Document:

Exhibit 10.1

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS AGREEMENT, effective as of August 22, 2011, is made by and between CF Industries Holdings, Inc., a Delaware corporation (the “Company”), and Dennis P. Kelleher (the “Executive”).

 

WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continued employment of key management personnel; and

 

WHEREAS, the Board recognizes that the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and

 

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

 

1.                                       Defined Terms.  The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

 

2.                                       Term of Agreement.  This Agreement shall become effective upon execution, and the Term shall continue in effect through December 31, 2012; provided, however, that commencing on January 1, 2012 and each January 1 thereafter, the Term shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Company or the Executive shall have given notice not to extend the Term; and further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change in Control occurred.

 

3.                                       Company’s Covenants Summarized.  In order to induce the Executive to remain in the employ of the Company and in consideration of the Executive’s covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and the other payments and benefits described herein.  Except as provided in Section 9.1 hereof, no Severance Payments shall be payable under this Agreement unless there shall have been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive’s employment with the Company following a Change in Control and during the Term.  This Agreement shall not be construed as

 

 

creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company.

 

4.                                       The Executive’s Covenants.  The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the Term, the Executive will remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive’s employment for Good Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Company of the Executive’s employment for any reason.

 

5.                                       Compensation Other Than Severance Payments.

 

5.1                                 Following a Change in Control and during the Term, during any period that the Executive fails to perform the Executive’s full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive’s full salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period (other than any disability plan), until the Executive’s employment is terminated by the Company for Disability.

 

5.2                                 If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay the Executive’s full salary to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Company’s compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason.

 

5.3                                 If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay to the Executive the Executive’s normal post-termination compensation and benefits as such payments become due.  Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company’s retirement, insurance and other compensation or benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason.

 

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6.                                       Severance Payments.

 

6.1                                 If the Executive’s employment is terminated following a Change in Control and during the Term, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (“Severance Payments”) and Section 6.2, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof.  For purposes of this Agreement, the Executive’s employment shall be deemed to have been terminated following a Change in Control by the Company without Cause or by the Executive with Good Reason, if (i) the Executive’s employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control ever occurs).

 

(A)                              In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to two times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the Executive’s target annual bonus pursuant to any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which the Date of Termination occurs or, if higher, the fiscal year in which the first event or circumstance constituting Good Reason occurs.

 

(B)                                For thetwenty-four (24) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater after tax cost to the Executive than the after tax cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a different method, such health insurance benefits shall be provided through a third-party insurer.  Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the

 

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extent benefits of the same type are received by or made available to the Executive during the twenty-four (24) month period following the Executive’s termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the after tax cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason.

 

(C)                                In addition to the benefits to which the Executive is entitled under each DC Pension Plan, the Company shall pay the Executive a lump sum amount, in cash, equal to the sum of (1) the amount that would have been contributed or allocated to each DC Pension Plan by the Company on the Executive’s behalf (without regard to whether such amount would be vested) during the two years immediately following the Date of Termination, determined (x) as if the Executive made the maximum permissible contributions thereto during such period, (y) as if the Executive earned compensation during such period at a rate equal to the Executive’s compensation (as defined in the DC Pension Plans) during the twelve (12) months immediately preceding the Date of Termination or, if higher, during the twelve months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (z) without regard to any amendment to the DC Pension Plans made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits thereunder and (2) all other amounts credited to the Executive’s account under each DC Pension Plan to the extent such amounts were unvested on the Date of Termination.

 

(D)                               If the Executive would have become entitled to benefits under the Company’s post-retirement health care or life insurance plans, as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, had the Executive’s employment terminated at any time during the period of twenty-four (24) months after the Date of Termination, the Company shall provide such post-retirement health care or life insurance benefits to the Executive and the Executive’s dependents commencing on the later of (i) the date on which such coverage would have first become available and (ii) the date on which benefits described in subsection (B) of this Section 6.1 terminate.  If the operation of this Section 6.1(D) would result in adverse tax consequences to the Executive as a result of the Executive’s participation in the Company’s post-retirement health care or life insurance plans, the Company shall instead provide substantially similar benefits and coverage through a third party insurer.

 

(E)                                 The Company shall provide the Executive with outplacement services suitable to the Executive’s position for a period of two

 

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years or, if earlier, until the first acceptance by the Executive of an offer of employment.

 

(F)                                 Notwithstanding any provision of any annual or long-term incentive plan to the contrary, the Company shall pay to the Executive a lump sum amount, in cash, equal to the sum of (i) any unpaid incentive compensation which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination under any such plan and which, as of the Date of Termination, is contingent only upon the continued employment of the Executive to a subsequent date, and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards to the Executive for all then uncompleted periods under any such plan, calculated as to each such award by multiplying the award that the Executive would have earned on the last day of the performance award period, assuming the achievement, at the target level (or, if greater, based on actual results to Date of Termination), of the individual and corporate performance goals established with respect to such award, by the fraction obtained by dividing the number of full months and any fractional portion of a month during such performance award period through the Date of Termination by the total number of months contained in such performance award period.

 

6.2                                 (A)                              Whether or not the Executive becomes entitled to the Severance Payments, if any of the payments or benefits received or to be received by the Executive (including any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, excluding the Gross-Up Payment, being hereinafter referred to as the “Total Payments”) will be subject to the Excise Tax, the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, and after taking into account the phase out of itemized deductions and personal exemptions attributable to the Gross-Up Payment, shall be equal to the Total Payments.

 

(B)                                For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments shall be treated as “parachute payments” (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the “Auditor”), such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all “excess parachute payments” within the meaning of section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of

 

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the Base Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code.  For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the Date of Termination (or if there is no Date of Termination, then the date on which the Gross-Up Payment is calculated for purposes of this Section 6.2), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

 

(C)                                In the event that the Excise Tax is finally determined to be less than the amount taken into account hereunder in calculating the Gross-Up Payment, the Executive shall repay to the Company, within five (5) business days following the time that the amount of such reduction in the Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up Payment being repaid by the Executive), to the extent that such repayment results in a reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code.  In the event that the Excise Tax is determined to exceed the amount taken into account hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) within five (5) business days following the time that the amount of such excess is finally determined.  The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments.

 

6.3                                 The payments provided in subsections (A),(C) and (F) of Section 6.1 hereof and in Section 6.2 hereof shall be made not later than the fifth day following the date upon which the revocation period for the release described in Section 6.6 expires (or, with respect to the payment described in Section 6.2, if there is no Date of Termination, then the date on which the Gross-Up Payment is calculated for purposes of Section 6.2 hereof); provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Executive or, in the case of payments under Section 6.2 hereof, in accordance with Section 6.2 hereof, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or

 

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on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) day after the Date of Termination.  In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in section 1274(b)(2)(B) of the Code).  At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).  In the event necessary to comply with the provisions of Section 409A of the Code and the guidance issued thereunder, (a) reimbursements to Executive as a result of the operation of Section 6.1(B) hereof shall be made not later than the end of the calendar year following the year in which the reimbursable expense is incurred and (b) if Executive is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code), any reimbursements to Executive as a result of the operation of 6.1(B) hereof with respect to a reimbursable event within the first six months following the Date of Termination shall be made as soon as practicable following the date which is six months and one day following the Date of Termination (subject to clause (a) of this sentence).

 

6.4                                 The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive’s employment, in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder.  Such payments shall be made within five (5) business days after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require.  The Executive’s reimbursement rights described in this Section 6.4 shall remain in effect for the Executive’s lifetime, provided, that, in order for the Executive to be entitled to reimbursement hereunder, the Executive must submit the written reimbursement request described above within 180 days following the date upon which the applicable expense is incurred.

 

6.5                                 The Executive agrees that prior to and following the Date of Termination, he shall retain in confidence any confidential information known to him concerning the Company and its Affiliates and their respective businesses for as long as such information is not publicly disclosed.

 

6.6                                 Notwithstanding anything to the contrary, all compensation and benefits payable to Executive pursuant to this Section 6 (other than Sections 6.2 and 6.4) are conditioned on receipt by the Company of an executed release of claims by Executive in the form attached hereto as Exhibit A and the expiration of any revocation period in

 

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such release.  In order to be entitled to such compensation and benefits, the Executive must execute such release of claims within the consideration period described in paragraph (d) in the form of release attached hereto as Exhibit A.

 

7.                                       Termination Procedures and Compensation During Dispute.

 

7.1                                 Notice of Termination.  After a Change in Control and during the Term, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.  Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail.

 

7.2                                 Date of Termination.  “Date of Termination,” with respect to any purported termination of the Executive’s employment after a Change in Control and during the Term, shall mean (i) if the Executive’s employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30) day period), and (ii) if the Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days, respectively, from the date such Notice of Termination is given).

 

7.3                                 Dispute Concerning Termination.  If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the earlier of (i) the date on which the Term ends or (ii) the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of an arbitrator or a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive

 

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only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

 

7.4                                 Compensation During Dispute.  If a purported termination occurs following a Change in Control and during the Term and the Date of Termination is extended in accordance with Section 7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given, until the Date of Termination, as determined in accordance with Section 7.3 hereof.  Amounts paid under this Section 7.4 are in addition to all other amounts due under this Agreement (other than those due under Section 5.2 hereof) and shall not be offset against or reduce any other amounts due under this Agreement.

 

8.                                       No Mitigation.  The Company agrees that, if the Executive’s employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 hereof or Section 7.4 hereof.  Further, except as specifically provided in Section 6.1(B) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

 

9.                                       Successors; Binding Agreement.

 

9.1                                 In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive’s employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination.

 

9.2                                 This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the

 

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terms of this Agreement to the executors, personal representatives or administrators of the Executive’s estate.

 

10.                                 Notices.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Executive, to the address inserted below the Executive’s signature on the final page hereof and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

 

To the Company:

 

CF Industries Holdings, Inc.

4 Parkway North, Suite 400

Deerfield, Illinois 60015-2590

 

Attention:  Vice President, Human Resources

 

11.                                 Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.  No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party (including, but not limited to, the previous version of this Agreement as it existed prior to the amendments referred to in the first paragraph hereof); provided, however, that this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Company only in the event that the Executive’s employment with the Company is terminated on or following a Change in Control, by the Company other than for Cause or by the Executive for Good Reason.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois.  All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections.  Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed.  The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 6 and 7 hereof) shall survive such expiration.

 

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12.                                 Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

13.                                 Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

14.                                 Settlement of Disputes; Arbitration.  14.1 All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing.  Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon.  The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executive’s claim has been denied.  Notwithstanding the above,  in the event of any dispute, any decision by the Board hereunder shall be subject to a de novo review by the arbitrator.

 

14.2                           Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Chicago, Illinois in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the evidentiary standards set forth in this Agreement shall apply.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.  Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive’s right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

15.                                 Definitions.  For purposes of this Agreement, the following terms shall have the meanings indicated below:

 

(A)                              “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

 

(B)                                “Auditor” shall have the meaning set forth in Section 6.2 hereof.

 

(C)                                “Base Amount” shall have the meaning set forth in section 280G(b)(3) of the Code.

 

(D)                               “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

 

(E)                                 “Board” shall mean the Board of Directors of the Company.

 

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(F)                                 “Cause” for termination by the Company of the Executive’s employment shall mean (i) the willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) that has not been cured within 30 days after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise.  For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in or not opposed to the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and convincing evidence that Cause exists.

 

(G)                                “Change in Control” shall mean the first to occur of:

 

(I)                                    any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of CF Industries Holdings, Inc. (not including in the securities beneficially owned by such Person any securities acquired directly from CF Industries Holdings, Inc. or any of its subsidiaries) representing 25% or more of the combined voting power of CF Industries Holdings, Inc.’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 of the initial public offering, 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 CF Industries Holdings, Inc.) whose appointment or election by the Board or nomination for election by CF Industries Holdings, Inc.’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 CF Industries Holdings, Inc. or any direct or indirect subsidiary of CF Industries Holdings, Inc. 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

 

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of the Board of the entity surviving such merger or consolidation or, if CF Industries Holdings, Inc. or the entity surviving such merger is then a subsidiary, the ultimate parent thereof; or

 

(IV)                            the stockholders of CF Industries Holdings, Inc. approve a plan of complete liquidation or dissolution of CF Industries Holdings, Inc. or there is consummated an agreement for the sale or disposition by CF Industries Holdings, Inc. of all or substantially all of CF Industries Holdings, Inc.’s assets, other than (a) a sale or disposition by CF Industries Holdings, Inc. of all or substantially all of CF Industries Holdings, Inc.’s assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of CF Industries Holdings, Inc. following the completion of such transaction in substantially the same proportions as their ownership of CF Industries Holdings, Inc. immediately prior to such sale or (b) other than a sale or disposition by CF Industries Holdings, Inc. of all or substantially all of CF Industries Holdings, Inc.’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.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred (1) by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of CF Industries Holdings, Inc. immediately prior to such transaction or series of transactions continue to havesubstantially the same proportionate ownership in an entity which owns all or substantially all of the assets of CF Industries Holdings, Inc. immediately following such transaction or series of transactions or (2) as a result of the initial public offering of the Company’s common stock or any transactions or any events contemplated by such offering.

 

(H)                               “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

(I)                                    “Company” shall mean CF Industries Holdings, Inc., as applicable, and except in determining under Section 15(G) hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

(J)                                   “DC Pension Plan” shall mean any tax-qualified, supplemental or excess defined contribution plan maintained by the Company and any other defined

 

13

 

contribution plan or agreement entered into between the Executive and the Company which is designed to provide the executive with supplemental retirement benefits.

 

(K)                               “Date of Termination” shall have the meaning set forth in Section 7.2 hereof.

 

(L)                                 “Disability”  shall be deemed the reason for the termination by the Company of the Executive’s employment, if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s duties with the Company for a period of six (6) consecutive months, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive’s duties.

 

(M)                            “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

(N)                               “Excise Tax” shall mean any excise tax imposed under section 4999 of the Code.

 

(O)                               “Executive” shall mean the individual named in the first paragraph of this Agreement.

 

(P)                                 “Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence (without the Executive’s express written consent which specifically references this Agreement) after any Change in Control, or prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in paragraphs (I) through (VII) below to a “Change in Control” as references to a “Potential Change in Control”), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (I), (V), (VI) or (VII) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

 

(I)                                    the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect immediately prior to the Change in Control including, without limitation, if the Executive was, immediately prior to the Change in Control, an executive officer of a public company, the Executive ceasing to be an executive officer of a public company;

 

(II)                                a reduction by the Company in the Executive’s annual base salary as in effect on the date hereof or as the same may be

 

14

 

increased from time to time except for across-the-board salary reductions similarly affecting all executives of the Company and all executives of any Person in control of the Company;

 

(III)                            the relocation of the Executive’s principal place of employment to a location more than 35 miles from the Executive’s principal place of employment immediately prior to the Change in Control or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

 

(IV)                            the failure by the Company to pay to the Executive any portion of the Executive’s current compensation or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days after the date demand for payment is made provided such compensation is due;

 

(V)                                the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in Control which is material to the Executive’s total compensation unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed immediately prior to the Change in Control;

 

(VI)                            the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which the Executive was participating immediately prior to the Change in Control (except for across the board changes similarly affecting all executives of the Company and all executives of any Person in control of the Company), the taking of any other action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled with the Company in accordance with the vacation policy applicable to the Executive in effect at the time of the Change in Control; or

 

15

 

(VII)                        any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 7.1 hereof; for purposes of this Agreement, no such purported termination shall be effective.  The Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness.

 

The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.  In order for Good Reason to exist hereunder, the Executive must provide notice to the Company of the existence of the condition described in clauses (I) through (VII) above within 90 days of the initial existence of the condition (or, if later, within 90 days of the Executive’s becoming aware of such condition), and the Company must have failed to cure such condition within 30 days of the receipt of such notice.

 

(Q)                               “Gross-Up Payment” shall have the meaning set forth in Section 6.2 hereof.

 

(R)                                “Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.

 

(S)                                 “Person” shall have the meaning given 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 (i) CF Industries Holdings, Inc. or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of CF Industries, Inc. or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) 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.

 

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

 

(I)                                    the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

(II)                                the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control;

 

(III)                            any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding securities (not

 

16

 

including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates); or

 

(IV)                            the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

 

(U)                               “Retirement” shall be deemed the reason for the termination by the Executive of the Executive’s employment if such employment is terminated in accordance with the Company’s retirement policy, including early retirement, generally applicable to its salaried employees.

 

(V)                                “Severance Payments” shall have the meaning set forth in Section 6.1 hereof.

 

(W)                           “Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.

 

(X)                               “Term” shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).

 

(Y)                                “Total Payments” shall mean those payments so described in Section 6.2 hereof.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	
 
    	
 
    	
CF   INDUSTRIES HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   STEPHEN R. WILSON
    
	
 
    	
 
    	
 
    	
Stephen   R. Wilson
    
	
 
    	
 
    	
 
    	
President   & Chief Executive Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
/s/   DENNIS P. KELLEHER
    
	
 
    	
 
    	
 
    	
Dennis   P. Kelleher
    

 

18

 

EXHIBIT A

 

RELEASE

 

(a)  Dennis P. Kelleher (“Executive”), for and in consideration of benefits provided pursuant to the Change in Control Severance Agreement with CF Industries Holdings, Inc. (collectively, referred to herein as the “Company”) entered into effective as of August 22, 2011 and as amended thereafter (the “Severance Agreement”), on behalf of Executive and Executive’s heirs, executors, administrators, successors and assigns, voluntarily, knowingly and willingly releases and discharges the Company and its parents, subsidiaries and affiliates (collectively, the “Company Group”), together with their respective present and former partners, officers, directors, employees and agents, and each of their predecessors, heirs, executors, administrators, successors and assigns, and any and all employee pension or welfare benefit plans of the Company, including current and former trustees and administrators of these plans (collectively, the “Company Releasees”) from any and all charges, complaints, claims, promises, agreements, controversies, causes of action, demands, damages and liabilities (“Claims”) of any nature whatsoever, known or unknown, suspected or unsuspected, which against the Company Releasees, jointly or severally, Executive or Executive’s heirs, executors, administrators, successors or assigns everhad or now have by reason of any matter, cause or thing whatsoever arising from the beginning of time to the time Executive executes this release (the “Release”).  This Release includes, without limitation, any Claims arising out of or relating in any way to Executive’s employment or director relationship with the Company, or the termination thereof, any Claims arising under any statute or regulation, including but not limited to the Age Discrimination in Employment Act of 1967,Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, or the Employee Retirement Income Security Act of 1974, each as amended, or any other federal, state or local law, regulation, ordinance or common law, or under any policy, agreement, understanding or promise, written or oral, formal or informal, between any Company Releasee and Executive.  Executive shall not be entitled to any recovery, in any action or proceeding that may be commenced on Executive’s behalf in any way arising out of or relating to the matters released under this Release.  Notwithstanding the foregoing, nothing herein shall release any Company Releasee from any Claim based on (i) Executive’s rights under the Severance Agreement or any other agreement with the Company (including, but not limited to, any stock option agreements), (ii) any right or claim that arises after the date Executive executes this Release, (iii) Executive’s eligibility for indemnification in accordance with applicable laws or the certificate of incorporation or by-laws of the Company (or any affiliate or subsidiary) or any applicable insurance policy, with respect to any liability Executive incurs or incurred as a director, officer or employee of the Company or any affiliate or subsidiary (including as a trustee, director or officer of any employee benefit plan) or (iv) any rights Executive may have to vested benefits under any employee benefit plan or program.

 

A-1

 

(b)  Executive has been advised to consult with an attorney of Executive’s choice prior to signing this Release, has done so and enters into this Release freely and voluntarily.

 

[(c) Executive acknowledges that the Company has enclosed with this Release information concerning (i) the ages and job titles of all employees who are eligible to receive severance pay and (ii) the ages of all employees in the same job classification or organizational unit who are not eligible to receive severance pay.](1)

 

(d)  Executive has had at least [twenty-one (21)] [forty-five (45)](2) calendar days to consider the terms of this Release.  Once Executive has signed this Release, Executive has seven (7) additional days to revoke Executive’s consent and may do so by writing to the Company as provided in Section 10 of the Severance Agreement.  Executive’s Release shall not be effective, and no payments or benefits shall be due under Section 6 of the Severance Agreement, until the eighth day after Executive has executed this Release and returned it to the Company, assuming that Executive has not revoked Executive’s consent to this Release during such time (the “Revocation Date”).

 

(e)  In the event that any one or more of the provisions of this Release shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder thereof shall not in any way be affected or impaired thereby.

 

(f)  This Release shall be governed by the law of the State of Illinois without reference to its choice of law rules.

 

 

	
CF   INDUSTRIES HOLDINGS, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed   as of this     day of                     .
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dennis   P. Kelleher
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed   as of this     day of                     .
    	
 
    	
 
    

 

(1)                                  Note:  this paragraph is to be included only for applicable group terminations or exit incentive programs.

 

(2)                                  Note:  use longer period for applicable group terminations or exit incentive programs.

 

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  EXHIBIT 10.2    
    

 
    FORM OF CHANGE-IN-CONTROL SEVERANCE AGREEMENT
  FOR SENIOR OFFICERS    
    

        CHANGE-IN-CONTROL SEVERANCE AGREEMENT (this
"Agreement") by and between Intrepid Potash, Inc., a Delaware corporation (the "Company"), and
[                        ] (the "Executive"), dated as of the
[                        ] day of
[                        ] [            ]. 

 RECITALS  

        The Board of Directors of the Company (the "Board") has determined that it is in the
best interests of the Company and its stockholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change in
Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change in Control, and to
provide the Executive with compensation and benefits arrangements upon a Change in Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement. 

 AGREEMENT  

        NOW, THEREFORE, it is hereby agreed as follows: 

        1.    Definitions.    Unless the context or definitions elsewhere in this Agreement clearly
indicate otherwise, the terms below shall be defined as follows: 

        a.     "Average Annual Bonus/STI" means the average of the annual
bonuses/short-term incentive actually received by the Executive, if any, for the two (2) most recently completed fiscal years of the Company. In the event the Executive was
employed, as of the Date of Termination, through only one completed fiscal year of the Company, the Average Annual Bonus/STI shall be equal to the average of the bonus/short-term incentive
actually received by the Executive for such completed fiscal year and his target bonus/short-term incentive in effect as of the Date of Termination. In the event that Executive was not, as
of the Date of Termination, employed through at least one completed fiscal year of the Company, Executive's Average Annual Bonus/STI shall be deemed to be his target annual
bonus/short-term incentive in effect as of the Date of Termination. 

        b.     "Cause" means any one or more of the following events: 

          (i)  conviction
of (or pleading nolo contendere to) a felony; 

         (ii)  engaging
in theft, fraud, embezzlement, or willful misappropriation of the property of the Company; 

        (iii)  violation
of any Company policy or practice regarding discrimination or harassment that would be grounds for termination of a Company employee in general; 

        (iv)  Executive's
willful failure to perform substantially Executive's material duties (other than such failure resulting from incapacity due to physical or mental illness),
which, for avoidance of doubt, shall include Executive's insubordination, after (i) a written demand for corrected performance is delivered to Executive by the Board or the Company's Chief
Executive Officer that identifies specifically the manner in which the Board or the Company's Chief Executive Officer believes Executive has not performed substantially Executive's material duties,
and (ii) Executive fails to cure the matters identified in the written demand within 30 days. No act or failure to act by Executive shall be deemed "willful" if done, or 

 

omitted
to be done, by him in good faith and with the reasonable belief that his action or omission was in the best interest of the Company. 

        c.     "Change in Control" means: 

          (i)  the
acquisition by any individual, entity, or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of "beneficial ownership" (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 30% of the combined voting power of the Company's then outstanding securities entitled to vote generally in the election
of directors, other than any acquisition (1) directly from, or by, the Company, (2) by a trustee or other fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries, or (3) by Robert P. Jornayvaz III, Hugh E. Harvey Jr. or J. Landis Martin (collectively the
"Principals"), or by any "group" (within the meaning of Section 13(d)(3) of the Exchange Act) that is controlled by one or more of the
Principals; or 

         (ii)  the
individual directors of the Board as of the effective date (the "Incumbent Directors") cease to constitute at least
two-thirds of the Board; provided, however, that for purposes of this paragraph, any new director whose election by the Board or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the Incumbent Directors shall be considered an Incumbent Director; or 

        (iii)  consummation,
in one transaction or a series or related transactions, of a reorganization, merger, or consolidation of the Company or sale or other disposition, direct
or indirect, of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business
Combination, the Persons who were the "beneficial owners" of outstanding voting securities of the Company immediately prior to such Business Combination "beneficially own," by reason of such ownership
of the Company's voting securities immediately before the Business Combination, more than 30% of the combined voting power of the company resulting from such Business Combination
(including, without limitation, a company which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such Business Combination; or 

        (iv)  approval
by those Persons holding the voting securities of the Company of a complete liquidation or dissolution of the Company. 

        A
Person will not be deemed to be a member of a "group" for purposes of this definition solely by virtue of becoming party to an agreement with one or more Principals that requires such
Person to vote the voting stock of the Company in a manner specified by the Principals. In no event shall the sale of the Company's common stock to the public by the Company or the Principals pursuant
to a registration statement filed with the Securities and Exchange Commission constitute a Change in Control for purposes of this Agreement. 

        d.     "Code" means the Internal Revenue Code of 1986, as it may be amended or
revised from time to time. 

        e.     "Date of Termination" means the date Executive terminates employment with
the Company. 

        f.      "Disability" means any physical or mental condition which prevents
Executive, for a period of 90 consecutive days, from performing and carrying out Executive's material duties and responsibilities with the Company, as determined by the Board. 

2

 

        g.     "Involuntary Termination" means: 

          (i)  Executive's
employment is terminated by the Company for any reason other than for Cause, death, or Disability; or 

         (ii)  Executive
resigns as a result of any of the following events or conditions which remain in effect for at least thirty (30) days after notice has been provided by
Executive to the Company of the existence of
such event or condition: (A) a reduction in Executive's base salary or annual bonus opportunity; (B) a material diminution in Executive's responsibility or authority; (C) a change
of more than 30 miles in the location at which Executive primarily performs his services; or (D) any material failure by the Company to comply with any material term of this Agreement.
Executive shall notify the Company of such event or condition within ninety (90) days of the initial existence of the event or condition. 

        It
is the intent of the Company that a termination pursuant to this subparagraph 2g. shall meet the definition of "involuntary separation" set forth in Treasury Regulation
Section 1.409A-1(n), and this Agreement shall be interpreted accordingly. 

        h.     "Termination Protection Period" means the period of time commencing on the
date of a Change in Control and ending twenty-four (24) months after the date of such Change in Control. 

        2.    Term.    The term of this Agreement shall extend from the effective date hereof until
the sooner of (a) the expiration of the Termination Protection Period, (b) the Executive's Date of Termination, except in the case of a Qualified Termination (as defined in
subparagraph 3a., below), or (c) the date on which the parties agree in writing to terminate this Agreement. 

        3.    Change in Control Benefits.    

        a.    Severance Payment and Benefits.    In the event of an Involuntary Termination of
Executive's employment within the Termination Protection Period (a "Qualified Termination"), Executive shall be entitled to the following payments and
benefits: 

        (i)    Cash Payments.    The Company shall pay to the Executive in a lump sum in cash the aggregate of the following
amounts: 

        (1)   an
amount equal to the sum of (x) any base salary earned but not yet paid to Executive through the Date of Termination, (B) any
bonus/short-term incentive earned and payable in accordance with the terms of any applicable Company bonus/short-term incentive plan but not yet paid to Executive as of the
date of termination, and (C) any other compensation earned through the date of termination but not yet paid to Executive (the "Accrued
Obligations"); 

        (2)   an
amount equal to the product of (x) two (2) and (y) the sum of (i) the Executive's annual base salary in effect on the Date of Termination
(which shall, in all events, be deemed to be at least as much as the Executive's annual base salary in effect as of the Change of Control), and (ii) the Executive's Average Annual Bonus/STI;
and 

        (3)   an
amount equal to the product of (x) the Executive's target annual bonus/short-term incentive for the fiscal year in which the Date of Termination
occurs, and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365. 

        Except
as may be required by subparagraph 3c., below, payment shall be made as soon as reasonably practicable following the Date of Termination, but in all events within thirty
(30) days thereof. 

3

 

        (ii)    Health and Welfare Continuation.    For two (2) years after the Executive's Date of Termination, the
Company shall provide, free of charge, health and welfare benefits to the Executive and/or the Executive's family which are at least equal to the benefits which would have been provided in accordance
with the plans, programs, practices and policies in existence as of the Executive's Date of Termination or, if more favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive health and welfare
benefits under another employer provided plan, program, or arrangement, the health and welfare benefits described herein shall be discontinued effective immediately upon Executive's eligibility for
such other coverage. It is the intent of the parties that, to the maximum extent permitted, the continued health and welfare benefits provided pursuant to this subparagraph shall be exempt from the
application of Code Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9)(v)(B). 

        (iii)    Outplacement Services.    The Company shall, at its sole expense as incurred, provide the Executive with up
to $5,000 of individual outplacement services during the one (1) year period following the Date of Termination. The scope and provider of such services shall be selected by the Executive. It is
the intention of the parties that the outplacement services provided pursuant to this subparagraph be exempt from the application of Code Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(9)(v)(A). 

        b.    Equity Acceleration.    All equity incentive awards made under
the Intrepid Potash, Inc. 2008 Equity Incentive Plan and under any other equity incentive plans sponsored or maintained by the Company shall vest in full immediately prior to the occurrence of
a Change in Control. 

        c.    409A Payment and Ordering Rules.    Payments under this paragraph 3 are intended
to qualify to the maximum extent possible as "short-term deferrals" exempt from the application of Code Section 409A. Any payments that do not so qualify are intended to qualify for
the Code Section 409A
exemption set forth in Treasury Regulation Section 1.409A-1(b)(9)(iii) (which exempts from Code Section 409A certain payments made upon an "involuntary separation from
service"). To the extent that payments made pursuant to this paragraph 3 are made upon an "involuntary separation from service" but exceed the exemption threshold set forth in Treasury
Regulation Section 1.409A-1(b)(9)(iii), the exemption will first be applied to any continued health and welfare benefits payable under this paragraph 3 (to the extent such
benefits are subject to Code Section 409A and are payable within six (6) months from the Executive's "separation from service," as defined for purposes of Code Section 409A (the
"Delayed Payment Date")) and thereafter to the cash payments that are payable closest in time to the date of termination, until the exemption has been
applied in full. Any payments under this paragraph 3 that are not exempted from Code Section 409A and that are payable prior to the Delayed Payment Date shall be withheld by the Company
and paid to Executive on the Delayed Payment Date or as soon thereafter as is administratively feasible. For purposes of this paragraph, any payment or benefit to be made in installments or
periodically shall be deemed a series of separate payments pursuant to Treasury Regulation Section 1.409A-2(b)(2)(iii). Nothing in this paragraph shall prohibit the Company and
Executive from making use of any other Code Section 409A exemption that may be applicable to a payment or benefit hereunder. 

        4.    Non-Exclusivity of Rights.    Excepted as specifically provided otherwise
herein, nothing in this Agreement shall prevent or limit Executive's continuing or future participation in any plan, program, practice, or policy provided by the Company for which Executive is
qualified or may qualify, nor shall anything in this Agreement limit or otherwise affect such rights as Executive may have under any employee equity incentive, 401(k) plan, deferred compensation plan,
health or life insurance plans, or other employee benefit plan of the Company. Except as explicitly modified by this Agreement, benefits 

4

 

which
are vested or which Executive is otherwise entitled to receive under any plan, policy, practice, or program, or pursuant to any contract or agreement with the Company shall be payable in
accordance with such plan, policy, practice, program, contract, or agreement. 

        5.    Full Settlement.    Except as specifically provided otherwise herein, the Company's
obligation to make the payments provided for in this Agreement and otherwise to perform their obligations hereunder shall not be affected by any setoff, counterclaim, recoupment, defense, or other
claim, right, or action which the Company may have against Executive or others, unless such setoff or claim is based upon the fraud or intentional wrongdoing of Executive. In no event shall Executive
be obligated to seek other employment or to take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and, except as specifically
provided otherwise herein, such amounts shall not be affected by whether or not Executive obtains other employment. 

        6.    280G Provisions.    If it is determined that any payment or benefit provided to or for
the benefit of Executive (a "Payment"), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise,
would be subject to the excise tax imposed by Code section 4999 or any interest or penalties with respect to such excise tax (such excise tax together with any such interest and penalties,
shall be referred to as the "Excise Tax"), then a calculation shall first be made under which
such payments or benefits provided to Executive are reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax (the "4999
Limit"). The Company shall then compare (a) Executive's Net After-Tax Benefit (as defined below) assuming application of the 4999 Limit with
(b) Executive's Net After-Tax Benefit without application of the 4999 Limit. "Net After-Tax Benefit" shall mean the sum of (i) all payments that Executive
receives or is entitled to receive that are contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within
the meaning of Code section 280G(b)(2), less (ii) the amount of federal, state, local, employment, and Excise Tax (if any) imposed with respect to such payments. In the event
(a) is greater than (b), Executive shall receive Payments solely up to the 4999 Limit, with cash Payments reduced or eliminated first and in the order that such Payments would be made to
Executive, such that cash Payments that would be paid furthest in time from the date of the event triggering the payments would be reduced or eliminated last. In the event (b) is greater than
(a), then Executive shall be entitled to receive all such Payments, and shall be solely liable for any and all Excise Tax related thereto. 

5

 

  
        7.    Confidential Information; Non-Solicitation;
Non-Disparagement.    

        a.    Confidential Information.    Except as expressly authorized by the Board, during the
term of this agreement or at any time thereafter, Executive shall not divulge, furnish, make accessible to anyone, lay claim to, attempt to lay claim to or use, or attempt to use, in any way (other
than in the ordinary course of the business of the Company) any confidential or secret knowledge or information of Intrepid Mining LLC or of the Company or its subsidiaries (collectively the
"Intrepid Parties") that Executive has acquired or become acquainted with or will acquire or become acquainted with during the period of Executive's
employment by Intrepid Mining LLC (if applicable) and by the Company, whether developed by himself or by others, concerning any pricing information, trade secrets, confidential or business
plans or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Intrepid Parties, any customer or dealer lists of the Intrepid Parties, any
confidential or secret development of the Intrepid Parties, or any other confidential information or secret aspects of the business of the Intrepid Parties (collectively,
"Confidential Information"). Executive acknowledges that the Confidential Information constitutes a unique and valuable asset of the Intrepid Parties
and represents a substantial investment of time and expense by the Intrepid Parties, and that any disclosure or other use of the Confidential Information other than for the sole benefit of the
Intrepid Parties would be wrongful and would cause irreparable harm to the Intrepid Parties. Both during and after the term of this Agreement, Executive shall refrain from any acts or omissions that
would reduce the value of the Confidential Information. The foregoing obligations of confidentiality shall not apply to any knowledge or information (i) that is now published or that
subsequently becomes generally publicly known in the form in which it was obtained from the Intrepid Parties, other than as a direct or indirect result of the breach of this Agreement by Executive; or
(ii) is lawfully obtained by Executive from a third party, provided that Executive did not have actual knowledge that such third party was restricted or prohibited from disclosing such
information to Executive. At the time of the termination of Executive's employment, or at such other time as the Company may request, Executive shall return all memoranda, notes, plans, records,
computer tapes and software and other documents and data (and copies thereof) relating to Confidential Information that Executive may then possess or have under his or her control. 

        b.    Non-Solicitation:    In his capacity as an employee, Executive has met with
and will continue to meet with the Intrepid Parties' current or prospective customers, suppliers, partners,
licensees or other business relations (collectively, "Business Relations") on behalf of the Intrepid Parties, and, as a consequence of using or
associating himself with the Intrepid Parties' name, goodwill, and professional reputation, Executive has been placed in a position where he can develop personal and professional relationships with
the Intrepid Parties' current and prospective customers. In addition, during the course and as a result of Executive's employment, Executive has been or may be provided certain specialized training or
know-how. Executive acknowledges that this goodwill and reputation, as well as Executive's knowledge of Confidential Information and specialized training and know-how, could be
used unfairly in competition against the Intrepid Parties. Accordingly, in consideration of the employment of Executive by the Company and the provision to Executive of this Agreement, Executive
agrees that during the time period commencing on the date hereof and terminating on the date that is one (1) year after the Date of Termination, Executive shall not directly or indirectly
through another entity or person (i) induce or attempt to induce any employee of the Intrepid Parties to leave the employ of the Intrepid Parties, (ii) hire any person who was employed
by the Intrepid Parties at any time during the one-year period immediately preceding the Date of Termination, or (iii) induce or attempt to induce any current or prospective
Business Relation of the Intrepid Parties (including, without limitation, any business entity that the Intrepid Parties have contacted in order to make a proposal to enter into a business
relationship) to withdraw, curtail or cease doing business with the Intrepid Parties. 

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        c.    Non-Disparagement.    Executive will refrain from making statements that
criticize, disparage or ridicule the Intrepid Parties (which, for purposes of this subparagraph, shall include their directors, agents, officers, employees, members, or assigns) or that are
detrimental to the reputation or image of any Intrepid Party. Executive agrees that if Executive receives an inquiry from a third party that seeks to elicit an opinion of Executive regarding any
Intrepid Party, Executive shall respond by stating that there is no existing relationship between Executive and such Intrepid Party and that Executive is unable to comment further. Such statements (or
words to that effect) shall not constitute a statement that criticizes, disparages or ridicules any Intrepid Party or that is detrimental to the reputation or image of any Intrepid Party. Executive
shall reasonably cooperate with any reasonable requests, from the Company or a party negotiating with the Company, for information concerning the Company in connection with any transaction or proposed
transaction involving the Company with respect to which the Board requests Executive's cooperation, and shall, in the course of such cooperation, make no statement and take no action that could
reasonably be viewed as intending to impede or discourage the transaction or proposed transaction. Executive agrees and acknowledges that the foregoing provisions of this paragraph are reasonably
designed to carry out the purposes of this Agreement, and do not constitute an unreasonable or overly broad limitation on Executive's speech or action. 

        d.    Third-Party Beneficiaries:    The provisions of this paragraph 7 may be enforced
by any of the Intrepid Parties, and the protections afforded herein shall inure to each such Intrepid Party as an intended third-party beneficiary. 

        e.    Severability:    To the extent that any provision of this paragraph shall be determined
to be invalid or unenforceable, the invalid or unenforceable portion of such provision shall be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and
of this paragraph shall be unaffected. In furtherance of and not in limitation of the foregoing, should the duration of, or activities covered by the non-solicitation agreement contained
in paragraph 7(b) be determined to be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent, or those
activities which may validly or enforceably be covered. Executive acknowledges the uncertainty of the law in this respect and expressly stipulates that this paragraph shall be construed in a manner
which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law. 

        f.    Injunctive Relief:    Executive agrees that it would be difficult to compensate the
Intrepid Parties fully for damages for any violation of the provisions of this paragraph 7. Accordingly, Executive specifically agrees that the Intrepid Parties shall be entitled to temporary
and permanent injunctive relief to enforce the provisions of this paragraph and that such relief may be granted without the necessity of proving actual damages. This provision with respect to
injunctive relief shall not, however, diminish the right of the Intrepid Parties to claim and recover damages in addition to injunctive relief. 

        8.    Resolution of Disputes.    To the extent permitted by applicable law, and except as
provided below, any dispute arising out of this Agreement shall be submitted to binding arbitration in Denver, Colorado pursuant to the rules of the American Arbitration Association. In the event any
dispute arising out of this Agreement may not be arbitrated under applicable law (which, for purposes of this Agreement, shall be deemed to include actions for temporary injunctive relief to enforce
the provisions of paragraph 7 hereof), litigation concerning such dispute shall be brought and maintained only in the District Court for the City and County of Denver, Colorado, the County
Court for the City and County of Denver, Colorado, or the U.S. District Court for the District of Colorado. The prevailing party in any arbitration or litigation concerning this Agreement shall
recover, in addition to any damages or other relief awarded to that party, the prevailing party's reasonable costs and attorneys fees. 

7

 

        9.    Successors and Assignment.    This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and permitted assigns and any such successor or permitted assignee shall be deemed substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" and "assignee" shall be limited to any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, reorganization, or
otherwise, directly or indirectly acquires the stock of the Company or to which the Company assigns this Agreement by operation of law or otherwise in connection with any sale of all or substantially
all of the assets of the Company, provided that any successor or permitted assignee promptly assumes in a writing delivered to Executive this Agreement
and, in no event, shall any such succession or assignment release the Company from its obligations thereunder. The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law or otherwise. 

        10.    409A Savings Clause:    The parties intend that payments or benefits payable under this
Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Code, and the provisions of this Agreement shall be construed and administered in accordance with such
intent. To the extent such potential payments or benefits could become subject to Code Section 409A, the parties shall cooperate to amend this Agreement with the goal of giving Executive the
economic benefits described herein in a manner that does not result in such tax being imposed. If the parties are unable to agree on a mutually acceptable amendment, the Company may, without
Executive's consent and in such manner as it deems appropriate or desirable, amend or modify this Agreement or delay the payment of any amounts hereunder to the minimum extent necessary to meet the
requirements of Code Section 409A. 

        11.    Miscellaneous.    

        a.    Governing Law.    This Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado. 

        b.    Amendment.    Except as provided in Section 10, above, this Agreement may not be
amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 

        c.    Notices.    All notices and other communications under this Agreement shall be in
writing and shall be given to the other party by hand delivery or by registered or certified mail, return receipt requested, postage prepaid, addressed as
follows:

 

 

				
	
 	
 If to Executive:	
 	
To the most recent home address on file with the Company.
	
 	
 If to the Employers:	
 	
Intrepid Potash, Inc.

Attn: Executive Vice President of Human

Resources and Risk Management

707 17th Street, Suite 4200

Denver, CO 80202

 

 
or
to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. 

        d.    Severability.    The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement and the remaining provisions shall be enforced to the fullest extent permitted by law. 

8

 

        e.    Withholding Tax.    The Company may withhold from any amounts payable under this
Agreement such federal, state, and local taxes as shall be required to be withheld pursuant to applicable law or regulation. 

        f.    No Waiver.    Executive's or the Company's failure to insist upon strict compliance with
any provision of this Agreement or the failure to assert any right Executive or the Company may have under this Agreement shall not be deemed to be a waiver of any other provision or right of this
Agreement. 

        g.    At-Will Employment.    Executive and the Company each acknowledge that the
employment of Executive by the Company is "at will," and Executive's employment may be terminated at any time and without notice by either Executive or by the Company for any reason or for no reason. 

        h.    Other Agreements.    This Agreement sets forth the entire understanding of the parties
with regard to the subject matter hereto and the parties agree that the payments and benefits provided herein shall be the sole change in control severance benefits to be provided to Executive. For
avoidance of doubt, Executive understands and agrees (i) that Executive shall not be eligible to participate in the Intrepid Potash, Inc. Change in Control Severance Plan, and
(ii) that the terms of this Agreement shall
supersede the terms of any prior agreement or understanding between the parties concerning the subject matter hereto. 

        IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written. 

 

 

							
	Date:	 	 	 	 	 	 
	 	 	

  	 	

  [Name of employee.]
	

 	
 	
 	
 	
INTREPID POTASH, INC., a Delaware corporation
	
 Date:	
 	
 	
 	
By:	
 	

 
	 	 	

  	 	 	 	

  Name:

Title:

 

 9

QuickLinks

EXHIBIT 10.2

FORM OF CHANGE-IN-CONTROL SEVERANCE AGREEMENT FOR SENIOR OFFICERS

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