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                                                                   EXHIBIT 10(Y)

                    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"). The Corporation's Stock Option Incentive Plan, previously in
     effect, has been bifurcated into this Plan and the Corporation's Stock
     Option Plan -- Officers and Key Employees.

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.

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 shall be 10 years from the
     date the option is granted. The option agreement may contain provisions
     limiting the number of Common Shares with respect to
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     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 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.

     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 in the number 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.
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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.

10.  CHANGE OF CONTROL

     If a "change of control" of the Corporation occurs, each 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 of Directors of the Corporation 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.

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
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     option previously granted to an optionee under this Plan. Amendments to the
     Plan require pre-clearance of The Toronto Stock Exchange and the Montreal
     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.