PAGE 1
RENTECH, INC.
1331 17th Street, Suite 720
Denver, Colorado 80202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 19, 1996
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
Rentech, Inc., a Colorado corporation (the Company), will be held at the
Guaranty Bank Building, 7th Floor Conference Room, 1331 17th Street, Denver,
Colorado, on September 19, 1996 at 10:00 a.m. (local time) for the following
purposes:
1. To elect one director to the Company's Board of Directors to hold
office for a three-year term and until his successor is elected and qualified;
2. To approve the Company's 1996 Stock Option Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only holders of record of the common stock of the Company at the close
of business on August 7, 1996 will be entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors
(signature)
Ronald C. Butz, Secretary
Dated: August 14, 1996
ALL OF THE SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER
OR NOT YOU EXPECT TO BE PRESENT, PLEASE DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY TO THE COMPANY IN THE ACCOMPANYING POSTPAID ENVELOPE.
PAGE 2
RENTECH, INC.
1331 17th Street, Suite 720
Denver, Colorado 80202
(303) 298-8008
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 19, 1996
The accompanying proxy is solicited by the Board of Directors of
Rentech, Inc. (the "Company") for use at the annual meeting of stockholders
(the "Annual Meeting") to be held at the Guaranty Bank Building, 7th Floor
Conference Room, 1331 17th Street, Denver, Colorado, on September 19, 1996 at
10:00 a.m., local time, and at any and all adjournments thereof for the
purposes set forth in the notice of annual meeting of stockholders. The
Company anticipates that this proxy statement and the accompanying form of
proxy will be first sent or given to stockholders on or about August 16, 1996.
Any stockholder giving such a proxy has the right to revoke the proxy at
any time before it is voted by written notice to the secretary of the Company,
by executing a new proxy bearing a later date, or by voting in person at the
annual meeting. A proxy, when executed and not revoked, will be voted in
accordance therewith. If no instructions are given, proxies will be voted
FOR the election of the nominees for director identified in this proxy
statement, FOR approval of the new 1996 Stock Option Plan, and FOR all other
proposals presented by management.
All expenses in connection with the solicitation of proxies will be
borne by the Company. The solicitation will be made by mail. The Company
will also supply brokers or persons holding stock in their names or in the
names of their nominees with such number of proxies, proxy material and
annual reports as they may require for mailing to beneficial owners and will
reimburse them for their reasonable expenses incurred in connection therewith.
Certain directors, officers and employees of the Company not specifically
employed for that purpose may solicit proxies without additional compensation
by mail, telephone, facsimile transmission, telegraph or personal interview.
VOTING SECURITIES AND VOTING RIGHTS
The close of business on August 7, 1996 has been fixed by the Board of
Directors of the Company as the record date for the determination of
stockholders entitled to notice of and to vote at the annual meeting. On
that date, the Company had outstanding 10,534,994 shares of common stock, all
of which are entitled to vote on the matters to come before the annual
meeting. The common stock is the only class of equity securities of the
Company currently outstanding.
Each outstanding share of common stock entitles the holder to one vote.
There are no cumulative voting rights. The presence in person or by proxy of
a majority of the outstanding shares of common stock is necessary to
constitute a quorum at the meeting, but, if a quorum should not be present,
the meeting may be adjourned from time to time until a quorum is obtained.
If a quorum is present, the affirmative vote of a majority of shares
represented in person or by proxy will be required to approve the matters
specified herein to be voted upon. Any holder of shares represented by a
proxy that has been returned properly signed by the stockholder of record
will be considered present for the purpose of determining whether or not a
quorum exists even if the proxy contains abstentions or broker non-votes.
PAGE 3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company has established the number of directors to serve on its
Board of Directors as six. The directors are divided into three classes,
each with staggered three-year terms of office. At each annual meeting of
stockholders, the terms of two directors expire and nominees are elected to
hold office for three-year terms to succeed the directors whose terms expire
at the meeting. At this meeting, one director will be elected to hold office
for a term expiring at the annual meeting of stockholders to be held in 1999
and until the election and qualification of his successor.
The two directors whose terms are expiring, Charles B. Benham and Dennis
L. Yakobson, are the Class II directors. Dennis L. Yakobson has been
nominated by the Board of Directors for reelection. Dennis L. Yakobson has
consented to serve as director, if elected, and the Board of Directors has
no reason to believe that he will be unable to serve. The Board of Directors
has not nominated another person for the second vacancy, but has begun a
search for a qualified person to serve as a director. The Board believes
that, in connection with the Company's plan to expand its business, it would
be well served by a nominee with broad experience in business rather than a
more limited engineering background. If the Board succeeds in attracting a
qualified person, it expects to fill the remaining vacancy by appointment.
Election requires the affirmative vote by holders of at least a majority of
the shares voting on the matter, and the Board of Directors recommends a vote
FOR the election of the nominee. In the absence of instructions to the
contrary, shares represented by all proxies will be voted for the election of
all such nominees. If for any reason any nominee is unable to serve, the
Board of Directors may designate substitute nominees, in which event the
shares represented by all proxies will be voted for such substitute nominees,
unless an instruction to the contrary is indicated on the proxy.
The Board of Directors does not have a standing nominating committee.
The Board selects director nominees and will consider suggestions by
stockholders for names of possible future nominees delivered in writing to
the Secretary of the Company on or before January 15 in any year. CMPS&F Pty
Limited, an Australian engineering and construction management group that is
a shareholder, and an investment group identified as RIG 86, are each
entitled to have a nominee of their choice serve on the Board of Directors,
subject to shareholder election. As of this date, these rights have not been
exercised, and the Company has no indication that they will be exercised.
The Board has a stock option committee, consisting of Erich W. Tiepel and D.
Barry McKennitt, whose primary function is to administer the Company's stock
option plans and profit sharing plan. The committee met one time during 1995.
All members attended that meeting. The Board has an audit committee, to
assist the Board in fulfilling its responsibilities for financial reporting
by the Company and to review the scope of the audit and the reports of the
Company's independent auditors. Members of the audit committee are Mark S.
Bohn and D. Barry McKennitt. The audit committee met one time during 1995.
All members attended that meeting.
During fiscal 1995, the full Board of Directors met seven times. No
director attended less than 75% of the meetings.
1996 Nominee for Election to the Board of Directors:
Director Term to
Director's Name Principal Occupation Since Expire
- ------------------ -------------------- -------- ------
Dennis L. Yakobson President, Chief Executive Officer, 1981 1999
Chairman of the Board
PAGE 4
Dennis L. Yakobson, President, Chief Executive Officer, Director and
Chairman of the Board--
Mr. Yakobson, age 59, 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. From 1960 to 1969 he was
employed by Grumman Aerospace Corporation, with the final position held being
that of contract administrator with responsibility for negotiation of prime
contracts with governmental agencies. From 1969 to 1971 he was employed by
Martin Marietta Corporation, Denver, Colorado (now Lockheed Martin
Corporation) in a similar position, and from 1971 through 1975 was employed
by Martin Marietta as marketing engineer in space systems. In 1975 he was
employed by Wyoming Mineral Corporation in Denver as a contract admin-
istrator. Shortly thereafter, he became group leader-land and was
responsible for the direction of all activities in lease administration and
for all in-house landmen. In 1976, he was employed by Power Resources
Corporation, Denver, Colorado, a mineral exploration company, as vice
president-land, secretary, treasurer, and a director. In 1979, he became a
director and the secretary of Nova Petroleum Corporation also in Denver,
Colorado, and in 1981 became its vice president of administration and finance.
He resigned from Nova in November of 1983 to assume the presidency of the
Company. Mr. Yakobson devotes his full time to the business of the Company.
He serves as chairman of the board of directors of the Company.
Continuing Class III Directors (with terms expiring in 1997):
Erich W. Tiepel, Director--
Dr. Tiepel, age 52, 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. Dr. Tiepel has
twenty-three years of experience 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 Corp., 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. Dr. Tiepel has been a director of the Company since 1983.
PAGE 5
D. Barry McKennitt, Director--
Mr. McKennitt, age 58, received a Bachelor of Science degree in
Geological Engineering in 1959 and a Master of Science degree in Geology in
1962 from the University of Manitoba and a Masters Degree in Business
Administration from Harvard University in 1964. He was employed from 1958
through 1963 by Imperial Oil, Atlantic Richfield and Mobil Oil Company in
various capacities, including planning and evaluation, exploration research
and exploration and development drilling. Mr. McKennitt was a consulting
industrial economist in energy and resource economics from 1964 through 1969
with S.R.I. International in Menlo Park, California. From 1969 through 1971,
he was a senior investment analyst for Investors Diversified Services in
Minneapolis, Minnesota. In 1971, he joined The Boston Company, Boston,
Massachusetts, where he became a senior vice president and group director in
investment research and technology responsible for all energy and resource
investments. In 1978, Mr. McKennitt founded and was elected president of
Energy Associates, Inc., engaged in oil and gas investments and finance.
From 1989 to October 1992, he was also a vice president of Equitor North
American Asset Management, Inc., the North American investment arm of
Standard Chartered Bank of London, UK. In October 1992, Mr. McKennitt was
elected executive vice president and director of Constitution Management
Company, Inc., a Boston, Massachusetts investment management company. Mr.
McKennitt was a founding director of the National Association of Petroleum
Investment Analysts for which he has been a past president, director and is
an honorary life member. In 1995 he was elected Executive Director of the
Association. From 1988 through 1994 he has also served on the advisory
council of ITT Corporation, Sheraton Hotels division, and since 1991 he has
been a member of the advisory council of Associated Luxury Hotels, Inc. In
1995 he served on the Resort Advisory Council of Hilton Hotels Corporation.
He is also a member of the Association for Investment Management and Research,
The Boston Security Analysts Society and the Petroleum Analysts of Boston.
He has been a director of the Company since 1984.
Continuing Class I Directors (with terms expiring in 1998):
Mark S. Bohn, Vice President - Engineering, Treasurer, Assistant
Secretary and Director--
Dr. Bohn, age 45, received a Bachelors 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. He was employed from 1976 through 1978 at the General
Motors Research Laboratories in Warren, Michigan, on research in bluff body
aerodynamics, wind tunnel experimentation, flow visualization, and the fluid
mechanics of engine intake ports. Since 1978 he has been employed by Midwest
Research Institute at the Solar Energy Research Institute in Golden, Colorado,
working on conversion of organic materials to liquid hydrocarbon fuels, high
temperature applications of solar energy, power cycles for ocean thermal
energy conversion, direct contact heat transfer and building heat transfer.
Dr. Bohn is a registered Professional Engineer in Colorado and a member of
the American Society of Mechanical Engineers. He has published several
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, (West Educational
Publishing). He has been an officer and director of the Company since its
inception in 1981, and works part time on the business of the Company.
PAGE 6
Ronald C. Butz, Vice President, Chief Operating Officer, Secretary and
Director--
Mr. Butz, age 58, 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. From 1966 to 1982, Mr. Butz was a
practicing attorney in Denver, Colorado with the firm of Grant, McHendrie,
Haines and Crouse, P.C. In 1982, Mr. Butz became 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. He resigned these offices in
December 1983. In 1984, Mr. Butz became president of Capital Growth, Inc.,
a privately-held Colorado corporation providing investment services and
venture capital consulting. In 1984, he also became a director of the
Company. In October 1989, Mr. Butz was appointed a vice president of the
Company, and in June 1990 he was appointed secretary of the Company, and in
May 1996 he was appointed chief operating officer. Mr. Butz devotes his full
time to the business of the Company.
There are no family relationships among the directors. There are no
arrangements or understandings between any director and any other person
pursuant to which that director was elected.
The Company has adopted a salary reduction simplified employee pension
plan but presently has no other pension, retirement or similar plans. The
Company has profit-sharing and stock option plans. It provides a medial
reimbursement plan and life insurance coverage to officers and directors and
may provide other benefits to officers and employees in the future. It may
also compensate non-employee directors for attendance at board and committee
meetings at a per diem rate to be determined plus reimbursement of actual
expenses incurred in attending such meetings.
PROPOSAL NO. 2
ADOPTION OF THE 1996 STOCK OPTION PLAN
The stockholders are asked to consider and vote upon a proposal to
approve the 1996 Stock Option Plan (1996 Plan) which was adopted by the Board
of Directors on May 23, 1996 subject to stockholder approval, to be effective
on July 1, 1996. The primary provisions of the 1996 Plan are described in
the following paragraphs.
The Board of Directors believes that the 1996 Plan will help attract,
retain and motivate the Company's key employees, directors and consultants,
as well as achieve the goal of aligning management and stockholder interests,
and is therefore in the Company's best interests.
Adoption of the 1996 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 1996 Plan.
PAGE 7
Summary of the 1996 Plan:
Shares Subject to the 1996 Plan. The aggregate number of shares of the
Company's common stock that may be issued to grantees under the 1996 Plan is
500,000 shares. The shares may be unissued shares or treasury shares. The
1996 Plan provides for appropriate adjustment in the number of shares subject
to the 1996 Plan and to the grants previously made if there is a stock split,
stock dividend, reorganization or other relevant change affecting the
Company'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 1996 Plan after
May 23, 2006, but awards granted prior to or on that date may extend beyond
it.
Administration. The 1996 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 1996 Plan and
determines option terms, vesting schedules and number of shares subject to
grants. With respect to any awards granted, other than those 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
the Company, and all employees, directors, and consultants are eligible to be
selected to receive grants under the 1996 Plan. As of July 1, 1996, there
are six employees, three of whom are employee-directors and six directors who
are eligible to receive stock option grants. If the Company achieves progress
in its business plan to diversify, it anticipates hiring three to six
additional employees during 1996. It is not possible to predict the number of
employees who will be selected to receive grants under the 1996 Plan, and the
number of grantees could vary from time to time. There are currently seven
participants in the Company's 1990 Stock Option Plan and its 1994 Stock
Option Plan.
Stock Options. Options granted under the 1996 Plan will be in the form
of either incentive stock options (ISOs), which meet the requirements of
Section 422 of 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 May 23, 1996, the average of the closing
bid and asked prices of a share of common stock was $.50). 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.
PAGE 8
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. 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 termi-
nation 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 partici-
pant 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 the Company 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.
PAGE 9
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.
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. The Company 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. The Company does
not receive a deduction for this gain.
Amendments and Discontinuance. The Board of Directors may amend, alter
or discontinue the 1996 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 1996 Plan, (ii) change the employees
or class of employees eligible to participate in the 1996 Plan, or (iii)
extend the maximum option period as provided in the 1996 Plan.
Grants Made. No grants have been made under the 1996 Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information as of the record date
by (i) all persons who own of record or are known to the Company to
beneficially own more than 5% of the issued and outstanding shares of common
stock, and (ii) by each director, each director nominee, each of the execu-
tive officers named in the tables under "Executive Compensation" and by all
executive officers and directors as a group:
PAGE 10
Amount and Percent
Nature of of Class
Beneficial Based on
Positions and Common Stock Beneficial
Name and Address Offices Held Ownership (1) Ownership
Charles B. Benham Vice President 275,440 of record 2.6%
12878 W. 68th Avenue and Director (307,322 indirectly(2)
Arvada, CO 80004
Mark S. Bohn Vice President, 443,431 of record 4.2%
1614 Tamarac Drive Treasurer, Assistant (227,928 indirectly)(2)
Golden, CO 80401 Secretary and Director
Dennis L. Yakobson President, Chief 404,354 of record 3.8%
8847 Norwich Street Executive Officer and (313,082 indirectly)(2)
Westminster, CO 80030 Director
Erich W. Tiepel Director 59,252 of record (4)
2494 Houston Waring Cir. (263,106 indirectly)(2)
Littleton, CO 80120
Ronald C. Butz Vice President, Chief 164,151 of record 1.6%
711 Marion Street Operating Officer, (676,754 indirectly)(2)(3)
Denver, CO 80218 Secretary and Director
D. Barry McKennitt Director 65,000 of record (4)
415 Hayward Mill Road (119,382 indirectly)(2)
Concord, MA 01742
James P. Samuels Vice President-Finance 125,000 of record 1.2%
1331 17th Street, Ste. 720 Chief Financial Officer (125,000 indirectly)(5)
Denver, CO 80202
Fuel Resources Development Shareholder 723,710 of record 6.9%
Co.
1225 17th St., #2100
Denver, CO 80202
CMPS&F Pty Ltd. Shareholder 772,000 of record 7.3%
6 Albert Avenue
Chatswood, NSW Australia
2057
All Directors and Officers Officers and Directors 1,536,454 of record (3) 33.9%
as a Group (7 persons) (2,032,574 indirectly) (14.6% of
record)
(1) Does not include shares of common stock issuable upon any exercise of any stock options
that may hereafter be granted.
(2) Includes shares of common stock underlying presently exerciable stock options and stock
purchase warrants in the number indicated as owned indirectly.
(3) Includes 369,432 shares of common stock held of record by his spouse as to which shares
Mr. Butz disclaims beneficial ownership and shares of common stock underlying presently
exercisable stock options and stock purchase warrants.
(4) Less than one percent.
(5) Shares of common stock underlying presently exercisable stock purchase warrants.
/TABLE
PAGE 11
EXECUTIVE OFFICERS OF THE COMPANY
Certain information regarding the executive officers of the Company
follows:
Officer of the
Name Age Positions Held With Company Company Since
- ------------------- --- ---------------------------------- -------------
Dennis L. Yakobson 59 President, Chief Executive Officer 1981
Chairman of the Board
Charles B. Benham 59 Vice President-Research and 1981
Development and Director
Mark S. Bohn 45 Vice President-Engineering, 1981
Treasurer, Assistant Secretary
and Director
Ronald C. Butz 58 Vice President, Chief Operating 1984
Officer, Secretary and Director
James P. Samuels 49 Vice President - Finance, Chief 1996
Financial Officer
James P. Samuels, Vice President - Finance, Chief Financial Officer--
Mr. Samuels, age 49, has executive experience in general corporate
management, finance, sales and marketing, information technologies, and
consulting for both large companies and development stage businesses. He
received a Bachelor's degree in Business Administration from Lowell
Technological Institute, in 1970, and a Master of Business Administration
degree in 1972 from Suffolk University, Boston, Massachusetts, in 1972. He
completed an executive program in strategic market management through Harvard
University in Switzerland in 1984. From December 1995 through April 1996, 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 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.
PAGE 12
The executive officers of the Company serve at the pleasure of the Board
of Directors and do not have fixed terms. 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 the best
interests of the Company will be served thereby, without prejudice to
contractual rights, if any, of the person so removed.
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.
EXECUTIVE COMPENSATION
Employment Contracts
The Company employs Messrs. Yakobson, Benham and Butz, pursuant to
employment contracts which extend through March 31, 1997. The contracts
provide for annual cost of living adjustments.
The contracts provide that the individuals will serve as president and
chief executive officer, vice president-research and development, and vice
president and chief operating officer, respectively, together with such
duties, responsibilities and powers as the Board of Directors may reasonably
specify. If the Company terminates employment early without cause, the
contracts provide for continuation of salary for the remainder of the term or
one year, whichever is more, as severance pay. No damages are payable by an
employee to the Company if the employee terminates his employment before the
end of the contract term. The contracts impose obligations of confidentiality
as well as covenants not to compete with the Company for three years
following termination of employment for any reason whatsoever.
Cash Compensation
The following table shows all cash compensation paid or to be paid by
the Company 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 the Company as of the end
of the Company's last fiscal year whose salary and bonus for such period in
all capacities in which the executive officer served exceeded $100,000.
Summary Compensation Table
Long-Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ---------------------- ---------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted
Name and Annual Stock LTIP All Other
Principal Compen- Award(s) Options/ Payouts Compen-
Position Year Salary($) Bonus($) sation($) ($) SARs(#) ($) sation($)
- --------- ---- --------- -------- --------- ---------- ------- -------- ---------
Dennis L. Yakobson 1995 $102,486(1) --- --- --- 79,382* --- ---
Chief Executive 1994 105,516 --- --- --- 59,382* --- ---
Officer 1993 100,488 --- --- --- 17,500 --- ---
Ronald C. Butz, 1995 $ 98,934(2) --- --- --- 79,382* --- ---
Vice President, 1994 108,868 --- --- --- 59,382* --- ---
Chief Operating 1993 97,020 --- --- --- 17,500 --- ---
Officer
PAGE 13
Charles B. Benham 1995 98,934(2) --- --- --- 79,382* --- ---
Vice President 1994 101,868 --- --- --- 59,382* --- ---
1993 97,020 --- --- --- 17,500 --- ---
* No stock options or SARs were granted to the executive officers during 1994 or 1995. The figures shown
result from extensions during 1994 and 1995 of the expiration dates of stock options previously granted.
(1) 1995 salary of $8,310 was deferred and has been converted into restricted shares of the Company's common stock.
(2) 1995 salary of $8,022 was deferred and has been converted into restricted shares of the Company's common stock.
Option/SAR Exercises and Holdings
The following table sets forth information with respect to the named
executives, concerning the exercise of options and/or limited SARs during the
last fiscal year and unexercised options and limited SARs held as of the end
of the fiscal year December 31, 1995:
Aggregated Option/SAR Exercises
in Last Fiscal Year and FY-End Option/SAR Values:
<D> <E>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End (#) at FY End ($)
Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized($) Unexercisable Unexercisable
- ------------------ ------------- ---------- ------------- -------------
Dennis L. Yakobson --- --- 146,882(1) $2,472(1)
Ronald C. Butz --- --- 146,882(1) $2,472(1)
Charles B. Benham --- --- 146,882(1) $2,472(1)
- ---------------
(1) Exercisable.
Option/SAR Repricings
There have been no adjustments or amendments to the exercise price of
stock options or SARs previously awarded to any of the named executive
officers, whether through amendment, cancellation or replacement grants or
any other means during the last fiscal year ended December 31, 1995 of the
Company, except that during 1995 the Company extended the expiration date of
options to purchase 356,292 shares of the Company's common stock previously
granted, at the then-market price, to officers and directors. The extensions
of time within which to exercise the options are shown as grants of options
in the following table:
PAGE 14
Option/SAR Grants in Last Fiscal Year
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term
- ------------------------------------------------------------------------------------------------------------------
(a) (b) (c)
Number of % of Total Market
Securities Options/SARs Exercise Price
Underlying Granted to or Base Date of
Options/SARs Employees in Price Grant Expiration
Name Granted(#) Fiscal Year ($/Sh.) ($/Sh.)* Date 0%($) 5%($) 10%
- ------------------ ------------ ------------ -------- -------- ---------- ------- ------- -------
Dennis L. Yakobson 29,691* 6.1% $.5052 $1.37 12/31/96 $20,550 $27,711 $29,744
29,691* 6.1% $.5052 $1.37 3/1/97 $20,550 $27,771 $29,744
20,000 4.1% $1.27 $1.27 4/6/00 -0- $24,593 $26,478
Ronald C. Butz 29,691* 6.1% $.5052 $1.37 12/31/96 $20,550 $27,771 $29,774
29,691* 6.1% $.5052 $1.37 3/1/97 $20,550 $27,771 $29,774
20,000 4.1% $1.27 $1.27 4/6/00 -0- $24,593 $26,478
Charles B. Benham 29,691* 6.1% $.5052 $1.37 12/31/96 $20,550 $27,771 $29,774
29,691* 6.1% $.5052 $1.37 3/1/97 $20,550 $27,771 $29,774
20,000 4.1% $1.27 $1.27 4/6/00 -0- $24,593 $26,478
* The expiration date of the option was extended; the options were granted.
Profit Sharing Plan
The Company has adopted a profit-sharing plan for the benefit of all
employees. The plan will be administered by a committee appointed by the
board of directors. Awards by the committee to its members will be subject
to approval by the disinterested members of the board of directors. Awards
are discretionary and shall not aggregate an amount in excess of five percent
of audited pre-tax earnings before depreciation, amortization and
extraordinary income for the preceding fiscal year. However, bonuses are
payable only if such pre-tax earnings exceed $500,000 for the year, a
condition that has not yet been met.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Erich W. Tiepel, a director, owns 50 percent of Resource Technologies
Group, Inc. The Company has contracted with Resource Technologies Group to
conduct an environmental audit. Contract payments by the Company in 1994
were $149. There were no such payments in 1995.
Mark S. Bohn, a director, performed engineering consulting services for
the Company during 1995 in the amount of $11,976 and during 1994 in the
amount of $8,904.
OTHER MATTERS TO BE VOTED UPON
Management does not know of any other matters to be brought before the
meeting. If any other matters not mentioned in the proxy statement are
property brought before the meeting, the individuals named in the enclosed
proxy intend to vote such proxy in accordance with their best judgment on
such matters.
PAGE 15
COMPLIANCE WITH SECTION 16(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
The Company's executive officers and directors are required to file
reports of ownership and changes in ownership of the Company's securities
with the Securities and Exchange Commission as required under provisions of
the Securities Exchange Act of 1934. Based solely on the information pro-
vided to the Company by individual directors and executive officers, the
Company believes that during the last fiscal year all directors and executive
officers have complied with applicable filing requirements.
INDEPENDENT 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 the
Company for its 1996 fiscal year. To the knowledge of management, neither
such firm nor any of its members has any direct or material indirect
financial interest in the Company nor any connection with the Company 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 state-
ments.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1997 annual
meeting of Stockholders must be received by the Company on or before March
15, 1997, in order to be eligible for inclusion in the Company's proxy state-
ment and form of proxy. To be so included, a proposal must also comply with
all applicable provisions of Rule 14a-8 under the Securities Exchange Act of
1934.
OTHER MATTERS
Management does not know of any other matters to be brought before the
annual meeting. If any other matters 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 their best judgment on
such matters.
By Order of the Board of Directors
(signature)
Ronald C. Butz, Secretary
August 14, 1996
PAGE 16
PROXY RENTECH, INC. PROXY
1331 17th Street, Suite 720
Denver, Colorado 80202
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Linda D. Kansorka and Charles B. Benham
as proxies, each with the power to appoint his or her substitute and hereby
authorizes them to represent and to vote, as designated below, all the
shares of common stock of Rentech, Inc. held of record on August 7, 1996,
by the undersigned at the annual meeting of shareholders to be held at the
Guaranty Bank Building, 7th Floor Conference Room, 1331 17th Street, Denver,
Colorado on September 19, 1996 at 10:00 a.m. local time, and at any adjourn-
ment thereof.
1. ELECTION OF DIRECTOR / / FOR nominee listed below (except
as marked to the contrary below.)
/ / WITHHOLD AUTHORITY to vote for
nominee listed below.
For a three-year term to 1999 and until his successor is elected and
qualified: Dennis L. Yakobson
(INSTRUCTION: Mark only one box. To withhold authority to vote for
any individual nominee, write that nominee's name in the pace provided below.)
-------------------------------------------------------------------
2. / / FOR / / AGAINST approval of the 1996 Stock Option Plan.
3. In their discretion the proxies are authorized to vote upon such other
business as may properly come before the meeting.
PAGE 17
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE NOMINEE LISTED ABOVE AS TO WHOM AUTHORITY TO VOTE HAS
NOT BEEN WITHHELD AND FOR ALL OTHER PROPOSALS.
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.
Dated: , 1996
--------------------------------
-------------------------------------------------
-------------------------------------------------
Signature
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.