Document:

exv10w1w23

 

Exhibit 10.1.23

LONG-TERM INCENTIVE AWARD

Date of Award:                     

Number of Targeted Performance Shares Awarded: xx,xxx

Recipient

Dear:

     We are pleased to inform you that as an executive of Terra Industries Inc. (“Terra”) or a
Subsidiary thereof, you have been awarded, under the Stock Incentive Plan of 2002 (the “Plan”), the
number of Performance Shares set forth above, subject to certain restrictions, terms and conditions
set forth in this letter and in the Plan. Terra Common Shares may be issued to you in the future
for the “Performance Shares” granted to you if Terra achieves certain financial results described
below in paragraph 1.

     1. The number of Performance Shares shown above represents the targeted amount. You will be
awarded Terra Common Shares equal to between 0% and 200% of the targeted number of Performance
Shares, less applicable taxes, based on Terra’s annualized average return on capital employed
(“ROCE”) described as follows:

     a. The ROCE period will be the thirty-six month period ending [DATE] (referred to hereafter
as the “Period”).

     b. The return amount, or numerator of the calculation, will be the annualized average of
the sum of Income from Operations for the Period, adjusted for any charges or credits the
Compensation Committee deems unusual, reduced by 35% representing normal income tax expense.

     c. The capital amount, or denominator of the calculation, will be the average of the
amounts reported on the twelve Terra quarterly balance sheets for the Period for the following
items: Common shareholders and preferred shareholders equity, short and long-term debt, deferred
income taxes and minority interest, less cash.

     d. If Terra’s annualized average ROCE for the Period is 4% or less, no Performance Shares
will be earned.

     e. If Terra’s annualized average ROCE for the Period is between 4% and 9%, 1% of the
targeted Performance Shares will be earned for each 0.05% annualized average ROCE exceeds 4%.

     f. If Terra’s annualized average ROCE for the Period is between 9% and 11.5%, 1% of the
targeted Performance Shares will be earned for each 0.025% annualized average ROCE exceeds 9%.

 

 

     g. The maximum number of Performance Shares earned is 200% of the targeted amount.

     2. Issuance of Performance Shares will be made as soon as practical in [YEAR] after the
Compensation Committee of Terra’s Board of Directors approves the portion, if any, of targeted
Performance Shares granted herein that is earned based on Terra’s performance during the Period.

     3. If a “change of control” occurs prior to December 31, 2008, the Performance Shares will be
earned at the greater of (a) calculated award described in paragraph 1. a. through g. using the
actual quarters completed in the Period and (b) the targeted Performance Shares. Any noncash,
deferred or contingent consideration provided for in the sale agreement shall be valued at its fair
market value on a present value basis. The determination of value for these purposes shall be
conclusively made by the Company with the assistance of the Company’s independent accountants. Any
of the following events will constitute a change of control: (i) any person, or group of persons
acting in concert, 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 “Voting Shares”) of Terra in an amount having, or convertible into
securities having, 25% or more of the ordinary voting power for the election of Terra directors;
(ii) during a period of not more than 24 months, a majority of the Board of Directors of Terra
ceases to consist of the existing membership or successors 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 Terra’s outstanding securities entitled to vote do not own more 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 Terra or (B) a sale or other disposition of all or substantially all
of the assets of Terra, or a transaction having a similar effect.

     4. If your employment with Terra terminates for any reason during the term of this agreement,
all unearned Performance Shares shall automatically be forfeited by you, except as follows:

     a. If your employment terminates by reason of death, the Performance Shares shall be
awarded with the award calculated as described in paragraph 1. a. through g. using the actual
quarters completed prior to the date of death. You may designate one or more beneficiaries by
a writing filed with Terra’s Corporate Secretary. Beneficiaries may be named contingently or
successively and may share in different proportions if so designated.

     b. If your employment terminates by reason of Total Disability, the Performance Shares
shall continue to be eligible for issuance pursuant to paragraphs 1. a. through g. of this
letter.

     c. In cases of special circumstances the Compensation Committee may, in its sole discretion
when it finds that a waiver would be in the best interests of Terra, extend the period for
earning all or a portion of your Performance Shares.

     5. This award shall not be effective unless you sign a copy of this letter and deliver it to
the Corporate Secretary of the Corporation, Terra Centre, 600 Fourth Street, Sioux City, Iowa
51101, before 4:30 p.m. central time on [DATE]. If the Corporate Secretary does not have your
properly

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executed copy of this letter before such time, then, anything in this letter to the contrary
notwithstanding, this award shall terminate and be of no effect.

     6. You hereby agree to pay to Terra, or otherwise make arrangements satisfactory to regarding
payment of, any federal, state or local taxes required or authorized by law to be withheld with
respect to the award of the Performance Shares (the “Withholding Taxes”). Terra shall have, to the
extent permitted by law, the right to deduct from any payment of any kind otherwise due to the
Employee, any Withholding Taxes and to condition the delivery of the Performance Shares after the
award of Performance Shares on the payment to Terra of the Withholding Taxes. In lieu of the
payment of such amounts in cash, you may pay all or a portion of the Withholding Taxes by
reconveying to Terra a portion of the Common Shares otherwise to be delivered upon earning the
Performance Shares.

     7. Terra may, in its sole discretion, at any time or from time to time, in lieu of the
delivery of all or any portion of your Performance Shares, pay to you cash equal to the Fair Market
Value (as defined in the Stock Incentive Plan of 2002) of such shares on the day the Performance
Shares are earned.

     8. Nothing in this Agreement shall confer upon the Employee any right to continue in the
employ of the Corporation or a Subsidiary, or affect the right of the Corporation or of any
Subsidiary to terminate the employment of the Employee, with or without cause.

     9. Your rights with respect to this Performance Share Grant may not be assigned or transferred
in any manner and shall not be subject to any lien, claim, encumbrance, obligation or liability of
any kind. This Performance Share Grant shall be construed in accordance with and governed by the
laws of the State of Iowa without regard to any State’s conflict of laws principles.

     These Performance 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 available on request from the Corporate
Secretary of the Corporation.

	 	 	 	 	 	 	 
	 

	 	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	TERRA INDUSTRIES INC.	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

President and Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	Vice President, General Counsel	 	 
	 

	 	 	 	and Corporate Secretary	 	 

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I hereby agree to the terms and conditions set forth above and acknowledge receipt of the Stock
Incentive Plan of 2002 and the Prospectus covering shares issued under that Plan.

Signature of Employee

 

	 	 	 
	 

	 	 

4exv10w1w24

 

Exhibit 10.1.24

LONG-TERM INCENTIVE AWARD

Date of Award: [DATE]

Number of Targeted Phantom Shares Awarded: x,xxx

Recipient

Dear (name):

     I am pleased to inform you that Terra Industries Inc. (“Terra”) has awarded you Phantom Shares in
recognition of your valued service to Terra and as an inducement for your continued contribution to
the success of Terra.

     The number of Phantom Shares noted above represents the targeted amount. You will be entitled to a
cash payment, less applicable taxes, equal to the value of between 0% and 200% of the targeted
number of Phantom Shares based on Terra’s annualized average return on capital employed (“ROCE”)
described as follows:

a. The ROCE period will be the thirty-six month period ending [DATE] (referred to
hereafter as the “Period”).

b. The return amount, or numerator of the calculation, will be the annualized average of
the sum of Income from Operations for the Period, adjusted for any charges or credits the
Compensation Committee deems unusual, reduced by 35% representing normal income tax expense.

c. The capital amount, or denominator of the calculation, will be the average of the
amounts reported on the twelve Terra quarterly balance sheets for the Period for the following
items: Common shareholders and preferred shareholders equity, short and long-term debt, deferred
income taxes and minority interest, less cash.

d. If Terra’s annualized average ROCE for the Period is 4% or less no cash value of the
targeted Phantom Shares will be earned.

e. If Terra’s annualized average ROCE for the Period is between 4% and 9%, 1% of the cash
value of the targeted Phantom Shares will be earned for each 0.05% annualized average ROCE
exceeds 4%.

f. If Terra’s annualized average ROCE for the Period is between 9% and 11.5%, 1% of the
cash value of the targeted Phantom Shares will be earned for each 0.025% annualized average ROCE
exceeds 9%.

 

 

g. The maximum cash value earned is 200% of the Phantom Shares targeted amount.

     Any cash payment attributable to the Phantom Shares will be made as soon as practical in
[YEAR] after the Compensation Committee of Terra’s Board of Directors approves the portion, if any,
of targeted Phantom Shares granted herein that is earned based on Terra’s performance during the
period.

     In the event of a sale of Terra (including by merger or other corporate transaction) or a sale of
substantially all of the Company’s assets, the number of Phantom Shares earned in the event of
the sale of the Company prior to December 31, 2008 will be the greater of (a) the calculated award
described in a. through g. above using the actual quarters completed in the Period and (b) the
targeted number of Phantom Shares. Any noncash, deferred or contingent consideration provided
for in the sale agreement shall be valued at its fair market value on a present value basis. The
determination of value for these purposes shall be conclusively made by the Company with the
assistance of the Company’s independent accountants.

     Your rights with respect to this Phantom Shares Grant may not be assigned or transferred in any
manner and shall not be subject to any lien, claim, encumbrance, obligation or liability of any
kind.

     If your employment is terminated by death or permanent disability (as defined below) during
the Period, you or your beneficiary shall continue to be eligible for award pursuant to this letter
for one year from the date of death, or permanent disability.

     If your employment terminates for any reason other than death or permanent disability prior to the
completion of the Period, all of your rights with respect to this Phantom Stock Award shall be
forfeited.

     You may designate one or more beneficiaries by a writing filed with the Secretary of Terra.
Beneficiaries may be named contingently or successively and may share in different proportions if
so designated.

     Permanent disability shall mean a disability by reason of illness, accident or other incapacity as
a result of which you are not engaged in any occupation or employment for wage or profit for which
you are reasonably qualified by education, training or experience; provided, however, that in the
event Terra maintains a long-term disability plan in which you are entitled to receive benefits,
you shall be deemed to be permanently disabled when you become eligible to receive benefits under
the long-term disability plan.

     Although this Phantom Share award is intended to provide you with an economic equivalent of stock
ownership, the award of Phantom Shares hereunder shall not entitle you to vote or exercise any of
the other rights of a holder of Terra Common Stock.

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     In the event of a stock dividend, stock split, or other change in Terra’s Common Stock by reason of
recapitalization, reorganization or like transaction, Terra shall make an appropriate adjustment in
the number of Phantom Shares credited to your account. However, no adjustment will be made if the
number of shares of outstanding Common Stock is changed as a result of a purchase of shares by
Terra for their fair value or as a result of the issuance of additional shares of Common Stock for
their fair value. For these purposes the determination of Terra that shares are acquired or issued
for their fair value shall be final and conclusive.

     Nothing in this Phantom Share award shall confer on you any right to continue in the employ of
Terra or to interfere with the right of Terra to terminate your employment at any time.

     Terra’s obligation with respect to this award shall not be funded or secured in any manner, nor
shall your right to receive payments be assignable or transferable, voluntarily or involuntarily,
except as expressly provided herein.

     Terra shall be entitled to withhold the amount of any tax attributable to any amount payable
hereunder.

     This Phantom Share Grant shall be construed in accordance with and governed by the laws of the
State of Iowa without regard to any state’s conflict of laws principles.

     If you have any questions with respect to this Award, please feel free to call upon me.

	 	 	 	 	 	 	 
	 

	 	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	TERRA INDUSTRIES INC.	 	 
	 
	 
	 
	 	By:
	 	 	 	 
	 

	 	 	 	 

President and Chief Executive Officer
	 	 
	 
	 
	 
	 	By:
	 	 	 	 
	 

	 	 	 	 

Vice President, General Counsel
	 	 
	 

	 	 	 	and Corporate Secretary	 	 

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