Document:

EXHIBIT 10.15

 

CF INDUSTRIES HOLDINGS, INC.

 

2005 EQUITY AND INCENTIVE PLAN

 

 

As amended by the Compensation

Committee of the Board of Directors

on December 13, 2007

 

 

CF INDUSTRIES HOLDINGS, INC.

 

2005 EQUITY AND INCENTIVE PLAN

 

	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
   

  	
  Purpose;
  Types of Awards; Construction

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Administration

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Eligibility

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Stock
  Subject to the Plan

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Specific
  Terms of Awards

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Change in
  Control Provisions

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  General
  Provisions

  	
   

  	
  12

  

 

 

CF INDUSTRIES HOLDINGS, INC.

 

2005 EQUITY AND INCENTIVE PLAN

 

1.             Purpose;
Types of Awards; Construction.

 

The purpose of
the CF INDUSTRIES HOLDINGS, INC. 2005 Equity and Incentive Plan (the “Plan”) is
to promote the interests of the Company and its Subsidiaries and the
stockholders of the Company by providing officers, employees, consultants and
independent contractors (including non-employee directors)  of the Company and its Subsidiaries with
appropriate incentives and rewards to encourage them to enter into and continue
in the employ or service of the Company or its Subsidiaries, to acquire a
proprietary interest in the long-term success of the Company and to reward the
performance of individuals in fulfilling their personal responsibilities for
long-range and annual achievements. The Plan provides for the grant of options
(including “incentive stock options” and “nonqualified stock options”), stock
appreciation rights, restricted stock, restricted stock units and other stock-
or cash-based awards.  The Plan is
designed so that Awards granted hereunder intended to comply with the
requirements for “performance-based compensation” under Section 162(m) of
the Code may comply with such requirements, and the Plan and Awards shall be
interpreted in a manner consistent with such requirements.  Notwithstanding any provision of the Plan, to
the extent that any Award would be subject to Section 409A of the Code, no
such Award may be granted if it would fail to comply with the requirements set forth
in Section 409A of the Code and any regulations or guidance promulgated
thereunder.

 

2.             Definitions.

 

For purposes of the Plan, the following terms
shall be defined as set forth below:

 

(a)           “Annual Incentive
Program” means the program described in Section 6(c) hereof.

 

(b)           “Award” means any
Option, SAR, Restricted Stock, Restricted Stock Unit or Other Stock-Based Award
or Other Cash-Based Award granted under the Plan.

 

(c)           “Award Agreement” means
any written agreement, contract, or other instrument or document evidencing an
Award.

 

(d)           “Board” means the Board
of Directors of the Company.

 

(e)           A “Change in Control”
shall be deemed to have occurred if an event set forth in any one of the
following paragraphs shall have occurred:

 

(i)            any Person is or becomes the Beneficial Owner (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities beneficially owned
by 

 

 

such Person any
securities acquired directly from the Company or any of its affiliates)
representing 25% or more of the combined voting power of the Company’s then
outstanding securities; or

 

(ii)           the following individuals cease for any reason to
constitute a majority of the number of directors then serving on the Board: individuals
who, on the date hereof, constitute the Board and any new director (other than
a director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was previously
so approved or recommended; or;

 

(iii)          there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation immediately following which
the individuals who comprise the Board immediately prior thereto constitute at
least a majority of the Board of the entity surviving such merger or consolidation
or, if the Company or the entity surviving such merger is then a subsidiary,
the ultimate parent thereof; or

 

(iv)          the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than (a) a sale or disposition by the Company of
all or substantially all of the Company’s assets to an entity, at least 60% of
the combined voting power of the voting securities of which are owned by
stockholders of the Company following the completion of such transaction in
substantially the same proportions as their ownership of the Company
immediately prior to such sale or (b) other than a sale or disposition by
the Company of all or substantially all of the Company’s assets immediately
following which the individuals who comprise the Board immediately prior
thereto constitute at least a majority of the board of directors of the entity
to which such assets are sold or disposed or, if such entity is a subsidiary,
the ultimate parent thereof.

 

(a)       Notwithstanding the foregoing, (1) a “Change in
Control” shall not be deemed to have occurred by virtue of the consummation of
any transaction or series of integrated transactions immediately following
which the holders of the common 

 

2

 

stock of the Company
immediately prior to such transaction or series of transactions continue to
have  substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions, and (2) a “Change in Control” shall not occur for purposes
of the Plan as result of the initial public offering of the common stock of CF
Industries Holdings, Inc. or any transactions or events contemplated by
such offering.

 

(f)            “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

 

(g)           “Committee” shall mean,
at the discretion of the Board, a Committee of the Board, which shall consist
of two or more persons, each of whom, unless otherwise determined by the Board,
is an “outside director” within the meaning of Section 162(m) of the
Code and a “nonemployee director” within the meaning of Rule 16b-3.

 

(h)           “Company” means CF
INDUSTRIES HOLDINGS, INC., a corporation organized under the laws of the State
of Delaware, or any successor corporation.

 

(i)            “Covered Employee”
shall have the meaning set forth in Section 162(m)(3) of the Code.

 

(j)            “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time, and as now
or hereafter construed, interpreted and applied by regulations, rulings and
cases.

 

(k)           “Fair Market Value”
means, with respect to Stock or other property, the fair market value of such
Stock or other property determined by such methods or procedures as shall be
established from time to time by the Committee. 
Unless otherwise determined by the Committee in good faith, the per
share Fair Market Value of Stock as of a particular date shall mean (i) the
mean between the highest and lowest reported sales price per share of Stock on
the national securities exchange on which the Stock is principally traded, for
the last preceding date on which there was a sale of such Stock on such
exchange, or (ii) if the shares of Stock are then traded in an
over-the-counter market, the average of the closing bid and asked prices for
the shares of Stock in such over-the-counter market for the last preceding date
on which there was a sale of such Stock in such market, or (iii) if the
shares of Stock are not then listed on a national securities exchange or traded
in an over-the-counter market, such value as the Committee, in its sole
discretion, shall determine.

 

(l)            “Grantee” means an
employee, consultants or independent contractor (including non-employee
director) of the Company or any Subsidiary of the Company that has been granted
an Award under the Plan.

 

(m)          “Initial Public Offering”
means the initial public offering of the shares of Stock of the Company.

 

3

 

(n)           “ISO” means any Option
intended to be and designated as an incentive stock option within the meaning
of Section 422 of the Code.

 

(o)           “Long Term Incentive
Program” means the program described in Section 6(b) hereof.

 

(p)           “NQSO” means any Option
that is not designated as an ISO.

 

(q)           “Option” means a right,
granted to a Grantee under Section 6(b)(i), to purchase shares of
Stock.  An Option may be either an ISO or
an NQSO.

 

(r)            “Other Cash-Based
Award” means cash awarded under the Annual Incentive Program or the Long Term
Incentive Program, including cash awarded as a bonus or upon the attainment of
Performance Goals or otherwise as permitted under the Plan.

 

(s)           “Other Stock-Based
Award” means a right or other interest granted to a Grantee under the Annual
Incentive Program or the Long Term Incentive Program that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on,
or related to, Stock, including but not limited to (i) unrestricted Stock
awarded as a bonus or upon the attainment of Performance Goals or otherwise as
permitted under the Plan, and (ii) a right granted to a Grantee to acquire
Stock from the Company containing terms and conditions prescribed by the
Committee.

 

(t)            “Performance Goals”
means performance goals based on the attainment by the Company or any
Subsidiary of the Company (or any division or business unit of such entity) of
performance goals pre-established by the Committee, based on one or more of the
following criteria (as determined in accordance with generally accepted
accounting principles): (1) return on total stockholder equity; (2) earnings
per share of Company Stock; (3) net income (before or after taxes); (4) earnings
before any or all of interest, taxes, minority interest, depreciation and
amortization; (5) sales or revenues; (6) return on assets, capital or
investment; (7) market share; (8) cost reduction goals; (9) budget
comparisons; (10) implementation or completion of critical projects or
processes; (11) the formation of joint ventures, research or development
collaborations, or the completion of other corporate transactions; and (12) any
combination of, or a specified increase in, any of the foregoing. The
performance goals may be based upon the attainment of specified levels of
performance under one or more of the measures described above relative to the
performance of other entities. To the extent permitted under Section 162(m) of
the Code (including, without limitation, compliance with any requirements for
stockholder approval), the Committee may designate additional business criteria
on which the performance goals may be based or adjust, modify or amend the
aforementioned business criteria. 
Performance Goals may include a threshold level of performance below
which no Award will be earned, a level of performance at which the target
amount of an Award will be earned and a level of performance at which the
maximum amount of the Award will be earned. 
The Committee shall have the authority to make equitable adjustments to
the Performance Goals in recognition of unusual or non-recurring events
affecting the Company or any Subsidiary of the Company or the 

 

4

 

financial statements of the
Company or any Subsidiary of the Company, in response to changes in applicable
laws or regulations, or to account for items of gain, loss or expense
determined to be extraordinary or unusual in nature or infrequent in occurrence
or related to the disposal of a segment of a business or related to a change in
accounting principles.

 

(u)           “Person” shall have the
meaning set forth in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (1) the Company or any Subsidiary Corporation, (2) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any Subsidiary Corporation, (3) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (4) a
corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company.

 

(v)           “Plan” means this CF
INDUSTRIES HOLDINGS, INC. 2005 Equity and Incentive Plan, as amended from time
to time.

 

(w)          “Restricted Stock” means
an Award of shares of Stock to a Grantee under Section 6(b)(iii) that
may be subject to certain restrictions and to a risk of forfeiture.

 

(x)            “Restricted Stock Unit”
means a right granted to a Grantee under Section 6(b)(iv) to receive
Stock or cash at the end of a specified deferral period, which right may be
conditioned on the satisfaction of specified performance or other criteria.

 

(y)           “Rule 16b-3” means
Rule 16b-3, as from time to time in effect promulgated by the Securities
and Exchange Commission under Section 16 of the Exchange Act, including
any successor to such Rule.

 

(z)            “Stock” means shares
of the common stock, par value $0.01 per share, of the Company.

 

(aa)         “Stock Appreciation Right”
or “SAR” means the right, granted to a Grantee under Section 6(b)(ii), to
be paid an amount measured by the appreciation in the Fair Market Value of
Stock from the date of grant to the date of exercise of the right.

 

(bb)         “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code.

 

(cc)         “Total Authorized Shares”
shall have the meaning set forth in Section 5 of the Plan.

 

5

 

3.             Administration.

 

The Plan shall be administered by the
Committee.  The Committee shall have the
authority in its discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all the powers
and authorities either specifically granted to it under the Plan or necessary
or advisable in the administration of the Plan, including, without limitation,
the authority to grant Awards; to determine the persons to whom and the time or
times at which Awards shall be granted; to determine the type and number of
Awards to be granted, the number of shares of Stock to which an Award may
relate and the terms, conditions, restrictions and performance criteria relating
to any Award; to determine Performance Goals no later than such time as
required to ensure that an underlying Award which is intended to comply with
the requirements of Section 162(m) of the Code so complies; and to
determine whether, to what extent, and under what circumstances an Award may be
settled, cancelled, forfeited, exchanged, or surrendered; to make adjustments
in the terms and conditions of, and the Performance Goals (if any) included in,
Awards; to construe and interpret the Plan and any Award; to prescribe, amend
and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the Award Agreements (which need not be identical for
each Grantee); and to make all other determinations deemed necessary or
advisable for the administration of the Plan. Notwithstanding the foregoing,
neither the Board, the Committee nor their respective delegates shall have the
authority to reprice (or cancel and regrant) any Option or, if applicable,
other Award at a lower exercise, base or purchase price without first obtaining
the approval of the Company’s stockholders.

 

All determinations of the Committee shall be
made by a majority of its members either present in person or participating by
conference telephone at a meeting or by written consent.  The Committee may delegate to one or more of
its members or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan.  All decisions, determinations and
interpretations of the Committee shall be final and binding on all persons,
including but not limited to the Company, any Subsidiary of the Company, or
Grantee (or any person claiming any rights under the Plan from or through any
Grantee) and any stockholder.

 

No member of the Board or Committee shall be
liable for any action taken or determination made in good faith with respect to
the Plan or any Award granted hereunder. Notwithstanding anything to the
contrary continued herein, prior to the consummation of the  Initial Public Offering, all Committee action
may be taken by the Board.

 

4.             Eligibility.

 

Awards may be granted to executive officers
and other key employees, consultants and independent contractors (including
non-employee directors) of the 

 

6

 

Company or its Subsidiaries,
including officers and directors who are employees, and to key consultants to
the Company or its Subsidiaries.  In
determining the persons to whom Awards shall be granted and the number of
shares to be covered by each Award, the Committee shall take into account the
duties of the respective persons, their present and potential contributions to
the success of the Company or its Subsidiaries and such other factors as the
Committee shall deem relevant in connection with accomplishing the purposes of
the Plan.

 

5.             Stock
Subject to the Plan.

 

The maximum number of shares of Stock
reserved for the grant of Awards under the Plan shall be 8,250,000 shares of
Stock, subject to adjustment as provided herein (“Total Authorized Shares”).  Subject to adjustment as provided herein, no
more than (1) 2,887,500 Shares may be awarded under the Plan in the
aggregate in respect of Awards other than Options and SARs, (2) 1,237,500
Shares may be made subject to Options or SARs awarded to an individual in a
single calendar year, and (3) 618,750 Shares may be made subject to
stock-based awards other than Options (including SARs, Restricted Stock and
Restricted Stock Units or Other Stock-Based Awards denominated in shares of
Stock) to an individual in a single calendar year.  Determinations made in respect of the limitations
set forth in the immediately preceding sentence shall be made in a manner
consistent with Section 162(m) of the Code.  Such shares may, in whole or in part, be
authorized but unissued shares or shares that shall have been or may be
reacquired by the Company in the open market, in private transactions or
otherwise.  If any shares subject to an
Award are forfeited, cancelled, exchanged or surrendered or if an Award
terminates or expires without a distribution of shares to the Grantee, or if
shares of stock are surrendered or withheld as payment of either the exercise
price of an Award and/or withholding taxes in respect of an Award, the shares
of stock with respect to such Award shall, to the extent of any such
forfeiture, cancellation, exchange, surrender, withholding, termination or
expiration, again be available for Awards under the Plan.  Upon the exercise of any Award granted in
tandem with any Awards such related Awards shall be cancelled to the extent of
the number of shares of Stock as to which the Award is exercised and,
notwithstanding the foregoing, such number of shares shall no longer be
available for Awards under the Plan.

 

In the event of a dividend (other than a
normal cash dividend) or other distribution (whether in the form of cash,
Stock, or other property), recapitalization, Stock split, reverse split,
reorganization, merger, consolidation, spin-off, combination, or share
exchange, or other similar corporate transaction or event which affects the
Stock, the Committee shall appropriately adjust the number and kind of shares
of Stock or other property (including cash) that may thereafter be issued in
connection with new Awards and shall also adjust, in each case in order to
prevent dilution or enlargement of the rights of Grantees under the Plan, (i) the
number and kind of shares of Stock or other property (including cash) issued or
issuable in respect of outstanding Awards, (ii) the exercise price, grant
price, or purchase price relating to any outstanding Award (provided, that,
with respect to ISOs, such adjustment shall be made in accordance with Section 424(h) of
the Code); and (iii) if applicable and to the extent the Committee
determines to be appropriate, the Performance Goals applicable to outstanding
Awards.  The Committee 

 

7

 

shall have the authority to
determine the specific adjustments that shall be made in each case in order to
achieve the objectives stated in the preceding sentence.  The decision of the Committee regarding any
such adjustment shall be final, binding and conclusive.

 

6.             Specific
Terms of Awards.

 

(a)           General.  The term of each Award
shall be for such period as may be determined by the Committee.  Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or any
Subsidiary of the Company upon the grant, maturation, or exercise of an Award
may be made in such forms as the Committee shall determine at the date of grant
or thereafter, including, without limitation, cash, Stock, or other property,
and may be made in a single payment or transfer, in installments, or on a
deferred basis.  The Committee may make rules relating
to installment or deferred payments with respect to Awards, including the rate
of interest to be credited with respect to such payments.  In addition to the foregoing, the Committee
may impose on any Award or the exercise thereof, at the date of grant or
thereafter, such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine.

 

(b)           Long Term Incentive
Program.  Under the Long Term
Incentive Program, the Committee is authorized to grant the Awards described in
this Section 6(b), under such terms and conditions as deemed by the
Committee to be consistent with the purposes of the Plan.  Such Awards may be granted with value and
payment contingent upon Performance Goals. 
Each Award granted under the Long Term Incentive Program shall be
evidenced by an Award Agreement containing such terms and conditions applicable
to such Award as the Committee shall determine at the date of grant or
thereafter.

 

(i)            Options.  The Committee is authorized to grant Options
to Grantees on the following terms and conditions:

 

(A)          Type of Award.  The Award Agreement evidencing the grant of
an Option under the Plan shall designate the Option as an ISO or an NQSO.

 

(B)           Exercise Price.  The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee, but in no
event shall the exercise price of any Option be less than the Fair Market Value
of a share of Stock on the date of grant of such Option.  The exercise price for Stock subject to an
Option may be paid in cash or by an exchange of Stock previously owned by the
Grantee, through a “broker cashless exercise” procedure approved by the
Committee, a combination of the above, or any other method approved the
Committee, in any case in an amount having a combined value equal to such
exercise price.

 

8

 

(C)           Term and Exercisability
of Options.  Unless the Committee
determines otherwise, the date on which the Committee adopts a resolution
expressly granting an Option shall be considered the day on which such Option
is granted.  Options shall be exercisable
over the exercise period (which shall not exceed ten years from the date of
grant), at such times and upon such conditions as the Committee may determine,
as reflected in the Award Agreement; provided, that the Committee shall have
the authority to accelerate the exercisability of any outstanding Option at
such time and under such circumstances as it, in its sole discretion, deems
appropriate.  An Option may be exercised
to the extent of any or all full shares of Stock as to which the Option has
become exercisable, by giving written notice of such exercise to the Committee
or its designated agent.

 

(D)          Termination of
Employment, etc.  An Option may not be
exercised unless the Grantee is then a director of, in the employ of, or then
maintains an independent contractor relationship with, the Company or a
Subsidiary of the Company, and unless the Grantee has remained continuously so
employed, or continuously maintained such a relationship, since the date of
grant of the Option; provided, that the Award Agreement may contain provisions
extending the exercisability of Options, in the event of specified
terminations, to a date not later than the expiration date of such Option.

 

(E)           Other Provisions.  Options may be subject to such other
conditions including, but not limited to, restrictions on transferability of
the shares acquired upon exercise of such Options, as the Committee may
prescribe in its discretion or as may be required by applicable law.

 

(ii)           SARs.  The Committee is authorized to grant SARs to
Grantees on the following terms and conditions:

 

(A)          In General.  SARs may be granted independently or in
tandem with an Option. Unless the Committee determines otherwise, a SAR (1) granted
in tandem with an NQSO may be granted at the time of grant of the related NQSO
or at any time thereafter or (2) granted in tandem with an ISO may only be
granted at the time of grant of the related ISO.  A SAR granted in tandem with an Option shall
be exercisable only to the extent the underlying Option is exercisable.  Payment of an SAR may be made in cash, Stock,
or property as specified in the Award Agreement or determined by the Committee.

 

9

 

(B)           SARs.  A SAR shall confer on the Grantee a right to
receive an amount with respect to each share subject thereto, upon exercise
thereof, equal to the excess of (1) the Fair Market Value of one share of
Stock on the date of exercise over (2) the grant price of the SAR (which
in the case of an SAR granted in tandem with an Option shall be equal to the
exercise price of the underlying Option, and which in the case of any other SAR
shall be such price as the Committee may determine).

 

(iii)          Restricted Stock.  The Committee is authorized to grant
Restricted Stock to Grantees on the following terms and conditions:

 

(A)          Issuance and
Restrictions.  Restricted Stock shall
be subject to such restrictions on transferability and other restrictions, if
any, as the Committee may impose at the date of grant or thereafter, which
restrictions may lapse separately or in combination at such times, under such
circumstances, in such installments, or otherwise, as the Committee may
determine; provided that, except as provided in Section 7, any such
restrictions that are based only on continued employment for a specified period
of time shall not lapse less than one year after the date of grant of the
Award.  The Committee may place
restrictions on Restricted Stock that shall lapse, in whole or in part, only
upon the attainment of Performance Goals. 
Except to the extent restricted under the Award Agreement relating to
the Restricted Stock, a Grantee granted Restricted Stock shall have all of the
rights of a stockholder including, without limitation, the right to vote
Restricted Stock and the right to receive dividends thereon.

 

(B)           Forfeiture.  Upon termination of employment with or
service to the Company or any Subsidiary of the Company, during the applicable
restriction period, Restricted Stock shall be forfeited; provided, that the
Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock will be waived in whole or in part in
the event of terminations resulting from specified causes, and the Committee
may in other cases waive in whole or in part the forfeiture of Restricted
Stock.

 

(C)           Certificates for
Stock.  Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee shall
determine.  If certificates representing
Restricted Stock are registered in the name of the Grantee, such certificates
shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and the Company shall retain
physical possession of the certificate.

 

10

 

(D)          Dividends.  Dividends paid on Restricted Stock shall be
either paid at the dividend payment date in cash or in shares of unrestricted
Stock having a Fair Market Value equal to the amount of such dividends.  Stock distributed in connection with a stock
split or stock dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has been
distributed.

 

(iv)          Restricted Stock
Units.  The Committee is authorized
to grant Restricted Stock Units to Grantees, subject to the following terms and
conditions:

 

(A)          Award and
Restrictions.  Delivery of Stock or
cash, as determined by the Committee, will occur upon expiration of the
deferral period specified for Restricted Stock Units by the Committee.  The Committee may place restrictions on
Restricted Stock that shall lapse, in whole or in part, only upon the
attainment of Performance Goals; provided that, except as provided in Section 7,
any such restrictions that are based only on continued employment for a
specified period of time shall not lapse less than one year after the date of
grant of the Award.

 

(B)           Forfeiture.  Upon termination of employment with or
service to the Company or any Subsidiary of the Company, during the applicable
deferral period or portion thereof to which forfeiture conditions apply, or
upon failure to satisfy any other conditions precedent to the delivery of Stock
or cash to which such Restricted Stock Units relate, all Restricted Stock Units
and any accrued but unpaid dividend equivalents that are then subject to
deferral or restriction shall be forfeited; provided, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine
in any individual case, that restrictions or forfeiture conditions relating to
Restricted Stock Units will be waived in whole or in part in the event of
termination resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of Restricted Stock Units.

 

(v)           Other Stock- or
Cash-Based Awards.  The Committee is
authorized to grant Awards to Grantees in the form of Other Stock-Based Awards
or Other Cash-Based Awards, as deemed by the Committee to be consistent with
the purposes of the Plan.  Awards granted
pursuant to this paragraph may be granted with value and payment contingent
upon Performance Goals, so long as such goals relate to periods of performance
in excess of one calendar year.  The
Committee shall determine the terms and conditions of such Awards at the date
of 

 

11

 

grant or thereafter.  The maximum value of the aggregate payment
that any Grantee may receive with respect to Other Cash-Based Awards pursuant
to this Section 6(b)(v) in respect of any annual performance period
is $3,000,000  and for any other
performance period in excess of one year, such amount multiplied by a fraction,
the numerator of which is the number of months in the performance period and
the denominator of which is twelve. 
Payments earned hereunder may be decreased or, with respect to any
Grantee who is not a Covered Employee, increased in the sole discretion of the
Committee based on such factors as it deems appropriate.  No payment shall be made to a Covered
Employee prior to the certification by the Committee that the Performance Goals
have been attained.  The Committee may
establish such other rules applicable to the Other Stock- or Cash-Based
Awards to the extent not inconsistent with Section 162(m) of the
Code.

 

(c)           Annual Incentive
Program.  The Committee is authorized
to grant Awards to Grantees pursuant to the Annual Incentive Program, under
such terms and conditions as deemed by the Committee to be consistent with the
purposes of the Plan.  The maximum value
of the aggregate payment that any Grantee may receive under the Annual
Incentive Program in respect of any calendar year is $3,000,000.  Payments earned hereunder may be decreased
or, with respect to any Grantee who is not a Covered Employee, increased in the
sole discretion of the Committee based on such factors as it deems
appropriate.  No payment shall be made to
a Covered Employee prior to the certification by the Committee that the
Performance Goals have been attained. 
The Committee may establish such other rules applicable to the
Annual Incentive Program to the extent not inconsistent with Section 162(m) of
the Code.

 

7.             Change
in Control Provisions.

 

Unless otherwise determined by the Committee
and evidenced in an Award Agreement, in the event of a Change of Control:

 

(a)           any Award carrying a
right to exercise that was not previously vested and exercisable shall become
fully vested and exercisable; and

 

(b)           the restrictions,
deferral limitations, payment conditions, and forfeiture conditions applicable
to any other Award granted under the Plan shall lapse and such Awards shall be
deemed fully vested, and any performance conditions imposed with respect to
Awards shall be deemed to be fully achieved.

 

8.             General
Provisions.

 

(a)           Nontransferability.  Unless otherwise determined by the Committee,
Awards shall not be transferable by a Grantee except by will or the laws of
descent and distribution and shall be exercisable during the lifetime of a
Grantee only by such Grantee or his guardian or legal representative.

 

12

 

(b)           No Right to
Continued Employment, etc.  Nothing
in the Plan or in any Award, any Award Agreement or other agreement entered
into pursuant hereto shall confer upon any Grantee the right to continue in the
employ or service of the Company or Subsidiary of the Company or to be entitled
to any remuneration or benefits not set forth in the Plan or such Award
Agreement or other agreement or to interfere with or limit in any way the right
of the Company or any such Subsidiary to terminate such Grantee’s employment or
independent contractor relationship.

 

(c)           Taxes.  The Company or any Subsidiary of the Company
is authorized to withhold from any Award granted, any payment relating to an
Award under the Plan, including from a distribution of Stock, or any other
payment to a Grantee, amounts of withholding and other taxes due in connection with
any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company and Grantees to satisfy
obligations for the payment of withholding taxes and other tax obligations
relating to any Award.  This authority
shall include authority to withhold or receive Stock or other property and to
make cash payments in respect thereof in satisfaction of a Grantee’s tax
obligations.  The Committee may provide
in the Award Agreement that in the event that a Grantee is required to pay any
amount to be withheld in connection with the issuance of shares of Stock in
settlement or exercise of an Award, the Grantee shall or may satisfy such
obligation (in whole or in part) by electing to have a portion of the shares of
Stock to be received upon settlement or exercise of such Award equal to the
minimum amount required to be withheld.

 

(d)           Stockholder
Approval; Amendment and Termination.

 

(i)            The Plan shall take
effect upon its adoption by the Board.

 

(ii)           The Board may at any
time and from time to time alter, amend, suspend, or terminate the Plan in
whole or in part; provided, however, that unless otherwise determined by the
Board, an amendment that requires stockholder approval in order for the Plan to
continue to comply with Section 162(m) or any other law, regulation
or stock exchange requirement shall not be effective unless approved by the
requisite vote of stockholders. 
Notwithstanding the foregoing, no amendment to or termination of the
Plan shall affect adversely any of the rights of any Grantee, without such
Grantee’s consent, under any Award theretofore granted under the Plan.  Moreover, the Company reserves the right to cancel, amend, terminate, suspend, or
otherwise change outstanding Awards under the Annual Incentive Program for any
reason at any time before, during or after the calendar year to which an Award
relates, upon authorization of the Board. 
The Committee may expand, reduce or otherwise change any and all
opportunities, Awards, and any and all financial factors, or financial measures
used in outstanding Awards under the Annual Incentive Program for any reason at
any time before, during or after the calendar year to which an Award
relates.  All changes described in this
paragraph are at the sole discretion of the Board and/or 

 

13

 

the Committee, may be made at
any time, and may have a retroactive effective date.

 

(e)           Expiration of Plan.  Unless earlier terminated by the Board
pursuant to the provisions of the Plan, the Plan shall expire on the tenth
anniversary of the date of the Plan’s adoption by the Board.  No Awards shall be granted under the Plan
after such expiration date.  The
expiration of the Plan shall not affect adversely any of the rights of any Grantee,
without such Grantee’s consent, under any Award theretofore granted.

 

(f)            Deferrals.  The Committee shall have the authority to
establish such procedures and programs that it deems appropriate to provide
Grantees with the ability to defer receipt of cash, Stock or other property
payable with respect to Awards granted under the Plan.

 

(g)           No Rights to Awards;
No Stockholder Rights.  No Grantee
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Grantees.   Except as provided specifically herein, a
Grantee or a transferee of an Award shall have no rights as a stockholder with
respect to any shares covered by the Award until the date of the issuance of a
stock certificate to him for such shares or the issuance of shares to him in
book-entry form.

 

(h)           Unfunded Status of
Awards.  The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation.  With respect to any payments not yet made to
a Grantee pursuant to an Award, nothing contained in the Plan or any Award
shall give any such Grantee any rights that are greater than those of a general
creditor of the Company.

 

(i)            No Fractional
Shares.  No fractional shares of
Stock shall be required to be issued or delivered pursuant to the Plan or any
Award.  The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu
of such fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.

 

(j)            Regulations and
Other Approvals.

 

(i)            The obligation of the
Company to sell or deliver Stock with respect to any Award granted under the
Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining
of all such approvals by governmental agencies as may be deemed necessary or
appropriate by the Committee.

 

(ii)           Each Award is subject
to the requirement that, if at any time the Committee determines, in its
absolute discretion, that the listing, registration or qualification of Stock
issuable pursuant to the Plan is required by any securities exchange or under
any state or federal law, or the consent or approval of any governmental
regulatory body is necessary 

 

14

 

or desirable as a condition of, or in
connection with, the grant of an Award or the issuance of Stock, no such Award
shall be granted or payment made or Stock issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected or
obtained free of any conditions not acceptable to the Committee.

 

(iii)          In the event that the
disposition of Stock acquired pursuant to the Plan is not covered by a then
current registration statement under the Securities Act and is not otherwise
exempt from such registration, such Stock shall be restricted against transfer
to the extent required by the Securities Act or regulations thereunder, and the
Committee may require a Grantee receiving Stock pursuant to the Plan, as a
condition precedent to receipt of such Stock, to represent to the Company in
writing that the Stock acquired by such Grantee is acquired for investment only
and not with a view to distribution.

 

(iv)          The Committee may
require a Grantee receiving Stock pursuant to the Plan, as a condition
precedent to receipt of such Stock, to enter into a stockholder agreement or “lock-up”
agreement in such form as the Committee shall determine is necessary or
desirable to further the Company’s interests.

 

(k)           Governing Law.  The Plan and all determinations made and
actions taken pursuant hereto shall be governed by the laws of the State of
Delaware  without giving effect to the conflict
of laws principles thereof.

 

15EXHIBIT
10.16

 

 

CF INDUSTRIES HOLDINGS, INC.

 

2005 EQUITY AND INCENTIVE PLAN

 

Annual Incentive Program

 

 

Effective January 1, 2008

 

 

	
  TABLE OF CONTENTS

  

 

	
  Purpose

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Participation
  Eligibility

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Award
  Opportunities

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Company
  Performance Metric & Award Pool

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Determination
  of Individual Awards

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Payment of
  Awards

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  AIP Awards and
  Employee Benefits

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Other
  Provisions

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  8

  

 

2

 

CF
INDUSTRIES HOLDINGS, INC.

 

2005
EQUITY AND INCENTIVE PLAN

 

Annual
Incentive Program

 

Purpose

 

The
purpose of the Annual Incentive Program (“AIP”), established under the Company’s
2005 Equity and Incentive Plan, is to support the accomplishment of the Company’s
financial objectives. In doing so the AIP is designed to:

 

·                  Closely align the compensation of AIP
participants with the financial interests and expectations of the Company’s
stockholders.

 

·                  Provide opportunities, when combined with
base salaries, for participants to earn competitive levels of direct cash
compensation in order to attract and retain high-performing management
employees.

 

·                  Define an appropriate portion of management
compensation as being “at risk”, thereby providing enhanced opportunities for
pay for performance.

 

Participation
Eligibility

 

Participation
in the AIP is limited to corporate officers and other management positions that
have the ability to contribute meaningfully to the Company’s business results.

 

Participation
in the AIP by non-officers must be approved by the Chairman and Chief Executive
Officer of the Company.  Participation by
the “executive officers,” who are identified as such in the proxy statement,
and by other officers reporting directly to the Chairman and Chief Executive
Officer must be approved by the Compensation Committee of the Board of
Directors.

 

Award
Opportunities

 

Each
approved participant is assigned to a specific Target Award Group. A
participant’s assigned Group reflects a combination of his/her position’s
relative responsibility level and competitive compensation level. Each Group
has a target award level stated as a percent of “base earnings,” defined as
payroll earnings received during the program year.  Each year all participants will receive award
agreements that reflect the award opportunity for that specific program year.

 

3

 

The
Target Award level as of January 1, 2008 for each Group is as follows:

 

	
   

  	
   

  	
  Target Award

  	
   

  
	
  Group

  	
   

  	
  % of Base

  Earnings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Chairman & CEO

  	
   

  	
  100

  	
  %

  
	
  2.

  	
  Selected Sr. Vice Presidents and Vice Presidents

  	
   

  	
  60

  	
   

  
	
  3.

  	
  Selected Sr. Vice Presidents

  	
   

  	
  55

  	
   

  
	
  4.

  	
  Selected Sr. Vice Presidents

  	
   

  	
  50

  	
   

  
	
  5.

  	
  Selected Vice Presidents

  	
   

  	
  45

  	
   

  
	
  6.

  	
  Selected Vice Presidents

  	
   

  	
  40

  	
   

  
	
  7.

  	
  Selected Vice Presidents & Selected Dirs.

  	
   

  	
  35

  	
   

  
	
  8.

  	
  Gen. Mgrs. & Selected Dirs.

  	
   

  	
  30

  	
   

  
	
  9.

  	
  Selected Directors & Mgrs.

  	
   

  	
  24

  	
   

  
	
  10.

  	
  Selected Directors & Mgrs.

  	
   

  	
  20

  	
   

  
	
  11.

  	
  Selected Directors & Mgrs.

  	
   

  	
  16

  	
   

  

 

Company
Performance Metric & Award Pool

 

The
performance metric used to determine the aggregate award pool is Cash Flow
Return on Average Gross Capital Employed (CFROC).  The Company’s performance standard at the
Target level is a CFROC of 19%.  The definition
of CFROC is presented in Exhibit I.

 

The
determination of the aggregate award pool is based upon the following Company performance
schedule:

 

	
  Cash Flow Return on

  Average Gross Capital

  Employed

  	
   

  	
  Aggregate

  Award Pool as a % of

  Target

  	
   

  
	
  42

  	
  %

  	
  (Maximum)

  	
   

  	
   

  	
  200

  	
  %

  
	
  33

  	
   

  	
   

  	
   

  	
   

  	
  150

  	
   

  
	
  19

  	
   

  	
  (Target)

  	
   

  	
   

  	
  100

  	
   

  
	
  5

  	
   

  	
  (Threshold)

  	
   

  	
   

  	
  50

  	
   

  

 

The
aggregate award pool for performance levels between objectives are determined
proportionately.  In addition, if the
Company’s performance is below Threshold, an award pool equal to 15% of the
target awards at the 100% of target level of all program participants in
aggregate (excluding the executive officers who are named in the summary
compensation table in the proxy statement, referred to as the “named executive
officers”) will be available for distribution based on management discretion.  In such circumstances, it is possible that
none, some or all of the award pool will be paid to participants.

 

4

 

Determination
of Individual Awards

 

The
determination of actual individual awards from the pool is based on the following
provisions:

 

·                  The Company’s CFROC performance (rounded to the
nearest one-tenth of a whole percent, for example 38.2%) will be used to
determine the percent of target (rounded to the nearest whole percent, for
example 179%) available to participants.

 

·                  The awards for the Chairman and CEO and all other
named executive officers are equal to their respective target awards multiplied
by the percent of target attained by applying the Company’s CFROC against the
performance schedule.  No awards are
granted to these executives if Company performance is below the Threshold
level.

 

·                  The pool of award dollars available for
distribution to all other participants is equal to these participants’ target
awards in aggregate multiplied by the percent of target attained based on
Company performance.  The award for an
individual participant is equal to 85% of the amount determined by multiplying
his/her target award by the percent of target attained based on Company
performance.  The remaining 15% of the
pool is distributed based on management discretion.

 

·                  When Company performance does not meet the
CFROC threshold level, an award pool equal to 15% of the target awards of all
participants, other than the named executive officers, may be distributed on a
discretionary basis.

 

Payment of Awards

 

Payment
of approved awards is made no later than March 15 of the calendar year
following completion of the Program Year.

 

Participants,
if eligible, may elect to defer all or a portion of their AIP awards under the
provisions of the Company’s non-qualified deferred compensation plans if such
elections are in place prior to January 1 of the Program year or within 30
days of participation date if participation starts after the first of the year.  Deferrals are subject to applicable taxes.

 

Payment
of awards to participants whose employment with the Company terminates is as
follows:

 

·                  Due to Retirement, Disability, Death or Job
Elimination (As defined below)

 

Awards
are pro-rated based on the participant’s base earnings through the date of
termination or disability and are determined and paid out after the close of
the Program Year based on applicable performance for the Program Year.

 

5

 

·                  For Cause (As defined below)

 

Awards
for the current Program Year (the year of termination) and awards not yet paid
out for the previous Program Year are forfeited.

 

·                  For Any Other Reason

 

Awards
for the current Program Year (the year of termination) are forfeited.  Awards for a completed Program Year not yet
paid are paid out after the close of the Program Year if applicable performance
is achieved.

 

“Retirement”
shall mean the Participant’s termination of employment, other than for Cause,
death or Disability, following the attainment by the Participant of at least
age fifty-five.

 

“Disability”
shall have the meaning ascribed to such term in the Participant’s individual
employment, severance or other agreement with the Company or, if the Participant
is not party to such an agreement, “Disability” shall mean Participant’s
inability because of ill health, physical or mental disability, to perform Participant’s
duties for a period of 180 days in any twelve-month period.

 

“Job
Elimination” shall mean the Participant’s termination of employment resulting
from the Company’s determination that the job held by the participant is
obsolete.

 

“Cause”
shall have the meaning ascribed to such term in the Participant’s individual
employment, severance or other agreement with the Company or, if the
Participant is not party to such an agreement, “Cause” shall mean (i) dishonesty
in the performance of the Participant’s duties, or (ii) the Participant’s
malfeasance or misconduct in connection with the Participant’s duties or (iii) any
act or omission which is injurious to the Company or its Subsidiaries or
affiliates, monetarily or otherwise.

 

Awards
forfeited under the AIP will not be distributed to other participants.

 

AIP Awards and Employee Benefits

 

Participants’
AIP awards, whether paid out or deferred, are included in the definition of
Compensation for the purpose of calculating pension benefits for eligible
participants in the CF Industries, Inc. Retirement Income Plan and the CF
Industries, Inc. Supplemental Benefit and Deferral Plan.  AIP awards are not used in the calculation of
any other employee benefits.

 

Other Provisions

 

Benefits
paid to Program participants in the form of salary continuation under CF’s
Short-Term Disability Plan are included in base earnings for the purpose of
determining awards under the AIP.

 

6

 

Any
conflict between the AIP provisions stated in this document and the provisions
stated in the 2005 Equity and Incentive Plan will be governed by the 2005
Equity and Incentive Plan.

 

The
AIP is administered by the Compensation Committee of the Company’s Board of
Directors, or by such person or persons as the Compensation Committee may
delegate to administer the Program.  Such
administrator has the authority to make all necessary or desirable interpretations
under the AIP, which are final and binding on all AIP participants.

 

The Company may modify or terminate the AIP at any
time. In the event of program termination, the performance results will be
determined from the beginning of the current program year to the effective date
of program termination. Based on these results, any awards earned will be paid
in cash to participants on a pro-rata basis within 45 days after the date of
the program termination.

 

7

 

Exhibit I

 

Definition of Cash Flow Return on Average Gross Capital Employed

 

The
Company Performance Metric for the Annual Incentive Program is Cash Flow Return
on Average Gross Capital Employed (CFROC) defined as follows:

 

	
  CFROC =

  	
  Cash Flow

  
	
  Average Gross Capital Employed

  

 

Where:

 

Cash
Flow =

 

Cash
Flow from Operating Activities

Less:  Additions to Property, Plant &
Equipment (excluding major capital expenditures)

Less:  Minority Interest in CFL

Less:  Changes in Net Operating Working Capital*

Less:  Increase (Decrease) in Customer Advances

Plus:
  Interest Expense

 

Gross Capital Employed =

 

Total Stockholders’ Equity (Book Equity) + Interest
Bearing Debt (Gross Debt)

 

Average
Gross Capital Employed =

 

Gross
Capital Employed as of 12/31 for current Program Year, plus Gross Capital Employed
as of 12/31 of previous Program Year divided by 2.

 

*Net
Operating Working Capital =

 

Inventories

Plus:
 Accounts Receivable

Plus:
 Positive Exchange Positions

Plus:
 Margin Deposits

Plus:
 Prepaid Expenses

Less: Accounts Payable & Accrued Expenses
excluding Accruals related to Asset Retirement Obligations

Less:
Negative Exchange Positions

 

The
Company’s CFROC performance will be calculated and rounded to the nearest
one-tenth of a whole percent, for example 16.9%.

 

8

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