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EX-12.1 - EXHIBIT 12.1 - RENTECH, INC. | c95053exv12w1.htm |
EX-31.1 - EXHIBIT 31.1 - RENTECH, INC. | c95053exv31w1.htm |
EX-31.2 - EXHIBIT 31.2 - RENTECH, INC. | c95053exv31w2.htm |
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
Amendment No. 1
(Mark One)
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended September 30, 2009
OR
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from to
Commission File No. 001-15795
RENTECH, INC.
(Exact name of registrant as specified in its charter)
Colorado | 84-0957421 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
10877 Wilshire Boulevard, Suite 710
Los Angeles, California 90024
(Address of principal executive offices)
Los Angeles, California 90024
(Address of principal executive offices)
(310) 571-9800
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock
Name of Each Exchange on Which Registered: NYSE Amex
Securities registered pursuant to Section 12(g) of the Act:
None
Common Stock
Name of Each Exchange on Which Registered: NYSE Amex
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. Yes o. No þ.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o. No þ.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to
submit and post such files). Yes o No o
Indicate by check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
The aggregate market value of the voting and non-voting common equity held by non-affiliates as of
March 31, 2009, the last business day of the registrants most recently completed second quarter,
was approximately $67.2 million (based upon the closing price of the common stock on March 31,
2009, as reported by the NYSE Amex).
The number of shares of the Registrants common stock outstanding as of January 13, 2010 was
213,366,149.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Table of Contents
EXPLANATORY NOTE
Rentech, Inc. (Rentech, the Company, we, us and our) is filing this Amendment No. 1
on Form 10-K/A (this Amendment) to amend its Annual Report on Form 10-K for the fiscal year ended
September 30, 2009, filed with the Securities and Exchange Commission (the SEC) on December 14,
2009 (the Original 10-K).
This Amendment is being filed to amend the Original 10-K to include the information required
by Items 10 through 14 of Part III of Form 10-K. In addition, on the cover page, (i) the reference
in the Original 10-K to the incorporation by reference of Rentechs 2010 definitive proxy statement
has been deleted and (ii) the information with respect to the number of outstanding shares of
Rentechs common stock (Common Stock) has been updated. Rentech is also updating its lists of
exhibits in Item 15 of this report to include the certifications specified in Rule 13(a)-14(a)
under the Securities Exchange Act of 1934 required to be filed with this Amendment and the
Computation of Ratio of Earnings to Fixed Charges. Except for the foregoing amendments and updates,
the Amendment does not modify or update the Original 10-K.
PART III
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
The directors and executive officers of Rentech and their ages and their positions with
Rentech as of January 13, 2010, are as follows:
Name | Age | Position(s) | ||||
D. Hunt Ramsbottom |
52 | Chief Executive Officer, President and Director | ||||
Dan J. Cohrs |
56 | Chief Financial Officer and Executive Vice President | ||||
Douglas M. Miller |
49 | Executive Vice President, Project Development | ||||
Richard T. Penning |
54 | Executive Vice President, Technology and Commercial Affairs | ||||
Colin M. Morris |
37 | Vice President and General Counsel | ||||
Michael S. Burke (1) |
46 | Director | ||||
Michael F. Ray (1) |
56 | Director | ||||
Ronald M. Sega (1) |
57 | Director | ||||
Edward M. Stern (1) |
50 | Director | ||||
Halbert S. Washburn (1) |
49 | Director | ||||
John A. Williams |
66 | Director | ||||
Dennis L. Yakobson |
73 | Director and Chairman |
(1) | Independent Director. |
Information Regarding Directors with Terms Expiring in 2010:
Michael F. Ray, DirectorMr. Ray was appointed as a member of our Board of Directors in May
2005. Mr. Ray founded and has served as President of ThioSolv, LLC since 2001. ThioSolv, LLC is in
the business of developing and licensing technology. Mr. Ray was appointed to the Board of
Directors for Cyanco Corporation in October 2008. Cyanco Corporation, a producer of sodium cyanide
in the Western United States, is majority owned by Oaktree Capital Management which holds more than
95% of its outstanding shares. From 1995 to 2001, Mr. Ray served as Vice President of Business
Development for the Catalyst and Chemicals Division of The Coastal Corporation. Mr. Ray worked for
Coastal Chem, Inc. as President from 1990 to 1995 and Vice President of Corporate Development and
Administration from 1986 to 1990. From 1985 to 1986, Mr. Ray served as Vice President of Carbon
Dioxide Marketing. Mr. Ray worked for Liquid Carbonic Corporation as Regional Operations Manager
from 1981 to 1985 and Plant Manager from 1980 to 1981. Mr. Ray received his Bachelor of Science in
Industrial Technology from Western Washington University and his Masters of Business Administration
from Houston Baptist University. Mr. Ray previously served as a member of the Board of Directors of
Coastal Chem, Inc., Cheyenne LEADS and Wyoming Heritage Society. Mr. Ray also served on the
Nitrogen Fertilizer Industry Ad Hoc Committee, University of Wyoming EPSCOR Steering Committees and
Wyoming Governors committee for evaluating state employee compensation.
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Edward M. Stern, DirectorMr. Stern was appointed as a member of our Board of Directors in
December 2006. Since 2004, Mr. Stern has served as the President and Chief Executive Officer of
Neptune Regional Transmission System, LLC, a company which developed, constructed and now operates
a 660 MW undersea electric transmission system that will interconnect Sayreville, New
Jersey with Long Island, New York. Mr. Stern is also leading the development of several other
large transmission and renewable energy projects. From 1991 through 2004, Mr. Stern was employed by
Enel North America, Inc. (a subsidiary of Enel SpA, an Italian electric utility company) and its
predecessor, CHI Energy, Inc., an energy company which owned or operated nearly one hundred power
plants in seven countries, specializing in renewable energy technologies including hydroelectric
projects and wind farms. While at Enel North America, Inc. and CHI Energy, Inc., Mr. Stern served
as General Counsel and, commencing in 1999, as President, Director and Chief Executive Officer. Mr.
Stern currently serves on the Board of Directors of EPV Solar, Inc., a Princeton, New Jersey based
manufacturer of solar energy products and systems and Capital Access Network, Inc., a small
business lender. Mr. Stern also serves on the Advisory Board of Starwood Energy Group Global, LLC,
a private equity firm specializing in energy and infrastructure investments. Mr. Stern received
B.A., J.D. and M.B.A. degrees from Boston University and is a member of the Massachusetts Bar and
the Federal Energy Bar.
John A. Williams, DirectorMr. Williams was appointed as a member of our Board of Directors in
November 2009. Mr. Williams has over 40 years of business experience, principally in the real
estate and banking industries. Since January 2004, Mr. Williams has served as the Chief Executive
Officer, President and Managing Member of Corporate Holdings, LLC, a diversified holdings company,
and since November 2004, he has served as Chief Executive Officer and Managing Member of Williams
Realty Advisors, LLC, a real estate fund advisor to over $3 billion in assets. Mr. Williams is
currently a board member and executive officer of Preferred Apartment Communities, Inc., a new real
estate investment trust. Mr. Williams founded Post Properties, Inc., a developer, owner and manager
of upscale multifamily apartment communities in selected markets in the United States, in 1970.
Mr. Williams served as Chief Executive Officer of Post Properties from 1970 until 2002, and he
served on its board from inception until 2004. Mr. Williams served as Chairman for Post Properties
from inception until February 2003 and Chairman Emeritus from February 2003 until August 2004.
Mr. Williams currently serves on the Board of Directors of the Atlanta Falcons of which he is also
a minority owner. Mr. Williams previously served on a variety of boards of directors, including
those of NationsBank Corporation, Barnett Banks, Inc. and Crawford & Company. Mr. Williams earned a
B.S. degree in industrial management from the Georgia Institute of Technology.
Information Regarding Directors with Terms Expiring in 2011:
Michael S. Burke, Director Mr. Burke was appointed as a member of our Board of Directors in
March 2007. Mr. Burke is currently the Executive Vice President, Chief Financial Officer of AECOM
Technology Corporation (NYSE: ACM), a global provider of professional technical and management
support services to government and commercial clients. Mr. Burke joined AECOM as Senior Vice
President, Corporate Strategy in October 2005. From 1990 to 2005, Mr. Burke was with the accounting
firm, KPMG LLP. He served in various senior leadership positions most recently as a Western Area
Managing Partner from 2002 to 2005 and was a member of KPMGs Board of Directors from 2000 through
2005. While on the KPMG Board of Directors, Mr. Burke served as the Chairman of the Board Process
and Governance Committee and a member of the Audit and Finance Committee. Mr. Burke also serves on
various charitable and community boards. Mr. Burke received a B.S. degree in accounting from the
University of Scranton and a J.D. degree from Southwestern University.
Ronald M. Sega, Director Dr. Sega was appointed as a member of our Board of Directors in
December 2007. Currently Dr. Sega serves as Vice President for Applied Research with the Colorado
State University Research Foundation. He also serves as the Woodward Professor of Systems
Engineering at Colorado State Universitys College of Engineering. In addition, he serves as
Special Assistant to the Universitys Vice President for Research. From August 2005 to August 2007,
Dr. Sega served as Under Secretary for the U.S. Air Force. In that capacity, he oversaw the
recruiting, training and equipping of approximately 700,000 people and a budget of approximately
$110 billion. Designated as the Department of Defense Executive Agent for Space, Dr. Sega
developed, coordinated and integrated plans and programs for space systems of all Department of
Defense space major defense acquisition programs. From August 2001 until July 2005, Dr. Sega was
Director of Defense Research and Engineering, Office of the Secretary of Defense. Dr. Sega worked
for NASA from 1990 until 1996 and made two shuttle flights during his career as an astronaut. Dr.
Sega received a B.S. in mathematics and physics from the United States Air Force Academy in 1974, a
master of science degree in physics from The Ohio State University in 1975, and a doctorate in
electrical engineering from the University of Colorado at Boulder in 1982.
Dennis L. Yakobson, Director and Chairman of the BoardMr. Yakobson has served as a director
of Rentech and Chairman of the Board since 1983 and is one of the founders. In December 2005, he
resigned from his position as Chief Executive Officer and currently serves as the Chairman. He was
employed as Vice President of Administration and Finance of Nova Petroleum Corporation, Denver,
Colorado, from 1981 to 1983. From 1979 to 1983, he served as a Director and Secretary of Nova
Petroleum Corporation. He resigned from those positions in November 1983 to become a Director and
assume the presidency of Rentech. From 1976 to 1981, he served as a Director, Secretary and
Treasurer of Power Resources Corporation in Denver, a mineral exploration company, and was employed
by it as the Vice President-Land. From 1975 to 1976, he was employed by Wyoming Mineral Corporation
in Denver as a
contract administrator. From 1971 through 1975, he was employed by Martin Marietta
Corporation, Denver, as marketing engineer in space systems. From 1969 to 1971, he was employed by
Martin Marietta in a similar position. From 1960 to 1969, he was employed by Grumman Aerospace
Corporation, his final position with it being contract administrator with responsibility for
negotiation of prime contracts with governmental agencies. He is a Director of GTL Energy Pty Ltd.,
a private company based in Adelaide, Australia. He received a Bachelor of Science degree in Civil
Engineering from Cornell University in 1959 and a Masters in Business Administration degree from
Adelphi University in 1963.
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Information Regarding Directors with Terms Expiring in 2012:
D. Hunt Ramsbottom, Chief Executive Officer, President and DirectorMr. Ramsbottom was
appointed President and director of Rentech in September 2005 and Chief Executive Officer in
December 2005. Mr. Ramsbottom had been serving as a consultant to Rentech since August 2005 under
the terms of a Management Consulting Agreement Rentech entered into with Management Resource
Center, Inc. Mr. Ramsbottom has over 25 years of experience building and managing growth companies.
Prior to accepting his position at Rentech, Mr. Ramsbottom held various key management positions
including: Principal and Managing Director of Circle Funding Group, LLC, from 2004 to 2005; Chief
Executive Officer and Chairman of M2 Automotive, Inc., from 1997 to 2004; and Chief Executive
Officer of Thompson PBE (NASDAQ: THOM), from 1989 to 1997, which was acquired by FinishMaster, Inc.
in 1997. On April 17, 2005, M2 Automotive, Inc. completed an assignment for the benefit of its
creditors pursuant to a state law insolvency proceeding. Mr. Ramsbottom holds a Bachelor of Science
degree from Plymouth State College.
Halbert S. Washburn, DirectorMr. Washburn was appointed as a director of Rentech in December
2005. Mr. Washburn has over 25 years of experience in the energy industry. Mr. Washburn has been
the Co-Chief Executive Officer and a Director of BreitBurn GP, LLC, the general partner of
BreitBurn Energy Partners LP (NASDAQ: BBEP), since August 2006. He has served as the co-founder,
Co-President and Director of BreitBurn Energy Corporation since 1988. In addition, Mr. Washburn
currently serves as Co-Chief Executive Officer and Director for BreitBurn Management Company, LLC,
BreitBurn Energy Holdings, LLC and BEH (GP), LLC. From June 2004 through August 2008, he served as
Co-Chief Executive Officer and Director for Pro GP Corp. Mr. Washburn is responsible for
BreitBurns oil and gas operations and co-manages BreitBurns acquisition and capital formation
activities. Mr. Washburn currently serves on the Executive Committee of the Board of Directors of
the California Independent Petroleum Association. He also served as Chairman of the Stanford
University Petroleum Investments Committee and as Secretary and Chairman of the Wildcat Committee.
Mr. Washburn holds a Bachelor of Science degree in Petroleum Engineering from Stanford University.
Executive Officers
Information concerning the business experience of Mr. Ramsbottom, who serves as President and
Chief Executive Officer, is provided above.
Dan J. Cohrs, Chief Financial Officer and Executive Vice PresidentMr. Cohrs was appointed our
Executive Vice President, Chief Financial Officer in October 2008. Mr. Cohrs was also Treasurer of
Rentech from October 2008 until November 2009. Mr. Cohrs has more than 20 years of experience in
corporate finance, strategy and planning, and mergers and acquisitions. Mr. Cohrs worked as Chief
Development and Financial Officer of, and served as a Partner and Board Member of Agency 3.0, LLC,
a private digital advertising and consulting agency in Los Angeles from April 2008 until September
2009. He worked as Chief Development & Financial Officer of Skycrest Ventures, LLC, a private
investment and consulting firm in Los Angeles from August 2007 to October 2008. From June 2006
until May 2007, Mr. Cohrs served as a consultant for finance and corporate development, as well as
Interim Chief Financial Officer for a period of time, for Ampd Mobile, a private mobile media
entertainment company in Los Angeles. He worked as an independent consultant and advised companies
regarding financings, investor presentations and business plans from 2003 through 2007. In
addition, Mr. Cohrs served as a Visiting Senior Lecturer at Cornell Universitys Johnson School of
Management in the area of corporate governance from November 2005 until March 2006. Mr. Cohrs
served as Executive Vice President and Chief Financial Officer of Global Crossing Ltd. from May
1998 through June 2003. Mr. Cohrs earned M.S. and Ph.D. degrees in finance, economics and public
policy from Cornell Universitys Johnson Graduate School of Management and a B.S. degree in
Engineering from Michigan State University.
Douglas M. Miller, Executive Vice President, Project Development Mr. Miller was appointed to
the position of Executive Vice President for Renewable Energy Businesses in January 2009 (in
October 2009 the title was changed to Executive Vice President Project Development). Mr. Miller
is responsible for the development of Rentechs biomass initiatives. Mr. Miller served as Executive
Vice President and Chief Operating Officer of Rentech from January 2006 through December 2008.
Between July 2008 and October 2008, Mr. Miller served as the Companys Chief Financial Officer on
an interim basis. Prior to his employment at Rentech, Mr. Miller
was employed by Unocal Corporation from 1991 through its acquisition by Chevron Corporation in
October 2005, and for more than five years prior to the acquisition, served as Vice President,
Corporate Development. Mr. Miller received his Bachelors of Earth Sciences from the University of
California, Berkeley and his Masters of Business Administration from the University of California,
Los Angeles.
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Richard T. Penning, Executive Vice President, Technology and Commercial AffairsMr. Penning
was appointed Executive Vice President, Technology and Commercial Affairs of Rentech in January
2007. Mr. Penning had served as a consultant to Rentech beginning in August 2006. Mr. Penning has
over 30 years of business experience in the oil and chemical industries. Mr. Penning worked for 28
years with UOP, LLC until its acquisition by Honeywell, having held various management positions
including: Vice President and General Manager of Ventures and Business Development from 2004 to
2005; and Vice President, Six Sigma and Supply Chain from 2002 until 2004. Previously he held
leadership roles in the catalyst and marketing areas of UOP, LLC. Mr. Penning obtained a Bachelor
of Science degree in Chemical Engineering from Case Western Reserve University and a Master of
Business Administration degree from the University of Chicago Graduate School of Business.
Colin M. Morris, Vice President and General CounselMr. Morris has served as the Vice
President and General Counsel of Rentech since June 2006. Mr. Morris practiced Corporate and
Securities Law at the Los Angeles office of Latham & Watkins LLP from June 2004 to May 2006. From
September 2000 to May 2004, Mr. Morris practiced Corporate and Securities Law in the Silicon Valley
office of Wilson, Sonsini, Goodrich and Rosati. Prior to that Mr. Morris practiced Corporate and
Securities Law in the Silicon Valley office of Pillsbury Winthrop Shaw Pittman LLP. Mr. Morris
received an A.B. degree in Government from Georgetown University and a J.D. from the University of
California, Berkeley, Boalt Hall School of Law.
Audit Committee and Audit Committee Financial Expert
The Board of Directors has a standing Audit Committee. The Board of Directors has determined
that each member of the Audit Committee is independent within the meaning of the rules of the SEC
and the NYSE Amex.
The charter of our Audit Committee is available on the Corporate Governance section of our
website at http://www.rentechinc.com. The Board of Directors regularly reviews developments in
corporate governance and modifies the charter as warranted. Modifications are reflected on our
website at the address previously given. Information contained on our website is not incorporated
into and does not constitute a part of the Original 10-K or this Amendment. Our website address
referenced above is intended to be an inactive textual reference only and not an active hyperlink
to the website.
The Audit Committee of the Board of Directors has been delegated responsibility for reviewing
with the independent auditors the plans and results of the audit engagement; reviewing the
adequacy, scope and results of the internal accounting controls and procedures; reviewing the
degree of independence of the auditors; reviewing the auditors fees; and recommending the
engagement of the auditors to the full Board of Directors.
The Audit Committee currently consists of Mr. Burke, Mr. Ray and Mr. Washburn. The Board of
Directors has determined that Mr. Burke, the Chairman of the Audit Committee, qualifies as an
audit committee financial expert as defined by the rules of the SEC.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires Rentechs executive
officers and directors, and persons who own more than ten percent of a registered class of
Rentechs equity securities (collectively, Insiders), to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission (the SEC). Insiders
are required by SEC regulations to furnish Rentech with copies of all Section 16(a) forms they
file. To Rentechs knowledge, based solely on its review of the copies of such reports furnished to
Rentech or written representations from certain Insiders that they were not required to file a Form
5 to report previously unreported ownership or changes in ownership, we believe that, during our
fiscal year ended September 30, 2009, the Insiders complied with all such filing requirements
except with respect to one Form 4 reporting the grant of stock options to Eileen Ney, Rentechs
Chief Accounting Officer, on February 12, 2009, which was filed late on June 2, 2009, and one Form
5 reporting the gift of shares from Mr. Ramsbottom to his children during the period 2007 through
2009, which was filed on November 13, 2009.
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Code of Ethics
Rentech has adopted a code of business conduct ethics that applies to Rentechs directors,
officers and employees. This code includes a special section entitled Business Conduct and Ethics
for Senior Financial Officers which applies to the Companys principal executive officer,
principal financial officer, principal accounting officer or controller, and persons performing
similar functions. A copy of the code of ethics was filed as an exhibit to Rentechs annual report
on Form 10-K for the fiscal year ended September 30, 2008 and is available on the Corporate
Governance Section of our website at www.rentechinc.com. Our website address referenced above is
not intended to be an active hyperlink, and the contents of our website shall not be deemed to be
incorporated herein.
ITEM 11. | EXECUTIVE COMPENSATION |
Compensation Discussion and Analysis
Compensation Program Objectives and Executive Summary
The following discussion and analysis describes our compensation objectives and policies as
applied to D. Hunt Ramsbottom, our Chief Executive Officer, Dan J. Cohrs, our Chief Financial
Officer, Douglas M. Miller, Executive Vice President Project Development, Richard T. Penning,
our Executive Vice President of Commercial Affairs and Technology Development, and Colin M. Morris,
our General Counsel. Messrs. Ramsbottom, Cohrs, Miller, Penning, and Morris are referred to in this
Annual Report on Form 10-K/A as the Named Executive Officers or NEOs.
Rentechs goal is to create value for its shareholders by becoming a global provider of clean
energy solutions, through the commercialization of its proprietary technologies for the production
of ultra-clean synthetic fuels and chemicals, natural gas substitutes, and electric power from
renewable and fossil feedstocks. Our technology portfolio now includes the Rentech-SilvaGas biomass
gasification technology that we recently acquired with the acquisition of the SilvaGas Holding
Corporation, which enables us to offer integrated technologies that can convert biomass and wastes
to syngas and subsequently into clean fuels and electric power. We believe the successful
commercialization of our technologies should result in a significant number of opportunities to
have our technologies deployed in ultra clean synthetic fuel, power and chemical plants both
domestically and internationally. We expect to have our technologies deployed in projects which
Rentech develops and owns, as well as projects in which Rentech is solely a technology licensor. We
expect that successful commercialization of our technologies will enable Rentech to significantly
increase its market capitalization and result in a very substantial increase in revenues, assets,
and business complexity. We also own an operating nitrogen fertilizer manufacturing plant that uses
natural gas as its feedstock. The plant is located in East Dubuque, Illinois.
Key operational goals include: developing pioneer commercial scale synthetic fuels, and power
projects using the Rentech Process (which project may be a standalone biomass fed plant, a fossil
fed plant or a combination of both) and Rentech-SilvaGas biomass gasification technology; producing
fuels and chemicals that meet customer requirements at our Product Demonstration Unit, or PDU;
entering into contracts for the sale of those products; maximizing the value from our nitrogen
fertilizer plant in East Dubuque, Illinois through improved product mix and plant reliability;
signing license agreements for the use of our technologies; and securing the financing necessary
for our first commercial scale reactor and then building our first commercial scale reactor.
We have focused on building an experienced management team that is capable of managing the
Company through a period of growth in order to meet our goals. We believe it is important both to
retain our key executives and to recruit the additional talent we need to expand the Company. We
have made it a policy to hire executives who are not only highly qualified for their positions at
our current size, but who also have the skills we believe to be necessary to perform their roles at
the same high standard in a company that is significantly greater in size and complexity.
In fiscal year 2007, we retained a compensation consulting firm to compare the pay levels of
our executives to those in a selected group of peer companies set forth in more detail below. Our
base salaries were at or near the median of our peers. Our target total cash compensation was above
the peer group median by about 20%. Our long-term incentives were not tied as closely to the
performance of the Company and shareholder returns as some in the peer group. As a result, during
fiscal 2007 through fiscal 2009, we developed new long term incentive plans designed to more
closely align managements compensation with the performance of the Company over the long term. The
components of the long term incentive equity awards are described below.
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We believe that in our marketplace for talent, our base salaries are competitive, because they
are in line with the median of those paid by our peer companies. Our annual cash bonuses are
structured to provide short term incentives that place a focus on specific,
defined business objectives for the Company during the year. The majority of those objectives
were achieved in fiscal 2009. Given the challenges that faced the industry and our Company in
fiscal 2009, this performance against objectives was at least in line with and in some cases better
than that of our peer companies. The Compensation Committee of our Board of Directors approved new
long-term incentive awards in fiscal 2008 as well as after the end of fiscal year 2009 (the LTI
Awards) that were structured to reward both absolute and relative stock performance as well as
certain specific goals related to the development of commercial projects. The LTI Awards place a
strong emphasis on retention of talent. The fiscal 2008 awards are designed to reward both absolute
stock price performance and stock price performance relative to that of our peer companies, paying
nothing for 25th percentile performance, but offering an opportunity for pay at the 75th percentile
for performance at or above the 75th percentile, with a sliding scale for performance between those
benchmarks. The Compensation Committee believes that the successful commercialization of the
Companys technologies is critical to the creation of shareholder value, and as a result, the
fiscal 2010 awards are designed to reward the achievement of milestones in the development of
commercial projects.
Our philosophy is to provide a market-level salary for our executives with the opportunity to
exceed market levels for total compensation if short- and long-term performance exceeds
expectations. Based on the 2007 evaluation of compensation, the Company believes that the total
compensation package for fiscal year 2010 will continue to pay our executives at the median level
of the market for average performance, with compensation approximating the 75th percentile of the
market for exceptional performance.
Independent Compensation Consultant
In July 2007, the Compensation Committee retained an independent compensation consultant,
Watson Wyatt Worldwide (Watson Wyatt), to assist it in evaluating our executive compensation
programs and in developing programs to meet our needs going forward. The Compensation Committee was
responsible for selecting the consultant, determining the scope of all work done and negotiating
and approving fees for such work. Management provided input on each of these items as requested by
the Committee. During fiscal 2009 and 2010, the Compensation Committee retained Watson Wyatt to
assist it in formulating and evaluating the long-term incentive equity awards for a group of its
officers including its NEOs.
Peer Group Generation and Benchmarking Results
When the Company was recruiting and hiring several members of the current management team
during the period 2005 through 2006, the Compensation Committee gathered information independently
with the assistance of a compensation consultant, on executives in comparable positions in energy
companies of between $100 million and $500 million in market capitalization. This information was
used as a benchmark in making the original salary, incentive and equity awards to the executives
hired at that time, as documented in their employment contracts. At the time of hire, Mr. Morris
did not have an employment contract, but a similar process was followed in his hiring and offer
process.
In 2007, Watson Wyatt worked with the Compensation Committee and Rentechs management to
develop an updated group of peer companies to which Rentechs executive compensation programs could
be compared. The list was created by evaluating companies (a) in the alternative energy and/or
fertilizer industry and (b) with a market capitalization of about $500 million, slightly larger
than our market capitalization at the time. We believe this was a group that represented the type
of companies with whom we competed for executive talent and with whom we therefore wanted to be
competitive in terms of compensation. The original peer group was constructed by Watson Wyatt.
Rentechs management reviewed the list and made a few suggested modifications, which were reviewed
by Watson Wyatt. The final group of companies was submitted for review and approval to the
Compensation Committee, and consisted of the following:
| Aventine Renewable Energy |
||
| Headwaters, Inc. |
||
| Verasun Energy Corporation |
||
| MGP Ingredients, Inc. |
||
| Pacific Ethanol, Inc. |
||
| Energy Conversion Devices, Inc. |
||
| Fuel Tech, Inc. |
||
| Ballard Power Systems, Inc. |
||
| Evergreen Energy, Inc. |
||
| Fuelcell Energy, Inc. |
||
| Methanex Corporation |
||
| Terra Industries, Inc. |
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Methanex and Terra Industries were judged to be too large for proper comparison of
compensation, and were removed from the analysis for the purposes of making judgments on
compensation. However, these are considered good industry peers and are included in the peer group
for comparisons of Company stock price performance. US Bioenergy Corporation was originally
included in the peer list, however, it was acquired in fiscal 2008 by Verasun Energy Corporation,
which is already listed. During fiscal 2009, Aventine Renewable Energy, Verasun Energy Corporation
and Pacific Ethanol, Inc. filed for bankruptcy protection under Chapter 11.
In mid-2007, data was gathered from these peer companies, as well as from published survey
data from major compensation survey providers (including Watson Wyatt), on various elements of
executive compensation including base salaries, total cash compensation, long-term incentives and
total direct compensation.
Rentechs base salaries were found to be at or near the median of the market data gathered,
exceeding the 50th percentile of the data by 3% on average for our then named executive officers
(NEOs). Our target total cash compensation was higher than the median of the market data, on
average about 23% above the 50th percentile of market data gathered for our NEOs. We made stock
option grants to our NEOs in July 2006 with a three year vesting schedule which were designed to
cover the 15 month period until the end of fiscal year 2007. We made few other equity grants in
fiscal 2007. A comparison of our long-term incentives (LTIs) and total direct compensation (base,
bonus, and LTI), including annualized grant values from 2006 and part of sign-on equity, was
generally between the 60th and 75th percentiles of the market. We concluded from this that the
level of our total compensation was well positioned to attract and retain the type of management
team that we believe is necessary to successfully implement our commercialization strategy.
However, we also determined that the form of our long-term incentive grants could be improved by
more closely aligning managements compensation with the performance of the Company and the return
to shareholders. To that end we developed a new structure for our LTI awards that the Compensation
Committee approved in fiscal 2008, that more closely aligns managements long term compensation
with returns to shareholders and provides additional incentives to perform better than our peer
companies. In addition, in November of 2009, we developed another structure for additional LTI
awards that was designed to reward the achievement of specific milestones in the development of
commercial projects using our technologies.
Core Components of Executive Compensation
Base Salary
Base salaries for the executive officers at Rentech were generally set during the hiring
process for the executives in late 2005 and early 2006. The base salaries were again reviewed in
early fiscal 2009. The Board considered data on executives in comparable positions at other
publicly traded companies near our size within the energy industry when making offers to the
current team of executives and the terms of these negotiations are documented in written employment
contracts. Previously, each of these employment contracts provided for an automatic increase in
base salary equal to the change in the Consumer Price Index for all Urban Consumers on a
year-over-year, August to August, basis. Subsequent to the end of fiscal year 2008, the employment
agreements were amended and restated, and the automatic increase in base salary based on the
Consumer Price Index was replaced with a potential increase at the discretion of the Board of
Directors. Salary increases effective October 2007 for fiscal year 2008 based on the change in the
Consumer Price Index for Messrs. Ramsbottom, Miller and Penning were 2.0%. Salary increases
effective October 2008 for fiscal year 2009 based on the change in the Consumer Price Index for
Messrs. Ramsbottom, Miller and Penning were 5.4%. There were no salary increases for fiscal year
2010 for Messrs. Ramsbottom, Miller and Penning.
The Board may provide additional merit increases to the base salary of the Companys
executives at its discretion. During fiscal 2009, the Board approved an increase of 1.5% for Mr.
Ramsbottom, reflecting the overall performance of the Company, and his leadership in developing and
promoting the rebranding of the Company through the development of the renewable energy strategy.
During fiscal 2009, Mr. Cohrs received a 10% increase for his role in improving the financial
management and liquidity of the Company, and in negotiating and closing the acquisition of
SilvaGas. During fiscal 2010, Mr. Cohrs received an additional 10% increase in recognition of his
increased responsibilities in leading the project management function. During fiscal 2010, Mr.
Morris received a 3% increase for his continued leadership of and performance in the corporate
legal department. In each case, the merit increases reflected the performance of each executive
relative to our stated goals, combined with an assessment of the executives overall performance,
teamwork, and a review of the relative pay among our executives compared to the value they
contributed to the Company. In the case of Mr. Ramsbottoms increase after fiscal year 2008 ended,
the increase was limited due to the difficult economic environment facing the industry and the
reduced expense budget implemented by the Company in late 2008.
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Annual Bonus
Rentech maintains an annual incentive plan for its executive officers. Successful completion
of the short-term objectives of the Company are critical in achieving the planned level of growth,
but, given the stage of the Companys development, are not yet necessarily reflected in traditional
incentive plan targets such as financial growth metrics. The annual incentive plan is designed to
reward our executives for successfully taking the immediate steps needed to implement our long-term
strategy. The target bonus for the Chief Executive Officer (CEO) in his employment agreement is
set at 100% of his base salary. The target bonus of our Chief Financial Officer, Dan Cohrs, is set
at 60% of his base salary. The targets for the other NEOs in their employment agreements are set at
50% of their respective base salaries. Our practice is to award target bonuses for average
performance against goals. Bonuses may range from 0% of target in the case of poor performance to
200% of target in the case of outstanding performance, all at the discretion of the Compensation
Committee.
In the beginning of each fiscal year, the CEO and other senior officers develop a series of
broad objectives for the year. This plan is then reviewed by the Compensation Committee and the
Board, which provides substantial input and revisions and sets the goals for the year. The decision
on objectives is made by the Board. These goals are then widely distributed among eligible
participants.
At the end of the year, the CEO develops a scorecard that summarizes performance for each of
his direct reports compared to the goals set by the Board, with each goal ranked on a scale from
zero (did not meet) to two (exceptional performance). This scorecard is reviewed by the
Compensation Committee and the Board, and modified as appropriate in their discretion. Final bonus
payments for the CEO and the other executives are determined based on Company performance on goals
over which they exert some level of control, as determined by the CEO, the Compensation Committee
and the Board. The bonuses may range from 0% of target to 200% of target depending on performance.
The decision as to the level of executive bonuses is made by the Compensation Committee and the
Board.
In fiscal 2009, we had the following goals and results:
1. | Goal: A continued strong safety record at our facilities with an OSHA recordable rate at
or below a target rate. |
||
Performance: We exceeded this goal. We completed fiscal 2009 with an OSHA recordable rate of
just under 4.0 recordable incidents for every 200,000 hours worked at the Companys
facilities, which is well below the industry average for comparable operations. |
|||
2. | Goal: Financial performance expectations including a) specific targets for consolidated
revenue, EBITDA and cash balances, b) compliance with debt covenants, and c) remediation of
material weaknesses reported in the Companys Form 10-K for the fiscal year ended September
30, 2008. |
||
Performance: We fell short of the stated goals for revenue and EBITDA, but exceeded the goal
for cash balances at the end of the year, after adjusting for the proceeds of capital
issuances. We achieved the goals of compliance with debt covenants and remediation of
material weaknesses reported in the Companys Form 10-K for the fiscal year ended September
30, 2008. However, we had a new material weaknesses as reported in the Companys Form 10-K
for the fiscal year ended September 30, 2009. |
|||
3. | Goal: Successful operation of the PDU during 2009 that is within the approved budget and
that meets or exceeds the validation criteria for products produced. |
||
Performance: We achieved all operating criteria set forth in this goal. The PDU has been
operating successful production campaigns for over a year. During fiscal 2009, the PDUs
operations confirmed at demonstration scale that our technology can meet important capital
and operating costs targets. This is critical as those targets serve as a basis for our
commercial scale projects. |
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4. | Goal: For commercial development, the goals were a) completion of vendor cost estimates
for a commercial scale reactor, and b) a commitment for a commercial scale reactor through
Rentech development, a license agreement or the placement of a Rentech reactor at an
existing site with syngas production. |
||
Performance: The vendor cost estimate for a commercial scale reactor was completed. Several,
but not all, of the critical steps relating to the commercial deployment of a reactor were
completed through Rentechs development activities related to its project in Rialto,
California. |
|||
5. | Goal: Complete two strategic transactions, such as acquisitions, corporate investments or
joint ventures, in support of the development of our renewable energy business, such as the
addition of biomass gasification technology to our portfolio of process technologies. |
||
Performance: This goal was accomplished. We acquired access to biomass gasification
technologies through the acquisition of SilvaGas Holding Corporation and a 25% ownership
interest in ClearFuels Technology, Inc. |
|||
6. | Goal: For technology development, the goals were a) completion of feasibility studies and
development of implementation plans that will promote the development of the next generation
of the Companys technology and b) the selection and development of technologies to
integrate biomass gasification technologies with the Rentech Process. |
||
Performance: Both of these goals were achieved. |
The Compensation Committee considered both the Companys performance against these goals, and
individual contributions toward achieving the goals. The Committee then determined the bonus
amounts for the NEOs.
For fiscal 2009, the bonuses as a percentage of the target bonuses were as follows: for Mr.
Ramsbottom 120% of his target bonus, for Mr. Cohrs 140% of his target bonus, for Mr. Miller 100% of
his target bonus, for Mr. Penning 85% of his target bonus, and for Mr. Morris 110% of his target
bonus. Mr. Ramsbottoms bonus reflected the overall performance of the Company as discussed above,
his significant individual contributions in implementing the renewable energy strategy of the
Company through the acquisition of SilvaGas and the investment in ClearFuels, and his leadership of
the Company through a very difficult economic period. Mr. Cohrs bonus reflected his role in
improving the financial management and liquidity of the Company, and in negotiating and closing the
acquisition of SilvaGas. Mr. Millers bonus reflected his performance in developing and
implementing the Companys renewable energy strategy. Mr. Pennings bonus reflected his
contributions to development of the Natchez Project and the promotion of the Companys licensing
and technology activities. Mr. Morriss bonus reflected the high quality of the legal work
necessary in every function of the Company, including the development of the Rialto and Natchez
Projects, the acquisition of SilvaGas, the investment in ClearFuels, and the amendment of our
senior credit agreement.
The specific goals for the Company in fiscal year 2010 are designed to move the implementation
of the Companys strategy to the next steps required to commercialize our technology. The Board
believes that the 2010 goals are challenging. Some of the goals set by the Board include
proprietary information that, if disclosed, might create a competitive disadvantage or otherwise
negatively affect the performance of Rentech in the marketplace. Therefore, the description of the
goals below do not include some information contained in the goals determined by the Board. The
following is an overview of the goals.
1. | A continued strong safety record at our facilities with an OSHA recordable rate at or
below a target rate. |
||
2. | Financial performance expectations including a) specific targets for consolidated EBITDA
and cash balances, and b) a specific target for net capital proceeds raised. |
||
3. | Successful operation of the PDU during 2010 that is within the approved budget and that
meets or exceeds performance criteria aimed at improving the economic efficiency of the
process. |
||
4. | Specific targets for licensing our technologies, a specific target for licensing and
engineering revenue, and a target for development milestones for the Rialto Project. |
||
5. | Other factors which contribute to the success of the Company as determined by the Board. |
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Long-Term Incentive Equity Awards
Effective July 18, 2008, the Compensation Committee of the Board of Directors approved LTI
Awards for a group of its officers including its named executive officers. The awards are comprised
of performance shares and restricted stock units with a combination of performance vesting and
time-based vesting provisions. The awards are intended to balance the goals of retention, equity
ownership and performance. The goals for the performance share plan are expected to provide for
maximum payout only if the Company has relative performance at or above the 75th percentile of
other companies in the industry and a significant absolute share price increase. The
performance-based elements of the plan are expected to provide for no payout at all for performance
at or below the 25th percentile of the peer group and an absolute share price increase below a
threshold. The performance metrics are based on absolute share price appreciation and total
shareholder return in order to closely align the return to the Companys shareholders with
management compensation. The following are summary descriptions of the performance share awards:
| Under the absolute share price target award, zero to 100 percent of
the performance stock vests on April 1, 2011, with the final vesting
amount dependent on the Companys volume weighted average stock price
falling within a share price target range. The Companys share price
must be greater than $2.00 per share for any shares to vest, and the
amount of shares that vests increases pro-rata for a price greater
than $2.00 up to a maximum vesting at $4.00. |
||
| Under the total shareholder return award, zero to 100 percent of the
performance stock vests on April 1, 2011, with the final vesting
amount dependent on the Companys total shareholder return ranking
relative to the total shareholder return for 12 identified companies
in a peer group previously described under Peer Group Generation and
Benchmarking Results. The Companys ranking must be greater than the
25th percentile for any shares to vest, and the amount of shares that
vests increases pro-rata for a ranking greater than the 25th
percentile up to a maximum vesting at the 75th percentile. |
||
| Both performance share awards are subject to the recipients continued
employment with the Company, with vesting in a change of control and
upon certain terminations without cause. |
The LTI Awards also include a management stock purchase plan in which a portion of each
participants cash bonus award was allocated to purchase vested restricted stock units (RSUs) at
the fair market value of the Companys stock price on the date of grant. The Company then matched
the participants purchase with an equal number of RSUs that cliff vest on April 1, 2011, subject
to the recipients continued employment with the Company.
The final portion of the equity awards vest over a three year period with one-third of the
restricted stock units vesting on each of the first three anniversaries of April 1, 2008, subject
to the recipients continued employment with the Company.
During the fiscal year 2008, the Company issued a total of 2,182,000 performance shares and
restricted stock units to members of management, including the NEOs, composed of the following:
Type of Award | Number of Awards | |||
Time-vested awards |
968,000 | |||
Absolute share price target awards |
457,000 | |||
Total shareholder return awards |
457,000 | |||
Management stock purchase plan awards |
150,000 | |||
Company matching of management stock purchase plan awards |
150,000 | |||
Total |
2,182,000 | |||
The Compensation Committee and the Board of Directors approved long-term incentive equity
awards for a group of its officers including its named executive officers effective November 17,
2009. The awards include both restricted stock units that may vest upon the achievement of certain
performance targets, and restricted stock units that vest over time. The awards are intended to
balance the objectives of retention, equity ownership by management, and achievement of performance
targets. Vesting of the performance awards is tied to milestones related to the development,
construction and operation of the Companys proposed renewable synthetic fuels and power project in
Rialto, California or another comparable project designated by the Compensation Committee. Under
the performance vesting awards, sixty percent (60%) of the performance-based restricted stock units
vest upon the closing of financing for the project, twenty percent (20%) vest upon completion of
construction and initial operation of the project facility and twenty percent (20%) vest upon
sustained operation of the project facility. The Compensation Committee may also designate
additional performance vesting milestones in the awards. The performance vesting awards are subject
to the recipients continued employment with the Company, provided that a recipients award may
vest with respect to a milestone that is achieved within six months of (i) termination
without cause related to a change in control or (ii) death or disability. All unvested
restricted stock units expire five years after the date of grant.
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The long-term incentive equity awards also include a time vesting restricted stock unit award
that vests over a three year period with one-third of the restricted stock units vesting on each of
the first three anniversaries of November 17, 2009. The time vesting awards are subject to the
recipients continued employment with the Company, provided that a recipients award may vest upon
(i) termination without cause related to a change in control or (ii) death or disability.
Pursuant to the Companys management stock purchase plan, twenty-five percent (25%) of the
cash bonus awards for the NEOs in fiscal 2008 was allocated to purchase vested RSUs, but the RSUs
and the Company matching RSUs were not granted until November 2009. The cash bonus amounts
allocated to purchase the RSUs were reported as compensation for fiscal 2008. The number of RSUs
awarded was equal to the number that would have been awarded had the grants been made on schedule
in the spring of 2009, plus a matching contribution by the Company of eighty percent (80%) of the
amounts purchased with the amounts allocated from the cash bonuses. The Company matching RSUs vest
November 3, 2012, subject to the recipients continued employment with the Company. In fiscal year
2009, ten percent (10%) of the cash bonus awards for the NEOs was allocated to purchase vested
RSUs in December 2009 pursuant to the management stock purchase plan. The Company matched these
awards with an equal number of RSUs that vest December 10, 2012, subject to the recipients
continued employment with the Company.
During fiscal years 2009 and 2010, the Company issued a total of 7,115,112 performance shares
and restricted stock units to members of management, including the NEOs, composed of the following:
Type of Award | Number of Awards | |||
Performance awards |
3,650,000 | |||
Time-vested awards |
2,365,000 | |||
Absolute share price target awards |
55,250 | |||
Total shareholder return awards |
55,250 | |||
Management stock purchase plan awards |
533,581 | |||
Company matching of management stock purchase plan awards |
456,031 | |||
Total |
7,115,112 | |||
Benefits and Perquisites
As part of the compensation package, Rentech provides its executives with a car allowance, a
financial advisor as well as other benefits such as health insurance and a 401(k) matching program
at levels comparable to those provided to employees at other levels in the organization. The
Compensation Committee does not believe that perquisites should play an important role in the
compensation of our executives, but also believes that the benefits described above are reasonable
and in line with those provided to management level employees.
Employment Contracts
Rentech has entered into employment agreements with certain members of executive management,
which provide severance and other benefits upon termination by us without cause, non-renewal of the
executives employment agreement or resignation by the executive for good reason. The industry in
which we operate is very volatile and acquisitive, and we feel that these contracts provide our
executive team with an adequate level of security in their roles in such an environment. As of
September 30, 2009, Rentech had entered into employment agreements with Messrs. Ramsbottom, Cohrs,
Miller and Penning. Subsequent to fiscal year end, we entered into an employment agreement with Mr.
Morris.
Compensation Committee Report
The Compensation Committee of the Board of Directors has reviewed and discussed with
management the foregoing Compensation Discussion and Analysis and, based on such review and
discussion, the Compensation Committee determined that the Compensation Discussion and Analysis
should be included in this report.
Michael F. Ray, Chairman
Halbert S. Washburn
Edward M. Stern
Halbert S. Washburn
Edward M. Stern
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Table of Contents
Summary Compensation Table
The following table summarizes the compensation for the fiscal years ended September 30, 2009,
2008 and 2007 for each of the following: (i) our chief executive office (principal executive
officer), (ii) our chief financial officer (principal financial officer), and (iii) our three next
most highly compensated executive officers as of September 30, 2009.
Non- | Change in | |||||||||||||||||||||||||||||||||||
Equity | Pension | |||||||||||||||||||||||||||||||||||
Incentive | Value and | |||||||||||||||||||||||||||||||||||
Plan | Deferred | All Other | ||||||||||||||||||||||||||||||||||
Stock | Option | Compen- | Compen- | Compen- | ||||||||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | sation | sation | sation | Total | |||||||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) (1) | ($) (2) | ($) (3) | ($) | ($) | ($) (4) | ($) | |||||||||||||||||||||||||||
D. Hunt
Ramsbottom, Chief Executive Officer |
2009 | $ | 417,500 | $ | 452,520 | $ | 411,175 | $ | 161,924 | | | $ | 30,630 | $ | 1,473,749 | |||||||||||||||||||||
2008 | $ | 381,601 | $ | 309,750 | $ | 904,704 | $ | 204,536 | | | $ | 27,100 | $ | 1,827,691 | ||||||||||||||||||||||
2007 | $ | 384,100 | $ | 376,100 | $ | 836,530 | $ | 211,649 | | | $ | 28,022 | $ | 1,836,401 | ||||||||||||||||||||||
Dan J.
Cohrs, Chief Financial Officer (5) |
2009 | $ | 296,500 | $ | 249,480 | $ | 91,590 | $ | | | | $ | 62,628 | $ | 700,198 | |||||||||||||||||||||
Douglas M.
Miller, Executive Vice President, Project Development |
2009 | $ | 351,500 | $ | 158,175 | $ | 274,961 | $ | 84,201 | | | $ | 40,525 | $ | 909,362 | |||||||||||||||||||||
2008 | $ | 312,874 | $ | 105,450 | $ | 673,340 | $ | 106,359 | | | $ | 38,699 | $ | 1,236,722 | ||||||||||||||||||||||
2007 | $ | 311,400 | $ | 82,550 | $ | 639,394 | $ | 110,058 | | | $ | 33,803 | $ | 1,177,205 | ||||||||||||||||||||||
Richard T. Penning,
Executive Vice President, Technology and
Commercial Affairs |
2009 | $ | 293,400 | $ | 112,230 | $ | 221,691 | $ | | | | $ | 93,878 | $ | 721,199 | |||||||||||||||||||||
2008 | $ | 268,343 | $ | 71,513 | $ | 554,389 | $ | | | | $ | 97,821 | $ | 992,066 | ||||||||||||||||||||||
2007 | $ | 188,727 | $ | 96,100 | $ | 384,531 | $ | | | | $ | 111,044 | $ | 780,402 | ||||||||||||||||||||||
Colin M.
Morris, General Counsel |
2009 | $ | 229,500 | $ | 113,580 | $ | 225,942 | $ | 48,577 | | | $ | 37,471 | $ | 655,070 | |||||||||||||||||||||
2008 | $ | 210,757 | $ | 86,063 | $ | 261,352 | $ | 61,361 | | | $ | 28,847 | $ | 648,380 | ||||||||||||||||||||||
2007 | $ | 204,925 | $ | 102,000 | $ | 241,500 | $ | 63,495 | | | $ | 26,661 | $ | 638,581 |
(1) | The bonuses that were awarded in December 2009 were payable 90% in cash, with the remaining
10% allocated to purchase restricted stock units which were issued in December 2009. The value
of the restricted stock units purchased with the allocated portion of the 2009 bonus is
included in the Stock Awards column. The Company made matching grants of restricted stock
units to each named executive officer with a value equal to 10% of his 2009 bonus amount in
December 2009, which matching amount will vest over a three year period. |
|
The bonuses for fiscal year 2008 were payable 75% in cash, with the remaining 25% withheld to
purchase restricted stock units. The value of the restricted stock units purchased with the
allocated portion of the 2008 bonus is included in the Stock Awards column. The Company made
matching grants of restricted stock units to each named executive officer with a value equal to
20% of his 2008 bonus amount, which matching amount will vest over a three year period. |
||
The bonuses for fiscal year 2007 were payable 80% in cash, with the remaining 20% being withheld
to purchase restricted stock units, except for Mr. Pennings commencement bonus, which was paid
in cash. The value of the restricted stock units purchased with the allocated portion of the 2007
bonus is included in the Stock Awards column. The Company made matching grants of restricted
stock units to each named executive officer with a value equal to 20% of his 2007 bonus amount,
which matching amount will vest over a three year period. |
||
(2) | The amounts reflect stock based compensation recognized for financial statement reporting
purposes in fiscal year 2009, calculated in accordance with the applicable guidance, and the
withheld portion of the bonuses used to purchase restricted stock units. |
|
(3) | The amounts reflect stock based compensation recognized for financial statement reporting
purposes in fiscal year 2009, calculated in accordance with the applicable guidance. |
|
(4) | All Other Compensation includes 401(k) matching contributions of $0, $9,398, $12,295, $9,648
and $9,241 for Messrs. Ramsbottom, Cohrs, Miller, Penning and Morris, respectively. All Other
Compensation also includes perquisites valued at the aggregate incremental cost to Rentech
consisting of automobile allowance, payment for financial and tax planning services and the other
payments made by the Company described below under Perquisites. |
|
(5) | Mr. Miller served as interim CFO from July 2008 through September 2008. Subsequent to fiscal
year end, Mr. Cohrs was appointed as the CFO in October 2008. |
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Perquisites
Auto | Other | Financial & | ||||||||||||||
Name | Allowance | Payments | Tax Planning | Total | ||||||||||||
D. Hunt Ramsbottom |
$ | 14,400 | $ | 16,230 | $ | 30,630 | ||||||||||
Dan J. Cohrs |
$ | 12,000 | $ | 25,000 | (1) | $ | 16,230 | $ | 53,230 | |||||||
Douglas M. Miller |
$ | 12,000 | $ | 16,230 | $ | 28,230 | ||||||||||
Richard T. Penning |
$ | 12,000 | $ | 56,000 | (2) | $ | 16,230 | $ | 84,230 | |||||||
Colin M. Morris |
$ | 12,000 | $ | 16,230 | $ | 28,230 |
(1) | Commencement payment. |
|
(2) | Relocation expenses. |
Grants of Plan-Based Awards
The following table sets forth information with respect to the NEOs concerning the grant of
plan-based awards during the last fiscal year.
All Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All Other | Option | Grant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future | Estimated Future | Stock | Awards: | Exercise or | Date | |||||||||||||||||||||||||||||||||||||||||||||||||||
Payouts Under | Payouts Under | Awards: | Number of | Base Price of | Closing | Grant | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equity or | Non-Equity Incentive Plan Awards | Equity Incentive Plan Awards | Number of | Securities | Option | Market | Date | |||||||||||||||||||||||||||||||||||||||||||||||||
Grant | Non-Equity | Threshold | Target | Maximum | Threshold | Target | Maximum | Shares of Stock | Underlying | Awards | Price | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||
Name | Date | Award | ($) | ($) | ($) | (#) | (#) | (#) | or Units (#) | Options (#) | ($ per Share) | Per Share | ($) (1) | Notes | ||||||||||||||||||||||||||||||||||||||||||
Dan J. Cohrs |
12/30/2008 | Equity | | | | | | | 325,000 | | | $ | 0.62 | $ | 153,503 | (2) | ||||||||||||||||||||||||||||||||||||||||
12/30/2008 | Equity | | | | | 55,250 | 55,250 | | | | $ | 0.62 | 11,279 | (3) | ||||||||||||||||||||||||||||||||||||||||||
12/30/2008 | Equity | | | | | 55,250 | 55,250 | | | | $ | 0.62 | 22,557 | (4) |
(1) | See Note 16 Accounting for Stock Based Compensation in Rentechs 2009 Form 10-K for an
explanation of the valuation model assumptions used to value stock awards under applicable
guidance. |
|
(2) | Represents restricted stock units that vest in equal annual installments starting on October
22, 2009. |
|
(3) | Represents a performance
share award, zero to 100% of which vests on April 1, 2011
depending on the Companys volume weighted stock price falling within a share price target range of greater
than $2.00 and up to $4.00. Though the agreement allows for a proportional payout for amounts
in between, the target performance of 100% was established at the volume weighted average
price of $4.00 per share. |
|
(4) | Represents a performance share award, zero to 100% of which vests on April 1, 2011 depending
on the Companys total shareholder return ranking relative to the total shareholder return of
a specified peer group. The companys total shareholder return must exceed the 25th
percentile for any payout to occur and a full payout is achieved at the 75th
percentile or more. Though the agreement allows for a proportional payout for amounts in
between, the target performance of 100% was established at the 75th percentile. |
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Table of Contents
Outstanding Equity Awards at Fiscal Year End
The following table sets forth information with respect to the NEOs, concerning the
outstanding equity awards as of September 30, 2009.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
Equity | Equity | |||||||||||||||||||||||||||||||||||||||
Incentive | Incentive | Equity Incentive | ||||||||||||||||||||||||||||||||||||||
Plan Awards: | Market | Plan Awards: | Plan Awards: | |||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number | Value | Number of | Market or | ||||||||||||||||||||||||||||||||||
Securities | Securities | Securities | of Shares or | of Shares or | Unearned | Payout | ||||||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Units of | Units of | Shares, Units | Value of Unearned | ||||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Stock | Stock | or | Shares, Units or | |||||||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | that have not | that have not | Other Rights | Other Rights | ||||||||||||||||||||||||||||||||
(#) | (#) | Options | Price | Expiration | Vested | Vested | that have not | that have not | ||||||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) (1) | Vested (#) | Vested ($) | Notes | ||||||||||||||||||||||||||||||
D. Hunt Ramsbottom |
250,000 | | | $ | 4.15 | 7/13/2016 | | | | | (2) | |||||||||||||||||||||||||||||
| | 787,500 | $ | 1.82 | (3 | ) | | | | | (3) | |||||||||||||||||||||||||||||
| | | | | 57,687 | $ | 93,453 | | | (4) | ||||||||||||||||||||||||||||||
| | | | | 100,000 | $ | 162,000 | | | (5) | ||||||||||||||||||||||||||||||
| | | | | | | 175,000 | $ | 283,500 | (6) | ||||||||||||||||||||||||||||||
| | | | | | | 175,000 | $ | 283,500 | (7) | ||||||||||||||||||||||||||||||
2,082,500 | | | $ | 1.82 | (8 | ) | | | | | (8) | |||||||||||||||||||||||||||||
Dan J. Cohrs |
| | | | | 325,000 | $ | 526,500 | | | (9) | |||||||||||||||||||||||||||||
| | | | | | | 55,250 | $ | 89,505 | (6) | ||||||||||||||||||||||||||||||
| | | | | | | 55,250 | $ | 89,505 | (7) | ||||||||||||||||||||||||||||||
Douglas M. Miller |
130,000 | | | $ | 4.15 | 7/13/2016 | | | | | (2) | |||||||||||||||||||||||||||||
| | | | | 12,665 | $ | 20,517 | | | (4) | ||||||||||||||||||||||||||||||
| | | | | 39,667 | $ | 64,261 | | | (5) | ||||||||||||||||||||||||||||||
| | | | | | | 55,250 | $ | 89,505 | (6) | ||||||||||||||||||||||||||||||
| | | | | | | 55,250 | $ | 89,505 | (7) | ||||||||||||||||||||||||||||||
Richard T. Penning |
| | | | | 91,666 | $ | 148,499 | | | (10) | |||||||||||||||||||||||||||||
| | | | | 12,436 | $ | 20,146 | | | (4) | ||||||||||||||||||||||||||||||
| | | | | 32,667 | $ | 52,921 | | | (5) | ||||||||||||||||||||||||||||||
| | | | | | | 45,500 | $ | 73,710 | (6) | ||||||||||||||||||||||||||||||
| | | | | | | 45,500 | $ | 73,710 | (7) | ||||||||||||||||||||||||||||||
Colin M. Morris |
75,000 | | | $ | 4.15 | 7/13/2016 | | | | | (2) | |||||||||||||||||||||||||||||
| | | | | 15,644 | $ | 25,343 | | | (4) | ||||||||||||||||||||||||||||||
| | | | | 32,667 | $ | 52,921 | | | (5) | ||||||||||||||||||||||||||||||
| | | | | | | 45,500 | $ | 73,710 | (6) | ||||||||||||||||||||||||||||||
| | | | | | | 45,500 | $ | 73,710 | (7) |
(1) | Calculated based on the $1.62 closing price of Rentechs common stock on September 30, 2009. |
|
(2) | Represents a stock option award that vested in three equal annual installments starting on
July 14, 2007. |
|
(3) | Represents a warrant granted in 2005 and held by East Cliff Advisors, LLC, an entity
affiliated with Mr. Ramsbottom. Half of the warrant will vest upon the sooner of Rentechs
stock price reaching $5.25 or higher for 12 consecutive trading days or December 31, 2011 as
long as Mr. Ramsbottom is still an employee of the Company. The expiration date for this half
of the warrant has been extended to December 31, 2012. The other half of the warrant will vest
upon Rentechs stock price reaching $5.25 or higher for 12 consecutive trading days and the
expiration date for this half of the warrant has been extended to the earlier of 90 days after
Mr. Ramsbottom ceases to be employed by the Company or December 31, 2011. |
|
(4) | Represents a restricted stock unit award that vests on April 1, 2011. |
|
(5) | Represents a restricted stock unit award that vests in three equal annual installments
starting on April 1, 2009. |
|
(6) | Represents a performance share award, zero to 100% of which vests on April 1, 2011 depending
on the Companys volume weighted stock price falling within a share price target range of
greater than $2.00 and up to $4.00. |
|
(7) | Represents a performance share award, zero to 100% of which vests on April 1, 2011 depending
on the Companys total shareholder return ranking relative to the total shareholder return of
a specified peer group. |
|
(8) | Represents a warrant held by East Cliff Advisors, LLC, an entity affiliated with Mr.
Ramsbottom. The expiration date for this warrant is the earlier of 90 days after Mr.
Ramsbottom ceases to be employed by the Company or December 31, 2011. |
|
(9) | Represents an inducement restricted stock unit award that vests in three equal annual
installments starting on October 22, 2009. |
|
(10) | Represents an inducement restricted stock unit award that vests in three equal annual
installments starting on January 15, 2008. |
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Table of Contents
Option Exercises and Stock Vested
The following table sets forth information with respect to the NEOs concerning the option
exercises and stock vested during the fiscal year ended September 30, 2009.
Option Awards | Stock Awards | |||||||||||||||
Number of | Value | Number of | Value | |||||||||||||
Shares Acquired | Realized | Shares Acquired | Realized | |||||||||||||
on Exercise | on Exercise | on Vesting | on Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($) (1) | ||||||||||||
D. Hunt Ramsbottom |
| | 200,000 | $ | 120,500 | |||||||||||
Dan J. Cohrs |
| | | | ||||||||||||
Douglas M. Miller |
| | 144,833 | $ | 91,503 | |||||||||||
Richard T. Penning |
| | 108,000 | $ | 68,140 | |||||||||||
Colin M. Morris |
| | 66,333 | $ | 38,973 |
(1) | Value Realized on Vesting represents the amount equal to the closing market price of the
shares on the date of vesting multiplied by the number of shares that vested pursuant to
restricted stock units. |
Potential Payments upon Termination or Change-in-Control
The employment agreements of Messrs. Ramsbottom, Cohrs, Miller, Penning and Morris provide for
severance payments upon termination without cause, non-renewal of the executives employment
agreement and the executives resignation for good reason. The employment agreements also provide
for payments upon a termination without cause and executives resignation for good reason upon a
change in control at the Company. In addition, the performance share and restricted stock unit
agreements of Messrs. Ramsbottom, Cohrs, Miller, Penning and Morris identified in the tables below
provide for accelerated vesting upon the occurrence of the same events. In the event that any
severance payments to Messrs. Ramsbottom, Cohrs, Miller, Penning and Morris are subject to federal
excise taxes under the golden parachute provisions of the tax code, Rentech is required to pay
the executives a gross-up for any such excise taxes plus any excise, income or payroll taxes owed
on the payment of the gross-up for the excise taxes. No severance payments or accelerated vesting
events are provided if a NEO is terminated for cause or resigns without good reason.
The potential payouts and vesting amounts that each of Messrs. Ramsbottom, Cohrs, Miller,
Penning and Morris would receive upon one of the qualifying termination or change in control events
described above, assuming such event occurred on September 30, 2009, are set forth in the tables
below. The amounts include the fair value of accelerated restricted stock unit awards valued as of
September 30, 2009.
Termination without Cause or for Good Reason as of September 30, 2009
Cash | Acceleration | Medical | ||||||||||||||||||
Severance | of Restricted | Benefits | ||||||||||||||||||
Name | Payments | Stock Units | Payments | Gross-up | Total | |||||||||||||||
D. Hunt Ramsbottom (1) |
$ | 1,257,000 | $ | 70,875 | $ | 26,895 | | $ | 1,354,770 | |||||||||||
Dan J. Cohrs (2) |
$ | 528,000 | $ | 197,877 | $ | 26,895 | | $ | 752,772 | |||||||||||
Douglas M. Miller (3) |
$ | 527,250 | $ | 22,376 | $ | 26,895 | | $ | 576,521 | |||||||||||
Richard T. Penning (4) |
$ | 472,100 | $ | 166,926 | $ | 26,895 | | $ | 665,921 | |||||||||||
Colin M. Morris (5) |
$ | 344,250 | $ | 18,428 | $ | 10,589 | | $ | 373,267 |
(1) | Mr. Ramsbottoms cash severance payments would equal the sum of (a) two times his
annual base salary paid over the one year period after his termination date and (b) a
target bonus equal to his annual base salary paid on the date when executive bonuses are
paid for the fiscal year in which the termination takes place. Mr. Ramsbottoms medical
benefits would be paid by the Company for 18 months. Based upon the total shareholder
return of the Company as of September 30, 2009 relative to the specified peer group, 25% of
Mr. Ramsbottoms total shareholder return performance share award would accelerate and
vest upon termination. |
|
(2) | Mr. Cohrs cash severance payments would equal the sum of (a) his annual base salary
paid over the one year period after executives termination date and (b) a target bonus
equal to 60% of his annual base salary paid on the date when executive bonuses are paid for
the fiscal year in which the termination takes place. Mr. Cohrs medical benefits would be
paid by the Company for 18 months. Based upon the total shareholder return of the Company
as of September 30, 2009 relative to the specified peer group, 25% of Mr. Cohrs total
shareholder return performance share award would accelerate and vest upon
termination. In addition, the restricted stock units scheduled to vest over the next 12
months pursuant to his inducement award would accelerate and vest upon termination. |
17
Table of Contents
(3) | Mr. Millers cash severance payments would equal the sum of (a) his annual base salary
paid over the one year period after executives termination date and (b) a target bonus
equal to 50% of his annual base salary paid on the date when executive bonuses are paid for
the fiscal year in which the termination takes place. Mr. Millers medical benefits would
be paid by the Company for 18 months. Based upon the total shareholder return of the
Company as of September 30, 2009 relative to the specified peer group, 25% of Mr. Millers
total shareholder return performance share award would accelerate and vest upon
termination. |
|
(4) | Mr. Pennings cash severance payments would equal the sum of (a) his annual base salary
paid over the one year period after his termination date and (b) a target bonus equal to
50% of his annual base salary paid on the date when executive bonuses are paid for the
fiscal year in which the termination takes place. Mr. Pennings medical benefits would be
paid by the Company for 18 months. Based upon the total shareholder return of the Company
as of September 30, 2009 relative to the specified peer group, 25% of Mr. Pennings total
shareholder return performance share award would accelerate and vest upon termination. In
addition, the restricted stock units scheduled to vest over the next 12 months pursuant to
his inducement award would accelerate and vest upon termination. |
|
(5) | Mr. Morris cash severance payments would equal the sum of (a) his annual base salary
paid over the one year period after his termination date and (b) a target bonus equal to
50% of his annual base salary paid on the date when executive bonuses are paid for the
fiscal year in which the termination takes place. Mr. Morris medical benefits would be
paid by the Company for 18 months. Based upon the total shareholder return of the Company
as of September 30, 2009 relative to the specified peer group, 25% of Mr. Morriss total
shareholder return performance share award would accelerate and vest upon termination. |
Termination without Cause upon a Change in Control as of September 30, 2009
Cash | Acceleration | Medical | ||||||||||||||||||
Severance | of Restricted | Benefits | ||||||||||||||||||
Name | Payments | Stock Units | Payments | Gross-up | Total | |||||||||||||||
D. Hunt Ramsbottom (1) |
$ | 1,340,800 | $ | 822,453 | | | $ | 2,163,253 | ||||||||||||
Dan J. Cohrs (2) |
$ | 607,200 | $ | 705,510 | | | $ | 1,312,710 | ||||||||||||
Douglas M. Miller (3) |
$ | 527,250 | $ | 263,788 | | | $ | 791,038 | ||||||||||||
Richard T. Penning (3) |
$ | 440,100 | $ | 368,986 | | | $ | 809,086 | ||||||||||||
Colin M. Morris (3) |
$ | 355,700 | $ | 225,684 | | | $ | 581,384 |
(1) | Mr. Ramsbottoms cash severance payments would equal the sum of (a) two times his
annual base salary and (b) the higher of (i) his target bonus equal to his annual base
salary or (ii) his prior years actual bonus. The cash severance payments would be due
within ten business days of his termination. All of Mr. Ramsbottoms restricted stock units
would accelerate and vest upon termination. |
|
(2) | Mr. Cohrs cash severance payments would equal the sum of (a) his annual base salary
and (b) the higher of (i) his target bonus equal to 60% of his annual base salary or (ii)
his prior years actual bonus. The cash severance payments would be due within ten business
days of his termination. All of executives performance share awards and restricted stock
units would accelerate and vest upon termination. |
|
(3) | The executives cash severance payments would equal the sum of (a) executives annual
base salary and (b) the higher of (i) executives target bonus equal to 50% of his annual
base salary or (ii) executives prior years actual bonus. The cash severance payments
would be due within ten business days of executives termination. All of executives
performance share awards and restricted stock units would accelerate and vest upon
termination |
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Table of Contents
Director Compensation
The following table sets forth compensation information with respect to our non-employee
directors as of the end of the last fiscal year.
Change in Pension | ||||||||||||||||||||||||||||
Fees | Non-Equity | Value and | ||||||||||||||||||||||||||
Earned or | Incentive | Nonqualified | ||||||||||||||||||||||||||
Paid in | Stock | Option | Plan | Deferred | All Other | |||||||||||||||||||||||
Cash | Awards | Awards | Compensation | Compensation | Compensation | Total | ||||||||||||||||||||||
Name | ($) | ($) (1) | ($) (1) | ($) | Earnings | ($) | ($) | |||||||||||||||||||||
Michael S. Burke |
$ | 35,000 | $ | 57,764 | $ | 7,866 | | | | $ | 100,630 | |||||||||||||||||
Michael F. Ray |
$ | 31,500 | $ | 57,764 | $ | 7,866 | | | | $ | 97,130 | |||||||||||||||||
Ronald M. Sega |
$ | 24,000 | $ | 57,764 | $ | 7,866 | | | | $ | 89,630 | |||||||||||||||||
Edward M. Stern |
$ | 31,500 | $ | 57,764 | $ | 7,866 | | | | $ | 97,130 | |||||||||||||||||
Halbert S. Washburn |
$ | 28,000 | $ | 57,764 | $ | 7,866 | | | | $ | 93,630 | |||||||||||||||||
Dennis L. Yakobson |
$ | 35,000 | $ | 57,764 | $ | 7,866 | | | | $ | 100,630 |
(1) | The amounts reflect stock based compensation recognized for financial statement reporting
purposes in fiscal year 2009, calculated in accordance with the applicable guidance. |
The following table sets forth information with respect to the directors concerning the stock and
option awards during the last fiscal year.
Grant Date | Grant Date | |||||||||||||||
Stock | Fair Value | Option | Fair Value | |||||||||||||
Awards | Stock | Awards | Options | |||||||||||||
Director |
||||||||||||||||
Michael S. Burke |
65,600 | $ | 39,360 | 15,000 | $ | 5,250 | ||||||||||
Michael F. Ray |
65,600 | $ | 39,360 | 15,000 | $ | 5,250 | ||||||||||
Ronald M. Sega |
65,600 | $ | 39,360 | 15,000 | $ | 5,250 | ||||||||||
Edward M. Stern |
65,600 | $ | 39,360 | 15,000 | $ | 5,250 | ||||||||||
Halbert S. Washburn |
65,600 | $ | 39,360 | 15,000 | $ | 5,250 | ||||||||||
Dennis L. Yakobson |
65,600 | $ | 39,360 | 115,000 | $ | 128,250 |
The aggregate number of stock awards and the aggregate number of option awards outstanding as of
September 30, 2009 for directors are:
Unvested | Unexercised | |||||||
Stock | Option | |||||||
Awards | Awards | |||||||
Director |
||||||||
Michael S. Burke |
| 65,000 | ||||||
Michael F. Ray |
| 100,000 | ||||||
Ronald M. Sega |
| 50,000 | ||||||
Edward M. Stern |
| 65,000 | ||||||
Halbert S. Washburn |
| 80,000 | ||||||
Dennis L. Yakobson |
| 160,000 |
Directors who are employees of Rentech do not receive additional compensation for their
services. Effective January 2010, the compensation plan for nonemployee directors provides for an
annual retainer of $30,000 to be paid in $7,500 quarterly increments to each outside director.
Additional cash compensation is provided for participation in committees of the Board, up to a
maximum of $15,000 per year for all committee work. The Chairman of the Board receives $25,000 per
year, the Chairman of the Audit Committee receives $15,000 per year; the Chairman of the
Compensation and the Chairman of the Nominating Committee receive $7,500 per year; and regular
committee members receive $5,000 per year. Directors are reimbursed for reasonable out-of-pocket
expenses incurred in their capacity as directors. No additional cash fees are paid to directors for
attendance at Board or committee meetings.
Each new non-employee member of the Board is granted a five-year, fully-vested option to
purchase 20,000 shares of the Companys common stock at the fair market value of the Companys
common stock on the date of grant. Each non-employee director serving immediately following the
Companys annual meeting of shareholders also is granted the number of shares of fully vested
Company common stock obtained by dividing $50,000 by the fair market value of the Companys common
stock on the date of grant, rounded up to the nearest 100 shares. Each non-employee director
serving immediately following the Companys annual meeting of
shareholders also is granted a stock option with a six-year term to purchase shares of the
Companys common stock equal in value to $25,000 based on the Black-Scholes option-pricing model at
an exercise price equal to the fair market value of a share of the Companys common stock on the
date of grant, determined in accordance with our Incentive Plan. The stock option will vest in a
single installment on the earlier of the one year anniversary of the date of grant and the
Companys annual meeting of shareholders, subject to the directors continued Board service through
such date.
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Table of Contents
Employment Contracts
As of September 30, 2009, we had entered into employment agreements with certain of our named
executive officers including, Messrs. Ramsbottom, Cohrs, Miller and Penning. We entered into an
employment agreement with Mr. Morris in November 2009. These employment agreements are described
below.
D. Hunt Ramsbottom
Mr. Ramsbottoms employment agreement continues through December 31, 2011, subject to
automatic one-year renewals, and provides for a current base salary of $419,000 per year (subject
to increase) and a bonus opportunity targeted at 100% of base salary (with actual bonus eligibility
ranging from 0 200% of base salary). Upon a termination of Mr. Ramsbottoms employment without
cause or with good reason (each as defined in his employment agreement) or due to a non-renewal
of his employment term by the Company, Mr. Ramsbottom is entitled to receive an amount equal to
three times his base salary, payable over two years, in addition to Company-paid continuation
health benefits for up to eighteen months, provided that he signs a release of claims against the
Company. If Mr. Ramsbottoms employment terminates without cause, with good reason or due to a
non-renewal of his employment term by the Company in connection with a change in control of the
Company, his cash severance will be paid in a lump sum and, if his annual bonus for the year
immediately preceding his termination exceeds his then-current base salary, the cash severance will
equal twice his base salary plus the amount of his prior year annual bonus (instead of three times
his base salary).
Dan J. Cohrs
Mr. Cohrs employment agreement continues through October 22, 2011, subject to automatic
one-year renewals, and provides for a current base salary of $363,000 per year (subject to
increase) and a bonus opportunity targeted at 60% of base salary (with actual bonus eligibility
ranging from 0 120% of base salary). Under Mr. Cohrs employment agreement, in December 2008 Mr.
Cohrs was granted 325,000 restricted stock units (vesting in annual increments over three years)
and 110,500 performance shares which vest subject to the attainment of specified performance
objectives. Mr. Cohrs employment agreement also provides for a one-time commencement payment of
$25,000. Upon a termination of Mr. Cohrs employment without cause or with good reason (each as
defined in his employment agreement), Mr. Cohrs is entitled to receive an amount equal to one times
his base salary, payable over one year, in addition to payment of his target bonus and Company-paid
continuation health benefits for up to eighteen months, provided that he signs a release of claims
against the Company. If Mr. Cohrs employment terminates without cause, with good reason or due
to a non-renewal of his employment term by the Company in connection with a change in control of
the Company, his cash severance will be paid in a lump sum and, if his annual bonus for the year
immediately preceding his termination exceeds his target bonus, the prior years actual bonus will
be substituted for the target bonus. If Mr. Cohrs employment terminates due to a non-renewal of his
employment term by the Company (other than in connection with a change in control of the Company),
Mr. Cohrs is entitled to receive an amount equal to one times his base salary, payable over one
year, in addition to which he may receive payment of a discretionary bonus.
Douglas M. Miller
Mr. Millers employment agreement continues through January 20, 2011, subject to automatic
one-year renewals, and provides for a current base salary of $351,500 per year (subject to
increase) and a bonus opportunity targeted at 50% of base salary (with actual bonus eligibility
ranging from 0 100% of base salary). Upon a termination of Mr. Millers employment without
cause or with good reason (each as defined in his employment agreement), Mr. Miller is entitled
to receive an amount equal to one times his base salary, payable over one year, in addition to
Company-paid continuation health benefits for up to eighteen months, and payment of his target
bonus, provided that he signs a release of claims against the Company. If Mr. Millers employment
terminates without cause, with good reason or due to a non-renewal of his employment term by
the Company in connection with a change in control of the Company, his cash severance will be paid
in a lump sum and, if his annual bonus for the year immediately preceding his termination exceeds
his target bonus, the prior years actual bonus will be substituted for the target bonus. If Mr.
Millers employment terminates due to a non-renewal of his employment term by the Company (other
than in connection with a change in control of the Company),
Mr. Miller is entitled to receive an amount equal to one times his base salary, payable over
one year, in addition to which he may receive payment of a discretionary bonus.
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Table of Contents
Richard T. Penning
Mr. Pennings employment agreement continues through January 15, 2011, subject to automatic
one-year renewals, and provides for a current base salary of $293,400 per year (subject to
increase) and a bonus opportunity targeted at 50% of base salary (with actual bonus eligibility
ranging from 0 100% of base salary). Upon a termination of Mr. Pennings employment without
cause or with good reason (each as defined in his employment agreement), Mr. Penning is
entitled to receive an amount equal to one times his base salary plus up to an additional $32,000
in connection with certain relocation expenses, each payable over one year, in addition to
Company-paid continuation health benefits for up to eighteen months and payment of his target
bonus, provided that he signs a release of claims against the Company. If Mr. Pennings employment
terminates without cause, with good reason or due to a non-renewal of his employment term by
the Company in connection with a change in control of the Company, his cash severance will be paid
in a lump sum and, if his annual bonus for the year immediately preceding his termination exceeds
his target bonus, the prior years actual bonus will be substituted for the target bonus. If Mr.
Pennings employment terminates due to a non-renewal of his employment term by the Company (other
than in connection with a change in control of the Company), Mr. Penning is entitled to receive an
amount equal to one times his base salary plus up to an additional $32,000 in connection with
certain relocation expenses, payable over one year, in addition to which he may receive payment of
a discretionary bonus.
Colin M. Morris
Mr. Morris employment agreement continues through November 3, 2010, subject to automatic
one-year renewals, and provides for a current base salary of $236,500 per year (subject to
increase) and a bonus opportunity targeted at 50% of base salary (with actual bonus eligibility
ranging from 0 100% of base salary). Upon a termination of Mr. Morris employment without cause
or with good reason (each as defined in his employment agreement), Mr. Morris is entitled to
receive an amount equal to one times his base salary, payable over one year, in addition to
Company-paid continuation health benefits for up to eighteen months, and payment of his target
bonus, provided that he signs a release of claims against the Company. If Mr. Morris employment
terminates without cause, with good reason or due to a non-renewal of his employment term by
the Company in connection with a change in control of the Company, his cash severance will be paid
in a lump sum and, if his annual bonus for the year immediately preceding his termination exceeds
his target bonus, the prior years actual bonus will be substituted for the target bonus. If Mr.
Morris employment terminates due to a non-renewal of his employment term by the Company (other
than in connection with a change in control of the Company), Mr. Morris is entitled to receive an
amount equal to one times his base salary, payable over one year, in addition to which he may
receive payment of a discretionary bonus.
The employment agreements entitle the executives to a gross-up payment from the Company
equal to any excise taxes that the executive incurs under Internal Revenue Code Section 280G (and
any taxes on such gross-up payment) in connection with a change in control of the Company. The
agreements also provide in addition to customary health, welfare, retirement and vacation benefits
and certain other perquisites and contain customary confidentiality and other restrictive
covenants. Each of the executives covered by an employment agreement has also executed a corporate
confidentiality and proprietary rights agreement. Though not addressed in the employment
agreements, each of the NEOs is entitled to accelerated vesting of certain equity awards in the
event of a change in control of the Company.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2009, the following individuals served as members of the Compensation
Committee: Michael F. Ray, Halbert S. Washburn, and Edward M. Stern. None of these individuals has
ever served as an officer or employee of the Company or any of its subsidiaries. No executive
officer of the Company has served as a director or member of the compensation committee of another
entity at which an executive officer of such entity is also a director of the Company.
21
Table of Contents
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS |
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial ownership of Rentechs
common stock as of January 13, 2010 by (i) all owners of record or those who are known to Rentech
to beneficially own more than 5% of the issued and outstanding shares of Rentechs common stock,
(ii) each director and NEO identified in the tables under Executive Compensation, and (iii) by
all named executive officers and directors as a group:
Directors and Executive Officers (1)(2) | Amount and Nature of | Percent | ||||||
Listed in alphabetical order | Beneficial Ownership (3) | of Class | ||||||
Michael S. Burke |
159,400 | * | ||||||
Dan J. Cohrs |
86,006 | * | ||||||
Douglas M. Miller |
429,154 | * | ||||||
Colin M. Morris |
246,042 | * | ||||||
Richard T. Penning |
323,844 | * | ||||||
D. Hunt Ramsbottom (4)(5) |
2,881,543 | 1.3 | % | |||||
Michael F. Ray (6) |
405,385 | * | ||||||
Ronald M. Sega |
129,400 | * | ||||||
Edward M. Stern |
169,400 | * | ||||||
Halbert S. Washburn |
186,400 | * | ||||||
John A. Williams (7) |
7,335,953 | 3.4 | % | |||||
Dennis L. Yakobson (8) |
594,904 | * | ||||||
All Directors and Executive Officers as a Group (12 persons) |
12,967,431 | 6.0 | % | |||||
Beneficial Owners of | Amount and Nature of | Percent | ||||||
More than 5% | Beneficial Ownership | of Class | ||||||
BlackRock, Inc. (9) |
20,617,183 | 9.7 | % |
* | Less than 1%. |
|
(1) | Except as otherwise noted and subject to applicable community property laws, each shareholder
has sole voting and investment power with respect to the shares beneficially owned. The
business address of each director and executive officer is c/o Rentech, Inc., 10877 Wilshire
Blvd., Suite 710, Los Angeles, CA 90024. |
|
(2) | If a person has the right to acquire shares of common stock subject to options and other
convertible or exercisable securities within 60 days of January 13, 2010, then such shares are
deemed outstanding for purposes of computing the percentage ownership of that person, but are
not deemed outstanding for purposes of computing the percentage ownership of any other person.
The following shares of common stock subject to stock options, warrants and restricted stock
units (including restricted stock units which are fully vested but not yet paid out until the
earlier of the recipients termination and three years from award) may be acquired within 60
days of January 13, 2010 and are included in the table above: |
| Michael S. Burke 50,000 under options; |
||
| Dan J. Cohrs 16,402 under restricted stock units; |
||
| Douglas M. Miller 130,000 under options and 79,758 under restricted stock units; |
||
| Colin M. Morris 75,000 under options and 69,380 under restricted stock units; |
||
| Richard T. Penning 149,928 under restricted stock units; |
||
| D. Hunt Ramsbottom 2,082,500 under warrants, 250,000 under options and 253,970 under
restricted stock units; |
||
| Michael F. Ray 62,248 under warrants and 85,000 under options; |
||
| Ronald M. Sega 35,000 under options; |
||
| Edward M. Stern 50,000 under options; |
22
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| Halbert S. Washburn 65,000 under options; |
||
| John A. Williams 20,000 under options; and |
||
| Dennis L. Yakobson 45,000 under options. |
(3) | Information with respect to beneficial ownership is based upon information furnished by each
shareholder or contained in filings with the Securities and Exchange Commission. |
|
(4) | Includes a warrant held by East Cliff Advisors, LLC for 2,082,500 shares and excludes a
warrant held by East Cliff Advisors, LLC for 787,500 shares. With respect to the warrant for
787,500 shares, half of these warrants will vest upon the earlier of Rentechs stock price
reaching $5.25 or higher for 12 consecutive trading days or December 31, 2011 as long as Mr.
Ramsbottom is still an employee of the Company. The other 393,750 warrants will vest upon
Rentechs stock price reaching $5.25 or higher for 12 consecutive trading days. The exercise
price of each of the warrants is $1.82 per share. Mr. Ramsbottom is the managing member and
has sole investment and voting power in East Cliff Advisors, LLC. |
|
(5) | Includes 24,000 shares held for the benefit of Mr. Ramsbottoms children as to which Mr.
Ramsbottom disclaims beneficial ownership. |
|
(6) | Includes 7,500 shares held by Mr. Rays spouses IRA as to which Mr. Ray disclaims beneficial
ownership. |
|
(7) | Includes 1,708,582 shares held for the benefit of Mr. Williams children as to which Mr.
Williams disclaims beneficial ownership. |
|
(8) | Includes 20,000 shares held in custodial accounts as to which Mr. Yakobson disclaims
beneficial ownership. |
|
(9) | Based on information in a Schedule 13G filed by BlackRock, Inc. (BlackRock) with the SEC on
January 8, 2010 for its holdings as of December 31, 2009. BlackRock reported that it has sole
power to vote and to dispose of all 20,617,183 shares. BlackRocks principal business office
address is 40 East 52nd Street, New York, NY 10022. |
23
Table of Contents
Equity Compensation Plan Information
The following table provides information as of September 30, 2009 with respect to our
compensation plans, including individual compensation arrangements, under which our equity
securities are authorized for issuance.
Number of | ||||||||||||
securities remaining | ||||||||||||
Number of securities | available for future | |||||||||||
to be issued | Weighted-average | issuance under equity | ||||||||||
upon exercise of | exercise price of | compensation plans | ||||||||||
outstanding options, | outstanding options, | (excluding securities | ||||||||||
Plan category | warrants and rights (a) | warrants and rights (b) | reflected in column (a)) (c) | |||||||||
Equity compensation plans approved by security holders |
3,867,000 | $ | 1.78 | 11,384,000 | ||||||||
Equity compensation plans not approved by security holders |
2,580,000 | $ | 1.52 | | ||||||||
Total |
6,447,000 | $ | 1.68 | 11,384,000 | ||||||||
The equity securities issued as compensation under shareholder approved compensation plans
consist of stock options, restricted stock units and performance shares. The equity securities
issued as compensation without shareholder approval consist of stock options, stock purchase
warrants and restricted stock units. The stock options and stock purchase warrants have exercise
prices equal to the fair market value of our common stock, as reported by the NYSE Amex, as of the
date the securities were granted. The options and warrants may be exercised for a term ranging from
five to ten years after the date they were granted.
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
Certain Relationships and Related Party Transactions
Pursuant to its charter, the Audit Committee of the Board of Directors is responsible for
reviewing and approving all related party transactions. While we do not have a formal written
policy or procedure for the review, approval or ratification of related party transactions, the
audit committee must review the material facts of any such transaction and approve that transaction
on a case by case basis.
Mr. Williams was a greater than 10% shareholder of SilvaGas Holdings Corporation when it was
acquired by the Company in June of 2009 pursuant to the terms of an Agreement and Plan of Merger
(the Merger Agreement). In addition to the consideration paid at the closing, the former SilvaGas
stockholders may be entitled to receive additional shares of the Companys common stock as earn-out
consideration. Potential earn-out consideration will be calculated based on the degree to which the
biomass gasification unit implementing SilvaGas technology at the Companys proposed project in
Rialto, California, or an alternative project to be designated by the Company, achieves certain
performance criteria no later than March 29, 2022. Depending on the performance of the gasifier,
such additional earn-out consideration may vary from zero to the sum of (i) 6,250,000 shares of
Company common stock and (ii) that number of shares equal in value to $5,500,000 at the time of any
such payment (provided that such number may not exceed 11,000,000 shares). In the event the
SilvaGas biomass gasification unit fails to achieve the performance criteria, SilvaGas stockholders
may be entitled to receive shares of the Companys common stock with a value equal to a portion of
the licensing fees and other royalties the Company receives from licensing the SilvaGas technology.
The SilvaGas stockholders will not be entitled to receive such common stock unless the licensing
fees and other royalties received by the Company exceed a certain threshold. In no event will the
aggregate consideration paid in shares of the Company to SilvaGas stockholders at closing and as
earn-out consideration exceed 20% of the total outstanding common stock of the Company as of the
date of the Merger Agreement.
For identification of each director determined to be independent, see Item 10 Directors,
Executive Officers and Corporate Governance.
24
Table of Contents
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
The following table presents fees billed and expected to be billed for professional audit
services rendered by PricewaterhouseCoopers LLP and Ehrhardt Keefe Steiner & Hottman PC for fiscal
years 2009 and 2008, as applicable, and fees billed and expected to be billed for other services
rendered by PricewaterhouseCoopers LLP and Ehrhardt Keefe Steiner & Hottman PC for fiscal years
2009 and 2008, as applicable.
Fiscal Year | Fiscal Year | |||||||
2009 | 2008 | |||||||
PricewaterhouseCoopers LLP (1): |
||||||||
Audit Fees (2) |
$ | 888,505 | $ | | ||||
Audit-Related Fees (3) |
33,970 | | ||||||
Tax Fees (4) |
111,890 | | ||||||
Total |
$ | 1,034,365 | $ | | ||||
Ehrhardt
Keefe Steiner & Hottman PC (5): |
||||||||
Audit Fees (6) |
$ | 223,016 | $ | 706,642 | ||||
Audit-Related Fees (3) |
27,799 | 25,876 | ||||||
Tax Fees (7) |
86,150 | |||||||
All Other
Fees (8) |
59,796 | |||||||
Total |
$ | 396,761 | $ | 732,518 | ||||
(1) | Effective June 8, 2009, the Audit Committee of the Board of Directors of the Company
approved the engagement of PricewaterhouseCoopers LLP (PwC) as the Companys independent
registered public accounting firm for the fiscal year ending September 30, 2009. During the
fiscal years ended September 30, 2008 and September 30, 2007, and during the subsequent
interim period from October 1, 2008 through June 8, 2009, respectively, neither the Company
nor anyone acting on its behalf has consulted with PwC with respect to either (i) the
application of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on the Companys consolidated
financial statements, and neither a written report nor oral advice was provided to the
Company that PwC concluded was an important factor considered by the Company in reaching a
decision as to any accounting, auditing or financial reporting issue; or (ii) any matter
that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of
Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable
event (as defined in Item 304(a)(1)(v) of Regulation S-K). |
|
(2) | Represents the aggregate fees billed and expected to be billed for professional
services rendered for the audit of Rentechs consolidated financial statements for the
fiscal year ended September 30, 2009, and for the audit of Rentechs internal control over
financial reporting and for reviews of the financial statements included in Rentechs
quarterly reports on Form 10-Q, assistance with Securities Act filings and related matters,
consents issued in connection with SEC filings, and consultations on financial accounting
and reporting standards arising during the course of the audit for fiscal year 2009. |
|
(3) | Represents fees billed for assurance and related services that are reasonably related
to the performance of the audit or review of Rentechs financial statements, and are not
reported as Audit Fees. |
|
(4) | Represents the aggregate fees billed and expected to be billed for Rentechs 2009 tax
return and tax consultation regarding property and sales tax issues. |
25
Table of Contents
(5) | Effective June 8, 2009, the Audit Committee of the Board of Directors of the Company
approved the dismissal of Ehrhardt Keefe Steiner & Hottman PC (EKS&H) as the Companys
independent registered public accounting firm. During the years ended September 30, 2008
and September 30, 2007, and during the subsequent interim periods from October 1, 2008
through June 8, 2009, the Company had no disagreements with EKS&H on any matter of
accounting principles or practices, financial statement disclosure, or auditing scope or
procedure that, if not resolved to EKS&Hs satisfaction, would have caused EKS&H to make
reference to the subject matter thereof in connection with its report on the Companys
consolidated financial statements for either of such years. The reports of EKS&H on the
Companys consolidated financial statements as of September 30, 2008 and September 30,
2007, and for each of the years in the three-year period ended September 30, 2008 and in
the three-year period ended September 30, 2007, did not contain an adverse opinion or a
disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or
accounting principles. During the fiscal years ended September 30, 2008 and September 30,
2007, and during the subsequent interim period from October 1, 2008 through June 8, 2009,
there were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K),
except that in EKS&Hs report dated
December 14, 2008 (which was included in the Companys Annual Report on Form 10-K for the
year ended September 30, 2008) on the Companys internal control over financial reporting as
of September 30, 2008, EKS&H expressed an adverse opinion on the effectiveness of the
Companys internal control over financial reporting due to the existence of the material
weakness identified and described in Managements Report on Internal Control Over Financial
Reporting under Item 9A in the 2008 Form 10-K. During fiscal year 2009, the Company reported
in its Quarterly Report for the period ended March 31, 2009 that the material weakness
previously identified in the Companys internal control over financial reporting as of
September 30, 2008 had been significantly reduced through the improvements to the Companys
internal control over financial reporting implemented during the past two fiscal quarters. |
|
(6) | Represents the aggregate fees billed for professional services rendered for the audit
of Rentechs consolidated financial statements for the fiscal year ended September 30,
2008, and for the audit of managements assessment of internal controls, and for reviews of
the financial statements included in Rentechs quarterly reports on Form 10-Q, assistance
with Securities Act filings and related matters, consents issued in connection with SEC
filings, and consultations on financial accounting and reporting standards arising during
the course of the audit for fiscal year 2008. |
|
(7) | Represents the aggregate fees expected to be billed for Rentechs 2009 tax provision. |
|
(8) | Represents fees billed for comfort letters issued related to direct sales of equity. |
The Audit Committee is required to pre-approve all audit services and non-audit services
(other than de minimis non-audit services as defined by the Sarbanes-Oxley Act of 2002). Non-audit
services were reviewed with the Audit Committee, which concluded that the provision of such
services by PricewaterhouseCoopers LLP were compatible with the maintenance of that firms
independence in the conduct of its auditing functions. The Audit Committee pre-approved all fees
incurred in fiscal year 2009, except for work completed by PwC for comfort letters related to two
equity transactions. The full Board of Directors approved both equity transactions and pre-approved
all related work necessary to complete the transactions. The fees for the work on the comfort
letters constituted less than 5% of the total PwC fees.
PART IV
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
(a)(1) and (2) Financial Statements and Schedules.
The information required by this Item is included in Part II Item 8 of this report.
(b) Exhibits.
See Exhibit Index.
26
Table of Contents
EXHIBIT INDEX
2.1 | Stock Purchase Agreement, dated March 8, 2005, by and between Rentech, Inc. and
Zinsser Co., Inc. (incorporated by reference to Exhibit 10.1 to Current Report on
Form 8-K filed March 10, 2005). |
|||
2.2 | Stock Purchase Agreement, dated November 5, 2005, by and between Rentech
Development Corporation and Royster-Clark, Inc. (incorporated by reference to
Exhibit 2.1 to Current Report on Form 8-K filed November 9, 2005). |
|||
2.3 | First Amendment to the Stock Purchase Agreement dated November 5, 2005, by and
between Rentech Development Corporation and Royster-Clark, Inc. (incorporated by
reference to Exhibit 2.2 to Registration Statement on Form S-3 filed March 20,
2006). |
|||
2.4 | Second Amendment to the Stock Purchase Agreement dated November 5, 2005, by and
between Rentech Development Corporation and Royster-Clark Nitrogen, Inc.
(incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed
March 14, 2006). |
|||
2.5 | Third Amendment to the Stock Purchase Agreement dated November 5, 2005, by and
between Rentech Development Corporation and Royster-Clark Nitrogen, Inc.
(incorporated by reference to Exhibit 2.2 to Current Report on Form 8-K filed
March 14, 2006). |
|||
2.6 | Purchase and Sale Agreement, dated September 16, 2005, by and between Rentech
Development Corporation and RFC-Sand Creek Development, LLC (incorporated by
reference to Exhibit 10.1 to Current Report on Form 8-K filed September 22, 2005). |
|||
2.7 | Equity Purchase Agreement dated November 15, 2006 by and between Rentech, Inc. and
PML Exploration Services, LLC (incorporated by reference to Exhibit 2.1 to Current
Report on Form 8-K filed November 16, 2006). |
|||
2.8 | Agreement and Plan of Merger, dated June 23, 2009 among Rentech, Inc., SilvaGas
Holdings Corporation, RTK Acquisition Sub, Inc., RTK Acquisition Sub, LLC, John A.
Williams as the Principal Stockholder, Milton Farris as the Stockholder
Representative and the other stockholders of the SilvaGas Holdings Corporation
party thereto (incorporated by reference to Exhibit 2.1 to Companys Current
Report on Form 8-K filed on June 24, 2009). |
|||
3.1 | Amended and Restated Articles of Incorporation, dated April 29, 2005 (incorporated
by reference to Exhibit 3(i) to Quarterly Report on Form 10-Q, for the quarterly
period ended March 31, 2005, filed May 9, 2005). |
|||
3.2 | Articles of Amendment to Amended and Restated Articles of Incorporation of
Rentech, Inc. (incorporated by reference to Exhibit 3.1 to Quarterly Report on
Form 10-Q, for the quarterly period ended March 31, 2008, filed May 9, 2008). |
|||
3.3 | Articles of Amendment to Amended and Restated Articles of Incorporation of
Rentech, Inc. (incorporated by reference to Exhibit 3.1 to Companys Current
Report on Form 8-K filed on May 22, 2009). |
|||
3.4 | Bylaws dated November 30, 2004 (incorporated by reference to Exhibit 3(ii) to
Annual Report on Form 10-K for the year ended September 30, 2004 filed December 9,
2004). |
|||
4.1 | Stock Option Agreement, dated December 10, 2004, by and between Rentech, Inc. and
Royster-Clark Inc. (incorporated by reference to Exhibit 10.8 to Current Report on
Form 8-K filed December 16, 2004). |
|||
4.2 | Stock Purchase Warrant, dated September 17, 2004, by and between Rentech, Inc. and
Mitchell Technology Investments (incorporated by reference to Exhibit 10.2 to
Current Report on Form 8-K filed September 23, 2004). |
|||
4.3 | Registration Rights Agreement, dated September 17, 2004, by and between Rentech,
Inc. and Mitchell Technology Investments (incorporated by reference to
Exhibit 10.3 to Current Report on Form 8-K filed September 23, 2004). |
27
Table of Contents
4.4 | Form of Stock Purchase Warrants, dated April 8, 2005, by and among Rentech, Inc.
and Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP, Monarch Pointe
Fund, Ltd., Pentagon Special Purpose Fund, Ltd. and M.A.G. CAPITAL, LLC, for
Placement of Preferred Stock (incorporated by reference to Exhibits 10.2, 10.3,
10.4, 10.5 and 10.6 to Current Report on Form 8-K filed April 14, 2005). |
|||
4.5 | Registration Rights Agreement, dated April 8, 2005, by and among Rentech, Inc. and
Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP, Monarch Pointe Fund,
Ltd., Pentagon Special Purpose Fund, Ltd. and M.A.G. CAPITAL, LLC, for Placement
of Preferred Stock (incorporated by reference to Exhibit 10.7 to Current Report on
Form 8-K filed April 14, 2005). |
|||
4.6 | Warrant to Purchase 1,000,000 Shares of Common Stock by and between Rentech, Inc.
and DKRW Advanced Fuels LLC, dated January 12, 2006 (incorporated by reference to
Exhibit 2.1 to Current Report on Form 8-K filed January 19, 2006). |
|||
4.7 | Stock Purchase Warrants (incorporated by reference to Exhibits 10.1 through 10.16
to Current Report on Form 8-K filed May 20, 2005). |
|||
4.8 | Indenture dated April 18, 2006, by and between Rentech, Inc. and Wells Fargo Bank,
National Association, as Trustee (incorporated by reference to Exhibit 4.2 to
Current Report on Form 8-K filed April 18, 2006). |
|||
4.9 | Officers Certificate to Indenture dated April 18, 2006 to Indenture (incorporated
by reference to Exhibit 4.3 to Current Report on Form 8-K filed April 18, 2006). |
|||
4.10 | Form of 4.00% Convertible Senior Note Due 2013 (incorporated by reference to
Exhibit 4.4 to Current Report on Form 8-K filed April 18, 2006). |
|||
4.11 | Form of Subscription Agreement (incorporated by reference to exhibit 10.2 to
Current Report on Form 8-K filed April 20, 2007). |
|||
4.12 | Form of Warrant to purchase shares of Common Stock (incorporated by reference to
exhibit 10.3 to Current Report on Form 8-K filed April 20, 2007). |
|||
4.13 | Form of Warrant to purchase shares of Common Stock (incorporated by reference to
exhibit 10.2 to Current Report on Form 8-K filed January 20, 2009). |
|||
4.14 | Warrant Agreement, dated June 23, 2009 between Rentech, Inc. and ClearFuels
Technology Inc. (incorporated by reference to exhibit 10.1 to Companys Current
Report on Form 8-K filed on June 24, 2009). |
|||
4.15 | Stock Purchase Agreement, dated June 24, 2009, between Rentech, Inc. and the
Buyers party thereto (incorporated by reference to exhibit 10.1 to Companys
Current Report on Form 8-K filed on June 25, 2009). |
|||
4.16 | Placement Agent Agreement, dated August 20, 2009 between Rentech, Inc. and Roth
Capital Partners, LLC. (incorporated by reference to exhibit 10.1 to Companys
Current Report on Form 8-K filed on August 21, 2009). |
|||
4.17 | Form of Subscription Agreement (incorporated by reference to exhibit 10.2 to
Companys Current Report on Form 8-K filed on August 21, 2009). |
|||
4.18 | Placement Agent Agreement, dated September 23, 2009 between Rentech, Inc. and
Brean Murray, Carret & Co., LLC. (incorporated by reference to exhibit 10.1 to
Companys Current Report on Form 8-K filed on September 23, 2009). |
|||
4.19 | Form of Subscription Agreement (incorporated by reference to exhibit 10.2 to
Companys Current Report on Form 8-K filed on September 23, 2009). |
|||
4.20 | Certificate of Incorporation of Rentech Energy Midwest Corporation (incorporated
by reference to exhibit 4.4 to Form S-3 filed March 27, 2009). |
|||
4.21 | Bylaws of Rentech Energy Midwest Corporation (incorporated by reference to
exhibit 4.5 to Form S-3 filed March 27, 2009). |
28
Table of Contents
4.22 | Articles of Incorporation of Rentech Development Corporation (incorporated by
reference to Exhibit 4.5 to Registration Statement on Form S-3 filed on March 20,
2006). |
|||
4.23 | Bylaws of Rentech Development Corporation (incorporated by reference to
Exhibit 4.6 to Registration Statement on Form S-3 filed on March 20, 2006). |
|||
4.24 | Articles of Incorporation of Rentech Services Corporation (incorporated by
reference to Exhibit 4.7 to Registration Statement on Form S-3 filed on March 20,
2006). |
|||
4.25 | Bylaws of Rentech Services Corporation (incorporated by reference to Exhibit 4.8
to Registration Statement on Form S-3 filed on March 20, 2006). |
|||
4.26 | Articles of Organization of Rentech Energy Technology Center, LLC (formerly Sand
Creek Energy, LLC) (incorporated by reference to Exhibit 4.9 to Registration
Statement on Form S-3 filed on March 20, 2006). |
|||
4.27 | Limited Liability Company Agreement of RSFC, LLC (incorporated by reference to
exhibit 4.11 to Form S-3 filed March 27, 2009). |
|||
4.28 | Limited Liability Company Agreement of RSFC Land Management, LLC (incorporated by
reference to exhibit 4.12 to Form S-3 filed March 27, 2009). |
|||
10.1 | License Agreement, dated October 8, 1998, by and between Rentech, Inc. and Texaco
Natural Gas, Inc. (incorporated by reference to Exhibit 10.10 to Annual Report on
Form 10-KSB, No. 000-19260, for the year ended September 30, 1998, filed
January 13, 1999). |
|||
10.2 | ** | Master License Agreement by and among Rentech, Inc. and DKRW Energy LLC and DKRW
Advanced Fuels LLC, dated January 12, 2006 (incorporated by reference to
Exhibit 10.1 to Current Report on Form 8-K filed January 19, 2006). |
||
10.3 | License Agreement by and between Rentech, Inc. and Medicine Bow Fuel & Power, LLC,
dated January 12, 2006 (incorporated by reference to Exhibit 10.2 to Current
Report on Form 8-K filed January 19, 2006).** |
|||
10.4 | Amendment to Site License Agreement with Medicine Bow Fuel & Power, LLC, dated
October 26, 2007 (incorporated by reference to Exhibit 10.1 to Current Report on
Form 8-K filed November 1, 2007). |
|||
10.5 | Omnibus Amendment by and among Rentech, Inc. and Medicine Bow Fuel & Power, LLC
and DKRW Advanced Fuels LLC, dated December 7, 2007 (incorporated by reference to
Exhibit 10.1 to Current Report on Form 8-K filed December 13, 2007). |
|||
10.6 | * | Amended and Restated Employment Agreement by and between Rentech, Inc. and D. Hunt
Ramsbottom, Jr. dated December 31, 2008 (incorporated by reference to
Exhibit 10.43 to Amendment No. 1 to Annual Report on Form 10-K/A filed January 28,
2009). |
||
10.7 | * | Amended and Restated Employment Agreement by and between Rentech, Inc. and Douglas
M. Miller dated December 31, 2008 (incorporated by reference to Exhibit 10.44 to
Amendment No. 1 to Annual Report on Form 10-K/A filed January 28, 2009). |
||
10.8 | * | Employment Agreement by and between Rentech, Inc. and Dan J. Cohrs, dated October
22, 2008 (incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K
filed December 15, 2008). |
||
10.9 | * | Amended and Restated Employment Agreement by and between Rentech, Inc. and Richard
T. Penning, dated December 31, 2008 (incorporated by reference to Exhibit 10.45 to
Amendment No. 1 to Annual Report on Form 10-K/A filed January 28, 2009). |
||
10.10 | * | Employment Agreement with Colin Morris (incorporated by reference to exhibit 10.3
to Companys Current Report on Form 8-K filed on November 6, 2009). |
||
10.11 | * | Compensation Plan for Outside Directors (incorporated by reference to Item 1.01 to
Current Report on Form 8-K filed April 19, 2006). |
29
Table of Contents
10.12 | Lease Agreement dated as of April 21, 2006 with Center West (incorporated by
reference to Exhibit 99.1 to Current Report on Form 8-K filed April 21, 2006). |
|||
10.13 | Rider to the Lease Agreement dated as of April 21, 2006 by and between Rentech,
Inc. and Center West (incorporated by reference to Exhibit 99.2 to Current Report
on Form 8-K filed April 21, 2006). |
|||
10.14 | * | Form of Stock Option Grant Notice and Stock Option Agreement under 2006 Incentive
Award Plan (incorporated by reference to Exhibit 10.1 to Current Report on
Form 8-K filed July 20, 2006). |
||
10.15 | * | 2005 Stock Option Plan (incorporated by reference to Exhibit 10.34 to Quarterly
Report on Form 10-Q for the fiscal quarter ended December 31, 2004 filed
February 9, 2005). |
||
10.16 | * | Amended and Restated Rentech, Inc. 2006 Incentive Award Plan (incorporated by
reference to Exhibit 10.1 to Current Report on Form 8-K filed March 29, 2007). |
||
10.17 | * | First Amendment to Rentechs Amended and Restated 2006 Incentive Award Plan
(incorporated by reference to Exhibit 10.1 to Companys Current Report on Form 8-K
filed on November 6, 2009). |
||
10.18 | * | Rentech, Inc. 2009 Incentive Award Plan (incorporated by reference to Exhibit 10.1
to Companys Current Report on Form 8-K filed on May 22, 2009). |
||
10.19 | * | First Amendment to Rentechs 2009 Incentive Award Plan (incorporated by reference
to Exhibit 10.2 to Companys Current Report on Form 8-K filed on November 6,
2009). |
||
10.20 | ** | Development Cost Sharing and Equity Option Agreement, dated May 25, 2007 by and
between Rentech, Inc. and Peabody Venture Fund, LLC (incorporated by reference to
exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
and filed on August 9, 2007). |
||
10.21 | ** | Coal Supply Agreement, dated May 25, 2007 by and between Rentech, Inc. and
COALSALES LLC (incorporated by reference to Exhibit 10.1 to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2007 and filed on August 9, 2007). |
||
10.22 | Line of Credit Agreement between Rentech, Inc. and Lehman Brothers, Inc. dated May
7, 2008 (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form
10-Q, for the quarterly period ended March 31, 2008, filed May 9, 2008). |
|||
10.23 | Credit Agreement, dated May 30, 2008, by and among Rentech Energy Midwest
Corporation, as the borrower, Rentech, Inc. and Credit Suisse, Cayman Islands
Branch, individually and as Administrative Agent and Collateral Agent
(incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed
June 5, 2008). |
|||
10.24 | Amended and Restated Credit Agreement, dated June 13, 2008, by and among Rentech
Energy Midwest Corporation, as the borrower, Rentech, Inc. and Credit Suisse,
Cayman Islands Branch, individually and as Administrative Agent and Collateral
Agent (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K
filed June 19, 2008). |
|||
10.25 | First Amendment and Waiver to Amended and Restated Credit Agreement, dated January
14, 2009 by and among Rentech Energy Midwest Corporation, as the borrower,
Rentech, Inc. and Credit Suisse, Cayman Islands Branch, individually and as
Administrative Agent and Collateral Agent (incorporated by reference to Exhibit
10.1 to Current Report on Form 8-K filed January 20, 2009). |
|||
10.26 | *** | Waiver and Amendment Letter, dated August 11, 2009 by and among Rentech Energy
Midwest Corporation, as the borrower, Rentech, Inc. and Credit Suisse, Cayman
Islands Branch, individually and as Administrative Agent and Collateral Agent. |
||
10.27 | *** | Third Amendment and Waiver to Amended and Restated Credit Agreement, dated
December 14, 2009 by and among Rentech Energy Midwest Corporation, as the
borrower, Rentech, Inc. and Credit Suisse, Cayman Islands Branch, individually and
as Administrative Agent and Collateral Agent. |
||
10.28 | Guarantee and Collateral Agreement, dated May 30, 2008, by and among Rentech
Energy Midwest Corporation, Rentech, Inc., the subsidiaries of Rentech, Inc.
listed therein and Credit Suisse, Cayman Islands Branch, as Collateral Agent
(incorporated by reference to exhibit 10.2 to Current Report on Form 8-K filed
June 5, 2008). |
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10.29 | Reaffirmation and Amendment Agreement, dated June 13, 2008, by and among Rentech
Energy Midwest Corporation, Rentech, Inc., the subsidiaries of Rentech, Inc.
listed therein and Credit Suisse, Cayman Islands Branch, as Collateral Agent
(incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed
June 19, 2008). |
|||
10.30 | Intellectual Property Security Agreement, date May 30, 2008, by and among Rentech
Energy Midwest Corporation, Rentech, Inc., the subsidiaries listed therein and
Credit Suisse, Cayman Islands Branch, as Administrative Agent and Collateral Agent
(incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed
June 5, 2008). |
|||
10.31 | * | Form of Absolute Share Price Target Performance Share Award Agreement
(incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed
July 23, 2008). |
||
10.32 | * | Form of Total Shareholder Return Performance Share Award Agreement (incorporated
by reference to Exhibit 10.2 to Current Report on Form 8-K filed July 23, 2008). |
||
10.33 | * | Form of Performance Vesting Restricted Stock Unit Agreement (incorporated by
reference to Exhibit 10.1 to Current Report on Form 8-K filed November 23, 2009). |
||
10.34 | Form of Distribution Agreement by and between Rentech Development Inc. and
Royster-Clark Resources LLC (incorporated by reference to Exhibit 10.40 to Annual
Report on Form 10-K for the year ended September 30, 2005 filed December 9,
2005).** |
|||
10.35 | *** | Amendment to the Distribution Agreement, dated October 13, 2009 among Rentech
Energy Midwest Corporation, Rentech Development Corporation and Agrium U.S., Inc. |
||
10.36 | Second
Amendment to Lease, dated January 21, 2010, by and between
Rentech, Inc. and Center West (incorporated by reference to
Exhibit 10.1 to Current Report on Form 8-K filed
January 26, 2010). |
|||
12.1 | Computation of Ratio of Earnings to Fixed Charges |
|||
14 | Code of Ethics (incorporated by reference to Exhibit 14 to Companys Annual Report
on Form 10-K for the fiscal year ended September 30, 2008 filed on December 15,
2008). |
|||
21 | *** | Subsidiaries of Rentech, Inc. |
||
23.1 | *** | Consent of Independent Registered Public Accounting Firm. |
||
23.2 | *** | Consent of Independent Registered Public Accounting Firm. |
||
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14 or Rule 15d-14(a). |
|||
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14 or Rule 15d-14(a). |
|||
32.1 | *** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. |
||
32.2 | *** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. |
* | Management contract or compensatory plan or arrangement. |
|
** | Certain portions of this Exhibit have been omitted and filed
separately under an application for confidential treatment. |
|
*** | Previously filed. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Rentech, Inc. |
||||
/s/ D. Hunt Ramsbottom | ||||
D. Hunt Ramsbottom, | ||||
Chief Executive Officer and President |
Date: January 28, 2010
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