Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of
June 7, 2006, originally effective as of August 1, 2005,
and amended, effective on January 25, 2007, by and between Clearant, Inc., a Delaware corporation
(“Employer”), and Jon M. Garfield, an individual (“Employee”).

RECITALS

A. WHEREAS, Employee has experience and expertise applicable to employment with Employer to
perform as the Chief Financial Officer of Employer, Employer has agreed to employ Employee and
Employee has agreed to enter into such employment, on the terms set forth in this Agreement.

B. WHEREAS, Employee acknowledges that this Agreement is necessary for the protection of
Employer’s investment in its business, good will, products, methods of operation, information, and
relationships with its customers and other employees.

C. WHEREAS, Employer acknowledges that Employee desires definition of his compensation and
benefits, and other terms of his employment.

D. WHEREAS,
following the resignation of Alain Delongchamp, the Board of
Directors appointed Employee to the additional role of Chief
Executive Officer on January 25, 2007.

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

AGREEMENT

1. TERM OF AGREEMENT

1.1 Initial Term. The initial term of this Agreement shall begin August 1, 2005
(“Commencement Date”) and shall continue until the earlier of: (a) the date on which it is
terminated pursuant to Section 5; or (b) two (2) years following the date of execution
hereof (“Initial Term”). At any time up to six (6) months prior to the expiration of the Initial
Term, Employer shall have the option to extend the total term of
employment (“Term”) to up to three
(3) years from the Commencement Date. Thereafter, the Term may be extended for additional two (2)
year periods upon the mutual agreement of the parties.

2. EMPLOYMENT

2.1 Employment of Employee. Employer agrees to employ Employee to render services on
the terms set forth herein. Employee hereby accepts such employment on the terms and conditions of
this Agreement.

2.2 Position and Duties.
Employee shall serve as the Chief Financial Officer of Employer, reporting to the Chief
Executive Officer (“CEO”) of Employer, and shall have the general powers and duties
of management usually vested in that office in a corporation and such other powers and duties
as may be prescribed from time to time by the CEO and the Board of Directors of Employer.
After January 25, 2007, Employee shall also serve as Chief
Executive Officer (“CEO”) of Employer, reporting to the Company’s Board of
Directors and shall have the general powers and duties of management usually vested in
that office in a corporation and such other powers and duties as may be prescribed
from time to time by the Board of Directors of Employer.

 

 

 

2.3 Standard of Performance. Employee agrees that he will at all times faithfully and
industriously and to the best of his ability, experience and talents perform all of the duties that
may be required of and from him pursuant to the terms of this Agreement. Such duties shall be
performed at such place or places as the interests, needs, business and opportunities of Employer
shall require or render advisable.

2.4 Exclusive Service. Employee shall devote all of his business energies and
abilities and all of his productive time to the performance of his duties under this Agreement
(reasonable absences during holidays and vacations excepted), and shall not, without the prior
written consent of Employer, render to others any business service of any kind (whether or not for
compensation) that, in the opinion of Employer, would materially interfere with the performance of
his duties under this Agreement.

Employee shall not, without the prior written consent of Employer, maintain any affiliation
with, whether as an agent, consultant, employee, officer, director, trustee or otherwise, nor shall
he directly or indirectly render any services of an advisory nature or otherwise to, or participate
or engage in, any other business activity.

3. COMPENSATION

3.1 Compensation. During the term of this Agreement, Employer shall pay the amounts
and provide the benefits described in this Section 3, and Employee agrees to accept such
amounts and benefits in full payment for Employee’s services under this Agreement.

3.2 Base Salary. Employer shall pay to Employee a base salary of $240,000.00 annually
in equal semi-monthly installments, less applicable taxes. At Employer’s sole discretion,
Employee’s base salary may be increased annually in accordance with standard Employer procedures in
reviewing employee performance and increasing compensation as appropriate. An annual increase will
be targeted at a minimum increase of the Consumer Price Index for Los Angeles, California (or a
reasonable proxy thereof). Employee’s base salary shall be
increased to $280,000 annually, paid as described above, upon the
closing and funding of Employer’s next financing round.

3.3 Discretionary Bonus. Except as described in Subsection 3.4 below,
Employee is eligible to receive an annual bonus in the sole discretion of Employer. This
discretionary bonus will be targeted at up to one hundred percent (100%) of Employee’s base
salary based on achieving certain key individual and company goals, milestones, profitability and
performance. These goals and milestone will be established by mutual agreement of Employee and
Employer each year.

3.4 Equity Incentive Plan.

(a) Employee shall be granted options to purchase 750,000 shares of Employer’s common stock
(“Common Stock”), at fair market value as of the date of the grant, as follows: 25,000 shares on
January 27, 2006, and 25,000 shares on April 14, 2006, vesting one-third (33.3%) on each of the
first, second and third anniversaries of the grant dates; 200,000 shares on August 31, 2005, and
500,000 shares on May 1, 2006, vesting one-fourth (25%) on each of the first, second, third and fourth anniversaries of the grant dates.
Employee may be eligible for additional options in Employer’s sole discretion, based upon
extraordinary performance in meeting goals and milestones as specified by Employer or the
Compensation Committee of its Board of Directors at the beginning of each year.

 

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(b) If the Initial Term is not extended by at least two (2) years from the Commencement Date,
one hundred percent (100%) of Employee’s unvested stock options will vest immediately at the end of
the Initial Term. Except as otherwise set forth herein, vesting of options will cease upon the
termination of Employee’s employment with Employer. The options will be governed in accordance
with Employer’s 2005 Stock Award Plan.

3.5 Fringe Benefits. Subject to Subsection 3.7 and upon satisfaction of the
applicable eligibility requirements, Employee shall be provided with group medical and dental
insurance and group dental coverage through Employer’s plans. Medical and dental benefits will
commence on the first day of the month following the Commencement Date. Employer will pay for
$360,000.00 of term life insurance for the benefit of Employee, subject to the standard physical
examination if required by the issuing insurance company. In addition, Employee will be provided
with accidental death and disability and long-term disability insurance and membership and monthly
dues for Sports Club LA (or a reasonable equivalent if Employer’s offices are relocated). Employee
is also eligible to participate in Employer’s 401K plan beginning on the first day of the month
following the Commencement Date.

3.6 Paid Time Off. Employee shall accrue, on a daily basis, a total of four (4)
workweeks of paid time off (PTO) per year following the date of this Agreement, provided, however,
that Employee’s accrued and unused PTO may not exceed a total of six (6) workweeks. Thereafter,
Employee will not continue to accrue PTO benefits until he has used enough PTO time to fall below
this maximum amount. Any accrued but unused vacation will be paid to Employee, on a pro rata basis,
at the time that his employment is terminated.

3.7 Deduction from Compensation. Employer shall deduct and withhold from all
compensation payable to Employee all amounts required to be deducted or withheld pursuant to any
present or future law, ordinance, regulation, order, writ, judgment, or decree requiring such
deduction and withholding.

4. REIMBURSEMENT OF EXPENSES

4.1 Travel and Other Expenses. Employer shall pay to or reimburse Employee for those
travel, promotional and similar expenditures incurred by Employee which Employer determines are
reasonably necessary for the proper discharge of Employee’s duties under this Agreement and for
which Employee submits appropriate receipts and indicates the amount, date, location and business
character in a timely manner.

4.2 Liability Insurance. Employer shall provide Employee with officers and directors’
insurance, or other liability insurance, consistent with its usual business practices, to cover
Employee against all insurable events related to his employment with Employer.

 

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4.3 Indemnification. Promptly upon written request from Employee, Employer shall
indemnify Employee, to the fullest extent under applicable law, for all judgements, fines,
settlements, losses, costs or expenses (including attorney’s fees), arising out of Employee’s
activities as an agent, employee, officer or director of Employer, or in any other capacity on
behalf of or at the request of Employer. Such agreement by Employer shall not be deemed to impair
any other obligation of Employer respecting indemnification of Employee otherwise arising out of
this or any other agreement or promise of Employer or under any statute.

4.4 Relocation. Employee shall relocate to Southern California upon request of the
Board and after given reasonable notice, not to be less than 90 days. Upon execution, Employer
shall make a one time payment of $100,000 to Employee as a non-accountable reimbursement.

5. TERMINATION

5.1 Termination by Employer With Good Cause or Resignation by Employee. Employer may
terminate Employee’s employment at any time, without notice, for Good Cause. If Employer should
terminate Employee’s employment with Good Cause, or if Employee resigns, Employer shall pay
Employee his salary prorated through the date of termination, at the rate in effect at the time
notice of termination is given, together with any benefits accrued through the date of termination.
Employer shall have no further obligations to pay any compensation or any other benefits to
Employee under this Agreement or any other agreement, and all unvested options will terminate.

5.2 Good Cause. For purposes of this Agreement, a termination shall be for “Good
Cause” if Employee, in the subjective, good faith opinion of Employer, shall:

(a) commit an act of fraud, misappropriation of funds or embezzlement in connection with his
duties;

(b) commit an act, or fail to commit an act, that amounts to willful misconduct, wanton
misconduct or gross negligence;

(c) breach Employee’s fiduciary duty to Employer, including, but not limited to, acts of
self-dealing (whether or not for personal profit);

(d) engage in insobriety or other substance abuse during work activities, including any use of
illegal drugs;

(e) be convicted of, or enter a plea of guilty or no contest to, a felony under state or
federal law;

(f) following written notice and reasonable opportunity to cure:

(1) engage in any activity that is in conflict with Employee’s employment including, but not
limited to, actions inconsistent with Employer’s corporate and business objectives;

 

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(2) fail to substantially perform the responsibilities and duties specified herein (other than
any such failure resulting from Employee’s incapacity due to physical or mental illness); or

(3) materially breach this Agreement.

5.3 Termination by Employer Without Good Cause. If Employer terminates Employee’s
employment without Good Cause, Employer shall pay Employee his salary prorated through the date of
termination, at the rate in effect at the time notice of termination is given, together with any
benefits accrued through the date of termination. Employer shall also pay Employee in a lump sum an
amount equal to Employee’s base salary (at the rate in effect at the time of termination) through
the end of the Term. In addition, one hundred percent (100%) of Employee’s unvested stock options
will vest immediately. The term for continued medical benefits shall be consistent with the
severance terms outlined above provided that coverage will terminate sooner if Employee becomes
covered under another job’s plan. To be eligible for this payment, Employee must execute a Full
General Release Agreement (“Release”). Employer shall have no further obligations to Employee
under this Agreement.

5.4 Change in Control. If Employee’s position or duties as set forth in
Subsection 2.2, or those duties in effect at the time of termination if the Employee has
been promoted are materially reduced or Employee’s employment is terminated, without Good Cause,
during the first eighteen (18) months following a Change in Control, Employee shall be entitled to
receive a lump sum in an amount equal to: (i) one and one-half years of salary (at the rate in
effect at the time of termination); and (ii) one and one-half times the Employee’s full targeted
bonus for that year. In addition, all of Employees unvested options shall vest immediately and the
term for continued medical benefits shall be consistent with the severance term outlined above
provided that coverage will terminate sooner if Employee becomes covered under another job’s plan.
To be eligible for this payment, Employee must execute a Release. Employer shall have no further
obligations to Employee under this Agreement. A “Change in Control” means (a) any “person” (as
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), other than a trustee or other fiduciary holding under an employee benefit plan, becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities representing
more than half (50%) of (i) the outstanding shares of common stock of the Company or (ii) the
combined voting power of the Company’s then outstanding securities; (b) the Company is party to a
merger or consolidation which results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining outstanding or by
being converted into voting securities of the surviving or another entity) at least half (50%) of
the combined voting power of the voting securities of the Company or such surviving or other entity
outstanding immediately after such merger or consolidation; (c) the sale or disposition of all or
substantially all of the Company’s assets (or consummation of any transaction having similar
effect); (d) the dissolution or liquidation of the Company; or (e) the composition of the Board of
Directors changes during any period of thirty-six (36) months such that individuals who at the
beginning of the period were members of the Board of Directors (the “Continuing Directors”) cease
for any reason to constitute a majority thereof

 

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5.5 Death or Disability. To the extent consistent with federal and state law,
Employee’s employment, salary, and accrual of commissions shall terminate on his death or
disability. “Disability” means any health condition, physical or mental, or other cause beyond
Employee’s control, that prevents him from performing his duties, even after reasonable
accommodation is made by Employer, for a period of one hundred eighty (180) consecutive days within
any three hundred sixty (360) day period. In the event of termination due to death or Disability,
Employer shall pay Employee (or his legal representative) his salary prorated through the date of
termination, at the rate in effect at the time of termination, together with any benefits accrued
through the date of termination. Employer shall have no further obligations to Employee (or his
legal representative) under this Agreement.

5.6 Return of Employer Property. Within five (5) days after the Termination Date,
Employee shall return to Employer all products, books, records, forms, specifications, formulae,
data processes, designs, papers and writings relating to the business of Employer including without
limitation proprietary or licensed computer programs, customer lists and customer data, and/or
copies or duplicates thereof in Employee’s possession or under Employee’s control. Employee shall
not retain any copies or duplicates of such property and all licenses granted to him by Employer to
use computer programs or software shall be revoked on the Termination Date.

6. DUTY OF LOYALTY

6.1 During the term of this Agreement, Employee shall not, without the prior written consent
of Employer, directly or indirectly render services of a business, professional, or commercial
nature to any person or firm, whether for compensation or otherwise, or engage in any activity
directly or indirectly competitive with or adverse to the business or welfare of Employer, whether
alone, as a partner, or as an officer, director, employee, consultant, or holder of more than one
percent (1%) of the capital stock of any other corporation. Otherwise, Employee may make personal
investments in any other business so long as these investments do not require him to participate in
the operation of the companies in which he invests.

7. CONFIDENTIAL INFORMATION

7.1 Trade Secrets of Employer. Employee, during the term of this Agreement, will
develop, have access to and become acquainted with various trade secrets which are owned by
Employer and/or its affiliates and which are regularly used in the operation of the businesses of
such entities. Employee shall not disclose such trade secrets, directly or indirectly, or use them
in any way, either during the term of this Agreement or at any time thereafter, except as required
in the course of his employment by Employer. All files, contracts, manuals, reports, letters,
forms, documents, notes, notebooks, lists, records, documents, customer lists, vendor lists,
purchase information, designs, computer programs and similar items and information, relating to the
businesses of such entities, whether prepared by Employee or otherwise and whether now existing or
prepared at a future time, coming into his possession shall remain the exclusive property of such
entities, and shall not be removed for purposes other than work-related from the premises where the
work of Employer is conducted, except with the prior written authorization by Employer.

 

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7.2 Confidential Data of Customers of Employer. Employee, in the course of his
duties, will have access to and become acquainted with financial, accounting, statistical and
personal data of customers of Employer and of their affiliates. All such data is confidential and
shall not be disclosed, directly or indirectly, or used by Employee in any way, either during the
term of this Agreement (except as required in the course of employment by Employer) or at any time
prior to such information being in the public domain by no fault of Employee.

7.3 Continuing Effect. The provisions of this Section 7 shall remain in
effect after the Termination Date.

8. NO SOLICITATION

8.1 No Solicitation of Employees. Employee agrees that he will not, during his
employment with Employer, and for two (2) years thereafter, encourage or solicit any other employee
of Employer to terminate his or her employment for any reason, nor will he assist others to do so.

8.2 No Solicitation of Customer. Employee agrees that he will not, during his
employment with Employer, and for one (1) year thereafter, directly or indirectly call on, or
otherwise solicit, competing business from any actual customer or potential customer known by
Employee to be targeted by Employer, nor will he assist others in doing so.

9. INTELLECTUAL PROPERTIES.

To the extent permissible under applicable law, all intellectual properties made or conceived
by Employee during the term of this employment by Employer shall be the right and property solely
of Employer, whether developed independently by Employee or jointly with others. The Employee will
sign the Employer’s Employee Innovation, Proprietary Information and Confidentiality Agreement
prior to or on the Commencement Date.

10. OTHER PROVISIONS

10.1 Compliance With Other Agreements. Employee represents and warrants to Employer
that, to his knowledge and belief, the execution, delivery and performance of this Agreement will
not conflict with or result in the violation or breach of any term or provision of any order,
judgment, injunction, contract, agreement, commitment or other arrangement to which Employee is a
party or by which he is bound. Should claims, demands, causes of action, costs or expenses
(including attorneys’ fees) arise from any alleged breach of employment contract as a result of
accepting employment with Employer, Employer will indemnify Employee for reasonable legal fees,
provided that Employee did not knowingly or willfully breach such employment agreement, and is not
found by a court, jury or arbitrator to have breached such employment agreement.

10.2 Injunctive Relief. Employee acknowledges that the services to be rendered under
this Agreement and the items described in Sections 6, 7, 8 and 9 are of a special, unique
and extraordinary character, that it would be difficult or impossible to replace such services or
to compensate Employer in money damages for a breach of this Agreement.

 

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Accordingly, Employee agrees and consents that if he violates any of the provisions of this
Agreement, Employer, in addition to any other rights and remedies available under this Agreement or
otherwise, shall be entitled to temporary and permanent injunctive relief, without the necessity of
proving actual damages in connection therewith.

10.3 Attorneys’ Fees. The prevailing party in any suit or other proceeding brought to
enforce, interpret or apply any provisions of this Agreement, shall be entitled to recover all
costs and expenses of the proceeding and investigation (not limited to court costs), including all
attorneys’ fees.

10.4 Counsel. The parties acknowledge and represent that, prior to the execution of
this Agreement, they have had an opportunity to consult with their respective counsel concerning
the terms and conditions set forth herein. Additionally, Employee represents that he has had an
opportunity to receive independent legal advice concerning the taxability of any consideration
received under this Agreement. Employee has not relied upon any advice from Employer and/or its
attorneys with respect to the taxability of any consideration received under this Agreement.
Employee further acknowledges that Employer has not made any representations to him with respect to
tax issues.

10.5 Nondelegable Duties. This is a contract for Employee’s personal services. The
duties of Employee under this Agreement are personal and may not be delegated or transferred in any
manner whatsoever, and shall not be subject to involuntary alienation, assignment or transfer by
Employee during his life.

10.6 Governing Law. The validity, construction and performance of this Agreement
shall be governed by the laws, without regard to the laws as to choice or conflict of laws, of the
State of California.

10.7 Venue. If any dispute arises regarding the application, interpretation or
enforcement of any provision of this Agreement, including fraud in the inducement, such dispute
shall be resolved either in federal or state court in Los Angeles County, California.

10.8 Arbitration. Any disputes, controversies or claims arising out of or relating to
this Agreement shall be resolved by binding arbitration before a retired judge at JAMS in Santa
Monica, California, in accordance with its applicable rules and procedures. To the maximum extent
allowed by applicable law, the prevailing party shall be awarded its reasonable attorney’s fees,
costs and expenses. Judgment on any interim or final award may be entered by any court of
competent jurisdiction.

10.9 No Jury. If any dispute arises regarding the application, interpretation or
enforcement of any provision of this Agreement, including fraud in the inducement, the parties
hereby waive their right to a jury trial.

10.10 No Punitive Damages. If any dispute arises regarding the application,
interpretation or enforcement of any provision of this Agreement, including fraud in the
inducement, the parties hereby waive their right to seek punitive damages in connection with said
dispute.

 

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10.11 Severability. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions, and this Agreement shall be construed in all
respects as if any invalid or unenforceable provision were omitted.

10.12 Amendment and Waiver. This Agreement may be amended, modified or supplemented
only by a writing executed by each of the parties. Either party may in writing waive any provision
of this Agreement to the extent such provision is for the benefit of the waiving party. No waiver
by either party of a breach of any provision of this Agreement shall be construed as a waiver of
any subsequent or different breach, and no forbearance by a party to seek a remedy for
noncompliance or breach by the other party shall be construed as a waiver of any right or remedy
with respect to such noncompliance or breach.

10.13 Binding Effect. The provisions of this Agreement shall bind and inure to the
benefit of the parties and their respective successors and permitted assigns.

10.14 Notice. Any notices or communications required or permitted by this Agreement
shall be deemed sufficiently given if in writing and when delivered personally or 48 hours after
deposit with the United States Postal Service as registered or certified mail, postage prepaid and
addressed as follows:

(a) If to Employer, to the principal office of Employer in the State of California, marked
“Attention: Chief Executive Officer”; or

(b) If to Employee, to the most recent address for Employee appearing in Employer’s records.

10.15 Headings. The Section and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.

 

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10.16 Entire Agreement. This Agreement is the only agreement and understanding
between the parties pertaining to the subject matter of this Agreement, and supersedes all prior
agreements, summaries of agreements, descriptions of compensation packages, discussions,
negotiations, understandings, representations or warranties, whether verbal or written, between the
parties pertaining to such subject matter.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

EMPLOYER:

CLEARANT, INC.

	 	 	 	 	 
	 
	 	 	 	 
	By

	 	/s/ John Wehrle
 

John Wehrle
	 	 
	 

	 	Chairman of the Board	 	 

	 	 	 
	 

	 	EMPLOYEE:
	 
	 	 
	 

	 	/s/ Jon M. Garfield
	 

	 	 
	 

	 	Jon M. Garfield

 

-10-Filed by Bowne Pure Compliance

 

Exhibit 10.1

CONSULTING AND NON-COMPETITION AGREEMENT

This Consulting and Non-Competition Agreement (“Agreement”) is made and entered into this 1st day of
April, 2008 by and between Francis G. Meyer, an individual (hereinafter “Consultant”), and Terra Industries
Inc., a Maryland corporation, having offices at 600 Fourth Street, Sioux City, Iowa 51101, and its subsidiaries
(hereinafter referred to collectively as “Terra”).

WHEREAS, Consultant will voluntarily retire from his position as a full-time Terra employee on April 4, 2008;

WHEREAS, the parties wish to enter into an agreement whereby Consultant will act as an independent contractor for
Terra during the period specified below and will be prohibited from competing with Terra until July 26, 2010 according
to the terms provided herein; and

WHEREAS, in consideration for Consultant’s agreement to provide substantial consulting services and to be bound by
the restrictive covenants set forth in this Agreement, Terra wishes to allow Consultant’s Restricted Stock Awards and
Performance Share Awards (each, as defined in Section 10) that are outstanding and unvested as of April 4, 2008 to
remain outstanding and continue to vest pursuant to their terms as set forth in this Agreement.

NOW, THEREFORE, the parties mutually agree as follows:

	1.	 	Appointment. Pursuant to the terms of this Agreement, Terra hereby retains Consultant to provide
consulting services as specified from time to time throughout the term hereof. The term of this Agreement (the
“Initial Consulting Term”) shall commence on April 5, 2008 and, unless sooner terminated pursuant to
Section 4 hereof, shall expire on April 5, 2009. The Initial Consulting Term may be extended by mutual written
agreement between Terra and Consultant, with any such extension beyond April 5, 2009 referred to as the
“Extended Consulting Term.” The Initial Consulting Term and any Extended Consulting Term shall be
referred to collectively as the “Consulting Term.” Consultant shall report to Terra’s Chief Executive
Officer or to such other person designated by Terra’s Chief Executive Officer. Terra’s Chief Executive Officer,
or his designee, shall determine and communicate to Consultant all consulting priorities, duties and reporting
responsibilities. The nature and duration of duties assigned to Consultant hereunder shall vary.

	2.	 	Consulting Fees/Payment.

	 	a.	 	Terra shall pay Consultant $1,400 per day worked during the Initial Consulting Term (the
“Daily Consulting Fee”), plus expenses, as provided in Section 3. Except as set forth in
Section 4, regardless of the number of days actually worked during the Initial Consulting Term, the
Consultant shall be entitled to a minimum aggregate payment of $50,400 (“Minimum Consulting
Fee”) for consulting services during the Initial Consulting Term. Consultant shall bill Terra
monthly for his services and expenses. Terra shall pay Consultant within 15 days of receipt of
Consultant’s bill, provided that, in order for the full amount of the Minimum Consulting Fee to be
considered a short-term deferral for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Section 409A”), the Minimum Consulting Fee shall be paid to Consultant in full on
or prior to March 15, 2009, even if Consultant works fewer than 36 days prior to March 15, 2009.
Notwithstanding the payment of any unearned portion of the Minimum Consulting Fee on March 15, 2009,
Consultant will be required to continue to perform consulting services, as needed, through April 5, 2009
pursuant to this Agreement, and will be paid the Daily Consulting Fee for each day of such services to
the extent that the aggregate number of days during the Initial Consulting Term on which Consultant has
provided consulting services exceeds 36 days.

 

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	 	b.	 	Consultant’s daily rate for consulting services during the Extended Consulting Term, if any,
shall be mutually agreed and Consultant shall have no guaranteed minimum fee unless specifically
negotiated.

	3.	 	Travel Approval and Expenses. All travel or other expenses undertaken by Consultant pursuant to this
Agreement must be authorized in advance by Terra. Terra shall reimburse Consultant for all reasonable expenses
incurred by Consultant. Terra’s Administrative Policy Manual shall govern all aspects of Consultant’s undertaking
and reimbursement of travel expenses.

	4.	 	Termination.

	 	a.	 	Unless the parties mutually agree in writing to extend this Agreement following expiration of
the Initial Consulting Term on terms and conditions mutually agreed to at such time, this Agreement will
automatically terminate upon expiration of the Initial Consulting Term. Moreover, either party may
terminate this Agreement prior to the expiration of the Initial Consulting Term on 10 days’ written
notice to the other party, provided that if Consultant terminates this Agreement prior to the expiration
of the Initial Consulting Term for reasons other than death or Disability (as defined in the Employment
Severance Agreement between Terra and Consultant, dated October 5, 2006 (the “Employment Severance
Agreement”)), all unvested Restricted Stock Awards and Performance Share Awards shall be immediately
forfeited.

	 	b.	 	If this Agreement is terminated prior to March 15, 2009 by Consultant, other than as a result
of death or Disability, Terra shall make a lump sum payment to Consultant equal to the excess, if any,
of (i) the product of (A) three multiplied by the number of full months that have passed since the first
day of the Initial Consulting Term and (B) $1,400, over (ii) the aggregate of all Daily Consulting Fees
earned by and paid to Consultant prior to the date of termination, any such payment to be paid not later
than March 15, 2009.

	 	c.	 	If this Agreement is terminated prior to March 15, 2009 by Terra for any reason other than
Cause (as defined in the Employment Severance Agreement) or as a result of Consultant’s death or
Disability, Terra will make a lump sum payment to Consultant equal to either (i) the amount of any
unpaid portion of the Minimum Consulting Fee plus any unpaid Daily Consulting Fees earned for services
in excess of 36 days during the Initial Consulting Term or (ii) if the full amount of the Minimum
Consulting Fee has already been paid prior to the date of termination, the amount of any unpaid Daily
Consulting Fees earned as of the date of termination. In the case of the immediately preceding
sentence, any unpaid portion of the Minimum Consulting Fee will be paid not later than March 15, 2009,
and any additional unpaid Daily Consulting Fees for services in excess of 36 days during the Initial
Consulting Term will be paid not later than 15 days of Terra’s receipt of Consultant’s bill for such
services.

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	 	d.	 	If this Agreement is terminated prior to the expiration of the Initial Consulting Term by
Terra for Cause, Terra will have no obligation to make any further payments to Consultant hereunder,
other than with respect to Daily Consulting Fees earned by Consultant prior to the date of termination
and for any expenses incurred in accordance with Section 3. The amount of any earned Daily Consulting
Fees up to the Minimum Consulting Fee will be paid to Consultant not later than March 15, 2009, and any
additional unpaid Daily Consulting Fees for services in excess of 36 days during the Initial Consulting
Term will be paid not later than 15 days of Terra’s receipt of Consultant’s bill for such services.

	5.	 	Work Product. All work product generated by Consultant as a result of his activities hereunder shall be
the sole and exclusive property of Terra, and Consultant shall endeavor to take all appropriate action to ensure
Terra obtains the sole benefit therefrom.

	6.	 	Independent Contractor Status.

	 	a.	 	It is understood by the parties hereto that Consultant shall at all times during the Initial
Consulting Term and any Extended Consulting Term be an independent contractor with respect to Terra and
there shall not be implied any relationship of employer-employee, partnership, joint venture, principal
and agent or the like by the agreements contained herein. Consultant shall not be entitled to
participate in any employee benefit plans or other benefits or conditions of employment available to the
employees of Terra and its affiliates.

	 	b.	 	Consultant shall not have any authority to act as an agent of Terra and its affiliates,
except on authority specifically so delegated in a prior writing from Terra’s Chief Executive Officer,
and he shall not represent to the contrary to any person. Under no circumstances shall Consultant have
or claim to have power of decision hereunder in any activity on behalf of Terra, nor shall Consultant
have the power or authority hereunder to obligate, bind or commit Terra in any respect. Consultant
shall not (i) direct the work of any employee of Terra, (ii) make any management decisions on behalf of
Terra or (iii) undertake to commit Terra to any course of action in relation to third persons. Although
Terra may specify the results to be achieved by Consultant and may control and direct him in that
regard, Terra shall not exercise or have the power to exercise such level of control over Consultant as
would indicate or establish that a relationship of employer and employee exists between Terra and
Consultant. Subject to the terms of the Agreement, Consultant shall have full and complete control over
the manner and method of rendering consulting services hereunder.

	 	c.	 	To the extent consistent with applicable law, Terra shall not withhold or deduct from any
amounts payable under this Agreement any amount or amounts in respect of income taxes or other
employment taxes of any other nature on behalf of Consultant. Consultant shall be solely responsible
for the payment of any Federal, state, local or other income and/or self-employment taxes in respect of
the amounts payable to Consultant under this Agreement and shall hold Terra and its affiliates and their
officers, directors and employees harmless from any liability arising from Consultant’s failure to
comply with the foregoing provisions of this sentence.

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	7.	 	Confidentiality.

	 	a.	 	Section 7 of the Employment Severance Agreement shall remain in effect and the term
“Confidential Information” shall have the meaning set forth in Section 7 of the Employment
Severance Agreement.

	 	b.	 	Consultant agrees that upon the expiration of the Consulting Term, upon Terra’s request, he
shall promptly return all of the Confidential Information which may be in writing or other concrete
form, including any drafts, working documents or reports containing Confidential Information.

	8.	 	Non-Competition and Non-Solicitation.

	 	a.	 	Consultant agrees that Consultant shall not, without the prior written consent of Terra, from
April 5, 2008 through July 26, 2010 (such period, the “Restriction Period”), directly or
indirectly (other than in Consultant’s capacity as a consultant of Terra):

	 	(i)	 	engage in any activity or business, or establish any new business that is in
competition with Terra or its affiliates (such activity or business, a “Competitive
Activity”), including (A) operating, attempting to operate or participating in the operation of
a business relating to the production and marketing of nitrogen products; (B) soliciting or
attempting to solicit any customer or client or prospective customer or client of Terra or any of
its affiliates (including, without limitation, actively sought prospective customers or clients),
to purchase any goods or services of the type sold by Terra or any of affiliates from anyone other
than Terra or its affiliates; and (C) assisting any Person in any way to do, or attempt to do,
anything prohibited by (A) or (B) above; or

	 	(ii)	 	(A) solicit, recruit or hire, any person who is at such time, or who at any time
during the six-month period prior to such solicitation or hiring had been, an employee of, or
exclusive consultant then under contract with, Terra or its affiliates, without Terra’s prior
written consent; (B) solicit or encourage any employee of Terra or its affiliates to leave the
employment of Terra or its affiliates; or (C) intentionally interfere with the relationship of
Terra or any of its affiliates with any person or entity who or which is employed by or otherwise
engaged to perform services for Terra or any such affiliate.

The Restriction Period shall be deemed automatically extended for a period equal to any period during
which Consultant is in violation of the provisions of this Section 8(a).

	 	b.	 	Notwithstanding anything to the contrary contained in this Agreement, Consultant’s passive
ownership of less than an aggregate of 2% of any class of stock of an entity engaged, directly or
indirectly, in Competitive Activities will not be deemed to result in a breach of Section 8(a), provided
that such stock is listed on a national securities exchange or is quoted on the National Market System
of NASDAQ.

	 	c.	 	If a final and non-appealable judicial determination is made that any of the provisions of
this Section 8 constitutes an unreasonable or otherwise unenforceable restriction against Consultant,
the provisions of this Section 8 will not be rendered void but will be deemed to be modified to the
minimum extent necessary to remain in force and effect for the greatest period and to the greatest
extent that such court determines constitutes a reasonable restriction under the circumstances.
Moreover, notwithstanding the fact that any provision of this Section 8 is determined not to be
specifically enforceable, Terra will nevertheless be entitled to recover monetary damages as a result of
Consultant’s breach of such provision.

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	9.	 	Acknowledgements.

	 	a.	 	Consultant acknowledges that Terra and its affiliates have expended and shall continue to
expend substantial amounts of time, money and effort to develop business strategies, employee and
customer relationships and goodwill to build an effective organization. Consultant acknowledges that
Terra has a legitimate business interest and right in protecting its Confidential Information, goodwill,
employee and customer relationships, and that Terra would be seriously damaged by the disclosure of
Confidential Information and the loss or deterioration of its customer and employee relationships.
Consultant further acknowledges that Terra and its affiliates are entitled to protect and preserve the
going concern value of Terra to the extent permitted by law.

	 	b.	 	In light of the foregoing acknowledgments, Consultant agrees that the covenants contained in
Sections 7 and 8 are reasonable and properly required for the adequate protection of the businesses and
goodwill of Terra and its affiliates. Consultant further acknowledges that, although Consultant’s
compliance with the covenants contained in Sections 7 and 8 may prevent Consultant from earning a
livelihood in a business similar to the business of Terra, Consultant’s experience and capabilities are
such that Consultant has other opportunities to earn a livelihood and adequate means of support for
Consultant and Consultant’s dependents.

	10.	 	Restricted Stock Awards and Performance Share Awards. Consultant currently holds shares of Terra common
stock that are subject to vesting conditions (“Restricted Stock Awards”) and performance share awards
entitling Consultant to delivery of shares of Terra common stock upon satisfaction of performance goals
(“Performance Share Awards”), in each case that were granted under the Terra Industries Inc. Stock
Incentive Plan of 2002 and are governed by an award agreement. Subject to the terms and conditions of this
Section 10, in consideration for (a) the consulting services to be provided by Consultant, and with the
expectation that Consultant will provide substantial consulting services to Terra during the Consulting Term, and
(b) for Consultant’s compliance with the obligations set forth in Sections 7 and 8, Consultant’s outstanding
Restricted Stock Awards and Performance Share Awards will remain outstanding following April 4, 2008 and available
for vesting according to the terms of the corresponding award agreements as if Consultant had remained employed
through the end of the Restriction Period. For the avoidance of doubt, the terms and conditions of the Restricted
Stock Awards and Performance Share Awards relating to death, Disability, Change in Control and satisfaction of
performance goals, as set forth in the applicable award agreements, will continue to apply during the Restriction
Period. Notwithstanding any provision of this Agreement or any other agreement between Consultant and Terra to
the contrary, in the event that this Agreement is terminated prior to the expiration of the Initial Consulting
Term pursuant to Section 4(b) or 4(d) or in the event of Consultant’s breach of any of the covenants set forth in
Section 7 or 8 herein, as determined by Terra’s Board of Directors in its sole discretion, any Restricted Stock
Awards or Performance Share Awards that are unvested as of such time shall be immediately forfeited, and
Consultant shall be entitled to no further payments or benefits with respect thereto.

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	11.	 	Indemnity. Terra shall defend, indemnify and hold harmless Consultant from and against any and all
suits, claims, causes of action, damages, losses, liabilities, obligations, costs or expenses (including
reasonable attorneys’ fees) incurred by or asserted against Consultant arising out of, relating to, or otherwise
resulting in whole or in part from any of the services or other activities performed by Consultant for Terra under
this Agreement, excluding those arising out of the willful acts or omissions by, or gross negligence of,
Consultant.

	12.	 	Cooperation. Consultant agrees that, upon reasonable notice and without the necessity of Terra’s
obtaining a subpoena or court order, Consultant shall provide reasonable cooperation in connection with any suit,
action or proceeding (or any appeal from any suit, action or proceeding), and any investigation and/or defense of
any claims asserted against Terra or any of its affiliates, that relates to events occurring during the Consulting
Term as to which Consultant may have relevant information (including but not limited to furnishing relevant
information and materials to Terra or its designee and/or providing testimony at depositions and at trial),
provided that Terra shall reimburse Consultant for expenses reasonably incurred in connection with any such
cooperation occurring after termination or expiration of the Consulting Term, and provided that any such
cooperation occurring after the termination or expiration of the Consulting Term shall be scheduled to the extent
reasonably practicable so as not to unreasonably interfere with Consultant’s business or personal affairs.

	13.	 	Section 409A of the Code.

	 	a.	 	It is intended that the provisions of this Agreement comply with Section 409A, and all
provisions of this Agreement shall be construed and interpreted in a manner consistent with the
requirements for avoiding taxes or penalties under Section 409A.

	 	b.	 	Neither Consultant nor any of Consultant’s creditors or beneficiaries shall have the right to
subject any deferred compensation (within the meaning of Section 409A) payable under this Agreement or
under any other plan, policy, arrangement or agreement of or with Terra or any of its affiliates (this
Agreement and such other plans, policies, arrangements and agreements, the “Company Plans”) to
any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment. Except as permitted under Section 409A, any deferred compensation (within the meaning of
Section 409A) payable to Consultant or for Consultant’s benefit under this Agreement may not be reduced
by, or offset against, any amount owing by Consultant to Terra or any of its affiliates.

	 	c.	 	Notwithstanding any provision of this Agreement or any Company Plan to the contrary, in light
of the uncertainty with respect to the proper application of Section 409A, Terra reserves the right to
make amendments to any Company Plan as Terra deems necessary or desirable to avoid the imposition of
taxes or penalties under Section 409A. In any case, Consultant shall be solely responsible and liable
for the satisfaction of all taxes and penalties that may be imposed on Consultant or for Consultant’s
account in connection with any Company Plan (including any taxes and penalties under Section 409A), and
neither Terra nor any of its affiliates shall have any obligation to indemnify or otherwise hold
Consultant harmless from any or all of such taxes or penalties.

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	14.	 	Assignment. 

	 	a.	 	This Agreement is personal to Consultant and, without the prior written consent of Terra,
shall not be assignable by Consultant otherwise than by will or the laws of descent and distribution,
and any assignment in violation of this Agreement shall be void.

	 	b.	 	Notwithstanding the foregoing Section 14(a), this Agreement and all rights of Consultant
hereunder shall inure to the benefit of and be enforceable by Consultant’s personal or legal
representatives, executors, administrators, successors, heirs, devisees and legatees. If Consultant
should die while any amounts would still be payable to him hereunder if he had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Consultant’s devisee, legatee or other designee or, should there be no such designee, to
Consultant’s estate.

	 	c.	 	Terra shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or assets of Terra (a
“Successor”) to assume and agree to perform this Agreement in the same manner and to the same
extent that Terra would have been required to perform it if no such succession had taken place. As used
in this Agreement, the term “Terra” shall mean Terra as hereinbefore defined, any Successor and any
permitted assignee to which this Agreement is assigned.

	15.	 	Governing Law; Construction; Dispute Resolution.

	 	a.	 	This Agreement shall be governed by and construed in accordance with the laws of the State of
Iowa, without regard to the conflicts of law principles thereof. No provision of this Agreement or any
related document shall be construed against or interpreted to the disadvantage of any party hereto by
any court or other governmental or judicial authority by reason of such party’s having or being deemed
to have structured or drafted such provision.

	 	b.	 	Each party irrevocably and unconditionally submits to the exclusive jurisdiction and venue of
the United States District Court for the Northern District of Iowa (or, if subject matter jurisdiction
in that court is not available, in any state court located within the city of Sioux City, Iowa) for the
purposes of any suit, action or other proceeding arising out of this Agreement. Except as otherwise
specifically provided in this Agreement, the parties undertake not to commence any suit, action or
proceeding arising out of or relating to this Agreement in a forum other than a forum described in this
Section 15(b); provided, however, that nothing herein shall preclude Terra or Consultant
from bringing any suit, action or proceeding in any other court for the purposes of enforcing the
provisions of this Section 15(b) or enforcing any judgment obtained by Terra or Consultant.

	 	c.	 	The agreement of the parties to the forum described in Section 15(b) is independent of the
law that may be applied in any suit, action or proceeding and the parties agree to such forum even if
such forum may under applicable law choose to apply non-forum law. The parties hereby waive, to the
fullest extent permitted by applicable law, any objection that they now or hereafter have to personal
jurisdiction or to the laying of venue of any such suit, action or proceeding brought in an applicable
court described in this Section, and the parties agree that they shall not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such court. The parties agree
that, to the fullest extent permitted by applicable law, a final and non-appealable judgment in any
suit, action or proceeding brought in any applicable court described in Section 15(b) shall be
conclusive and binding upon the parties and may be enforced in any other jurisdiction.

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	 	d.	 	The parties hereto irrevocably consent to the service of any and all process in any suit,
action or proceeding arising out of or relating to this Agreement by the mailing of copies of such
process to such party at such party’s address specified in Section 20.

	 	e.	 	Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right
it may have to a trial by jury in respect of any suit, action or proceeding arising out of or relating
to this Agreement. Each party (i) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties
hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 15(c).

	 	f.	 	Each party shall bear its own costs and expenses (including reasonable attorneys’ fees and
expenses) incurred in connection with any dispute arising out of or relating to this Agreement.

	16.	 	Entire Agreement; Termination of Employment Severance Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained herein and, except as explicitly stated
herein, supersedes all prior agreements, promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative of any party hereto. None of the
parties shall be liable or bound to any other party in any manner by any representations and warranties or
covenants relating to such subject matter except as specifically set forth herein. Effective upon Consultant’s
retirement from Terra, the Employment Severance Agreement is superseded and replaced, except that the following
Sections will survive termination of the Employment Severance Agreement: Section 5 (Certain Additional Payments by
the Company), Section 6 (Noncompetition and Nonsolicitation), Section 7 (Nondisclosure of Confidential
Information), Section 11 (Cooperation) and Section 15 (Dispute Resolution).

	17.	 	Amendment; No Waiver. Except as set forth in Section 13, no provisions of this Agreement may be amended,
modified, waived or discharged except by a written document signed by Consultant and a duly authorized officer of
Terra. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall
not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement. No failure or delay by either party in
exercising any right or power hereunder will operate as a waiver thereof, nor will any single or partial exercise
of any such right or power, or any abandonment of any steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have been made by either party, which are
not set forth expressly in this Agreement.

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	18.	 	Severability. If any term or provision of this Agreement is invalid, illegal or incapable of being
enforced by any applicable law or public policy, all other conditions and provisions of this Agreement shall
nonetheless remain in full force and effect so long as the economic and legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon any such
determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

	19.	 	Survival. The rights and obligations of the parties under the provisions of this Agreement, including,
without limitation, Sections 7, 8 and 15, shall survive and remain binding and enforceable, notwithstanding the
expiration of the Initial Consulting Term and any Extended Consulting Term, the termination of this Agreement, the
termination of Consultant’s services with Terra for any reason or any settlement of the financial rights and
obligations arising from Consultant’s services hereunder, to the extent necessary to preserve the intended
benefits of such provisions.

	20.	 	Notices. All notices or other communications required or permitted by this Agreement will be made in
writing and all such notices or communications will be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:

	 	 	If to Terra: 	 	Terra Industries Inc.
600 Fourth Street
P.O. Box 6000
Sioux City, IA 51102-6000

	 	 	 	 	Attention: General Counsel
Fax: (712) 233-5586

	 	 	If to Consultant: 	 	Francis G. Meyer
E 4275 462nd Ave. 
Menomonie, WI 54751

or to such other address as any party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

	21.	 	Headings and References. The headings of this Agreement are inserted for convenience only and neither
constitute a part of this Agreement nor affect in any way the meaning or interpretation of this Agreement. When a
reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated.

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	22.	 	Counterpart. This Agreement may be executed in one or more counterparts (including via facsimile), each
of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument
and shall become effective when one or more counterparts have been signed by each of the parties and delivered to
the other party.

	23.	 	Construction. For purposes of this Agreement, the words “include” and “including”, and variations
thereof, shall not be deemed to be terms of limitation but rather shall be deemed to be followed by the words
“without limitation”. The term “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean
the degree to which a subject or other thing extends, and such phrase shall not simply mean if.

In recognition whereof, the parties hereto do affix their signatures on this 1st day of April, 2008.

	 	 	 
	Terra Industries Inc. 

	 	Consultant
	 

	 	 
	By: /s/ Michael L. Bennett         

	 	/s/ Francis G. Meyer          
	 

	 	 
	Name: Michael L. Bennett

	 	Francis G. Meyer
	Title: President and Chief Executive Officer

	 	

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