EMPLOYMENT AGREEMENT Between Rentech, Inc. and Douglas M. Miller
Exhibit 10.44
THIS AGREEMENT was originally entered into and made effective as of January 20, 2006 (the
“Prior Agreement”) between Rentech, Inc. (the “Company”) and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(“Executive”) and is hereby amended and restated in its entirety as of December 31, 2008
(the “Amendment Date”).
In consideration of the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Employment. The Company has employed Executive and shall continue to employ Executive,
and Executive hereby agrees to continue employment with the Company, upon the terms and conditions
set forth in this Agreement, for the period beginning on January 20, 2006 (the “Commencement
Date”) and ending as provided in Section 4 hereof (the “Employment Period”).
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Company’s Executive Vice
President of Renewable Energy Businesses. During the Employment Period, Executive shall render
such administrative, financial and other executive and managerial services to the Company and its
affiliates (the “Company Group”) as are consistent with Executive’s position and the
by-laws of the Company and as the Chief Executive Officer (“CEO”) may from time to time
reasonably direct. Executive shall also serve for no additional compensation or remuneration as an
officer or director of such subsidiaries of the Company as may from time to time be designated by
the CEO or the Board of Directors of the Company (the “Board”).
(b) During the Employment Period, Executive shall report to the CEO and shall devote his best
efforts and his full business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs of the Company.
Executive shall perform his duties, responsibilities and functions to the Company hereunder to the
best of his abilities in a diligent, trustworthy, professional and efficient manner and shall
comply with the Company’s policies and procedures in all material respects. In performing his
duties and exercising his authority under this Agreement, Executive shall support and implement the
business and strategic plans approved from time to time by the Board and shall support and
cooperate with the Company’s efforts to operate in conformity with the business and strategic plans
approved by the Board. During the Employment Period, Executive shall not serve as an officer or
director of, or otherwise perform services for compensation for, any other entity without the prior
written consent of the Board which shall not be unreasonably withheld. Executive may serve as an
officer or director of or otherwise participate in purely educational, welfare, social, religious
and civic organizations so long as such activities do not interfere with Executive’s regular
performance of duties and responsibilities hereunder in any material respect. Nothing contained
herein shall preclude Executive from (i) engaging in charitable and community activities,
(ii) participating in industry and trade organization activities, and (iii) managing his and his
family’s personal investments and affairs; provided, that Executive shall not have any
ownership interest (of record or beneficial) in any firm, corporation, partnership, proprietorship
or other business that competes directly with the Company’s ▇▇▇▇▇▇▇-Tropsch business except for (x)
an investment of not more than 1.0% of the outstanding securities
of a company traded on a public securities exchange or (y) investments made through public
mutual funds.
3. Compensation and Benefits.
(a) The Company shall pay Executive an annual salary (the “Base Salary”) at the rate
of $300,000 in regular installments in accordance with the Company’s ordinary payroll practices (in
effect from time to time), but in any event no less frequently than monthly. Executive shall be
eligible for an annual review of his Base Salary based on performance as determined by the Board in
its sole discretion, with the first review following the Amendment Date to occur during December
2009.
(b) Bonuses and Incentive Compensation.
(i) Annual Bonus. For each fiscal year ending during the Employment Period, Executive
will be eligible to earn an annual bonus based on achievement of performance criteria established
by the Board as soon as administratively practicable following the beginning of each such fiscal
year (the “Annual Bonus”). The target amount (the “Target Bonus”) of Executive’s
Annual Bonus shall equal 50% of Executive’s Base Salary (at the annual rate in effect at the start
of the fiscal year), with a maximum Annual Bonus in an amount equal to 100% of Executive’s Base
Salary (at the annual rate in effect at the start of the fiscal year). If the Board determines, in
its sole discretion, that an Annual Bonus has become payable with respect to a fiscal year based on
the attainment of applicable performance criteria, then the Company shall pay the Annual Bonus for
each fiscal year in a single cash lump sum after the end of the Company’s fiscal year in accordance
with procedures established by the Board, but in no event later than the fifteenth day of the third
month following the end of such fiscal year. To be eligible for an Annual Bonus pursuant to this
Section 3(b), Executive must be an employee on the last day of the relevant fiscal year.
(ii) [INTENTIONALLY OMITTED]
(c) Expenses. During the Employment Period, the Company shall reimburse Executive for
all reasonable business expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement in accordance with the Company’s policies in effect from time
to time with respect to travel, entertainment and other business expenses for senior executives.
Executive shall also receive an automobile allowance of $1,000 per month, paid monthly.
(d) Other Benefits. Executive shall also be entitled to the following benefits during
the Employment Period, unless otherwise modified by the Board:
(i) participation in the Company’s retirement plans, health and welfare plans, disability
insurance plans and other benefit plans of the Company as in effect from time to time, under the
terms of such plans and to the same extent and under the same conditions such participation and
coverages are provided generally to other senior executives of the Company;
(ii) reimbursement for the reasonable costs for business travel to Denver, Colorado, including
but not limited to airfare, ground transportation and lodging;
(iii) coverage for services rendered to the Company, its subsidiaries and affiliates while
Executive is a director or officer of the Company, or of any of its subsidiaries or affiliates,
under director and officer liability insurance policy(ies) maintained by the Company from time to
time; and
(iv) five weeks of vacation per year.
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4. Termination. The Employment Period shall end on the third anniversary of the
Commencement Date; provided, however, that the Employment Period shall be
automatically renewed for successive one-year terms thereafter on the same terms and conditions set
forth herein unless either party provides the other party with notice that it has elected not to
renew the Employment Period at least 90 days prior to the end of the initial Employment Period or
any subsequent extension thereof. Notwithstanding the foregoing, (i) the Employment Period shall
terminate immediately upon Executive’s resignation (with or without Good Reason, as defined
herein), death or Disability (as defined herein) and (ii) the Employment Period may be terminated
by the Company at any time prior to such date for Cause (as defined herein) or without Cause.
Except as otherwise provided herein, any termination of the Employment Period by the Company shall
be effective as specified in a written notice from the Company to Executive, but in no event more
than 90 days from the date of such notice. The termination of the Employment Period shall not
affect the respective rights and obligations of the parties which, pursuant to the terms of this
Agreement, apply following the date of Executive’s termination of employment with the Company.
5. Severance.
(a) Termination Without Cause or for Good Reason. In the event that Executive incurs
a “separation from service” from the Company (within the meaning of Section 409A(a)(2)(A)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”) and Treasury Regulation Section
1.409A-1(h)) (“Separation from Service”) (1) by the Company without Cause (as defined
herein), or (2) by Executive for Good Reason (as defined herein), then, subject to Executive’s
execution and non-revocation of a Release substantially in the form attached as Exhibit B
within 30 days after such Separation from Service, Executive shall be entitled to the benefits set
forth below in this Section 5(a). Each payment under this Section 5(a) shall be treated as a
separate payment for purposes of Section 409A (as defined below).
(i) The Company shall pay Executive an amount equal to one times Executive’s Base Salary plus
one times Executive’s Target Bonus (as in effect on the date of Executive’s termination). The
severance amount described in the previous sentence shall be paid as follows, subject to Section 19
below: (A) the continuation of Base Salary shall be paid in substantially equal installments over a
period of one year from Executive’s Separation from Service in accordance with the payroll
practices of the Company in effect from time to time, beginning on the first payroll date occurring
on or after the thirtieth day following Executive’s Separation from Service (such payroll date, the
“First Payroll Date”) (with amounts otherwise payable prior to the First Payroll Date paid
on the First Payroll Date) and (B) the Target Bonus shall be paid on the date that executive
bonuses are paid generally for the fiscal year in which the date of termination took place, which
shall, in any event, be no earlier than the First Payroll Date and no later than two and one-half
months after the end of such fiscal year.
(ii) All stock options, restricted stock, restricted stock units (including the Executive
LTIP, as defined below) and other similar equity awards shall be governed by the terms of any
applicable equity plans and award agreements.
(iii) Executive shall be entitled to benefits mandated under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), under Section 4980B of the Code, or any
replacement or successor provision of United States tax law, subject to Executive’s valid election
to receive COBRA benefits, with the premium paid at the Company’s expense until the first to occur
of (A) eighteen months from the date of termination, (B) the expiration of the period of time
during which Executive is entitled to continuation coverage under the Company’s group health plan
under COBRA, or (C) such date that Executive becomes eligible for coverage under the group health
plan of another employer, provided, that if any plan pursuant to which such benefits are
provided is not, or ceases prior to the expiration of the period of continuation coverage to be,
exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), then
an amount equal to each remaining premium
payment shall thereafter be paid to Executive as currently taxable compensation in
substantially equal monthly installments over the continuation coverage period (or the remaining
portion thereof).
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In addition, if Executive’s employment terminates pursuant to this Section 5(a), the Company
shall pay Executive the amounts described in Section 5(d)(i), (ii) and (iii) within 30 days of the
date of termination (or such earlier date as may be mandated by applicable law) and shall pay or
provide the other benefits described in Section 5(d) in accordance therewith.
(b) Termination for Cause or Voluntary Resignation. In the event that Executive’s
employment with the Company is terminated (i) by the Board for Cause or (ii) by Executive’s
resignation from the Company for any reason other than Good Reason or Disability (as defined
herein), subject to applicable law, the Company agrees to the following:
(i) All stock options, restricted stock, restricted stock units (including the Executive LTIP)
and other similar equity awards shall be governed by the terms of any applicable equity plans and
award agreement(s); and
(ii) The Company shall pay Executive the amounts described in Section 5(d)(i), (ii) and (iii)
within 30 days of the date of termination (or such earlier date as may be mandated by applicable
law) and shall pay or provide the other benefits described in Section 5(d) in accordance therewith.
For purposes of this Agreement, Executive’s voluntary resignation or retirement shall be
considered Executive’s resignation from the Company without Good Reason.
(c) Death or Disability. In the event that Executive’s employment with the Company is
terminated as a result of Executive’s death or Disability, the Company agrees to the following:
(i) All stock options, restricted stock, restricted stock units (including the Executive LTIP)
and other similar equity awards shall be governed by the terms of any applicable equity plans and
award agreement(s); and
(ii) The Company shall pay Executive the amounts described in Section 5(d)(i), (ii) and (iii)
within 30 days of the date of termination (or such earlier date as may be mandated by applicable
law) and shall pay or provide the other benefits described in Section 5(d) in accordance therewith.
(d) Payments Upon Termination of Employment. In the case of any termination of
Executive’s employment with the Company, Executive or his estate or legal representative shall be
entitled to receive, to the extent permitted by applicable law, from the Company (i) Executive’s
Base Salary through the date of termination to the extent not previously paid, (ii) to the extent
not previously paid, the amount of any Annual Bonus earned or accrued by Executive as of the date
of termination for any fiscal year of the Company ended prior to the date of termination that is
then unpaid, (iii) any vacation pay, expense reimbursements and other cash entitlements accrued by
Executive, in accordance with Company policy for senior executives, as of the date of termination
to the extent not previously paid, and (iv) all vested benefits accrued by Executive under all
benefit plans and qualified and nonqualified retirement, pension, 401(k) and similar plans and
arrangements of the Company, in such manner and at such times as are provided under the terms of
such plans and arrangements. Except as provided in Section 5(e) below, if applicable, all stock
options, restricted stock, restricted stock units and other similar equity awards shall be governed
by the terms of any applicable equity plans and award agreement(s).
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(e) Termination Without Cause, Non-Renewal or for Good Reason In Connection With a Change
in Control. In the event that Executive incurs a Separation from Service during the period
beginning three months before and ending two years immediately following a Change in Control (as
defined herein) of the Company (1) by the Company without Cause, (2) as a result of the
Company electing not to renew the Agreement in accordance with Section 4 above on terms and
conditions substantially similar to those contained herein, if, at the time of such non-renewal,
(A) Executive is willing and able to continue providing services on terms and conditions
substantially similar to those contained in this Agreement and (B) the Company has not, since the
date of such Change in Control, already renewed this Agreement for a period of one or more years
from the date of such Change of Control in accordance with Section 4 above, or (3) by Executive for
Good Reason, then, subject to Executive’s execution and non-revocation of a Release substantially
in the form attached as Exhibit B within 30 days after such Separation from Service,
Executive shall be entitled to the benefits set forth below in this Section 5(e) (in addition to
the benefits set forth in Section 5(a)(iii) above).
(i) The Company shall pay Executive the payments set forth in Section 5(a)(i) in accordance
with the terms and conditions set forth in Section 5(a); provided, however, that in
determining the amount of payment due under Section 5(a)(i), Executive’s actual Annual Bonus for
the year preceding the Change in Control shall be used, if higher than his Target Bonus; and
provided, further, that, subject to Section 19 below, payments pursuant to Section
5(a)(i) shall be made in a lump sum (A) if the Separation from Service occurs during the
three-month period preceding the Change in Control, on the 95th day following such Separation from
Service (to the extent not previously paid in accordance with Section 5(a)(i)), and (B) if the
Separation from Service occurs during the two-year period following the Change in Control, no later
than 10 business days after Executive’s Separation from Service.
(ii) The 375,000 restricted stock units granted under Section 3(b)(ii) of the Prior Agreement
(the “Executive LTIP”) shall fully vest, to the extent not already vested, and shall be
settled in full within thirty days after such Separation from Service and otherwise be governed by
the terms of the award agreement attached hereto as Exhibit A (the “LTIP Award
Agreement”). All other stock options, restricted stock, restricted stock units and other
similar equity awards shall be governed by the terms of any applicable equity plans and award
agreement(s).
In addition, if Executive’s employment terminates pursuant to this Section 5(e), the Company
shall pay Executive the amounts described in Section 5(d)(i), (ii) and (iii) within 30 days of the
date of termination (or such earlier date as may be mandated by applicable law) and shall pay or
provide the other benefits described in Section 5(d) in accordance therewith.
(f) Non-Renewal. In the event that Executive incurs a Separation from Service as a
result of the Company electing not to renew the Agreement in accordance with Section 4 above on
terms and conditions substantially similar to those contained herein and, (A) at the time of such
non-renewal, Executive is willing and able to continue providing services on terms and conditions
substantially similar to those contained in this Agreement and (B) Section 5(e) does not apply to
such non-renewal, then, subject to Executive’s execution and non-revocation of a Release
substantially in the form attached as Exhibit B within 30 days after such Separation from
Service, Executive shall be entitled to the benefits set forth below in this Section 5(f).
(i) The Company shall pay Executive an amount equal to twelve months of Executive’s Base
Salary (as in effect on the date of Executive’s termination), which amount shall, subject to
Section 19 below, be paid in substantially equal installments over a period of twelve months from
Executive’s Separation from Service in accordance with the payroll practices of the Company in
effect from time to time, beginning on the First Payroll Date (with amounts otherwise payable prior
to the First Payroll Date paid on the First Payroll Date). Each payment under this Section 5(f)
shall be treated as a separate payment for purposes of Section 409A. In addition, upon a
non-renewal described in this Section 5(f), if Executive has not already been awarded an Annual
Bonus in respect of the fiscal year immediately preceding such non-renewal, the Company may, in its
sole discretion, award an Annual
Bonus to Executive in respect of such fiscal year based on Executive’s service and the
attainment of applicable performance objectives during such fiscal year.
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(ii) All stock options, restricted stock, restricted stock units (including the Executive
LTIP) and other similar equity awards shall be governed by the terms of any applicable equity plans
and award agreements.
In addition, if Executive’s employment terminates pursuant to this Section 5(f), the Company
shall pay Executive the amounts described in Section 5(d)(i), (ii) and (iii) within 30 days of the
date of termination (or such earlier date as may be mandated by applicable law) and shall pay or
provide the other benefits described in Section 5(d) in accordance therewith.
(g) Excess Parachute Payments.
(i) In the event any payment granted to Executive pursuant to the terms of this Agreement or
otherwise (a “Payment”) is determined to be subject to any excise tax (“Excise
Tax”) imposed by Section 4999 of the Code (or any successor to such Section), the Company shall
pay to Executive, no later than the time any Excise Tax is payable with respect to such Payment
(through withholding or otherwise), an additional amount (a “Gross-Up Payment”) which,
after the imposition of all income, employment, excise and other taxes, penalties and interest
thereon, is equal to the sum of (A) the Excise Tax on such Payment plus (B) any penalty and
interest assessments associated with such Excise Tax.
(ii) The determinations to be made with respect to this Section 5(g) shall be made by a
certified public accounting firm designated by the Company and reasonably acceptable to Executive
and Executive may rely on such determination in making payments to the Internal Revenue Service.
(iii) Notwithstanding anything herein to the contrary, any Gross-Up Payment or any
payment of any income or other taxes to be paid by the Company under this Section 5(g) shall be
made by the Company no later than the end of Executive’s taxable year next following Executive’s
taxable year in which Executive remits the related taxes. Any costs and expenses incurred by the
Company on behalf of Executive under this Section 5(g) due to any tax contest, audit or litigation
shall be paid by the Company as incurred and, in any event, no later than the end of Executive’s
taxable year following Executive’s taxable year in which the taxes that are the subject of the tax
contest, audit or litigation are remitted to the taxing authority, or where as a result of such tax
contest, audit or litigation no taxes are remitted, the end of Executive’s taxable year following
Executive’s taxable year in which the audit is completed or there is a final and non-appealable
settlement or other resolution of the contest or litigation.
(h) No Other Payments. Except as provided in Sections 5(a), (b), (c), (d), (e), (f)
and (g) above, all of Executive’s rights to salary, bonuses, employee benefits and other
compensation hereunder which would have accrued or become payable after the termination or
expiration of the Employment Period shall cease upon such termination or expiration, other than
those expressly required under applicable law (such as COBRA).
(i) No Mitigation, No Offset. In the event of Executive’s termination of employment
for whatever reason, Executive shall be under no obligation to seek other employment, and there
shall be no offset against amounts due him under this Agreement or otherwise on account of any
remuneration attributable to any subsequent employment or claims asserted by the Company or any
affiliate; provided, that this provision shall not apply with respect to any amounts that
Executive owes to the Company or any member of the Company Group on account of any amount in
respect of any of which Executive is obligated to make repayment to the Company or any member of
the Company Group.
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(j) Definitions. For purposes of this Agreement, the following terms shall have the
following meanings:
(i) “Cause” shall mean one or more of the following:
(A) the conviction of, or an agreement to a plea of nolo contendere to, a crime involving
moral turpitude or any felony;
(B) Executive’s willful refusal substantially to perform duties as reasonably directed by the
CEO under this or any other agreement;
(C) in carrying out his duties, Executive engages in conduct that constitutes fraud, willful
neglect or willful misconduct which, in either case, would result in demonstrable harm to the
business, operations, prospects or reputation of the Company;
(D) a material violation of the requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (“SOX”)
or other federal or state securities law, rule or regulation; or
(E) any other material breach of this Agreement.
For purpose of this Agreement, the Company is not entitled to assert that Executive’s
termination is for Cause unless the Company gives Executive written notice describing the facts
which are the basis for such termination and such grounds for termination (if susceptible to
correction) are not corrected by Executive within 30 days of Executive’s receipt of such notice to
the reasonable, good faith satisfaction of the Board.
(ii) “Change in Control” shall mean the first to occur of any of the following events:
(A) A transaction or series of transactions (other than an offering of Common Stock to the
general public through a registration statement filed with the Securities and Exchange Commission)
whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other
than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or
any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly
controls, is controlled by, or is under common control with, the Company) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company possessing more than 50% of the total combined voting power of the
Company’s securities outstanding immediately after such acquisition; or
(B) During any twelve-month period, individuals who, at the beginning of such period,
constitute the Board together with any new director(s) (other than a director designated by a
person who shall have entered into an agreement with the Company to effect a transaction described
in Section 5(j)(ii)(A) or Section 5(j)(ii)(C)) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning of the twelve-month
period or whose election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
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(C) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or
substantially all of the Company’s assets in any single transaction or series of related
transactions or (z) the acquisition of assets or stock of another entity, in each case other than a
transaction:
(1) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities immediately after the
transaction, and
(2) After which no person or group beneficially owns voting securities representing 35% or
more of the combined voting power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this Section 5(j)(ii)(C)(2) as beneficially owning 35% or
more of combined voting power of the Successor Entity solely as a result of the voting power held
in the Company prior to the consummation of the transaction; or
(D) The Company’s stockholders approve a liquidation or dissolution of the Company.
The Board shall have full and final authority, which shall be exercised in its discretion, to
determine conclusively whether a Change in Control of the Company has occurred pursuant to the
above definition, and the date of the occurrence of such Change in Control and any incidental
matters relating thereto.
(iii) “Disability” shall mean Executive’s being unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months.
(iv) “Good Reason” shall mean Executive’s resignation from employment with the Company
prior to the end of the Employment Period as a result of one or more of the following reasons:
(A) the Company materially reduces the amount of Executive’s then current Base Salary;
(B) a material diminution in Executive’s authority, duties or responsibilities;
(C) a material breach of this Agreement by the Company; or
(D) a material change to the geographic location at which Executive must provide services
(within the meaning of Section 409A, provided, however, that in no event shall a relocation of less
than 50 miles be deemed material for purposes of this clause (D)).
Notwithstanding the foregoing, Executive agrees that he shall not be entitled to terminate his
employment for Good Reason in the event he is subject to any unintended or adverse tax consequences
under Section 409A or he is required to forfeit incentive or other compensation pursuant to
Section 304 of SOX. For purposes of this Agreement, a termination of employment by Executive shall
not be deemed to be for Good Reason unless (i) Executive gives the Board written notice describing
the event or events which are the basis for such termination within 90 days after the event or
events occur, (ii) such grounds for termination (if susceptible to correction) are not corrected by
the Company within 30 days of the Company’s receipt of such notice to the reasonable, good faith
satisfaction of Executive, and (iii) Executive terminates his employment no later than 30 days after the expiration of the cure
period described in clause (ii) of this paragraph.
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6. Insurance; Indemnification and Advancement of Expenses.
(a) Insurance. The Company agrees to maintain director’s and officer’s liability
insurance covering the Executive for services rendered to the Company, its subsidiaries and
affiliates while Executive is a director or officer of the Company or any of its subsidiaries or
affiliates.
(b) Indemnification and Advancement of Expenses. Executive shall be entitled to the
benefits of Articles Thirteen and Fourteen of the Company’s Amended and Restated Articles of
Incorporation and the Company shall not amend such provisions during the Employment Period without
advance written notice to Executive. The Company shall not during the Employment Period enter into
any supplemental indemnification agreement with its directors or executive officers, as such,
unless Executive is offered an agreement containing terms pertaining to indemnification and
advancement of expenses that are substantially identical to the most favorable indemnification and
advancement of expenses terms provided to such directors or executive officers (excepting standard
“Side A” and similar arrangements customarily provided solely to non-employee directors), which
agreement may not be amended without advance written notice to Executive.
7. Confidential Information. Executive acknowledges that he has entered into the Company’s
form of Confidentiality and Invention Assignment Agreement attached hereto as Exhibit C and
hereby reaffirms his obligations thereunder.
8. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to Executive hereunder, Executive
acknowledges that during the course of his employment with the Company, he shall become familiar
with the Company Group’s trade secrets and with other confidential information concerning the
Company Group and that his services shall be of special, unique and extraordinary value to the
Company Group; and, therefore, without limiting any other provision of this Agreement, Executive
agrees that, during the Employment Period, he shall not directly or indirectly own any interest in,
manage, control, be employed in an executive, managerial or administrative capacity by, or
otherwise render executive, managerial or administrative services to, any company engaged in any
business directly or directly involving developing projects or licensing technology based on or
competitive with a ▇▇▇▇▇▇▇▇-Tropsch process which competes with the businesses of the Company,
within any geographical area in which the Company engages in such businesses. Nothing herein shall
prohibit Executive from being a passive owner of (x) not more than 1.0% of the outstanding
securities of a company traded on a public securities exchange or (y) investments made through
public mutual funds.
(b) During the Employment Period and for one year thereafter (the “Noncompete
Period”), Executive shall not directly or indirectly through another person or entity
(i) induce, solicit, encourage or attempt to induce, solicit or encourage any employee of the
Company to leave the employ of the Company, or in any way interfere with the relationship between
the Company and any employee thereof; or (ii) use the Company’s confidential or proprietary
information to induce, solicit or encourage or attempt to induce, solicit or encourage any
customer, supplier, licensee, licensor, franchisee or other business relation of the Company to
cease doing business with the Company, or in any way interfere with the relationship between any
such customer, supplier, licensee or business relation of the Company (including, without
limitation, making any negative or disparaging statements or communications regarding the Company).
The Company covenants that it will not, and it will advise members of senior
management of the Company and the Board not to, make any negative or disparaging statements or
communications regarding Executive.
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(c) If, at the time of enforcement of this Section 8, a court shall hold that the duration,
scope or area restrictions stated herein are unreasonable under circumstances then existing, the
parties agree that the maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be allowed to revise
the restrictions contained herein to cover the maximum period, scope and area permitted by law.
Executive acknowledges that the restrictions contained in this Section 8 are reasonable and that he
has reviewed the provisions of this Agreement with his legal counsel.
(d) Executive acknowledges that in the event of the breach or a threatened breach by Executive
of any of the provisions of this Section 8, the Company would suffer irreparable harm, and, in
addition and supplementary to other rights and remedies existing in its favor, the Company shall be
entitled to specific performance and/or injunctive or other equitable relief from a court of
competent jurisdiction in order to enforce or prevent any violations of the provisions hereof
(without posting a bond or other security). In addition, in the event of a breach or violation by
Executive of Section 8(a), the Noncompete Period shall be automatically extended by the amount of
time between the initial occurrence of the breach or violation and when such breach or violation
has been duly cured.
9. Executive’s Representations. Executive hereby represents and warrants to the Company
that (i) the execution, delivery and performance of this Agreement by Executive do not and shall
not conflict with, breach, violate or cause a default under, any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is bound which has not been
waived; (ii) Executive is not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any other person or entity; and (iii) from and after the
Commencement Date, this Agreement shall be the valid and binding obligation of Executive,
enforceable in accordance with its terms. Executive represents and agrees that he fully
understands his right to discuss all aspects of this Agreement with his private attorney, and that
to the extent, if any, that he desired, he availed himself of such right. Executive further
represents that he has carefully read and fully understands all of the provisions of this
Agreement, that he is competent to execute this Agreement, that his agreement to execute this
Agreement has not been obtained by any duress and that he freely and voluntarily enters into it,
and that he has read this document in its entirety and fully understands the meaning, intent and
consequences of this document.
10. Employment At-Will. Subject to the termination obligations provided for in this
Agreement, Executive hereby agrees that the Company may dismiss him and terminate his employment
with the Company, with or without advance notice and without regard to (i) any general or specific
policies (whether written or oral) of the Company relating to the employment or termination of its
employees, or (ii) any statements made to Executive, whether made orally or contained in any
document, pertaining to Executive’s relationship with the Company, or (iii) the existence or
non-existence of Cause. Inclusion under any benefit plan or compensation arrangement will not give
Executive any right or claim to any benefit hereunder except to the extent such right has become
fixed under the express terms of this Agreement.
10
11. Notices. All notices or communications hereunder shall be in writing, addressed as
follows:
To the Company:
Chief Executive Officer
Rentech, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Rentech, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
General Counsel
Rentech, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Rentech, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To Executive:
To the address on file in the permanent records of the Company at the time of the notice.
All such notices shall be conclusively deemed to be received and shall be effective (i) if
sent by hand delivery, upon receipt or (ii) if sent by electronic mail or facsimile, upon
confirmation of receipt by the sender of such transmission.
12. Severability. In the event any provision or part of this Agreement is found to be
invalid or unenforceable, only that particular provision or part so found, and not the entire
Agreement, will be inoperative.
13. Complete Agreement. This Agreement, the LTIP Award Agreement(s) and those documents
expressly referred to herein embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in any way, including
without limitation, the Prior Agreement.
14. No Strict Construction. The language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.
15. Counterparts. This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and the same agreement.
16. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the beneficiaries, heirs and representatives of Executive and the successors and assigns of the
Company (including without limitation, any successor due to reincorporation of the Company or
formation of a holding company). The Company shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock,
liquidation, or otherwise) to all or a majority of its assets, by agreement in form and substance
satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform this Agreement if no
such succession had taken place. Executive may not assign his rights (except by will or the laws
of descent and distribution) or delegate his duties or obligations hereunder. Except as provided
by this Section 16, this Agreement is not assignable by any party and no payment to be made
hereunder shall be subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or other charge.
17. Choice of Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and
construed in accordance with, the laws of the State of California regardless of the law that might
be applied under principles of conflicts of laws.
11
18. Amendment and Waiver. The provisions of this Agreement may be amended, modified or
waived only with the prior written consent of the Company and Executive, and no course of conduct
or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the
provisions of this Agreement (including, without limitation, the Company’s right to terminate the
Employment Period for Cause) shall affect the validity, binding effect or enforceability of this
Agreement or be deemed to be an implied waiver of any provision of this Agreement.
19. Internal Revenue Code Section 409A.
(a) General. To the extent applicable, this Agreement shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any such regulations or
other such guidance that may be issued after the Commencement Date (“Section 409A”).
Notwithstanding any provision of this Agreement to the contrary, in the event that following the
Commencement Date, the Company determines in good faith that any compensation or benefits payable
under this Agreement may not be either exempt from or compliant with Section 409A, the Company
shall consult with Executive and adopt such amendments to this Agreement or adopt other policies or
procedures (including amendments, policies and procedures with retroactive effect), or take any
other commercially reasonable actions necessary or appropriate to (i) preserve the intended tax
treatment of the compensation and benefits payable hereunder, to preserve the economic benefits of
such compensation and benefits, and/or to avoid less favorable accounting or tax consequences for
the Company and/or (ii) to exempt the compensation and benefits payable hereunder from Section 409A
or to comply with the requirements of Section 409A and thereby avoid the application of penalty
taxes thereunder; provided, however, that this Section 19(a) does not, and shall
not be construed so as to, create any obligation on the part of the Company to adopt any such
amendments, policies or procedures or to take any other such actions or to indemnify the Executive
for any failure to do so.
(b) Specified Employee. Notwithstanding anything to the contrary in this Agreement,
no compensation or benefits, including without limitation any severance payment under Section 5
above, shall be paid to Executive during the 6-month period following his Separation from Service
to the extent that the Company determines that Executive is a “specified employee” at the time of
such Separation from Service (within the meaning of Section 409A) and that that paying such amounts
at the time or times indicated in this Agreement would be a prohibited distribution under Section
409A(a)(2)(b)(i) of the Code. If the payment of any such amounts is delayed as a result of the
previous sentence, then on the first business day following the end of such 6-month period (or such
earlier date upon which such amount can be paid under Section 409A without being subject to such
additional taxes, including as a result of Executive’s death), the Company shall pay to Executive a
lump-sum amount equal to the cumulative amount that would have otherwise been payable to Executive
during such 6-month period, along with interest at the prime rate (as reported in the Wall Street
Journal or such other source as the Company deems reliable) from the date such payments were
otherwise due to the date of payment.
20. Insurance. The Company may, at its discretion, apply for and procure in its own name
and for its own benefit life and/or disability insurance on Executive in any amount or amounts
considered advisable. Executive agrees to cooperate in any medical or other examination, supply
any information and execute and deliver any applications or other instruments in writing as may be
reasonably necessary to obtain and constitute such insurance. Executive hereby represents that he
has no reason to believe that his life is not insurable at rates now prevailing for healthy men of
his age.
12
21. Withholding. Any payments made or benefits provided to Executive under this Agreement
shall be reduced by any applicable withholding taxes or other amounts required to be withheld by
law or contract.
22. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement or otherwise in connection with the Executive’s employment by the Company that cannot be
mutually resolved by the parties to this Agreement and their respective advisors and
representatives shall be settled exclusively by arbitration in Los Angeles, California in
accordance with the rules of the American Arbitration Association before one arbitrator of
exemplary qualifications and stature, who shall be selected jointly by an individual to be
designated by the Company and an individual to be selected by Executive, or if such two individuals
cannot agree on the selection of the arbitrator, who shall be selected by the American Arbitration
Association. The Company will pay the direct costs and expenses of any such arbitration, including
the fees and costs of the arbitrator; provided, however, that the arbitrator may,
at his or her election, award attorneys’ fees to the prevailing party, if permitted by applicable
law.
23. [INTENTIONALLY OMITTED]
24. Executive’s Cooperation. During the Employment Period and thereafter, Executive shall
cooperate with the Company and its affiliates, upon the Company’s reasonable request, with respect
to any internal investigation or administrative, regulatory or judicial proceeding involving
matters within the scope of Executive’s duties and responsibilities to the Company Group during the
Employment Period (including, without limitation, Executive being available to the Company upon
reasonable notice for interviews and factual investigations, appearing at the Company’s reasonable
request to give testimony without requiring service of a subpoena or other legal process, and
turning over to the Company all relevant Company documents which are or may come into Executive’s
possession during the Employment Period); provided, however, that any such request
by the Company shall not be unduly burdensome or interfere with Executive’s personal schedule or
ability to engage in gainful employment. In the event the Company requires Executive’s cooperation
in accordance with this Section 24, the Company shall reimburse Executive for reasonable
out-of-pocket expenses (including travel, lodging and meals) incurred by Executive in connection
with such cooperation, subject to reasonable documentation. In the event that the obligations
under this Section 24 require more than 20 hours of the Executive’s time after the termination of
the Employment Period, the Company shall thereafter also pay to Executive compensation at an hourly
rate equal to result of (a) the Base Salary applicable on the date of the termination of
Executive’s employment , divided by (b) 1,750.
(Signature Page Follows)
13
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date
first written above.
| RENTECH, INC. |
||||
| By: | /s/ ▇. ▇▇▇▇ Ramsbottom, Jr. | |||
| ▇. ▇▇▇▇ Ramsbottom, Jr. | ||||
| Title: | President and CEO | |||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
14
EXHIBIT B
FORM OF RELEASE
This General Release of all Claims (this “Agreement”) is entered into by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(“Executive”) and Rentech, Inc. (the “Company”), effective as of
[ ].
In further consideration of the promises and mutual obligations set forth in the Employment
Agreement between Executive and the Company, dated [ ] (the
“Employment Agreement”), Executive and the Company agree as follows:
1. Return of Property. All Company files, access keys, desk keys, ID badges,
computers, electronic devices, telephones and credit cards, and such other property of the Company
as the Company may reasonably request, in Executive’s possession must be returned no later than the
date of Executive’s termination from the Company.
2. General Release and Waiver of Claims.
(a) Release. In consideration of the payments and benefits
provided to Executive under the Employment Agreement and after consultation with counsel,
Executive, personally and on behalf of each of Executive’s respective heirs, executors,
administrators, representatives, agents, successors and assigns (collectively, the
“Releasors”) hereby irrevocably and unconditionally releases and forever discharges the
Company and its subsidiaries and affiliates and each of their respective officers, employees,
directors, and agents and all persons acting in concert with them or any of them
(“Releasees”) from any and all claims, actions, causes of action, rights, judgments,
obligations, damages, demands, accountings or liabilities of whatever kind or character
(collectively, “Claims”), including, without limitation, any Claims under any federal,
state, local or foreign law, including without limitation, the Age Discrimination in Employment
Act, as amended, 29 U.S.C. § 621, et seq.; Title VII of the Civil Rights Act of
1964, as amended by the Civil Rights Act of 1991, 42 U.S.C. § 2000 et seq.; Equal Pay Act,
as amended, 29 U.S.C. § 206(d); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and
Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; the Americans with Disabilities Act of
1990, 42 U.S.C. § 12101 et seq.; the False Claims Act ,
31 U.S.C. § 3729 et seq.;
the Employee Retirement Income Security Act, as amended, 29 U.S.C.
§ 1001 et seq.;
the Worker Adjustment and Retraining Notification Act, as amended, 29
U.S.C. § 2101 et seq.; the Fair Labor Standards Act, 29
U.S.C. § 215 et seq.; the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002; the California Fair Employment and Housing Act, as amended, Cal. Lab. Code § 12940
et seq.; the California Equal Pay Law, as amended, Cal. Lab. Code §§
1197.5(a),1199.5; the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇▇ Family Rights Act of 1991, as amended, Cal. Gov’t Code
§§12945.2, 19702.3; California Labor Code §§ 1101, 1102, 69 Ops. Cal. Atty. Gen. 80 (1986);
California Labor Code §§ 1102.5(a), (b); the California
WARN Act, Cal. Lab. Code § 1400 et seq.; the California
False Claims Act, Cal. Gov’t Code § 12650 et seq.; the California
Corporate Criminal Liability Act, Cal. Penal Code § 387; and the California Labor Code, that the
Releasors had, have, may have, or in the future may possess, arising out of (i) Executive’s
employment relationship with and service as an employee, officer or director of the Company, and
the termination of such relationship or service, and (ii) any event, condition, circumstance or
obligation that occurred, existed or arose on or prior to the date hereof; provided,
however, that Executive does not release, discharge or waive any rights to payments and
benefits provided under the Employment Agreement that are contingent upon the execution by
Executive of this Agreement, any vested benefits, any rights to indemnification, or any rights as a
shareholder of the Company.
THE EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF AND IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
BEING AWARE OF SAID CODE SECTION, THE EXECUTIVE HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE
THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
(b) Specific Release of ADEA Claims. In further consideration
of the payments and benefits provided to Executive under the Employment Agreement, the Releasors
hereby unconditionally release and forever discharge the Releasees from any and all Claims that the
Releasors may have as of the date Executive signs this Agreement arising under the Federal Age
Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations
promulgated thereunder (“ADEA”). By signing this Agreement, Executive hereby acknowledges
and confirms the following: (i) Executive was, and is hereby, advised by the Company in connection
with his termination to consult with an attorney of his choice prior to signing this Agreement and
to have such attorney explain to Executive the terms of this Agreement, including, without
limitation, the terms relating to Executive’s release of claims arising under ADEA, and Executive
has in fact consulted with an attorney; (ii) Executive was given a period of not fewer than 21 days
to consider the terms of this Agreement and to consult with an attorney of his choosing with
respect thereto; (iii) Executive knowingly and voluntarily accepts the terms of this Agreement;
(iv) the payments and benefits provided to Executive in consideration of this release are in
addition to any amounts otherwise owed to Executive; and (v) this Agreement is written in a manner
designed to be understood by Executive and he understands it. Executive also understands that he
has seven days following the date on which he signs this Agreement within which to revoke the
release contained in this paragraph, by providing the Company a written notice of his revocation of
the release and waiver contained in this paragraph.
(c) No Assignment. Executive represents and warrants that he
has not assigned any of the Claims being released under this Agreement.
3. Proceedings. Executive has not filed, and agrees not to initiate or cause to
be initiated on his behalf, any complaint, charge, claim or proceeding against the Releasees before
any local, state or federal agency, court or other body relating to any Claims released under this
Agreement, including without limitation, any Claims relating to his employment or the termination
of his employment, (each, individually, a “Proceeding”), and agrees not to participate
voluntarily in any Proceeding. Notwithstanding the foregoing, Executive may bring to the attention
of the United States Equal Employment Opportunity Commission (the “EEOC”) claims of
discrimination. Executive waives any right he may have to benefit in any manner from any relief
(whether monetary or otherwise) arising out of any Proceeding.
4. Remedies. In the event Executive initiates or voluntarily participates in any
Proceeding, or if he fails to abide by any of the terms of this Agreement or his post-termination
obligations contained in the Employment Agreement, or if he revokes the ADEA release contained in
Paragraph 2(b) of this Agreement within the seven-day period provided under Paragraph 2(b), the
Company may, in addition to any other remedies it may have, reclaim any amounts paid to him under
the severance provisions of the Employment Agreement or terminate any benefits or payments that are
subsequently due under the
Employment Agreement, without waiving the release granted herein. The foregoing shall not apply to
Executive’s bringing to the attention of the EEOC any claims of discrimination. Executive
acknowledges and agrees that the remedy at law available to the Company for breach of any of his
post-termination obligations under the Employment Agreement or his obligations under Paragraphs 2
and 3 of this Agreement would be inadequate and that damages flowing from such a breach may not
readily be susceptible to being measured in monetary terms. Accordingly, Executive acknowledges,
consents and agrees that, in addition to any other rights or remedies that the Company may have at
law or in equity, the Company shall be entitled to seek a temporary restraining order or a
preliminary or permanent injunction, or both, without bond or other security, restraining Executive
from breaching his post-termination obligations under the Employment Agreement or his obligations
under Paragraphs 2 and 3 of this Agreement. Such injunctive relief in any court shall be available
to the Company, in lieu of, or prior to or pending determination in, any arbitration proceeding.
Executive understands that by entering into this Agreement he will be limiting
the availability of certain remedies that he may have against the Company and limiting also his
ability to pursue certain claims against the Company.
5. Severability Clause. In the event any provision or part of this Agreement is
found to be invalid or unenforceable, only that particular provision or part so found, and not the
entire Agreement, will be inoperative.
6. Non-admission. Nothing contained in this Agreement will be deemed or
construed as an admission of wrongdoing or liability on the part of the Company.
7. Governing Law. All matters affecting this Agreement, including the validity
thereof, are to be governed by, and interpreted and construed in accordance with, the laws of the
State of California regardless of the law that might be applied under principles of conflicts of
laws.
8. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement or otherwise in connection with Executive’s employment by the Company that cannot be
mutually resolved by the parties to this Agreement and their respective advisors and
representatives shall be settled exclusively by arbitration in Los Angeles, California in
accordance with the rules of the American Arbitration Association before one arbitrator of
exemplary qualifications and stature, who shall be selected jointly by an individual to be
designated by the Company and an individual to be selected by Executive or, if such two individuals
cannot agree on the selection of the arbitrator, who shall be selected by the American Arbitration
Association. The Company will pay the direct costs and expenses of any such arbitration, including
the fees and costs of the arbitrator; provided, however, that the arbitrator may,
at his or her election, award attorneys’ fees to the prevailing party, if permitted by applicable
law.
9. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company:
Rentech, Inc.
To Executive:
With a copy to:
All such notices shall be conclusively deemed to be received and shall be
effective (i) if sent by hand delivery, upon receipt or (ii) if sent by electronic mail or
facsimile, upon confirmation of receipt by the sender of such transmission.
EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT AND THAT HE FULLY KNOWS,
UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT HE HEREBY EXECUTES THE SAME AND MAKES THIS
AGREEMENT AND THE RELEASE AND AGREEMENTS PROVIDED FOR HEREIN VOLUNTARILY AND OF HIS OWN FREE WILL.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
| RENTECH, INC. | ||||||||
| By: | ||||||||
| Title: | ||||||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||||
EXHIBIT C
CONFIDENTIALITY AND INVENTION ASSIGNMENT AGREEMENT