Exhibit 10.34

 

RENTECH, INC.

 

2005 Stock Option Plan

 

RENTECH, INC.

2005 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 “2005 Stock Option Plan” (the “Plan”). It is intended that certain
of the options issued to employees pursuant to the Plan will constitute
incentive stock options within the meaning of Section 422A of the Internal
Revenue Code and that other options issued pursuant to the Plan shall constitute
nonstatutory options. The Board of Directors shall determine which options are
to be incentive stock options and which are to be nonstatutory options and shall
enter into option agreements with recipients accordingly.

 

1.2 Purpose. The purpose of this Plan is to enhance shareholder investment by
attracting, retaining and motivating key employees, directors and consultants of
the Company, and to encourage stock ownership by such persons by providing them
with a means to acquire a proprietary interest in the Company’s success, and to
align the interests of management with those of shareholders.

 

ARTICLE II

DEFINITIONS

 

2.1 Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below, unless the context clearly requires
otherwise, and when said meaning is intended, the term shall be capitalized.

 

(a) “Board” means the Board of Directors of the Company.

 

(b) “Code” means the Internal Revenue Code of 1986, as amended.

 

(c) “Committee” shall mean the Committee provided by Article IV hereof, which
may be created at the discretion of the Board.

 

(d) “Company” means Rentech, Inc., a Colorado corporation.

 

(e) “Consultant” means any person or entity, including a Parent Corporation or a
Subsidiary Corporation, that provides services (other than as an Employee) to
the Company, a Parent Corporation or a Subsidiary Corporation, and shall include
a Non-Employee Officer or Non-Employee Director, as defined subsequently.

 

(f) “Date of Exercise” means the date the Company receives notice, by an
Optionee, of the exercise of an Option pursuant to Section 8.1 of this Plan.
Such notice shall indicate the number of shares of Stock the Optionee intends to
exercise.

 

(g) “Employee” means any person, including an officer or director of the Company
or a Subsidiary Corporation, who is employed by the Company or a Subsidiary
Corporation.

 

(h) “Fair Market Value” means the fair market value of Stock upon which an
option is granted under this Plan, determined as the average of the closing bid
and asked prices of the Stock, as reported by Nasdaq.

 

(i) “Incentive Stock Option” means an Option granted under this Plan which is
intended to qualify as an “incentive stock option” within the meaning of Section
422A of the Code.

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(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

 

3.1 Eligibility and Participation. All Employees are eligible to participate in
this Plan and receive either or both Incentive Stock Options and Nonstatutory
Options under the Plan. All Consultants are eligible to participate in this Plan
and receive Nonstatutory Options hereunder. Optionees in the Plan shall be
selected by the Board, in its sole discretion, from among those Employees and
Consultants who, in the opinion of the Board, are in a position to contribute
materially to the Company’s continued growth and development and to its
long-term financial success.

 

ARTICLE IV

ADMINISTRATION

 

4.1 Administration. The Board shall be responsible for administering the Plan.

 

(a) The Board is authorized to interpret the Plan; to prescribe, amend, and
rescind rules and regulations relating to the Plan; to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Company; and to make all other determinations necessary or advisable for the
administration of the Plan. Determinations, interpretations, or other actions
made or taken by the Board, pursuant to the provisions of this Plan, shall be
final and binding and conclusive for all purposes and upon all persons.

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(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.

 

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

 

5.1 Number. The total number of shares of Stock hereby made available and
reserved for issuance under the Plan shall be 1,000,000 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.

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5.3 Adjustment in Capitalization. In the event of any change in the outstanding
shares of Stock by reason of a stock dividend or split, recapitalization,
reclassification, or other similar corporate change, the aggregate number of
shares of Stock remaining subject to the Plan and to Options previously granted
shall be appropriately adjusted by the Board, whose determination shall be
conclusive; provided however, that fractional shares shall be rounded to the
nearest whole share. In any such case, the number and kind of shares that are
subject to any Option (including any Option outstanding after termination of
employment) and the Option price per share shall be proportionately and
appropriately adjusted without any change in the aggregate Option price to be
paid therefor upon exercise of the Option.

 

ARTICLE VI

DURATION OF THE PLAN

 

6.1 Duration of the Plan. Subject to approval of shareholders, the Plan shall be
in effect for ten years from the date of its adoption by the Board. Any Options
outstanding at the end of said period shall remain in effect in accordance with
their terms. The Plan shall terminate before the end of said period if all Stock
subject to it has been purchased pursuant to the exercise of Options granted
under the Plan.

 

ARTICLE VII

TERMS OF STOCK OPTIONS

 

7.1 Grant of Options. Subject to Section 5.1, Options may be granted to
Employees or Consultants at any time and from time to time as determined by the
Board; provided, however, that Consultants may receive only Nonstatutory Options
and may not receive Incentive Stock Options. The Board shall have complete
discretion in determining the terms and conditions and number of Options granted
to each Optionee. In making such determinations, the Board may take into account
the nature of services rendered by such Employees or Consultants, their present
and potential contributions to the Company and its Subsidiary Corporations, and
such other factors as the Board in its discretion shall deem relevant. The Board
also shall determine whether an Option is to be an Incentive Stock Option or a
Nonstatutory Option.

 

(a) In the case of Incentive Stock Options, the total Fair Market Value
(determined at the date of grant) of shares of Stock with respect to which
incentive stock options granted after December 31, 1986 are exercisable for the
first time by the Optionee during any calendar year under all plans of the
Company under which incentive stock options may be granted (and all such plans
of any Parent Corporations and any Subsidiary Corporations of the Company) shall
not exceed $100,000. Hereinafter, this requirement is sometimes referred to as
the “$100,000 Limitation”.

 

(b) Nothing in this Article VII of the Plan shall be deemed to prevent the grant
of Options permitting exercise in excess of the maximums established by the
preceding paragraph where such excess amount is treated as a Nonstatutory
Option.

 

(c) The Board is expressly given the authority to issue amended or replacement
Options with respect to shares of Stock subject to an Option previously granted
hereunder. An amended Option amends the terms of an Option previously granted
and thereby supersedes the previous Option. A replacement Option is similar to a
new Option granted hereunder except that it provides that it shall be forfeited
to the extent that a previously granted Option is exercised, or except that its
issuance is conditioned upon the termination of a previously granted Option.

 

(d) The date of grant of an Option is either the date it is granted or such
other date as may be designed at the time of the award of the Option.

 

7.2 No Tandem Options. Where an Option granted under this Plan is intended to be
an Incentive Stock Option, the Option shall not contain terms pursuant to which
the exercise of the Option would affect the Optionee’s right to exercise another
Option, or vice versa, such that the Option intended to be an Incentive Stock
Option would be deemed a tandem stock option within the meaning of the
regulations under Section 422A of the Code.

 

7.3 Option Agreement: Terms and Conditions to Apply Unless Otherwise Specified.
As determined by the Board on the date of grant, each Option shall be evidenced
by an Option agreement (the “Option Agreement”) that includes the
non-transferability provisions required by Section 10.2 hereof and specifies:
whether the Option is an Incentive Stock Option or a Nonstatutory option; the
Option price; the duration of the Option; the number of shares of Stock to which
the Option applies; any vesting or exercisability restrictions which the Board
may impose; in the case of an Incentive Stock Option, a provision

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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;

 

(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.

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ARTICLE VIII

WRITTEN NOTICE, ISSUANCE OF STOCK

CERTIFICATES. SHAREHOLDER PRIVILEGES

 

8.1 Written Notice. An Optionee wishing to exercise an Option shall give written
notice to the Company, in the form and manner prescribed by the Board. Full
payment for the shares exercised pursuant to the Option must accompany the
written notice.

 

8.2 Issuance of Stock Certificates. As soon as practicable after the receipt of
written notice and payment, the Company shall deliver to the Optionee or to a
permitted nominee of the Optionee a certificate or certificates for the
requisite number of shares of stock.

 

8.3 Privileges of a Shareholder. An Optionee or any other person entitled to
exercise an Option under this Plan shall not have stockholder privileges with
respect to any Stock covered by the Option until the date of issuance of a stock
certificate for such stock.

 

ARTICLE IX

TERMINATION OF EMPLOYMENT OR SERVICES

 

9.1 Death. If an Optionee’s employment in the case of an Employee, or provision
of services as a Consultant, in the case of a Consultant, terminates by reason
of death, the Option may thereafter be exercised at any time prior to the
expiration date of the Option or within 12 months after the date of such death,
whichever period is the shorter, by the person or persons entitled to do so
under the Optionee’s will or, if the 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 six months of the Termination Date; provided, however, that
where the Optionee is an Employee, and is terminated due to disability within
the meaning of Code 422A, he may exercise such portion of his Option as was
exercisable by him on his Termination Date within one year of his Termination
Date. In any event, the Option cannot be exercised after the expiration of the
term of the Option. Options not exercised within the applicable period specified
above shall terminate.

 

(a) In the case of an Employee, a change of duties or position within the
Company or an assignment of employment in a Subsidiary Corporation or Parent
Corporation of the Company, if any, or from such a Corporation to the Company,
shall not be considered a termination of employment for purposes of this Plan.

 

(b) The Option Agreements may contain such provisions as the Board shall approve
with reference to the effect of approved leaves of absence upon termination of
employment.

 

9.3 Termination for Cause. In the event of an Optionee’s termination of
employment, in the case of an Employee, or termination of the provision of
services as a Consultant, in the case of a Consultant, which termination is by
the Company or a Subsidiary Corporation for cause, any Option or Options held by
him under the Plan, to the extent not exercised before such termination, shall
terminate upon notice of termination for cause.

 

ARTICLE X

RIGHTS OF OPTIONEES

 

10.1 Service. Nothing in this Plan shall interfere with or limit in any way the
right of the Company or a Subsidiary Corporation to terminate any Employee’s
employment, or any Consultant’s services, at any time, nor confer upon any
Employee any right to continue in the employ of the Company or a Subsidiary
Corporation, or upon any Consultant any right to continue to provide services to
the Company or a Subsidiary Corporation.

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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.

 

ARTICLE XI

OPTIONEE-EMPLOYEE’S TRANSFER OR LEAVE OF ABSENCE

 

11.1 Optionee-Employee’s Transfer or Leave of Absence. For purposes of this
Plan:

 

(a) A transfer of an Optionee who is an Employee from the Company to a
Subsidiary Corporation or Parent Corporation, or from one such Corporation to
another, or

 

(b) A leave of absence for such an Optionee (i) which is duly authorized in
writing by the Company or a Subsidiary Corporation, and (ii) if the Optionee
holds an Incentive Stock Option, which qualifies under the applicable
regulations under the Code which apply in the case of incentive stock options,
shall not be deemed a termination of employment. However, under no circumstances
may an Optionee exercise an Option during any leave of absence, unless
authorized by the Board.

 

ARTICLE XII

AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN

 

12.1 Amendment, Modification and Termination of the Plan.

 

(a) The Board may at any time terminate, and from time to time may amend or
modify the Plan; provided, however, that no such action of the Board, without
approval of the shareholders, may:

 

(i) increase the total amount of Stock which may be purchased through Options
granted under the Plan, except as provided in Article V;

 

(ii) change the class of Employees or Consultants eligible to receive Options;
or

 

(iii) extend the maximum option period provided in this Plan.

 

(b) No amendment, modification, or termination of the Plan shall in any manner
adversely affect any outstanding Option under the Plan without the consent of
the Optionee holding the Option.

 

ARTICLE XIII

ACQUISITION, MERGER OR LIQUIDATION

 

13.1 Acquisition.

 

(a) In the event that an Acquisition occurs with respect to the Company, the
Company shall have the option, but not the obligation, to cancel Options
outstanding as of the effective date of Acquisition, whether or not such Options
are then exercisable, in return for payment to the Optionees of an amount equal
to a reasonable estimate of an amount (hereinafter the “Spread”) equal to the
difference between the net amount per share payable in the Acquisition or as a
result of the Acquisition, less the exercise price of the Option. In estimating
the Spread, appropriate adjustments to give effect to the existence of the
Options 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,

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through a merger or similar corporate transaction, or otherwise. In cases where
the acquisition consists of the acquisition of assets of the Company, the net
amount per share shall be calculated on the basis of the net amount receivable
with respect to shares upon a distribution and liquidation by the Company after
giving effect to expenses and charges, including but not limited to taxes,
payable by the Company before the liquidation can be completed.

 

(c) Where the Company does not exercise its option under this Section 13.1 the
remaining provisions of this Article XIII shall apply, to the extent applicable.

 

13.2 Merger or Consolidation. Subject to any required action by the
shareholders, if the Company shall be the surviving corporation in any merger or
consolidation, any option granted under this Plan shall pertain to and apply to
the securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled in such merger or consolidation.

 

13.3 Other Transactions. A dissolution or a liquidation of the Company or a
merger and consolidation in which the Company is not the surviving corporation
shall cause every Option outstanding hereunder to terminate as of the effective
date of such dissolution, liquidation, merger or consolidation. However, the
Optionee either (i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the Optionee
an option (the “Substitute Option”) to purchase its shares on terms and
conditions both as to number of shares and otherwise, that will substantially
preserve to the Optionee the rights and benefits of the Option outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such dissolution, liquidation, merger, or consolidation to exercise any
unexercised Options whether or not then exercisable, subject to the provisions
of this Plan. The Board shall have absolute and uncontrolled discretion to
determine whether the Optionee has been offered a firm commitment and whether
the tendered Substitute Option will substantially preserve to the Optionee the
rights and benefits of the Option outstanding hereunder. In any event, any
Substitute Option for an Incentive Stock Option shall comply with the
requirements of Code Section 425(a).

 

ARTICLE XIV

SECURITIES REGISTRATION

 

14.1 Securities Registration. In the event that the Company shall deem it
necessary or desirable to register under the Securities Act of 1933, as amended,
or any other applicable statute, any Options or any Stock with respect to which
an Option may be or shall have been granted or exercised, or to qualify any such
Options or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Optionee shall cooperate with the Company and take such action
as is necessary to permit registration or qualification of such Options or
Stock.

 

14.2 Representations. Unless the Company has determined that the following
representation is unnecessary, each person exercising an Option under the Plan
may be required by the Company, as a condition to the issuance of the shares
pursuant to exercise of the Option, to make a representation in writing (i) that
he is acquiring such shares for his own account for investment and not with a
view to, or for sale in connection with, the distribution of any part thereof,
(ii) that before any transfer in connection with the resale of such shares, he
will obtain the written opinion of counsel for the Company, or other counsel
acceptable to the Company, that such shares may be transferred. The Company may
also require that the certificates representing such shares contain legends
reflecting the foregoing.

 

ARTICLE XV

TAX WITHHOLDING

 

15.1 Tax Withholding. Whenever shares of Stock are to be issued in satisfaction
of Options exercised under this Plan, the Company shall have the power to
require the recipient of the Stock to remit to the Company an amount sufficient
to satisfy any applicable federal, state, and local withholding tax
requirements.

 

ARTICLE XVI

INDEMNIFICATION

 

16.1 Indemnification. To the extent permitted by law, each person who is or
shall have been a member of the Board shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company’s approval, or paid by him in satisfaction of

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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

 

18.1 Effective Date. The Plan shall be effective on January 1, 2005.

 

ARTICLE XIX

COMPLIANCE WITH CODE

 

19.1 Compliance with Code. Incentive Stock Options granted hereunder are
intended to qualify as “incentive stock options” under Code 422A. If any
provision of this Plan is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with Incentive Stock
Options granted under this Plan being treated as incentive stock options under
the Code.

 

ARTICLE XX

NO OBLIGATION TO EXERCISE OPTION

 

20.1 No Obligation to Exercise. The granting of an Option shall impose no
obligation upon the holder thereof to exercise such Option.

 

THIS 2005 STOCK OPTION PLAN was adopted by the Board of Directors of Rentech,
Inc. on December 21, 2004 to be effective as of January 1, 2005. It is to be
submitted for approval by shareholders at the annual meeting of shareholders to
be held on March 17, 2005.

 

RENTECH, INC. By:  

/s/ Dennis L. Yakobson

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    Dennis L. Yakobson, President