Exhibit 10(mm)
2009 Performance Option Plan

1.   PURPOSE OF PLAN       Potash Corporation of Saskatchewan Inc. (the
“Corporation”) by resolution of its Board of Directors (the “Board”) has
established, subject to shareholder approval at the Corporation’s 2009 Annual
and Special Meeting of shareholders, this Potash Corporation of Saskatchewan
Inc. 2009 Performance Option Plan (the “Plan”) to support the Corporation’s
compensation philosophy of providing selected employees and officers with an
opportunity to: promote the growth and profitability of the Corporation; align
their interests with shareholders; and earn compensation commensurate with
corporate performance. The Corporation believes this Plan will directly assist
in supporting the Corporation’s compensation philosophy by providing
participants with the opportunity through stock options, which will vest, if at
all, based on corporate performance over a three-year period, to acquire common
shares of the Corporation (“Common Shares”).   2.   DURATION OF THIS PLAN      
This Plan was adopted by the Board on February 20, 2009 to be effective as of
January 1, 2009 (the “Effective Date”), subject to shareholder approval at the
Corporation’s 2009 Annual and Special Meeting of shareholders, and shall remain
in effect, unless sooner terminated as provided herein, until one (1) year from
the Effective Date, at which time it will terminate. After this Plan is
terminated, no stock options may be granted but stock options previously granted
shall remain outstanding in accordance with their applicable terms and
conditions and this Plan’s terms and conditions.   3.   ADMINISTRATION      
This Plan shall be administered by the Compensation Committee of the Board or
any other committee designated by the Board to administer this Plan (the
“Committee”). The Committee shall be responsible for administering this Plan,
subject to this Section 3 and the other provisions of this Plan. The Committee
may employ attorneys, consultants, accountants, agents, and other individuals,
any of whom may be an employee, and the Committee, the Corporation, and its
officers and directors shall be entitled to rely upon the advice, opinions, or
valuations of any such individuals. All actions taken and all interpretations
and determinations made by the Committee shall be made in the Committee’s sole
discretion and shall be final and binding upon the participants, the
Corporation, and all other interested individuals. To the extent applicable, the
Plan shall be administered with respect to optionees subject to the laws of the
U.S. so as to avoid the application of penalties pursuant to Section 409A of the
Internal Revenue Code, and stock options hereunder may be subject to such
restrictions as the Committee determines are necessary to avoid application of
such Section 409A.   4.   AUTHORITY OF THE COMMITTEE       The Committee shall
have full and exclusive discretionary power to interpret the terms and the
intent of this Plan and any Stock Option Award Agreement or other agreement or
document ancillary to or in connection with this Plan, to determine eligibility
for stock options and to adopt such rules, regulations, forms, instruments, and
guidelines for administering this Plan as the Committee may deem necessary or
proper. Such authority shall include adopting modifications and amendments to
any Stock Option Award Agreement that are necessary to comply with the laws of
the countries and other jurisdictions in which the Corporation and/or its
subsidiaries operate.   5.   SHARES SUBJECT TO STOCK OPTIONS       The aggregate
number of Common Shares issuable after February 20, 2009 pursuant to stock
options under this Plan may not exceed 1,000,000 Common Shares. The aggregate
number of Common Shares in respect of which stock options have been granted to
any one person pursuant to this Plan and which remain outstanding shall not at
any time exceed 250,000. The authorized limits under this Plan shall be subject
to adjustment under Sections 12 and 13.       If any stock option granted under
this Plan, or any portion thereof, expires or terminates for any reason without
having been exercised in full, the Common Shares with respect to which such
option has not been exercised shall again be

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    available for further stock options under this Plan; provided, however, that
any stock option that is granted under this Plan that does not vest as a result
of a failure to satisfy the Performance Measures, shall not be again available
for grant under this Plan.

6.   GRANT OF STOCK OPTIONS       From time to time the Board may designate
individual officers and employees of the Corporation and its subsidiaries
eligible to be granted options to purchase Common Shares and the number of
Common Shares which each such person will be granted a stock option to purchase;
provided that the aggregate number of Common Shares subject to such stock
options may not exceed the number provided for in Section 5 of this Plan.
Non-employee directors and other non-employee contractors and third party
vendors are not eligible to participate in this Plan.   7.   OPTION PRICE      
The option price for any option granted under this Plan to any optionee shall be
fixed by the Board when the option is granted and shall be not less than the
fair market value of the Common Shares at such time which, for optionees
resident in the United States and any other optionees designated by the Board,
shall be deemed to be the closing price per Common Share on the New York Stock
Exchange on the last trading day immediately preceding the day the option is
granted and, for all other optionees, shall be deemed to be the closing price
per Common Share on the Toronto Stock Exchange on the last trading day
immediately preceding the day the option is granted; provided that, in either
case, if the Common Shares did not trade on such exchange on such day the option
price shall be the closing price per share on such exchange on the last day on
which the Common Shares traded on such exchange prior to the day the option is
granted.   8.   VESTING OF STOCK OPTIONS       Subject to achievement of
Performance Measures as certified and approved by the Audit Committee of the
Board, stock options granted under this Plan will vest no later than thirty
(30) days after the audited financial statements for the applicable Performance
Period have been approved by the Board.   9.   PERFORMANCE MEASURES FOR VESTING
OF STOCK OPTIONS

  (a)   The Performance Measures which will be used to determine the degree to
which stock options will vest over the three-year period beginning the first day
of the fiscal year in which they are granted (the “Performance Period”) shall be
cash flow return on investment (“CFROI”) and weighted average cost of net debt
and equity capital (“WACC”).

  (i)   CFROI is the ratio of after tax operating cash flow to average gross
investment over the fiscal year, calculated as A divided by B, where (1) A
equals operating income less/plus nonrecurring or unusual items less/plus change
in unrealized gains/losses on derivative instruments included in net income plus
accrued incentive awards plus depreciation and amortization less current taxes,
and (2) B equals the average of total assets less/plus the fair value adjustment
for investments in available for sale securities less the fair value of
derivative instrument assets plus accumulated depreciation plus accumulated
amortization less cash and cash equivalents less non interest bearing current
liabilities excluding derivatives.     (ii)   WACC is the weighted average cost
of net debt and equity capital, calculated as [A times the product of B divided
by C] plus [D times the product of E divided by C], where (1) A equals the
after-tax market yield cost of debt, (2) B equals the market value of debt less
cash and cash equivalents (3) C equals the market value of debt less cash and
cash equivalents, plus the market value of equity, (4) D equals the cost of
equity, and (5) E equals the market value of equity.

  (b)   In determining the number of stock options that will actually vest based
on the degree to which the Performance Measures have been attained during the
applicable Performance Period, the following chart shall be utilized which shows
the three year average excess of CFROI being greater than WACC and the
respective portion of the stock option that will vest:

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      Performance Measure   Vesting Scale 3 year average excess of   % of Stock
Option CFROI > WACC   Grant Vesting <0%   0% 0.20%   30% 1.20%   70% 2.20%   90%
2.50%   100%

  (c)   In assessing the portion of the stock options that shall vest in
accordance with the above chart, the following shall be done:

  (i)   Each year, the CFROI and WACC will be calculated in accordance with the
definitions herein, based on the audited financial statements and approved by
the Audit Committee.     (ii)   In each Performance Period, the average of the
three fiscal years shall be calculated by taking the simple average of the
individual years’ results.     (iii)   The resulting three-year average will
then be applied, using the scale above to determine the number of stock options,
if any, that will vest as of the end of the Performance Period.     (iv)   For
results falling between the reference points in the chart above, the level of
vesting shall be mathematically interpolated between the reference points.

10.   TERMS OF STOCK OPTIONS       The period during which a stock option is
exercisable (the “Term”) may not exceed 10 years from the date the stock option
is granted (the “Initial Exercise Period”), plus any Additional Exercise Period
(as defined below). If such Initial Exercise Period would otherwise expire
(i) during a Blackout Period (as defined below) applicable to the relevant
optionee or (ii) within 10 trading days after the expiration of the Blackout
Period applicable to the relevant optionee, the Term of the related stock option
shall expire on the date that is the tenth trading day after the end of such
Blackout Period (an “Additional Exercise Period”). For purposes of this Plan,
“Blackout Period” means any period during which the relevant optionee is
prohibited by the Corporation’s trading policy from trading in the Corporation’s
securities. The Stock Option Award Agreement may contain provisions limiting the
number of Common Shares with respect to which stock options may be exercised in
any one year. Each stock option agreement shall contain provisions to the effect
that:

  (a)   if the employment of an optionee as an officer or employee of the
Corporation or a subsidiary terminates, by reason of his or her death, or if an
optionee who is a retiree pursuant to Section 10(b) dies, the legal personal
representatives of the optionee will be entitled to exercise any unexercised
vested options, including such stock options that may vest after the date of
death, during the period ending at the end of the twelfth calendar month
following the calendar month in which the optionee dies, failing which exercise
the stock options terminate;     (b)   subject to the terms of Section 10(a)
above, if the employment of an optionee as an officer or employee of the
Corporation or a subsidiary terminates, by reason of retirement in accordance
with the then prevailing retirement policy of the Corporation or subsidiary, the
optionee will be entitled to exercise any unexercised vested stock options,
including such stock options that may vest after the date of retirement, during
the period ending at the end of the 36th month following the calendar month in
which the optionee retires, failing which exercise the stock options terminate;
    (c)   subject to the terms of Section 14 below, if the employment of an
optionee as an officer or employee of the Corporation or a subsidiary
terminates, for any reason other than as provided in Sections 10(a) or (b), the
optionee will be entitled to exercise any unexercised vested stock options, to
the extent exercisable at the date of such event, during the period ending at
the end of the calendar month immediately following the calendar month in which
the event occurs, failing which exercise the stock options terminate;

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  (d)   for greater certainty and for these purposes, an optionee’s employment
with the Corporation or a subsidiary shall be considered to have terminated
effective on the last day of the optionee’s actual and active employment with
the Corporation or subsidiary whether such day is selected by agreement with the
optionee or unilaterally by the Corporation or subsidiary and whether with or
without advance notice to the optionee. For the avoidance of doubt, no period of
notice that is given or ought to have been given under applicable law in respect
of such termination of employment will be utilized in determining an optionee’s
entitlement under the Plan. The employment of an optionee with the Corporation
shall be deemed to have terminated for all purposes of the Plan if such person
is employed by or provides services to a person that is a subsidiary of the
Corporation and such person ceases to be a subsidiary of the Corporation, unless
the Committee determines otherwise; and     (e)   each stock option is personal
to the optionee and is not assignable, except (i) as provided in Section 10(a),
and (ii) at the election of the Board, a stock option may be assignable to the
spouse, children and grandchildren of the original optionee and to a trust,
partnership or limited liability company, the entire beneficial interest of
which is held by one or more of the foregoing.

    Nothing contained in Sections 10(a), (b) or (c) shall extend the Term beyond
its stipulated expiration date or the date on which it is otherwise terminated
in accordance with the provisions of this Plan.       If a stock option is
assigned pursuant to Section 10(e)(ii), the references in Sections 10(a),
(b) and (c) to the termination of employment or death of an optionee shall not
relate to the assignee of a stock option but shall relate to the original
optionee. In the event of such assignment, legal personal representatives of the
original optionee shall not be entitled to exercise the assigned stock option,
but the assignee of the stock option or the legal personal representatives of
the assignee may exercise the stock option during the applicable specified
period.   11.   EXERCISE OF STOCK OPTIONS       Subject to the provisions of
this Plan, a vested stock option may be exercised from time to time by
delivering to the Corporation at its registered office a written notice of
exercise specifying the number of Common Shares with respect to which the stock
option is being exercised and accompanied by payment in cash or certified cheque
in full of the purchase price of the Common Shares then being purchased.   12. 
  ADJUSTMENTS       Appropriate adjustments to the authorized limits set forth
in Section 5, in the number, class and/or type of Common Shares optioned and in
the option price per share, both as to stock options granted or to be granted,
shall be made by the Board to give effect to adjustments in the number of Common
Shares which result from subdivisions, consolidations or reclassifications of
the Common Shares, the payment of share dividends by the Corporation, the
reconstruction, reorganization or recapitalization of the Corporation or other
relevant changes in the capital of the Corporation.   13.    MERGERS       If
the Corporation proposes to amalgamate or merge with another body corporate, the
Corporation shall give written notice thereof to optionees in sufficient time to
enable them to exercise outstanding vested stock options, to the extent they are
otherwise exercisable by their terms, prior to the effective date of such
amalgamation or merger if they so elect. The Corporation shall use its best
efforts to provide for the reservation and issuance by the amalgamated or
continuing corporation of an appropriate number of Common Shares, with
appropriate adjustments, so as to give effect to the continuance of the stock
options to the extent reasonably practicable. In the event that the Board
determines in good faith that such continuance is not in the circumstances
practicable, it may upon 30 days’ notice to optionees terminate the stock
options.   14.    CIRCUMSTANCES FOR ACCELERATED VESTING       If a “change of
control” of the Corporation occurs and at least one of the two additional
circumstances described below occurs, each then outstanding stock option granted
under this Plan may be exercised, in whole or in part, even if such option is
not otherwise exercisable by its terms.

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  (a)   Additional circumstances include:

  (i)   Upon a “change of control” the potential successor fails to assume the
obligations with respect to each option or fails to convert or replace the
options with equivalent options; or     (ii)   During the two-year period
following the effective date of a change of control, the optionee is terminated
without Cause (as defined below) or the optionee resigns employment for Good
Reason (as defined below).

  (b)   For purposes of this Plan, a change of control of the Corporation shall
be deemed to have occurred if any of the following occur, unless the Board
adopts a plan after the Effective Date of this Plan that has a different
definition (in which case such definition shall be applied), or the Committee
decides to modify or amend the following definition through an amendment of this
Plan:

  (i)   within any period of two consecutive years, individuals who at the
beginning of such period constituted the Board and any new directors whose
appointment by the Board or nomination for election by shareholders of the
Corporation was approved by a vote of at least a majority of the directors then
still in office who either were directors at the beginning of the period or
whose appointment or nomination for election was previously so approved, cease
for any reason to constitute a majority of the Board;     (ii)   there occurs an
amalgamation, merger, consolidation, wind-up, reorganization or restructuring of
the Corporation with or into any other entity, or a similar event or series of
such events, other than any such event or series of events which results in
securities of the surviving or consolidated corporation representing 50% or more
of the combined voting power of the surviving or consolidated corporation’s then
outstanding securities entitled to vote in the election of directors of the
surviving or consolidated corporation being beneficially owned, directly or
indirectly, by the persons who were the holders of the Corporation’s outstanding
securities entitled to vote in the election of directors of the Corporation
prior to such event or series of events in substantially the same proportions as
their ownership immediately prior to such event of the Corporation’s then
outstanding securities entitled to vote in the election of directors of the
Corporation;     (iii)   50% or more of the fixed assets (based on book value as
shown on the most recent available audited annual or unaudited quarterly
consolidated financial statements) of the Corporation are sold or otherwise
disposed of (by liquidation, dissolution, dividend or otherwise) in one
transaction or series of transactions within any twelve month period;     (iv)  
any party, including persons acting jointly or in concert with that party,
becomes (through a take-over bid or otherwise) the beneficial owner, directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation’s then outstanding securities entitled
to vote in the election of directors of the Corporation, unless in any
particular situation the Board determines in advance of such event that such
event shall not constitute a change of control; or     (v)   the Board approves
and/or recommends that shareholders accept, approve or adopt any transaction
that would constitute a change of control under clause (ii), (iii) or (iv) of
this Section 14(b) and determines that the change of control resulting from such
transaction will be deemed to have occurred as of a specified date earlier than
the date under (ii), (iii) or (iv), as applicable.

  (c)   For purposes of this Plan, “Cause” means dishonest or willful misconduct
or lack of good faith resulting in material harm to the Corporation, financial
or otherwise.     (d)   For purposes of this Plan, “Good Reason” means:

  (i)   a substantial diminution in the optionee’s authorities, duties,
responsibilities, status (including offices, titles, and reporting requirements)
from those in effect immediately prior to the change of control;     (ii)   the
Corporation requires the optionee to be based at a location in excess of fifty
(50) miles from the location of the optionee’s principal job location or office
immediately prior to the change of control, except for required travel on
Corporation business to an extent substantially consistent with the optionee’s
business obligations immediately prior to the change of control;     (iii)   a
reduction in the optionee’s base salary, or a substantial reduction in
optionee’s target compensation under any incentive compensation plan, as in
effect as of the date of the change of control;

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  (iv)   the failure to increase the optionee’s base salary in a manner
consistent (both as to frequency and percentage increase) with practices in
effect immediately prior to the change of control or with practices implemented
subsequent to the change of control with respect to similarly positioned
employees; or     (v)   the failure of the Corporation to continue in effect the
optionee’s participation in the Corporation’s short- and long-tem incentive
plans, stock option plans, and employee benefit and retirement plans, policies
or practices, at a level substantially similar or superior to and on a basis
consistent with the relative levels of participation of other
similarly-positioned employees, as existed immediately prior to the change of
control.

    A termination of employment by the optionee for one of the reasons set forth
in clause (i), (ii), (iii), (iv) or (v) of this Section 14(d), will not
constitute Good Reason unless, within the 30-day period immediately following
the occurrence of such Good Reason event, the optionee has given written notice
to the Corporation of the event relied upon for such termination and the
Corporation has not remedied such event within 30 days (the “Cure Period”) of
the receipt of such notice. For the avoidance of doubt, the optionee’s
employment shall not be deemed to terminate for Good Reason unless and until the
Cure Period has expired and the Corporation has not remedied the applicable Good
Reason event. The Corporation and the optionee may mutually waive in writing any
of the foregoing provisions with respect to an event that otherwise would
constitute Good Reason.   15.    RECOUPMENT POLICY       Each stock option
granted under this Plan to an optionee that, as of the date the option is
granted, participates in the Corporation’s Medium-Term Incentive Plan shall be
subject to the terms and conditions of the Corporation’s Policy on Recoupment of
Unearned Compensation (as previously adopted and, from time to time, amended by
the Board) attached to such optionee’s Stock Option Award Agreement (as defined
below).   16.    AMENDMENT OR DISCONTINUANCE OF THIS PLAN       The Board may
amend or discontinue the Plan at any time, without obtaining the approval of
shareholders of the Corporation unless required by the relevant rules of the
Toronto Stock Exchange, provided that, subject to Sections 12, 13, and 14, no
such amendment may increase the aggregate maximum number of Common Shares that
may be subject to stock options under this Plan, change the manner of
determining the minimum option price, extend the Term under any option beyond
10 years (plus any Additional Exercise Period) or the date on which the option
would otherwise expire under the Plan, expand the assignment provisions of the
Plan, permit non-employee directors to participate in the Plan or, without the
consent of the holder of the option, alter or impair any option previously
granted to an optionee under this Plan; and, provided further, for greater
certainty, that, without the prior approval of the Corporation’s shareholders,
stock options issued under this Plan shall not be repriced, replaced, or
regranted through cancellation, or by lowering the option price of a previously
granted stock option. Pre-clearance of the Toronto Stock Exchange of amendments
to the Plan will be required to the extent provided under the relevant rules of
the Toronto Stock Exchange.   17.    EVIDENCE OF STOCK OPTIONS       Each stock
option granted under this Plan shall be evidenced by a written stock option
agreement between the Corporation and the optionee which shall give effect to
the provisions of this Plan and include such other terms as the Committee shall
determine (“Stock Option Award Agreement”).   18.    WITHHOLDING       To the
extent that the Corporation is required to withhold federal, provincial, state,
local or foreign taxes in connection with any payment made or benefit realized
by an optionee or other person hereunder, and the amounts available to the
Corporation for such withholding are insufficient, it shall be a condition to
the receipt of such payment or the realization of such benefit that the optionee
or such other person make arrangements satisfactory to the Corporation for
payment of the balance of such taxes required to be withheld, which arrangements
(in the discretion of the Board) may include relinquishment of a portion of such
benefit. Participants shall also make such arrangements in connection with the
disposition of Common Shares acquired upon the exercise of option rights with
respect to this Plan.

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(IMAGE) [o55074o5507401.gif] Potash Corporation of Saskatchewan Inc.
This certificate evidences and confirms the grant to
                                         (the “Optionee”) of options to purchase
the number of Common Shares of the Corporation specified under Paragraph (1) on
the terms and subject to the conditions of the Potash Corporation of
Saskatchewan Inc. 2009 Performance Option Plan (the “2009 Plan”) and the terms
and conditions set forth below. In the event of any inconsistency between the
terms of the 2009 Plan and those set forth below, the terms of the 2009 Plan
shall control. Capitalized terms used below that are not defined in this
certificate shall have the meanings specified in the 2009 Plan.

  1.   Number of Shares: The Optionee is hereby granted options under the 2009
Plan to Purchase                      Common Shares.     2.   Option Exercise
Price: The exercise price for each Common Share is                     .     3.
  Time and Conditions to Vesting: The options will become vested following the
end of the Performance Period January 1, 2009 through December 31, 2011 if, and
to the extent, the applicable Performance Measures for the Performance Period
are achieved. Subject to applicable conditions under the 2009 Plan with respect
to continued employment during the Performance Period and achievement of the
minimum Performance Measures, the date for vesting will be determined but will
not be later than 30 days after the audited financial statements of the
Corporation for the 2011 fiscal year of the Corporation have been approved by
the Board. Upon vesting, the Optionee will have the right to purchase a number
of Common Shares covered by the option equal to the percentage determined in
accordance with the performance matrix and vesting scale provided under the 2009
Plan.     4.   Once vested, the options will continue to be exercisable until
the expiry date for the options of May 7, 2019.     5.   Notwithstanding the
provisions of paragraph 4 above, this option will terminate as provided in
paragraph 10 of the 2009 Plan in the event that the actual and active employment
of the Optionee ceases. The option is personal to the Optionee and is not
assignable, except in accordance with the conditions attached hereto as
Appendix I.     6.   Notice of exercise of the option is to be given in
accordance with paragraph 11 of the 2009 Plan.     7.   Adjustments to the
option may be made as provided in paragraph 12 of the 2009 Plan, the provisions
of paragraph 13 of the 2009 Plan shall apply in the event of a proposed
amalgamation or merger of the Corporation, and the provisions of paragraph 14 of
the 2009 Plan will apply in the event of a “change of control” of the
Corporation as defined in that paragraph.     8.   This grant of option is
subject to receipt of any necessary regulatory approvals and shall be governed
by the laws of Saskatchewan.

              Potash Corporation of Saskatchewan Inc.  
Date: May 7, 2009
  By:    
 
      President and Chief Executive Officer

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Potash Corporation of Saskatchewan Inc.
2009 Performance Option Plan
1. PURPOSE OF PLAN. Potash Corporation of Saskatchewan Inc. (the “Corporation”)
by resolution of its Board of Directors (the “Board”) has established, subject
to shareholder approval at the Corporation’s 2009 Annual and Special Meeting of
shareholders, this Potash Corporation of Saskatchewan Inc. 2009 Performance
Option Plan (the “Plan”) to support the Corporation’s compensation philosophy of
providing selected employees and officers with an opportunity to: promote the
growth and profitability of the Corporation; align their interests with
shareholders; and earn compensation commensurate with corporate performance. The
Corporation believes this Plan will directly assist in supporting the
Corporation’s compensation philosophy by providing participants with the
opportunity through stock options, which will vest, if at all, based on
corporate performance over a three-year period, to acquire common shares of the
Corporation (“Common Shares”).
2. DURATION OF THIS PLAN. This Plan was adopted by the Board on February 20,
2009 to be effective as of January 1, 2009 (the “Effective Date”), subject to
shareholder approval at the Corporation’s 2009 Annual and Special Meeting of
shareholders, and shall remain in effect, unless sooner terminated as provided
herein, until one (1) year from the Effective Date, at which time it will
terminate. After this Plan is terminated, no stock options may be granted but
stock options previously granted shall remain outstanding in accordance with
their applicable terms and conditions and this Plan’s terms and conditions.
3. ADMINISTRATION. This Plan shall be administered by the Compensation Committee
of the Board or any other committee designated by the Board to administer this
Plan (the “Committee”). The Committee shall be responsible for administering
this Plan, subject to this Section 3 and the other provisions of this Plan. The
Committee may employ attorneys, consultants, accountants, agents, and other
individuals, any of whom may be an employee, and the Committee, the Corporation,
and its officers and directors shall be entitled to rely upon the advice,
opinions, or valuations of any such individuals. All actions taken and all
interpretations and determinations made by the Committee shall be made in the
Committee’s sole discretion and shall be final and binding upon the
participants, the Corporation, and all other interested individuals. To the
extent applicable, the Plan shall be administered with respect to optionees
subject to the laws of the U.S. so as to avoid the application of penalties
pursuant to Section 409A of the Internal Revenue Code, and stock options
hereunder may be subject to such restrictions as the Committee determines are
necessary to avoid application of such Section 409A.
4. AUTHORITY OF THE COMMITTEE. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of this Plan and any
Stock Option Award Agreement or other agreement or document ancillary to or in
connection with this Plan, to determine eligibility for stock options and to
adopt such rules, regulations, forms, instruments, and guidelines for
administering this Plan as the Committee may deem necessary or proper. Such
authority shall include adopting modifications and amendments to any Stock
Option Award Agreement that are necessary to comply with the laws of the
countries and other jurisdictions in which the Corporation and/or its
subsidiaries operate.
5. SHARES SUBJECT TO STOCK OPTIONS. The aggregate number of Common Shares
issuable after February 20, 2009 pursuant to stock options under this Plan may
not exceed 1,000,000 Common Shares. The aggregate number of Common Shares in
respect of which stock options have been granted to any one person pursuant to
this Plan and which remain outstanding shall not at any time exceed 250,000. The
authorized limits under this Plan shall be subject to adjustment under
Sections 12 and 13.
     If any stock option granted under this Plan, or any portion thereof,
expires or terminates for any reason without having been exercised in full, the
Common Shares with respect to which such option has not been exercised shall
again be available for further stock options under this Plan; provided, however,
that any stock option that is granted under this Plan that does not vest as a
result of a failure to satisfy the Performance Measures, shall not be again
available for grant under this Plan.
6. GRANT OF STOCK OPTIONS. From time to time the Board may designate individual
officers and employees of the Corporation and its subsidiaries eligible to be
granted options to purchase Common Shares and the number of Common Shares which
each such person will be granted a stock option to purchase; provided that the
aggregate number of Common Shares subject to such stock options may not exceed
the number provided for in Section 5 of this Plan. Non-employee directors and
other non-employee contractors and third party vendors are not eligible to
participate in this Plan.
7. OPTION PRICE. The option price for any option granted under this Plan to any
optionee shall be fixed by the Board when the option is granted and shall be not
less than the fair market value of the Common Shares at such time which, for
optionees resident in the United States and any other optionees designated by
the Board, shall be deemed to be the closing price per Common Share on the New
York Stock Exchange on the last trading day immediately preceding the day the
option is granted and, for all other optionees, shall be deemed to be the
closing price per Common Share on the Toronto Stock Exchange on the last trading
day immediately preceding the day the option is granted; provided that, in
either case, if the Common Shares did not trade on such exchange on such day the
option price shall be the closing price per share on such exchange on the last
day on which the Common Shares traded on such exchange prior to the day the
option is granted.
8. VESTING OF STOCK OPTIONS. Subject to achievement of Performance Measures as
certified and approved by the Audit Committee of the Board, stock options
granted under this Plan will vest no later than thirty (30) days after the
audited financial statements for the applicable Performance Period have been
approved by the Board.
9. PERFORMANCE MEASURES FOR VESTING OF STOCK OPTIONS.
(a) The Performance Measures which will be used to determine the degree to which
stock options will vest over the three-year period beginning the first day of
the fiscal year in which they are granted (the “Performance Period”) shall be
cash flow return on investment (“CFROI”) and weighted average cost of net debt
and equity capital (“WACC”).
(i) CFROI is the ratio of after tax operating cash flow to average gross
investment over the fiscal year, calculated as A divided by B, where (1) A
equals operating income less/plus nonrecurring or unusual items less/plus change
in unrealized gains/losses on derivative instruments included in net income plus
accrued incentive awards plus depreciation and amortization less current taxes,
and (2) B equals the average of total assets less/plus the fair value adjustment
for investments in available for sale securities less the fair value of
derivative instrument assets plus accumulated depreciation plus accumulated
amortization less cash and cash equivalents less non interest bearing current
liabilities excluding derivatives.
(ii) WACC is the weighted average cost of net debt and equity capital,
calculated as [A times the product of B divided by C] plus [D times the product
of E divided by C], where (1) A equals the after-tax market yield cost of debt,
(2) B equals the market value of debt less cash and cash equivalents (3) C
equals the market value of debt less cash and cash equivalents, plus the market
value of equity, (4) D equals the cost of equity, and (5) E equals the market
value of equity.
(b) In determining the number of stock options that will actually vest based on
the degree to which the Performance Measures have been attained during the
applicable Performance Period, the following chart shall be utilized which shows
the three year average excess of CFROI being greater than WACC and the
respective portion of the stock option that will vest:

      Performance Measure   Vesting Scale 3 year average excess of   % of Stock
Option CFROI > WACC   Grant Vesting <0%   0% 0.20%   30% 1.20%   70% 2.20%   90%
2.50%   100%

(c) In assessing the portion of the stock options that shall vest in accordance
with the above chart, the following shall be done:
(i) Each year, the CFROI and WACC will be calculated in accordance with the
definitions herein, based on the audited financial statements and approved by
the Audit Committee.
(ii) In each Performance Period, the average of the three fiscal years shall be
calculated by taking the simple average of the individual years’ results.
(iii) The resulting three-year average will then be applied, using the scale
above to determine the number of stock options, if any, that will vest as of the
end of the Performance Period.
(iv) For results falling between the reference points in the chart above, the
level of vesting shall be mathematically interpolated between the reference
points.
10. TERMS OF STOCK OPTIONS. The period during which a stock option is
exercisable (the “Term”) may not exceed 10 years from the date the stock option
is granted (the “Initial Exercise Period”), plus any Additional Exercise Period
(as defined below). If such Initial Exercise Period would otherwise expire
(i) during a Blackout Period (as defined below) applicable to the relevant
optionee or (ii) within 10 trading days after the expiration of the Blackout
Period applicable to the relevant optionee, the Term of the related stock option
shall expire on the date that is the tenth trading day after the end of such
Blackout Period (an “Additional Exercise Period”). For purposes of this Plan,
“Blackout Period” means any period during which the relevant optionee is
prohibited by the Corporation’s trading policy from trading in the Corporation’s
securities. The Stock Option Award Agreement may contain provisions limiting the
number of Common Shares with respect to which stock options may be exercised in
any one year. Each stock option agreement shall contain provisions to the effect
that:
(a) if the employment of an optionee as an officer or employee of the
Corporation or a subsidiary terminates, by reason of his or her death, or if an
optionee who is a retiree pursuant to Section 10(b) dies, the legal personal
representatives of the optionee will be entitled to exercise any unexercised
vested options, including such stock options that may vest after the date of
death, during the period ending at the end of the twelfth calendar month
following the calendar month in which the optionee dies, failing which exercise
the stock options terminate;
(b) subject to the terms of Section 10(a) above, if the employment of an
optionee as an officer or employee of the Corporation or a subsidiary
terminates, by reason of retirement in accordance with the then prevailing
retirement policy of the Corporation or subsidiary, the optionee will be
entitled to exercise any unexercised vested stock options, including such stock
options that may vest after the date of retirement, during the period ending at
the end of the 36th month following the calendar month in which the optionee
retires, failing which exercise the stock options terminate;
(c) subject to the terms of Section 14 below, if the employment of an optionee
as an officer or employee of the Corporation or a subsidiary terminates, for any
reason other than as provided in Sections 10(a) or (b), the optionee will be
entitled to exercise any unexercised vested stock options, to the extent
exercisable at the date of such event, during the period ending at the end of
the calendar month immediately following the calendar month in which the event
occurs, failing which exercise the stock options terminate;
(d) for greater certainty and for these purposes, an optionee’s employment with
the Corporation or a subsidiary shall be considered to have terminated effective
on the last day of the optionee’s actual and active employment with the
Corporation or subsidiary whether such day is selected by agreement with the
optionee or unilaterally by the Corporation or subsidiary and whether with or
without advance notice to the optionee. For the avoidance of doubt, no period of
notice that is given or ought to have been given under applicable law in respect
of such termination of employment will be utilized in determining an optionee’s
entitlement under the Plan. The employment of an optionee with the Corporation
shall be deemed to have terminated for all purposes of the Plan if such person
is employed by or provides services to a person that is a subsidiary of the
Corporation and such person ceases to be a subsidiary of the Corporation, unless
the Committee determines otherwise;  and
(e) each stock option is personal to the optionee and is not assignable, except
(i) as provided in Section 10(a), and (ii) at the election of the Board, a stock
option may be assignable to the spouse, children and grandchildren of the
original optionee and to a trust, partnership or limited liability company, the
entire beneficial interest of which is held by one or more of the foregoing.
Nothing contained in Sections 10(a), (b) or (c) shall extend the Term beyond its
stipulated expiration date or the date on which it is otherwise terminated in
accordance with the provisions of this Plan.
If a stock option is assigned pursuant to Section 10(e)(ii), the references in
Sections 10(a), (b) and (c) to the termination of employment or death of an
optionee shall not relate to the assignee of a stock option but shall relate to
the original optionee. In the event of such assignment, legal personal
representatives of the original optionee shall not be entitled to exercise the
assigned stock option, but the assignee of the stock option or the legal
personal representatives of the assignee may exercise the stock option during
the applicable specified period.
11. EXERCISE OF STOCK OPTIONS. Subject to the provisions of this Plan, a vested
stock option may be exercised from time to time by delivering to the Corporation
at its registered office a written notice of exercise specifying the number of
Common Shares with respect to which the stock option is being exercised and
accompanied by payment in cash or certified cheque in full of the purchase price
of the Common Shares then being purchased.
12. ADJUSTMENTS. Appropriate adjustments to the authorized limits set forth in
Section 5, in the number, class and/or type of Common Shares optioned and in the
option price per share, both as to stock options granted or to be granted, shall
be made by the Board to give effect to adjustments in the number of Common
Shares which result from subdivisions, consolidations or reclassifications of
the Common Shares, the payment of share dividends by the Corporation, the
reconstruction, reorganization or recapitalization of the Corporation or other
relevant changes in the capital of the Corporation.
13. MERGERS. If the Corporation proposes to amalgamate or merge with another
body corporate, the Corporation shall give written notice thereof to optionees
in sufficient time to enable them to exercise outstanding vested stock options,
to the extent they are otherwise exercisable by their terms, prior to the
effective date of such amalgamation or merger if they so elect. The Corporation
shall use its best efforts to provide for the reservation and issuance by the
amalgamated or continuing corporation of an appropriate number of Common Shares,
with appropriate adjustments, so as to give effect to the continuance of the
stock options to the extent reasonably practicable. In the event that the Board
determines in good faith that such continuance is not in the circumstances
practicable, it may upon 30 days’ notice to optionees terminate the stock
options.
14. CIRCUMSTANCES FOR ACCELERATED VESTING. If a “change of control” of the
Corporation occurs and at least one of the two additional circumstances
described below occurs, each then outstanding stock option granted under this
Plan may be exercised, in whole or in part, even if such option is not otherwise
exercisable by its terms:
(a) Additional circumstances include:
(i) Upon a “change of control” the potential successor fails to assume the
obligations with respect to each option or fails to convert or replace the
options with equivalent options; or
(ii) During the two-year period following the effective date of a change of
control, the optionee is terminated without Cause (as defined below) or the
optionee resigns employment for Good Reason (as defined below).
(b) For purposes of this Plan, a change of control of the Corporation shall be
deemed to have occurred if any of the following occur, unless the Board adopts a
plan after the Effective Date of this Plan that has a different definition (in
which case such definition shall be applied), or the Committee decides to modify
or amend the following definition through an amendment of this Plan:
(i) within any period of two consecutive years, individuals who at the beginning
of such period constituted the Board and any new directors whose appointment by
the Board or nomination for election by shareholders of the Corporation was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of the period or whose appointment or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board;
(ii) there occurs an amalgamation, merger, consolidation, wind-up,
reorganization or restructuring of the Corporation with or into any other
entity, or a similar event or series of such events, other than any such event
or series of events which results in securities of the surviving or consolidated
corporation representing 50% or more of the combined voting power of the
surviving or consolidated corporation’s then outstanding securities entitled to
vote in the election of directors of the surviving or consolidated corporation
being beneficially owned, directly or indirectly, by the persons who were the
holders of the Corporation’s outstanding securities entitled to vote in the
election of directors of the Corporation prior to such event or series of events
in substantially the same proportions as their ownership immediately prior to
such event of the Corporation’s then outstanding securities entitled to vote in
the election of directors of the Corporation;
(iii) 50% or more of the fixed assets (based on book value as shown on the most
recent available audited annual or unaudited quarterly consolidated financial
statements) of the Corporation are sold or otherwise disposed of (by
liquidation, dissolution, dividend or otherwise) in one transaction or series of
transactions within any twelve month period;
(iv) any party, including persons acting jointly or in concert with that party,
becomes (through a take-over bid or otherwise) the beneficial owner, directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation’s then outstanding securities entitled
to vote in the election of directors of the Corporation, unless in any
particular situation the Board determines in advance of such event that such
event shall not constitute a change of control; or
(v) the Board approves and/or recommends that shareholders accept, approve or
adopt any transaction that would constitute a change of control under clause
(ii), (iii) or (iv) of this Section 14(b) and determines that the change of
control resulting from such transaction will be deemed to have occurred as of a
specified date earlier than the date under (ii), (iii) or (iv), as applicable.
(c) For purposes of this Plan, “Cause” means dishonest or willful misconduct or
lack of good faith resulting in material harm to the Corporation, financial or
otherwise.
(d) For purposes of this Plan, “Good Reason” means:
(i) a substantial diminution in the optionee’s authorities, duties,
responsibilities, status (including offices, titles, and reporting requirements)
from those in effect immediately prior to the change of control;
(ii) the Corporation requires the optionee to be based at a location in excess
of fifty (50) miles from the location of the optionee’s principal job location
or office immediately prior to the change of control, except for required travel
on Corporation business to an extent substantially consistent with the
optionee’s business obligations immediately prior to the change of control;
(iii) a reduction in the optionee’s base salary, or a substantial reduction in
optionee’s target compensation under any incentive compensation plan, as in
effect as of the date of the change of control;
(iv) the failure to increase the optionee’s base salary in a manner consistent
(both as to frequency and percentage increase) with practices in effect
immediately prior to the change of control or with practices implemented
subsequent to the change of control with respect to similarly positioned
employees; or
(v) the failure of the Corporation to continue in effect the optionee’s
participation in the Corporation’s short- and long-tem incentive plans, stock
option plans, and employee benefit and retirement plans, policies or practices,
at a level substantially similar or superior to and on a basis consistent with
the relative levels of participation of other similarly-positioned employees, as
existed immediately prior to the change of control.
A termination of employment by the optionee for one of the reasons set forth in
clause (i), (ii), (iii), (iv) or (v) of this Section 14(d), will not constitute
Good Reason unless, within the 30-day period immediately following the
occurrence of such Good Reason event, the optionee has given written notice to
the Corporation of the event relied upon for such termination and the
Corporation has not remedied such event within 30 days (the “Cure Period”) of
the receipt of such notice. For the avoidance of doubt, the optionee’s
employment shall not be deemed to terminate for Good Reason unless and until the
Cure Period has expired and the Corporation has not remedied the applicable Good
Reason event. The Corporation and the optionee may mutually waive in writing any
of the foregoing provisions with respect to an event that otherwise would
constitute Good Reason.
15. RECOUPMENT POLICY Each stock option granted under this Plan to an optionee
that, as of the date the option is granted, participates in the Corporation’s
Medium-Term Incentive Plan shall be subject to the terms and conditions of the
Corporation’s Policy on Recoupment of Unearned Compensation (as previously
adopted and, from time to time, amended by the Board) attached to such
optionee’s Stock Option Award Agreement (as defined below).
16. AMENDMENT OR DISCONTINUANCE OF THIS PLAN. The Board may amend or discontinue
the Plan at any time, without obtaining the approval of shareholders of the
Corporation unless required by the relevant rules of the Toronto Stock Exchange,
provided that, subject to Sections 12, 13, and 14, no such amendment may
increase the aggregate maximum number of Common Shares that may be subject to
stock options under this Plan, change the manner of determining the minimum
option price, extend the Term under any option beyond 10 years (plus any
Additional Exercise Period) or the date on which the option would otherwise
expire under the Plan, expand the assignment provisions of the Plan, permit
non-employee directors to participate in the Plan or, without the consent of the
holder of the option, alter or impair any option previously granted to an
optionee under this Plan; and, provided further, for greater certainty, that,
without the prior approval of the Corporation’s shareholders, stock options
issued under this Plan shall not be repriced, replaced, or regranted through
cancellation, or by lowering the option price of a previously granted stock
option. Pre-clearance of the Toronto Stock Exchange of amendments to the Plan
will be required to the extent provided under the relevant rules of the Toronto
Stock Exchange.
17. EVIDENCE OF STOCK OPTIONS. Each stock option granted under this Plan shall
be evidenced by a written stock option agreement between the Corporation and the
optionee which shall give effect to the provisions of this Plan and include such
other terms as the Committee shall determine (“Stock Option Award Agreement”).
18. WITHHOLDING. To the extent that the Corporation is required to withhold
federal, provincial, state, local or foreign taxes in connection with any
payment made or benefit realized by an optionee or other person hereunder, and
the amounts available to the Corporation for such withholding are insufficient,
it shall be a condition to the receipt of such payment or the realization of
such benefit that the optionee or such other person make arrangements
satisfactory to the Corporation for payment of the balance of such taxes
required to be withheld, which arrangements (in the discretion of the Board) may
include relinquishment of a portion of such benefit. Participants shall also
make such arrangements in connection with the disposition of Common Shares
acquired upon the exercise of option rights with respect to this Plan.