<PAGE>   1
                                                                  EXHIBIT 10(bb)

                     POTASH CORPORATION OF SASKATCHEWAN INC.
                         STOCK OPTION PLAN -- DIRECTORS



1.       PURPOSE OF PLAN

         Potash Corporation of Saskatchewan Inc. (the "Corporation") by
         resolution of its Board of Directors (the "Board") has established this
         Plan to encourage directors of the Corporation to promote the growth
         and profitability of the Corporation by providing them with the
         opportunity through options to acquire Common Shares of the Corporation
         ("Common Shares").

2.       ADMINISTRATION

         This Plan shall be administered by the Board.

3.       GRANT OF OPTIONS

         From time to time the Board may designate individual directors of the
         Corporation to be granted options to purchase Common Shares and the
         number of Common Shares which each such person will be granted an
         option to purchase; provided that the aggregate number of Common Shares
         subject to such options may not exceed the number provided for in
         paragraph 4 of this Plan.

4.       SHARES SUBJECT TO OPTION

         The aggregate number of Common Shares issuable after January 24, 1995
         pursuant to options under this Plan may not exceed 456,000 shares. The
         number of Common Shares issuable pursuant to options under this Plan
         shall be subject to adjustment under paragraphs 8 and 9.

         The aggregate number of Common Shares in respect of which options have
         been granted to any one person and which remain outstanding shall not
         at any time exceed 5% of the number of issued and outstanding Common
         Shares (on a non-diluted basis) at that time.

         If any 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 options under this Plan.



<PAGE>   2



5.       OPTION PRICE

         The option price under this Plan to any optionee shall be 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 share of the Common
         Shares 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 share of the
         Common Shares 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.

6.       TERMS OF OPTION

         The period during which an option is exercisable may not exceed 10
         years from the date the option is granted. The option agreement may
         contain provisions limiting the number of Common Shares with respect to
         which the option may be exercised in any one year. Each option
         agreement shall contain provisions to the effect that:

         a.       if an optionee ceases to be a director of the Corporation by
                  reason of his or her death or an optionee who is a retiree
                  pursuant to clause b below dies, the legal personal
                  representatives of the optionee will be entitled to exercise
                  any unexercised options, including such 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 options
                  terminate;

         b.       subject to the terms of clause a above, if an optionee ceases
                  to be a director of the Corporation by reason of retirement in
                  accordance with the then prevailing retirement policy of the
                  Corporation, the optionee will be entitled to exercise any
                  unexercised options, including such options as may vest after
                  the date of retirement, until the expiry date of such options
                  or the date on which such options are otherwise terminated in
                  accordance with the provisions of this Plan, failing which
                  exercise the options terminate;

         c.       if an optionee ceases to be a director of the Corporation for
                  any reason other than as provided in the preceding clauses a.
                  or b., the optionee will be entitled to exercise any
                  unexercised 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 options
                  terminate; and


         d.       each option is personal to the optionee and is not assignable,
                  except (i) as provided in the preceding clause a, and (ii) at
                  the election of the Board, an 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.

                                      - 2-
<PAGE>   3



         Nothing contained in the preceding clauses a, b or c shall extend the
         period during which an option may be exercised beyond its stipulated
         expiry date or the date on which it is otherwise terminated in
         accordance with the provisions of this Plan.

         If an option is assigned pursuant to the preceding subclause (ii) of
         clause d, the references in the preceding clauses a, b and c to ceasing
         to be a director or death of an optionee shall not relate to the
         assignee of an 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
         option, but the assignee of the option or the legal personal
         representatives of the assignee may exercise the option during the
         applicable specified period.


7.       EXERCISE OF OPTIONS

         Subject to the provisions of this Plan, an 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 shares with
         respect to which the option is being exercised and accompanied by
         payment in cash or certified cheque in full of the purchase price of
         the shares then being purchased.

8.       ADJUSTMENTS

         Appropriate adjustments to the authorized limits set forth in paragraph
         4, in the number, class and/or type of shares optioned and in the
         option price per share, both as to options granted or to be granted,
         may be made by the Board in its discretion 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. If the Corporation sells all
         or substantially all of its assets as an entirety or substantially as
         an entirety, options under this Plan may be exercised, in whole or in
         part, at any time up to and including (but not after) a date 30 days
         following the date of completion of such sales or prior to the close of
         business on the date the option expires, whichever is earlier.

9.       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
         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 shares, with appropriate adjustments, so as
         to give effect to the continuance of the 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 options.

                                     - 3 -

<PAGE>   4


10.      CHANGE OF CONTROL

         If a "change of control" of the Corporation occurs, each then
         outstanding option granted under this Plan may be exercised, in whole
         or in part, even if such option is not otherwise exercisable by its
         terms. For purposes of this paragraph 10, a change of control of the
         Corporation shall be deemed to have occurred if:

         a.       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;

         b.       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;

         c.       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;

         d.       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

         e.       the Board approves and/or recommends that shareholders accept,
                  approve or adopt any transaction that would constitute a
                  change of control under clause b, c or d above.


                                      - 4 -
<PAGE>   5


11.      AMENDMENT OR DISCONTINUANCE OF THIS PLAN

         The Board may amend or discontinue this Plan at any time but, subject
         to paragraphs 8, 9 and 10, no such amendment may increase the aggregate
         maximum number of shares that may be subject to option under this Plan,
         change the manner of determining the minimum option price, extend the
         option period under any option beyond 10 years or, without the consent
         of the holder of the option, alter or impair any option previously
         granted to an optionee under this Plan. Amendments to the Plan require
         pre-clearance of The Toronto Stock Exchange.

12.      EVIDENCE OF OPTIONS

         Each option granted under this Plan shall be embodied in a written
         option agreement between the Corporation and the optionee which shall
         give effect to the provisions of this Plan.


                                     - 5 -