Document:

exv10wbb

 

Exhibit 10(bb)

THE POTASH CORPORATION OF SASKATCHEWAN INC.

DEFERRED SHARE UNIT PLAN FOR NON-EMPLOYEE DIRECTORS

			
	Section 1	 	Purpose

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

			
	Section 2	 	Definitions

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

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

 

 

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

 

 

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

			
	Section 3	 	Administration of the Plan

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

			
	Section 4	 	Eligibility

The Plan shall apply to all members of the Board who, at the time of any discretionary grant
described in Section 5(a) below or at the time of execution of the Agreement and at all times
thereafter while they continue to serve as a member of the Board, as the case may be, are not
employees of the Corporation or of any Subsidiary of the Corporation (“Eligible Directors”).

A Participant who becomes an employee of the Corporation or a Subsidiary of the Corporation shall
no longer be eligible to receive Share Units under the Plan. In that case, starting with the
Quarter in which the Participant became such an employee, all of his or her future Quarterly
Retainer Payments, if any, shall be paid in cash. However, Share Units already credited to such
person’s account shall remain governed by the Plan for so long as there has been no Termination of
Board Service with respect to such person.

 

 

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

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

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

 

 

			
	Section 6	 	Execution of Agreement

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

			
	Section 7	 	Dividendlike Amounts

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

			
	Section 8	 	Payment of Share Units

Except as may be determined by the Committee, and approved by the Board, or except as set forth
below in this Section 8, the entitlement date (“Entitlement Date”) of a Participant with respect to
whom Termination of Board Service has occurred shall be the tenth (10th) trading day
following the release of the Corporation’s quarterly or annual results immediately following
Termination of Board Service by the Participant. In no event shall the Entitlement Date occur
later than two and one half months after the beginning of the calendar year commencing immediately
after the Termination of Board Service by the Participant. A Participant shall receive no later
than two and one half months after the beginning of the calendar year commencing immediately after
the Termination of Board Service by the Participant, at the discretion of the Committee, and as
approved by the Board, in satisfaction of the number of Share Units recorded in the Participant’s
account on the Entitlement Date: (1) a number of Common Shares to be purchased on the open market
equal to the number of Share Units then recorded in the account of the Participant, or as may be
adjusted pursuant to Section 19 hereof, and reduced by any applicable withholding taxes and other
source deductions reflected in the form of Share Units, required by law to be withheld by the
Corporation in connection with the total payments made in satisfaction of the Participant’s Share
Units; or (2) a cash payment equal to the product determined by multiplying: (a) the number of
Share Units then recorded in the account of the Participant, by (b) the Payout Market Value of a
Common Share on the Entitlement Date, net of applicable withholdings. No payment of Share Units
shall be made by the Corporation to a Participant under the Plan until Termination of Board Service
has occurred with respect to such Participant.

Where the Corporation’s Common Shares are to be purchased on the open market, the Corporation shall
notify the Broker on the Entitlement Date as to the number of Common Shares to be purchased by the
Broker on behalf of the Participant. As soon as practicable thereafter, the Broker shall purchase
on the open market the number of Common Shares which the Corporation has requested the Broker to
purchase and notify the Participant and the Corporation of: (1) the aggregate purchase price
(“Aggregate Purchase Price”) of the Common Shares, (2) the purchase price per Common Share or, if
the Common Shares were purchased at different prices, the average purchase price (computed on a
weighted average basis) per Common Share (“Price per Common Share”), (3) the amount of any related
reasonable brokerage commission, and (4) the settlement date for the purchase of the Common Shares.
On the settlement date, upon payment of the Aggregate Purchase Price and related reasonable
brokerage commission by the Corporation, the Broker shall deliver to the Participant or to his
legal representative the certificate representing the Common Shares. Regardless of whether a cash
payment or Common Shares of the Corporation are used to satisfy the Participant’s Share Unit
entitlement, any entitlement to

 

 

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

			
	Section 9	 	Participant’s Account

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

			
	Section 10	 	Deferral of Other Fees

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

			
	Section 11	 	Effective Date of the Plan

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

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

The Board may from time to time amend, suspend or terminate the Plan in whole or in part. However,
any such amendment, suspension or termination shall not adversely affect the rights of any
Participant under any Agreement existing at the time of such amendment, suspension or termination
without the consent of the affected Participant. Notwithstanding the foregoing, any amendment or
termination of the Plan shall be such that the Plan continuously satisfies the requirements of
Regulation 6801(d) of the Act or any successor provision thereto.

If the Board terminates the Plan, prior awards of Share Units shall, at the discretion of the
Board, either (1) become immediately payable in accordance with the terms of the Plan in effect at
such time, or (2) remain outstanding and in effect and paid in due course in accordance with their
applicable terms and conditions.

			
	Section 13	 	Purchases on the Open Market

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

 

 

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

			
	Section 14	 	Rights of Participants

Except as specifically set out in the Plan or an Agreement, no Eligible Director, Participant or
other person shall have any claim or right to any Common Shares deliverable in payment of Share
Units granted pursuant to the Plan.

Under no circumstances shall Share Units be considered Common Shares nor shall they entitle any
Participant to exercise voting rights or any other rights attaching to the ownership of the Common
Shares, nor shall any Participant be considered the owner of the Common Shares until after the date
of the purchase of such Common Shares on the open market.

Neither the Plan nor any grant thereunder shall be construed as granting a Participant a right to
be retained as a member of the Board or as a member of the board of directors of any Subsidiary or
a claim or right to any future grants of Share Units.

			
	Section 15	 	Death of Participant

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

			
	Section 16	 	Compliance with Applicable Laws

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

			
	Section 17	 	Withholding Taxes

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

			
	Section 18	 	Transferability

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

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

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

 

 

			
	Section 20	 	Unfunded Plan

Unless otherwise determined by the Committee and approved by the Board, the Plan shall be unfunded
until payment of the Share Units under Section 8 hereof.

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

			
	Section 21	 	Governing Law

The Plan shall be governed by and interpreted in accordance with the laws in force in the province
of Saskatchewan.exv10wff

 

Exhibit 10(ff)

Appendix C

2008 Performance Option Plan

	1.	 	PURPOSE OF PLAN
	 
	 	 	Potash Corporation of Saskatchewan Inc. (the “Corporation”) by resolution of its Board of
Directors (the “Board”) has established, subject to shareholder approval at the Corporation’s
2008 Annual and Special Meeting of shareholders, this Potash Corporation of Saskatchewan Inc.
2008 Performance Option Plan (the “Plan”) to support the Corporation’s compensation philosophy
of providing selected employees and officers with an opportunity to: promote the growth and
profitability of the Corporation; align their interests with shareholders; and earn compensation
commensurate with corporate performance. The Corporation believes this Plan will directly assist
in supporting the Corporation’s compensation philosophy by providing participants with the
opportunity through stock options, which will vest, if at all, based on corporate performance
over a three-year period, to acquire Common Shares of the Corporation (“Common Shares”).
	 
	2.	 	DURATION OF THIS PLAN
	 
	 	 	This Plan was adopted by the Board on February 20, 2008 to be effective as of January 1, 2008
(the “Effective Date”), subject to shareholder approval at the Corporation’s 2008 Annual and
Special Meeting of shareholders, and shall remain in effect, unless sooner terminated as
provided herein, until one (1) year from the Effective Date, at which time it will terminate.
After this Plan is terminated, no stock options may be granted but stock options previously
granted shall remain outstanding in accordance with their applicable terms and conditions and
this Plan’s terms and conditions.
	 
	3.	 	ADMINISTRATION
	 
	 	 	This Plan shall be administered by the Compensation Committee of the Board or any other
committee designated by the Board to administer this Plan (the “Committee”). The Committee shall
be responsible for administering this Plan, subject to this Section 3 and the other provisions
of this Plan. The Committee may employ attorneys, consultants, accountants, agents, and other
individuals, any of whom may be an employee, and the Committee, the Corporation, and its
officers and directors shall be entitled to rely upon the advice, opinions, or valuations of any
such individuals. All actions taken and all interpretations and determinations made by the
Committee shall be made in the Committee’s sole discretion and shall be final and binding upon
the participants, the Corporation, and all other interested individuals. To the extent
applicable, the Plan shall be administered with respect to optionees subject to the laws of the
U.S. so as to avoid the application of penalties pursuant to Section 409A of the Internal
Revenue Code, and stock options hereunder may be subject to such restrictions as the Committee
determines are necessary to avoid application of such Section 409A.
	 
	4.	 	AUTHORITY OF THE COMMITTEE
	 
	 	 	The Committee shall have full and exclusive discretionary power to interpret the terms and the
intent of this Plan and any Stock Option Award Agreement or other agreement or document
ancillary to or in connection with this Plan, to determine eligibility for stock options and to
adopt such rules, regulations, forms, instruments, and guidelines for administering this Plan as
the Committee may deem necessary or proper. Such authority shall include adopting modifications
and amendments to any Stock Option Award Agreement that are necessary to comply with the laws of
the countries and other jurisdictions in which the Corporation and/or its subsidiaries operate.

 

 

	5.	 	SHARES SUBJECT TO STOCK OPTIONS
	 
	 	 	The aggregate number of Common Shares issuable after February 20, 2008 pursuant to stock options
under this Plan may not exceed 1,000,000 Common Shares. The aggregate number of Common Shares in
respect of which stock options have been granted to any one person pursuant to this Plan and
which remain outstanding shall not at any time exceed 250,000. The authorized limits under this
Plan shall be subject to adjustment under Sections 12 and 13.
	 
	 	 	If any stock option granted under this Plan, or any portion thereof, expires or terminates for
any reason without having been exercised in full, the Common Shares with respect to which such
option has not been exercised shall again be available for further stock options under this
Plan; provided, however, that any stock option that is granted under this Plan that does not
vest as a result of a failure to satisfy the Performance Measures, shall not be again available
for grant under this Plan.
	 
	6.	 	GRANT OF STOCK OPTIONS
	 
	 	 	From time to time the Board may designate individual officers and employees of the Corporation
and its subsidiaries eligible to be granted options to purchase Common Shares and the number of
Common Shares which each such person will be granted a stock option to purchase; provided that
the aggregate number of Common Shares subject to such stock options may not exceed the number
provided for in Section 5 of this Plan. Non-employee directors and other non-employee
contractors and third party vendors are not eligible to participate in this Plan.
	 
	7.	 	OPTION PRICE
	 
	 	 	The option price for any option granted under this Plan to any optionee shall be fixed by the
Board when the option is granted and shall be not less than the fair market value of the Common
Shares at such time which, for optionees resident in the United States and any other optionees
designated by the Board, shall be deemed to be the closing price per Common Share on the New
York Stock Exchange on the last trading day immediately preceding the day the option is granted
and, for all other optionees, shall be deemed to be the closing price per Common Share on the
Toronto Stock Exchange on the last trading day immediately preceding the day the option is
granted; provided that, in either case, if the Common Shares did not trade on such exchange on
such day the option price shall be the closing price per share on such exchange on the last day
on which the Common Shares traded on such exchange prior to the day the option is granted.
	 
	8.	 	VESTING OF STOCK OPTIONS
	 
	 	 	Subject to achievement of Performance Measures as certified and approved by the Audit Committee
of the Board, stock options granted under this Plan will vest no later than thirty (30) days
after the audited financial statements for the applicable Performance Period have been approved
by the Board.
	 
	9.	 	PERFORMANCE MEASURES FOR VESTING OF STOCK OPTIONS

	 	(a)	 	The Performance Measures which will be used to determine the degree to which stock
options will vest over the three-year period beginning the first day of the fiscal year in
which they are granted (the “Performance Period”) shall be cash flow return on investment
(“CFROI”) and weighted average cost of net debt and equity capital (“WACC”).

	 	(i)	 	CFROI is the ratio of after tax operating cash flow to average gross
investment over the fiscal year, calculated as A divided by B, where (1) A equals
operating income less/plus nonrecurring or unusual items plus accrued incentive
awards plus depreciation and amortization less current taxes, and (2) B equals the
average of

 

 

	 	 	 	total assets less/plus the fair value adjustment for investments in available for sale
securities less the fair value of derivative instrument assets plus accumulated
depreciation plus accumulated amortization less cash and cash equivalents less non
interest bearing current liabilities.
	 
	 	(ii)	 	WACC is the weighted average cost of net debt and equity capital,
calculated as [A times the product of B divided by C] plus [D times the product of E
divided by C], where (1) A equals the after-tax market yield cost of debt, (2) B
equals the market value of debt less cash and cash equivalents (3) C equals the
market value of debt less cash and cash equivalents, plus the market value of
equity, (4) D equals the cost of equity, and (5) E equals the market value of
equity.

	 	(b)	 	In determining the number of stock options that will actually vest based on the
degree to which the Performance Measures have been attained during the applicable
Performance Period, the following chart shall be utilized which shows the three year
average excess of CFROI being greater than WACC and the respective portion of the stock
option that will vest:

	 	 	 
	Performance Measure	 	Vesting Scale
	3 year average excess of	 	% of Stock Option
	CFROI> WACC	 	Grant Vesting
	<0%
	 	0%
	0.20%
	 	30%
	1.20%
	 	70%
	2.20%
	 	90%
	2.50%
	 	100%

	 	(c)	 	In assessing the portion of the stock options that shall vest in accordance with the
above chart, the following shall be done:

	 	(i)	 	Each year, the CFROI and WACC will be calculated in accordance with the
definitions herein, based on the audited financial statements and approved by the
Audit Committee.
	 
	 	(ii)	 	In each Performance Period, the average of the three fiscal years shall
be calculated by taking the simple average of the individual years’ results.
	 
	 	(iii)	 	The resulting three-year average will then be applied, using the scale
above to determine the number of stock options, if any, that will vest as of the end
of the Performance Period.
	 
	 	(iv)	 	For results falling between the reference points in the chart above, the
level of vesting shall be mathematically interpolated between the reference points.

	10.	 	TERMS OF STOCK OPTIONS
	 
	 	 	The period during which a stock option is exercisable (the “Term”) may not exceed 10 years from
the date the stock option is granted (the “Initial Exercise Period”), plus any Additional
Exercise Period (as defined below). If such Initial Exercise Period would otherwise expire (i)
during a Blackout Period (as defined below) applicable to the relevant optionee or (ii) within
10 trading days after the expiration of the Blackout Period applicable to the relevant optionee,
the Term of the related stock option shall expire on the date that is the tenth trading day
after the end of such Blackout Period (an “Additional Exercise Period”). For purposes of this
Plan, “Blackout Period” means any period during which the relevant optionee is prohibited by the
Corporation’s trading policy from trading in the Corporation’s securities. The Stock Option
Award Agreement may contain provisions limiting the number of Common Shares with 

 

 

	 	 	respect to which stock options may be exercised in any one year. Each stock option agreement shall contain
provisions to the effect that:

	 	(a)	 	if the employment of an optionee as an officer or employee of the Corporation or a
subsidiary terminates, by reason of his or her death, or if an optionee who is a retiree
pursuant to Section 10(b) dies, the legal personal representatives of the optionee will be
entitled to exercise any unexercised vested options, including such stock options that may
vest after the date of death, during the period ending at the end of the twelfth calendar
month following the calendar month in which the optionee dies, failing which exercise the
stock options terminate;
	 
	 	(b)	 	subject to the terms of Section 10(a) above, if the employment of an optionee as an
officer or employee of the Corporation or a subsidiary terminates, by reason of retirement
in accordance with the then prevailing retirement policy of the Corporation or subsidiary,
the optionee will be entitled to exercise any unexercised vested stock options, including
such stock options that may vest after the date of retirement, during the period ending at
the end of the 36th month following the calendar month in which the optionee retires,
failing which exercise the stock options terminate;
	 
	 	(c)	 	if the employment of an optionee as an officer or employee of the Corporation or a
subsidiary terminates, for any reason other than as provided in Sections 10(a) or (b), the
optionee will be entitled to exercise any unexercised vested stock options, to the extent
exercisable at the date of such event, during the period ending at the end of the calendar
month immediately following the calendar month in which the event occurs, failing which
exercise the stock options terminate;
	 
	 	(d)	 	for greater certainty and for these purposes, an optionee’s employment with the
Corporation or a subsidiary shall be considered to have terminated effective on the last
day of the optionee’s actual and active employment with the Corporation or subsidiary
whether such day is selected by agreement with the optionee or unilaterally by the
Corporation or subsidiary and whether with or without advance notice to the optionee. For
the avoidance of doubt, no period of notice that is given or ought to have been given
under applicable law in respect of such termination of employment will be utilized in
determining an optionee’s entitlement under the Plan. The employment of an optionee with
the Corporation shall be deemed to have terminated for all purposes of the Plan if such
person is employed by or provides services to a person that is a subsidiary of the
Corporation and such person ceases to be a subsidiary of the Corporation, unless the
Committee determines otherwise; and
	 
	 	(e)	 	each stock option is personal to the optionee and is not assignable, except (i) as
provided in Section 10(a), and (ii) at the election of the Board, a stock option may be
assignable to the spouse, children and grandchildren of the original optionee and to a
trust, partnership or limited liability company, the entire beneficial interest of which
is held by one or more of the foregoing.

	 	 	Nothing contained in Sections 10(a), (b) or (c) shall extend the Term beyond its stipulated
expiration date or the date on which it is otherwise terminated in accordance with the
provisions of this Plan.
	 
	 	 	If a stock option is assigned pursuant to Section 10(e)(ii), the references in Sections 10(a),
(b) and (c) to the termination of employment or death of an optionee shall not relate to the
assignee of a stock option but shall relate to the original optionee. In the event of such
assignment, legal personal representatives of the original optionee shall not be entitled to
exercise the assigned stock option, but the assignee of the stock option or the legal personal
representatives of the assignee may exercise the stock option during the applicable specified
period.

 

 

	11.	 	EXERCISE OF STOCK OPTIONS
	 
	 	 	Subject to the provisions of this Plan, a vested stock option may be exercised from time to time
by delivering to the Corporation at its registered office a written notice of exercise
specifying the number of Common Shares with respect to which the stock option is being exercised
and accompanied by payment in cash or certified cheque in full of the purchase price of the
Common Shares then being purchased.
	 
	12.	 	ADJUSTMENTS
	 
	 	 	Appropriate adjustments to the authorized limits set forth in Section 5, in the number, class
and/or type of Common Shares optioned and in the option price per share, both as to stock
options granted or to be granted, shall be made by the Board to give effect to adjustments in
the number of Common Shares which result from subdivisions, consolidations or reclassifications
of the Common Shares, the payment of share dividends by the Corporation, the reconstruction,
reorganization or recapitalization of the Corporation or other relevant changes in the capital
of the Corporation.
	 
	13.	 	MERGERS
	 
	 	 	If the Corporation proposes to amalgamate or merge with another body corporate, the Corporation
shall give written notice thereof to optionees in sufficient time to enable them to exercise
outstanding vested stock options, to the extent they are otherwise exercisable by their terms,
prior to the effective date of such amalgamation or merger if they so elect. The Corporation
shall use its best efforts to provide for the reservation and issuance by the amalgamated or
continuing corporation of an appropriate number of Common Shares, with appropriate adjustments,
so as to give effect to the continuance of the stock options to the extent reasonably
practicable. In the event that the Board determines in good faith that such continuance is not
in the circumstances practicable, it may upon 30 days’ notice to optionees terminate the stock
options.
	 
	14.	 	CHANGE OF CONTROL
	 
	 	 	If a “change of control” of the Corporation occurs, each then outstanding stock option granted
under this Plan may be exercised, in whole or in part, even if such option is not otherwise
exercisable by its terms. For purposes of this Plan, a change of control of the Corporation
shall be deemed to have occurred if any of the following occur, unless the Board adopts a plan
after the Effective Date of this Plan that has a different definition (in which case such
definition shall be applied), or the Committee decides to modify or amend the following
definition through an amendment of this Plan:

	 	(a)	 	within any period of two consecutive years, individuals who at the beginning of such
period constituted the Board and any new directors whose appointment by the Board or
nomination for election by shareholders of the Corporation was approved by a vote of at
least a majority of the directors then still in office who either were directors at the
beginning of the period or whose appointment or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board;
	 
	 	(b)	 	there occurs an amalgamation, merger, consolidation, wind-up, reorganization or
restructuring of the Corporation with or into any other entity, or a similar event or
series of such events, other than any such event or series of events which results in
securities of the surviving or consolidated corporation representing 50% or more of the
combined voting power of the surviving or consolidated corporation’s then outstanding
securities entitled to vote in the election of directors of the surviving or consolidated
corporation being beneficially owned, directly or indirectly, by the persons who were the
holders of

 

 

	 	 	 	the Corporation’s outstanding securities entitled to vote in the election of
directors of the Corporation prior to such event or series of events in substantially the
same proportions as their ownership immediately prior to such event of the Corporation’s
then outstanding securities entitled to vote in the election of directors of the
Corporation;
	 
	 	(c)	 	50% or more of the fixed assets (based on book value as shown on the most recent
available audited annual or unaudited quarterly consolidated financial statements) of the
Corporation are sold or otherwise disposed of (by liquidation, dissolution, dividend or
otherwise) in one transaction or series of transactions within any twelve month period;
	 
	 	(d)	 	any party, including persons acting jointly or in concert with that party, becomes
(through a take-over bid or otherwise) the beneficial owner, directly or indirectly, of
securities of the Corporation representing 20% or more of the combined voting power of the
Corporation’s then outstanding securities entitled to vote in the election of directors of
the Corporation, unless in any particular situation the Board determines in advance of
such event that such event shall not constitute a change of control; or
	 
	 	(e)	 	the Board approves and/or recommends that shareholders accept, approve or adopt any
transaction that would constitute a change of control under clause (b), (c) or (d) above
and determines that the change of control resulting from such transaction will be deemed
to have occurred as of a specified date earlier than the date under (b), (c) or (d), as
applicable.

	15.	 	AMENDMENT OR DISCONTINUANCE OF THIS PLAN
	 
	 	 	The Board may amend or discontinue the Plan at any time, without obtaining the approval of
shareholders of the Corporation unless required by the relevant rules of the Toronto Stock
Exchange, provided that, subject to Sections 12, 13, and 14, no such amendment may increase the
aggregate maximum number of Common Shares that may be subject to stock options under this Plan,
change the manner of determining the minimum option price, extend the Term under any option
beyond 10 years (plus any Additional Exercise Period) or the date on which the option would
otherwise expire under the Plan, expand the assignment provisions of the Plan, permit
non-employee directors to participate in the Plan or, without the consent of the holder of the
option, alter or impair any option previously granted to an optionee under this Plan; and,
provided further, for greater certainty, that, without the prior approval of the Corporation’s
shareholders, stock options issued under this Plan shall not be repriced, replaced, or regranted
through cancellation, or by lowering the option price of a previously granted stock option.
Pre-clearance of the Toronto Stock Exchange of amendments to the Plan will be required to the
extent provided under the relevant rules of the Toronto Stock Exchange.
	 
	16.	 	EVIDENCE OF STOCK OPTIONS
	 
	 	 	Each stock option granted under this Plan shall be evidenced by a written stock option agreement
between the Corporation and the optionee which shall give effect to the provisions of this Plan
and include such other terms as the Committee shall determine (“Stock Option Award Agreement”).
	 
	17.	 	WITHHOLDING
	 
	 	 	To the extent that the Corporation is required to withhold federal, provincial, state, local or
foreign taxes in connection with any payment made or benefit realized by an optionee or other
person hereunder, and the amounts available to the Corporation for such withholding are
insufficient, it shall be a condition to the receipt of such payment or the realization of such
benefit that the optionee or such other person make arrangements satisfactory to the 

 

 

	 	 	Corporation for payment of the balance of such taxes required to be withheld, which arrangements (in the
discretion of the Board) may include relinquishment of a portion of such benefit. Participants
shall also make such arrangements in connection with the disposition of Common Shares acquired
upon the exercise of option rights with respect to this Plan.

 

 

          Potash Corporation of Saskatchewan Inc.

This certificate evidences and confirms the grant to                      (the “Optionee”) of options to purchase the number of Common Shares of the Corporation specified under
Paragraph (1) on the terms and subject to the conditions of the Potash Corporation of Saskatchewan Inc. 2008 Performance Option Plan (the “2008 Plan”) and the terms and conditions set
forth below. In the event of any inconsistency between the terms of the 2008 Plan and those set forth below, the terms of the 2008 Plan shall control. Capitalized terms used below
that are not defined in this certificate shall have the meanings specified in the 2008 Plan.

	 	1.	 	Number of Shares: The Optionee is hereby granted options under the 2008 Plan to Purchase                      Common Shares.
	 
	 	2.	 	Option Exercise Price: The exercise price for each Common Share is $                    .
	 
	 	3.	 	Time and Conditions to Vesting: The options will become vested following the end of the Performance Period January 1, 2008 through December 31, 2010 if, and to the extent, the
applicable Performance Measures for the Performance Period are
achieved. Subject to applicable conditions under the 2008 Plan with respect to continued employment during the
Performance Period and achievement of the minimum Performance Measures, the date for vesting will be determined but will not be later than 30 days after the audited financial
statements of the Corporation for the 2010 fiscal year of the Corporation have been approved by the Board. Upon vesting, the Optionee will have the right to purchase a number of
Common Shares covered by the option equal to the percentage determined in accordance with the performance matrix and vesting scale provided under the 2008 Plan.
	 
	 	4.	 	Once vested, the options will continue to be exercisable until the expiry date for the options of May 8, 2018.
	 
	 	5.	 	Notwithstanding the provisions of paragraph 4 above, this option will terminate as provided in paragraph 10 of the 2008 Plan in the event that the actual and active employment
of the Optionee ceases. The option is personal to the Optionee and is not assignable, except in accordance with the conditions attached hereto as Appendix I.
	 
	 	6.	 	Notice of exercise of the option is to be given in accordance with paragraph 11 of the 2008 Plan.
	 
	 	7.	 	Adjustments to the option may be made as provided in paragraph 12 of the 2008 Plan, the provisions of paragraph 13 of the 2008 Plan shall apply in the event of a proposed
amalgamation or merger of the Corporation, and the provisions of paragraph 14 of the 2008 Plan will apply in the event of a “change of control” of the Corporation as defined in
that paragraph.
	 
	 	8.	 	This grant of option is subject to receipt of any necessary regulatory approvals and shall be governed by the laws of Saskatchewan.

	 	 	 	 	 
	 	Potash Corporation of Saskatchewan Inc.

 	 
	Date:                       	By:  	 	 
	 	 	President and Chief Executive Officer 	 
	 	 	 	 
	 

 

 

Potash Corporation of Saskatchewan Inc.

2008 Performance Option Plan

1. PURPOSE OF PLAN. Potash Corporation of Saskatchewan Inc.
(the “Corporation”) by resolution of its Board of Directors (the “Board”) has established, subject
to shareholder approval at the Corporation’s 2008 Annual and Special Meeting of shareholders, this
Potash Corporation of Saskatchewan Inc. 2008 Performance Option Plan (the “Plan”) to support the
Corporation’s compensation philosophy of providing selected employees and officers with an
opportunity to: promote the growth and profitability of the Corporation; align their interests with
shareholders; and earn compensation commensurate with corporate performance. The Corporation
believes this Plan will directly assist in supporting the Corporation’s compensation philosophy by
providing participants with the opportunity through stock options, which will vest, if at all,
based on corporate performance over a three-year period, to acquire Common Shares of the
Corporation (“Common Shares”).

2. DURATION OF THIS PLAN. This Plan was adopted by the Board on February 20, 2008 to be effective
as of January 1, 2008 (the “Effective Date”), subject to shareholder approval at the Corporation’s
2008 Annual and Special Meeting of shareholders, and shall remain in effect, unless sooner
terminated as provided herein, until one (1) year from the Effective Date, at which time it will
terminate. After this Plan is terminated, no stock options may be granted but stock options
previously granted shall remain outstanding in accordance with their applicable terms and
conditions and this Plan’s terms and conditions.

3. ADMINISTRATION. This Plan shall be administered by the Compensation Committee of the Board or
any other committee designated by the Board to administer this Plan (the “Committee”). The
Committee shall be responsible for administering this Plan, subject to this Section 3 and the other
provisions of this Plan. The Committee may employ attorneys, consultants, accountants, agents, and
other individuals, any of whom may be an employee, and the Committee, the Corporation, and its
officers and directors shall be entitled to rely upon the advice, opinions, or valuations of any
such individuals. All actions taken and all interpretations and determinations made by the
Committee shall be made in the Committee’s sole discretion and shall be final and binding upon the
participants, the Corporation, and all other interested individuals. To the extent applicable, the
Plan shall be administered with respect to optionees subject to the laws of the U.S. so as to avoid
the application of penalties pursuant to Section 409A of the Internal Revenue Code, and stock
options hereunder may be subject to such restrictions as the Committee determines are necessary to
avoid application of such Section 409A.

4. AUTHORITY OF THE COMMITTEE. The Committee shall have full and exclusive discretionary power to
interpret the terms and the intent of this Plan and any Stock Option Award Agreement or other
agreement or document ancillary to or in connection with this Plan, to determine eligibility for
stock options and to adopt such rules, regulations, forms, instruments, and guidelines for
administering this Plan as the Committee may deem necessary or proper. Such authority shall include
adopting modifications and amendments to any Stock Option Award Agreement that are necessary to
comply with the laws of the countries and other jurisdictions in which the Corporation and/or its
subsidiaries operate.

5. SHARES SUBJECT TO STOCK OPTIONS. The aggregate number of Common Shares issuable after February
20, 2008 pursuant to stock options under this Plan may not exceed 1,000,000 Common Shares. The
aggregate number of Common Shares in respect of which stock options have been granted to any one
person pursuant to this Plan and which remain outstanding shall not at any time exceed 250,000. The
authorized limits under this Plan shall be subject to adjustment under Sections 12 and 13.

     If any stock option granted under this Plan, or any portion thereof, expires or terminates for
any reason without having been exercised in full, the Common Shares with respect to which such
option has not been exercised shall again be available for further stock options under this Plan;
provided, however, that any stock option that is granted under this Plan that does not vest as a
result of a failure to satisfy the Performance Measures, shall not be again available for grant
under this Plan.

6. GRANT OF STOCK OPTIONS. From time to time the Board may designate individual
officers and employees of the Corporation and its subsidiaries eligible to be granted options to
purchase Common Shares and the number of Common Shares which each such person will be granted a
stock option to purchase; provided that the aggregate number of Common Shares subject to such stock
options may not exceed the number provided for in Section 5 of this Plan. Non-employee directors
and other non-employee contractors and third party vendors are not eligible to participate in this
Plan.

7. OPTION PRICE. The option price for any option granted under this Plan to any optionee shall be
fixed by the Board when the option is granted and shall be not less than the fair market value of
the Common Shares at such time which, for optionees resident in the United States and any other
optionees designated by the Board, shall be deemed to be the closing price per Common Share on the
New York Stock Exchange on the last trading day immediately preceding the day the option is granted
and, for all other optionees, shall be deemed to be the closing price per Common Share on the
Toronto Stock Exchange on the last trading day immediately preceding the day the option is granted;
provided that, in either case, if the Common Shares did not trade on such exchange on such day the
option price shall be the closing price per share on such exchange on the last day on which the
Common Shares traded on such exchange prior to the day the option is granted.

8. VESTING OF STOCK OPTIONS. Subject to achievement of Performance Measures as certified and
approved by the Audit Committee of the Board, stock options granted under this Plan will vest no
later than thirty (30) days after the audited financial statements for the applicable Performance
Period have been approved by the Board.

9. PERFORMANCE MEASURES FOR VESTING OF STOCK OPTIONS.

	(a)	 	The Performance Measures which will be used to determine the degree to which stock options
will vest over the three-year period beginning the first day of the fiscal year in which they
are granted (the “Performance Period”) shall be cash flow return on investment (“CFROI”) and
weighted average cost of net debt and equity capital (“WACC”).

	 	(i)	 	CFROI is the ratio of after tax operating cash flow to average gross investment over
the fiscal year, calculated as A divided by B, where (1) A equals operating income
less/plus nonrecurring or unusual items plus accrued incentive awards plus depreciation and
amortization less current taxes, and (2) B equals the average of total assets less/plus the
fair value adjustment for investments in available for sale securities less the fair value
of derivative instrument assets plus accumulated depreciation plus accumulated amortization
less cash and cash equivalents less non interest bearing current liabilities.
	 
	 	(ii)	 	WACC is the weighted average cost of net debt and equity capital, calculated as [A
times the product of B divided by C] plus [D times the product of E divided by C], where
(1) A equals the after-tax market yield cost of debt, (2) B equals the market value of debt
less cash and cash equivalents (3) C equals the market value of debt less cash and cash
equivalents, plus the market value of equity, (4) D equals the cost of equity, and (5) E
equals the market value of equity.

	(b)	 	In determining the number of stock options that will actually vest based on the degree to
which the Performance Measures have been attained during the applicable Performance Period,
the following chart shall be utilized which shows the three year average excess of CFROI being
greater than WACC and the respective portion of the stock option that will vest:

	 	 	 
	Performance Measure	 	Vesting Scale
	3 year average excess of	 	% of Stock Option
	CFROI > WACC	 	Grant Vesting
	<0%
	 	0%
	0.20%
	 	30%
	1.20%
	 	70%
	2.20%
	 	90%
	2.50%
	 	100%

	(c)	 	In assessing the portion of the stock options that shall vest in accordance with the above
chart, the following shall be done:

	 	(i)	 	Each year, the CFROI and WACC will be calculated in accordance with the definitions
herein, based on the audited financial statements and approved by the Audit Committee.
	 
	 	(ii)	 	In each Performance Period, the average of the three fiscal years shall be calculated
by taking the simple average of the individual years’ results.
	 
	 	(iii)	 	The resulting three-year average will then be applied, using the scale above to
determine the number of stock options, if any, that will vest as of the end of the
Performance Period.
	 
	 	(iv)	 	For results falling between the reference points in the chart above, the level of vesting
shall be mathematically interpolated between the reference points.

10. TERMS OF STOCK OPTIONS. The period during which a stock option is exercisable (the “Term”) may
not exceed 10 years from the date the stock option is granted (the “Initial Exercise Period”), plus
any Additional Exercise Period (as defined below). If such Initial Exercise Period would otherwise
expire (i) during a Blackout Period (as defined below) applicable to the relevant optionee or (ii)
within 10 trading days after the expiration of the Blackout Period applicable to the relevant
optionee, the Term of the related stock option shall expire on the date that is the tenth trading
day after the end of such Blackout Period (an “Additional Exercise Period”). For purposes of this
Plan, “Blackout Period” means any period during which the relevant optionee is prohibited by the
Corporation’s trading policy from trading in the Corporation’s securities. The Stock Option Award
Agreement may contain provisions limiting the number of Common Shares with respect to which stock
options may be exercised in any one year. Each stock option agreement shall contain provisions to
the effect that:

	(a)	 	if the employment of an optionee as an officer or employee of the Corporation or a subsidiary
terminates, by reason of his or her death, or if an optionee who is a retiree pursuant to
Section 10(b) dies, the legal personal representatives of the optionee will be entitled to
exercise any unexercised vested options, including such stock options that may vest after the
date of death, during the period ending at the end of the twelfth calendar month following the
calendar month in which the optionee dies, failing which exercise the stock options terminate;
	 
	(b)	 	subject to the terms of Section 10(a) above, if the employment of an optionee as an officer
or employee of the Corporation or a subsidiary terminates, by reason of retirement in
accordance with the then prevailing retirement policy of the Corporation or subsidiary, the
optionee will be entitled to exercise any unexercised vested stock options, including such
stock options that may vest after the date of retirement, during the period ending at the end
of the 36th month following the calendar month in which the optionee retires, failing which
exercise the stock options terminate;
	 
	(c)	 	if the employment of an optionee as an officer or employee of the Corporation or a subsidiary
terminates, for any reason other than as provided in Sections 10(a) or (b), the optionee will
be entitled to exercise any unexercised vested stock options, to the extent exercisable at the
date of such event, during the period ending at the end of the calendar month immediately
following the calendar month in which the event occurs, failing which exercise the stock
options terminate;
	 
	(d)	 	for greater certainty and for these purposes, an optionee’s employment with the Corporation
or a subsidiary shall be considered to have terminated effective on the last day of the
optionee’s actual and active employment with the Corporation or subsidiary whether such day is
selected by agreement with the optionee or unilaterally by the Corporation or subsidiary and
whether with or without advance notice to the optionee. For the avoidance of doubt, no period
of notice that is given or ought to have been given under applicable law in respect of such
termination of employment will be utilized in determining an optionee’s entitlement under the
Plan. The employment of an optionee with the Corporation shall be deemed to have terminated
for all purposes of the Plan if such person is employed by or provides services to a person
that is a subsidiary of the Corporation and such person ceases to be a subsidiary of the
Corporation, unless the Committee determines otherwise; and
	 
	(e)	 	each stock option is personal to the optionee and is not assignable, except (i) as provided
in Section 10(a), and (ii) at the election of the Board, a stock option may be assignable to
the spouse, children and grandchildren of the original optionee and to a trust, partnership or
limited liability company, the entire beneficial interest of which is held by one or more of
the foregoing.

Nothing contained in Sections 10(a), (b) or (c) shall extend the Term beyond its stipulated
expiration date or the date on which it is otherwise terminated in accordance with the provisions
of this Plan.

If a stock option is assigned pursuant to Section 10(e)(ii), the references in Sections 10(a), (b)
and (c) to the termination of employment or death of an optionee shall not relate to the assignee
of a stock option but shall relate to the original optionee. In the event of such assignment, legal
personal representatives of the original optionee shall not be entitled to exercise the assigned
stock option, but the assignee of the stock option or the legal personal representatives of the
assignee may exercise the stock option during the applicable specified period.

11. EXERCISE OF STOCK OPTIONS. Subject to the provisions of this Plan, a vested stock option may
be exercised from time to time by delivering to the Corporation at its registered office a written
notice of exercise specifying the number of Common Shares with respect to which the stock option is
being exercised and accompanied by payment in cash or certified cheque in full of the purchase
price of the Common Shares then being purchased.

12. ADJUSTMENTS. Appropriate adjustments to the authorized limits set forth in Section 5, in the
number, class and/or type of Common Shares optioned and in the option price per share, both as to
stock options granted or to be granted, shall be made by the Board to give effect to adjustments in
the number of Common Shares which result from subdivisions, consolidations or reclassifications of
the Common Shares, the payment of share dividends by the Corporation, the reconstruction,
reorganization or recapitalization of the Corporation or other relevant changes in the capital of
the Corporation.

13. MERGERS. If the Corporation proposes to amalgamate or merge with another body corporate, the
Corporation shall give written notice thereof to optionees in sufficient time to enable them to
exercise outstanding vested stock options, to the extent they are otherwise exercisable by their
terms, prior to the effective date of such amalgamation or merger if they so elect. The Corporation
shall use its best efforts to provide for the reservation and issuance by the amalgamated or
continuing corporation of an appropriate number of Common Shares, with appropriate adjustments, so
as to give effect to the continuance of the stock options to the extent reasonably practicable. In
the event that the Board determines in good faith that such continuance is not in the circumstances
practicable, it may upon 30 days’ notice to optionees terminate the stock options.

14. CHANGE OF CONTROL. If a “change of control” of the Corporation occurs, each then outstanding
stock option granted under this Plan may be exercised, in whole or in part, even if such option is
not otherwise exercisable by its terms. For purposes of this Plan, a change of control of the
Corporation shall be deemed to have occurred if any of the following occur, unless the Board adopts
a plan after the Effective Date of this Plan that has a different definition (in which case such
definition shall be applied), or the Committee decides to modify or amend the following definition
through an amendment of this Plan:

	(a)	 	within any period of two consecutive years, individuals who at the beginning of such period
constituted the Board and any new directors whose appointment by the Board or nomination for
election by shareholders of the Corporation was approved by a vote of at least a majority of
the directors then still in office who either were directors at the beginning of the period or
whose appointment or nomination for election was previously so approved, cease for any reason
to constitute a majority of the Board;
	 
	(b)	 	there occurs an amalgamation, merger, consolidation, wind-up, reorganization or restructuring
of the Corporation with or into any other entity, or a similar event or series of such events,
other than any such event or series of events which results in securities of the surviving or
consolidated corporation representing 50% or more of the combined voting power of the
surviving or consolidated corporation’s then outstanding securities entitled to vote in the
election of directors of the surviving or consolidated corporation being beneficially owned,
directly or indirectly, by the persons who were the holders of the Corporation’s outstanding
securities entitled to vote in the election of directors of the Corporation prior to such
event or series of events in substantially the same proportions as their ownership immediately
prior to such event of the Corporation’s then outstanding securities entitled to vote in the
election of directors of the Corporation;
	 
	(c)	 	50% or more of the fixed assets (based on book value as shown on the most recent available
audited annual or unaudited quarterly consolidated financial statements) of the Corporation
are sold or otherwise disposed of (by liquidation, dissolution, dividend or otherwise) in one
transaction or series of transactions within any twelve month period;
	 
	(d)	 	any party, including persons acting jointly or in concert with that party, becomes (through a
take-over bid or otherwise) the beneficial owner, directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power of the Corporation’s then
outstanding securities entitled to vote in the election of directors of the Corporation,
unless in any particular situation the Board determines in advance of such event that such
event shall not constitute a change of control; or
	 
	(e)	 	the Board approves and/or recommends that shareholders accept, approve or adopt any
transaction that would constitute a change of control under clause (b), (c) or (d) above and
determines that the change of control resulting from such transaction will be deemed to have
occurred as of a specified date earlier than the date under (b), (c) or (d), as applicable.

15. AMENDMENT OR DISCONTINUANCE OF THIS PLAN. The Board may amend or discontinue the Plan at any
time, without obtaining the approval of shareholders of the Corporation unless required by the
relevant rules of the Toronto Stock Exchange, provided that, subject to Sections 12, 13, and 14, no
such amendment may increase the aggregate maximum number of Common Shares that may be subject to
stock options under this Plan, change the manner of determining the minimum option price, extend
the Term under any option beyond 10 years (plus any Additional Exercise Period) or the date on
which the option would otherwise expire under the Plan, expand the assignment provisions of the
Plan, permit non-employee directors to participate in the Plan or, without the consent of the
holder of the option, alter or impair any option previously granted to an optionee under this Plan;
and, provided further, for greater certainty, that, without the prior approval of the Corporation’s
shareholders, stock options issued under this Plan shall not be repriced, replaced, or regranted
through cancellation, or by lowering the option price of a previously granted stock option.
Pre-clearance of the Toronto Stock Exchange of amendments to the Plan will be required to the
extent provided under the relevant rules of the Toronto Stock Exchange.

16. EVIDENCE OF STOCK OPTIONS. Each stock option granted under this Plan shall be evidenced by a
written stock option agreement between the Corporation and the optionee which shall give effect to
the provisions of this Plan and include such other terms as the Committee shall determine (“Stock
Option Award Agreement”).

17. WITHHOLDING. To the extent that the Corporation is required to withhold federal, provincial,
state, local or foreign taxes in connection with any payment made or benefit realized by an
optionee or other person hereunder, and the amounts available to the Corporation for such
withholding are insufficient, it shall be a condition to the receipt of such payment or the
realization of such benefit that the optionee or such other person make arrangements satisfactory
to the Corporation for payment of the balance of such taxes required to be withheld, which
arrangements (in the discretion of the Board) may include relinquishment of a portion of such
benefit. Participants shall also make such arrangements in connection with the disposition of
Common Shares acquired upon the exercise of option rights with respect to this Plan.

 

 

APPENDIX I

This option may be assigned, in whole or in part, only if the following conditions are satisfied:

	 	1.	 	No consideration may be paid in connection with the assignment.
	 
	 	2.	 	An assignment may be made only to one or more persons or entities included in
the following: the original Optionee’s spouse, children and grandchildren and a
trust, partnership or limited liability company, the entire beneficial interest of
which is held by one or more of the foregoing.
	 
	 	3.	 	Prior to any such assignment,

	 	(a)	 	the assignor shall advise the Corporation, in a writing
delivered to Potash Corporation of Saskatchewan Inc., 122 1st Avenue South,
Saskatoon, Saskatchewan, Canada S7K 7G3, Attention: General Counsel, of all
pertinent information concerning the proposed assignment, including the date
of the assignment, the number of shares involved, the relationship of the
assignee to the original Optionee and the address and telephone number of the
assignee; and
	 
	 	(b)	 	the assignee shall agree in a writing so delivered to advise
the Corporation in writing of any change in the name, address or telephone
number of the assignee.

The decision to assign all or part of this option involves complex tax and financial
considerations. An Optionee should consult the Optionee’s own tax and financial advisors before
such assignment.

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