Exhibit 10.1

RENTECH, INC.

AMENDED AND RESTATED

2006 INCENTIVE AWARD PLAN

ARTICLE 1.

PURPOSE

          The purpose of the Rentech, Inc. Amended and Restated 2006 Incentive
Award Plan (the “Plan”) is to promote the success and enhance the value of
Rentech, Inc. (the “Company”) by linking the personal interests of the members
of the Board, Employees, and Consultants to those of Company stockholders and by
providing such individuals with an incentive for outstanding performance to
generate superior returns to Company stockholders. The Plan is further intended
to provide flexibility to the Company in its ability to motivate, attract, and
retain the services of members of the Board, Employees, and Consultants upon
whose judgment, interest, and special effort the successful conduct of the
Company’s operation is largely dependent.

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

          Wherever the following terms are used in the Plan they shall have the
meanings specified below, unless the context clearly indicates otherwise. The
singular pronoun shall include the plural where the context so indicates.

          2.1          “Award” means an Option, a Restricted Stock award, a
Stock Appreciation Right award, a Performance Share award, a Performance Stock
Unit award, a Dividend Equivalents award, a Stock Payment award, a Deferred
Stock award, a Restricted Stock Unit award, a Performance Bonus Award, or a
Performance-Based Award granted to a Participant pursuant to the Plan.

          2.2          “Award Agreement” means any written agreement, contract,
or other instrument or document evidencing an Award, including through
electronic medium.

          2.3          “Board” means the Board of Directors of the Company.

          2.4          “Change in Control” means:

 

               (a)        A transaction or series of transactions (other than an
offering of 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 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 2.4(a) or Section 2.4(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

 

 

 

               (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:

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          (i)         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

 

          (ii)        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 2.4(c)(ii) 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 Committee 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.

          2.5          “Code” means the Internal Revenue Code of 1986, as
amended, together with the regulations and other official guidance promulgated
thereunder.

          2.6          “Committee” means the committee of the Board described in
Article 12.

          2.7          “Consultant” means any consultant or adviser if: (a) the
consultant or adviser renders bona fide services to the Company; (b) the
services rendered by the consultant or adviser are not in connection with the
offer or sale of securities in a capital-raising transaction and do not directly
or indirectly promote or maintain a market for the Company’s securities; and
(c) the consultant or adviser is a natural person who has contracted directly
with the Company to render such services.

          2.8          “Covered Employee” means an Employee who is, or could be,
a “covered employee” within the meaning of Section 162(m) of the Code.

          2.9          “Deferred Stock” means a right to receive a specified
number of shares of Stock during specified time periods pursuant to Section 8.5.

          2.10        “Disability” means that the Participant qualifies to
receive long-term disability payments under the Company’s long-term disability
insurance program, as it may be amended from time to time or, if no such plan is
applicable to a Participant, as determined in the sole discretion of the
Committee.

          2.11        “Dividend Equivalents” means a right granted to a
Participant pursuant to Section 8.3 to receive the equivalent value (in cash or
Stock) of dividends paid on Stock.

          2.12        “Effective Date” shall have the meaning set forth in
Section 13.1.

          2.13        “Eligible Individual” means any person who is an Employee,
a Consultant or an Independent Director, as determined in the sole discretion of
the Committee.

          2.14        “Employee” means any officer or other employee (as defined
in accordance with Section 3401(c) of the Code) of the Company or any
Subsidiary.

          2.15        “Exchange Act” means the Securities Exchange Act of 1934,
as amended.

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          2.16        “Fair Market Value” means, as of any given date, (a) if
Stock is traded on an exchange, the closing price of a share of Stock as
reported in the Wall Street Journal for the first trading date immediately prior
to such date during which a sale occurred; or (b) if Stock is not traded on an
exchange but is quoted on NASDAQ or a successor or other quotation system,
(i) the last sales price (if Stock is then listed as a National Market Issue
under the NASD National Market System) or (ii) the mean between the closing
representative bid and asked prices (in all other cases) for the Stock on the
date immediately prior to such date on which sales prices or bid and asked
prices, as applicable, are reported by NASDAQ or such successor quotation
system; or (c) if Stock is not publicly traded, the fair market value
established by the Committee acting in good faith, provided, that the Committee
may, in its sole discretion, conduct such valuation in a manner that causes such
valuation to fall within the meaning of “fair market value” under Code
Section 409A.

          2.17        “Full Value Award” means any Award other than an Option or
other Award for which the Participant pays the intrinsic value (whether directly
or by forgoing a right to receive a payment from the Company).

          2.18        “Incentive Stock Option” means an Option that is intended
to meet the requirements of Section 422 of the Code or any successor provision
thereto.

          2.19        “Independent Director” means a member of the Board who is
not an Employee of the Company.

          2.20        “Non-Employee Director” means a member of the Board who
qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) under the
Exchange Act, or any successor rule.

          2.21        “Non-Qualified Stock Option” means an Option that is not
intended to be an Incentive Stock Option.

          2.22        “Option” means a right granted to a Participant pursuant
to Article 5 of the Plan to purchase a specified number of shares of Stock at a
specified price during specified time periods. An Option may be either an
Incentive Stock Option or a Non-Qualified Stock Option.

          2.23        “Participant” means any Eligible Individual who, as a
member of the Board, Consultant or Employee, has been granted an Award pursuant
to the Plan.

          2.24        “Performance-Based Award” means an Award granted to
selected Covered Employees pursuant to Section 8.7, but which is subject to the
terms and conditions set forth in Article 9. All Performance-Based Awards are
intended to qualify as Qualified Performance-Based Compensation.

          2.25        “Performance Bonus Award” has the meaning set forth in
Section 8.7.

          2.26        “Performance Criteria” means the criteria that the
Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The Performance
Criteria that will be used to establish Performance Goals are limited to the
following: net earnings (either before or after interest, taxes, depreciation
and amortization), economic value-added, sales or revenue, net income (either
before or after taxes), operating earnings, cash flow (including, but not
limited to, operating cash flow and free cash flow), cash flow return on
capital, return on net assets, return on stockholders’ equity, return on assets,
return on capital, stockholder returns, return on sales, gross or net profit
margin, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings per share, price per share of Stock, and
market share, any of which may be measured either in absolute terms or as
compared to any incremental increase or as compared to results of a peer group.
The Committee shall define in an objective fashion the manner of calculating the
Performance Criteria it selects to use for such Performance Period for such
Participant.

          2.27        “Performance Goals” means, for a Performance Period, the
goals established in writing by the Committee for the Performance Period based
upon the Performance Criteria. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual. The Committee, in its discretion, may, within the time
prescribed by Section 162(m) of the Code, adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of Participants (a) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (b) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions.

          2.28        “Performance Period” means the one or more periods of
time, which may be of varying and overlapping durations, as the Committee may
select, over which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Participant’s right to, and the
payment of, a Performance-Based Award.

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          2.29        “Performance Share” means a right granted to a Participant
pursuant to Section 8.1, to receive Stock, the payment of which is contingent
upon achieving certain Performance Goals or other performance-based targets
established by the Committee.

          2.30        “Performance Stock Unit” means a right granted to a
Participant pursuant to Section 8.2, to receive Stock, the payment of which is
contingent upon achieving certain Performance Goals or other performance-based
targets established by the Committee.

          2.31        “Plan” means this Rentech, Inc. 2006 Incentive Award Plan,
as it may be amended from time to time.

          2.32        “Qualified Performance-Based Compensation” means any
compensation that is intended to qualify as “qualified performance-based
compensation” as described in Section 162(m)(4)(C) of the Code.

          2.33        “Restricted Stock” means Stock awarded to a Participant
pursuant to Article 6 that is subject to certain restrictions and may be subject
to risk of forfeiture.

          2.34        “Restricted Stock Unit” means an Award granted pursuant to
Section 8.6.

          2.35        “Securities Act” shall mean the Securities Act of 1933, as
amended.

          2.36        “Stock” means the common stock of the Company, par value
$0.01 per share, and such other securities of the Company that may be
substituted for Stock pursuant to Article 11.

          2.37        “Stock Appreciation Right” or “SAR” means a right granted
pursuant to Article 7 to receive a payment equal to the excess of the Fair
Market Value of a specified number of shares of Stock on the date the SAR is
exercised over the Fair Market Value on the date the SAR was granted as set
forth in the applicable Award Agreement.

          2.38        “Stock Payment” means (a) a payment in the form of shares
of Stock, or (b) an option or other right to purchase shares of Stock, as part
of any bonus, deferred compensation or other arrangement, made in lieu of all or
any portion of the compensation, granted pursuant to Section 8.4.

          2.39        “Subsidiary” means any “subsidiary corporation” as defined
in Section 424(f) of the Code and any applicable regulations promulgated
thereunder or any other entity of which a majority of the outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Company.

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

          3.1          Number of Shares.

 

               (a)          Subject to Article 11 and Section 3.1(b), the
aggregate number of shares of Stock which may be issued or transferred pursuant
to Awards under the Plan is 8,000,000, provided, that such aggregate number of
shares of Stock available for issuance under the Plan shall be reduced by one
share for each share of Stock delivered in settlement of any Full Value Award
and shall be reduced by one share for each share of Stock granted pursuant to
any Stock Appreciate Right award.

 

 

 

                (b)          To the extent that an Award terminates, expires, or
lapses for any reason, any shares of Stock subject to the Award shall again be
available for the grant of an Award pursuant to the Plan; however, any shares of
Stock tendered or withheld to satisfy the grant or exercise price or tax
withholding obligation pursuant to any Award shall not again be available for
the grant of an Award pursuant to the Plan. To the extent permitted by
applicable law or any exchange rule, shares of Stock issued in assumption of, or
in substitution for, any outstanding awards of any entity acquired in any form
of combination by the Company or any Subsidiary shall not be counted against
shares of Stock available for grant pursuant to this Plan. The payment of
Dividend Equivalents in cash in conjunction with any outstanding Awards shall
not be counted against the shares available for issuance under the Plan.
Notwithstanding the provisions of this Section 3.1(b), no shares of Common Stock
may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.

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          3.2          Stock Distributed. Any Stock distributed pursuant to an
Award may consist, in whole or in part, of authorized and unissued Stock,
treasury Stock or Stock purchased on the open market.

          3.3          Limitation on Number of Shares Subject to Awards.
Notwithstanding any provision in the Plan to the contrary, and subject to
Article 11, the maximum number of shares of Stock with respect to one or more
Awards that may be granted to any one Participant during a rolling three-year
period (measured from the date of any grant) shall be two million and the
maximum amount that may be paid in cash during any calendar year with respect to
any Performance-Based Award (including, without limitation, any Performance
Bonus Award) shall be $1,000,000.

ARTICLE 4.

ELIGIBILITY AND PARTICIPATION

          4.1          Eligibility. Each Eligible Individual shall be eligible
to be granted one or more Awards pursuant to the Plan.

          4.2          Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all Eligible Individuals,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award. No Eligible Individual shall have any right to be granted an
Award pursuant to this Plan.

          4.3          Foreign Participants. Notwithstanding any provision of
the Plan to the contrary, in order to comply with the laws in other countries in
which the Company and its Subsidiaries operate or have Eligible Individuals, the
Committee, in its sole discretion, shall have the power and authority to:
(i) determine which Subsidiaries shall be covered by the Plan; (ii) determine
which Eligible Individuals outside the United States are eligible to participate
in the Plan; (iii) modify the terms and conditions of any Award granted to
Eligible Individuals outside the United States to comply with applicable foreign
laws; (iv) establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable (any such
subplans and/or modifications shall be attached to this Plan as appendices);
provided, however, that no such subplans and/or modifications shall increase the
share limitations contained in Sections 3.1 and 3.3 of the Plan; and (v) take
any action, before or after an Award is made, that it deems advisable to obtain
approval or comply with any necessary local governmental regulatory exemptions
or approvals. Notwithstanding the foregoing, the Committee may not take any
actions hereunder, and no Awards shall be granted, that would violate the
Exchange Act, the Code, any securities law or governing statute or any other
applicable law.

ARTICLE 5.

STOCK OPTIONS

          5.1          General. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

 

              (a)          Exercise Price. The exercise price per share of Stock
subject to an Option shall be determined by the Committee and set forth in the
Award Agreement; provided, that, subject to Section 5.2(d), the exercise price
for any Option shall not be less than 100% of the Fair Market Value of a share
of Stock on the date of grant.

 

 

 

              (b)          Time and Conditions of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part; provided that the term of any Option granted under the Plan shall not
exceed ten years. The Committee shall also determine the performance or other
conditions, if any, that must be satisfied before all or part of an Option may
be exercised.

 

 

 

              (c)          Payment. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation: (i) cash, (ii) shares of Stock held for such
period of time as may be required by the Committee in order to avoid adverse
accounting consequences and having a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option or exercised portion
thereof, or (iii) other property acceptable to the Committee (including through
the delivery of a notice that the Participant has placed a market sell order
with a broker with respect to shares of Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise
price; provided that payment of such proceeds is then made to the Company upon
settlement of such sale), and the methods by which shares of Stock shall be
delivered or deemed to be delivered to Participants. Notwithstanding any other
provision of the Plan to the contrary, no Participant who is a member of the
Board or an “executive officer” of the Company within the meaning of
Section 13(k) of the Exchange Act shall be permitted to pay the exercise price
of an Option, or continue any extension of credit with respect to the exercise
price of an Option with a loan from the Company or a loan arranged by the
Company in violation of Section 13(k) of the Exchange Act.

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              (d)          Evidence of Grant. All Options shall be evidenced by
an Award Agreement between the Company and the Participant. The Award Agreement
shall include such additional provisions as may be specified by the Committee.

          5.2         Incentive Stock Options. Incentive Stock Options shall be
granted only to Employees and the terms of any Incentive Stock Options granted
pursuant to the Plan, in addition to the requirements of Section 5.1, must
comply with the provisions of this Section 5.2.

 

             (a)          Expiration. Subject to Section 5.2(c), an Incentive
Stock Option shall expire and may not be exercised to any extent by anyone after
the first to occur of the following events:

 

             (i)          Ten years from the date it is granted, unless an
earlier time is set in the Award Agreement;

 

 

 

             (ii)         Six months after the Participant’s termination of
employment as an Employee other than on account of the Participant’s Disability
or death, provided, that any exercise of an Option more than three months after
the Participant’s termination of employment as an Employee on account of the
Participant’s Disability or death shall cause such Option to be treated as a
Non-Qualified Stock Option; and

 

 

 

             (iii)        One year after the date of the Participant’s
termination of employment or service on account of Disability or death. Upon the
Participant’s Disability or death, any Incentive Stock Options exercisable at
the Participant’s Disability or death may be exercised by the Participant’s
legal representative or representatives, by the person or persons entitled to do
so pursuant to the Participant’s last will and testament, or, if the Participant
fails to make testamentary disposition of such Incentive Stock Option or dies
intestate, by the person or persons entitled to receive the Incentive Stock
Option pursuant to the applicable laws of descent and distribution.

 

                 (b)          Dollar Limitation. The aggregate Fair Market Value
(determined as of the time the Option is granted) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a Participant
in any calendar year may not exceed $100,000 or such other limitation as imposed
by Section 422(d) of the Code, or any successor provision. To the extent that
Incentive Stock Options are first exercisable by a Participant in excess of such
limitation, the excess shall be considered Non-Qualified Stock Options.

 

 

 

                 (c)          Ten Percent Owners. An Incentive Stock Option
shall be granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of all
classes of Stock of the Company only if such Option is granted at a price that
is not less than 110% of Fair Market Value on the date of grant and the Option
is exercisable for no more than five years from the date of grant.

 

 

 

                 (d)          Notice of Disposition. The Participant shall give
the Company prompt notice of any disposition of shares of Stock acquired by
exercise of an Incentive Stock Option within (i) two years from the date of
grant of such Incentive Stock Option or (ii) one year after the transfer of such
shares of Stock to the Participant.

 

 

 

                 (e)          Right to Exercise. During a Participant’s
lifetime, an Incentive Stock Option may be exercised only by the Participant.

 

 

 

                 (f)          Failure to Meet Requirements. Any Option (or
portion thereof) purported to be an Incentive Stock Option, which, for any
reason, fails to meet the requirements of Section 422 of the Code shall be
considered a Non-Qualified Stock Option.

          5.3            Granting of Options to Independent Directors. The Board
may from time to time, in its sole discretion, and subject to the limitations of
the Plan:

 

                 (a)          Select from among the Independent Directors
(including Independent Directors who have previously been granted Options under
the Plan) such of them as in its opinion should be granted Options;

 

 

 

                 (b)          Subject to Section 3.3, determine the number of
shares of Stock that may be purchased upon exercise of the Options granted to
such selected Independent Directors; and

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                 (c)          Subject to the provisions of this Article 5,
determine the terms and conditions of such Options, consistent with the Plan.

Options granted to Independent Directors shall be Non-Qualified Stock Options.

ARTICLE 6.

RESTRICTED STOCK AWARDS

          6.1          Grant of Restricted Stock. The Committee is authorized to
make Awards of Restricted Stock to any Participant selected by the Committee in
such amounts and subject to such terms and conditions as determined by the
Committee. All Awards of Restricted Stock shall be evidenced by an Award
Agreement.

          6.2          Issuance and Restrictions. Subject to Section 10.6,
Restricted Stock shall be subject to such restrictions on transferability and
other restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive
dividends on the Restricted Stock). These restrictions may lapse separately or
in combination at such times, pursuant to such circumstances, in such
installments, or otherwise, as the Committee determines at the time of the grant
of the Award or thereafter.

          6.3          Forfeiture. Except as otherwise determined by the
Committee at the time of the grant of the Award or thereafter, upon termination
of employment or service during the applicable restriction period, Restricted
Stock that is at that time subject to restrictions shall be forfeited; provided,
however, that, except as otherwise provided by Section 10.6, the Committee may
(a) provide in any Restricted Stock Award Agreement that restrictions or
forfeiture conditions relating to Restricted Stock will be waived in whole or in
part in the event of terminations resulting from specified causes, and (b) in
other cases waive in whole or in part restrictions or forfeiture conditions
relating to Restricted Stock.

          6.4          Certificates for Restricted Stock. Restricted Stock
granted pursuant to the Plan may be evidenced in such manner as the Committee
shall determine. If certificates representing shares of Restricted Stock are
registered in the name of the Participant, certificates must bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical
possession of the certificate until such time as all applicable restrictions
lapse.

ARTICLE 7.

STOCK APPRECIATION RIGHTS

          7.1          Grant of Stock Appreciation Rights.

 

              (a)          A Stock Appreciation Right may be granted to any
Participant selected by the Committee. A Stock Appreciation Right shall be
subject to such terms and conditions not inconsistent with the Plan as the
Committee shall impose and shall be evidenced by an Award Agreement.

 

 

 

              (b)          A Stock Appreciation Right shall entitle the
Participant (or other person entitled to exercise the Stock Appreciation Right
pursuant to the Plan) to exercise all or a specified portion of the Stock
Appreciation Right (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount equal to the product of (i) the excess of
(A) the Fair Market Value of the Stock on the date the Stock Appreciation Right
is exercised over (B) the Fair Market Value of the Stock on the date the Stock
Appreciation Right was granted and (ii) the number of shares of Stock with
respect to which the Stock Appreciation Right is exercised, subject to any
limitations the Committee may impose.

          7.2          Payment and Limitations on Exercise.

 

              (a)          Subject to Section 7.2(b), payment of the amounts
determined under Section 7.1(b) above shall be in cash, in Stock (based on its
Fair Market Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Committee in the Award Agreement.

 

 

 

              (b)          To the extent any payment under Section 7.1(b) is
effected in Stock, it shall be made subject to satisfaction of all provisions of
Article 5 above pertaining to Options.

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ARTICLE 8.

OTHER TYPES OF AWARDS

          8.1          Performance Share Awards. Any Participant selected by the
Committee may be granted one or more Performance Share awards which shall be
denominated in a number of shares of Stock and which may be linked to any one or
more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or
dates or over any period or periods determined by the Committee. In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.

          8.2          Performance Stock Units. Any Participant selected by the
Committee may be granted one or more Performance Stock Unit awards which shall
be denominated in unit equivalent of shares of Stock and/or units of value
including dollar value of shares of Stock and which may be linked to any one or
more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or
dates or over any period or periods determined by the Committee. In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.

          8.3          Dividend Equivalents.

 

              (a)          Any Participant selected by the Committee may be
granted Dividend Equivalents based on the dividends declared on the shares of
Stock that are subject to any Award, to be credited as of dividend payment
dates, during the period between the date the Award is granted and the date the
Award is exercised, vests or expires, as determined by the Committee. Such
Dividend Equivalents shall be converted to cash or additional shares of Stock by
such formula and at such time and subject to such limitations as may be
determined by the Committee.

 

 

 

              (b)          Dividend Equivalents granted with respect to Options
or SARs that are intended to be Qualified Performance-Based Compensation shall
be payable, with respect to pre-exercise periods, regardless of whether such
Option or SAR is subsequently exercised.

          8.4          Stock Payments. Subject to Section 10.5(b), any
Participant selected by the Committee may receive Stock Payments in the manner
determined from time to time by the Committee; provided, that unless otherwise
determined by the Committee, such Stock Payments shall be made in lieu of base
salary, bonus, or other cash compensation otherwise payable to such Participant.
The number of shares shall be determined by the Committee and may be based upon
the Performance Criteria or other specific performance criteria determined
appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.

          8.5          Deferred Stock. Any Participant selected by the Committee
may be granted an award of Deferred Stock in the manner determined from time to
time by the Committee. The number of shares of Deferred Stock shall be
determined by the Committee and may be linked to the Performance Criteria or
other specific performance criteria determined to be appropriate by the
Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee subject to Section 10.6. Subject to
Section 10.5(b), stock underlying a Deferred Stock award will not be issued
until the Deferred Stock award has vested, pursuant to a vesting schedule or
performance criteria set by the Committee. Unless otherwise provided by the
Committee, a Participant awarded Deferred Stock shall have no rights as a
Company stockholder with respect to such Deferred Stock until such time as the
Deferred Stock Award has vested and the Stock underlying the Deferred Stock
Award has been issued.

          8.6          Restricted Stock Units. The Committee is authorized to
make Awards of Restricted Stock Units to any Participant selected by the
Committee in such amounts and subject to such terms and conditions as determined
by the Committee. At the time of grant, the Committee shall specify the date or
dates on which the Restricted Stock Units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting as it deems
appropriate subject to Section 10.6. At the time of grant, the Committee shall
specify the maturity date applicable to each grant of Restricted Stock Units
which shall be no earlier than the vesting date or dates of the Award and may be
determined at the election of the grantee. On the maturity date, the Company
shall, subject to Section 10.5(b), transfer to the Participant one unrestricted,
fully transferable share of Stock for each Restricted Stock Unit scheduled to be
paid out on such date and not previously forfeited.

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          8.7          Performance Bonus Awards. Any Participant selected by the
Committee may be granted one or more Performance-Based Awards in the form of a
cash bonus (a “Performance Bonus Award”) payable upon the attainment of
Performance Goals that are established by the Committee and relate to one or
more of the Performance Criteria, in each case on a specified date or dates or
over any period or periods determined by the Committee subject to Section 10.6.
Any such Performance Bonus Award paid to a Covered Employee shall be based upon
objectively determinable bonus formulas established in accordance with
Article 9.

          8.8          Term. Except as otherwise provided herein, the term of
any Award of Performance Shares, Performance Stock Units, Dividend Equivalents,
Stock Payments, Deferred Stock or Restricted Stock Units shall be set by the
Committee in its discretion.

          8.9          Exercise or Purchase Price. The Committee may establish
the exercise or purchase price, if any, of any Award of Performance Shares,
Performance Stock Units, Deferred Stock, Stock Payments or Restricted Stock
Units; provided, however, that such price shall not be less than the par value
of a share of Stock on the date of grant, unless otherwise permitted by
applicable state law.

          8.10         Exercise upon Termination of Employment or Service. An
Award of Performance Shares, Performance Stock Units, Dividend Equivalents,
Deferred Stock, Stock Payments and Restricted Stock Units shall only be
exercisable or payable while the Participant is an Employee, Consultant or a
member of the Board, as applicable; provided, however, that the Committee in its
sole and absolute discretion may provide that an Award of Performance Shares,
Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or
Restricted Stock Units may be exercised or paid subsequent to a termination of
employment or service, as applicable, or following a Change in Control of the
Company, or because of the Participant’s retirement, death or disability, or
otherwise; provided, however, that any such provision with respect to
Performance Shares or Performance Stock Units shall be subject to the
requirements of Section 162(m) of the Code that apply to Qualified
Performance-Based Compensation.

          8.11        Form of Payment. Payments with respect to any Awards
granted under this Article 8 shall be made in cash, in Stock or a combination of
both, as determined by the Committee.

          8.12        Award Agreement. All Awards under this Article 8 shall be
subject to such additional terms and conditions as determined by the Committee
and shall be evidenced by an Award Agreement.

ARTICLE 9.

PERFORMANCE-BASED AWARDS

          9.1          Purpose. The purpose of this Article 9 is to provide the
Committee the ability to qualify Awards other than Options and SARs and that are
granted pursuant to Articles 6 and 8 as Qualified Performance-Based
Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9
shall control over any contrary provision contained in Articles 6 or 8;
provided, however, that the Committee may in its discretion grant Awards to
Covered Employees that are based on Performance Criteria or Performance Goals
but that do not satisfy the requirements of this Article 9.

          9.2          Applicability. This Article 9 shall apply only to those
Covered Employees selected by the Committee to receive Performance-Based Awards.
The designation of a Covered Employee as a Participant for a Performance Period
shall not in any manner entitle the Participant to receive an Award for the
period. Moreover, designation of a Covered Employee as a Participant for a
particular Performance Period shall not require designation of such Covered
Employee as a Participant in any subsequent Performance Period and designation
of one Covered Employee as a Participant shall not require designation of any
other Covered Employees as a Participant in such period or in any other period.

          9.3          Procedures with Respect to Performance-Based Awards. To
the extent necessary to comply with the Qualified Performance-Based Compensation
requirements of Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Articles 6 or 8 which may be granted to one or more Covered
Employees, no later than ninety (90) days following the commencement of any
fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of
the Code), the Committee shall, in writing, (a) designate one or more Covered
Employees, (b) select the Performance Criteria applicable to the Performance
Period, (c) establish the Performance Goals, and amounts of such Awards, as
applicable, which may be earned for such Performance Period, and (d) specify the
relationship between Performance Criteria and the Performance Goals and the
amounts of such Awards, as applicable, to be earned by each Covered Employee for
such Performance Period. Following the completion of each Performance Period,
the Committee shall certify in writing whether the applicable Performance Goals
have been achieved for such Performance Period. In determining the amount earned
by a Covered Employee, the Committee shall have the right to reduce or eliminate
(but not to increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period.

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          9.4          Payment of Performance-Based Awards. Unless otherwise
provided in the applicable Award Agreement, a Participant must be employed by
the Company or a Subsidiary on the day a Performance-Based Award for such
Performance Period is paid to the Participant. Furthermore, a Participant shall
be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved.
In determining the amount earned under a Performance-Based Award, the Committee
may reduce or eliminate the amount of the Performance-Based Award earned for the
Performance Period, if in its sole and absolute discretion, such reduction or
elimination is appropriate.

          9.5          Additional Limitations. Notwithstanding any other
provision of the Plan, any Award which is granted to a Covered Employee and is
intended to constitute Qualified Performance-Based Compensation shall be subject
to any additional limitations set forth in Section 162(m) of the Code (including
any amendment to Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as qualified
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and the Plan shall be deemed amended to the extent necessary to conform to such
requirements.

ARTICLE 10.

PROVISIONS APPLICABLE TO AWARDS

          10.1          Stand-Alone and Tandem Awards. Awards granted pursuant
to the Plan may, in the discretion of the Committee, be granted either alone, in
addition to, or in tandem with, any other Award granted pursuant to the Plan.
Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.

          10.2          Award Agreement. Awards under the Plan shall be
evidenced by Award Agreements that set forth the terms, conditions and
limitations for each Award which may include the term of an Award, the
provisions applicable in the event the Participant’s employment or service
terminates, and the Company’s authority to unilaterally or bilaterally amend,
modify, suspend, cancel or rescind an Award.

          10.3          Limits on Transfer. No right or interest of a
Participant in any Award may be pledged, encumbered, or hypothecated to or in
favor of any party other than the Company or a Subsidiary, or shall be subject
to any lien, obligation, or liability of such Participant to any other party
other than the Company or a Subsidiary. Except as otherwise provided by the
Committee, no Award shall be assigned, transferred, or otherwise disposed of by
a Participant other than by will or the laws of descent and distribution. The
Committee by express provision in the Award or an amendment thereto may permit
an Award (other than an Incentive Stock Option) to be transferred to, exercised
by and paid to certain persons or entities related to the Participant, including
but not limited to members of the Participant’s family, charitable institutions,
or trusts or other entities whose beneficiaries or beneficial owners are members
of the Participant’s family and/or charitable institutions, or to such other
persons or entities as may be expressly approved by the Committee, pursuant to
such conditions and procedures as the Committee may establish. Any permitted
transfer shall be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a “blind trust” in connection with the Participant’s
termination of employment or service with the Company or a Subsidiary to assume
a position with a governmental, charitable, educational or similar non-profit
institution) and on a basis consistent with the Company’s lawful issue of
securities.

          10.4          Beneficiaries. Notwithstanding Section 10.3, a
Participant may, in the manner determined by the Committee, designate a
beneficiary to exercise the rights of the Participant and to receive any
distribution with respect to any Award upon the Participant’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any
rights pursuant to the Plan is subject to all terms and conditions of the Plan
and any Award Agreement applicable to the Participant, except to the extent the
Plan and Award Agreement otherwise provide, and to any additional restrictions
deemed necessary or appropriate by the Committee. If the Participant is married
and resides in a community property state, a designation of a person other than
the Participant’s spouse as his or her beneficiary with respect to more than 50%
of the Participant’s interest in the Award shall not be effective without the
prior written consent of the Participant’s spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant’s will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.

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          10.5          Stock Certificates; Book Entry Procedures.

 

               (a)          Notwithstanding anything herein to the contrary, the
Company shall not be required to issue or deliver any certificates evidencing
shares of Stock pursuant to the exercise of any Award, unless and until the
Board has determined, with advice of counsel, that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered
pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Board
may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements. The Committee shall
have the right to require any Participant to comply with any timing or other
restrictions with respect to the settlement or exercise of any Award, including
a window-period limitation, as may be imposed in the discretion of the
Committee.

 

 

 

               (b)          Notwithstanding any other provision of the Plan,
unless otherwise determined by the Committee or required by any applicable law,
rule or regulation, the Company shall not deliver to any Participant
certificates evidencing shares of Stock issued in connection with any Award and
instead such shares of Stock shall be recorded in the books of the Company (or,
as applicable, its transfer agent or stock plan administrator).

          10.6          Full Value Award Vesting Limitations. Notwithstanding
any other provision of this Plan to the contrary, Full Value Awards made to
Employees or Consultants shall become vested over a period of not less than
three years (or, in the case of vesting based upon the attainment of Performance
Goals or other performance-based objectives, over a period of not less than one
year) following the date the Award is made; provided, however, that,
notwithstanding the foregoing, Full Value Awards that result in the issuance of
an aggregate of up to 5% of the shares of Stock available pursuant to
Section 3.1(a) may be granted to any one or more Participants without respect to
such minimum vesting provisions.

          10.7          Paperless Exercise. In the event that the Company
establishes, for itself or using the services of a third party, an automated
system for the exercise of Awards, such as a system using an internet website or
interactive voice response, then the paperless exercise of Awards by a
Participant may be permitted through the use of such an automated system.

ARTICLE 11.

CHANGES IN CAPITAL STRUCTURE

          11.1          Adjustments.

 

                (a)          In the event of any stock dividend, stock split,
combination or exchange of shares, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the shares of
Stock or the share price of the Stock, the Committee may make such proportionate
adjustments, if any, as the Committee in its sole discretion may deem
appropriate to reflect such change with respect to (a) the aggregate number and
kind of shares that may be issued under the Plan (including, but not limited to,
adjustments of the limitations in Sections 3.1 and 3.3); (b) the terms and
conditions of any outstanding Awards (including, without limitation, any
applicable performance targets or criteria with respect thereto); and (c) the
grant or exercise price per share for any outstanding Awards under the Plan. Any
adjustment affecting an Award intended as Qualified Performance-Based
Compensation shall be made consistent with the requirements of Section 162(m) of
the Code.

 

 

 

                (b)          In the event of any transaction or event described
in Section 11.1 or any unusual or nonrecurring transactions or events affecting
the Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations or
accounting principles, the Committee, in its sole and absolute discretion, and
on such terms and conditions as it deems appropriate, either by the terms of the
Award or by action taken prior to the occurrence of such transaction or event
and either automatically or upon the Participant’s request, is hereby authorized
to take any one or more of the following actions whenever the Committee
determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:

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             (i)          To provide for either (A) termination of any such
Award in exchange for an amount of cash, if any, equal to the amount that would
have been attained upon the exercise of such Award or realization of the
Participant’s rights (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction or event described in this Section 11.2 the
Committee determines in good faith that no amount would have been attained upon
the exercise of such Award or realization of the Participant’s rights, then such
Award may be terminated by the Company without payment) or (B) the replacement
of such Award with other rights or property selected by the Committee in its
sole discretion;

 

 

 

             (ii)         To provide that such Award be assumed by the successor
or survivor corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar options, rights or awards covering the stock of the
successor or survivor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices;

 

 

 

             (iii)        To make adjustments in the number and type of shares
of Stock (or other securities or property) subject to outstanding Awards, and in
the number and kind of outstanding Restricted Stock or Deferred Stock and/or in
the terms and conditions of (including the grant or exercise price), and the
criteria included in, outstanding options, rights and awards and options, rights
and awards which may be granted in the future;

 

 

 

             (iv)         To provide that such Award shall be exercisable or
payable or fully vested with respect to all shares covered thereby,
notwithstanding anything to the contrary in the Plan or the applicable Award
Agreement; and

 

 

 

             (v)          To provide that the Award cannot vest, be exercised or
become payable after such event.

          11.2          Acceleration Upon a Change in Control. Notwithstanding
any provision to the contrary contained herein or in any applicable Award
Agreement or other written agreement entered into between the Company and a
Participant, if a Change in Control occurs then, immediately prior to the Change
in Control, all Awards outstanding under the Plan shall become fully vested and
exercisable and all forfeiture restrictions on such Awards shall lapse.  Subject
to the foregoing, upon, or in anticipation of, a Change in Control, the
Committee may cause any and all Awards outstanding hereunder to terminate at a
specific time in the future, including but not limited to the date of such
Change in Control, and may give each Participant the right to exercise such
Awards during a period of time as the Committee, in its sole and absolute
discretion, shall determine.  In the event that the terms of any agreement
between the Company or any Company subsidiary or affiliate and a Participant
contains provisions that conflict with and are more restrictive than the
provisions of this Section 11.2, this Section 11.2 shall prevail and control and
the more restrictive terms of such agreement (and only such terms) shall be of
no force or effect.

          11.3          No Other Rights. Except as expressly provided in the
Plan, no Participant shall have any rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend, any
increase or decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other
corporation. Except as expressly provided in the Plan or pursuant to action of
the Committee under the Plan, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to an Award or the grant or exercise price of
any Award.

ARTICLE 12.

ADMINISTRATION

          12.1          Committee.  Unless and until the Board delegates
administration of the Plan to a Committee as set forth below, the Plan shall be
administered by the full Board, and for such purposes the term “Committee” as
used in this Plan shall be deemed to refer to the Board. The Board, at its
discretion or as otherwise necessary to comply with the requirements of
Section 162(m) of the Code, Rule 16b-3 promulgated under the Exchange Act or to
the extent required by any other applicable rule or regulation, shall delegate
administration of the Plan to a Committee. The Committee shall consist solely of
two or more members of the Board each of whom is an “outside director,” within
the meaning of Section 162(m) of the Code, a Non-Employee Director and an
“independent director” under the rules of the American Stock Exchange (or other
principal securities market on which shares of Stock are traded).

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Notwithstanding the foregoing: (a) the full Board, acting by a majority of its
members in office, shall conduct the general administration of the Plan with
respect to all Awards granted to Independent Directors and for purposes of such
Awards the term “Committee” as used in this Plan shall be deemed to refer to the
Board and (b) the Committee may delegate its authority hereunder to the extent
permitted by Section 12.5. Appointment of Committee members shall be effective
upon acceptance of appointment. In its sole discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Committee under the Plan except with respect to matters which under Rule 16b 3
under the Exchange Act or Section 162(m) of the Code, or any regulations or
rules issued thereunder, are required to be determined in the sole discretion of
the Committee. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may only be filled by the Board.

          12.2          Action by the Committee.  A majority of the Committee
shall constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and acts approved in writing by a majority
of the Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good faith, rely or
act upon any report or other information furnished to that member by any officer
or other employee of the Company or any Subsidiary, the Company’s independent
certified public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.

          12.3          Authority of Committee.  Subject to any specific
designation in the Plan, the Committee has the exclusive power, authority and
discretion to:

 

                 (a)          Designate Participants to receive Awards;

 

 

 

                 (b)          Determine the type or types of Awards to be
granted to each Participant;

 

 

 

                 (c)          Determine the number of Awards to be granted and
the number of shares of Stock to which an Award will relate;

 

 

 

                 (d)          Determine the terms and conditions of any Award
granted pursuant to the Plan, including, but not limited to, the exercise price,
grant price, or purchase price, any reload provision, any restrictions or
limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers
thereof, any provisions related to non-competition and recapture of gain on an
Award, based in each case on such considerations as the Committee in its sole
discretion determines; provided, however, that the Committee shall not have the
authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;

 

 

 

                 (e)          Determine whether, to what extent, and pursuant to
what circumstances an Award may be settled in, or the exercise price of an Award
may be paid in, cash, Stock, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;

 

 

 

                 (f)          Prescribe the form of each Award Agreement, which
need not be identical for each Participant;

 

 

 

                 (g)          Decide all other matters that must be determined
in connection with an Award;

 

 

 

                 (h)          Establish, adopt, or revise any rules and
regulations as it may deem necessary or advisable to administer the Plan;

 

 

 

                 (i)          Interpret the terms of, and any matter arising
pursuant to, the Plan or any Award Agreement; and

 

 

 

                 (j)          Make all other decisions and determinations that
may be required pursuant to the Plan or as the Committee deems necessary or
advisable to administer the Plan.

          12.4          Decisions Binding.  The Committee’s interpretation of
the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all
decisions and determinations by the Committee with respect to the Plan are
final, binding, and conclusive on all parties.

          12.5          Delegation of Authority.  To the extent permitted by
applicable law, the Committee may from time to time delegate to a committee of
one or more members of the Board or one or more officers of the Company the
authority to grant or amend Awards to Participants other than (a) senior
executives of the Company who are subject to Section 16 of the Exchange Act,
(b) Covered Employees, or (c) officers of the Company (or members of the Board)
to whom authority to grant or amend Awards has been delegated hereunder. Any
delegation hereunder shall be subject to the restrictions and limits that the
Committee specifies at the time of such delegation, and the Committee may at any
time rescind the authority so delegated or appoint a new delegatee. At all
times, the delegatee appointed under this Section 12.5 shall serve in such
capacity at the pleasure of the Committee.

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ARTICLE 13.

EFFECTIVE AND EXPIRATION DATE

          13.1           Effective Date.  The Plan is effective as of the date
the Plan is approved by the Company’s stockholders (the “Effective Date”). The
Plan will be deemed to be approved by the stockholders if it receives the
affirmative vote of the holders of a majority of the shares of stock of the
Company present or represented and entitled to vote at a meeting duly held in
accordance with the applicable provisions of the Company’s Bylaws.

          13.2           Expiration Date.  The Plan will expire on, and no Award
may be granted pursuant to the Plan after the tenth anniversary of the Effective
Date, except that no Incentive Stock Options may be granted under the Plan after
the earlier of the tenth anniversary of (i) the date the Plan is approved by the
Board or (ii) the Effective Date. Any Awards that are outstanding on the tenth
anniversary of the Effective Date shall remain in force according to the terms
of the Plan and the applicable Award Agreement.

ARTICLE 14.

AMENDMENT, MODIFICATION, AND TERMINATION

          14.1           Amendment, Modification, and Termination.  Subject to
Section 15.14, with the approval of the Board, at any time and from time to
time, the Committee may terminate, amend or modify the Plan; provided, however,
that (a) to the extent necessary and desirable to comply with any applicable
law, regulation, or stock exchange rule, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as
required, (b) stockholder approval is required for any amendment to the Plan
that (i) increases the number of shares available under the Plan (other than any
adjustment as provided by Article 11), or (ii) results in a material increase in
benefits or a change in eligibility requirements, and (c) no amendment to the
Plan shall permit the Committee to grant Options or SARs with an exercise price
that is below Fair Market Value on the date of grant or to extend the exercise
period for an Option or SAR beyond ten years from the date of grant.
Notwithstanding any provision in this Plan to the contrary, (A) no Option may be
amended to reduce the per share exercise price of the shares subject to such
Option below the per share exercise price as of the date the Option is granted,
and (B) no Option or SAR may be granted in exchange for, or in connection with,
the cancellation or surrender of an Option having a higher per share exercise
price.

          14.2           Awards Previously Granted.  Except with respect to
amendments made pursuant to Section 15.14, no termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted pursuant to the Plan without the prior written consent of the
Participant.

ARTICLE 15.

GENERAL PROVISIONS

          15.1           No Rights to Awards.  No Eligible Individual or other
person shall have any claim to be granted any Award pursuant to the Plan, and
neither the Company nor the Committee is obligated to treat Eligible
Individuals, Participants or any other persons uniformly.

          15.2           No Stockholders Rights.  Except as otherwise provided
herein, a Participant shall have none of the rights of a stockholder with
respect to shares of Stock covered by any Award until the Participant becomes
the record owner of such shares of Stock.

          15.3           Withholding.  The Company or any Subsidiary shall have
the authority and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, local and
foreign taxes (including the Participant’s employment tax obligations) required
by law to be withheld with respect to any taxable event concerning a Participant
arising as a result of this Plan. The Committee may in its discretion and in
satisfaction of the foregoing requirement allow a Participant to elect to have
the Company withhold shares of Stock otherwise issuable under an Award (or allow
the return of shares of Stock) having a Fair Market Value equal to the sums
required to be withheld.

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Notwithstanding any other provision of the Plan, the number of shares of Stock
which may be withheld with respect to the issuance, vesting, exercise or payment
of any Award (or which may be repurchased from the Participant of such Award
within six months (or such other period as may be determined by the Committee)
after such shares of Stock were acquired by the Participant from the Company) in
order to satisfy the Participant’s federal, state, local and foreign income and
payroll tax liabilities with respect to the issuance, vesting, exercise or
payment of the Award shall be limited to the number of shares which have a Fair
Market Value on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for
federal, state, local and foreign income tax and payroll tax purposes that are
applicable to such supplemental taxable income.

          15.4           No Right to Employment or Services.  Nothing in the
Plan or any Award Agreement shall interfere with or limit in any way the right
of the Company or any Subsidiary to terminate any Participant’s employment or
services at any time, nor confer upon any Participant any right to continue in
the employ or service of the Company or any Subsidiary.

          15.5           Unfunded Status of Awards.  The Plan is intended to be
an “unfunded” plan for incentive compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.

          15.6           Indemnification.  To the extent allowable pursuant to
applicable law, each member of the Committee and of the Board shall be
indemnified and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action or failure to act pursuant to the Plan and against and from any
and all amounts paid by him or her in satisfaction of judgment in such action,
suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled pursuant to the Company’s Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.

          15.7           Relationship to other Benefits.  No payment pursuant to
the Plan shall be taken into account in determining any benefits pursuant to any
pension, retirement, savings, profit sharing, group insurance, welfare or other
benefit plan of the Company or any Subsidiary except to the extent otherwise
expressly provided in writing in such other plan or an agreement thereunder.

          15.8           Expenses.  The expenses of administering the Plan shall
be borne by the Company and its Subsidiaries.

          15.9           Titles and Headings.  The titles and headings of the
Sections in the Plan are for convenience of reference only and, in the event of
any conflict, the text of the Plan, rather than such titles or headings, shall
control.

          15.10         Fractional Shares.  No fractional shares of Stock shall
be issued and the Committee shall determine, in its discretion, whether cash
shall be given in lieu of fractional shares or whether such fractional shares
shall be eliminated by rounding up or down as appropriate.

          15.11        Limitations Applicable to Section 16 Persons. 
Notwithstanding any other provision of the Plan, the Plan, and any Award granted
or awarded to any Participant who is then subject to Section 16 of the Exchange
Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 under the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

          15.12         Government and Other Regulations.  The obligation of the
Company to make payment of awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company shall be under no obligation to
register pursuant to the Securities Act, as amended, any of the shares of Stock
paid pursuant to the Plan. If the shares paid pursuant to the Plan may in
certain circumstances be exempt from registration pursuant to the Securities
Act, as amended, the Company may restrict the transfer of such shares in such
manner as it deems advisable to ensure the availability of any such exemption.

          15.13         Governing Law.  The Plan and all Award Agreements shall
be construed in accordance with and governed by the laws of the State of
Colorado.

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          15.14         Section 409A.  Awards granted under this Plan and
amounts payable in connection therewith are not intended to provide for any
deferral of compensation subject to gross income inclusion under Code
Section 409A; rather, such Awards and amounts payable in connection therewith
are intended to be exempt from gross income inclusion under Code Section 409A
because either (A) such Awards are “stock rights” or “statutory stock options”
that do not constitute “nonqualified deferred compensation” within the meaning
of Code Section 409A, or (B) because such Awards will be paid not later than the
later to occur of: (i) the 15th day of the third month following the
Participant’s first taxable year in which such amounts are no longer subject to
a substantial risk of forfeiture, and (ii) the 15th day of the third month
following first taxable year of the Company in which such amounts are no longer
subject to substantial risk of forfeiture, as determined in accordance with Code
Section 409A (the “Short-Term Deferral Date”). In the event that any Awards or
amounts payable in connection therewith would, nevertheless, be subject to gross
income inclusion under Code Section 409A because such Awards or amounts are not
actually or constructively received by any Participant on or before the
Short-Term Deferral Date or for any other reason, to the extent such amounts
constitute a deferral of compensation subject to Code Section 409A, then
(x) subject to clause (y), such amounts shall be paid during the year following
the year in which such amounts are no longer subject to a substantial risk of
forfeiture, and (y) if the Employee is a “specified employee,” within the
meaning of Code Section 409A, with respect to the Company, such amounts shall be
paid upon the date which is six months after the date of the Employee’s
“separation from service” (or, if earlier, the date of the Employee’s death) in
accordance with Code Section 409A.

* * * * *

I hereby certify that: (i) the foregoing Plan was duly adopted initially by the
Board of Directors of Rentech, Inc. on December 30, 2005; (ii) the Board of
Directors approved an amendment to the Plan on September 8, 2006 and (iii) this
amended and restated form was approved by the Board of Directors on January 25,
2007, subject to approval by the stockholders.

* * * * *

I hereby certify that the foregoing Plan was initially approved by the
stockholders of Rentech, Inc. on  April 13, 2006 and an amendment was approved
by the stockholders March 22, 2007.

Executed on this 27th day of  March, 2007.

 

 

 

/s/ Colin M. Morris

 

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Corporate Secretary

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