Document:

EX-10(hh)

 Exhibit 10(hh) 

Adopted February 22, 2016 

2016 Short-Term Incentive Plan 

Effective January 1, 2016 

Potash Corporation of Saskatchewan Inc. 
  

			
	Signature	 	 /s/ Keith G. Martell

	Name	 	Keith G. Martell
	Title	 	Chair, Human Resources and Compensation Committee
		
	Date	 	February 22, 2016

  

			
	Signature	 	 /s/ Lee Knafelc

	Name	 	Lee Knafelc
	Title	 	Senior Vice President, Human Resources and Administration
		
	Date	 	February 22, 2016

 Contents 

 

							
		
	 Section 1—Establishment of the Plan
	  	 	5	  
			
	 1.01
	 	Purpose	  	 	5	  
			
	 1.02
	 	Effective Date	  	 	5	  
		
	 Section 2—Definitions 
	  	 	5	  
			
	 2.01
	 	Accrued Incentive Awards	  	 	5	  
			
	 2.02
	 	Adjusted EBITDA	  	 	5	  
			
	 2.03
	 	Adjusted EBITDA Ratio	  	 	5	  
			
	 2.04
	 	Award Payment	  	 	6	  
			
	 2.05
	 	Board	  	 	6	  
			
	 2.06
	 	CEO	  	 	6	  
			
	 2.07
	 	Committee	  	 	6	  
			
	 2.08
	 	Corporation	  	 	6	  
			
	 2.09
	 	Depreciation and Amortization	  	 	6	  
			
	 2.10
	 	EBITDA Award Multiplier	  	 	6	  
			
	 2.11
	 	EBITDA Award Percentage	  	 	6	  
			
	 2.12
	 	Eligible Employee	  	 	7	  
			
	 2.13
	 	Entitled Employee	  	 	7	  
			
	 2.14
	 	Environmental Incidents	  	 	7	  
			
	 2.15
	 	Finance Costs	  	 	7	  
			
	 2.16
	 	Hourly Employee	  	 	7	  
			
	 2.17
	 	Income Taxes	  	 	8	  
			
	 2.18
	 	Individual Award Multiplier	  	 	8	  
			
	 2.19
	 	Lost Time Injury Rate	  	 	8	  
			
	 2.20
	 	Non-recurring/Unusual Items Included in Operating Income	  	 	8	  
			
	 2.21
	 	Operations Award Multiplier	  	 	8	  
			
	 2.22
	 	PCS Inc.	  	 	8	  
			
	 2.23
	 	Permit Excursion	  	 	8	  

  
 2 

							
			
	 2.24
	 	Plan	  	 	8	  
			
	 2.25
	 	Provincial Reportable Spill	  	 	9	  
			
	 2.26
	 	Recordable Injury Rate	  	 	9	  
			
	 2.27
	 	Reportable Quantity Release	  	 	9	  
			
	 2.28
	 	Retirement	  	 	9	  
			
	 2.29
	 	Salary	  	 	9	  
			
	 2.30
	 	SH&E Award Multiplier	  	 	10	  
			
	 2.31
	 	Target EBITDA	  	 	10	  
			
	 2.32
	 	Target Percentage	  	 	10	  
			
	 2.33
	 	Unrealized Gains/Losses on Derivative Instruments Included in Operating Income	  	 	10	  
			
	 2.34
	 	Year	  	 	10	  
		
	 Section 3—Participation 
	  	 	10	  
			
	 3.01
	 	Participation Requirements 	  	 	10	  
		
	 Section 4—Award Payments 
	  	 	10	  
			
	 4.01
	 	Eligibility	  	 	10	  
			
	 4.02
	 	Calculation of EBITDA Award Payment	  	 	11	  
			
	 4.03
	 	Entitled Operations Employees	  	 	11	  
			
	 4.04
	 	Entitled Corporate Office Employees and Entitled Corporate Executives	  	 	12	  
			
	 4.05
	 	Limitation of Award Payments and General Discretion	  	 	12	  
			
	 4.06
	 	Timing of Award Payments	  	 	13	  
			
	 4.07
	 	Recoupment Policy	  	 	13	  
		
	 Section 5—Administration of the Plan 
	  	 	13	  
			
	 5.01
	 	Administration 	  	 	13	  
		
	 Section 6—Transfer of Employment 
	  	 	14	  
			
	 6.01
	 	Transfer of Employment 	  	 	14	  
		
	 Section 7—General Provisions 
	  	 	14	  
			
	 7.01
	 	Assignment or Alienation	  	 	14	  
			
	 7.02
	 	Amendment or Termination	  	 	14	  

  
 3 

							
			
	 7.03
	 	Effect of Amendment or Termination	  	 	14	  
			
	 7.04
	 	No Enlargement of Contractual Rights	  	 	14	  
			
	 7.05
	 	Interpretation	  	 	15	  
			
	 7.06
	 	Withholding of Taxes	  	 	15	  
			
	 7.07
	 	Binding on Successors	  	 	15	  
			
	 7.08
	 	Currency	  	 	15	  
		
	 Section 8—Change in Control 
	  	 	15	  
			
	 8.01
	 	Definition of Change in Control	  	 	15	  
			
	 8.02
	 	Prior Year CIC STIP Award Payment	  	 	15	  
			
	 8.03
	 	CIC STIP Award Payment	  	 	15	  
		
	 Appendix “A”—STIP Award Percentage 
	  	 	17	  

  
 4 

 Section 1—Establishment of the Plan 

1.01  Purpose 

This 2016 Short-Term Incentive Plan is established for the purpose of rewarding eligible employees on an annual basis for their efforts and contributions in
the attainment of certain performance measures that contribute materially to the success of the business interests of Potash Corporation of Saskatchewan Inc. 

1.02  Effective Date 

Subject to Section 7.02 (Amendment or Termination), this Plan shall be effective on and after January 1, 2016. 

Section 2—Definitions 

The following terms, when capitalized, shall be defined as follows: 

2.01  Accrued Incentive Awards 

“Accrued Incentive Awards” means the amounts accrued during the Year that represent expected payments under this Plan and other group incentive
plans as appropriate. 
 2.02  Adjusted EBITDA 

“Adjusted EBITDA” means the amount derived from the following formula: 
  

	 	(a)	Net Income before Finance Costs, Income Taxes, and Depreciation and Amortization, plus/minus 

  

	 	(b)	Non-recurring/Unusual Items Included in Operating Income, plus/minus 

  

	 	(c)	Change in Unrealized Gains/Losses on Derivative Instruments Included in Operating Income, plus 

  

	 	(d)	Accrued Incentive Awards. 

 2.03  Adjusted EBITDA Ratio 

“Adjusted EBITDA Ratio” means the amount derived from the following formula: 

 

	 	(a)	Adjusted EBITDA 

 DIVIDED BY 

 

	 	(b)	Target EBITDA 

 and used to calculate an Entitled Employee’s EBITDA Award Percentage for a
given Year pursuant to Section 4.02. Notwithstanding the foregoing, if the amount derived from the formula above is less than 50%, then the Adjusted EBITDA Ratio shall be deemed to be 0%, and if the amount derived from the formula above is
greater than 150%, then the Adjusted EBITDA Ratio shall be deemed to be 150%. 

  
 5 

 2.04  Award Payment 

“Award Payment” means a cash payment to an Entitled Employee calculated pursuant to Section 4 (Award Payments). 

 

	 	(a)	“EBITDA Award Payment” is the payment calculated based upon the Adjusted EBITDA Ratio, a measure of Adjusted EBITDA relative to Target EBITDA. 

 

	 	(b)	“Individual Award Payment” is the payment calculated based on individual job performance in accordance with Section 4.03(c) or Section 4.04(c), as applicable. 

 

	 	(c)	“Operations Award Payment” is the payment calculated based upon operations performance factors as established in accordance with Section 4.03(b) for the benefit of Entitled Operations Employees.

  

	 	(d)	“SH&E Award Payment” is the payment calculated based upon safety, health and environmental performance factors as established in accordance with Section 4.04(b) for the benefit of Entitled Corporate
Office Employees and Entitled Corporate Executives. 

 2.05  Board 

“Board” means the Board of Directors of PCS Inc. 
 
2.06  CEO 
 “CEO” means the Chief Executive Officer of PCS Inc. 

2.07  Committee 

“Committee” means the Human Resources and Compensation Committee of the Board. 

2.08  Corporation 

“Corporation” means PCS Inc. and its direct and indirect subsidiaries. 

2.09  Depreciation and Amortization 

“Depreciation and Amortization” means the depreciation and amortization expense for a given Year, as set out in the audited consolidated financial
statements of PCS Inc. for that Year. 
 2.10  EBITDA Award Multiplier 

“EBITDA Award Multiplier” means, with respect to an Entitled Employee, the percentage set forth in the “EBITDA Award Multiplier” column on
Appendix “A” with respect to such Entitled Employee’s Tier. 
 2.11  EBITDA Award Percentage

 “EBITDA Award Percentage” means the percentage of an Entitled Employee’s Salary derived from the formula set forth in
Section 4.02. 

  
 6 

 2.12  Eligible Employee 

“Eligible Employee” means an employee, including an Hourly Employee, who has satisfied the eligibility requirements set out in Section 4.01
(Eligibility). 
 2.13  Entitled Employee 

“Entitled Employee” means an Eligible Employee who is recommended by the CEO and approved by the Committee to participate in this Plan. 

 

	 	(a)	Entitled Corporate Executive 

 “Entitled Corporate Executive” means an
Entitled Employee who would otherwise be an Entitled Corporate Office Employee, but for the fact that he or she has been designated by the Committee as an Entitled Corporate Executive. 

 

	 	(b)	Entitled Corporate Office Employee 

 “Entitled Corporate Office Employee”
means an Entitled Employee who is attached to one of the corporate facilities of PCS Inc. or its direct or indirect subsidiaries at either Saskatoon or Northbrook, but in each case other than an Entitled Corporate Executive. 

 

	 	(c)	Entitled Operations Employee 

 “Entitled Operations Employee” means an
Entitled Employee who is attached to one of the operating facilities of PCS Inc. or its direct or indirect subsidiaries. 

2.14  Environmental Incidents 

“Environmental Incidents” means, for a given Year, the number derived from the following formula: 

 

	 	(a)	the number of Reportable Quantity Releases during such Year, plus 

  

	 	(b)	the number of Permit Excursions during such Year, plus 

  

	 	(c)	the number of Provincial Reportable Spills during such Year. 

2.15  Finance Costs 

“Finance Costs” means the finance cost expense or income recognized for a given Year as set out in the audited consolidated financial statements of
PCS Inc. for that Year. 
 2.16  Hourly Employee 

“Hourly Employee” means an employee employed at either a Canadian or U.S. operation who is paid on an hourly wage rate basis, including both
employees who are and who are not covered by a collective bargaining agreement. 

  
 7 

 2.17  Income Taxes 

“Income Taxes” means the income tax expense accrued for a given Year, as set out in the audited consolidated financial statements of PCS Inc. for
that Year. 
 2.18  Individual Award Multiplier 

“Individual Award Multiplier” means, with respect to an Entitled Employee, the percentage set forth in the “Individual Award Multiplier”
column on Appendix “A” with respect to such Entitled Employee’s Tier. 
 2.19  Lost Time Injury
Rate 
 “Lost Time Injury Rate” means, for a given Year, the amount derived from the following formula: 

 

	 	(a)	the total number of lost-time injuries for all employees, contractors and others on site during such Year, multiplied by 200,000 

DIVIDED BY 
  

	 	(b)	the actual number of hours worked by employees, contractors and others on site during such Year. 

 
2.20  Non-recurring/Unusual Items Included in Operating Income 
 “Non-recurring/Unusual Items Included in Operating Income”
means items that are considered non-routine, unique, and not expected to be repeated in a normal course of the Corporation’s operating cycle, and which are recognized in Operating Income for a given Year as set out in the audited consolidated
financial statements of PCS Inc. for that Year. Such items may result in a measurable charge or increase to income and may or may not be triggered by a management decision. 

2.21  Operations Award Multiplier 

“Operations Award Multiplier” means, with respect to an Entitled Operations Employee, the percentage set forth in the “Operations Award
Multiplier” column on Appendix “A” with respect to such Entitled Operations Employee’s Tier. 

2.22  PCS Inc. 

“PCS Inc.” means Potash Corporation of Saskatchewan Inc. 

2.23  Permit Excursion 

“Permit Excursion” means an exceedance of a federal, state, provincial or local permit condition or regulatory limit. 

2.24  Plan 

“Plan” means this 2016 Short-Term Incentive Plan, as amended from time to time. 

  
 8 

 2.25  Provincial Reportable Spill 

“Provincial Reportable Spill” means an unconfined spill or release into the environment. 

2.26  Recordable Injury Rate 

“Recordable Injury Rate” means, for a given Year, the amount derived from the following formula: 

 

	 	(a)	the total number of recordable injuries for employees, contractors and others on site during such Year, multiplied by 200,000 

DIVIDED BY 
  

	 	(b)	the actual number of hours worked by employees, contractors and others on site during such Year. 

 
2.27  Reportable Quantity Release 
 “Reportable Quantity Release” means a release the quantity of which equals or exceeds the
United States Environmental Protection Agency’s notification level and is reportable to the United States Coast Guard National Response Center. 
 
2.28  Retirement 
 “Retirement” (or similar terms) means, with respect to an Entitled Employee who is subject to United States
income tax, such Entitled Employee’s separation from service after attaining age 55 and completing 5 years of service. Retirement with respect to any Entitled Employee who is not subject to United States income tax means retirement as
determined in accordance with the qualified retirement plan of the Corporation in which the Entitled Employee is eligible to participate. 
 
2.29  Salary 
 “Salary” means: 
  

	 	(a)	For Entitled Employees who are exempt from the overtime requirements of U.S. wage and hour legislation, other than Canadian Hourly Employees, the actual base salary earned during a given Year. 

 

	 	(b)	For Entitled Employees who are Canadian Hourly Employees, the actual total base pay for the given Year, excluding, but not limited to, overtime, bonuses, shift differentials and premiums. 

 

	 	(c)	For Entitled Employees who are U.S. employees and who are non-exempt from the overtime requirements of U.S. wage and hour legislation, total earned income, including overtime and shift differentials, for the given Year.

  
 9 

 2.30  SH&E Award Multiplier 

“SH&E Award Multiplier” means, with respect to an Entitled Corporate Office Employee or Entitled Corporate Executive, the percentage set forth
in the “SH&E Award Multiplier” column on Appendix “A” with respect to such Entitled Employee’s Tier. 
 
2.31  Target EBITDA 
 “Target EBITDA” means the Adjusted EBITDA projected in the annual budget approved by the Board and used
in the formula set forth in Section 
4.02 to calculate an Entitled Employee’s EBITDA Award Percentage for a given Year. 
 2.32  Target
Percentage 
 “Target Percentage” means the percentage assigned to the Tier Level for Entitled Employees within that Tier, as shown in the
table contained in Appendix “A”. The Target Percentage applicable to an Entitled Employee shall be recommended by the CEO and approved by the Committee. 

2.33  Unrealized Gains/Losses on Derivative Instruments Included in Operating Income 

“Unrealized Gains/Losses on Derivative Instruments Included in Operating Income” means the mark to market adjustments on the company’s
derivative instrument assets and liabilities, including but not limited to, natural gas non-hedging and foreign exchange non-hedging, that are required to be recognized under accounting standards for reporting purposes, and which are recognized in
operating income for a given Year as set out in the audited consolidated financial statements of PCS Inc. for that Year. 

2.34  Year 

“Year” means the fiscal year of PCS Inc. 
 
Section 3—Participation 
 3.01  Participation Requirements 

Participation in the Plan is limited to Eligible Employees. 

Section 4—Award Payments 

4.01  Eligibility 

A permanent employee of the Corporation who: 
  

	 	(a)	is employed for at least one month during a Year, and, except in the case of a termination of employment due to Retirement or death or as otherwise provided herein, who is in the employ of the Corporation at the end of
a Year, and 

  

	 	(b)	is not a participant in another annual cash bonus plan sponsored by the Corporation for the same period during the Year as covered by this Plan 

shall become an Eligible Employee. 

  
 10 

 4.02  Calculation of EBITDA Award Payment 

Subject to Section 4.05 (Limitation of Award Payments and General Discretion), for purposes of Section 4.03 or 4.04, as applicable, the portion of
an Entitled Employee’s Award Payment calculated pursuant to this Section 4.02 (the EBITDA Award Payment) shall be equal to the Entitled Employee’s EBITDA Award Percentage multiplied by his or her Salary. 

 

	 	(a)	The EBITDA Award Percentage (which, for the avoidance of doubt, shall be no greater than 200% of the applicable Target Percentage) is calculated as follows: 

If the Adjusted EBITDA Ratio equals or exceeds 50% and does not exceed 100%, the calculation is: 

Target Percentage multiplied by Adjusted EBITDA Ratio = EBITDA Award Percentage 

If the Adjusted EBITDA Ratio exceeds 100% and does not exceed 150%, the calculation is: 

(Two times Target Percentage multiplied by Adjusted EBITDA Ratio) minus Target Percentage = EBITDA Award Percentage 

 

	 	(b)	No EBITDA Award Percentage is calculated for an Adjusted EBITDA Ratio of less than 50% and for Award Percentage calculations, Adjusted EBITDA Ratio is limited to 150%. 

4.03  Entitled Operations Employees 

Subject to Section 4.05 (Limitation of Award Payments and General Discretion), an Entitled Operations Employee shall be entitled to an Award Payment
equal to the sum of paragraphs (a), (b), and, for certain Entitled Operations Employees who are in Tier 6 through 11 (as described in Appendix “A”), (c) below: 
  

	 	(a)	The EBITDA Award Payment, multiplied by the applicable EBITDA Award Multiplier; 

  

	 	(b)	the Operations Award Payment, which is the Target Percentage of the Salary of the Entitled Operations Employee, adjusted (in no event to be greater than 200% of the Target Percentage) by applying a formula to be
developed from time to time by the CEO in consultation with the Senior Vice President, Human Resources & Administration and the appropriate subsidiary President which formula shall reasonably reflect the actual results of the operating
facility to which the employee is attached (potentially including Recordable Injury Rate, Lost-Time Injury Rate and Environmental Incidents) compared to the approved target for that operating facility, subject to achieving a threshold of at least
25% of the operating facility’s targets, multiplied by the applicable Operations Award Multiplier; and 

  

	 	(c)	the Individual Award Payment, which is, for an Entitled Operations Employee who is in Tier 6 through 11, the Target Percentage of the Salary of the Entitled Operations Employee, adjusted (in no event to be greater than
200% of the Target Percentage) based upon the Entitled Operations Employee’s job performance, as determined by his or her supervisor, and approved in accordance with the provisions of this Plan, multiplied by the applicable Individual Award
Multiplier. 

  
 11 

	 	(d)	No portion of the Award Payment for an Entitled Operations Employee who is not in Tier 6 through 11 will be based on individual job performance. 

4.04  Entitled Corporate Office Employees and Entitled Corporate Executives 

Subject to Section 4.05 (Limitation of Award Payments and General Discretion), an Entitled Corporate Office Employee or an Entitled Corporate Executive
shall be entitled to an Award Payment equal to the sum of paragraphs (a), (b) and (c) below: 
  

	 	(a)	The EBITDA Award Payment, multiplied by the applicable EBITDA Award Multiplier; 

  

	 	(b)	the SH&E Award Payment, which is the Target Percentage of the Salary of the Entitled Employee, adjusted (in no event to be greater than 200% of the Target Percentage) by applying a formula to be developed from time
to time by the CEO in consultation with the Senior Vice President, Human Resources & Administration which formula shall reasonably reflect the Corporation’s safety, health and environmental results (potentially including Recordable
Injury Rate, Lost-Time Injury Rate and Environmental Incidents) compared to the approved target, subject to achieving a threshold of less than 110% of the applicable target, multiplied by the applicable SH&E Award Multiplier; and

  

	 	(c)	the Individual Award Payment, which is the Target Percentage of the Salary of the Entitled Corporate Office Employee or Entitled Corporate Executive, adjusted (in no event to be greater than 200% of the Target
Percentage) based upon the Entitled Employee’s job performance, as determined by his or her supervisor, and approved in accordance with the provisions of this Plan, multiplied by the applicable Individual Award Multiplier. 

4.05  Limitation of Award Payments and General Discretion 

 

	 	(a)	Subject to Section 4.01, in the event that, for a given Year, the Entitled Employee (i) is employed by the Corporation for less than the full Year, (ii) is employed on a part-time basis for any portion of
the Year, (iii) terminates employment with the Corporation prior to the end of the Year due to Retirement or death, (iv) is promoted or demoted from one Group or Tier to another Group or Tier set forth in Appendix “A,” or
(v) experiences a change in Salary during the Year, the Award Payment (and the constituent elements of such Award Payment) for such Entitled Employee will be adjusted to account for such employment change by applying appropriate pro-ration
and/or weighting, as applicable. Further, notwithstanding Section 4.01 to the contrary, an employee who for part of the Year was an active employee but for part of the Year was on long-term disability or an approved or unpaid leave of absence,
may be considered an Entitled Employee and eligible for a pro-rata share of the Award Payment based upon the fraction of the Year the employee was considered an active employee and subject, if applicable, to potential additional adjustments as
described in the prior sentence; provided, however, that in situations where the fractional portion of the Year worked is less than one-twelfth, the employee will not be considered an Entitled Employee unless the CEO recommends and the Committee
approves the exception. 

  
 12 

	 	(b)	The Award Payment for any Entitled Employee may exceed or be below the amount calculated in accordance with this Section 4 (as adjusted pursuant to Section 4.05(a), if applicable) based on individual
performance, the shareholders’ experience, significant safety, health and environmental events or other factors. Award Payments falling outside the established range shall be reviewed and approved by the Board and the Committee for the CEO and
the CEO and the Committee for direct reports to the CEO. For all others, approval of the CEO is required. 

  

	 	(c)	Notwithstanding the Groups and Tiers established in Appendix “A”, the Committee may on the recommendation of the CEO, designate an Eligible Employee for inclusion in one of such Groups or Tiers when, but for
such designation, the Eligible Employee would not otherwise be included in such Group or Tier. 

4.06  Timing of Award Payments 

The Committee shall, on the recommendation of the CEO and within 30 days of the end of a Year, approve the Adjusted EBITDA calculation and the amount of Award
Payments for each Entitled Employee who is a direct report to the CEO for any given Year. The CEO’s Award Payment will be approved by the Board. Following approval of the Adjusted EBITDA calculation, final calculations for the remaining
Entitled Employees will be prepared. The Award Payments shall be paid to Entitled Employees within 30 days of the Committee’s approval of the Adjusted EBITDA calculation and no later than 2 1⁄2 months after the end of the Year. 
 4.07  Recoupment Policy 

Notwithstanding any other provision under this Section, Entitled Employees 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), a copy of which shall be distributed to each such Entitled Employee. In addition, notwithstanding anything in this Plan to the contrary, any
award under the Plan may also provide for the cancellation or forfeiture of the award or the forfeiture and repayment to the Corporation of any gain related to the award, or other provisions intended to have a similar effect, upon such terms and
conditions as may be required by the Committee or under Section 10D of the Securities Exchange Act of 1934, as amended, and any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities
exchange or national securities association on which the Corporation’s common shares may be traded. 

Section 5—Administration of the Plan 

5.01  Administration 

The Committee shall conclusively interpret the provisions of this Plan and decide all questions of fact arising in the application of the Plan. Determinations
and interpretations in individual cases may be made by the CEO with due regard to consistency with any prior action by the Committee and such determination shall be binding and conclusive upon the individual employees concerned and persons claiming
under them. The Committee shall be advised of any such determination or interpretation made by the CEO. To the extent applicable, the Plan shall be administered with respect to Entitled Employees subject to U.S. law so as to avoid penalties pursuant
to Section 409A of the Internal Revenue Code. 

  
 13 

 Section 6—Transfer of Employment 

6.01  Transfer of Employment 

If an Entitled Employee’s employment is transferred during a Year to a different location, within the Corporation the Senior Vice President, Human
Resources & Administration and the CEO shall determine whether the Entitled Employee’s Award Payment is calculated in accordance with Section 4.03 (Entitled Operations Employees), Section 4.04 (Entitled Corporate Office
Employees and Entitled Corporate Executives), or a combination of those sections. 
 Section 7—General
Provisions 
 7.01  Assignment or Alienation 

Except as required by applicable laws, the right of an Entitled Employee to receive an Award Payment under this Plan shall not be: 

 

	 	(a)	given as security; 

  

	 	(b)	subject to transfer, anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation; or 

  

	 	(c)	subject to execution, attachment, levy or similar process or assignment by operation of law, 

and any attempt to effect any such action shall be null and void and of no effect. 

7.02  Amendment or Termination 

Subject to Section 7.03 (Effect of Amendment or Termination), this Plan may be amended in whole or in part from time to time or terminated by the
Corporation. Any amendment or termination shall be binding on the Corporation, Entitled Employees, Eligible Employees and their respective beneficiaries. 

7.03  Effect of Amendment or Termination 

Notwithstanding Section 7.02 (Amendment or Termination), no amendment or termination of any provision of this Plan shall directly or indirectly deprive
any Entitled Employee or beneficiary of all or any portion of an Award Payment earned with respect to any Year ending prior to the date of the amendment or termination. 

7.04  No Enlargement of Contractual Rights 

This Plan shall not give any Entitled Employee or Eligible Employee the right to be retained in the service of the Corporation nor shall it interfere with the
right of the Corporation to terminate the employment of the Entitled Employee or Eligible Employee. Participation in this Plan shall not give any Entitled Employee or Eligible Employee any right or claim to any benefit, except to the extent provided
in this Plan. 

  
 14 

 7.05  Interpretation 

This Plan shall be interpreted pursuant to the laws of the Province of Saskatchewan. Section headings are for convenience only and shall not be considered
provisions of the Plan. Words in the singular shall include the plural, and vice versa, unless qualified by the context. 

7.06  Withholding of Taxes 

The Corporation shall withhold all applicable taxes from any amounts paid pursuant to this Plan. 

7.07  Binding on Successors 

This Plan shall be binding on any successor or successors of PCS Inc. whether by merger, consolidation or otherwise. 

7.08  Currency 

The benefits payable pursuant to this Plan shall be paid in the same currency as the Entitled Employee receives his or her Salary. 

Section 8—Change in Control 

8.01  Definition of Change in Control 

For purposes of the Plan, the term “Change in Control” shall have the same meaning as the term “change in control” in the
Corporation’s 2016 Long-Term Incentive Plan, as amended. 
 8.02  Prior Year CIC STIP Award Payment

  

	 	(a)	Notwithstanding anything in the Plan to the contrary, upon the occurrence of a Change in Control, an Entitled Employee with respect to the Year immediately prior to the Year in which the Change in Control occurs (the
“Prior Year”) shall be entitled to receive for the Prior Year the Entitled Employee’s Award Payment for the Prior Year; provided that an Award Payment for the Prior Year was not previously paid to the Entitled Employee prior to the
effective date of the Change in Control; and provided further that Section 4.05(a) of the Plan shall continue to apply with respect to the Prior Year (the “Prior Year STIP Award Payment”). 

 

	 	(b)	Any Prior Year STIP Award Payment shall be paid within 30 calendar days following the effective date of the Change in Control; provided, however, that any Prior Year STIP Award Payment shall be paid no later than 2 
1⁄2 months after the end of the Prior Year. 

 8.03 
 CIC STIP Award Payment 
  

	 	(a)	 Notwithstanding anything in the Plan to the contrary, upon the occurrence of a Change in Control, an Entitled Employee (without regard to the
requirement set forth in Section 4.01(a) of the Plan that the employee be employed at the end of the Year) shall be entitled to receive for the Year that includes the effective date of the Change in Control the Entitled Employee’s Award
Payment for such Year, pro-rated for the portion of such Year that elapsed prior to the Change in Control (determined by dividing (i) the number of calendar days that elapsed during such Year from the commencement of such Year through

  
 15 

	 	
the effective date of the Change in Control by (ii) the number of calendar days in such Year); provided that Section 4.05(a) of the Plan shall continue to apply with respect to the
period prior to the Change in Control during such Year (the “CIC STIP Award Payment”). 

  

	 	(b)	For purposes of calculating an Entitled Employee’s CIC STIP Award Payment (and the Adjusted EBITDA), the Adjusted EBITDA for a given Year shall be deemed to be equal to the greater of (i) the Target EBITDA
with respect to such Year, or (ii) the actual Adjusted EBITDA during the portion of such Year that elapsed through the end of the month in which the Change in Control occurs. 

 

	 	(c)	For purposes of calculating an Entitled Operations Employee’s CIC STIP Award Payment, the operating facility results for purposes of Section 4.03(b) of the Plan for a given Year shall be deemed to be equal to
the greater of (i) the approved target of the operating facility with respect to such Year, or (ii) the actual results of the operating facility during the portion of such Year that elapsed through the end of the month in which the Change
in Control occurs. 

  

	 	(d)	For purposes of calculating an Entitled Corporate Office Employee’s or an Entitled Corporate Executive’s CIC STIP Award Payment, the safety, health and environmental results for purposes of
Section 4.04(b) of the Plan for a given Year shall be deemed to be equal to the greater of (i) the approved target with respect to such Year, or (ii) the actual safety, health and environmental results during the portion of such Year
that elapsed through the end of the month in which the Change in Control occurs. 

  

	 	(e)	For purposes of calculating an Entitled Employee’s CIC STIP Award Payment, the individual job performance results for purposes of Sections 4.03(c) and 4.04(c) of the Plan for a given Year shall be deemed to be
equal to the greater of (i) the approved target with respect to such Year, or (ii) the actual individual job performance results during the portion of such Year that elapsed through the end of the month in which the Change in Control
occurs. 

  

	 	(f)	Notwithstanding Section 4.05(b) of the Plan, the CIC STIP Award Payment may not be below the amount calculated in accordance with Sections 4.01 through 4.04 of the Plan (and this Section 8.03), nor shall any
approval be required for purposes of Section 4.05(b) of the Plan in the event that the CIC STIP Award Payment exceeds the amount calculated in accordance with Section 4 of the Plan. 

 

	 	(g)	For purposes of Section 4.05(a) of the Plan, the CIC STIP Award Payment shall be calculated on the basis of the Entitled Employee’s Group or Tier immediately prior to the Change in Control. 

 

	 	(h)	The CIC STIP Award Payment shall be paid within 30 calendar days following the effective date of the Change in Control. 

  

	 	(i)	Notwithstanding anything in the Plan to the contrary, to the extent that an Entitled Employee receives an additional Award Payment under the Plan in respect of any Year during which the Entitled Employee became entitled
to receive a CIC STIP Award Payment, any such additional Award Payment shall be reduced (but not below zero) by the amount of the CIC STIP Award Payment. 

  
 16 

 Appendix “A”—STIP Award Percentage 

 
  

 

																	
	Tier	  	Group	  	 Target

Percentage
	 	EBITDA
Award
Multiplier1, 2	 	 	 SH&E

Award
Multiplier3
	 	 	 Individual

Award
Multiplier4
	 
	Entitled Corporate Executives and Entitled Corporate Office Employees	  		 				 				 			
						
	 1  
	  	President and CEO	  	100%	 	 	70	% 	 	 	10	% 	 	 	20	% 
						
	 2  
	  	Exec Level 2	  	70%	 	 	70	% 	 	 	10	% 	 	 	20	% 
						
	 3  
	  	Exec Level 3	  	55%	 	 	70	% 	 	 	10	% 	 	 	20	% 
						
	 4  
	  	 Exec Levels 4a, 4b, 4c
 Staff Hay Points 1900
+
	  	40%	 	 	70	% 	 	 	10	% 	 	 	20	% 
						
	 5  
	  	Exec Level 5	  	35%	 	 	60	% 	 	 	10	% 	 	 	30	% 
						
	 6  
	  	 Exec Level 6
 Staff Hay Points 1600 to
1899
	  	30%	 	 	60	% 	 	 	10	% 	 	 	30	% 
						
	 7  
	  	 Exec Level 7
 Staff Hay Points 1300 to
1599
	  	25%	 	 	60	% 	 	 	10	% 	 	 	30	% 
						
	 8  
	  	Staff Hay Points 900 to 1299	  	20%	 	 	60	% 	 	 	10	% 	 	 	30	% 
						
	 9  
	  	Staff Hay Points 650 to 899	  	15%	 	 	60	% 	 	 	10	% 	 	 	30	% 
						
	 10
	  	Staff Hay Points 366 to 649	  	10%	 	 	50	% 	 	 	10	% 	 	 	40	% 
						
	 11
	  	Staff Hay Points 0 to 365	  	5%	 	 	50	% 	 	 	10	% 	 	 	40	% 

  
 17 

  

 

																			
	Tier	 	 	Group	 	 Target

Percentage
	 	 EBITDA

Award
Multiplier1, 2
	 	 	 Operations

Award
Multiplier4
	 	 	 Individual

Award
Multiplier4
	 
	  
	 Entitled Operations Employees
	 		 				 				 			
						
	 	6  	  	 	Managing Director, Trinidad Hay Points 1600 to 1899 5	 	30%	 	 	20	% 	 	 	50	% 	 	 	30	% 
						
	 	7  	  	 	Hay Points 1300 to 1599 5	 	25%	 	 	20	% 	 	 	50	% 	 	 	30	% 
						
	 	8  	  	 	Hay Points 900 to 1299 5	 	20%	 	 	20	% 	 	 	50	% 	 	 	30	% 
						
	 	9  	  	 	Hay Points 650 to 899 5	 	15%	 	 	20	% 	 	 	50	% 	 	 	30	% 
						
	 	10	  	 	Hay Points 366 to 649 5	 	10%	 	 	20	% 	 	 	50	% 	 	 	30	% 
						
	 	11	  	 	Hay Points 0 to 365 (excluding Trinidad) 4	 	5%	 	 	20	% 	 	 	50	% 	 	 	30	% 
						
	 	12	  	 	Hourly Employees (excluding Trinidad and those in Tier 13)	 	5%	 	 	50	% 	 	 	50	% 	 	 	0	% 
						
	 	13	  	 	Lanigan, Cory, Patience Lake and Allan unionized Hourly Employees	 	4.5%	 	 	50	% 	 	 	50	% 	 	 	0	% 

 Notes: 
  

	1.	Where the Adjusted EBITDA Ratio is greater than 150 (i.e. the maximum Adjusted EBITDA Ratio), the Adjusted EBITDA Ratio is deemed to be 150. 

If the Adjusted EBITDA Ratio is between 50% and 100%, the EBITDA Award Percentage = Target Percentage multiplied by Adjusted EBITDA Ratio. 

If the Adjusted EBITDA Ratio exceeds 100% and does not exceed 150%, the EBITDA Award Percentage = (2 times Target Percentage multiplied by
Adjusted EBITDA Ratio) minus Target Percentage. 
  

	2.	Subject to Section 4.05 (Limitation of Award Payments and General Discretion), where the Adjusted EBITDA Ratio is less than 50, the Adjusted EBITDA Ratio is deemed to be zero (0). 

 

	3.	The SH&E Award Percentage will be calculated by mathematical straight-line interpolation between 0% and 100%, with respect to performance between Threshold (110% of Target) and Target, and between 100% and 200% with
respect to performance between Target and Maximum (90% of Target). 

  

	4.	The Operations and Individual Awards are by mathematical straight-line interpolation between 0% and 200%. 

  

	5.	Weighting in 2016 for Entitled Operations Employees who are not a General Manager or do not report to a General Manager, or who are not otherwise designated, is 50%/50%/0% (i.e. no individual component).

  
 18Exhibit

Exhibit 10.7

MID-AMERICA APARTMENT COMMUNITIES, INC.
NON-QUALIFIED DEFERRED COMPENSATION PLAN
FOR OUTSIDE COMPANY DIRECTORS
AS AMENDED EFFECTIVE NOVEMBER 30, 2010

WHEREAS, Mid-America Apartment Communities, Inc. (“MAA”) maintains the Mid-America Apartment Communities, Inc. Non-Qualified Deferred Compensation Plan for Outside Company Directors (the “Plan”); and    

Whereas, the Plan was previously amended and restated, effective January 1, 2005, to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); and 

Whereas, the Plan was further amended (i) to incorporate additional changes required by Section 409A of the Code and the regulations promulgated thereunder and (ii) to permit eligible outside directors to elect Deferred Stock Awards in lieu of Restricted Stock Awards under the Mid-America Apartment Communities, Inc. 2004 Stock Plan (the “Stock Plan”); and

Whereas, MAA desires to further amend the Plan to incorporate additional changes required by Section 409A of the Code and the regulations promulgated thereunder;

NOW THEREFORE, the plan is hereby amended by the adoption of this restated plan effective November 30, 2010.

PURPOSE OF PLAN

Mid-America Apartment Communities, Inc., Mid-American Apartments, L. P. and Mid-America Apartments of Texas, L. P. (hereafter referred to as “MAA”) had determined that a non-qualified deferred compensation plan (hereafter referred to as “the Plan”) should be made available for its outside company directors.  The purpose of this Plan is (i) to enable eligible company directors to defer current taxation on all or a designated portion of their director’s fees that would otherwise be paid to them currently in the form of cash compensation and (ii) to permit eligible company directors to elect “Deferred Stock Awards” in lieu of Restricted Stock Awards under the Mid-America Apartment Communities, Inc. 2004 Stock Plan (the “Stock Plan”).  Capitalized terms used herein, but not otherwise defined in the Plan shall have the meanings as defined in the Stock Plan.

PARTICIPATION

Participants are limited to outside company directors which means a company director of Mid-America Apartment Communities, Inc. that is not also employed as an employee of MAA or any of its subsidiaries or affiliated companies.
BENEFITS

		
	1(a).
	Deferred Compensation Contributions:  Eligible directors may elect to defer all or any portion (in multiples of 25%) of the director’s fees otherwise payable in cash each year.  Such election must be made on forms supplied by MAA on or before the dates enumerated in section 2 below.  The amounts deferred by a director shall be credited to the director’s deferred compensation account, which shall be segregated from other accounts on the books and 

records of MAA, but which shall be part of the general assets of MAA and shall be subject to the claims of MAA’s general creditors.  The director shall be given the status of general creditor of MAA with respect to their deferred compensation account.

		
	1(b).
	Deferred Stock Awards:  Eligible directors may elect Deferred Stock Awards in lieu of Restricted Stock Awards that the director may otherwise be entitled to each year under the Stock Plan.  For this purpose, a Deferred Stock Award shall mean an award, grant or issuance of Common Stock of the Company pursuant to the Compensation Committee’s authority and discretion as set forth in Section 8 of the Stock Plan that may be deferred at the election of the director until such time as the individual ceases to be a director.  Such Deferred Stock Awards shall be subject to such conditions and restrictions, if any, as may be established by the Compensation Committee, in the Award Agreement (hereinafter, the “Deferred Stock Award Agreement”) executed by the director.

		
	2.
	When Deferral Election Must be Made  The election to (i) defer compensation, (ii) to change the amount of compensation to be deferred or (iii) to elect Deferred Stock Awards must be made no later than the dates specified in Section 409A of the Code and the regulations promulgated thereunder as follows:

The election to defer compensation for services performed during a taxable year or to elect Deferred Stock Awards must be made no later than the close of the preceding tax year or such other time as provided in regulations promulgated under Section 409A of the Code.

In the case of the first year in which a director becomes eligible to participate in the Plan, such elections may be made with respect to services to be performed subsequent to the election within 30 days after the date the director becomes eligible to participate in such Plan.

		
	1.
	Crediting of Plan Earnings on Deferred Compensation Contributions:  Immediately following each regularly scheduled Board of Directors meeting, MAA will credit the deferred compensation account with the accumulated cash fees owed to the directors participating in the Plan since the previous regularly scheduled Board of Directors meeting.  MAA shall not be liable for, and it makes no warranty with respect to, the results of said investments.  It is expressly understood that all assets in these accounts shall at all times remain the unrestricted property of MAA and shall not be held in trust for the directors nor shall any such asset be deemed collateral security for the performance of the obligations of MAA.  MAA may invest contributions only in the common stock of Mid-America Apartment Communities, Inc. (NYSE: MAA).  Each director participating in the Plan will receive annual statements reflecting the value of his or her accounts as reflected on MAA’s records.

		
	2.
	When Benefits Become Payable:  The director or his beneficiary designated in writing by the director shall begin receiving distributions from his deferred compensation accounts under the Plan on the 90th day following the end of the calendar year in which the individual ceases to be a director of MAA.  The vesting and exercise date of the director’s Deferred Stock Awards shall be governed by the Deferred Stock Award Agreement executed by the director. Notwithstanding the foregoing, in the event that the cessation of services as a director does not constitute a separation from service under this Plan for purposes of Code Section 409A, then the director shall begin receiving distributions from his deferred compensation accounts under 

the Plan on the 90th day following the end of the calendar year in which such a separation from service occurs.

		
	5.
	Payment of Deferred Compensation Contributions:  At the time benefits from the director’s deferred compensation account begin as described above, the amount of benefits will be calculated as follows:

Cash Payout:  For a cash payout, the value of the director’s deferred compensation account shall be valued as of December 31 immediately preceding the date payments begin, and such amount shall be paid to the director in 2 equal annual installments. The second and final payment shall include the value of dividend reinvestment shares generated from the unpaid balance then due.

Stock Payout:  For a stock payout, shares of common stock shall be issued to the director in two equal annual issuances. Half of the shares of common stock attributed to the director as of December 31 immediately preceding the date issuances begin shall be issued to the director in the first issuance. The second and final issuance shall include any dividend reinvestment shares which accumulated between the first issuance and the second and final issuance.

		
	6.
	Payment of Deferred Stock Awards:  The exercise and payment of Deferred Stock Awards shall be governed by the Deferred Stock Award Agreement executed by the director.

AMENDMENT AND TERMINATION OF PLAN

The Plan may be amended or terminated when in the sole opinion of MAA such amendment or termination is advisable.  The Plan can be amended retroactively at any time, except that it cannot be amended so that it materially adversely affects the rights of a participant as to amounts deferred prior to such amendment.  Any amendment or termination shall be made by a written instrument signed by the Chief Executive Officer, Chief Financial Officer or Corporate Secretary of MAA and consented by the Board of Directors. Any amendment or termination of the Plan and any payments made in connection with such amendment or termination must be made in compliance with Section 409A of the Code and the regulations promulgated thereunder.

MISCELLANCEOUS PROVISIONS

		
	1.
	Information to be Furnished:  Participants shall provide MAA with such information and evidence, and shall sign such documents, as may reasonably be requested from time to time for the purpose of administration of the Plan.

		
	2.
	Deferral Election Changes:  Once a deferral election is made, the percentage to be deferred will continue unchanged throughout each Plan year.  In order to change the percentage, a director must complete a new election form prior to the beginning of a Plan year.  The new election change will only be effective beginning with director fees payable during the following calendar year.

		
	3.
	Spendthrift Clause:  No participant or beneficiary shall have the right to transfer, assign, alienate, anticipate, pledge or encumber any part of the benefits provided by this Plan, nor shall such benefits be subject to seizure by legal process by any creditor of such participant or beneficiary.

		
	4.
	Governing Law:  This Plan shall be construed, administered and enforced according to the laws of Tennessee.

		
	5.
	Construction:  A pronoun or adjective in the masculine gender includes the feminine gender and the singular includes the plural, unless the context clearly indicates otherwise.

		
	6.
	Successors:  This Plan shall not be terminated by a transfer or sale of the assets of MAA or by merger or consolidation of MAA into or with any other corporation or entity, but the Plan shall be continued after such sale, merger or consolidation, and the transferee, purchaser, or successor entity shall be required as part of the sale, merger, or consolidation to agree to such continuation.

IN WITNESS WHEREOF, MAA has caused this Plan to be executed on the 30th day of November 2010, by the person named below, to be effective as of November 30, 2010.

MID-AMERICA APARTMENT COMMUNITIES, INC.

By:      /s/ Leslie Wolfgang
Leslie Wolfgang
SVP, Director of External Reporting and Corporate Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00254-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00254-of-00352.parquet"}]]