EXHIBIT 10.5
RENTECH, INC.
2001 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Establishment. Rentech, Inc., a Colorado corporation ("Company"),
hereby establishes a stock option plan for key employees, directors, and
consultants providing material services to the Company, as described herein,
which shall be known as the "2001 Stock Option Plan" (the "Plan"). It is
intended that certain of the options issued to employees pursuant to the Plan
may constitute incentive stock options within the meaning of Section 422A of the
Internal Revenue Code and that other options issued pursuant to the Plan shall
constitute nonstatutory options. The Board of Directors shall determine which
options are to be incentive stock options and which are to be nonstatutory
options and shall enter into option agreements with recipients accordingly.
1.2 Purpose. The purpose of this Plan is to enhance shareholder
investment by attracting, retaining and motivating key employees, directors and
consultants of the Company, and to encourage stock ownership by such persons by
providing them with a means to acquire a proprietary interest in the Company's
success, and to align the interests of management with those of shareholders.
ARTICLE II
DEFINITIONS
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2.1 Definitions. Whenever used herein, the following terms shall have
the respective meanings set forth below, unless the context clearly requires
otherwise, and when said meaning is intended, the term shall be capitalized.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" shall mean the Committee provided by Article
IV hereof, which may be created at the discretion of the Board.
(d) "Company" means Rentech, Inc., a Colorado corporation.
(e) "Consultant" means any person or entity, including a
Parent Corporation or a Subsidiary Corporation, that provides services
(other than as an Employee) to the Company, a Parent Corporation or a
Subsidiary Corporation, and shall include a Non-Employee Officer or
Non-Employee Director, as defined subsequently.
(f) "Date of Exercise" means the date the Company receives
notice, by an Optionee, of the exercise of an Option pursuant to
Section 8.1 of this Plan. Such notice shall indicate the number of
shares of Stock the Optionee intends to exercise.
(g) "Employee" means any person, including an officer or
director of the Company or a Subsidiary Corporation, who is employed by
the Company or a Subsidiary Corporation.
(h) "Fair Market Value" means the fair market value of Stock
upon which an option is granted under this Plan, determined as the
average of the closing bid and asked prices of the Stock, as reported
by Nasdaq.
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(i) "Incentive Stock Option" means an Option granted under
this Plan which is intended to qualify as an "incentive stock option"
within the meaning of Section 422A of the Code.
(j) "Non-Employee Director" means a member of the Board who is
not an employee of the Company at the time an Option is granted
hereunder.
(k) "Non-Employee Officer" means an officer of the Company who
is not an employee of the Company at the time an Option is granted
hereunder.
(l) "Nonstatutory Option" means an Option granted under this
Plan which is not intended to qualify as an incentive stock option
within the meaning of Section 422A of the Code. Nonstatutory Options
may be granted at such times and subject to such restrictions as the
Board shall determine without conforming to the statutory rules of
Section 422A of the Code applicable to incentive stock options.
(m) "Option" means the right, granted under this Plan, to
purchase Stock of the Company at the option price for a specified
period of time. For purposes of this Plan, an Option may be either an
Incentive Stock Option or a Nonstatutory Option.
(n) "Optionee" means an Employee or Consultant holding an
Option under the Plan.
(o) "Parent Corporation" shall have the meaning set forth in
Section 425(e) of the Code with the Company being treated as the
employer corporation for purposes of this definition.
(p) "Subsidiary Corporation" shall have the meaning set forth
in Section 425(f) of the Code with the Company being treated as the
employer corporation for purposes of this definition.
(q) "Significant Shareholder" means an individual who, within
the meaning of Section 422A(b)(6) of the Code, owns stock possessing
more than ten percent of the total combined voting power of all classes
of stock of the Company or of any Parent Corporation or Subsidiary
Corporation of the Company. In determining whether an individual is a
Significant Shareholder, an individual shall be treated as owning stock
owned by certain relatives of the individual and certain stock owned by
corporations in which the individual is a shareholder, partnerships in
which the individual is a partner, and estates or trusts of which the
individual is a beneficiary, all as provided in Section 425(d) of the
Code.
(r) "Stock" means the $.01 par value common stock of the
Company.
2.2 Gender and Number. Except when otherwise indicated by the context,
any masculine terminology when used in this Plan also shall include the feminine
gender, and the definition of any term herein in the singular also shall include
the plural.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
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3.1 Eligibility and Participation. All Employees are eligible to
participate in this Plan and receive either or both Incentive Stock Options and
Nonstatutory Options under the Plan. All Consultants are eligible to participate
in this Plan and receive Nonstatutory Options hereunder. Optionees in the Plan
shall be selected by the Board, in its sole discretion, from among those
Employees and Consultants who, in the opinion of the Board, are in a position to
contribute materially to the Company's continued growth and development and to
its long-term financial success.
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ARTICLE IV
ADMINISTRATION
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4.1 Administration. The Board shall be responsible for administering
the Plan.
(a) The Board is authorized to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the
Plan; to provide for conditions and assurances deemed necessary or
advisable to protect the interests of the Company; and to make all
other determinations necessary or advisable for the administration of
the Plan. Determinations, interpretations, or other actions made or
taken by the Board, pursuant to the provisions of this Plan, shall be
final and binding and conclusive for all purposes and upon all persons.
(b) At the discretion of the Board this Plan may be
administered by a Committee which shall be an executive committee of
the Board, consisting of not less than two members of the Board. The
members of such Committee may be directors who are eligible to receive
Options under this Plan, but Options may be granted to such persons
only by action of the full Board and not by action of the Committee. If
the Company determines that grant of Options by the full Board to
members of the Committee may not exempt the shares of Committee members
from the provisions of Rule 16b-3 under the Securities Exchange Act of
1934, this Plan, without further action, hereby authorizes and grants
options to purchase 10,000 shares each to each member of the Committee
for each year of continuous service on the Committee, except that, (i)
any Committee member, for any year, may elect not to accept an option
to purchase 10,000 shares or may elect to accept options for the
purchase of less than 10,000 shares; and (ii) if any Committee member
elects, for any year, to receive no option or an option to purchase
less than 10,000 shares for that year, that option shall be deemed
permanently waived, shall not cumulate, and shall not be available in
any future year. Such options shall be exercisable at the fair market
value of the Stock on the date of grant and shall have the same term
and may be exercised in installments as provided in Section 7.3 of this
Plan. Such Committee shall have full power and authority, subject to
the limitations of the Plan and any limitations imposed by the Board,
to construe, interpret and administer this Plan and to make
determinations which shall be final, conclusive and binding upon all
persons, including, without limitation, the Company, the shareholders,
the directors and any persons having any interests in any Options which
may be granted under this Plan, and, by resolution or resolutions
providing for the creation and issuance of any such Option, to fix the
terms upon which, the time or times at or within which, and the price
or prices at which any such shares may be purchased from the Company
upon the exercise of such Option. Such terms, time or times and price
or prices shall, in every case, be consistent with the provisions of
this Plan, and shall be set forth or incorporated by reference in the
instrument or instruments evidencing such Option.
(c) If the Committee has been appointed, the Board may from
time to time remove members from, or add members to, the Committee. The
Board may terminate the Committee at any time. Vacancies on the
Committee, howsoever caused, shall be filled by the Board. The
Committee shall select one of its members as Chairman, and shall hold
meetings at such times and places as the Chairman may determine. A
majority of the Committee at which a quorum is present, or acts reduced
to or approved in writing by all of the members of the Committee, shall
be the valid acts of the Committee. A quorum shall consist of a
majority of the members of the Committee.
(d) Where the Committee has been created by the Board,
references in this Plan to actions to be taken by the Board shall be
deemed to refer to the Committee as well, except where limited by this
Plan or by the Board.
(e) The Board shall have all of the enumerated powers of the
Committee, but shall not be limited to such powers. No member of the
Board or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted under
it.
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4.2 Special Provisions for Grants to Officers or Directors. Rule 16b-3
under the Securities and Exchange Act of 1934 (the "Act") provides that the
grant of a stock option to a director or officer of a company subject to the Act
will be exempt from the provisions of Section 16(b) of the Act if the conditions
set forth in said Rule are satisfied. Unless otherwise specified by the Board,
grants of Options hereunder to individuals who are officers or directors of the
Company shall be made in a manner that satisfies the conditions of said Rule.
ARTICLE V
STOCK SUBJECT TO THE PLAN
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5.1 Number. The total number of shares of Stock hereby made available
and reserved for issuance under the Plan shall be 500,000 shares for Incentive
Stock Options and Nonstatutory Stock Options. The aggregate number of shares of
Stock available under this Plan shall be subject to adjustment as provided in
Section 5.3. The total number of shares of Stock may be authorized but unissued
shares of Stock, or Shares acquired by purchase as directed by the Board from
time to time in its discretion, to be used for issuance upon exercise of Options
granted hereunder.
5.2 Unused Stock. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares of Stock subject
thereto shall (unless the Plan shall have terminated) become available for other
Options under the Plan.
5.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock by reason of a stock dividend or split,
recapitalization, reclassification, or other similar corporate change, the
aggregate number of shares of Stock remaining subject to the Plan and to Options
previously granted shall be appropriately adjusted by the Board, whose
determination shall be conclusive; provided however, that fractional shares
shall be rounded to the nearest whole share. In any such case, the number and
kind of shares that are subject to any Option (including any Option outstanding
after termination of employment) and the Option price per share shall be
proportionately and appropriately adjusted without any change in the aggregate
Option price to be paid therefor upon exercise of the Option.
ARTICLE VI
DURATION OF THE PLAN
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6.1 Duration of the Plan. Subject to approval of shareholders, the Plan
shall be in effect for ten years from the date of its adoption by the Board. Any
Options outstanding at the end of said period shall remain in effect in
accordance with their terms. The Plan shall terminate before the end of said
period if all Stock subject to it has been purchased pursuant to the exercise of
Options granted under the Plan.
ARTICLE VII
TERMS OF STOCK OPTIONS
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7.1 Grant of Options. Subject to Section 5.1, Options may be granted to
Employees or Consultants at any time and from time to time as determined by the
Board; provided, however, that Consultants may receive only Nonstatutory Options
and may not receive Incentive Stock Options. The Board shall have complete
discretion in determining the terms and conditions and number of Options granted
to each Optionee. In making such determinations, the Board may take into account
the nature of services rendered by such Employees or Consultants, their present
and potential contributions to the Company and its Subsidiary Corporations, and
such other factors as the Board in its discretion shall deem relevant. The Board
also shall determine whether an Option is to be an Incentive Stock Option or a
Nonstatutory Option.
(a) In the case of Incentive Stock Options, the total Fair
Market Value (determined at the date of grant) of shares of Stock with
respect to which incentive stock options granted after December 31,
1986 are exercisable for the first time by the Optionee during any
calendar year under all plans of the Company under which incentive
stock options may be granted (and all such plans of any Parent
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Corporations and any Subsidiary Corporations of the Company) shall not
exceed $100,000. Hereinafter, this requirement is sometimes referred to
as the "$100,000 Limitation".
(b) Nothing in this Article VII of the Plan shall be deemed to
prevent the grant of Options permitting exercise in excess of the
maximums established by the preceding paragraph where such excess
amount is treated as a Nonstatutory Option.
(c) The Board is expressly given the authority to issue
amended or replacement Options with respect to shares of Stock subject
to an Option previously granted hereunder. An amended Option amends the
terms of an Option previously granted and thereby supersedes the
previous Option. A replacement Option is similar to a new Option
granted hereunder except that it provides that it shall be forfeited to
the extent that a previously granted Option is exercised, or except
that its issuance is conditioned upon the termination of a previously
granted Option.
(d) The date of grant of an Option is either the date it is
granted or such other date as may be designed at the time of the award
of the Option.
7.2 No Tandem Options. Where an Option granted under this Plan is
intended to be an Incentive Stock Option, the Option shall not contain terms
pursuant to which the exercise of the Option would affect the Optionee's right
to exercise another Option, or vice versa, such that the Option intended to be
an Incentive Stock Option would be deemed a tandem stock option within the
meaning of the regulations under Section 422A of the Code.
7.3 Option Agreement: Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an Option agreement (the "Option Agreement") that includes the
non-transferability provisions required by Section 10.2 hereof and specifies:
whether the Option is an Incentive Stock Option or a Nonstatutory option; the
Option price; the duration of the Option; the number of shares of Stock to which
the Option applies; any vesting or exercisability restrictions which the Board
may impose; in the case of an Incentive Stock Option, a provision implementing
the $100,000 Limitation; and any other terms or conditions which the Board may
impose. All such terms and conditions shall be determined by the Board at the
time of grant of the Option.
(a) If not otherwise specified by the Board, the following
terms and conditions shall apply to Options granted under the Plan:
(i) Term. The duration of the Option shall be five
years from the date of grant.
(ii) Exercise of Option. Unless an Option is
terminated as provided hereunder, an Optionee may exercise his
Option for up to, but not in excess of, the amounts of shares
subject to the Option specified hereafter in this section,
based on the Optionee's number of years of continuous service
with the Company or a Subsidiary Corporation from the date on
which the Option is granted. In the case of an Optionee who is
an Employee, continuous service shall mean continuous
employment; in the case of an Optionee who is a Consultant,
continuous service shall mean the continuous provision of
consulting services. In applying said limitations, the amount
of shares, if any, previously purchased by the Optionee under
the Option shall be counted in determining the amount of
shares the Optionee can purchase at any time. The Optionee may
exercise his Option in the following amounts:
(A) After one year of such continuous
services, up to but not in excess of twenty percent
of the shares originally subject to the Option;
(B) After two years of such continuous
services, up to but not in excess of forty percent of
the shares originally subject to the Option;
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(C) After three years of such continuous
services, up to but not in excess of sixty percent of
the shares originally subject to the Option;
(D) After four years of such continuous
services, up to but not in excess of eighty percent
of the shares originally subject to the Option; and
(E) At the expiration of the fifth year of
such continuous services, the Option may be
exercised, in whole or in part, and at any time and
from time to time within its term but it shall not be
exercisable after the expiration of five years from
the date on which it was granted.
(b) The Board shall be free to specify terms and conditions
other than those set forth above, in its discretion.
(c) All Option Agreements shall incorporate the provisions of
this Plan by reference, with certain provisions to apply depending upon
whether the Option Agreement applies to an Incentive Stock Option or to
a Nonstatutory Option.
7.4 Option Price. No Incentive Stock Option granted pursuant to this
Plan shall have an Option price that is less than the Fair Market Value of Stock
on the date the Option is granted. Incentive Stock Options granted to
Significant Shareholders shall have an Option price of not less than 110 percent
of the Fair Market Value of Stock on the date of grant. The Option price for
Nonstatutory Options shall be established by the Board and shall not be subject
to the restrictions applicable to Incentive Stock Options.
7.5 Term of Options. Each Option shall expire at such time as the Board
shall determine when it is granted, provided however that under no circumstances
shall a Nonstatutory Option be exercisable later than the tenth anniversary date
of its grant, nor by its terms, shall an Incentive Stock Option granted to a
Significant Shareholder be exercisable later than the fifth year from the
anniversary date of its grant.
7.6 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Board shall in each instance approve, which need not be the same for all
Optionees.
7.7 Payment. Payment for all shares of Stock shall be made at the time
that an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment has been made. Payment shall be made (i) in cash, or (ii) if
acceptable to the Board, in Stock or in some other form; provided, however, in
the case of an Incentive Stock Option, that said other form of payment does not
prevent the Option from qualifying for treatment as an incentive stock option
within the meaning of the Code.
ARTICLE VIII
WRITTEN NOTICE, ISSUANCE OF STOCK
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CERTIFICATES. SHAREHOLDER PRIVILEGES
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8.1 Written Notice. An Optionee wishing to exercise an Option shall
give written notice to the Company, in the form and manner prescribed by the
Board. Full payment for the shares exercised pursuant to the Option must
accompany the written notice.
8.2 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall deliver to the Optionee
or to a permitted nominee of the Optionee a certificate or certificates for the
requisite number of shares of stock.
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8.3 Privileges of a Shareholder. An Optionee or any other person
entitled to exercise an Option under this Plan shall not have stockholder
privileges with respect to any Stock covered by the Option until the date of
issuance of a stock certificate for such stock.
ARTICLE IX
TERMINATION OF EMPLOYMENT OR SERVICES
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9.1 Death. If an Optionee's employment in the case of an Employee, or
provision of services as a Consultant, in the case of a Consultant, terminates
by reason of death, the Option may thereafter be exercised at any time prior to
the expiration date of the Option or within 12 months after the date of such
death, whichever period is the shorter, by the person or persons entitled to do
so under the Optionee's will or, if the Optionee shall fail to make a
testamentary disposition of an Option or shall die intestate, the Optionee's
legal representative or representatives. The Option shall be exercisable only to
the extent that such Option was exercisable as of the date of death.
9.2 Termination other than for Cause or Due to Death. In the event of
an Optionee's termination of employment, in the case of an Employee, or
termination of the provision of services as a Consultant, in the case of a
Consultant, other than by reason of death, the Optionee may exercise such
portion of his Option as was exercisable by him at the date of such termination
(the "Termination Date") at any time within three months of the Termination
Date; provided, however, that where the Optionee is an Employee, and is
terminated due to disability within the meaning of Code 422A, he may exercise
such portion of his Option as was exercisable by him on his Termination Date
within one year of his Termination Date. In any event, the Option cannot be
exercised after the expiration of the term of the Option. Options not exercised
within the applicable period specified above shall terminate.
(a) In the case of an Employee, a change of duties or position
within the Company or an assignment of employment in a Subsidiary
Corporation or Parent Corporation of the Company, if any, or from such
a Corporation to the Company, shall not be considered a termination of
employment for purposes of this Plan.
(b) The Option Agreements may contain such provisions as the
Board shall approve with reference to the effect of approved leaves of
absence upon termination of employment.
9.3 Termination for Cause. In the event of an Optionee's termination of
employment, in the case of an Employee, or termination of the provision of
services as a Consultant, in the case of a Consultant, which termination is by
the Company or a Subsidiary Corporation for cause, any Option or Options held by
him under the Plan, to the extent not exercised before such termination, shall
terminate upon notice of termination for cause.
ARTICLE X
RIGHTS OF OPTIONEES
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10.1 Service. Nothing in this Plan shall interfere with or limit in any
way the right of the Company or a Subsidiary Corporation to terminate any
Employee's employment, or any Consultant's services, at any time, nor confer
upon any Employee any right to continue in the employ of the Company or a
Subsidiary Corporation, or upon any Consultant any right to continue to provide
services to the Company or a Subsidiary Corporation.
10.2 Non-transferability. All Options granted under this Plan shall be
non-transferable by the Optionee, other than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only by
the Optionee. No Option may be assigned, pledged, hypothecated or otherwise
alienated or encumbered (whether by operation of law or otherwise), and any
attempt to do so shall be null and void.
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ARTICLE XI
OPTIONEE-EMPLOYEE'S TRANSFER OR LEAVE OF ABSENCE
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11.1 Optionee-Employee's Transfer or Leave of Absence. For purposes of
this Plan:
(a) A transfer of an Optionee who is an Employee from the
Company to a Subsidiary Corporation or Parent Corporation, or from one
such Corporation to another, or
(b) A leave of absence for such an Optionee (i) which is duly
authorized in writing by the Company or a Subsidiary Corporation, and
(ii) if the Optionee holds an Incentive Stock Option, which qualifies
under the applicable regulations under the Code which apply in the case
of incentive stock options, shall not be deemed a termination of
employment. However, under no circumstances may an Optionee exercise an
Option during any leave of absence, unless authorized by the Board.
ARTICLE XII
AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN
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12.1 Amendment, Modification an d Termination of the Plan.
(a) The Board may at any time terminate, and from time to time
may amend or modify the Plan; provided, however, that no such action of
the Board, without approval of the shareholders, may:
(i) increase the total amount of Stock which may be
purchased through Options granted under the Plan, except as
provided in Article V;
(ii) change the class of Employees or Consultants
eligible to receive Options; or
(iii) extend the maximum option period provided in
this Plan.
(b) No amendment, modification, or termination of the Plan
shall in any manner adversely affect any outstanding Option under the
Plan without the consent of the Optionee holding the Option.
ARTICLE XIII
ACQUISITION, MERGER OR LIQUIDATION
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13.1 Acquisition.
(a) In the event that an Acquisition occurs with respect to
the Company, the Company shall have the option, but not the obligation,
to cancel Options outstanding as of the effective date of Acquisition,
whether or not such Options are then exercisable, in return for payment
to the Optionees of an amount equal to a reasonable estimate of an
amount (hereinafter the "Spread") equal to the difference between the
net amount per share payable in the Acquisition or as a result of the
Acquisition, less the exercise price of the Option. In estimating the
Spread, appropriate adjustments to give effect to the existence of the
Options shall be made, such as deeming the Options to have been
exercised, with the Company receiving the exercise price payable
thereunder, and treating the stock receivable upon exercise of the
Options as being outstanding in determining the net amount per share.
(b) For purposes of this section, an "Acquisition" means any
transaction in which substantially all of the Company's assets are
acquired or in which a controlling amount of the Company's outstanding
shares of Stock are acquired, in each case by a single person or entity
or an affiliated group of persons and entities. For purposes of this
section, a controlling amount shall mean more than 50% of the issued
and outstanding shares of Stock of the Company. The Company shall have
such an option regardless of how the Acquisition is effectuated,
whether by direct purchase, through a merger or similar corporate
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transaction, or otherwise. In cases where the acquisition consists of
the acquisition of assets of the Company, the net amount per share
shall be calculated on the basis of the net amount receivable with
respect to shares upon a distribution and liquidation by the Company
after giving effect to expenses and charges, including but not limited
to taxes, payable by the Company before the liquidation can be
completed.
(c) Where the Company does not exercise its option under this
Section 13.1 the remaining provisions of this Article XIII shall apply,
to the extent applicable.
13.2 Merger or Consolidation. Subject to any required action by the
shareholders, if the Company shall be the surviving corporation in any merger or
consolidation, any option granted under this Plan shall pertain to and apply to
the securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled in such merger or consolidation.
13.3 Other Transactions. A dissolution or a liquidation of the Company
or a merger and consolidation in which the Company is not the surviving
corporation shall cause every Option outstanding hereunder to terminate as of
the effective date of such dissolution, liquidation, merger or consolidation.
However, the Optionee either (i) shall be offered a firm commitment whereby the
resulting or surviving corporation in a merger or consolidation will tender to
the Optionee an option (the "Substitute Option") to purchase its shares on terms
and conditions both as to number of shares and otherwise, that will
substantially preserve to the Optionee the rights and benefits of the Option
outstanding hereunder granted by the Company, or (ii) shall have the right
immediately prior to such dissolution, liquidation, merger, or consolidation to
exercise any unexercised Options whether or not then exercisable, subject to the
provisions of this Plan. The Board shall have absolute and uncontrolled
discretion to determine whether the Optionee has been offered a firm commitment
and whether the tendered Substitute Option will substantially preserve to the
Optionee the rights and benefits of the Option outstanding hereunder. In any
event, any Substitute Option for an Incentive Stock Option shall comply with the
requirements of Code Section 425(a).
ARTICLE XIV
SECURITIES REGISTRATION
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14.1 Securities Registration. In the event that the Company shall deem
it necessary or desirable to register under the Securities Act of 1933, as
amended, or any other applicable statute, any Options or any Stock with respect
to which an Option may be or shall have been granted or exercised, or to qualify
any such Options or Stock under the Securities Act of 1933, as amended, or any
other statute, then the Optionee shall cooperate with the Company and take such
action as is necessary to permit registration or qualification of such Options
or Stock.
14.2 Representations. Unless the Company has determined that the
following representation is unnecessary, each person exercising an Option under
the Plan may be required by the Company, as a condition to the issuance of the
shares pursuant to exercise of the Option, to make a representation in writing
(i) that he is acquiring such shares for his own account for investment and not
with a view to, or for sale in connection with, the distribution of any part
thereof, (ii) that before any transfer in connection with the resale of such
shares, he will obtain the written opinion of counsel for the Company, or other
counsel acceptable to the Company, that such shares may be transferred. The
Company may also require that the certificates representing such shares contain
legends reflecting the foregoing.
ARTICLE XV
TAX WITHHOLDING
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15.1 Tax Withholding. Whenever shares of Stock are to be issued in
satisfaction of Options exercised under this Plan, the Company shall have the
power to require the recipient of the Stock to remit to the Company an amount
sufficient to satisfy any applicable federal, state, and local withholding tax
requirements.
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ARTICLE XVI
INDEMNIFICATION
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16.1 Indemnification. To the extent permitted by law, each person who
is or shall have been a member of the Board shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may be a party
or in which he may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company's approval, or paid by him in satisfaction
of judgment in any such action, suit, or proceeding against him, provided he
shall give the Company an opportunity, at its own expense, to handle and defend
the same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
articles of incorporation or bylaws, as a matter of law, or otherwise, or any
power that the Company or any Subsidiary Corporation may have to indemnify them
or hold them harmless.
ARTICLE XVII
REQUIREMENTS OF LAW
17.1 Requirements of Law. The granting of Options and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
17.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the state of Colorado.
ARTICLE XVIII
EFFECTIVE DATE OF PLAN
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18.1 Effective Date. The Plan shall be effective on January 16, 2001.
ARTICLE XIX
COMPLIANCE WITH CODE
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19.1 Compliance with Code. Incentive Stock Options granted hereunder
are intended to qualify as "incentive stock options" under Code 422A. If any
provision of this Plan is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with Incentive Stock
Options granted under this Plan being treated as incentive stock options under
the Code.
ARTICLE XX
NO OBLIGATION TO EXERCISE OPTION
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20.1 No Obligation to Exercise. The granting of an Option shall impose
no obligation upon the holder thereof to exercise such Option.
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THIS 2001 STOCK OPTION PLAN was adopted by the Board of Directors of
Rentech, Inc. on January 16, 2001 to be effective as of January 16, 2001. It is
to be submitted for approval by shareholders at the annual meeting of
shareholders to be held on May 8, 2001.
RENTECH, INC.
By: /s/ Dennis L. Yakobson
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Dennis L. Yakobson, President
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