EMPLOYMENT
AGREEMENT
Between
Rentech, Inc.
and
Douglas M. Miller
THIS AGREEMENT was originally entered into and
made effective as of January 20, 2006 (the “ Prior
Agreement ”) between Rentech, Inc. (the “
Company ”) and Douglas M. Miller (“
Executive ”) and is hereby amended and restated in its
entirety as of December 31, 2008 (the “ Amendment
Date ”).
In consideration of the mutual covenants
contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
Employment . The Company has employed Executive and shall
continue to employ Executive, and Executive hereby agrees to
continue employment with the Company, upon the terms and conditions
set forth in this Agreement, for the period beginning on
January 20, 2006 (the “ Commencement Date
”) and ending as provided in Section 4 hereof (the
“ Employment Period ”).
(a) During the Employment Period, Executive
shall serve as the Company’s Executive Vice President of
Renewable Energy Businesses. During the Employment Period,
Executive shall render such administrative, financial and other
executive and managerial services to the Company and its affiliates
(the “ Company Group ”) as are consistent with
Executive’s position and the by-laws of the Company and as
the Chief Executive Officer (“ CEO ”) may from
time to time reasonably direct. Executive shall also serve for no
additional compensation or remuneration as an officer or director
of such subsidiaries of the Company as may from time to time be
designated by the CEO or the Board of Directors of the Company (the
“ Board ”).
(b) During the Employment Period, Executive
shall report to the CEO and shall devote his best efforts and his
full business time and attention (except for permitted vacation
periods and reasonable periods of illness or other incapacity) to
the business and affairs of the Company. Executive shall perform
his duties, responsibilities and functions to the Company hereunder
to the best of his abilities in a diligent, trustworthy,
professional and efficient manner and shall comply with the
Company’s policies and procedures in all material respects.
In performing his duties and exercising his authority under this
Agreement, Executive shall support and implement the business and
strategic plans approved from time to time by the Board and shall
support and cooperate with the Company’s efforts to operate
in conformity with the business and strategic plans approved by the
Board. During the Employment Period, Executive shall not serve as
an officer or director of, or otherwise perform services for
compensation for, any other entity without the prior written
consent of the Board which shall not be unreasonably withheld.
Executive may serve as an officer or director of or otherwise
participate in purely educational, welfare, social, religious and
civic organizations so long as such activities do not interfere
with Executive’s regular performance of duties and
responsibilities hereunder in any material respect. Nothing
contained herein shall preclude Executive from (i) engaging in
charitable and community activities, (ii) participating in
industry and trade organization activities, and (iii) managing
his and his family’s personal investments and affairs;
provided , that Executive shall not have any ownership
interest (of record or beneficial) in any firm, corporation,
partnership, proprietorship or other business that competes
directly with the Company’s Fischer-Tropsch business except
for (x) an investment of not more than 1.0% of the outstanding
securities of a company traded on a public securities exchange or
(y) investments made through public mutual funds.
3.
Compensation and Benefits .
(a) The Company shall pay Executive an
annual salary (the “ Base Salary ”) at the rate
of $300,000 in regular installments in accordance with the
Company’s ordinary payroll practices (in effect from time to
time), but in any event no less frequently than monthly. Executive
shall be eligible for an annual review of his Base Salary based on
performance as determined by the Board in its sole discretion, with
the first review following the Amendment Date to occur during
December 2009.
(b) Bonuses
and Incentive Compensation .
(i) Annual Bonus . For each fiscal
year ending during the Employment Period, Executive will be
eligible to earn an annual bonus based on achievement of
performance criteria established by the Board as soon as
administratively practicable following the beginning of each such
fiscal year (the “ Annual Bonus ”). The target
amount (the “ Target Bonus ”) of
Executive’s Annual Bonus shall equal 50% of Executive’s
Base Salary (at the annual rate in effect at the start of the
fiscal year), with a maximum Annual Bonus in an amount equal to
100% of Executive’s Base Salary (at the annual rate in effect
at the start of the fiscal year). If the Board determines, in its
sole discretion, that an Annual Bonus has become payable with
respect to a fiscal year based on the attainment of applicable
performance criteria, then the Company shall pay the Annual Bonus
for each fiscal year in a single cash lump sum after the end of the
Company’s fiscal year in accordance with procedures
established by the Board, but in no event later than the fifteenth
day of the third month following the end of such fiscal year. To be
eligible for an Annual Bonus pursuant to this Section 3(b),
Executive must be an employee on the last day of the relevant
fiscal year.
(ii)
[INTENTIONALLY OMITTED]
(c) Expenses . During the
Employment Period, the Company shall reimburse Executive for all
reasonable business expenses incurred by him in the course of
performing his duties and responsibilities under this Agreement in
accordance with the Company’s policies in effect from time to
time with respect to travel, entertainment and other business
expenses for senior executives. Executive shall also receive an
automobile allowance of $1,000 per month, paid monthly.
(d) Other Benefits . Executive
shall also be entitled to the following benefits during the
Employment Period, unless otherwise modified by the
Board:
(i) participation in the Company’s
retirement plans, health and welfare plans, disability insurance
plans and other benefit plans of the Company as in effect from time
to time, under the terms of such plans and to the same extent and
under the same conditions such participation and coverages are
provided generally to other senior executives of the
Company;
(ii) reimbursement for the reasonable costs
for business travel to Denver, Colorado, including but not limited
to airfare, ground transportation and lodging;
(iii) coverage for services rendered to the
Company, its subsidiaries and affiliates while Executive is a
director or officer of the Company, or of any of its subsidiaries
or affiliates, under director and officer liability insurance
policy(ies) maintained by the Company from time to time;
and
(iv) five weeks of vacation per
year.
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4.
Termination . The Employment Period shall end on the third
anniversary of the Commencement Date; provided ,
however , that the Employment Period shall be automatically
renewed for successive one-year terms thereafter on the same terms
and conditions set forth herein unless either party provides the
other party with notice that it has elected not to renew the
Employment Period at least 90 days prior to the end of the
initial Employment Period or any subsequent extension thereof.
Notwithstanding the foregoing, (i) the Employment Period shall
terminate immediately upon Executive’s resignation (with or
without Good Reason, as defined herein), death or Disability (as
defined herein) and (ii) the Employment Period may be
terminated by the Company at any time prior to such date for Cause
(as defined herein) or without Cause. Except as otherwise provided
herein, any termination of the Employment Period by the Company
shall be effective as specified in a written notice from the
Company to Executive, but in no event more than 90 days from
the date of such notice. The termination of the Employment Period
shall not affect the respective rights and obligations of the
parties which, pursuant to the terms of this Agreement, apply
following the date of Executive’s termination of employment
with the Company.
(a) Termination Without Cause or for
Good Reason . In the event that Executive incurs a
“separation from service” from the Company (within the
meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue
Code of 1986, as amended (the “ Code ”) and
Treasury Regulation Section 1.409A-1(h)) (“
Separation from Service ”) (1) by the Company
without Cause (as defined herein), or (2) by Executive for
Good Reason (as defined herein), then, subject to Executive’s
execution and non-revocation of a Release substantially in the form
attached as Exhibit B within 30 days after such
Separation from Service, Executive shall be entitled to the
benefits set forth below in this Section 5(a). Each payment
under this Section 5(a) shall be treated as a separate payment for
purposes of Section 409A (as defined below).
(i) The Company shall pay Executive an
amount equal to one times Executive’s Base Salary plus one
times Executive’s Target Bonus (as in effect on the date of
Executive’s termination). The severance amount described in
the previous sentence shall be paid as follows, subject to
Section 19 below: (A) the continuation of Base Salary
shall be paid in substantially equal installments over a period of
one year from Executive’s Separation from Service in
accordance with the payroll practices of the Company in effect from
time to time, beginning on the first payroll date occurring on or
after the thirtieth day following Executive’s Separation from
Service (such payroll date, the “ First Payroll Date
”) (with amounts otherwise payable prior to the First Payroll
Date paid on the First Payroll Date) and (B) the Target Bonus
shall be paid on the date that executive bonuses are paid generally
for the fiscal year in which the date of termination took place,
which shall, in any event, be no earlier than the First Payroll
Date and no later than two and one-half months after the end of
such fiscal year.
(ii) All stock options, restricted stock,
restricted stock units (including the Executive LTIP, as defined
below) and other similar equity awards shall be governed by the
terms of any applicable equity plans and award
agreements.
(iii) Executive shall be entitled to
benefits mandated under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“ COBRA
”), under Section 4980B of the Code, or any replacement
or successor provision of United States tax law, subject to
Executive’s valid election to receive COBRA benefits, with
the premium paid at the Company’s expense until the first to
occur of (A) eighteen months from the date of termination,
(B) the expiration of the period of time during which
Executive is entitled to continuation coverage under the
Company’s group health plan under COBRA, or (C) such
date that Executive becomes eligible for coverage under the group
health plan of another employer, provided , that if any plan
pursuant to which such benefits are provided is not, or ceases
prior to the expiration of the period of continuation coverage to
be, exempt from the application of Section 409A under Treasury
Regulation Section 1.409A-1(a)(5), then an amount equal
to each remaining premium payment shall thereafter be paid to
Executive as currently taxable compensation in substantially equal
monthly installments over the continuation coverage period (or the
remaining portion thereof).
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In addition, if Executive’s employment
terminates pursuant to this Section 5(a), the Company shall
pay Executive the amounts described in Section 5(d)(i),
(ii) and (iii) within 30 days of the date of
termination (or such earlier date as may be mandated by applicable
law) and shall pay or provide the other benefits described in
Section 5(d) in accordance therewith.
(b) Termination for Cause or Voluntary
Resignation . In the event that Executive’s employment
with the Company is terminated (i) by the Board for Cause or
(ii) by Executive’s resignation from the Company for any
reason other than Good Reason or Disability (as defined herein),
subject to applicable law, the Company agrees to the
following:
(i) All stock options, restricted stock,
restricted stock units (including the Executive LTIP) and other
similar equity awards shall be governed by the terms of any
applicable equity plans and award agreement(s); and
(ii) The Company shall pay Executive the
amounts described in Section 5(d)(i), (ii) and (iii)
within 30 days of the date of termination (or such earlier
date as may be mandated by applicable law) and shall pay or provide
the other benefits described in Section 5(d) in accordance
therewith.
For purposes of this Agreement,
Executive’s voluntary resignation or retirement shall be
considered Executive’s resignation from the Company without
Good Reason.
(c) Death or Disability . In the
event that Executive’s employment with the Company is
terminated as a result of Executive’s death or Disability,
the Company agrees to the following:
(i) All stock options, restricted stock,
restricted stock units (including the Executive LTIP) and other
similar equity awards shall be governed by the terms of any
applicable equity plans and award agreement(s); and
(ii) The Company shall pay Executive the
amounts described in Section 5(d)(i), (ii) and (iii)
within 30 days of the date of termination (or such earlier
date as may be mandated by applicable law) and shall pay or provide
the other benefits described in Section 5(d) in accordance
therewith.
(d) Payments Upon Termination of
Employment . In the case of any termination of
Executive’s employment with the Company, Executive or his
estate or legal representative shall be entitled to receive, to the
extent permitted by applicable law, from the Company
(i) Executive’s Base Salary through the date of
termination to the extent not previously paid, (ii) to the
extent not previously paid, the amount of any Annual Bonus earned
or accrued by Executive as of the date of termination for any
fiscal year of the Company ended prior to the date of termination
that is then unpaid, (iii) any vacation pay, expense
reimbursements and other cash entitlements accrued by Executive, in
accordance with Company policy for senior executives, as of the
date of termination to the extent not previously paid, and
(iv) all vested benefits accrued by Executive under all
benefit plans and qualified and nonqualified retirement, pension,
401(k) and similar plans and arrangements of the Company, in such
manner and at such times as are provided under the terms of such
plans and arrangements. Except as provided in Section 5(e) below,
if applicable, all stock options, restricted stock, restricted
stock units and other similar equity awards shall be governed by
the terms of any applicable equity plans and award
agreement(s).
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(e) Termination Without Cause,
Non-Renewal or for Good Reason In Connection With a Change in
Control . In the event that Executive incurs a Separation from
Service during the period beginning three months before and ending
two years immediately following a Change in Control (as defined
herein) of the Company (1) by the Company without Cause,
(2) as a result of the Company electing not to renew the
Agreement in accordance with Section 4 above on terms and
conditions substantially similar to those contained herein, if, at
the time of such non-renewal, (A) Executive is willing and
able to continue providing services on terms and conditions
substantially similar to those contained in this Agreement and
(B) the Company has not, since the date of such Change in
Control, already renewed this Agreement for a period of one or more
years from the date of such Change of Control in accordance with
Section 4 above, or (3) by Executive for Good Reason,
then, subject to Executive’s execution and non-revocation of
a Release substantially in the form attached as
Exhibit B within 30 days after such Separation
from Service, Executive shall be entitled to the benefits set forth
below in this Section 5(e) (in addition to the benefits set forth
in Section 5(a)(iii) above).
(i) The Company shall pay Executive the
payments set forth in Section 5(a)(i) in accordance with the
terms and conditions set forth in Section 5(a);
provided , however , that in determining the amount
of payment due under Section 5(a)(i), Executive’s actual
Annual Bonus for the year preceding the Change in Control shall be
used, if higher than his Target Bonus; and provided ,
further , that, subject to Section 19 below, payments
pursuant to Section 5(a)(i) shall be made in a lump sum (A) if
the Separation from Service occurs during the three-month period
preceding the Change in Control, on the 95th day following such
Separation from Service (to the extent not previously paid in
accordance with Section 5(a)(i)), and (B) if the
Separation from Service occurs during the two-year period following
the Change in Control, no later than 10 business days after
Executive’s Separation from Service.
(ii) The 375,000 restricted stock units
granted under Section 3(b)(ii) of the Prior Agreement (the
“ Executive LTIP ”) shall fully vest, to the
extent not already vested, and shall be settled in full within
thirty days after such Separation from Service and otherwise be
governed by the terms of the award agreement attached hereto as
Exhibit A (the “ LTIP Award Agreement
”). All other stock options, restricted stock, restricted
stock units and other similar equity awards shall be governed by
the terms of any applicable equity plans and award
agreement(s).
In addition, if Executive’s employment
terminates pursuant to this Section 5(e), the Company shall
pay Executive the amounts described in Section 5(d)(i),
(ii) and (iii) within 30 days of the date of
termination (or such earlier date as may be mandated by applicable
law) and shall pay or provide the other benefits described in
Section 5(d) in accordance therewith.
(f) Non-Renewal . In the event that
Executive incurs a Separation from Service as a result of the
Company electing not to renew the Agreement in accordance with
Section 4 above on terms and conditions substantially similar
to those contained herein and, (A) at the time of such
non-renewal, Executive is willing and able to continue providing
services on terms and conditions substantially similar to those
contained in this Agreement and (B) Section 5(e) does not
apply to such non-renewal, then, subject to Executive’s
execution and non-revocation of a Release substantially in the form
attached as Exhibit B within 30 days after such
Separation from Service, Executive shall be entitled to the
benefits set forth below in this Section 5(f).
(i) The Company shall pay Executive an
amount equal to twelve months of Executive’s Base Salary (as
in effect on the date of Executive’s termination), which
amount shall, subject to Section 19 below, be paid in
substantially equal installments over a period of twelve months
from Executive’s Separation from Service in accordance with
the payroll practices of the Company in effect from time to time,
beginning on the First Payroll Date (with amounts otherwise payable
prior to the First Payroll Date paid on the First Payroll Date).
Each payment under this Section 5(f) shall be treated as a separate
payment for purposes of Section 409A. In addition, upon a
non-renewal described in this Section 5(f), if Executive has
not already been awarded an Annual Bonus in respect of the fiscal
year immediately preceding such non-renewal, the Company may, in
its sole discretion, award an Annual Bonus to Executive in respect
of such fiscal year based on Executive’s service and the
attainment of applicable performance objectives during such fiscal
year.
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(ii) All stock options, restricted stock,
restricted stock units (including the Executive LTIP) and other
similar equity awards shall be governed by the terms of any
applicable equity plans and award agreements.
In addition, if Executive’s employment
terminates pursuant to this Section 5(f), the Company shall
pay Executive the amounts described in Section 5(d)(i),
(ii) and (iii) within 30 days of the date of
termination (or such earlier date as may be mandated by applicable
law) and shall pay or provide the other benefits described in
Section 5(d) in accordance therewith.
(g) Excess
Parachute Payments .
(i) In the event any payment granted to
Executive pursuant to the terms of this Agreement or otherwise (a
“ Payment ”) is determined to be subject to any
excise tax (“ Excise Tax ”) imposed by
Section 4999 of the Code (or any successor to such Section),
the Company shall pay to Executive, no later than the time any
Excise Tax is payable with respect to such Payment (through
withholding or otherwise), an additional amount (a “
Gross-Up Payment ”) which, after the imposition of all
income, employment, excise and other taxes, penalties and interest
thereon, is equal to the sum of (A) the Excise Tax on such
Payment plus (B) any penalty and interest assessments
associated with such Excise Tax.
(ii) The determinations to be made with
respect to this Section 5(g) shall be made by a certified public
accounting firm designated by the Company and reasonably acceptable
to Executive and Executive may rely on such determination in making
payments to the Internal Revenue Service.
(iii) Notwithstanding anything herein to
the contrary, any Gross-Up Payment or any payment of any income or
other taxes to be paid by the Company under this Section 5(g) shall
be made by the Company no later than the end of Executive’s
taxable year next following Executive’s taxable year in which
Executive remits the related taxes. Any costs and expenses incurred
by the Company on behalf of Executive under this Section 5(g) due
to any tax contest, audit or litigation shall be paid by the
Company as incurred and, in any event, no later than the end of
Executive’s taxable year following Executive’s taxable
year in which the taxes that are the subject of the tax contest,
audit or litigation are remitted to the taxing authority, or where
as a result of such tax contest, audit or litigation no taxes are
remitted, the end of Executive’s taxable year following
Executive’s taxable year in which the audit is completed or
there is a final and non-appealable settlement or other resolution
of the contest or litigation.
(h) No Other Payments . Except as
provided in Sections 5(a), (b), (c), (d), (e), (f) and
(g) above, all of Executive’s rights to salary, bonuses,
employee benefits and other compensation hereunder which would have
accrued or become payable after the termination or expiration of
the Employment Period shall cease upon such termination or
expiration, other than those expressly required under applicable
law (such as COBRA).
(i) No Mitigation, No Offset . In
the event of Executive’s termination of employment for
whatever reason, Executive shall be under no obligation to seek
other employment, and there shall be no offset against amounts due
him under this Agreement or otherwise on account of any
remuneration attributable to any subsequent employment or claims
asserted by the Company or any affiliate; provided , that
this provision shall not apply with respect to any amounts that
Executive owes to the Company or any member of the Company Group on
account of any amount in respect of any of which Executive is
obligated to make repayment to the Company or any member of the
Company Group.
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(j) Definitions . For purposes of
this Agreement, the following terms shall have the following
meanings:
(i) “
Cause ” shall mean one or more of the
following:
(A) the conviction of, or an agreement to a
plea of nolo contendere to, a crime involving moral turpitude or
any felony;
(B) Executive’s willful refusal
substantially to perform duties as reasonably directed by the CEO
under this or any
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