Exhibit 10(bb)
THE POTASH CORPORATION OF SASKATCHEWAN INC.
DEFERRED SHARE UNIT PLAN FOR NON-EMPLOYEE DIRECTORS

Section 1   Purpose

The Potash Corporation of Saskatchewan Inc. Deferred Share Unit Plan for
Non-Employee Directors (the “Plan”) is intended to enhance the Corporation’s
ability to attract and retain highly qualified individuals to serve as members
of the Board and to promote a greater alignment of interests between
non-employee members of the Board and the shareholders of the Corporation.

Section 2   Definitions

In this Plan, the following expressions shall have the following meanings:

  (a)   Aggregate Purchase Price” has the meaning assigned thereto in Section 8
hereof;     (b)   “Agreement” means the agreement, in the form recommended by
the Committee and as approved by the Board, as it may be amended from time to
time, entered into by the Corporation and an Eligible Director pursuant to
Section 6 hereof in connection with all of the Share Units which shall be
credited to a Participant’s account under the Plan and setting forth the related
rights and obligations of the Corporation and of the Eligible Director;     (c)
  “Annual Retainer Fee” means the amount, expressed in dollars, of the annual
retainer fee which would, but for the Plan, be payable in cash by the
Corporation to an Eligible Director for one year of service as a member of the
Board, beginning on the date of the annual general meeting of the Corporation at
which an Eligible Director is elected and ending on the date immediately
preceding the date of the following annual general meeting of the Corporation,
and for greater certainty, Annual Retainer Fee shall exclude any other fee which
may be payable by the Corporation to the Eligible Director.     (d)   “Board”
means the Board of Directors of the Corporation;     (e)   “Broker” means a
broker who is independent from the Corporation and who is a member of the stock
exchange which is relevant for determining the value of the Share Units;     (f)
  “Committee” means the committee of directors of the Corporation generally
responsible for compensation related matters;     (g)   “Common Share” means a
common share without nominal or par value of the Corporation;     (h)  
“Corporation” means Potash Corporation of Saskatchewan Inc.;     (i)  
“Effective Date” has the meaning assigned thereto in Section 11 hereof;     (j)
  “Elected Percentage” has the meaning assigned thereto in Section 5 hereof;    
(k)   “Election Expiry Date” has the meaning assigned thereto in Section 5
hereof;     (l)   “Eligible Director” has the meaning assigned thereto in
Section 4 hereof;

 

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  (m)   “Entitlement Date” has the meaning assigned thereto in Section 8 hereof;
    (n)   “Market Value” on any particular day means the market value of one
Common Share on such day which, (1) for Eligible Directors resident in Canada,
shall be calculated on the basis of the closing price for a board lot of Common
Shares on The Toronto Stock Exchange on that day, or if at least one board lot
of Common Shares shall not have been traded on The Toronto Stock Exchange on
that day, on the immediately preceding day for which at least one board lot was
so traded, and (2) for all other Eligible Directors, shall be calculated on the
basis of the closing price for a round lot of Common Shares on the New York
Stock Exchange on that day, or if at least one round lot of Common Shares shall
not have been traded on the New York Stock Exchange on that day, on the
immediately preceding day for which at least one round lot was so traded; or if,
at any time, the Common Shares are no longer listed on such stock exchange, then
the Market Value shall be calculated on the basis of the closing price, on the
aforesaid day, for a board or round lot of Common Shares on the stock exchange
on which the Common Shares are listed and had the greatest volume of trading on
that particular day;     (o)   “Participant” means an Eligible Director who has
been awarded or paid Share Units under the Plan;     (p)   “Payout Market Value”
on any particular day means the market value of one Common Share on such day
which, (1) for Eligible Directors resident in Canada, shall be calculated on the
basis of the simple average of the closing prices of the Common Shares on The
Toronto Stock Exchange, during the ten trading days prior to that date, (or if
no trades occur on a particular day, the average of the bid and asked prices on
The Toronto Stock Exchange on that day shall be used), and (2) for all other
Eligible Directors, shall be calculated on the basis of the simple average of
the closing prices of the Common Shares on the New York Stock Exchange, during
the ten trading days prior to that date, (or if no trades occur on a particular
day, the average of the bid and asked prices on the New York Stock Exchange on
that day shall be used), or if, at any time, the Common Shares are no longer
listed on such stock exchange, then the Payout Market Value shall be calculated
on the foregoing basis for the stock exchange on which the Common Shares are
listed and had the greatest volume of trading during the last ten trading days;
    (q)   “Plan” means The Potash Corporation of Saskatchewan Inc. Deferred
Share Unit Plan for Non-Employee Directors, as amended from time to time;    
(r)   “Price per Common Share” has the meaning assigned thereto in Section 8
hereof;     (s)   “Quarter” means any of the four quarters, of any financial
year, of the Corporation, currently ending on March 31, June 30, September 30
and December 31;     (t)   “Quarterly Retainer Payment” means the amount,
expressed in dollars, representing twenty-five percent (25%) of the Annual
Retainer Fee which would, but for the Plan, be payable in cash on the last day
of each Quarter by the Corporation to an Eligible Director, or if, with respect
to any Quarter, an Eligible Director has served during the applicable term as a
member of the Board of Directors for a number of days that is less than the full
Quarter, the amount, expressed in dollars, which is the product of: (1) the
quotient determined by dividing: (A) the number of days in the particular
Quarter during the term in which the Eligible Director served as a member of the
Board, by (B) the aggregate number of days in the particular Quarter; and
(2) the amount, expressed in dollars, of the Quarterly Retainer Payment which
would otherwise have been payable for such Quarter had the Eligible Director
served as a member of the Board for the full Quarter or the applicable term
during which the Eligible Director served as a member of the Board been extended
for the full Quarter.

 

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  (u)   “Reference Date”, with respect to any Quarter, means the date which
shall be used to determine, on a quarterly basis, the Market Value of a Common
Share for purposes of determining the number of Share Units to be credited, for
such Quarter, to a Participant’s account pursuant to Section 5 hereof, which
date shall be, unless otherwise determined by the Committee and approved by the
Board, the last trading day of such Quarter on which the Market Value of a
Common Share may be determined or, if a Participant’s Termination of Board
Service occurs during the Quarter prior to such last trading date, the date of
Termination of Board Service of the Participant, provided that if the date of
Termination of Board Service is not a trading day on which the Market Value of a
Common Share may be determined, the Reference Date shall be the immediately
preceding trading day on which such Market Value may be determined.     (v)  
“Share Unit” means a unit credited by means of a bookkeeping entry on the books
of the Corporation to a Participant’s account in accordance with the terms and
conditions of the Plan;     (w)   “Subsidiary” means any corporation a majority
of whose shares normally entitled to vote in electing directors is owned
directly or indirectly by the Corporation; and     (x)   “Termination of Board
Service” shall mean the earliest date on which both of the following conditions
are met: (1) the Participant has ceased to be a member of the Board or of the
Board of Directors of any Subsidiary of the Corporation for any reason
whatsoever, including the death of a Participant; and (2) the Participant is
neither an employee of the Corporation or of a Subsidiary of, nor a member of
the Board of Directors of the Corporation or of the Board of Directors of any
Subsidiary of the Corporation.

Section 3   Administration of the Plan

Subject to Section 5, Section 6, Section 8, Section 10 and Section 12 hereof,
the Plan shall be administered by the Committee, the whole subject to applicable
corporate and securities law requirements and the Committee shall have full and
complete authority to interpret the Plan, to prescribe such rules and
regulations (including those with respect to the holding of meetings by
telephone and/or video conference) and to make such other determinations as it
deems necessary or desirable for the administration of the Plan. All actions
taken and decisions made by the Committee shall, subject to confirmation by the
Board where required, be final, conclusive and binding on all parties concerned,
including, but not limited to, a Participant and such Participant’s
beneficiaries and legal representatives, the Corporation and its Subsidiaries,
their employees and shareholders. All expenses of administration of the Plan
shall be borne by the Corporation, including any reasonable brokerage fees
relating to the purchase of Common Shares under the Plan.

Section 4   Eligibility

The Plan shall apply to all members of the Board who, at the time of any
discretionary grant described in Section 5(a) below or at the time of execution
of the Agreement and at all times thereafter while they continue to serve as a
member of the Board, as the case may be, are not employees of the Corporation or
of any Subsidiary of the Corporation (“Eligible Directors”).
A Participant who becomes an employee of the Corporation or a Subsidiary of the
Corporation shall no longer be eligible to receive Share Units under the Plan.
In that case, starting with the Quarter in which the Participant became such an
employee, all of his or her future Quarterly Retainer Payments, if any, shall be
paid in cash. However, Share Units already credited to such person’s account
shall remain governed by the Plan for so long as there has been no Termination
of Board Service with respect to such person.

 

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Section 5   Discretionary Grant of Deferred Share Units and Election for
Deferral of Annual Retainer Fee

Share Units may be awarded or paid to an Eligible Director in the following
circumstances and on the following conditions:

  (a)   Discretionary Grant of Deferred Share Units         Subject to
confirmation by the Board, the Committee may recommend that Share Units be
awarded to an Eligible Director and shall recommend the number of Share Units to
be awarded to such Eligible Director. The Committee shall, subject to
confirmation by the Board, recommend the effective date of each grant of Share
Units and each grant shall be confirmed in writing by the Corporation to a
Participant.     (b)   Election for Deferral of Annual Retainer Fees         An
Eligible Director may elect, with respect to any particular calendar year, to be
paid up to one hundred percent (100%) of the Annual Retainer Fees otherwise
payable to such Eligible Director in cash in that calendar year in the form of
Share Units. In order to elect to participate in the Plan with respect to any
particular calendar year, an Eligible Director shall, on or before the date that
is the last business day of the calendar year ending immediately before the
particular calendar year to which the Annual Retainer Fees relate (the “Election
Expiry Date”), complete and deliver to the Corporation a written election
specifying, in percentage form (the “Elected Percentage”), the extent to which
such Eligible Director elects to participate in the Plan for the particular
calendar year. Such election may be revoked or modified if written notification
of such revocation or modification is received by the Corporation before the
Election Expiry Date. Subject to confirmation by the Board, the Committee may
substitute a new date for the Election Expiry Date, provided that such new date
shall apply solely to the Annual Retainer Fees earned for services rendered
after such new date.         In order for an Eligible Director to participate in
the Plan in the calendar year in which such Eligible Director is first elected
or appointed to the Board, the Eligible Director shall, before the earlier of:
(i) the date that is thirty days after the date the Eligible Director is first
elected or appointed to the Board; and (ii) the last business day of the
particular Quarter in which the Eligible Director is first elected or appointed
to the Board, complete and deliver to the Corporation a written election
specifying the Eligible Director’s Elected Percentage. Such election may be
revoked or modified if written notification of such revocation or modification
is received by the Corporation before the earlier of (i) and (ii) above.        
The number of Share Units (including fractional Share Units) to be credited on a
quarterly basis to an Eligible Director’s account under Section 9 hereof with
respect to any particular Quarter shall be equal to the quotient determined by
dividing: (1) the Elected Percentage, expressed in Canadian dollars for Eligible
Directors resident in Canada and expressed in U.S. dollars for all other
Eligible Directors, of the Eligible Director’s Quarterly Retainer Payment which
would, but for the Plan, have been paid in cash with respect to such Quarter, by
(2) the Market Value of a Common Share on the Reference Date for such Quarter.

 

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Section 6   Execution of Agreement

Each Eligible Director shall, as soon as practicable after the Effective Date,
or, in the case of Eligible Directors who shall become members of the Board
after such date, as soon as practicable after the date on which his or her term
as a member of the Board commenced, enter into an Agreement with the
Corporation. Such Agreement shall set out certain rights and obligations of the
parties thereto with respect to all of the Share Units which shall, under the
Plan, be credited to the account of a Participant, and shall remain in full
force and effect until all such Share Units shall have been cancelled.

Section 7   Dividendlike Amounts

A Participant’s account shall, from time to time during the term of the
Participant’s Agreement, including the period following the Participant’s
Termination of Board Service and until the Entitlement Date referred to in
Section 8 hereof, be credited with additional Share Units, the number of which
shall be equal to the quotient determined by dividing: (1) the product
determined by multiplying: (a) one hundred percent (100%) of the amount of each
dividend declared and paid by the Corporation on its Common Shares, on a per
share basis (excluding stock dividends, but including dividends which may be
paid in cash or in shares at the option of the shareholder), converted into
Canadian dollars for Participants resident in Canada, by (b) the number of Share
Units recorded in the Participant’s account on the record date for the payment
of such dividend, by (2) the Market Value of a Common Share on the payment date
of such dividend, with fractions computed to four decimal places.

Section 8   Payment of Share Units

Except as may be determined by the Committee, and approved by the Board, or
except as set forth below in this Section 8, the entitlement date (“Entitlement
Date”) of a Participant with respect to whom Termination of Board Service has
occurred shall be the tenth (10th) trading day following the release of the
Corporation’s quarterly or annual results immediately following Termination of
Board Service by the Participant. In no event shall the Entitlement Date occur
later than two and one half months after the beginning of the calendar year
commencing immediately after the Termination of Board Service by the
Participant. A Participant shall receive no later than two and one half months
after the beginning of the calendar year commencing immediately after the
Termination of Board Service by the Participant, at the discretion of the
Committee, and as approved by the Board, in satisfaction of the number of Share
Units recorded in the Participant’s account on the Entitlement Date: (1) a
number of Common Shares to be purchased on the open market equal to the number
of Share Units then recorded in the account of the Participant, or as may be
adjusted pursuant to Section 19 hereof, and reduced by any applicable
withholding taxes and other source deductions reflected in the form of Share
Units, required by law to be withheld by the Corporation in connection with the
total payments made in satisfaction of the Participant’s Share Units; or (2) a
cash payment equal to the product determined by multiplying: (a) the number of
Share Units then recorded in the account of the Participant, by (b) the Payout
Market Value of a Common Share on the Entitlement Date, net of applicable
withholdings. No payment of Share Units shall be made by the Corporation to a
Participant under the Plan until Termination of Board Service has occurred with
respect to such Participant.
Where the Corporation’s Common Shares are to be purchased on the open market,
the Corporation shall notify the Broker on the Entitlement Date as to the number
of Common Shares to be purchased by the Broker on behalf of the Participant. As
soon as practicable thereafter, the Broker shall purchase on the open market the
number of Common Shares which the Corporation has requested the Broker to
purchase and notify the Participant and the Corporation of: (1) the aggregate
purchase price (“Aggregate Purchase Price”) of the Common Shares, (2) the
purchase price per Common Share or, if the Common Shares were purchased at
different prices, the average purchase price (computed on a weighted average
basis) per Common Share (“Price per Common Share”), (3) the amount of any
related reasonable brokerage commission, and (4) the settlement date for the
purchase of the Common Shares. On the settlement date, upon payment of the
Aggregate Purchase Price and related reasonable brokerage commission by the
Corporation, the Broker shall deliver to the Participant or to his legal
representative the certificate representing the Common Shares. Regardless of
whether a cash payment or Common Shares of the Corporation are used to satisfy
the Participant’s Share Unit entitlement, any entitlement to

 

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fractional Share Units shall be paid in cash based on the Price per Common
Share, net of applicable withholdings.

Section 9   Participant’s Account

The Corporation shall maintain in its books an account for each Plan Participant
recording at all times the number of Share Units standing to the credit of the
Participant. Upon payment in satisfaction of Share Units, such Share Units shall
be cancelled. A written confirmation of the balance in the account shall be
mailed by the Corporation to the Participant at least annually.

Section 10   Deferral of Other Fees

The Committee may, at its discretion, subject to confirmation by the Board,
extend the Plan to cover fees other than Annual Retainer Fees and thereby allow
an Eligible Director to elect to receive such other fees which would otherwise
be payable in cash in any particular calendar year, in the form of Share Units.
In the event such extension should occur, the election shall be made on or
before the date that is the last business day of the calendar year ending
immediately before the particular calendar year to which such fees relate. In
order for an Eligible Director to make the election in the calendar year in
which such Eligible Director is first elected or appointed to the Board, the
Eligible Director shall complete and deliver to the Corporation his or her
written election, before the earlier of: (i) the date that is thirty days after
the date the Eligible Director is first elected or appointed to the Board; and
(ii) the day the Eligible Director first becomes entitled to receive payment of
such other fees. Any such payment in the form of Share Units shall be subject to
such conditions as the Committee may impose.

Section 11   Effective Date of the Plan

The effective date of the Plan (the “Effective Date”) shall be the date on which
an advance income tax ruling is received from the Canada Customs and Revenue
Agency confirming to the satisfaction of the Board that the Plan is “a
prescribed plan or arrangement” as described in paragraph 6801(d) of the Income
Tax Regulations.

Section 12   Amendments to, Suspension or Termination of, the Plan

The Board may from time to time amend, suspend or terminate the Plan in whole or
in part. However, any such amendment, suspension or termination shall not
adversely affect the rights of any Participant under any Agreement existing at
the time of such amendment, suspension or termination without the consent of the
affected Participant. Notwithstanding the foregoing, any amendment or
termination of the Plan shall be such that the Plan continuously satisfies the
requirements of Regulation 6801(d) of the Act or any successor provision
thereto.
If the Board terminates the Plan, prior awards of Share Units shall, at the
discretion of the Board, either (1) become immediately payable in accordance
with the terms of the Plan in effect at such time, or (2) remain outstanding and
in effect and paid in due course in accordance with their applicable terms and
conditions.

Section 13   Purchases on the Open Market

Where, pursuant to the Plan, the Corporation’s Common Shares are to be purchased
in satisfaction of a Participant’s Share Units, such purchases shall be made on
the open market by a Broker. Upon designation of a Broker or at any time
thereafter, the Corporation may elect to provide the designated Broker with a
letter agreement to be executed by the Broker and entered into with the
Participant and to which the Corporation would also be a party, setting forth,
inter alia, (1) the Broker’s concurrence to being so designated, to acting for
the Participant’s account in accordance with customary usage of the trade with a
view to obtaining the best share price for the Participant, and to delivering to
the Participant or his/her legal representative the share certificate for the
Common Shares purchased upon payment by the Corporation of the purchase price
and related reasonable brokerage commission, and (2) the Corporation’s agreement
to notify the Broker of the number of Common Shares to be purchased and to

 

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pay the purchase price and the related reasonable brokerage commission, provided
however that no terms of said letter agreement shall have the effect of making
the Broker or deeming the Broker to be an affiliate of (or not independent from)
the Corporation for purposes of any applicable corporate, securities or stock
exchange requirement.

Section 14   Rights of Participants

Except as specifically set out in the Plan or an Agreement, no Eligible
Director, Participant or other person shall have any claim or right to any
Common Shares deliverable in payment of Share Units granted pursuant to the
Plan.
Under no circumstances shall Share Units be considered Common Shares nor shall
they entitle any Participant to exercise voting rights or any other rights
attaching to the ownership of the Common Shares, nor shall any Participant be
considered the owner of the Common Shares until after the date of the purchase
of such Common Shares on the open market.
Neither the Plan nor any grant thereunder shall be construed as granting a
Participant a right to be retained as a member of the Board or as a member of
the board of directors of any Subsidiary or a claim or right to any future
grants of Share Units.

Section 15   Death of Participant

In the event of a Participant’s death, any and all Share Units then credited to
the Participant’s account shall become payable to the Participant’s estate in
accordance with Section 8 hereof.

Section 16   Compliance with Applicable Laws

Any obligation of the Corporation with respect to its Common Shares pursuant to
the terms of the Plan is subject to compliance with all applicable laws. The
Participant shall comply with all such laws and furnish the Corporation with any
and all information and undertakings as may be required to ensure compliance
therewith.

Section 17   Withholding Taxes

The Corporation shall be entitled to deduct any amount of withholding taxes and
other withholdings from any amount paid or credited hereunder.

Section 18   Transferability

In no event may the rights or interests of a Participant under the Plan be
assigned, encumbered, pledged, transferred or alienated in any way, except to
the extent that certain rights may pass to a beneficiary or legal representative
upon death of a Participant, by will or by the laws of succession and
distribution.

Section 19   Alteration of Number of Share Units Subject to the Plan

In the event of the declaration of any dividend declared upon the Common Shares
payable in Common Shares, a subdivision, stock-split, consolidation,
reclassification, exchange, capital reorganization or other change with respect
to the Common Shares, or a merger, consolidation, spin-off or other distribution
(other than ordinary course cash dividends) of the Corporation’s assets to its
shareholders or similar business transaction affecting the Common Shares, the
number of Share Units then recorded in the Participant’s account shall be
adjusted in such manner, if any, as the Board may in its discretion deem
appropriate to reflect the event. However, no amount will be paid to, or in
respect of, an Eligible Director under the Plan or pursuant to any other
arrangement, and no Share Units will be granted to such Eligible Director to
compensate for a downward fluctuation in the price of the Common Shares, nor
will any other form of benefit be conferred upon, or in respect of, an Eligible
Director for such purpose.

 

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Section 20   Unfunded Plan

Unless otherwise determined by the Committee and approved by the Board, the Plan
shall be unfunded until payment of the Share Units under Section 8 hereof.
The Corporation’s obligations hereunder shall constitute general, unsecured
obligations, payable solely out of its general assets and no Participant or
other person shall have any right to any specific assets of the Corporation. The
Corporation shall not segregate any assets for the purpose of funding its
obligations with respect to the Share Units credited hereunder and shall not be
deemed to be a trustee of any amounts to be distributed or paid pursuant to the
Plan. No liability or obligation of the Corporation shall be deemed to be
secured by any pledge of, or encumbrance on, any property of the Corporation.

Section 21   Governing Law

The Plan shall be governed by and interpreted in accordance with the laws in
force in the province of Saskatchewan.