PAGE 1
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-11(c) or
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)(4) 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
PAGE 2
RENTECH, INC.
1331 17th Street, Suite 720
Denver, Colorado 80202
-------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 24, 1998
-------------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
Rentech, Inc., a Colorado corporation (the "Company"), will be held at
Courtyard by Marriott, Cosmopolitan Room, 934 16th Street, Denver,
Colorado, on June 24, 1998 at 9:00 a.m. (local time) to consider and act
upon the following matters:
1. The election of two directors for three-year terms;
2. The approval of the 1998 Stock Option Plan; and
3. Such other business as may properly come before the meeting or
any adjournment or postponements thereof.
Only holders of record of the common stock of the Company at the
close of business on April 20, 1998 will be entitled to notice of and to
vote at the meeting.
By Order of the Board of Directors
Ronald C. Butz, Secretary
Dated: May 16, 1998
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 3
RENTECH, INC.
1331 17th Street, Suite 720
Denver, Colorado 80202
(303) 298-8008
-------------------------------
PROXY STATEMENT
--------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 24, 1998
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 Courtyard by Marriott,
Cosmopolitan Room, 934 16th Street, Denver, Colorado, on June 24, 1998 at
9:00 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 May 20,
1998.
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 1998
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 April 20, 1998 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 35,010,225 shares of common stock,
all of which are entitled to vote on the matters to come before the
annual meeting.
PAGE 4
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.
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.
The two directors whose terms are expiring, Ronald C. Butz and
Douglas L. Sheeran, are presently members of the Board of Directors.
Both have been nominated by the Board of Directors for reelection. Both
have consented to serve as director, if elected, and the Board of
Directors has no reason to believe that they will be unable to serve.
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 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.
During fiscal 1997, the Board of Directors met 15 times. The Board has a
compensation committee whose primary function is to administer the
Company's stock option plans and profit sharing plan. Members of the
compensation committee for 1997 were Erich W. Tiepel and Mark S. Bohn.
The committee met one time during 1997. Members of the compensation
committee for 1998 are Erich W. Tiepel and Douglas L. Sheeran. The Board
has an audit committee, whose objective is 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 for 1997 were Erich
W. Tiepel and Mark S. Bohn. The audit committee met two times during
1997. Members of the audit committee for 1998 are John J. Ball and John
P. Diesel.
PAGE 5
1998 Nominees for Election to the Board of Directors:
Director Term to
Director's Name Principal Occupation Since Expire
- --------------- -------------------- --------- ----------
Ronald C. Butz Vice President and Chief Operating Officer 1984 2001
Douglas L. Sheeran President, FCI, Inc. 1998 2001
Class I Directors:
Ronald C. Butz, Vice President, Chief Operating Officer, Secretary
and Director--
Mr. Butz, age 60, 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 1998 he was appointed
chief operating officer. Mr. Butz devotes his full time to the business
of the Company.
Douglas L. Sheeran, Director--
Mr. Sheeran, age 60, received a Bachelor of Arts degree in
Industrial Psychology from Miami University, Oxford, Ohio, in 1960. He
held a number of human resource positions of increasing scope and
responsibility with Home Life Insurance Company, 1960-1962, Kraft Foods
from 1962-1965, Electronic Associates Inc. from 1965-1968, and Celanese
Corporation from 1968-1973. These positions covered a range of labor
relations, organizational development, compensation and benefit
responsibilities at both operating sites and corporate staff. 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 resigned in 1986 and founded
FCI Inc., a human resource consulting firm specializing 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. Mr. Sheeran
is president of FCI, Inc.
PAGE 6
Continuing Class II Directors (with terms expiring in 1999):
Dennis L. Yakobson, President, Chief Executive Officer, Director and
Chairman of the Board--
Mr. Yakobson, age 61, 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 administrator. 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.
John P. Diesel, Director--
Mr. Diesel, age 71, 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. 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, held a series of
manufacturing officer positions, including group vice president. 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
aircraft carriers Nimitz class and Los Angeles class submarines. In 1977
he moved to the position of Executive Vice President of Tenneco, Inc.,
with responsibility for their automotive, farm and construction equipment
and packaging businesses. In 1978 he became President and a director of
Tenneco. 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 Corp., Allied Stores, Pullman
Corporation, Cooper Industries and Financial Institutions Reinsurance
Group. He continues to serve on the Board of Telepad Corporation.
Continuing Class III Directors (with terms expiring in 2000):
Erich W. Tiepel, Director--
Dr. Tiepel, age 54, 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
PAGE 7
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.
John J. Ball, Director--
Mr. Ball, age 55, 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 called to the Nova Scotia Bar in
1970 and the Ontario Bar in 1971. After his call to the Bar he joined
the firm of McMillan Binch, Toronto, as an associate from 1971 to 1975.
He then formed Broadhurst & Ball, Mississauga, as a partner from 1975 to
1984 and subsequently formed Keyser Mason Ball, Mississauga, as a senior
partner from 1984 to present. He has been and is the Managing Partner of
Keyser Mason Ball for over 10 years. He is presently a director of The
Mississauga Hospital Chair of the Bio-Ethics Committee and is 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 and is
a past Chair of the Vanier Corp., the Canadian National University
Football Championship.
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 1998 STOCK OPTION PLAN
The stockholders are asked to consider and vote upon a proposal to
approve the 1998 Stock Option Plan (1998 Plan) which was adopted by the
Board of Directors on January 15, 1998 subject to stockholder approval.
The primary provisions of the 1998 Plan are described in the following
paragraphs.
PAGE 8
The Board of Directors believes that the 1998 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 1998 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 1998 Plan.
Summary of the 1998 Plan:
Shares Subject to the 1998 Plan. The aggregate number of shares of
the Company's common stock that may be issued to grantees under the 1998
Plan is 500,000 shares. The shares may be unissued shares or treasury
shares. The 1998 Plan provides for appropriate adjustment in the number
of shares subject to the 1998 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 1998 Plan after January 15, 2008, but awards
granted prior to or on that date may extend beyond it.
Administration. The 1998 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 1998
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 1995 Plan. As of
July 1, 1998, 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
1998. It is not possible to predict the number of employees who will be
selected to receive grants under the 1998 Plan, and the number of
grantees could vary from time to time.
Stock Options. Options granted under the 1998 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
PAGE 9
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 15, 1998, the average of the closing bid and asked prices of
a share of common stock was $.82). 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.
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 the Company upon the grant of an ISO or
NSO. Otherwise, however, ISOs and NSOs are treated differently for
income tax purposes.
PAGE 10
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.
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 1998 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 1998
Plan, (ii) change the employees or class of employees eligible to
participate in the 1998 Plan, or (iii) extend the maximum option period
as provided in the 1998 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 executive officers named in the tables under "Executive Compensation"
and by all executive officers and directors as a group:
PAGE 11
Percent
of Class
Amount and Nature Based on
Positions and of Beneficial Common Beneficial
Name and Address Offices Held Stock Ownership(1) Ownership
- ---------------- ------------- -------------------- ----------
John J. Ball Director 0 of record *
201 City Centre Dr., Suite 701 (10,000 indirectly)(1)
Mississauga, Ontario L5B 2T4
Charles B. Benham Vice President- 275,440 of record 2.2%
12878 W. 68th Avenue Research and (488,380 indirectly)(1)
Arvada, CO 80004 Development
Mark S. Bohn Director 443,431 of record 2.1%
1614 Tamarac Drive (301,592 indirectly)(1)
Golden, CO 80401
Ronald C. Butz Vice President, Chief 521,583 of record(2) 2.9%
711 Marion Street Operating Officer, (508,380) indirectly)(1)
Denver, CO 80218 Secretary and Director
John P. Diesel Director 0 of record *
1224 U.S. Highway #1, Suite D (10,000 indirectly)(1)
North Palm Beach, FL 33408
Frank L. Livingston Vice President and 40,000 of record *
6000 13th Avenue Manager, Okon, Inc. (66,000 indirectly)(1)
Lakewood, CO 80214
James P. Samuels Vice President-Finance, 100,000 of record 2.0%
1331 17th Street, Suite 720 Chief Financial Officer (599,500 indirectly)(1)(3)
Denver, CO 80202
Douglas L. Sheeran Director 0 of record *
c/o FCI, Inc. (10,00 indirectly)(1)
621 Shrewsbury Avenue
Shrewsbury, NJ 07702
Erich W. Tiepel Director 123,277 of record 1.1%
2494 Houston Waring Cir. (292,448 indirectly)(1)
Littleton, CO 80120
Dennis L. Yakobson President, Chief 350,354 of record 2.5%
8847 Norwich Street Executive Officer (519,900 indirectly)(1)
Westminster, CO 80030 and Director
All Directors and Executive Officers and Directors 1,854,085 of record(2) 13.4%
Officers as a Group (2,834,200 indirectly)(1)(3) (5.3% of record)
(10 persons)
- ---------------
* Less than 1%
(1) Includes shares of common stock underlying presently exercisable stock options.
(2) Includes 357,432 shares of common stock held of record by his spouse as to which shares he denies beneficial
ownership.
(3) Includes shares of common stock underlying presently convertible promissory note.
PAGE 12
EXECUTIVE OFFICERS OF THE COMPANY
Certain information regarding the executive officers of the Company
follows:
Officer
of the
Positions Held Company
Name Age With Company Since
---- --- -------------- -------
Dennis L. Yakobson 61 President, Chief Executive 1981
Officer, Chairman of the Board
Charles B. Benham 61 Vice President - Research & 1981
Development
Ronald C. Butz 60 Vice President, Chief Operating 1984
Officer, Secretary and Director
Frank L. Livingston 55 Vice President and General 1997
Manager, Okon, Inc.
James P. Samuels 51 Vice President-Finance, Chief 1996
Financial Officer
Frank L. Livingston, Vice President and General Manager, Okon,
Inc.--
Mr. Livingston, age 55, received a Bachelor of Science Degree in
Chemistry from Colorado State University in 1965. He worked for
Mallinckrodt Chemical Co. from 1965 to 1971. While at Mallinckrodt
Chemical Co., he worked as a process research chemist and formulator
prior to becoming a specialty marketing manager for the industrial
chemical division. 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. Mr. Livingston joined Okon, Inc. in 1975
as sales manager and was promoted to Vice President of Sales in 1984.
Mr. Livingston also became a 24% owner of the company at that time. In
addition to his sales and marketing responsibilities, he was also
responsible for manufacturing and research and development for the
company. Mr. Livingston also served on the Board of Directors. With the
sale of Okon, Inc. to Rentech in 1997, Mr. Livingston became Vice
President and General Manager for Okon, Inc. and continues to serve on
Okon's Board of Directors.
PAGE 13
James P. Samuels, Vice President - Finance, Chief Financial
Officer--
Mr. Samuels, age 51, 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 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
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.
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.
PAGE 14
EXECUTIVE COMPENSATION
Employment Contracts
The Company employs Messrs. Yakobson, Benham and Butz, pursuant to
employment contracts which extend through March 31, 1999. The contracts
provide for annual cost of living adjustments. Mr. Samuels is employed
pursuant to an employment contract that extends to December 31, 1998.
Mr. Livingston is employed according to a contract that extends to March
14, 2000.
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. 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. 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 $100,000.
Summary Compensation Table
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
--------------------------------- ------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted All
Name and Annual Stock LTIP Other
Principal Bonus Compen- Award(2) Options/ Payouts Compen-
Position Year Salary($) ($) sation($) ($) SARs (#) ($) sation($)
- --------- ---- --------- ----- -------- ---------- -------- ------- ---------
Dennis L. Yakobson 1997 $112,184 --- --- --- 462,400 --- ---
Chief Executive 1996 60,937(1) --- --- --- --- --- ---
Officer 1995 102,486 --- --- --- 79,382 --- ---
Ronald C. Butz, Vice 1997 $108,296 --- --- --- 450,880 --- ---
President - Legal 1996 58,825(1) --- --- --- --- --- ---
& Finance 1995 98,934 --- --- --- 79,382 --- ---
Charles B. Benham 1997 $108,296 --- --- --- 450,880 --- ---
Vice President- 1996 58,825(1) --- --- --- --- --- ---
Research & 1995 98,934 --- --- --- 79,382 --- ---
Development
James P. Samuels 1997 $ 94,731 --- --- --- 450,880 --- ---
Chief Financial 1996 24,500(1) --- --- --- --- --- ---
Officer
- --------------
(1) For 1996, the period consisted of the nine months ended September 30, 1996.
PAGE 15
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 last fiscal year:
Aggregated Options/SAR Exercises
in Last Fiscal Year and FY-End Option/SAR Values:
(a) (b) (c) (d) (e)
Number of Securities Value of
Shares Underlying Unexercised Unexercised In-the-Money
Acquired Value Options/SARs at FY-End (#) Options/SARs at FY End($)
Name on Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------- -------------- ----------- ------------------------- -------------------------
Dennis L. Yakobson --- --- 462,400(1) $622,525
Ronald C. Butz --- --- 450,880(1) 606,685
Charles C. Benham --- --- 450,880(1) 606,685
James P. Samuels --- --- 530,000(1) 703,250
- ---------------
(1) Exercisable.
Option/SAR Repricings
There have been no adjustments or amendments to the exercise price
of stock options or SARs previously awarded to any of the named executive
officers, whether through amendment, cancellation or replacement grants
or any other means during the last fiscal year.
Option/SAR Grants in Last Fiscal Year*
Individual Grants
(a) (b) (c) (d) (e)
Number of % of Total Market
Securities Options/SARs Exercise Price on
Underlying Granted to or Base Date of Expi-
Options/SARs Employees in Price Grant ration
Name Granted(#) Fiscal Year ($/Sh) ($/Sh)* Date
- ------------------ ------------ ------------ -------- -------- -----
Dennis L. Yakobson 30,000 7.9% .1875 .1875 12/03/01
20,000 14.1% .25 .25 03/06/02
332,400 21.1% 1.25 1.25 05/13/00
10,000 6.7% .25 .25 07/07/02
70,000 16.3% .30 .30 09/10/02
Ronald C. Butz 30,000 7.9% .1875 .1875 12/03/01
20,000 14.1% .25 .25 03/06/02
320,880 20.5% 1.25 1.25 05/13/00
10,000 6.7% .25 .25 07/07/02
70,000 16.3% .30 .30 09/10/02
Charles B. Benham 30,000 7.9% .1875 .1875 12/03/01
20,000 14.1% .25 .25 03/06/02
320,880 20.5% 1.25 1.25 05/13/00
10,000 6.7% .25 .25 07/07/02
70,000 16.3% .30 .30 09/10/02
James P. Samuels 200,000 52.6% .1875 .1875 12/03/01
10,000 7.0% .25 .25 03/06/02
250,000 15.9% 1.25 1.25 03/13/00
10,000 6.7% .25 .25 07/07/02
60,000 14.0% .30 .30 09/10/02
- ---------------
* The market price is determined by averaging the closing bid and ask price on the date of
grant.
PAGE 16
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.
Bonuses are payable only if such pre-tax earnings exceed $500,000 for the
year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Erich W. Tiepel, a director, owns 50 percent of Resource
Technologies Group, Inc. The Company contracted with Resource
Technologies Group to conduct an environmental audit for $3,745, which
was discharged during the 9-month period ended September 30, 1996 through
issuance of 18,724 in restricted shares of the Company's common stock and
a warrant expiring September 20, 1997 to purchase the same number of
shares of common stock at $.25 per share. There were no payments during
the fiscal year ended September 30, 1997.
Mark S. Bohn, a director, performed engineering consulting services
for the Company during the nine months ended September 30, 1996 and, in
lieu of cash payment, was issued 91,046 shares of restricted stock and
warrants expiring September 20, 1997 for the purchase of $.25 per share
of the same number of shares of Common Stock as he was issued in lieu of
salary. There were no payments during the fiscal year ended September
30, 1997.
During the nine months ended September 30, 1996, certain sums that
the Company owed its officers for salaries were discharged by the
issuance of the Company's unregistered common stock issued at $.20 per
share. The number of such shares issued were 160,440 to Charles B.
Benham, 91,046 to Mark S. Bohn, 1 60,440 to Ronald C. Butz and 166,200 to
Dennis L. Yakobson, respectively. Each of them were also issued warrants
expiring September 20, 1997 for the purchase at $.25 per share of the
same number of shares of common stock as they were issued in lieu of
salary.
On August 18, 1997, James P. Samuels was one of four individuals who
loaned the Company $390,000 to pay all remaining obligations on the
preferred stock. Mr. Samuels' loan was $90,000. It is evidenced by a
promissory note due February 15, 1998. All notes bear interest at 20%
per annum. The principal amount of the notes along with accumulated
interest were paid in full on January 29, 1998. Additionally options to
purchase 55,000 shares of common stock at the then-market price of $.25
per share were granted for each $100,000 of the loan.
PAGE 17
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.
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
provided 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, except
that James P. Samuels filed a Form 4 report on October 10, 1997 that was
originally due on September 10, 1997 to report acquisition of a promissory
note convertible into common stock. .
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 1998 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
statements.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1999 annual
meeting of Stockholders must be received by the Company on or before March
15, 1999, in order to be eligible for inclusion in the Company's proxy
statement 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,
Ronald C. Butz, Secretary
May 16, 1998
PAGE 18
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 Mark A. Koenig
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 April 20, 1998 by
the undersigned at the annual meeting of shareholders to be held at
Courtyard by Marriott, Cosmopolitan Room, 934 16th Street, Denver, Colorado
on June 24, 1998 at 9:00 a.m. local time, and at any adjournment 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 2001 and until his successor is elected and
qualified:
Ronald C. Butz Douglas L. Sheeran
(INSTRUCTION: Mark only one box. To withhold authority to vote for
any individual nominee, write that nominee's name in the space provided
below.)
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2. FOR / / AGAINST / / approval of the 1998 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 19
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: , 1998
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-------------------------------------------------
-------------------------------------------------
Signature
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.