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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to
Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by Registrant [ ]
Filed by a Party other than Registrant [ X ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
RENTECH, INC.
(Name of Registrant as Specified In Its Charter)
LOREN L. MALL, BREGA & WINTERS P.C.
(Name of Person(s)) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
1) Title of each class of securities to which
transaction applies.
-------------------------
2) Aggregate number of securities to which transaction
applies.
-------------------------
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
-------------------------
4) Proposed maximum aggregate value of transaction:
------------
5) Total fee paid:
------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
1) Amount Previously Paid:
---------------
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
-----------------------------------
4) Date Filed:
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RENTECH, INC.
-----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 2001
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You are cordially invited to attend the annual meeting of
shareholders of Rentech, Inc. to be held at the Courtyard by Marriott,
Cosmopolitan Room, 934 16th Street, Denver, Colorado, on Tuesday, May 8,
2001 at 9:00 a.m. (local time) for the following purposes:
1. To elect two directors for terms of three years each;
2. To consider and vote upon a proposal to adopt the 2001 Stock
Option Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements of the meeting.
Accompanying this notice is a form of proxy, a proxy statement, and
a copy of Rentech's 2000 annual report to shareholders. The 2000 annual
report to shareholders is not a part of the proxy solicitation material.
Only holders of record of the common stock of Rentech at the close
of business on March 2, 2001 will be entitled to notice of and to vote at
the meeting and any adjournments or postponements of the meeting.
By Order of the Board of Directors
/s/ Ronald C. Butz
RONALD C. BUTZ,
Secretary
Denver, Colorado
March 9, 2001
YOUR VOTE IS IMPORTANT
This proxy statement is furnished in connection with the
solicitation of proxies by the Company, on behalf of the Board of
Directors, for the 2001 annual meeting of shareholders. The proxy
statement and the related proxy form are being distributed on or about
March 15, 2001. You can vote your shares using one of the following
methods:
- Vote through the Internet at the website shown on the proxy card.
- Vote by telephone using the toll-free number shown on the proxy
card.
- Complete and return a written proxy card.
- Attend the Company's 2001 annual meeting of shareholders and
vote.
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Votes submitted through the Internet or by telephone must be
received by 4:00 p.m. Eastern Time, on May 7, 2001. Internet and
telephone voting are available 24 hours per day. If you vote via
Internet or telephone, you do not need to return a proxy card.
You are invited to attend the meeting; however, to ensure your
representation at the meeting, you are urged to vote via the Internet or
telephone, or mark, sign, date and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope enclosed for that
purpose. Any shareholder attending the meeting may vote in person even
if he or she has voted via the Internet or telephone, or returned a proxy
card.
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RENTECH, INC.
1331 17th Street, Suite 720
Denver, Colorado 80202
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PROXY STATEMENT
--------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 2001
This proxy statement is furnished to shareholders in connection with
solicitation by the Board of Directors of Rentech, Inc. of proxies for
use at the annual meeting of shareholders to be held at the Courtyard by
Marriott, Cosmopolitan Room, 934 16th Street, Denver, Colorado, on
Tuesday, May 8, 2001 at 9:00 a.m., local time, and at any adjournments or
postponements of the meeting.
Rentech anticipates that this proxy statement and the accompanying
form of proxy will be first sent or given to shareholders on or about
March 15, 2001.
VOTING SECURITIES AND VOTING RIGHTS
Only shareholders of record at the close of business on March 2,
2001 are entitled to vote at the annual meeting or any adjournments or
postponements of the meeting. On that date, 64,050,946 shares of common
stock were outstanding. Each share of common stock outstanding on that
date entitles the holder to one vote on each matter submitted to a vote
at the meeting. Cumulative voting is not allowed.
Shareholders may vote in person or by proxy at the annual meeting.
All properly executed proxies received prior to the commencement of
voting at the meeting, and which have not been revoked, will be voted in
accordance with the directions given. If no specific instructions are
given for a matter to be voted upon, the proxy holders will vote the
shares covered by proxies received by them (i) FOR the election of the
nominees to the Board of Directors, (ii) FOR adoption of the 2001 Stock
Option Plan, and (iii) in accordance with the directors' recommendations
on any other matters that may come before the meeting.
A quorum for the transaction of business at the meeting requires the
presence at the annual meeting, in person or by proxy, of the holders of
a majority of the shares entitled to vote at the meeting. If a quorum is
present at the meeting, the two nominees for election as directors who
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receive the greatest number of votes cast for the election of directors
at the meeting will be elected directors. Any other matters submitted to
a vote of the shareholders will be approved if they receive the
affirmative vote of the holders of a majority of shares present in person
or by proxy and entitled to vote on the matter. Abstentions from votes
and "broker non-votes" (shares held by brokers or nominees which are
voted on at least one matter but which are not voted on a particular
matter because the broker or nominee does not have discretionary voting
power with respect to that matter and has not received voting
instructions from the beneficial owner of such shares) will be counted as
present for purposes of determining whether a quorum is present at the
annual meeting. Abstentions will be treated as present and entitled to
vote at the meeting. Accordingly, abstentions (i) will have no effect
on the outcome of the election of directors, and (ii) will have the same
effect as a vote against all other matters presented to shareholders at
the annual meeting. Broker non-votes on a matter will not be considered
present and entitled to vote on that matter, and accordingly, (i) will
have no effect on the outcome of a matter requiring the approval of the
holders of a plurality or majority of the shares present, in person or by
proxy, and entitled to vote at the annual meeting, and (ii) will have
the same effect as a vote against a matter requiring the approval of a
majority of all shares outstanding and entitled to vote at the annual
meeting.
Without affecting any vote previously taken, any shareholder may
revoke a proxy at any time before it is voted, either by delivering to
the Secretary of Rentech a written notice of revocation or a properly
signed proxy bearing a later date, or by voting in person at the annual
meeting. Attendance at the meeting will not in and of itself constitute
a revocation of a proxy.
Proxies will be solicited primarily by mail. In addition, officers,
directors and employees of Rentech may solicit proxies in person or by
telephone and facsimile transmission, for which they will not receive
additional compensation. Rentech will pay the costs of soliciting and
distributing proxies. Rentech may engage third parties to assist in
soliciting proxies. If it does, Rentech would incur additional costs.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Rentech's Board of Directors currently consists of six members. The
board is divided into three classes of two directors each. The directors
in each class are elected for three years and until the election and
qualification of their successors.
Ronald C. Butz and Douglas L. Sheeran have been nominated for
reelection as Class I directors for a term of three years each. The two
nominees are presently members of the Board of Directors. All other
members of the Board of Directors will continue in office until the
expiration of their respective terms at the 2002 or 2003 annual meeting
of shareholders.
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If the accompanying proxy card is properly signed and returned to
Rentech at or prior to the annual meeting, it will be voted for the
election of the nominees, unless contrary instructions are specified.
Although the Board of Directors has no reason to believe that either of
the nominees will decline or be unable to serve as a director, should
that occur, the persons appointed as proxies in the accompanying proxy
card intend to vote, unless the number of nominees or directors is
reduced by the Board of Directors, for such other nominee or nominees as
the Board of Directors may designate. The Board of Directors recommends
a vote FOR these two nominees.
Information Regarding Nominees for Election to the Board of Directors
(Class I Directors):
Ronald C. Butz, Vice President, Chief Operating Officer, Secretary
and Director-
Mr. Butz, age 63, has served as a director of Rentech since 1984.
In October 1989, Mr. Butz was appointed Vice President of Rentech, in
June 1990 he was appointed Secretary, and in May 1998 he became Chief
Operating Officer. From 1984 to 1989, Mr. Butz was employed as President
of Capital Growth, Inc., a privately-held Colorado corporation providing
investment services and venture capital consulting. From 1982 to 1983,
Mr. Butz was a shareholder, Vice President and Chief Operating Officer of
World Agricultural Systems, Ltd., a privately-held Colorado corporation
specializing in the international marketing of commodity storage systems.
From 1966 to 1982, Mr. Butz was a practicing attorney in Denver, Colorado
with the firm of Grant, McHendrie, Haines and Crouse, P.C. He received a
Bachelor of Science degree in Civil Engineering from Cornell University
in 1961 and a Juris Doctor degree from the University of Denver in 1965.
Douglas L. Sheeran, Director
Mr. Sheeran, age 63, has served as a director of Rentech since 1998.
Mr. Sheeran is Managing Director of FCI, Inc., which he founded in 1986.
FCI Inc., is a human resource consulting firm located in Shrewsbury, New
Jersey which specializes in executive staffing, merger planning and
organizational effectiveness. FCI's client base includes Fortune 500 and
start-up firms in technology, pharmaceutical, automotive and consumer
durable industries. From 1973 until 1986, Mr. Sheeran was employed by
Purolator Automotive Group and became Vice President, Human Resources,
with responsibilities for multiple North American business units. He
held a number of human resource positions of increasing scope and
responsibility with Home Life Insurance Company from 1960 to 1962, Kraft
Foods from 1962 to 1965, Electronic Associates Inc. from 1965 to 1968,
and Celanese Corporation from 1968 to 1973. These positions covered a
range of labor relations, organizational development, compensation and
benefit responsibilities at both operating sites and corporate locations.
He received a Bachelor of Arts degree in Industrial Psychology from Miami
University, Oxford, Ohio, in 1960.
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Information Regarding Continuing Class II Directors (with terms expiring
in 2003):
Dennis L. Yakobson, President, Chief Executive Officer, and Chairman
of the Board
Mr. Yakobson, age 64, is Chief Executive Officer of Rentech. He has
served as a director of Rentech and chairman of the board since 1983. He
was employed as Vice President of Administration and Finance of Nova
Petroleum Corporation, Denver, Colorado, from 1981 to 1983. From 1979 to
1983, he served as a director and Secretary of Nova Petroleum
Corporation, Denver, Colorado. He resigned those positions in November
1983 to become a director and assume the presidency of Rentech. From
1976 to 1981, he served as a director, Secretary and Treasurer of Power
Resources Corporation, Denver, a mineral exploration company, and was
employed by it as Vice President-Land. From 1975 to 1976, he was
employed by Wyoming Mineral Corporation in Denver as a contract
administrator. From 1971 through 1975, he was employed by Martin
Marietta Corporation, Denver, as marketing engineer in space systems.
From 1969 to 1971, he was employed by Martin Marietta (now Lockheed
Martin Corporation) in a similar position. From 1960 to 1969, he was
employed by Grumman Aerospace Corporation, his final position with it
being contract administrator with responsibility for negotiation of prime
contracts with governmental agencies. He received a Bachelor of Science
degree in Civil Engineering from Cornell University in 1959 and a Masters
Degree in Business Administration from Adelphi University in 1963.
John P. Diesel, Director
Mr. Diesel, age 74, has served as a director of Rentech since 1998.
In 1972, he became President of Newport News Shipbuilding, a wholly-owned
subsidiary of Tenneco. There for 5 years he was responsible for, among
other projects, the design and construction of the nuclear powered Nimitz
class aircraft carriers and Los Angeles class submarines. In 1977, he
moved to the position of Executive Vice President of Tenneco, Inc., with
responsibility for its automotive, farm and construction equipment and
packaging businesses. In 1978 he became President and a director of
Tenneco. Mr. Diesel was employed by McQuay-Norris Manufacturing Co. from
1951 to 1957 in the production of proximity fuses. He joined Booz Allen
and Hamilton in 1957, remaining there until 1961, and being elected to
the partnership in that time. Mr. Diesel joined A.O. Smith Corporation
as Vice President of Planning, and held a series of manufacturing officer
positions, including Group Vice President. During his tenure at Tenneco,
and after retiring, Mr. Diesel served on numerous boards of directors.
These directorships included the Aluminum Company of America, Brunswick
Corporation, Allied Stores, Pullman Corporation, Cooper Industries and
Financial Institutions Reinsurance Group, Fansteel Inc., and Telepad
Corporation. He received a Bachelor of Science degree in Industrial
Engineering from Washington University in 1951. Prior to attending the
university he served in the United States Navy as an aviator in the
Western Pacific.
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Information Regarding Continuing Class III Directors (with terms expiring
in 2002):
John J. Ball, Director
Mr. Ball, age 57, has served as a director of Rentech since 1998.
He formed the law firm, Broadhurst & Ball, Mississauga, Ontario, and was
a partner from 1975 to 1984. He subsequently formed Keyser Mason Ball,
Mississauga, and has served as a senior partner from 1984 to present.
Upon his admission to the Bar he joined the firm of McMillan Binch,
Toronto, as an associate from 1971 to 1975. He received a Bachelor of
Education and Arts Degree from Mount Allison University in 1966 and a
Bachelor of Laws Degree from Dalhousie University in 1969. He was
admitted to the Nova Scotia Bar in 1970 and the Ontario Bar in 1971. He
is presently a director of The Mississauga Hospital, Chair of its Bio-
Ethics Committee, and a member of the Board Merger Committee in
connection with the amalgamation of The Mississauga Hospital and The
Queensway Hospital. Mr. Ball is past member of the Board and Executive
Committees of Mount Allison University. He is a past Chair of the Vanier
Cup, which sponsors the Canadian National University Football
Championship.
Erich W. Tiepel, Director
Dr. Tiepel, age 58, has served as a director of Rentech since 1983.
Dr. Tiepel has had experience since 1977 in all phases of process design
and development, plant management and operations for chemical processing
plants. In 1981, Dr. Tiepel was a founder of Resource Technologies
Group, Inc. (RTG), a high technology consulting organization specializing
in process engineering, water treatment, hazardous waste remediation, and
regulatory affairs. Dr. Tiepel has been President of RTG since its
inception. From 1977 to 1981, he was project manager for Wyoming Mineral
Corporation, a subsidiary of Westinghouse Electric Corporation, Lakewood,
Colorado, where his responsibilities included management of the design,
contraction and operation of ground water treatment systems for ground
water cleanup programs. From 1971 to 1976, he was a principal project
engineer for process research for Westinghouse Research Labs. From 1967
to 1971, he was a trainee of the National Science Foundation at the
University of Florida in Gainesville, Florida. He obtained a Bachelor of
Science degree in Chemical Engineering from the University of Cincinnati
in 1967 and a Ph.D. in Chemical Engineering from the University of
Florida in 1971.
EXECUTIVE OFFICERS AND OTHER KEY MANAGERS
Information concerning the business experience of Mr. Butz and Mr.
Yakobson, who serve as executive officers of Rentech, is provided under
the previous section titled "Election of Directors."
Charles B. Benham, Vice President-Research and Development
Dr. Benham, age 64, was a founder of Rentech and has been an officer
of Rentech since its inception in 1981. He served as President until
1983 and as a director from inception until 1996. From 1977 to 1981, he
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worked at the Solar Energy Research Institute in Golden, Colorado, on
thermal and chemical processes for converting agricultural crop residues
to diesel fuel, on thermochemical transport of solar energy using ammonia
decomposition and steam reforming of methane, and on high temperature
applications of solar energy. He was employed at the Naval Weapons
Center, China Lake, California, from 1958 through 1977. There, he
performed research and development on thermal and chemical processes for
converting municipal solid wastes to liquid hydrocarbon fuels,
thermochemical analyses of solid-fueled and ramjet engines, combustor
modeling, rocket motor thrust vector control, rocket motor thrust
augmentation, catalyst behavior in carbon monoxide oxidation, and in
liquid hydrocarbon fuels for ramjet applications. Dr. Benham has
published several articles in the fields of liquid fuel production from
organic waste, catalyst pellet behavior and rocket propulsion. He
received a Bachelor of Science degree in Mechanical Engineering from the
University of Colorado in 1958, and a Master of Science degree in
Engineering in 1964 and a Ph.D. in Engineering (energy and kinetics) in
1970, both from the University of California at Los Angeles.
Mark S. Bohn, Vice President-Engineering
Dr. Bohn, age 50, a founder of Rentech, served as a director from
its organization in 1981 to June 1998. Since November 9, 1998 he has
been employed by Rentech as Vice President-Engineering. From 1978 to
November 1998, he was employed by Midwest Research Institute at the Solar
Energy Research Institute (now National Renewable Energy Laboratory) in
Golden, Colorado. He was employed from 1976 through 1978 at the General
Motors Research Laboratories in Warren, Michigan. Dr. Bohn is a
Registered Professional Engineer in Colorado and a Member of the American
Society of Mechanical Engineers and the American Institute of Chemical
Engineers. He has published numerous articles on liquid fuel production,
organic waste, heat transfer, power cycles, aerodynamics, optics,
acoustics, solar thermal energy, and co-authored the textbook Principles
of Heat Transfer (Brooks Cole Publishing). He received a Bachelor's
degree in Mechanical Engineering from Georgia Institute of Technology,
Atlanta, Georgia, in 1972, and a Master of Science degree in Mechanical
Engineering in 1973 and a Ph.D. in Mechanical Engineering in 1976, both
from the California Institute of Technology, Pasadena, California.
James P. Samuels, Vice President-Finance, Treasurer, and Chief
Financial Officer
Mr. Samuels, age 54, has served as Vice President-Finance, Treasurer
and Chief Financial Officer of Rentech since May 1, 1996. He has
executive experience in general corporate management, finance, sales and
marketing, information technologies, and consulting for both large
companies and development stage businesses. From December 1995 through
April 1998, he provided consulting services in finance and securities law
compliance to Telepad Corporation, Herndon, Virginia, a company engaged
in systems solutions for field force computing. From 1991 through August
1995, he served as Chief Financial Officer, Vice President-Finance,
Treasurer and director of Top Source, Inc., Palm Beach Gardens, Florida,
a development stage company engaged in developing and commercializing
state-of-the-art technologies for the transportation, industrial and
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petrochemical markets. During that employment, he also served as
President of a subsidiary of Top Source, Inc. during 1994 and 1995. From
1989 to 1991, he was Vice President and General Manager of the Automotive
Group of BML Corporation, Mississauga, Ontario, a privately-held company
engaged in auto rentals, car leasing, and automotive insurance. From
1983 through 1989, he was employed by Purolator Products Corporation, a
large manufacturer and distributor of automotive parts. He was President
of the Mississauga, Ontario branch from 1985 to 1989; a director of
marketing from 1984 to 1985; and director of business development and
planning during 1983 for the Rahway, New Jersey filter division
headquarters of Purolator Products Corporation. From 1975 to 1983, he
was employed by Bendix Automotive Group, Southfield, Michigan, a
manufacturer of automotive filters, electronics and brakes. He served in
various capacities, including group director for management consulting
services on the corporate staff, director of market research and
planning, manager of financial analysis and planning, and plant
controller at its Fram Autolite division. From 1973 to 1974, he was
employed by Bowmar Ali, Inc., Acton, Massachusetts, in various marketing
and financial positions, and in 1974 he was managing director of its
division in Wiesbaden, Germany. He received a Bachelor's degree in
Business Administration from Lowell Technological Institute in 1970, and
a Master of Business Administration degree from Suffolk University,
Boston, Massachusetts, in 1972. He completed an executive program in
strategic market management through Harvard University in Switzerland in
1984.
Frank L. Livingston, Vice President and General Manager, OKON, Inc.
Mr. Livingston, age 58, has served as Vice President and general
manager of OKON, Inc. since Rentech acquired that subsidiary in March
1997. Mr. Livingston joined OKON in 1975 as sales manager and was
promoted to Vice President of Sales in 1984. Mr. Livingston also became
a 24% owner of OKON at that time. In addition to his sales and marketing
responsibilities, he was also responsible for manufacturing and research
and development for OKON. Mr. Livingston also served on OKON's Board of
Directors. With the sale of OKON to Rentech in 1997, Mr. Livingston
continues to serve on its Board of Directors. From 1971 to 1975 Mr.
Livingston was employed by Gates Rubber Co. in Denver, Colorado as a
sales and marketing manager for a specialty chemical venture start-up
business within the company. He also worked as a research market analyst
for the venture group. Projects of the venture group included specialty
chemicals and lead-acid battery technology, as well as rubber products
made by the company for off-shore oil exploration and production. He was
employed by Mallinckrodt Chemical Co. from 1965 to 1971. While with it,
he worked as a process research chemist and formulator prior to becoming
a specialty marketing manager for the industrial chemical division. He
received a Bachelor of Science Degree in Chemistry from Colorado State
University in 1965.
Jimmie D. Fletcher, General Manager, Petroleum Mud Logging, Inc.
Mr. Fletcher, age 55, is general manager of Petroleum Mud Logging,
Inc. Mr. Fletcher has 26 years of experience in mud logging. From 1995
to August 15, 1999, Mr. Fletcher was employed by Pension Well Logging as
its general manager and marketing officer. From 1988 through 1994, Mr.
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Fletcher worked for Petroleum Mud Logging, Inc., of Oklahoma City, owned
by Hoyt L. Hudspeth, as a mud logging technician. From 1981 to 1988, Mr.
Fletcher was employed by OFT Exploration in Oklahoma City as a well site
geologist, and also worked as a consulting geologist. His first work
experience was with Dresser Industries in 1973 to 1974 as a mud logger.
Mr. Fletcher obtained a Bachelor of Science in Business Administration
with a minor in Geology and Economics from Southwestern State College of
Oklahoma in 1974.
There are no family relationships among the executive officers.
There are no arrangements or understandings between any officer and any
other person pursuant to which that officer was selected.
PROPOSAL NO. 2
ADOPTION OF THE 2001 STOCK OPTION PLAN
The stockholders are asked to consider and vote upon a proposal to
approve the 2001 Stock Option Plan (2001 Plan) which was adopted by the
Board of Directors on January 16, 2001 subject to shareholder approval.
The primary provisions of the 2001 Plan are described in the following
paragraphs.
The Board of Directors believes that the 2001 Plan will help
attract, retain and motivate Rentech's key employees, directors and
consultants, as well as achieve the goal of aligning management and
shareholder interests, and is therefore in the company's best interests.
Adoption of the 2001 Stock Option Plan requires the affirmative vote
of at least a majority of the shares voting on such matter. The Board of
Directors recommends that you vote FOR the adoption of the 2001 Plan.
Summary of the 2001 Plan:
Shares Subject to the 2001 Plan. The aggregate number of shares of
Rentech's common stock that may be issued to grantees under the 2001 Plan
is 500,000 shares. The 2001 Plan provides for appropriate adjustment in
the number of shares subject to the 2001 Plan and to the grants
previously made if there is a stock split, stock dividend, reorganization
or other relevant change affecting Rentech's corporate structure or its
equity securities. If shares under a grant are not issued to the extent
permitted prior to the expiration or forfeiture of the grant, then those
shares would again be available for inclusion in future grants. No grant
shall be made under the 2001 Plan after January 16, 2010, but awards
granted prior to or on that date may extend beyond that time.
Administration. The 2001 Plan is administered by the stock option
committee, the members of which meet the SEC definition of "disinterested
directors" and the IRS definition of "outside directors." The stock
option committee selects the participants, grants awards of stock
options, establishes rules and regulations for the operation of the 2001
Plan and determines option terms, vesting schedules and number of shares
subject to grants. With respect to any awards granted, other than those
PAGE 13
to executive officers and anyone else subject to Section 16 of the
Securities Exchange Act of 1934, the stock option committee may delegate
to the Chief Executive Officer its authority to select the participants
and determine option terms, vesting schedules and number of shares
subject to each grant.
Eligible Participants. All employees are considered responsible for
contributing to the management, growth and profitability of the business
of Rentech, and all employees, directors, and consultants are eligible to
be selected to receive grants under the 2001 Plan. As of December 31,
2000 there were approximately 65 employees, two of whom are employee-
directors and six directors who are eligible to receive stock option
grants.
Stock Options. Options granted under the 2001 Plan will be in the
form of either incentive stock options (ISOs), which meet the
requirements of Section 422 of the Internal Revenue Code (the Code), or
nonqualified stock options (NSOs), which do not meet such requirements.
Only employees may receive ISOs. The term of an option will be fixed by
the stock option committee, but no option may have a term of more than
ten years from the date of grant. Options will be exercisable at such
times as determined by the stock option committee. The option exercise
price is fair market value on the date of grant which is determined by
the average of the closing bid and asked prices of a share of common
stock on the date of grant if the date of grant is a trading date, or, if
not, on the most recently completed trading date prior to the date of
grant, as reported by Nasdaq. (On January 16, 2001, the closing sale
price of a share of common stock was $1.188). The date of grant is the
date on which the stock option committee grants an award or such other
date as the stock option committee may designate at the time of the
award. The grantee will pay the option price in cash or, if permitted by
the stock option committee, by delivering to the Company shares of common
stock already owned by the grantee that have a fair market value equal to
the option exercise price.
Code Limitations on Incentive Stock Options. The Code currently
places the following limitations on the award of ISOs. No ISO may be
granted to a participant who owns, at the date of grant, in excess of 10%
of the total outstanding common stock unless the exercise price of the
ISO is at least 110% of the fair market value on the date of grant and
the term of the ISO is no more than five years from the date of grant.
The total fair market value of shares subject to ISOs which are
exercisable for the first time by any optionee in any given calendar year
cannot exceed $100,000 (valued as of the date of grant). No ISO may be
exercisable more than three months following termination of employment
for any reason other than death or disability, nor more than one year
with respect to disability terminations.
Transferability of Awards. All stock options are non-transferable
and may be exercised during the grantee's lifetime only by the grantee
and may not be transferred other than by will or by the laws of descent
and distribution. No award of an option may be assigned, pledged,
hypothecated or otherwise alienated or encumbered (whether by operation
of law or otherwise), and any attempt to do so shall be null and void.
PAGE 14
ISOs will be non-transferable in accordance with the provisions of the
Code.
Termination of Employment. Vested options can be exercised for a
period no longer than one year after the death or disability of the
grantee. Unless an earlier date is fixed by the stock option committee
at the time of grant, unvested portions of stock options immediately
expire upon termination of employment for any other reason, but vested
portions of the options may be exercised for up to three months following
the termination, unless termination is for cause. If the Company
terminates employment for cause, all unexercised awards expire upon the
termination. Termination of employment by a participant will not be
deemed to occur upon: (i) transfer of a participant among the Company
and its subsidiaries; and (ii) a leave of absence for a company-approved
purpose. Termination of ISOs will be in accordance with the provisions
of the Code.
Conditions Upon Exercise of Stock Options. Shares of stock may not
be issued or delivered upon exercise of a stock option until the optionee
pays in full the exercise price and any required tax withholding and, if
applicable, the completion of registration and listing of the shares or
qualification as a private placement and the obtaining of any other
required approvals.
Federal Tax Consequences. There are no Federal income tax
consequences to a participant or Rentech upon the grant of an ISO or NSO.
Otherwise, however, ISOs and NSOs are treated differently for income tax
purposes.
An optionee is not taxed on the grant or exercise of an ISO. The
difference between the exercise price and the fair market value of the
shares on the exercise date will, however, be a preference item for
purposes of the alternative minimum tax. If an optionee holds the shares
acquired upon exercise of an ISO for at least two years following grant
and at least one year following exercise, the optionee's gain, if any,
upon a subsequent disposition of such shares is long-term capital gain.
The measure of the gain is the difference between the proceeds received
on disposition and the optionee's basis in the shares (which generally
equals the exercise price). If an optionee disposes of stock acquired
pursuant to exercise of an ISO before satisfying the one and two-year
holding periods previously described, the optionee will recognize both
ordinary income and capital gain in the year of disposition. The amount
of the ordinary income will be the lesser of: (i) the amount realized on
disposition less the optionee's adjusted basis in the stock (usually the
exercise price), or (ii) the difference between the fair market value of
the stock on the exercise date and the exercise price. The balance of
the consideration received on such a disposition will be long-term
capital gain if the stock had been held for at least one year following
exercise of the ISO. The Company is not entitled to an income tax
deduction on the grant or exercise of an ISO or on the optionee's
disposition of the shares after satisfying the holding period
requirements previously described. If the holding periods are not
satisfied, the Company will be entitled to a deduction in the year the
optionee disposes of the shares, in an amount equal to the ordinary
income recognized by the optionee.
PAGE 15
An optionee is not taxed on the grant of an NSO. On exercise,
however, the optionee recognizes ordinary income equal to the difference
between the exercise price and the fair market value of the shares on the
date of exercise. Rentech is entitled to an income tax deduction in the
year of exercise in the amount recognized by the optionee as ordinary
income. Any gain or subsequent disposition of the shares is long-term
capital gain if the shares are held for at least one year following
exercise. Rentech does not receive a deduction for this gain.
Amendments and Discontinuance. The Board of Directors may amend,
alter or discontinue the 2001 Plan, provided that any such amendment,
alteration or discontinuance does not impair the rights of any grantee,
without his or her consent, under any stock option previously granted.
The Board of Directors may not, without shareholder approval, (i)
increase the total number of shares reserved for issuance under the 2001
Plan, (ii) change the employees or class of employees eligible to
participate in the 2001 Plan, or (iii) extend the maximum option period
as provided in the 2001 Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of January 31,
2001 (i) by all persons known to the Company to beneficially own at
least 5% of the issued and outstanding shares of common stock, (ii) by
each director, each director nominee, each of the executive officers
named in the tables under "Executive Compensation," and (iii) by all
executive officers and directors as a group:
Amount and
Nature of
Beneficial Percent
Name(1)(2) Ownership(3) of Class
------------------ ------------ ---------
John J. Ball(4)(5) 147,000 *
Charles B. Benham 806,320 1.3%
Mark S. Bohn 795,523 1.3%
Ronald C. Butz(6) 765,031 1.2%
John P. Diesel 145,000 *
Frank L. Livingston 106,000 *
James P. Samuels 743,500 1.2%
Douglas L. Sheeran(4) 235,850 *
Erich W. Tiepel(4) 530,725 *
Dennis L. Yakobson(7) 928,034 1.5%
All Directors and Executive
Officers as a Group
(10 persons) 5,202,983 8.2%
Forest Oil Corp.(8) 3,369,650 5.3%
----------------
*Less than 1%.
(1) Except as otherwise noted and subject to applicable community
property laws, each shareholder has sole voting and investment
power with respect to the shares beneficially owned. The business
address of each director and executive officer is c/o Rentech,
Inc., 1331 17th St., Suite 720, Denver, CO 80202.
PAGE 16
(2) Shares of common stock subject to options that are exercisable
within 60 days of the date of this Proxy Statement are deemed
outstanding for purposes of computing the percentage ownership of
such person, but are not deemed outstanding for purposes of
computing the percentage ownership of any other person. The
following shares of common stock subject to stock options are
included in the table: John J. Ball - 70,000; Charles B. Benham
- 210,000; Mark S. Bohn - 160,000; Ronald C. Butz - 150,000; John P.
Diesel - 70,000; Frank L. Livingston - 81,000; James P. Samuels
- 360,000; Douglas L. Sheeran - 70,000; Erich W. Tiepel - 160,000;
Dennis L. Yakobson - 220,000.
(3) Information with respect to beneficial ownership is based upon
information furnished by each stockholder or contained in filings
with the Securities and Exchange Commission.
(4) Includes 75,000 shares of common stock issued pursuant to a stock
grant dated July 27, 1999, of which 25,000 shares are subject to
divestiture until July 27, 2001.
(5) Includes 2,000 shares of common stock held by Mr. Ball's spouse, as
to which Mr. Ball disclaims beneficial ownership.
(6) Does not include 237,432 shares of common stock held by Mr. Butz's
spouse, as to which Mr. Butz disclaims beneficial ownership.
(7) Includes 8,000 shares of common stock held by Mr. Yakobson's spouse,
as to which Mr. Yakobson disclaims beneficial ownership.
(8) Based on Amendment No. 1 to Schedule 13D filed by Forest Oil
Corporation on August 7, 2000. Includes options to purchase
2,894,650 shares of common stock that are immediately exercisable.
Its address is 1600 Broadway, Suite 2200, Denver, CO 80202.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held two meetings and acted by written
consent five other times during the fiscal year ended September 30, 2000.
No director attended fewer than 75% of the meetings of the Board of
Directors held during the period for which he has been a director or of
the meetings of committees of the Board of Directors on which he served
during the period that he served. Directors who are not employees of
Rentech are not paid fees for their services. Instead, they have been
granted stock options as consideration.
The Board of Directors has a standing audit committee, a stock
option committee and a compensation committee. It has no standing
nominating committees.
The audit committee of the Board of Directors reports to the board
regarding the appointment of the Company's independent public
accountants, the scope and results of its annual audits, compliance with
accounting and financial policies and management's procedures and
policies relative to the adequacy of internal accounting controls.
PAGE 17
During fiscal 2000, the audit committee consisted of Mr. Ball, Mr. Diesel
and Dr. Tiepel, all of whom are independent directors of the Company as
defined by the listing standards of the American Stock Exchange. During
fiscal 2000, the audit committee met three times. The charter adopted by
the Board of Directors for the audit committee is attached as Appendix A
to this proxy statement.
The stock option committee currently consists of Dr. Erich W. Tiepel
and Douglas L. Sheeran. The committee formally met two times during the
fiscal year ended September 30, 2000, and also met informally several
other times. The function of the committee is to determine the grant of
stock options to the executive officers and the terms of any options
granted to them. The committee made no grants of stock options to the
Company's executive officers during fiscal year 2000.
The compensation committee is comprised of Messrs. John J. Ball,
John P. Diesel, Douglas L. Sheeran and Dr. Erich W. Tiepel. None of
these directors have ever served as officers of the Company. The
committee met three times during the last fiscal year.
EXECUTIVE COMPENSATION
Employment Contracts
Executive officers generally are elected at the annual director
meeting immediately following the annual stockholder meeting. Any
officer or agent elected or appointed by the Board of Directors may be
removed by the board whenever in its judgment our best interests will be
served thereby, without prejudice to contractual rights, if any, of the
person so removed.
Rentech employs Messrs. Benham, Bohn, Butz, Samuels and Yakobson
pursuant to employment contracts that extend for three years. Mr.
Livingston and Mr. Fletcher are employed according to contracts that
extend to December 31, 2001.
The contracts provide that the individuals will serve in their
present capacities as officers, together with such duties,
responsibilities and powers as the Board of Directors may reasonably
specify. The contracts provide for annual cost of living adjustments.
If Rentech terminates employment early without cause, the contracts
provide for payment of salary for three years as severance pay. The
contracts impose obligations of confidentiality as well as covenants not
to compete with Rentech following termination of employment for any
reason whatsoever.
There are no family relationships among the executive officers.
There are no arrangements or understandings between any officer and any
other person pursuant to which that officer was elected.
PAGE 18
Compensation
The following table shows all compensation paid or to be paid by
Rentech or any of its subsidiaries, as well as other compensation paid or
accrued during the fiscal years indicated to the Chief Executive Officer
and the four other highest paid executive officers of Rentech as of the
end of Rentech's last fiscal year whose salary and bonus for such period
in all capacities in which the executive officer served exceeded
$100,000.
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Name and Annual Restricted Securities All Other
Principal Compen- Stock Underlying Compen-
Position Year Salary Bonus(1) sation Award(s ) Options/SARs LTIP sation
($) ($) ($) ($) (#) ($) ($)
Dennis L. Yakobson 2000 $191,356 $120,147 $1,465
Chief Executive 1999 $161,676 35,000
Officer 1998 $132,090 20,000
Ronald C. Butz 2000 $177,003 $ 88,147 $2,596
Chief Operating 1999 $150,972 35,000
Officer 1998 $128,058 20,000
Charles B. Benham 2000 $151,442 $ 43,046 $1,984
Vice President - 1999 $134,308 30,000
Research & 1998 $128,058 20,000
Development
Mark S. Bohn 2000 $151,442 $ 43,046
Vice President - 1999 $122,609 30,000
Engineering 1998 20,000
James P. Samuels 2000 $150,419 $ 52,884 $ 592
Chief Financial 1999 $133,144 - 30,000
Officer 1998 $128,058 20,000
________________
(1) After payment of personnel income tax obligations on these sums, the recipients individually elected
to invest all their net bonus amounts in Rentech by exercising stock options.
Option/SAR Exercises and Holdings
The following table sets forth information with respect to the named
executives, concerning the exercise of options and limited SARs during
the last fiscal year and unexercised options and limited SARs held as of
the end of the last fiscal year:
PAGE 19
Aggregated Options/SAR Exercises
In Last Fiscal Year and FY-End Option/SAR Values:
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARs Options/SARs
Acquired at FY-End (#) at FY-End ($)
on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
- ------------------ ----------- ----------- -------------- -------------
Dennis L. Yakobson 352,400 $241,554 185,000(1) $276,695
Ronald C. Butz 340,880 $234,815 125,000(1) 176,600
Charles B. Benham 340,880 $255,215 180,000(1) 270,385
Mark S. Bohn 192,092 $130,074 130,000(1) 191,035
James P. Samuels 234,000 $136,890 330,000(1) 527,060
______________
(1) Exercisable.
Compensation Committee Report on Executive Compensation
The compensation committee establishes the base salaries and any
cash bonuses paid to the Company's executive officers. It is the policy
of the committee to position the base salaries of Rentech's executives at
levels comparable to those provided to executives of other companies it
deems comparable. These include companies engaged in development of new
technologies. The policy is designed to link each executive's
compensation to individual performance and the Company's achievement of
its goals.
The compensation committee annually reviews the base salary of each
of the executive officers of the Company, including Mr. Yakobson, the
Chief Executive Officer. In determining salary adjustments, the
committee considers several factors. These include individual job
performance, responsibility, financial and operational performance of the
activities directed by the executive, experience, time in position,
future potential, and salary levels of comparable companies. The factors
are considered subjectively in the aggregate, and none of the factors is
accorded a specific weight. The committee has also reviewed information
on the compensation levels of executive officers provided by three annual
compensation surveys compiled by independent third parties. The surveys
covered approximately 1,500 small to medium size companies. Two of the
surveys applied to companies doing business at locations around the
United States, and one included only companies located in the Rocky
Mountain states. The committee used all of this information to arrive at
total compensation for the Company's executive officers that it believes
is appropriate to the Company's performance and their individual
contributions.
PAGE 20
During the fiscal year ended September 30, 2000, the compensation
committee supplemented the salaries of its executives with cash bonuses.
The bonuses were awarded by the committee, taking into consideration its
financial condition at the time, to compensate for previous salaries that
the committee determined had been inadequate. No particular formula was
used in determining the amount of the bonuses. The amounts awarded as
bonuses to individual executives, including the Chief Executive Officer,
reflect the committee's assessment of the executive's performance, level
of responsibility, compensation received by executives in similar
companies, previous compensation paid by Rentech to the same executives,
and Rentech's financial position.
REPORT OF THE AUDIT COMMITTEE
We have reviewed and discussed the audited financial statements of
Rentech for fiscal year 2000 with management. We have also discussed the
audited financial statements with Rentech's independent auditors. Our
discussions with the independent auditors included, among other things,
discussions relating to the auditor's responsibility under generally
accepted auditing standards, the processes used by our management in
formulating accounting estimates, significant adjustments made during the
audit, any disagreements with our management and any difficulties
encountered by the independent auditors in performing the audit. We also
reviewed written disclosures from the independent auditors relating to
any and all relationships between them and Rentech, and we discussed with
the auditors any relationship that might affect the objectivity or
independence of the independent auditors. Based on those discussions, we
are not aware of any relationship between the independent auditors and
Rentech that affects the objectivity or independence of the independent
auditors.
Based on the discussions and our review discussed above, we
recommended to the Board of Directors that the audited financial
statements for fiscal year 2000 be included in Rentech's Annual Report on
Form 10-K for 2000 for filing with the SEC.
This report is submitted by the members of the audit committee.
John J. Ball
John P. Diesel
Erich W. Tiepel
In accordance with the rules and regulations of the SEC, neither the
report of the audit committee, the compensation committee, nor the
performance graph appearing below will not be deemed to be "soliciting
material" or to be "filed" with the SEC or subject to Regulations 14A or
14C of the Securities Exchange Act of 1934 or to the liabilities of
Section 18 of the Exchange Act and will not be deemed to be incorporated
by reference into any filing under the Securities Act of 1933 or the
Exchange Act, notwithstanding any general incorporation by reference of
this proxy statement into any other filed document.
PAGE 21
Stock Performance Chart
The following chart compares the yearly percentage change in the
cumulative shareholder return on our common stock from October 1995 to
the end of the fiscal year ended September 30, 2000 with the cumulative
total return on the American Major Market Index and the Dow Jones
Oilfield Equipment & Services Index, a published line-of-business index.
The comparison assumes $100 was invested on September 30, 1995 in our
common stock and in each of the foregoing indices and assumes dividends,
if any, were reinvested.
[PERFORMANCE GRAPH APPEARS HERE]
Total Return Analysis
09/30/1995 09/30/1996 09/30/1997 09/30/1998 09/30/1999 09/30/2000
Rentech, Inc. $100.00 $39.36 $89.36 $96.81 $53.19 $201.06
DJ Oilfield
Equip. & Serv. $100.00 $135.24 $250.58 $139.35 $178.96 $260.86
AMEX Major
Market $100.00 $120.46 $161.66 $170.95 $214.62 $206.12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
Rentech's executive officers and directors are required to file
reports of ownership and changes in ownership of Rentech's securities
with the Securities and Exchange Commission as required under provisions
of Section 16(a) of the Securities Exchange Act of 1934. Based solely on
the information provided to Rentech by individual directors and executive
officers, Rentech believes that during the last fiscal year all directors
and executive officers have complied with the applicable filing
requirements.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected BDO Seidman, LLP as the
independent certified public accountants to audit the books, records and
accounts of Rentech for its 2001 fiscal year. To the knowledge of
management, neither such firm nor any of its members has any direct or
material indirect financial interest in Rentech nor any connection with
Rentech in any capacity otherwise than as independent accountants.
A representative of BDO Seidman, LLP is expected to be present at
the annual meeting of shareholders to answer proper questions and will be
afforded an opportunity to make a statement regarding the financial
statements.
PAGE 22
SERVICES PERFORMED BY THE COMPANY'S AUDITORS
Audit Fees. For the year ended September 30, 2000, the Company
incurred professional fees and out-of-pocket expenses to its auditors in
the amount of $131,000 related to auditing services.
All Other Fees. The Company was billed $68,000 by its auditors for
all other services provided during fiscal year 2000.
The Company's audit committee has considered whether the non-audit
services provided by the Company's auditors in connection with the year
ended September 30, 2000 were compatible with the auditors' independence.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the annual
meeting of shareholders held in 2002 must be received by Rentech's
corporate secretary on or before November 4, 2001, in order to be
eligible for inclusion in Rentech's proxy statement and form of proxy.
To be included, a proposal must also comply with all applicable
provisions of Rule 14a-8 under the Securities Exchange Act of 1934.
OTHER BUSINESS
Management does not know of any other matters to be brought before
the annual meeting. If any other business items not mentioned in this
proxy statement are properly brought before the meeting, the individuals
named in the enclosed proxy intend to vote such proxy in accordance with
the directors' recommendations on those matters.
By Order of the Board of Directors,
/s/ Ronald C. Butz
RONALD C. BUTZ
Secretary
PAGE 23
APPENDIX A
RENTECH, INC.
AUDIT COMMITTEE CHARTER
Organization
There shall be a permanent committee of the Board of Directors known
as the Audit Committee (the Committee). The Committee shall be composed
of three or more directors, each of whom is independent of the management
of the Company and free of any relationship that, in the opinion of the
Board of Directors, would interfere with the exercise of independent
judgment as a member of the Committee. The members of the Committee
shall be appointed by the Board of Directors and shall serve until each
annual meeting of the stockholders of the Company or until their
successors are elected or appointed. Each member of the Committee shall
have knowledge of financial matters, or shall obtain knowledge of
financial matters within a reasonable time after his appointment to the
Committee and at least one member of the Committee shall have accounting
or related financial management expertise.
Statement of Policy
The Committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, relating to
corporate accounting and reporting practices of the Company and the
quality and integrity of the financial reports of the Company. In so
doing, it is the responsibility of the Committee to maintain free and
open means of communication between the directors, the independent
auditors, the internal auditors and the financial management of the
Company.
Responsibilities
In carrying out its responsibilities, the Committee believes its
policies and procedures should remain flexible, to best react to changing
conditions and to ensure to the Board of Directors and shareholders that
the corporate accounting and reporting practices of the Company are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the Committee will:
1. Review and recommend to the directors the independent auditors
to be selected to audit the financial statements of the Company and its
divisions and subsidiaries.
2. Have a clear understanding with the independent auditors that
they are ultimately accountable to the Board of Directors and the
Committee, as the shareholders' representatives, who collectively have
the ultimate authority in deciding to engage, evaluate, and if
appropriate, terminate their services.
3. Review with the independent auditors and financial management of
the Company the scope of the proposed audit and timely quarterly reviews
for the current year and of non-audit services requested and the
procedures to be utilized.
PAGE 24
4. Ensure receipt from the Company's outside auditors of a formal,
written statement delineating all relationships between the auditors and
the Company, and discuss with the auditors any disclosed relationships or
services that may affect objectivity or independence and take appropriate
action to ensure the continued independence of the auditors.
5. Review with the auditors and management the Company's
policies and procedures with respect to internal auditing, accounting and
financial control procedures.
PAGE 25
PROXY RENTECH, INC. PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 8, 2001
AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
By casting your voting instructions on the reverse side, you hereby (a)
acknowledge receipt of the proxy statement related to this meeting, (b)
appoint Linda D. Kansorka and Mark A. Koenig as proxies, each with full
power of substitution, to vote all shares of Rentech common stock that
you would be entitled to cast if personally present at such meeting and
at any postponement or adjournment thereof and (c) revoke any proxies
previously given.
This proxy will be voted as specified by you. If no choice is specified,
the proxy will be voted according to the recommendations of the Board of
Directors indicated on the reverse side, and according to the discretion
of the Board of Directors for any other matters that may properly come
before the meeting or any postponement or adjournment thereof.
PAGE 26
RENTECH, INC. Options for Submitting Proxy
Vote By Internet - www.proxyvote.com
Use the Internet to transmit your voting instructions and for
electronic delivery of information. Have your voting instruction card in
hand when you access the web site. You will be prompted to enter your
12-digit Control Number which is located below to obtain your records and
create an electronic voting instruction form.
Vote By Phone - 1-800-890-8903
Use any touch-tone telephone to transmit your voting instructions.
Have your voting instruction card in hand when you call. You will be
prompted to enter your 12-digit Control Number which is located below and
then follow the simple instructions the Vote Voice provides you
Vote By Mail -
Mark, sign and date your voting instruction card and return it in
the postage-paid envelope we've provided or return to Rentech, Inc., c/o
ADP, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW in BLUE OR BLACK INK AS FOLLOWS / /
KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
DETACH AND RETURN THIS PORTION ONLY
RENTECH, INC.
1. ELECTION OF DIRECTORS (for terms described in the proxy statement):
The Board of Directors Recommends a Vote FOR Items 1 and 2.
For All / / Withhold All / / For All Except / /
To withhold authority to vote for
Nominees: Ronald C. Butz any individual, mark "For All
Douglas L. Sheeran Except" and write the nominee's
name on the line below.
2. Approval of the 2001 Stock Option Plan: / / FOR / / AGAINST
/ / ABSTAIN
3. In their discretion, the Proxies are authorized to vote on such other
business as may properly come before the meeting or any adjournments
thereof.
Please sign exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
--------------------- --------- ---------------------- ---------
Signature Date Signature Date
PLEASE SIGN WITHIN BOX PLEASE SIGN WITHIN BOX
PAGE 27
APPENDIX B
RENTECH, INC.
2001 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Establishment. Rentech, Inc., a Colorado corporation
("Company"), hereby establishes a stock option plan for key employees,
directors, and consultants providing material services to the Company, as
described herein, which shall be known as the "2001 Stock Option Plan"
(the "Plan"). It is intended that certain of the options issued to
employees pursuant to the Plan may constitute incentive stock options
within the meaning of Section 422A of the Internal Revenue Code and that
other options issued pursuant to the Plan shall constitute nonstatutory
options. The Board of Directors shall determine which options are to be
incentive stock options and which are to be nonstatutory options and
shall enter into option agreements with recipients accordingly.
1.2 Purpose. The purpose of this Plan is to enhance shareholder
investment by attracting, retaining and motivating key employees,
directors and consultants of the Company, and to encourage stock
ownership by such persons by providing them with a means to acquire a
proprietary interest in the Company's success, and to align the interests
of management with those of shareholders.
ARTICLE II
DEFINITIONS
2.1 Definitions. Whenever used herein, the following terms shall
have the respective meanings set forth below, unless the context clearly
requires otherwise, and when said meaning is intended, the term shall be
capitalized.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" shall mean the Committee provided by
Article IV hereof, which may be created at the discretion of the Board.
(d) "Company" means Rentech, Inc., a Colorado corporation.
(e) "Consultant" means any person or entity, including a
Parent Corporation or a Subsidiary Corporation, that provides services
(other than as an Employee) to the Company, a Parent Corporation or a
Subsidiary Corporation, and shall include a Non-Employee Officer or
Non-Employee Director, as defined subsequently.
PAGE 28
(f) "Date of Exercise" means the date the Company receives
notice, by an Optionee, of the exercise of an Option pursuant to Section
8.1 of this Plan. Such notice shall indicate the number of shares of
Stock the Optionee intends to exercise.
(g) "Employee" means any person, including an officer or
director of the Company or a Subsidiary Corporation, who is employed by
the Company or a Subsidiary Corporation.
(h) "Fair Market Value" means the fair market value of Stock
upon which an option is granted under this Plan, determined as the
average of the closing bid and asked prices of the Stock, as reported by
Nasdaq.
(i) "Incentive Stock Option" means an Option granted under
this Plan which is intended to qualify as an "incentive stock option"
within the meaning of Section 422A of the Code.
(j) "Non-Employee Director" means a member of the Board who
is not an employee of the Company at the time an Option is granted
hereunder.
(k) "Non-Employee Officer" means an officer of the Company
who is not an employee of the Company at the time an Option is granted
hereunder.
(l) "Nonstatutory Option" means an Option granted under this
Plan which is not intended to qualify as an incentive stock option within
the meaning of Section 422A of the Code. Nonstatutory Options may be
granted at such times and subject to such restrictions as the Board shall
determine without conforming to the statutory rules of Section 422A of
the Code applicable to incentive stock options.
(m) "Option" means the right, granted under this Plan, to
purchase Stock of the Company at the option price for a specified period
of time. For purposes of this Plan, an Option may be either an Incentive
Stock Option or a Nonstatutory Option.
(n) "Optionee" means an Employee or Consultant holding an
Option under the Plan.
(o) "Parent Corporation" shall have the meaning set forth in
Section 425(e) of the Code with the Company being treated as the employer
corporation for purposes of this definition.
(p) "Subsidiary Corporation" shall have the meaning set
forth in Section 425(f) of the Code with the Company being treated as the
employer corporation for purposes of this definition.
(q) "Significant Shareholder" means an individual who,
within the meaning of Section 422A(b)(6) of the Code, owns stock
possessing more than ten percent of the total combined voting power of
all classes of stock of the Company or of any Parent Corporation or
Subsidiary Corporation of the Company. In determining whether an
PAGE 29
individual is a Significant Shareholder, an individual shall be treated
as owning stock owned by certain relatives of the individual and certain
stock owned by corporations in which the individual is a shareholder,
partnerships in which the individual is a partner, and estates or trusts
of which the individual is a beneficiary, all as provided in Section
425(d) of the Code.
(r) "Stock" means the $.01 par value common stock of the
Company.
2.2 Gender and Number. Except when otherwise indicated by the
context, any masculine terminology when used in this Plan also shall
include the feminine gender, and the definition of any term herein in the
singular also shall include the plural.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. All Employees are eligible to
participate in this Plan and receive either or both Incentive Stock
Options and Nonstatutory Options under the Plan. All Consultants are
eligible to participate in this Plan and receive Nonstatutory Options
hereunder. Optionees in the Plan shall be selected by the Board, in its
sole discretion, from among those Employees and Consultants who, in the
opinion of the Board, are in a position to contribute materially to the
Company's continued growth and development and to its long-term financial
success.
ARTICLE IV
ADMINISTRATION
4.1 Administration. The Board shall be responsible for
administering the Plan.
(a) The Board is authorized to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the Plan;
to provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Company; and to make all other
determinations necessary or advisable for the administration of the Plan.
Determinations, interpretations, or other actions made or taken by the
Board, pursuant to the provisions of this Plan, shall be final and
binding and conclusive for all purposes and upon all persons.
(b) At the discretion of the Board this Plan may be
administered by a Committee which shall be an executive committee of the
Board, consisting of not less than two members of the Board. The members
of such Committee may be directors who are eligible to receive Options
under this Plan, but Options may be granted to such persons only by
action of the full Board and not by action of the Committee. If the
Company determines that grant of Options by the full Board to members of
the Committee may not exempt the shares of Committee members from the
provisions of Rule 16b-3 under the Securities Exchange Act of 1934, this
Plan, without further action, hereby authorizes and grants options to
purchase 10,000 shares each to each member of the Committee for each year
PAGE 30
of continuous service on the Committee, except that, (i) any Committee
member, for any year, may elect not to accept an option to purchase
10,000 shares or may elect to accept options for the purchase of less
than 10,000 shares; and (ii) if any Committee member elects, for any
year, to receive no option or an option to purchase less than 10,000
shares for that year, that option shall be deemed permanently waived,
shall not cumulate, and shall not be available in any future year. Such
options shall be exercisable at the fair market value of the Stock on the
date of grant and shall have the same term and may be exercised in
installments as provided in Section 7.3 of this Plan. Such Committee
shall have full power and authority, subject to the limitations of the
Plan and any limitations imposed by the Board, to construe, interpret and
administer this Plan and to make determinations which shall be final,
conclusive and binding upon all persons, including, without limitation,
the Company, the shareholders, the directors and any persons having any
interests in any Options which may be granted under this Plan, and, by
resolution or resolutions providing for the creation and issuance of any
such Option, to fix the terms upon which, the time or times at or within
which, and the price or prices at which any such shares may be purchased
from the Company upon the exercise of such Option. Such terms, time or
times and price or prices shall, in every case, be consistent with the
provisions of this Plan, and shall be set forth or incorporated by
reference in the instrument or instruments evidencing such Option.
(c) If the Committee has been appointed, the Board may from
time to time remove members from, or add members to, the Committee. The
Board may terminate the Committee at any time. Vacancies on the
Committee, howsoever caused, shall be filled by the Board. The Committee
shall select one of its members as Chairman, and shall hold meetings at
such times and places as the Chairman may determine. A majority of the
Committee at which a quorum is present, or acts reduced to or approved in
writing by all of the members of the Committee, shall be the valid acts
of the Committee. A quorum shall consist of a majority of the members of
the Committee.
(d) Where the Committee has been created by the Board,
references in this Plan to actions to be taken by the Board shall be
deemed to refer to the Committee as well, except where limited by this
Plan or by the Board.
(e) The Board shall have all of the enumerated powers of the
Committee, but shall not be limited to such powers. No member of the
Board or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted under
it.
4.2 Special Provisions for Grants to Officers or Directors. Rule
16b-3 under the Securities and Exchange Act of 1934 (the "Act") provides
that the grant of a stock option to a director or officer of a company
subject to the Act will be exempt from the provisions of Section 16(b) of
the Act if the conditions set forth in said Rule are satisfied. Unless
otherwise specified by the Board, grants of Options hereunder to
individuals who are officers or directors of the Company shall be made in
a manner that satisfies the conditions of said Rule.
PAGE 31
ARTICLE V
STOCK SUBJECT TO THE PLAN
5.1 Number. The total number of shares of Stock hereby made
available and reserved for issuance under the Plan shall be 500,000
shares for Incentive Stock Options and Nonstatutory Stock Options. The
aggregate number of shares of Stock available under this Plan shall be
subject to adjustment as provided in Section 5.3. The total number of
shares of Stock may be authorized but unissued shares of Stock, or Shares
acquired by purchase as directed by the Board from time to time in its
discretion, to be used for issuance upon exercise of Options granted
hereunder.
5.2 Unused Stock. If an Option shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares of
Stock subject thereto shall (unless the Plan shall have terminated)
become available for other Options under the Plan.
5.3 Adjustment in Capitalization. In the event of any change in
the outstanding shares of Stock by reason of a stock dividend or split,
recapitalization, reclassification, or other similar corporate change,
the aggregate number of shares of Stock remaining subject to the Plan and
to Options previously granted shall be appropriately adjusted by the
Board, whose determination shall be conclusive; provided however, that
fractional shares shall be rounded to the nearest whole share. In any
such case, the number and kind of shares that are subject to any Option
(including any Option outstanding after termination of employment) and
the Option price per share shall be proportionately and appropriately
adjusted without any change in the aggregate Option price to be paid
therefor upon exercise of the Option.
ARTICLE VI
DURATION OF THE PLAN
6.1 Duration of the Plan. Subject to approval of shareholders, the
Plan shall be in effect for ten years from the date of its adoption by
the Board. Any Options outstanding at the end of said period shall
remain in effect in accordance with their terms. The Plan shall
terminate before the end of said period if all Stock subject to it has
been purchased pursuant to the exercise of Options granted under the
Plan.
ARTICLE VII
TERMS OF STOCK OPTIONS
7.1 Grant of Options. Subject to Section 5.1, Options may be
granted to Employees or Consultants at any time and from time to time as
determined by the Board; provided, however, that Consultants may receive
only Nonstatutory Options and may not receive Incentive Stock Options.
The Board shall have complete discretion in determining the terms and
conditions and number of Options granted to each Optionee. In making
such determinations, the Board may take into account the nature of
services rendered by such Employees or Consultants, their present and
PAGE 32
potential contributions to the Company and its Subsidiary Corporations,
and such other factors as the Board in its discretion shall deem
relevant. The Board also shall determine whether an Option is to be an
Incentive Stock Option or a Nonstatutory Option.
(a) In the case of Incentive Stock Options, the total Fair
Market Value (determined at the date of grant) of shares of Stock with
respect to which incentive stock options granted after December 31, 1986
are exercisable for the first time by the Optionee during any calendar
year under all plans of the Company under which incentive stock options
may be granted (and all such plans of any Parent Corporations and any
Subsidiary Corporations of the Company) shall not exceed $100,000.
Hereinafter, this requirement is sometimes referred to as the "$100,000
Limitation".
(b) Nothing in this Article VII of the Plan shall be deemed to
prevent the grant of Options permitting exercise in excess of the
maximums established by the preceding paragraph where such excess amount
is treated as a Nonstatutory Option.
(c) The Board is expressly given the authority to issue
amended or replacement Options with respect to shares of Stock subject to
an Option previously granted hereunder. An amended Option amends the
terms of an Option previously granted and thereby supersedes the previous
Option. A replacement Option is similar to a new Option granted
hereunder except that it provides that it shall be forfeited to the
extent that a previously granted Option is exercised, or except that its
issuance is conditioned upon the termination of a previously granted
Option.
(d) The date of grant of an Option is either the date it is
granted or such other date as may be designed at the time of the award of
the Option.
7.2 No Tandem Options. Where an Option granted under this Plan is
intended to be an Incentive Stock Option, the Option shall not contain
terms pursuant to which the exercise of the Option would affect the
Optionee's right to exercise another Option, or vice versa, such that the
Option intended to be an Incentive Stock Option would be deemed a tandem
stock option within the meaning of the regulations under Section 422A of
the Code.
7.3 Option Agreement: Terms and Conditions to Apply Unless
Otherwise Specified. As determined by the Board on the date of grant,
each Option shall be evidenced by an Option agreement (the "Option
Agreement") that includes the non-transferability provisions required by
Section 10.2 hereof and specifies: whether the Option is an Incentive
Stock Option or a Nonstatutory option; the Option price; the duration of
the Option; the number of shares of Stock to which the Option applies;
any vesting or exercisability restrictions which the Board may impose; in
the case of an Incentive Stock Option, a provision implementing the
$100,000 Limitation; and any other terms or conditions which the Board
may impose. All such terms and conditions shall be determined by the
Board at the time of grant of the Option.
PAGE 33
(a) If not otherwise specified by the Board, the following
terms and conditions shall apply to Options granted under the Plan:
(i) Term. The duration of the Option shall be five years
from the date of grant.
(ii) Exercise of Option. Unless an Option is terminated
as provided hereunder, an Optionee may exercise his Option for up to, but
not in excess of, the amounts of shares subject to the Option specified
hereafter in this section, based on the Optionee's number of years of
continuous service with the Company or a Subsidiary Corporation from the
date on which the Option is granted. In the case of an Optionee who is
an Employee, continuous service shall mean continuous employment; in the
case of an Optionee who is a Consultant, continuous service shall mean
the continuous provision of consulting services. In applying said
limitations, the amount of shares, if any, previously purchased by the
Optionee under the Option shall be counted in determining the amount of
shares the Optionee can purchase at any time. The Optionee may exercise
his Option in the following amounts:
(A) After one year of such continuous services,
up to but not in excess of twenty percent of the shares originally
subject to the Option;
(B) After two years of such continuous services,
up to but not in excess of forty percent of the shares originally subject
to the Option;
(C) After three years of such continuous
services, up to but not in excess of sixty percent of the shares
originally subject to the Option;
(D) After four years of such continuous
services, up to but not in excess of eighty percent of the shares
originally subject to the Option; and
(E) At the expiration of the fifth year of such
continuous services, the Option may be exercised, in whole or in part,
and at any time and from time to time within its term but it shall not be
exercisable after the expiration of five years from the date on which it
was granted.
(b) The Board shall be free to specify terms and
conditions other than those set forth above, in its discretion.
(c) All Option Agreements shall incorporate the
provisions of this Plan by reference, with certain provisions to apply
depending upon whether the Option Agreement applies to an Incentive Stock
Option or to a Nonstatutory Option.
7.4 Option Price. No Incentive Stock Option granted pursuant to
this Plan shall have an Option price that is less than the Fair Market
Value of Stock on the date the Option is granted. Incentive Stock
Options granted to Significant Shareholders shall have an Option price of
PAGE 34
not less than 110 percent of the Fair Market Value of Stock on the date
of grant. The Option price for Nonstatutory Options shall be established
by the Board and shall not be subject to the restrictions applicable to
Incentive Stock Options.
7.5 Term of Options. Each Option shall expire at such time as the
Board shall determine when it is granted, provided however that under no
circumstances shall a Nonstatutory Option be exercisable later than the
tenth anniversary date of its grant, nor by its terms, shall an Incentive
Stock Option granted to a Significant Shareholder be exercisable later
than the fifth year from the anniversary date of its grant.
7.6 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and
conditions as the Board shall in each instance approve, which need not be
the same for all Optionees.
7.7 Payment. Payment for all shares of Stock shall be made at the
time that an Option, or any part thereof, is exercised, and no shares
shall be issued until full payment has been made. Payment shall be made
(i) in cash, or (ii) if acceptable to the Board, in Stock or in some
other form; provided, however, in the case of an Incentive Stock Option,
that said other form of payment does not prevent the Option from
qualifying for treatment as an incentive stock option within the meaning
of the Code.
ARTICLE VIII
WRITTEN NOTICE, ISSUANCE OF STOCK
CERTIFICATES; SHAREHOLDER PRIVILEGES
8.1 Written Notice. An Optionee wishing to exercise an Option
shall give written notice to the Company, in the form and manner
prescribed by the Board. Full payment for the shares exercised pursuant
to the Option must accompany the written notice.
8.2 Issuance of Stock Certificates. As soon as practicable after
the receipt of written notice and payment, the Company shall deliver to
the Optionee or to a permitted nominee of the Optionee a certificate or
certificates for the requisite number of shares of stock.
8.3 Privileges of a Shareholder. An Optionee or any other person
entitled to exercise an Option under this Plan shall not have stockholder
privileges with respect to any Stock covered by the Option until the date
of issuance of a stock certificate for such stock.
ARTICLE IX
TERMINATION OF EMPLOYMENT OR SERVICES
9.1 Death. If an Optionee's employment in the case of an Employee,
or provision of services as a Consultant, in the case of a Consultant,
terminates by reason of death, the Option may thereafter be exercised at
any time prior to the expiration date of the Option or within 12 months
after the date of such death, whichever period is the shorter, by the
person or persons entitled to do so under the Optionee's will or, if the
PAGE 35
Optionee shall fail to make a testamentary disposition of an Option or
shall die intestate, the Optionee's legal representative or
representatives. The Option shall be exercisable only to the extent that
such Option was exercisable as of the date of death.
9.2 Termination other than for Cause or Due to Death. In the event
of an Optionee's termination of employment, in the case of an Employee,
or termination of the provision of services as a Consultant, in the case
of a Consultant, other than by reason of death, the Optionee may exercise
such portion of his Option as was exercisable by him at the date of such
termination (the "Termination Date") at any time within three months of
the Termination Date; provided, however, that where the Optionee is an
Employee, and is terminated due to disability within the meaning of Code
422A, he may exercise such portion of his Option as was exercisable by
him on his Termination Date within one year of his Termination Date. In
any event, the Option cannot be exercised after the expiration of the
term of the Option. Options not exercised within the applicable period
specified above shall terminate.
(a) In the case of an Employee, a change of duties or position
within the Company or an assignment of employment in a Subsidiary
Corporation or Parent Corporation of the Company, if any, or from such a
Corporation to the Company, shall not be considered a termination of
employment for purposes of this Plan.
(b) The Option Agreements may contain such provisions as the
Board shall approve with reference to the effect of approved leaves of
absence upon termination of employment.
9.3 Termination for Cause. In the event of an Optionee's
termination of employment, in the case of an Employee, or termination of
the provision of services as a Consultant, in the case of a Consultant,
which termination is by the Company or a Subsidiary Corporation for
cause, any Option or Options held by him under the Plan, to the extent
not exercised before such termination, shall terminate upon notice of
termination for cause.
ARTICLE X
RIGHTS OF OPTIONEES
10.1 Service. Nothing in this Plan shall interfere with or limit
in any way the right of the Company or a Subsidiary Corporation to
terminate any Employee's employment, or any Consultant's services, at any
time, nor confer upon any Employee any right to continue in the employ of
the Company or a Subsidiary Corporation, or upon any Consultant any right
to continue to provide services to the Company or a Subsidiary
Corporation.
10.2 Non-transferability. All Options granted under this Plan
shall be non-transferable by the Optionee, other than by will or the laws
of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee. No Option may be assigned,
pledged, hypothecated or otherwise alienated or encumbered (whether by
operation of law or otherwise), and any attempt to do so shall be null
and void.
PAGE 36
ARTICLE XI
OPTIONEE-EMPLOYEE'S TRANSFER OR LEAVE OF ABSENCE
11.1 Optionee-Employee's Transfer or Leave of Absence. For
purposes of this Plan:
(a) A transfer of an Optionee who is an Employee from the
Company to a Subsidiary Corporation or Parent Corporation, or from one
such Corporation to another, or
(b) A leave of absence for such an Optionee (i) which is duly
authorized in writing by the Company or a Subsidiary Corporation, and
(ii) if the Optionee holds an Incentive Stock Option, which qualifies
under the applicable regulations under the Code which apply in the case
of incentive stock options, shall not be deemed a termination of
employment. However, under no circumstances may an Optionee exercise an
Option during any leave of absence, unless authorized by the Board.
ARTICLE XII
AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN
12.1 Amendment, Modification an d Termination of the Plan.
(a) The Board may at any time terminate, and from time to time
may amend or modify the Plan; provided, however, that no such action of
the Board, without approval of the shareholders, may:
(i) increase the total amount of Stock which may be
purchased through Options granted under the Plan, except as provided in
Article V;
(ii) change the class of Employees or Consultants
eligible to receive Options; or
(iii) extend the maximum option period provided in this
Plan.
(b) No amendment, modification, or termination of the Plan
shall in any manner adversely affect any outstanding Option under the
Plan without the consent of the Optionee holding the Option.
ARTICLE XIII
ACQUISITION, MERGER OR LIQUIDATION
13.1 Acquisition.
(a) In the event that an Acquisition occurs with respect to
the Company, the Company shall have the option, but not the obligation,
to cancel Options outstanding as of the effective date of Acquisition,
whether or not such Options are then exercisable, in return for payment
to the Optionees of an amount equal to a reasonable estimate of an amount
(hereinafter the "Spread") equal to the difference between the net amount
per share payable in the Acquisition or as a result of the Acquisition,
less the exercise price of the Option. In estimating the Spread,
appropriate adjustments to give effect to the existence of the Options
PAGE 37
shall be made, such as deeming the Options to have been exercised, with
the Company receiving the exercise price payable thereunder, and treating
the stock receivable upon exercise of the Options as being outstanding in
determining the net amount per share.
(b) For purposes of this section, an "Acquisition" means any
transaction in which substantially all of the Company's assets are
acquired or in which a controlling amount of the Company's outstanding
shares of Stock are acquired, in each case by a single person or entity
or an affiliated group of persons and entities. For purposes of this
section, a controlling amount shall mean more than 50% of the issued and
outstanding shares of Stock of the Company. The Company shall have such
an option regardless of how the Acquisition is effectuated, whether by
direct purchase, through a merger or similar corporate transaction, or
otherwise. In cases where the acquisition consists of the acquisition of
assets of the Company, the net amount per share shall be calculated on
the basis of the net amount receivable with respect to shares upon a
distribution and liquidation by the Company after giving effect to
expenses and charges, including but not limited to taxes, payable by the
Company before the liquidation can be completed.
(c) Where the Company does not exercise its option under this
Section 13.1 the remaining provisions of this Article XIII shall apply,
to the extent applicable.
13.2 Merger or Consolidation. Subject to any required action by
the shareholders, if the Company shall be the surviving corporation in
any merger or consolidation, any option granted under this Plan shall
pertain to and apply to the securities to which a holder of the number of
shares of Stock subject to the Option would have been entitled in such
merger or consolidation.
13.3 Other Transactions. A dissolution or a liquidation of the
Company or a merger and consolidation in which the Company is not the
surviving corporation shall cause every Option outstanding hereunder to
terminate as of the effective date of such dissolution, liquidation,
merger or consolidation. However, the Optionee either (i) shall be
offered a firm commitment whereby the resulting or surviving corporation
in a merger or consolidation will tender to the Optionee an option (the
"Substitute Option") to purchase its shares on terms and conditions both
as to number of shares and otherwise, that will substantially preserve to
the Optionee the rights and benefits of the Option outstanding hereunder
granted by the Company, or (ii) shall have the right immediately prior to
such dissolution, liquidation, merger, or consolidation to exercise any
unexercised Options whether or not then exercisable, subject to the
provisions of this Plan. The Board shall have absolute and uncontrolled
discretion to determine whether the Optionee has been offered a firm
commitment and whether the tendered Substitute Option will substantially
preserve to the Optionee the rights and benefits of the Option
outstanding hereunder. In any event, any Substitute Option for an
Incentive Stock Option shall comply with the requirements of Code Section
425(a).
PAGE 38
ARTICLE XIV
SECURITIES REGISTRATION
14.1 Securities Registration. In the event that the Company shall
deem it necessary or desirable to register under the Securities Act of
1933, as amended, or any other applicable statute, any Options or any
Stock with respect to which an Option may be or shall have been granted
or exercised, or to qualify any such Options or Stock under the
Securities Act of 1933, as amended, or any other statute, then the
Optionee shall cooperate with the Company and take such action as is
necessary to permit registration or qualification of such Options or
Stock.
14.2 Representations. Unless the Company has determined that the
following representation is unnecessary, each person exercising an Option
under the Plan may be required by the Company, as a condition to the
issuance of the shares pursuant to exercise of the Option, to make a
representation in writing (i) that he is acquiring such shares for his
own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof, (ii) that before
any transfer in connection with the resale of such shares, he will obtain
the written opinion of counsel for the Company, or other counsel
acceptable to the Company, that such shares may be transferred. The
Company may also require that the certificates representing such shares
contain legends reflecting the foregoing.
ARTICLE XV
TAX WITHHOLDING
15.1 Tax Withholding. Whenever shares of Stock are to be issued in
satisfaction of Options exercised under this Plan, the Company shall have
the power to require the recipient of the Stock to remit to the Company
an amount sufficient to satisfy any applicable federal, state, and local
withholding tax requirements.
ARTICLE XVI
INDEMNIFICATION
16.1 Indemnification. To the extent permitted by law, each person
who is or shall have been a member of the Board shall be indemnified and
held harmless by the Company against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by him in
connection with or resulting from any claim, action, suit, or proceeding
to which he may be a party or in which he may be involved by reason of
any action taken or failure to act under the Plan and against and from
any and all amounts paid by him in settlement thereof, with the Company's
approval, or paid by him in satisfaction of judgment in any such action,
suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
articles of incorporation or bylaws, as a matter of law, or otherwise, or
any power that the Company or any Subsidiary Corporation may have to
indemnify them or hold them harmless.
PAGE 39
ARTICLE XVII
REQUIREMENTS OF LAW
17.1 Requirements of Law. The granting of Options and the issuance
of shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be
required.
17.2 Governing Law. The Plan, and all agreements hereunder, shall
be construed in accordance with and governed by the laws of the state of
Colorado.
ARTICLE XVIII
EFFECTIVE DATE OF PLAN
18.1 Effective Date. The Plan shall be effective on January 16,
2001.
ARTICLE XIX
COMPLIANCE WITH CODE
19.1 Compliance with Code. Incentive Stock Options granted
hereunder are intended to qualify as "incentive stock options" under Code
422A. If any provision of this Plan is susceptible to more than one
interpretation, such interpretation shall be given thereto as is
consistent with Incentive Stock Options granted under this Plan being
treated as incentive stock options under the Code.
ARTICLE XX
NO OBLIGATION TO EXERCISE OPTION
20.1 No Obligation to Exercise. The granting of an Option shall
impose no obligation upon the holder thereof to exercise such Option.
THIS 2001 STOCK OPTION PLAN was adopted by the Board of Directors of
Rentech, Inc. on January 16, 2001 to be effective as of January 16, 2001.
It is to be submitted for approval by shareholders at the annual meeting
of shareholders to be held on May 8, 2001.
RENTECH, INC.
/s/ Dennis L. Yakobson
By: -----------------------------
Dennis L. Yakobson, President