Document:

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                                                               Exhibit 10.1.8.a.

                            AMENDMENT NO. 2 TO THE
                             TERRA INDUSTRIES INC.
                             SUPPLEMENTAL DEFERRED
                               COMPENSATION PLAN

     Terra Industries Inc. desires to amend its Supplemental Deferred
Compensation Plan as amended as of May 1, 1995 (the "Plan"), all on the terms
and conditions herein. Accordingly, the Plan is hereby amended as follows:

     (a)  Article VI of the Plan shall be amended by adding the following new
section 6.06 therein reading in its entirety as follows:

          "6.06  Early Distribution. The Participant may elect, before or after
                 ------------------
     Participant's Retirement or Termination of Service, to receive a
     distribution with respect to the value of part or all of the vested portion
     of the Participant's Bookkeeping Account. Any such distribution shall be
     equal to the value of the portion of the Participant's Bookkeeping Account
     elected, less a forfeiture penalty of 20% of that value, and the amount
     distributed shall be in full satisfaction of the Participant's rights with
     respect to the portion of the account so elected."

     (b)  Article X of the Plan shall be amended by adding the following new
section 10.05 therein reading in its entirety as follows:

          "10.05.  Legal Fees or Expenses. The Company shall reimburse the
                   ----------------------
     Participant for any legal fees and expenses reasonably incurred in
     connection with the enforcement of Participant's rights under this Plan;
     provided that the Company shall not be required to reimburse for such fees
     or expenses unless the resolution of any enforcement action taken by the
     Participant is substantially in favor of the Participant, whether by
     adjudication, settlement or otherwise."

     (c)  Except as herein provided, the Plan shall remain unchanged and in full
force and effect.

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by
its duly authorized officer as of the 26/th/ day of July , 2000.
                                      ------        ----

                                            TERRA INDUSTRIES INC.

                                            By  /s/ George H. Valentine
                                                -----------------------------

                                            Its  Senior Vice President
                                                -----------------------------<PAGE>

                                                                 Exhibit 10.1.19

                             TERRA INDUSTRIES INC.

                          INCENTIVE AWARD PROGRAM FOR
                            OFFICERS & KEY EMPLOYEES

                                      2000
                                      ----

I.   Purpose of the Plan
     -------------------

     The purpose of this Incentive Award Program is to motivate and reward
     officers and key employees of the Company toward achievement of planned
     annual goals and improved results.

II.  Eligibility in the Plan
     -----------------------

     Participation in this Incentive Award Program is limited to officers and
     key employees of Terra Industries Inc. and subsidiaries whose efforts are
     expected to contribute significantly to the success and accomplishment of
     the Company's planned goals.

III. Special Provisions and Considerations
     -------------------------------------

     Terra's incentive plan year coincides with the Company's fiscal year.  The
     Chief Executive Officer will establish corporate financial goals, which are
     approved by the Board of Directors, which will be used to establish the
     2000 incentive pool.  Each officer and key employee participating in this
     plan will be assigned a target incentive expressed as a percentage of year-
     end base salary.

     The Chief Executive Officer, Chief Operating Officer or appropriate Senior
     Officer, is responsible for approving each plan participant's individual
     goals as soon as practicable in 2000 (See Section IV below).  The
     importance of each goal is reflected in the weight assigned to it; each
     participant's goals will sum to one hundred percent (100%). These
     individual goals will be used in determining the participant's final
     incentive payment.  Each plan participant must periodically report on
     his/her goal achievement to the Chief Executive Officer.
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IV.  Funding the Officers and Key Employees Incentive Award Program
     --------------------------------------------------------------

     The 2000 Plan divides the incentive awards between a portion based upon
     Company financial performance and a portion based upon individual
     performance on personal goals (up to 34% of each participant's target
     bonus).  However, awards for achieving individual performance goals may not
     be paid if the Personnel Committee of the Board of Directors and the Chief
     Executive Officer determine that the Company's financial performance does
     not justify such awards.

     The funding for the Company's financial performance portion of the
     incentive award pool is based on Terra Industries Inc.'s actual 2000 net
     income. The budgeted 2000 net loss, which is based on forecasts of nitrogen
     products and methanol selling prices and natural gas costs, is substantial
     and does not justify an award.  Consequently, the Company `s financial
     performance portion of the pool starts to fund at fifty percent (50%) when
     the Company's actual 2000 net income is $0 and increases by one percent
     (1%) for each additional $1 million of net income.  Any funding for actual
     2000 net income  which is more than $150 million is at the discretion of
     the Personnel Committee of the Board of Directors and the Chief Executive
     Officer.

     Each participant will develop up to five goals that will be used as the
     measurement in determining payments under the personal goals section.
     These goals should be reviewed and approved by the appropriate Senior
     Officer and the Chief Executive Officer.  Accordingly, a participant could
     earn the portion of his or her bonus based on achieving personal goals even
     if there is no funding of the Company performance portion of the pool.
     However, funding of the individual performance awards pool is at the
     discretion of the Personnel Committee of the Board of Directors and the
     Chief Executive Officer.

V.   Basis of the Incentive Award
     ----------------------------

     The starting point in determining each participant's incentive award is the
     evaluation of the individual goals.  The participant's individual raw award
     is calculated by taking each participant's year-end salary, times his/her
     targeted incentive percentage and then times his/her individual goal
     achievement.

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     The sum of all participants' adjusted raw awards creates an adjusted raw
     pool.  This adjusted raw pool is compared with the sum of the plan
     participant's year-end salary, times their targeted percentage award (or a
     portion of his/her index used to calculate this pool) which is then
     adjusted by the Company's financial performance to form the incentive pool.
     This adjusted raw pool is adjusted up or down to match the incentive pool.
     All participant incentives are paid from the incentive pool.

     The Chief Executive Officer has the discretion to adjust any individual's
     participation up or down to reflect unusual or unplanned events or to
     reflect the degree of difficulty of the goals.  He may adjust amounts
     between plan participants and may add amounts from any discretionary part
     of the pool.  The Chief Executive Officer may also choose to award less
     than the full amount of the pool or add as much as 20% to the pool.

VI.  Review, Revision and Modification of the Goals
     ----------------------------------------------

     Under normal business conditions, the Company goals or individual
     objectives will not be altered or revised once established for the year.
     Unexpected and unforeseen developments during the course of the year may
     prompt re-examination of an officer's or key employee's established goals.
     It is the responsibility of each officer and key employee to note the
     conditions of change which would prompt such a review and take timely
     action.  Such action would include review with the Chief Executive Officer
     for the need for revision of an established goal as soon as possible after
     the detected change.  All changes are subject to final approval of the
     Chief Executive Officer.

VII. Payment of Award
     ----------------

     The incentive award will be paid to each officer and key employee by check
     as soon as possible after the close of the fiscal year and after approval
     of the Chief Executive Officer's recommendations by the Personnel Committee
     of the Board of Directors.

     To be eligible for full payment, the officer or key employee must have been
     in the employ of Terra Industries Inc. or one of its subsidiaries as of
     January 1 of the incentive plan year and must be actively employed by the
     Company on the date the incentive award is paid.

                                      -3-
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VIII.  Special Provision
       -----------------

       A newly elected officer or key employee will participate in this
       incentive program in proportion to the number of full months worked as an
       officer or key employee during the incentive program year.

       A participant who retires, becomes permanently disabled or dies shall
       cease to participate in this program as of the end of the month
       coincident with retirement, disability or death. The proportionate
       incentive award will be paid as soon as possible after the close of the
       fiscal year. While it is the intent of the Company to make awards under
       this plan and to continue the plan from year to year, it reserves the
       right to amend or terminate the plan entirely at its discretion.

                                      -4-

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