Exhibit 10.3


 


SEPARATION AGREEMENT AND RELEASE


This Agreement is
made and entered into by and between ERNEST THOMAS (“Employee”) and CF
INDUSTRIES, INC., including its parents, divisions, subsidiaries, affiliates,
employees, directors, officers, trustees, shareholders, successors and assigns
(“Company”).


WHEREAS, Employee’s
employment with the Company will end at the close of business on Friday,
May 25, 2007, which date is the end of the twenty-one (21) calendar day
period referred to in Paragraph 13(d) below plus a seven (7) calendar day
extension (as so extended, “Consideration Period”), unless Employee executes
and returns this Agreement within such Consideration Period, in which case
Employee’s employment with the Company will instead end upon the expiration of
the seven (7) calendar day revocation period (“Revocation Period”) referred to
in Paragraph 13(e) below (in either case the end of Employee’s employment with
the Company being referred to herein as the “Termination Date”);


WHEREAS, the
parties desire to effect a final settlement and compromise of all claims and
issues that have been raised or could have been raised by Employee and Company;


NOW THEREFORE, in
consideration of the mutual covenants and promises contained herein, the
parties agree as follows:


1.             The
Company will pay Employee the lump sum of $500,000, less appropriate
withholding, on or before the next regular pay period following the Termination
Date, but, as is also true for the consideration set out in Paragraphs 2, 3, 4,
and 5 below, in no event before five (5) business days beyond the expiration of
the Revocation Period.


2.             For
the period commencing immediately after the Termination Date and ending on
September 30, 2007 (“Consulting Period”), Employee agrees to make himself
available to provide limited consulting services to the Company from time to
time.  The consulting services that 



                                 
 









Employee
will provide shall be as requested by the Chief Executive Officer or the new
Chief Financial Officer of the Company, for the purpose of assisting the new
Chief Financial Officer with any questions or issues that may arise during the
transition, subject to Employee’s availability to provide such services in each
instance in light of Employee’s responsibilities in his new position.  Employee shall be paid a fee for such
consulting services at the rate of $500 per hour.  In no event shall Employee be expected or
required to perform more than one hour of consulting services in any one day or
more than twenty hours of consulting services in total during the Consulting
Period.


(a)           So
long as Employee remains a consultant through August 10, 2007, (i) one-third of
his stock option grant made under the CF Industries Holdings, Inc. 2005 Equity
and Incentive Plan (the “Plan”) as of August 10, 2005 shall become fully vested
and exercisable on August 10, 2007 and (ii) one-third of his stock option grant
made under the Plan as of August 10, 2006 shall become fully vested and
exercisable on August 10, 2007.


(b)           Employee’s
stock options will continue to be subject to the existing terms and conditions,
as set forth in the Plan and applicable award agreements, including those
provisions with respect to permissible methods of exercise (including those
methods previously approved by the Compensation Committee).  In particular, the term of Employee’s stock
options will continue through the Consulting Period and for ninety (90) days
thereafter, at the end of which period Employee’s stock options will terminate
to the extent not theretofore vested and exercised.


(c)           Employee
will no longer be subject to the provisions of the Company’s policy on insider
trading that, while he was Senior Vice President and Chief Financial Officer of
the Company, required him to confine his trading to quarterly trading windows
and to obtain pre-clearance before trading.



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3.             At
the next regular pay period following the Termination Date, Employee will be
paid the equivalent of all unused vacation to which he is entitled, if any.


4.             Employee
will receive all retirement and welfare plan benefits for which he is eligible,
if any, in accordance with the applicable plan documents.  As further consideration, any unvested
Company contributions to qualified and non-qualified savings plans will be paid
in cash at the next regular pay period following the Termination Date.


5.             The
Company will pay up to twelve (12) months of COBRA premiums for medical
insurance coverage should Employee elect to exercise his COBRA rights or until
such time as Employee becomes eligible for medical insurance coverage from
another employer, whichever occurs first. 
If Employee becomes eligible for medical insurance coverage from another
employer, the Company’s payments of his COBRA premiums pursuant to this
paragraph will cease.


6.             Other
than the benefits expressly referred to in Paragraphs 1 through 5 above, all
benefits Employee received as an employee of the Company cease and no longer
accrue as of the close of business on the Termination Date or, as applicable,
in accordance with the provisions of any applicable plan based on the
Termination Date.


7.             Employee
agrees not to discuss or disclose the terms of this Agreement except insofar as
Employee determines that it is necessary to reveal this information to his
attorney, accountant or tax preparer, members of his immediate family or as
required to do so by law or by the order of any court, government agency or
deliberative body with authority to order such disclosure; provided that
Employee may disclose the terms of this Agreement in order to enforce any of
the provisions of, or Employee’s rights under, this Agreement or to defend
Employee against any claim by the Company that Employee has breached any
provision of this Agreement.  Should
Employee receive any legal request, notice or order to disclose the terms of
this Agreement, 



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Employee
will immediately notify the Company’s General Counsel both in writing (at CF
Industries, Inc., 4 Parkway North Suite 400, Deerfield, IL  60015-2590) and telephonically (847-405-2400)
that Employee has received such disclosure demand so that the Company may
timely take any legal action it considers necessary to stop such
disclosure.  Should Employee breach this
confidentiality commitment, the Company reserves the right (a) to stop the
payment of any benefits pursuant to this Agreement not yet paid; (b) to
seek recovery of any payments already made pursuant to this Agreement; and/or
(c) to seek legal redress for any damages resulting from such disclosures.


8.             Employee
agrees that he will not take any action, or make any statement, whether orally
or in writing, which in any manner disparages or impugns the reputation or
goodwill of the Company and that to do so will constitute a material breach of
this Agreement.  The Company agrees that
its current officers will not take any action, or make any statement, whether
orally or in writing, which in any manner disparages or impugns the reputation
or goodwill of Employee and that to do so will constitute a material breach of
this Agreement.


9.             The
parties agree that the only public statement to be made by either party
regarding Employee’s separation from the Company will be the announcement that
Employee has left the Company to accept another position.  Employee is to direct all references to the
Company’s General Counsel who will respond only to written reference inquiries
with the following information:  dates of
employment, position(s) held and confirmation of last salary.  To the extent that Employee directs
references to persons at the Company other than the Company’s General Counsel,
the Company is not liable for any statements made by such nondesignated
individuals regarding Employee.  The
parties stipulate and agree that the Company has no liability for any
statements 



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made
regarding Employee by persons not employed by the Company at the time such
statements are made.


10.           Employee
represents and warrants that he has returned to the Company all Company
property.


11.           Employee
acknowledges that, as a former executive of the Company, he became aware of
Company trade secrets and other confidential, proprietary and legally
privileged information including but not limited to financial and legal matters
involving the Company.  Employee further
acknowledges that he is not to disclose any trade secrets, privileged or
confidential information he learned in the course of his employment with the
Company and that he is required to return to the Company any such trade secret,
privileged or confidential materials currently in his possession, whether in
hard copy, disk or on his hard drive.  If
Employee has turned over such trade secret, privileged or confidential Company
information and/or documents, whether in hard copy or electronic format, to any
third party, Employee is required as a condition of this Agreement to take all
necessary efforts to retrieve such data and return it to the Company as well as
to inform the Company’s General Counsel of the identity of all such third
parties so that the Company may take whatever action is necessary to retrieve
its data.


12.           In
exchange for the foregoing benefits and payments, Employee, for himself, his
heirs, and his executors and administrators, will release and forever discharge
the Company (as defined above) from any and all legally waivable claims,
demands, sums of money, contracts, controversies, agreements, promises, damages,
costs, causes of action and liabilities of any kind or character whatsoever,
from the beginning of time to the date Employee signs this Agreement, relating
to his employment at the Company, including the termination of such employment,
except insofar as it may be necessary to take action with respect to the
enforcement of this Agreement.  



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This
release includes, but is not limited to, all claims which could have been
raised under any local, state or federal statute, ordinance, regulation and/or
under any express or implied contract and/or under common law.


13.           With
respect to the foregoing release and waiver, Employee acknowledges the
following:


(a)           That
the foregoing release and waiver is entered into knowingly, voluntarily and
with the opportunity for advice by Employee’s personal attorney.


(b)           Employee
acknowledges that the entitlements set forth in this Agreement exceed in nature
and scope that to which he would otherwise be legally eligible to receive.


(c)           Nothing
contained in this Agreement purports to release any of Employee’s rights or
claims that may arise after the date of execution of this Agreement.


(d)           This
Agreement shall not give rise to any legal rights or obligations with respect
to any waiver of claims until Employee is afforded a period of at least
twenty-one (21) calendar days within which to consider the terms of this
Agreement.


(e)           Employee
shall be afforded seven (7) calendar days following the execution of this
Agreement within which Employee may revoke the Agreement insofar as it relates
to the Age Discrimination in Employment Act, and none of the terms and
provisions of this Agreement shall become effective or enforceable with respect
to any waiver of claims under the Age Discrimination in Employment Act until
such revocation period has expired.  Any
such revocation must be in writing, including email, and directed to Douglas
Barnard, General Counsel, CF Industries, Inc., 4 Parkway North Suite 400,
Deerfield, IL  60015-2590.  Mr. Barnard’s email address is:  dbarnard@cfindustries.com and his telephone
number is:  847-405-2400.  Although 



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such
revocation must be in writing, Mr. Barnard must also be informed by telephone
of the revocation on or before the last day of the revocation period.


14.           The
parties hereby stipulate and agree that nothing contained in this Agreement
shall be construed as an admission of liability, culpability or wrongdoing by
either party.


15.           This
Agreement constitutes the entire understanding between the parties.  No promises or agreements not contained in
this Agreement shall be binding unless set forth in writing and signed by all
the parties.


16.           The
parties agree that this Agreement shall be construed and enforced in accordance
with the laws of the State of Illinois, without regard to choice of law or
conflict of law principles.  The parties
agree that any legal proceedings relating to this Agreement will be instituted
in federal or state court in Cook County, Illinois, and the parties consent to
the jurisdiction of such courts for such actions.


17.           Should
any provision of this Agreement, in whole or in part, be held invalid or
unenforceable by operation of law or otherwise, all other provisions shall
remain in full force and effect and the parties agree that a court may modify
any provision to make it valid or enforceable in whole or in part.


	
  ERNEST THOMAS  

  	
  CF INDUSTRIES, INC. 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Ernest
  Thomas

  	
   

  	
  By:

  	
   /s/ Douglas
  C. Barnard

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated: 

  	
  May 24, 2007

  	
   

  	
  Its:

  	
  Vice President, General Counsel and Secretary 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Dated: May 17, 2007

  	
   

  
								



 


 



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