as of his Benefit Commencement Date (as defined in subsection 3.4 below) in an amount expressed as a single life annuity equal to:

(a)

the amount of the retirement benefit (expressed as a single life annuity) which the Participant would be entitled to receive under the Qualified Plan commencing on such Benefit Commencement Date (or would have been entitled to receive commencing on such date if the Participant’s benefits under the Qualified Plan had not commenced prior thereto), if:

	(i)		the Qualified Plan benefit were determined without regard to the Code Limitations, and
	(ii)		the Participant’s Average Monthly Compensation for purposes of determining the Qualified Plan benefit included amounts deferred under the Supplemental Deferred Compensation Plan;

REDUCED BY

(b)

the amount of the retirement benefit (expressed as a single life annuity) which the Participant would be entitled to receive under the Qualified Plan commencing on such Benefit Commencement Date (or would have been entitled to receive commencing on such date if the Participant’s benefits under the Qualified Plan had not commenced prior thereto);

FURTHER REDUCED, FROM TIME TO TIME, BY

(c)

the actuarial equivalent (using such reasonable actuarial assumptions and methods as the Committee may determine for such purposes) of any increase in the benefit to which the Participant is entitled or will become entitled under the Qualified Plan solely because of an increase in the limitation on benefits under section 415 of the Code.

3.2. Vesting . A Participant’s benefits under this Plan shall be nonforfeitable and fully vested at all times on and after the date on which the Participant is vested with respect to his benefits under the Qualified Plan; provided, however, that notwithstanding any other provision of the Plan to the contrary, the Committee, in its sole discretion, may cease any or all future payments of any benefits accrued under th