Document:

Exhibit 10.2

 

IPSCO Inc.

2005 Form 10-K

 

Amended Effective

December 31, 2002

 

IPSCO INC.

DEFERRED SHARE UNIT PLAN

FOR DIRECTORS

 

1.                                      INTRODUCTION

 

1.1                                 Purpose

 

The IPSCO Inc. Deferred Share Unit Plan for Directors has been
established to provide directors of the Company with the opportunity to acquire
share equivalent units convertible to cash or Common Shares upon their ceasing
to act as directors. Acquiring such units will allow directors to participate
in the long-term success of the Company and will promote a greater alignment of
interests between the directors and the shareholders.

 

1.2                                 Definitions

 

For purposes of the Plan:

 

(a)                                  “Additional
Fees” means the Chairman of the Board of Directors annual fee, Chairman of a
Committee annual fee, per Board Meeting fee (for either in person or by
telephone attendance) and per Committee Meeting fee payable in addition to the
Annual Retainer to Eligible Directors pursuant to the Compensation Plan;

 

(b)                                 “Annual
Retainer” means the annual retainer payable to an Eligible Director in each
year as determined by the Board from time to time in its discretion, for
service as a member of the Board during a calendar year and which, for the year
2000, shall be U.S.$28,000;

 

(c)                                  “Applicable
Withholding Taxes” means any and all taxes and other source deductions or other
amounts which the Company is required by law to withhold from any amounts to be
paid or credited hereunder;

 

(d)                                 “Award
Date” means each date on which Deferred Share Units are credited to an Eligible
Director in accordance with Section 3.1, which shall be, unless otherwise
determined by the Committee, the last business day of each calendar quarter of
each year;

 

 

(e)                                  “Award
Market Value” means the last sale price of a board lot of Common Shares on The
Toronto Stock Exchange on the last trading day on such Exchange prior to the
Award Date on which there was a trade of a board lot of Common Shares;

 

(f)                                    “Board”
means the board of directors of the Company;

 

(g)                                 “Committee”
means the committee of the Board responsible for recommending to the Board the
compensation of the Eligible Directors, which at the effective date of the Plan
is the Nomination and Governance Committee;

 

(h)                                 “Common
Shares” means the common shares of the Company;

 

(i)                                     “Company”
means IPSCO Inc.;

 

(j)                                     “Compensation
Plan” means the compensation plan for directors of the Company approved by the
Board, effective January 1, 2000, as amended from time to time;

 

(k)                                  “Deferred
Share Unit” means a unit equivalent in value to a Common Share, credited by
means of a bookkeeping entry in the books of the Company in accordance with
Section 3;

 

(l)                                     “Deferred
Share Unit Amount” has the meaning given thereto in Section 4.1;

 

(m)                               “Dividend
Equivalents” means a bookkeeping entry whereby each Deferred Share Unit is
credited with the equivalent amount of the dividend paid on a Common Share in
accordance with Section 3.3;

 

(n)                                 “Dividend
Market Value” means the last sale price of a board lot of Common Shares on The
Toronto Stock Exchange on the last trading day on such Exchange prior to a
dividend payment date on which there was a trade of a board lot of Common
Shares;

 

(o)                                 “Elected
Fees” has the meaning ascribed to such term in Section 3.1;

 

(p)                                 “Election
Form” means a document substantially in the form of Schedule “A” to this Plan;

 

(q)                                 “Eligible
Director” means a person who is, at the relevant time, a director or former
director of the Company who is not an employee of the Company or any of its
subsidiaries;

 

(r)                                    “Plan”
means this IPSCO Inc. Deferred Share Unit Plan for Directors, as amended from
time to time;

 

 

(s)                                  “Redemption
Date” means the date upon which an Eligible Director ceases to be a member of
the Board; and

 

(t)                                    “Redemption
Value” means the last sale price of a board lot of Common Shares on The Toronto
Stock Exchange on the last trading day on such Exchange prior to the Redemption
Date on which there was a trade of a board lot of Common Shares.

 

1.3                                 Effective Date of Plan

 

The effective date of the Plan shall be January 1, 2000 or such later
date as the Board may determine.

 

2.                                      ADMINISTRATION

 

2.1                                 Administration of the Plan

 

The Plan shall be administered by the Board of Directors which shall,
without limitation, have full and final authority in its discretion, but
subject to the express provisions of the Plan, to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it and to make
all other determinations deemed necessary or advisable for the administration
of the Plan. The Board of Directors may delegate any or all of its authority
with respect to the administration of the Plan and any or all of the rights,
powers and discretions with respect to the Plan granted to it hereunder to the
Committee or such other committee of directors of the Company as the Board of
Directors may designate and upon such delegation the Committee or other
committee of directors, as the case may be, as well as the Board of Directors,
shall be entitled to exercise any or all of such authority, rights, powers and
discretions with respect to the Plan. The directors of the Company may fully
participate in voting and in other deliberations or proceedings of the Board of
Directors in respect of the Plan, notwithstanding: (i) the eligibility of the
directors to participate in the Plan; and (ii) that the directors may hold
Deferred Share Units granted pursuant to the Plan.

 

2.2                                 Determination of Value if Common Shares Not Publicly
Traded

 

Should Common Shares no longer be publicly traded at the relevant time
such that the Redemption Value and/or the Award Market Value and/or the
Dividend Market Value cannot be determined in accordance with the formulae set
out in the definitions of those terms, such values shall be determined by the
Committee in good faith.

 

2.3                                 Taxes and Other Source Deductions

 

The Company shall be authorized to deduct from any amount to be paid or
credited hereunder any Applicable Withholding Taxes in such manner as the
Company determines.

 

 

3.                                      DEFERRED SHARE
UNITS

 

3.1                                 Award of Deferred Share Units

 

Each Eligible Director shall be credited with Deferred Share Units in
respect of one-half, of such director’s Annual Retainer or the full amount of
the Annual Retainer if so elected pursuant to Section 3.2(a) and the amount
elected with respect to payment of Additional Fees, if any, made by each
Eligible Director pursuant to Section 3.2(b) (collectively the “Elected Fees”),
in each case in the manner set forth in this Plan. All Deferred Share Units to
be credited to an Eligible Director will be credited to an account maintained
for the Eligible Director on the books of the Company. Deferred Share Units
will be credited to an Eligible Director in respect of the Annual Retainer and
Elected Fees, if any, earned in the calendar quarter ended on the Award Date. The
number of Deferred Share Units (including fractional Deferred Share Units) to
be credited as of each Award Date shall be determined by dividing (a) the
amount of the applicable portion of the Annual Retainer and Elected Fees, if
any, to be credited in Deferred Share Units on that Award Date by (b) the Award
Market Value.

 

3.2                                 Election

 

Each Eligible Director shall have the right to elect once each calendar
year whether such director wishes to receive: (a) all of such director’s Annual
Retainer; and/or (b) all or half of such director’s Additional Fees for the
immediately succeeding year in the form of Deferred Share Units. This election
shall be made by completing, signing and delivering to the Secretary of the
Company the Election Form: (i) in the case of an existing director, by the end
of the calendar year preceding the year to which such election is to apply; or
(ii) in the case of a new director, as soon as possible after the director’s
appointment. In each case, the election, when made, shall only apply
prospectively with respect to the Eligible Director’s Annual Retainer and
Additional Fees yet to be earned. Where no election is made with respect to the
remaining Annual Retainer or Additional Fees, such fees will remain in the form
of a cash payment.

 

3.3                                 Credits for Dividends

 

An Eligible Director’s account shall be credited with Dividend
Equivalents in the form of additional Deferred Share Units on each dividend
payment date in respect of which ordinary course cash dividends are paid on
Common Shares. Such Dividend Equivalents shall be computed by dividing: (a) the
amount obtained by multiplying the amount of the dividend declared and paid per
Common Share by the number of Deferred Share Units recorded in the Eligible
Director’s account on the record date for the payment of such dividend, by (b)
the Dividend Market Value, with fractions computed to three decimal places.

 

3.4                                 Reporting of Deferred Share Units

 

Statements of the Deferred Share Unit accounts will be provided to the
Eligible Directors at least annually.

 

 

4.                                      REDEMPTION OF
DEFERRED SHARE UNITS

 

4.1                                 Redemption of Deferred Share Units

 

(a)                                  An
Eligible Director shall be entitled on the Redemption Date to redeem the
Deferred Share Units credited to the Eligible Director’s account for an amount
(the “Deferred Share Unit Amount”) equal to the product that results from
multiplying (i) the number of Deferred Share Units recorded in the Eligible
Director’s account on the Redemption Date by (ii) the Redemption Value of the
Common Shares. Upon payment in full of the value of the Deferred Share Unit
Amount, the Deferred Share Units shall be cancelled.

 

(b)                                 The
Deferred Share Unit Amount payable to an Eligible Director, less any Applicable
Withholding Taxes, may be used to acquire Common Shares on the open market
through an independent broker designated by the Eligible Director (the “Designated
Broker”) or may be paid in cash to the Eligible Director, at the Eligible
Director’s option. Notwithstanding the foregoing, the Company may, in its
discretion, (i) pay the Deferred Share Unit Amount, less any Applicable
Withholding Taxes, in cash if the Company considers that purchase of the Common
Shares and delivery thereof to an Eligible Director in a jurisdiction would
require the Company to comply with legal requirements of the jurisdiction
applicable to the Eligible Director or the Company with respect to the purchase
of Common Shares, or (ii) subject to the receipt of any necessary shareholder
and regulatory approvals, issue to the Eligible Director such number of Common
Shares as equals the number of Deferred Share Units recorded in the Eligible
Director’s account on the Redemption Date. If the Company issues Common Shares
as aforesaid, such shares will be issued in consideration for the past services
of the Eligible Director to the Company and the entitlement of the Eligible
Director under this Plan shall be satisfied in full by such issuance of Common
Shares. The Company will also make a cash payment, less any Applicable
Withholding Taxes, to the Eligible Director with respect to the value of
fractional Deferred Share Units standing to the Eligible Director’s credit
after the maximum number of whole Common Shares has been issued by the Company
as described above.

 

(c)                                  If
the Eligible Director has elected, and the Company has determined, that payment
of the Deferred Share Unit Amount be made in the form of Common Shares
purchased on the open market through a Designated Broker, as described in
Section 4.1 (b) above, the Company will calculate the number of whole Common
Shares to be purchased by the Designated Broker on the open market on behalf
and for the benefit of the Eligible Director. The number of Common Shares will
be determined by dividing (i) the Deferred Share Unit Amount payable, less any
Applicable Withholdings Taxes, by (ii) the Redemption Value of a Common Share
as determined on the Redemption Date. On the Redemption Date or, if the
Redemption Date is not a trading date for shares on the Toronto Stock Exchange,
on the next such trading date, the Company shall advise the Designated Broker
of the specified number of whole Common Shares to be purchased on behalf of the
Eligible Director. The Designated Broker will purchase the specified number of
whole Common Shares as soon practicable after being notified by the Company. On
or before the date of settlement with respect to the purchase of the Common
Shares by the Designated Broker, the Company, acting as agent for the Eligible
Director, will pay the purchase price of the specified number of 

 

 

Common Shares to the Designated Broker, together with any reasonable
brokerage fees or commissions related thereto. The Company will also make a
cash payment, less any Applicable Withholdings Taxes, to the Eligible Director
with respect to the value of fractional Deferred Share Units still standing to
the Eligible Director’s credit after the maximum number of whole Common Shares
has been purchased as described above.

 

(d)                                 Notwithstanding
the preceding paragraphs, if an Eligible Director becomes an employee of the
Company or any of its subsidiaries, such Eligible Director’s Plan eligibility
will be suspended. In such a circumstance, the director shall not be eligible
to be credited with additional Deferred Share Units (other than Dividend
Equivalents credited under Section 3.3 on the Deferred Share Units credited to
such Eligible Director prior to the date of becoming such an employee) and
shall not be eligible for redemption of Deferred Share Units as set out in the
preceding paragraph until the later of the date of cessation of employment with
the Company or any of its subsidiaries and the date on which the director
ceases to be a member of the Board (the “Separation Date”). The date for
redemption of the Deferred Share Units in these circumstances shall be the
Separation Date and such date shall be deemed to be the Redemption Date for
purposes of the redemption of the Deferred Share Units.

 

4.2                                 Death of Eligible Director Prior to Redemption

 

Upon the death of an Eligible Director prior to the redemption of the
Deferred Share Units credited to the account of such Eligible Director under
the Plan, the beneficiary, or, in the absence of a valid designation of a
beneficiary, the estate of such Eligible Director, shall be entitled to redeem
the Deferred Share Units in accordance with Section 4.1. For greater certainty,
the Deferred Share Unit Amount payable shall be equivalent to the amount which
would have been paid to the Eligible Director pursuant to and subject to
Section 4.1, calculated as if the Eligible Director had previously ceased to be
a director of the Company on the day prior to his or her death. The beneficiary
or estate, as the case may be, shall be entitled to select the Redemption Date
and the manner of payment in satisfaction of Deferred Share Units in the same
manner as the Eligible Director would have been permitted to do so had he or
she survived and ceased to be a director of the Company on the day prior to his
or her death. Notwithstanding the foregoing, the Company may, in its
discretion, (i) pay the Deferred Share Unit Amount, less any Applicable Withholding
Taxes, in cash if the Company considers that purchase of the Common Shares and
delivery thereof to an Eligible Director’s beneficiary or estate, as the case
may be, in a jurisdiction would require the Company to comply with legal
requirements of the jurisdiction applicable to the beneficiary, the estate or
the Company with respect to the purchase of Common Shares, or (ii) subject to
the receipt of any necessary shareholder and regulatory approvals, issue to the
beneficiary or estate, as the case may be, such number of Common Shares as
equals the number of Deferred Share Units recorded in the beneficiary’s or
estate’s account on the Redemption Date.

 

 

5.                                      GENERAL

 

5.1                                 Adjustments to Deferred Share Units

 

In the event of the declaration of any stock dividend, a subdivision,
consolidation, reclassification, exchange, 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 Company’s assets to its shareholders,
the account of each Eligible Director and the Deferred Share Units outstanding
under the Plan 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 Deferred Share Units will be granted to such
Eligible Director to compensate for a downward fluctuation in the price of
Common Shares, nor will any other form of benefit be conferred upon, or in
respect of, an Eligible Director for such purpose.

 

5.2                                 Designation of Beneficiary

 

An Eligible Director may, by written notice to the Secretary of the
Company, designate a person to receive the benefits payable under the Plan on
the Eligible Director’s death, and may also by written notice to the Secretary
of the Company alter or revoke such designation from time to time, subject
always to the provisions of any applicable law. Such written notice shall be in
such form and shall be executed in such manner as the Committee in its
discretion may from time to time determine.

 

5.3                                 Amendment, Suspension, or Termination of Plan

 

(a)                                  The
Board may from time to time amend or suspend the Plan in whole or in part and
may at any time terminate the Plan. However, any such amendment, suspension, or
termination shall not adversely affect the right of any Eligible Director with
respect to Deferred Share Units credited to such Eligible Director at the time
of such amendment, suspension or termination, without the consent of the
affected Eligible Director.

 

(b)                                 If
the Board terminates the Plan, no new Deferred Share Units will be credited to
the account of an Eligible Director, but previously credited Deferred Share
Units shall remain outstanding, shall be entitled to Dividend Equivalents as
provided under section 3.3, and be paid in accordance with the terms and
conditions of the Plan existing at the time of termination. The Plan will
finally cease to operate for all purposes when the last remaining Eligible
Director receives payment, in cash or Common Shares, in satisfaction of all
Deferred Share Units recorded in the Eligible Director’s account.

 

5.4                                 Compliance with Laws

 

The administration of the Plan shall be subject to and performed in
conformity with all applicable laws and any applicable regulations of a duly
constituted authority. Should the Committee, in its sole discretion, determine
that it is not feasible or desirable to honour an election in favour of
Deferred Share Units due to such laws or regulations, its obligation shall be
satisfied by means of an equivalent cash payment (equivalence being determined
on a before-tax basis).

 

 

5.4                                 Reorganization of the Company

 

The existence of any Deferred Share Units shall not affect in any way
the right or power of the Company or its shareholders to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, or any amalgamation, combination, merger or
consolidation involving the Company or to create or issue any bonds,
debentures, shares or other securities of the Company or the rights and
conditions attaching thereto or to effect the dissolution or liquidation of the
Company or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar nature or
otherwise.

 

5.6                                 General Restrictions and Assignment

 

(a)                                  Except
as required by law, the rights of an Eligible Director under the Plan are not
capable of being anticipated, assigned, transferred, alienated, sold,
encumbered, pledged, mortgaged or charged and are not capable of being subject
to attachment or legal process for the payment of any debts or obligations of
the Eligible Director.

 

(b)                                 Rights
and obligations under the Plan may be assigned by the Company to a successor in
the business of the Company.

 

5.5                                 No Right to Service

 

Neither participation in the Plan nor any action taken under the Plan
shall give or be deemed to give any Eligible Director a right to continued
appointment as a member of the Board and shall not interfere with any right of
the shareholders of the Company to remove any Eligible Director as a member of
the Board at any time.

 

5.8                                 No Shareholder Rights

 

Under no circumstances shall Deferred Share Units be considered Common
Shares or shares of any other class of the Company, nor entitle any Eligible
Director to exercise voting rights or any other rights attaching to the
ownership of Common Shares, nor shall any Eligible Director be considered the
owner of the Common Shares by virtue of the award of Deferred Share Units.

 

5.9                                 Governing Law

 

The Plan shall be governed by, and interpreted in accordance with, the
laws of the Province of Saskatchewan and the laws of Canada applicable therein.

 

 

5.60                           Interpretation

 

In this text words importing the singular meaning shall include the
plural and vice versa, and words
importing the masculine shall include the feminine and neuter genders.

 

5.11                           Severability

 

The invalidity or unenforceability of any provision of this Plan shall
not affect the validity or enforceability of any other provision and any
invalid or unenforceable provision shall be severed from this Plan.

 

 

SCHEDULE “A”

 

IPSCO INC. DEFERRED SHARE UNIT PLAN FOR
DIRECTORS

(the “Plan”)

 

ANNUAL ELECTION FORM

 

1.                                      Annual
Retainer

 

I understand that one-half of my Annual Retainer will be received by me
in the form of Deferred Share Units. I elect to receive the balance of my
Annual Retainer as follows (please check either Box “A” or Box “B”):

 

	
  A.

  	
   

  	
  o

  	
   

  	
  in Deferred Share Units

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  - or -

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  o

  	
   

  	
  in cash.

  

 

2.                                      Additional
Fees

 

I elect to receive my Additional Fees as follows (please check either
Box “A” or Box “B”):

 

	
  A.

  	
   

  	
  o

  	
   

  	
  50% in cash and 50% in Deferred Share Units

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  - or -

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  o

  	
   

  	
  in Deferred Share Units

  

 

3.                                      Designation of
Beneficiary

 

In accordance with the terms of the Plan, I hereby revoke any
designation of beneficiary heretofore made by me under the Plan, and hereby
appoint as designated beneficiary to receive any payment in accordance with the
Plan that may fall due after my death:                                                                                                                             
[insert full name]; provided,
however, that if the above named beneficiary predeceases me such payment shall
be made to my estate.

 

4.                                      I understand
that:

 

•                                          All
capitalized terms shall have the meanings attributed to them under the Plan.

•                                          All
payments will be net of any Applicable Withholding Taxes.

 

	
   

  	
  )

  	
   

  	
   

  
	
  Witness Signature

  	
  )

  	
  Eligible Director Signature

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
  Witness Name (please print)

  	
  )

  	
  Eligible Director Name (please print)

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
  Date

  	
   

  

 

Until this Election Form is returned to the General Counsel
of the Company, 50% of the Annual Retainer will be received in the form of
Deferred Share Units and the remaining 50% Annual Retainer as well as the
Additional Fees will be paid in cash.Exhibit
10.3

 

IPSCO
Inc.

2005 Form
10-K

 

IPSCO
INC.

 

EXECUTIVE
DEFERRED COMPENSATION INCENTIVE PLAN

 

The IPSCO Inc. Executive
Deferred Compensation Incentive Plan (“Plan”)
is adopted effective as of June 1, 2005 for the benefit of select executives of
IPSCO Inc. (“Company”).  The Plan is intended to attract, retain and
motivate executives by permitting such individuals to defer a portion of their
Compensation on a pre-tax basis through an unfunded, notional account deemed to
be invested in shares of the Company’s common stock.  The Plan is intended to be a deferred
compensation plan for a select group of management or highly compensated
employees, as described in Sections 301(2), 301(a)(3) and 401(a)(1) of ERISA.

 

Accordingly, the Company
hereby adopts the Plan pursuant to the terms and provisions set forth below:

 

ARTICLE I

 

DEFINITIONS

 

Wherever used herein the
following terms shall have the meanings hereinafter set forth:

 

1.1.          “Account” or “Accounts” means the
bookkeeping account, accounts or subaccounts maintained under the Plan by the
Committee in the Participant’s name to which Compensation Deferrals, Company
Contributions and Earnings are credited in accordance with the Plan.

 

1.2.          “Beneficiary”
means the individuals or entity the Participant has designated as Beneficiary
under the IPSCO Enterprises Inc. Retirement Savings and Profit Sharing Plan (or
a successor qualified retirement savings plan), or if none, the Participant’s
spouse or, if none, his or her estate.

 

1.3.          “Board”
means the Board of Directors of the Company.

 

1.4.          “Bonus” means the additional cash
remuneration payable to a Participant pursuant to the Company’s Annual
Management Incentive Plan or any other similar or successor plan, program or
arrangement under which the Company pays an amount of cash remuneration to a
Participant above such Participant’s Salary.

 

1.5.          “Cause” means the willful and continued
neglect or refusal failure by the Participant to perform his or her duties and
responsibilities, or the willful taking of actions (or willful failures to take
actions) that materially impair the Participant’s ability to perform his or her
duties or responsibilities that in each case continues following written notice
by the Company (other than any such failure resulting from the Participant’s
incapacity due to physical or mental illness); or any act by the Participant
(discovered either during employment or thereafter) that constitutes gross
negligence or willful misconduct in the performance of his or her duties
hereunder, or the conviction of the Participant for any felony, in each case
which is materially and manifestly injurious to the Company.

 

 

For purposes of this
definition of Cause, no act, or failure to act, by Participant shall be deemed
willful unless done or omitted without good faith or without reasonable belief
that the action or omission was in the best interest of the Company.  Any act, or failure to act, based upon the
direction or instruction of the Board pursuant to a resolution duly adopted by
the Board or based upon the advice of counsel for the Company shall be presumed
to be done, or omitted to be done, in good faith and in the best interests of
the Company absent knowledge by the Participant to the contrary.

 

1.6.          “Change in Control” means the first
to occur of any of the following events:

 

(a)           A change in the ownership of the Company,
which is deemed to occur on the date that any one person, or more than one
person acting as a group as described below, acquires ownership of the Company’s
stock that, together with stock held by such person or group, constitutes more
than fifty percent (50%) of the total fair market value or total voting power
of the Company’s stock.  However, if any
one person, or more than one person acting as a group, is considered to own
more than fifty percent (50%) of the total fair market value or total voting
power of the stock of the Company, the acquisition of additional stock by the
same person or persons is not considered to cause a change in the ownership of
the corporation.  An increase in the
percentage of stock owned by any one person, or persons acting as a group, as a
result of a transaction in which the Company acquires its stock in exchange for
property will be treated as an acquisition of stock for purposes of this
section.  This section applies only when
there is a transfer or issuance of stock of the Company and the stock remains
outstanding after the transaction.

 

(b)           A change in the effective control of the
Company, which occurs on the date that either: 
(i) any one person, or more than one person acting as a group (as
described below), acquires (or has acquired during the twelve-month period
ending on the date of the most recent acquisition by such person or group)
ownership of Company stock possessing thirty-five percent (35%) or more of the
total voting power of the Company’s stock; or (ii) a majority of members of the
Board is replaced during any twelve-month period by directors whose appointment
or election is not endorsed by a majority of the members of the Company’s Board
prior to the date of appointment or election, provided that, for purposes of
this paragraph, the term “Company” refers solely to the corporation (A) for
whom the Participant is performing services at the time of the Change in
Control event, (B) that is liable for the payment of the deferred compensation
(or all corporations, if more than one is liable), or (C) that is a majority
shareholder of a corporation identified in (A) or (B) or any corporation in a
chain of corporations in which each corporation is a majority shareholder of
another corporation in the chain, ending in a corporation identified in (A) or
(B).  For this purpose, a majority
shareholder is a shareholder owning more than fifty percent (50%) of the total
fair market value and total voting power of such corporation.  If any one person, or more than one person
acting as a group, is considered to effectively control the Company, the
acquisition of additional control of the Company by the

 

2

 

same person or persons is not considered to cause a
change in the effective control of the Company.

 

(c)           A change in the ownership of a
substantial portion of the Company’s assets, which occurs on the date that any
one person, or more than one person acting as a group (as described below),
acquires (or has acquired during the twelve-month period ending on the date of
the most recent acquisition by such person or group) assets from the Company
that have a total gross fair market value equal to forty percent (40%) or more
of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition. 
For this purpose, gross fair market value means the value of the assets
of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.  A transfer of assets to an entity that is
controlled by the shareholders of the Company immediately after the transfer,
or a transfer of assets by the Company to any of the following, are not
considered to be a change in the ownership of a substantial portion of the
Company’s assets for purposes of this paragraph: (i) a shareholder of the
Company (immediately before the asset transfer) in exchange for or with respect
to its stock; (ii) an entity, fifty percent (50%) or more of the total value or
voting power of which is owned, directly or indirectly, by the Company; (iii) a
person, or more than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of
all the outstanding stock of the Company; or (iv) an entity, at least fifty
percent (50%) of the total value or voting power of which is owned, directly or
indirectly, by a person described in paragraph (iii).  For purposes of this paragraph (c) and except
as otherwise provided, a person’s status is determined immediately after the
transfer of the assets.  For example, a
transfer to a corporation in which the Company has no ownership interest before
the transaction, but which is a majority-owned subsidiary of the Company after
the transaction is not treated as a change in the ownership of the assets of
the Company.

 

(d)           Any other event(s) designated as a change
in control under the Code, regulations or guidance thereunder.

 

For purposes of this
Section, persons will not be considered to be acting as a group solely because
they purchase or own stock of the Company at the same time, or as a result of
the same public offering.  However, persons
will be considered to be acting as a group if they are owners of a corporation
that enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Company. 
If a person, including an entity shareholder, owns stock in the Company
and another corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar transaction with the Company, such shareholder
is considered to be acting as a group with other shareholders of the other
corporation only with respect to their ownership interest in that corporation
prior to the transaction.

 

1.7.          “Code” means the Internal Revenue Code of
1986, as amended from time to time, and any regulations relating thereto.

 

3

 

1.8.          “Committee” means the Management Resource
and Compensation Committee of the Board.

 

1.9.          “Company” means IPSCO Inc., a corporation
under the Canada Business Corporations Act (and any successor corporation or
other entity resulting from a merger or consolidation into or with the Company
or a transfer or sale of substantially all of the assets of the Company), or
any member of its controlled group (as defined in Sections 414(b), (c), (m) or
(o) of the Code) that adopts the Plan with the Company’s written approval.

 

1.10.        “Company Contributions” means any
contributions the Company may make, in its discretion, to a Participant’s
Account pursuant to Section 2.2.

 

1.11.        “Compensation” means a Participant’s
Salary payable in any Plan Year and any Bonus attributable to a service period
that begins in such Plan Year.

 

1.12         “Compensation Deferral” means an election
made by the Participant to defer a portion of his or her Compensation for a
Plan Year, as set forth in Section 2.1 of the Plan.

 

1.13.        “Disability” means a medically
determinable physical or mental impairment that can be expected to result in
death or to last for a continuous period of not less than twelve (12) months
and (i) that causes a Participant to be unable to engage in any substantial
gainful activity, or (ii) that has caused the Participant to receive income
replacement benefits for a period of not less than three (3) months under an
accident and health plan covering employees of the Participant’s employer.

 

1.14.        “Earnings” means a positive or negative adjustment
of an Account that tracks the Company’s shares of common stock as if the
nominal shares in the Account were shares registered to the Participant,
including, but not limited to, any appreciation, depreciation, dividend
equivalents or stock splits.

 

1.15.        “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended.

 

1.16.        “Participant” means a key employee of the
Company whom the Committee designates as eligible to participate in the Plan
and who makes a Compensation Deferral for such Plan Year.  A Participant shall remain a Participant
until he or she has received a distribution of the entire Account.

 

1.17.        “Plan” means the IPSCO Inc. Executive
Deferred Compensation Incentive Plan, as set forth herein and as hereinafter
amended from time to time.

 

1.18.        “Plan
Year” means the calendar year.

 

1.19.        “Salary” means a Participant’s rate of
base salary rate during the Plan Year.

 

1.20.        “Termination of Employment” means the
date on which the Participant for any reason ceases to be a common law employee
of the Company or any member of its controlled group.

 

4

 

ARTICLE II

 

COMPENSATION DEFERRALS AND CONTRIBUTIONS

 

2.1.          Compensation Deferral Elections. 
A Participant may elect to defer the receipt of a portion of his or her
Compensation from the Company in a Plan Year pursuant to rules and election
forms as may be established by the Committee. The amount of Compensation
deferred by a Participant shall be a fixed amount or percentage of such Compensation,
but shall not exceed: (i) fifty percent (50%) of such Participant’s Salary for
the Plan year; or (ii) a percentage of such Participant’s Bonus as permitted by
the Committee in its discretion.

 

The election by which a
Participant elects to defer Compensation as provided in this Plan shall be in
writing, signed by the Participant, and delivered to the Committee no later
than the December 31 preceding the beginning of the Plan Year for which
Compensation is to be deferred, or as otherwise permitted under Code Section
409A.  A Participant’s properly completed
election will become effective upon acceptance by the Company or as soon as
practicable thereafter.

 

Notwithstanding the
foregoing provisions of this Section 2.1:

 

(a)           in the
year in which the Plan is first established, a Participant may make an election
to defer Salary and/or Bonus to be earned for services performed both (i) after
the date the Plan is established and (ii) after the Participant’s election
becomes effective; and

 

(b)           in the
year in which a Participant first becomes eligible to participate in the Plan,
such Participant may make an election to defer Compensation for services to be
performed subsequent to the election, within thirty (30) days of the date the
Participant becomes eligible to participate in the Plan.

 

Any deferral election
made by the Participant shall be irrevocable with respect to the Compensation
covered by such election.

 

2.2.          Company Contributions. 
The Company, in its discretion, may make contributions on behalf of a
Participant for any Plan Year.  A Company
Contribution made on behalf of one Participant shall not entitle any other
Participant to a Company Contribution.

 

2.3           Deferral Period and Distribution. 
At the time a Participant makes a Compensation Deferral for a Plan Year,
the Participant may designate a date on which such Plan Year’s Compensation
Deferrals (and any Company Contributions made in such Plan Year), together with
any Earnings thereon, shall be distributed pursuant to Article IV and shall
elect a form of distribution under Section 4.2.

 

5

 

ARTICLE III

 

ACCOUNTS

 

3.1.          Participant Accounts. 
The Company shall maintain on behalf of each Participant a hypothetical,
bookkeeping account that will be deemed to consist exclusively of whole and
partial shares of the Company’s common stock.

 

3.2           Crediting of Accounts. 
All Compensation Deferral amounts shall be credited to a Participant’s
Account and credited with Earnings from the date the Compensation amount would
have been paid to the Participant, if not deferred.  Company Contributions, if any, shall be
credited to the Account as determined in the discretion of the Committee.  Earnings shall be credited to the Account as
of the date such Earnings would have been received by the Participant had the
nominal shares in the Account been actual shares registered to the Participant.
Amounts credited to the Account will be converted to nominal shares based on a)
the last sale price of a board lot of Common Shares on the Toronto Stock
Exchange and b) the closing Canadian-U.S. dollar exchange rate posted by the
Bank of Canada, each as of the date the Account is credited in accordance with
this Section 3.2.

 

3.3.          Forfeiture of Accounts. 
The portion of a Participant’s Account attributable to Compensation
Deferrals (and Earnings thereon) shall be nonforfeitable at all times.  Company Contributions shall be forfeitable
upon such terms determined by the Committee in writing at the time such Company
Contribution is credited to the Account. 
Notwithstanding any provision of this Section 3.3 to the contrary, if
the Committee finds Cause with respect to the Participant, the Participant
shall forfeit his or her entire Account and return any shares previously
distributed pursuant to Article IV to the Company at no cost.

 

ARTICLE IV

 

DISTRIBUTION
OF ACCOUNTS

 

4.1.          Distribution Events. 
The Company shall distribute a Participant’s Account (or a portion of
the Account, as applicable) to the Participant as soon as practicable upon the
earliest of the following:

 

(a)           the Participant’s Disability or death;

 

(b)           a Change in Control (as defined under
Section 409A of the Code);

 

(c)           the Participant’s Termination of
Employment (or in the case a “key employee” as defined in Code Section 416(i),
six months following the Participant’s Termination of Employment);

 

(d)           the date elected by a Participant with
respect to Compensation Deferrals and Company Contributions (and related
Earnings) made for a particular Plan Year.

 

6

 

4.2.          Form of Distribution. 
Distributions shall be made in the whole shares of the Company’s common
stock, with a payment of cash representing any partial shares, in a single,
lump sum distribution or in ten or fewer annual installments, as elected by the
Participant under Section 2.3.  If the
Participant fails to properly elect a form of distribution, distribution will
be made in a lump sum.  Notwithstanding the
foregoing, if the amount in a Participant’s Accounts at the time of the Participant’s
termination of employment for any reason is $25,000 or less, the Committee
shall cause the amount in such Accounts to be distributed to the Participant or
his or her Beneficiary in a single lump sum as soon as practicable.  For purposes of this Section 4.2, the Account
will be valued or converted to full and partial shares based on a) the last
sale price of a board lot of Common Shares on the Toronto Stock Exchange and b)
the closing Canadian-U.S. dollar exchange rate posted by the Bank of Canada,
each as of the date the Account is distributed to the Participant.

 

4.3.          Redeferral Election. 
A Participant may change his or her election as to the period or
commencement of distribution of his or her Accounts, provided, however, that:

 

(a)           a change in
distribution election will not be effective unless the Participant files such
change in writing with the Committee at least twelve (12) months prior to the
date that the distribution of his or her Accounts is otherwise scheduled to
commence;

 

(b)           any deferred
amounts subject to such change will be deferred for an additional period of not
less than five (5) years from the date the distribution would otherwise have
commenced, except with regard to payments made due to the Participant’s death
or Disability, or due to an unforeseeable emergency;

 

(c)           a change
in distribution election will not take effect until at least twelve (12) months
after such change is properly filed with the Committee; and

 

(d)           in no
event will a change in distribution election be permitted if such change
accelerates the time or schedule of any payment under the Plan.

 

4.4.          Hardship Distribution. 
A Participant may request, by filing a written form with the Committee,
that a distribution be made to him or her of all or part of the amount then
credited to his or her Accounts on account of a severe financial hardship.  The Committee will approve such a
distribution to the Participant only in the event of an unforeseeable
emergency.  An “unforeseeable emergency”
means a severe financial hardship to a Participant resulting from an illness or
accident of the Participant, the Participant’s spouse (as that term is used in
the Code), or a dependent (within the meaning of Section 152(a) of the Code) of
the Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances, arising from events
beyond the Participant’s control. 
Whether circumstances constitute an unforeseeable emergency depends on
the facts of each case, as determined by the Committee, but in any case does
not include a hardship that may be relieved through reimbursement or
compensation by insurance or otherwise, by liquidation of the Participant’s
assets to the extent that liquidation itself would not cause such a severe financial
hardship, or by ceasing to defer receipt of any Compensation not yet
earned.  The need to send a Participant’s
child to college and the desire to purchase a home shall not constitute an
unforeseeable emergency.  Any hardship
distribution shall be limited to an amount reasonably necessary to

 

7

 

meet the unforeseeable emergency and any taxes reasonably anticipated
as a result of the distribution, but not more than the amount of the
Participant’s Account.

 

ARTICLE V

 

ADMINISTRATION
OF THE PLAN

 

5.1.          Administration by the Committee. 
The Committee shall be responsible for the general operation and
administration of the Plan and for carrying out the provisions thereof.

 

5.2.          Powers and Duties of Committee.  The Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan.  The Committee,
in its discretion, shall interpret the Plan and shall determine all questions
arising in the administration, interpretation, and application of the Plan,
including but not limited to questions of eligibility and the status and rights
of employees, Participants and other persons. 
Any such determination by the Committee shall presumptively be conclusive
and binding on all persons.  To the
extent not inconsistent with this Plan, all provisions set forth in the Company’s
qualified retirement savings plan with respect to the administrative powers and
duties of the Committee, expenses of administration, and procedures for filing
claims, also shall be applicable with respect to this Plan.

 

ARTICLE VI

 

AMENDMENT
OR TERMINATION

 

6.1.          Amendment or Termination. 
The Committee intends the Plan to be permanent but reserves the right to
amend or terminate the Plan.  Any such
amendment or termination shall be made pursuant to a resolution of the
Committee and shall be effective as of the date of such resolution; provided,
however, that no amendment or termination shall adversely affect a Participant’s
entitlement to benefits attributable to amounts credited to his or her Account
in any Plan Year immediately prior to the Plan Year of the amendment or
termination without the Participant’s written consent.

 

6.2.          Effect of Amendment or Termination. 
No amendment or termination of the Plan shall directly or indirectly
reduce the balance or accelerate the distribution of any Account held hereunder
as of the effective date of such amendment or termination.  No additional contributions shall be made to
the Account of a Participant after termination of the Plan, but the Company
shall continue to credit Earnings to Participants’ Accounts pursuant to Section
3.2, until the balance of such Accounts have been fully distributed to each
Participant or beneficiary, as applicable.

 

ARTICLE VII

 

GENERAL
PROVISIONS

 

7.1.          Participants’ Rights Unsecured. 
Except as set forth in Section 7.2, the Plan at all times shall be
entirely unfunded and no provision shall at any time be made with respect to
segregating any assets of the Company for payment of any benefits
hereunder.  The right of a

 

8

 

Participant or the
Participant’s Beneficiary to receive a distribution of the Participant’s
Accounts hereunder shall be an unsecured claim against the general assets of
the Company, and neither the Participant nor a Beneficiary shall have any
rights in or against any specific assets of the Company.

 

7.2.          Trust Agreement. 
Notwithstanding the provisions of Section 7.1, the Company may enter
into a trust agreement (“Trust Agreement”) whereby the Company shall agree to
contribute to a trust (“Trust”) for the purposes of accumulating assets to
assist the Company in fulfilling its obligations to Participants
hereunder.  Upon a Change in Control, the
Company shall make such contributions to the Trust as shall be necessary to
fully fund the benefits of each eligible Participant under the Plan in
accordance with the terms of the Plan and Trust Agreement.  Such Trust Agreement shall include provisions
required in such model trust agreement that all assets of the Trust shall be
subject to the creditors of the Company in the event of insolvency.

 

7.3.          No Guaranty of Benefits. 
Nothing contained in the Plan shall constitute a guaranty by the Company
or any other person or entity that the assets of the Company will be sufficient
to pay any benefit hereunder.  No
Participant or other person shall have any right to receive a benefit or a
distribution of Accounts under the Plan except in accordance with the terms of
the Plan.

 

7.4.          No Enlargement of Employee Rights. 
Establishment of the Plan shall not be construed to give any Participant
the right to be retained in the service of the Company.

 

7.5.          Spendthrift Provision. 
No interest of any person or entity in, or right to receive a
distribution under, the Plan shall be subject in any manner to sale, transfer,
assignment, pledge, attachment, garnishment, or other alienation or encumbrance
of any kind; nor may such interest or right to receive a distribution be taken,
either voluntarily or involuntarily for the satisfaction of the debts of, or
other obligations or claims against, such person or entity, including claims
for alimony, support, separate maintenance and claims in bankruptcy
proceedings.

 

7.6           Applicable Law. 
The Plan shall be construed and administered under the laws of the State
of Illinois except to the extent preempted by federal law.

 

7.7.          Incapacity of Recipient. 
Subject to applicable state law, if any person entitled to a payment
under the Plan is deemed by the Committee to be incapable of personally
receiving and giving a valid receipt for such payment, then, unless and until
claim therefor shall have been made by a duly appointed guardian or other legal
representative of such person, the Committee may provide for such payment or
any part thereof to be made to any other person or institution then
contributing toward or providing for the care and maintenance of such
person.  Any such payment shall be a
payment for the account of such person and a complete discharge of any
liability of the Company and the Plan therefor.

 

7.8.          Corporate Successors. 
The Plan shall not be automatically terminated by a transfer or sale of
assets of the Company, or by the merger or consolidation of the Company into or
with any other corporation or other entity, but the Plan shall be continued
after such sale, merger or consolidation only if and to the extent that the
transferee, purchaser or successor entity agrees to continue the Plan.  In the event that the Plan is not continued
by the transferee, purchaser or successor entity, the Plan shall terminate
subject to the provisions of Article VI.

 

9

 

7.9.          Unclaimed Benefit. 
Each Participant or Beneficiary shall keep the Company informed of his
or her current address.  The Company
shall not be obligated to search for the whereabouts of any person.  If the location of a Participant is not made
known to the Company within three years after the date on which payment of the
Participant’s benefits under the Plan, may first be made, payment may be made
as though the Participant had died at the end of the three-year period.  If, within one additional year after such
three-year period has elapsed, or, within three years after the actual death of
a Participant, the Company is unable to locate any Beneficiary of the
Participant, then the Company shall have no further obligation to pay any
benefit hereunder to such Participant or Beneficiary or any other person and
such benefit shall be irrevocably forfeited.

 

7.10.        Assignment and
Alienation of Benefits.  The
right of each Participant to any account, benefit or payment hereunder will
not, to the extent permitted by law, be subject in any manner to attachment or
other legal process for the debts of that Participant; and no account, benefit
or payment will be subject to anticipation, alienation, sale, transfer,
assignment or encumbrance except by will, by the laws of descent and
distribution, or by a Participant election to satisfy a property settlement
agreement pursuant to a divorce.

 

7.11.        Limitations on Liability. 
Notwithstanding any of the preceding provisions of the Plan, none of the
Company, any member of the Committee, nor any individual acting as an employee
or agent of the Company or the Committee, shall be liable to any Participant,
former Participant or any Beneficiary or other person for any claim, loss,
liability or expense incurred in connection with the Plan.

 

7.12.        Claims Procedure. 
In the event that a Participant’s claim for benefits under the Plan is
denied in whole or in part by the Committee, the Committee will notify the
Participant (or Beneficiary) of the denial. 
Such notification will be made in writing, within 90 days of the date
the claim is received by the Committee. 
The notification will include: (i) the specific reasons for the denial;
(ii) specific reference to the Plan provisions upon which the denial is based;
(iii) a description of any additional information necessary for the claimant to
perfect the claim and an explanation of why such material or information is
necessary; and (iv) an explanation of the applicable review procedures.

 

The Participant (or
Beneficiary) has 90 days from the date he or she receives notice of a claim
denial to file a written request for review of the denial with the
Committee.  The Committee will review the
claim denial and inform the Participant (or Beneficiary) in writing of its
decision within 60 days of the date the claim review request is received by the
Committee, unless special circumstances require an extension of time, in which
case, a decision shall be rendered not later than 120 days after the receipt of
a request for review. Such decision shall be final and binding on the claimant.

 

7.13.        Interpretation. 
Words in the masculine gender shall include the feminine and the
singular shall include the plural, and vice versa, unless qualified by the
context.  Any headings used herein are
included for ease of reference only and are not to be construed so as to alter
the terms hereof.

 

10

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