**Exhibit10.1.23**

 

RESTRICTED SHARE AWARD 

 

Date of Grant: (Date) 

Number of Shares Awarded: (Shares) 

 

(Name) 

(Address) 

(City, State Zip) 

 

Dear (Recipient): 

 

We are pleased to inform you that as a non-employee director of Terra Industries Inc. (the “Corporation”), you have been granted, under the Terra Industries Inc. Stock Incentive Plan of 2002 (the “Plan”),the number of Common Shares of the Corporation set forth above, subject to certain restrictions, terms and conditions set forth in this letter and in the Plan. The restricted Common Shares issued to you are referred to in this letter as the“Restricted Shares.” 

 

1.     Fromthe date hereof until the restrictions on the Restricted Shares terminate (the “Restriction Period”), the Restricted Shares shall not be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed; provided, however, that anyof the Restricted Shares may be exchanged for any other Common Shares that are similarly restricted. 

 

2.     The Restriction Period shall terminate at the following times: 

 

a.     The Restriction Period shall terminate with respect to one hundred percent (100%) all of the Restricted Shareson the day any one of the following occurs on or before (Termination Date): (i) any person or group of persons acting in concert (other than Anglo American plc, and its affiliates or a group consisting solely of such persons (the “AngloAmerican Affiliates”)) acquires beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934) of the outstanding securities (the “VotingShares”) of the Corporation in an amount having, or convertible into securities having, 25% or more of the ordinary voting power for the election of directors of the Corporation, provided that this 25% beneficial ownership trigger shall applyonly when the Anglo American Affiliates no longer own 50% or more of the Voting Shares; (ii) during a period of not more than 24 months, a majority of the Board of Directors of the Corporation ceases to consist of the existing membership orsuccessors nominated by the existing membership or their similar successors; (iii) all or substantially all of the individuals and entities who were the beneficial owners of the Corporation’s outstanding securities entitled to vote do not ownmore than 60% of such securities in substantially the same proportions following a shareholder approved reorganization, merger, or consolidation; or (iv) shareholder approval of either (A) a complete liquidation or dissolution of the Corporation or(B) a sale or other disposition of all or substantially all of the assets of the Corporation, or a transaction having a similar effect. 

 

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 b.     The Restriction Period shall terminate with respect to one hundred percent (100%) of the Restricted Shares on (Termination Date). 
 

***The Corporation shall retain possession of the Restricted Shares untilthe later to occur of the termination of the Restriction Period and the termination of the security interest described in Section 6 of this letter.***

 

3.    If your service on the Board of Directors of the Corporation terminates during the term of this agreement, all Restricted Sharessubject to the Restriction Period shall automatically be forfeited by you and reconveyed to the Corporation, except as follows: 

 

a.    If your service terminates by reason of death, the Restricted Shares shall continue to be eligible for vestingpursuant to Section 2 for a period of one year from the date of death (provided that such vesting must occur, if at all, on or before (Termination Date)). 

 

b.    If your service terminates by reason of Total Disability or retirement, with the permission of the PersonnelCommittee, the Restricted Shares shall continue to be eligible for vesting pursuant to Section 2 (provided that such vesting must occur, if at all, on or before (Termination Date)). 

 

c.    In cases of special circumstances the Personnel Committee may, in its solediscretion when it finds that a waiver would be in the best interests of the Corporation, extend the period for vesting or terminate the Restriction Period with respect to all or a portion of your Restricted Shares. 

 

4.    ***This award shall not be effective unless yousign a copy of this letter and deliver it to the Corporate Secretary of the Corporation, Terra Centre, 600 Fourth Street, Sioux City, Iowa 51101, on or before (Return Date).*** If the Corporate Secretary does not have your properly executedcopy of this letter before such time, then, anything in this letter to the contrary notwithstanding, this award shall terminate and be of no effect. Your signing and delivering a copy of this letter shall evidence your acceptance of the RestrictedShares upon the terms and conditions of this Award. Attached is a copy of your Stock Certificate and Stock Power. Your execution of the stock power will permit the Corporation to enforce the security interest described in Section 6 of this letter orreconvey the Restricted Shares to the Corporation in the event the Award is forfeited. 

 

5.    Except as set forth in this letter, upon the issuance of the Restricted Shares you shall have all of the rights of a stockholder, including the right to vote the Restricted Shares and the right toreceive dividends thereon. The certificates for any Restricted Shares shall bear an appropriate legend reciting the terms, conditions and restrictions applicable thereto, and shall be subject to appropriate stop-transfer orders. The Corporationshall issue your Restricted Shares promptly after the Corporation’s Corporate Secretary receives the documents set forth in Section 4, the Restricted Shares have been listed (or authorized for listing upon official notice of issuance) upon eachstock exchange upon which the Common Shares of the Corporation are listed and there has been compliance with such laws and regulations as the Corporation may deem applicable. The Corporation agrees to use its best efforts to effect such listing andcompliance. 

 

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6.    Youhereby agree to pay to the Corporation, or otherwise make arrangements satisfactory to the Corporation regarding payment of, any federal, state or local taxes required or authorized by law to be withheld with respect to the award of the RestrictedShares or the termination of the Restriction Period (the “Withholding Taxes”). The Corporation shall have, to the extent permitted by law, the right to deduct from any payment of any kind otherwise due to the Employee, any WithholdingTaxes and to condition the delivery of the Restricted Shares after the termination of the Restriction Period on the payment to the Corporation of the Withholding Taxes. You hereby grant to the Corporation a security interest in the Restricted Sharesto secure the reconveyance of the Restricted Shares to the Corporation upon any forfeiture and to ensure adequate provision for the Withholding Taxes. The Corporation shall release its security interest in respect of any Restricted Shares on which(i) the Restriction Period has terminated and (ii) all Withholding Taxes have been paid. In lieu of the payment of such amounts in cash, you may pay all or a portion of the Withholding Taxes by (a) the delivery of Common Shares not subject to anyRestriction Period or (b) having the Corporation withhold a portion of the Common Shares otherwise to be delivered upon vesting of the Restricted Shares. 

 

7.    The Corporation may, in its sole discretion, at any time or from time to time, in lieu of the delivery of all or any portion ofyour Restricted Shares, pay to you cash equal to the Fair Market Value (as defined in the Terra Industries Inc. Stock Incentive Plan of 2002) of such shares on the day the Restriction Period terminates. 

 

8.    If any distribution is made to the holders ofRestricted Shares other than a cash dividend and new, different, or additional shares or other securities of the Corporation or of another company are received by the holders of the Restricted Shares, or if any recapitalization or reclassification,split-up or consolidation of the Restricted Shares shall be effected, or, if in connection with a merger or consolidation of the Corporation or a sale by the Corporation of all or a part of its assets, the Restricted Shares are exchanged for adifferent number or class of shares of stock or other securities of the Corporation or for shares of stock or other securities of any other company, then any such other securities shall be subject to similar restrictions as the Restricted Shares,and the number and class of Restricted Shares, and the restrictions, terms and other conditions applicable to any such other securities shall be equitably determined by the Personnel Committee. 

 

9.    Nothing in this Agreement shall confer upon thenon-employee Director any right to continue in the service of the Board of Directors of the Corporation, or affect the right of the Board of Directors of the Corporation to terminate the service of such Director, with or without cause. 

 

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TheseRestricted Shares are awarded pursuant to the Plan and are subject to its terms. Capitalized terms used in this letter have the same meanings as defined in the Plan. A copy of the Plan is being furnished to you with this letter and also is availableon request from the Corporate Secretary of the Corporation. 

 

Very truly yours,
   
TERRA INDUSTRIES INC.
      
By:
 
 
  
Michael L. Bennett

President and Chief Executive Officer

By:
 
 
  
Mark A. Kalafut
  
President and Chief Executive Officer

and Corporate Secretary

 

Ihereby agree to the terms and conditions set forth above and acknowledge receipt of the Terra Industries Inc. Stock Incentive Plan of 2002 and the Prospectus covering shares issued under that Plan. 

 
     
Signature of non-employee Director
  
 

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