EMPLOYMENT AGREEMENT

Exhibit 10.12

EMPLOYMENT AGREEMENT

by and between

TIMOTHY R. CANTRELL

and

PHOSPHATE HOLDINGS, INC.

and

MISSISSIPPI PHOSPHATES CORPORATION

T HIS E MPLOYMENT A GREEMENT is entered into on June 30, 2008 and is effective as of the 5th day of May, 2008 (“ Effective Date ”), by and between P HOSPHATE H OLDINGS , I NC . , a Delaware corporation (“ PHI ”), M ISSISSIPPI P HOSPHATES C ORPORATION , a Delaware corporation and wholly owned subsidiary of PHI (“ MPC ”), and T IMOTHY R. C ANTRELL (“ Executive ”). PHI and MPC may be referred to collectively as “ Employer .”

WHEREAS , Employer believes that the employment of Executive will be of substantial benefit to Employer and desires to assure itself of the continued availability of such services;

WHEREAS , Executive began to perform services for the Employer on the Effective Date;

WHEREAS , Executive desires to be employed by Employer on the terms and subject to the conditions hereinafter stated.

NOW, THEREFORE , in consideration of the above premises and other good and valuable consideration as herein recited, the parties hereto agree as follows:

1. Employment; Term . Executive shall serve as Treasurer of PHI and Chief Financial Officer of MPC, as more fully described herein. The principal place of employment will be within a 50-mile radius of Jackson, Mississippi.

The initial term of this Agreement shall begin as of the Effective Date and (subject to earlier termination pursuant to the terms of this Agreement) shall terminate on May 5, 2010 (the “ Initial Term ”). Upon the expiration of the Initial Term, the term of this Agreement shall be automatically renewed annually for successive terms of one (1) year (each, a “ Renewal Term ”), unless either party notifies the other party in writing of the non-renewal of this Agreement at least sixty (60) days prior to the expiration of the Initial Term or any Renewal Term thereafter.

2. Duties and Responsibilities . Executive shall report directly to the President of PHI. Executive shall be responsible for the financial operations of both PHI and MPC and shall perform such duties and responsibilities as may from time to time be determined by the Board of Directors. Executive shall be a full-time employee of Employer and shall exert his best efforts and devote substantially all of his time and attention to the affairs of Employer. Executive shall cooperate fully with Employer’s officers and employees in conjunction with their efforts to develop, manufacture, distribute and market Employer products.

3. Compensation . Employer shall pay to Executive for his services hereunder the following compensation:

(a) Base Compensation . Executive’s annual base salary shall be Two Hundred Twenty-Five Thousand and No/100 Dollars ($225,000.00) payable by Employer in accordance with Employer’s payroll procedures (“ Base Compensation ”). Executive shall also be eligible to receive a one-time signing bonus described in Section 3(b)(i), an annual bonus described in Section 3(b)(ii), to receive phantom stock described in Section 3(b)(iii), and to receive stock appreciation rights described in Section 3(b)(iv). Executive’s Base Compensation may be increased from time to time by the Board of Directors of Employer, but Executive’s annual base salary shall not be subject to reduction unless Employer implements a salary reduction applicable to all employees.

(b) Additional Compensation .

(i) Upfront Signing Bonus . Within fourteen (14) days from the date of execution of this Agreement, Employer shall pay to Executive a one-time signing bonus in the amount of Fifty Thousand and N0/100 Dollars ($50,000.00), which shall be subject to normal withholdings.

(ii) Annual Bonus . Executive shall be eligible to receive, in addition to Base Compensation, an annual bonus (“ Bonus ”), based on the Employer’s consolidated net income before interest, taxes, depreciation, amortization and accretion determined in accordance with generally accepted accounting principles and excluding (A) employee bonuses and similar incentive compensation and (B) other nonrecurring, noncash charges such as asset impairments (“ EBITDA ”) for each fiscal year during the term of this Agreement, computed as follows:

For the fiscal year of Employer ending December 31, 2008, Executive’s Bonus shall be computed solely on the basis of EBITDA for the last three fiscal quarters of such fiscal year; each EBITDA amount referred to in the immediately preceding portion of this Section 3(b)(ii) shall be reduced to an amount equal to seventy-five percent (75%) of the EBITDA amounts referenced

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above; and each percentage amount referred to in the immediately preceding portions of this Section 3(b)(ii) shall be reduced to a percentage equal to seventy-five percent (75%) of each percentage stated above; provided, however, that in the event EBITDA for the last three quarters of the 2008 fiscal year exceeds Thirty Million and No/100 Dollars ($30,000,000.00), then Executive shall be entitled to a Bonus equal to one hundred percent (100%) of Base Compensation. In the event that Executive shall not have been employed by the Employer for the entire fiscal year of Employer with respect to any fiscal year of Employer after December 31, 2008 for which any Bonus is payable, the amount of such Bonus for the year of termination shall be calculated based on “Annualized EBITDA,” which shall mean EBITDA through the last day of the month during which termination occurs multiplied by a fraction the numerator of which is twelve (12) and the denominator of which is the number of months of such fiscal year that have occurred through the last day of the month of termination. The Bonus shall be paid in a single lump sum within seventy-five (75) days after the expiration of the applicable fiscal year of Employer.

Example : Assume that Executive’s employment is terminated on June 15, 2010 and that EBITDA through June 30 for such fiscal year is $12,000,000. Therefore, Annualized EBITDA is $12,000,000 multiplied by 12/6, or $24,000,000, and Executive’s Bonus for the year of termination is 76% (60% plus [40% x 4/10] = 76%) of Executive’s Base Compensation.

(iii) Phantom Stock . Executive shall also receive as additional compensation for services rendered and to be rendered by Executive a number of units of phantom stock (“ Phantom Stock ”) equal to a number of shares (whole and fractional shares) of common stock of PHI having a value in the aggregate of One Hundred Thousand Dollars ($100,000) based on the fair market value per share of PHI common stock on the Effective Date of this Agreement. Within thirty (30) days following the first anniversary of the Effective Date hereof, Employer shall pay to Executive a cash amount equal to the product of one-half (1/2) of the number of units of Phantom Stock awarded to Executive, as determined in the preceding sentence, multiplied by the fair market value of one share of common stock of PHI on such first anniversary date. Within thirty (30) days following the second anniversary of the Effective Date hereof, Employer shall pay to Executive a cash amount equal to the product of the remaining one-half (1/2) of the number of units of Phantom Stock awarded to Executive as determined herein, multiplied by the fair market value of one share of common stock of PHI on such second anniversary date. The “fair market value” of a share of PHI common stock shall be determine as set forth in Section 3(b)(v) of this Agreement. Upon termination of Executive’s employment For Cause, Executive shall forfeit all unawarded Phantom Stock units, all Phantom Stock units held by Executive shall immediately terminate, be forfeited, and be deemed relinquished as of the date of such termination, and Executive shall not be entitled to any payment with respect to such units.

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Within thirty (30) days following the earlier of the occurrence of the termination of Executive’s employment for death, disability, Good Reason or Without Cause (each, an “ Employment Termination Event ”) or a Change of Control prior to the second anniversary of the Effective Date, Employer shall pay to Executive a cash amount equal to the product of the number of all Phantom Stock units awarded to Executive for which Executive has not previously received payment hereunder multiplied by the fair market value of one (1) share of PHI common stock on such Employment Termination Date or Change of Control date, whichever is applicable. As used in this Section 3, “ Phantom Stock Vesting Date ” shall mean, as applicable, the first anniversary of the Effective Date hereof, the second anniversary of the Effective Date hereof, the Employment Termination Date, or the Change of Control date. As used in this Section 3, “ Change of Control ” shall mean:

(A) The acquisition (other than a transfer by way of gift or testamentary disposition of stock to any person, or trust for the benefit of any person, related to any shareholder of Employer as of the date hereof) by any person (which for purposes hereof shall be deemed to include the separate shareholders of a corporation which merges with or into the Employer) or group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934 (the “ 1934 Act ”)), of beneficial ownership (as defined in Rule 13d-3 under the 1934 Act) of more than fifty percent (50%) of the voting power of the voting stock of the Employer, including by reason of any consolidation of the Employer with, or merger of the Employer into, any other person, or any merger of another person into the Employer;

(B) Any sale or transfer of all or substantially all of the assets of the Employer; or

(C) The liquidation or dissolution of the Employer.

(iv) Stock Appreciation Rights . Executive shall also receive as additional compensation for services rendered and to be rendered by Executive stock appreciation rights (“ SAR” ) in the amount of twenty-five thousand (25,000) units. The SAR units are hereby granted as of the Effective Date and shall vest and be exercisable on the second anniversary of the date of grant, or the earlier occurrence of the termination of Executive’s employment for death, disability, Good Reason, or Without Cause or a Change of Control event (the “ SAR Vesting Date ”). Upon termination of Executive’s employment For Cause prior to the second anniversary date, all SAR units held by Executive shall immediately terminate, be forfeited, and be deemed relinquished as of the date of such termination, and Executive shall not be entitled to any payment with respect to such SAR units. Upon the occurrence of the SAR Vesting Date, each SAR unit shall entitle Executive to the following amounts of appreciation: the excess of the fair market value of a share of PHI common stock as of the SAR Vesting Date over the fair market value of a share of PHI common stock as of the Effective

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Date. The fair market value of a share of PHI common stock shall be determined as set forth in Section 3(b)(v) of this Agreement. The total appreciation payable to Executive shall be equal to the number of SAR units owned by Executive multiplied by the amount of appreciation per right determined under the preceding sentences. The amount to be paid Executive shall be paid to the Executive within thirty (30) days of a SAR Vesting Date.

(v) Fair Market Value . For purposes of this Section 3(b)(v), the term “fair market value” of a share of PHI common stock shall be no less than 100% of the fair market value of PHI common stock on the date in question. The “fair market value” shall be the average of the high and low market prices at which a share of PHI common stock shall have been sold on the date in question, or on the next preceding trading date if such date was not a trading date, as reported on the applicable stock exchange.

(vi) Recapitalization . In the event that any dividend or other distribution (whether in the form of cash, common stock of PHI, or other property), recapitalization, stock split, reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects PHI common stock such that an adjustment is in order to prevent dilution or enlargement of the rights of Executive under this Agreement, then the Employer’s board of directors shall make such equitable changes or adjustments as it deems necessary or appropriate to the Phantom Stock or SARs granted herein, provided that equitable changes or adjustments shall be made in accordance with Section 409A of the Internal Revenue Code of 1986 and the regulations thereunder.

(vii) Registration Filing . Notwithstanding any of the provisions in this Agreement to the contrary, including but not limited to Section 3(b)(iv) above, in the event that PHI files a Form 10 in accordance with the Securities Act, a Form S-1 in accordance with the Securities Act of 1933, or any other appropriate registration form (either, a “ Registration Form ”), that shall cover the common stock of PHI, each of the SARs granted to Executive under Section 3(b)(iv) shall immediately, and without further action of either the Employer or the Executive, convert to options in favor of Executive to purchase common stock of PHI (“ Options ”) in the manner provided below:

(A) Unvested Rights . Each of the SARs that remain unvested on the date that PHI files a Registration Form shall be converted to unvested Options (the “ Unvested Options ”). These Unvested Options will be required to satisfy the SAR Vesting Date requirements set forth in Section 3(b)(iv) above as if the Unvested Options were granted to the Executive on the Effective Date.

(B) Vested Rights . Each of the SARs that have vested as of the date that PHI files a Registration Form shall be converted to fully vested and immediately exercisable Options (the “ Vested Options ”).

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The Options shall have an exercise price per Option equal to the fair market value of a share of PHI common stock as of the Effective Date. The Options shall be identical to the SARs in all other respects and remain subject to each applicable provision of this Agreement.

4. General Executive Benefits . During the term of this Agreement, Executive shall be entitled to the general retirement, profit sharing, health and dental insurance, term life insurance, long term disability insurance, salary continuation, hospital or other plans which may now be in effect or which may hereafter be adopted (“ Employee Benefits ”), it being understood that Executive shall have the same rights and privileges as other senior executive employees of Employer , except to the extent that such rights and privileges conflict with, or duplicate, the benefits provided to Executive under this Agreement. The proceeds of such life insurance shall be payable to a beneficiary designated by Executive.

5. Business Expenses . During the term of this Agreement, Employer will reimburse Executive for all ordinary and necessary business expenses incurred by him in connection with his employment upon timely submission by Executive of receipts and other documentation in conformance with Employer’s normal procedures, and in accordance with applicable United States Treasury Regulations. The Employer shall provide the appropriate forms to Executive to allow him to adequately substantiate and account for such business expenses.

6. Vacation . During the term of this Agreement, Executive shall be entitled to paid vacation, paid holidays and sick leave in accordance with Employer’s standard policies, as may be amended from time to time. For purposes of accruing and computing Executive’s paid vacation, paid holidays, and sick leave in accordance with Employer’s standard policies, Executive shall be credited for years of service with prior employers. Executive and Employer acknowledge and agree that the service credited to Executive with respect to such prior employment shall entitle Executive to receive the maximum paid vacation, paid holidays and sick leave allowed under Employer’s standard policies. If there is a conflict between PHI and MPC’s policies, then PHI’s policies shall control and be followed.

7. Termination .

(a) For Cause . Notwithstanding any other provisions of this Agreement, Employer may, at any time, without prior notice, discharge the Executive “For Cause.” For purposes of this Agreement, “For Cause” shall mean the occurrence of any one of the following events:

(i) Any illegal or dishonest conduct which materially and adversely affects the reputation, goodwill, or business position of Employer or which involves Employer funds or assets; or

(ii) Any reckless or intentional material damage to property or business of Employer; or

(iii) Theft, embezzlement or misappropriation of Employer property; or

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