Document:

Exhibit 10.13

 

IPSCO Inc.

2005 Form 10-K

 

PERFORMANCE
UNIT AWARD AGREEMENT

 

THIS AGREEMENT
made the 25th  day of August 2005,

 

BETWEEN:

 

IPSCO
INC., a corporation incorporated under the laws of
Canada,

 

(hereinafter called the “Corporation” or the “Company”),

 

OF THE FIRST PART,

 

-and-

 

PETER MACPHAIL, of
the City of Regina, in the Province of Saskatchewan,

 

(hereinafter called the “Participant”),

 

OF THE SECOND PART.

 

WHEREAS
the Corporation has established an Incentive Share Plan (which, as amended from
time to time by the Board of Directors of the Corporation and approved by
Shareholders, is hereinafter referred to as the “Plan”) whereby certain
designated officers, employees and directors of the Corporation and its
subsidiaries may from time to time be granted options, restricted shares and
performance units;

 

AND WHEREAS
the Participant, as an employee of the Corporation, has been designated to
receive a grant of Performance Units (as defined herein), subject to and in
accordance with the terms of this Agreement and of the Plan;

 

NOW THEREFORE THIS
AGREEMENT WITNESSETH that in consideration of the
mutual covenants herein contained the parties do hereby agree as follows:

 

1.                                      Grant

 

Pursuant to Section 9 of the Plan, the
Corporation hereby grants and awards to the Participant, Six Thousand Four
Hundred (6,400) performance units (the “Performance Units”).  Each Performance Unit shall be subject to the
terms of the Plan and of this Agreement, including the terms relating to the
Performance Period and the Performance Objective (as those terms are herein
defined).  One-half of the Performance
Units will be subject to the Performance Objective I as defined in Section 3
herein.  The remaining one-half of the
Performance Units will be subject to the Performance Objective II as defined in
Section 4 herein.

 

1

 

2.                                      Performance
Period

 

The performance period applicable to the
Performance Units shall be the period beginning on July 1, 2005 (the “Commencement
Date”) and ending on June 30, 2008 (the “Performance Period”).

 

3.                                      Performance
Objective I

 

The performance objective (the “Performance
Objective I”) applicable to one-half of the Performance Units is as follows:

 

•                  Participants
are eligible to earn a Performance Unit Payout at the end of the Performance
Period based on the 3-year average of IPSCO’s Return on Capital Employed (“ROCE”)
relative to 3-year average ROCE for a group of steel industry peers as defined
elsewhere in this Agreement.

 

•                  The
actual number of shares earned at the end of the Performance Period will range
from 0% to 200% of the Performance Units granted, depending on actual
performance relative to the goals established at the beginning of the
Performance Period.  The following
Performance Award matrix will determine Awards granted under Performance
Objective I at the end of the Performance Period.

 

Example: Plan Year 2005

 

 

Absolute Performance 

3-year average ROCE

 

•                  Awards
will be interpolated for performance falling between discrete points on the matrix.  However, below 8% IPSCO ROCE, no awards will
be paid for ROCE performance below the median of peers. Below 5% IPSCO ROCE, no
awards will be paid regardless of performance relative to peers.

 

2

 

•                  Return
on Capital Employed (“ROCE”), the Absolute and Relative Performance Measure,
shall be measured based on the following definition and related adjustments:

 

	
  ROCE 
  =

  	
  After-tax
  operating profit + tax-affected Depreciation/Amortization charge

  
	
  Total
  Net Assets – Non-interest-bearing current Liabilities – Cash and Cash
  Equivalents +

  $50m base cash + Accumulated Depreciation and Amortization – Construction in
  Progress

  

 

•                  Capital
Employed (the denominator) shall be averaged for the year;

 

•                  The
Performance Period shall average ROCE over the three-year period;

 

•                  Adjustments
will be made to the ROCE measure as follows:

 

•                  Construction
in progress is excluded from the capital base until investments are
operational.

 

•                  “Excess”
cash is excluded from the capital base — $50 million of cash is required by the
Company for ongoing operations; any cash in excess of $50 million will be
excluded for the 2005 Plan Year.

 

•                  Acquisitions
will be excluded from the ROCE calculation until six months after transaction,
or until agreed upon with the MRCC.

 

•                  Deferred
tax liabilities are considered a quasi-equity account and remain in the capital
base.

 

•                  Peers
include:

 

1.             AK
Steel

2.             Carpenter Technology

3.             Commercial Metals

4.             Gerdau Ameristeel

5.             Lone Star Technologies

6.             Maverick Tube

7.             Nucor

8.             Oregon Steel Mills, Inc.

9.             Quanex

10.           Reliance Steel and Aluminum

11.           Ryerson Tull, Inc.

12.           Steel Dynamics

13.           Worthington Industries

 

•                  If during the
Performance Period any of the Peer Companies ceases to trade on a Public
Exchange, it will be removed from the Peer Comparison Group for the entire
Performance Period.

 

3

 

4.                                      Performance
Objective II

 

The performance objective (“Performance
Objective II”) for the remaining one-half of the Performance Units shall be
based upon the achievement of a cumulative net income by the Corporation as
reported from July 1, 2006 to June 30, 2008.

 

5.                                      Vesting
of Performance Units

 

The Performance Units will vest (the “Vesting
Date”) upon the earlier of:

 

(a)                                  the
date of a Change of Control;

 

(b)                                 August 5,
2008, provided that the Performance Objective is met;

 

and, provided further that the Participant is employed (or is deemed by
Section 7 to be employed) by the Company or a Subsidiary (as defined in
the Plan) on that date and has been (or is deemed by Section 7 to have
been employed) employed by the Company or a Subsidiary by the Vesting  Date, or has been (or is deemed by Section 8
to have been) continuously so employed since the date hereof.  Performance Units not vested on or before the
last day of the Performance Period pursuant to the preceding sentence shall
lapse and be terminated and cancelled.

 

For the purposes of this Section 5, the
date of a Change of Control means the date on which any one of the following
occurs:  (i) any person or group of
persons acting in concert acquires beneficial ownership (within the meaning of
The Securities Act, 1988 (Saskatchewan)) as amended from time to time, of 20%
or more of the outstanding Common Shares of the Corporation, or securities
convertible into 20% or more of the outstanding Common Shares on a
post-conversion basis; (ii) during a period of not more than 24 months, a
majority of the Board of Directors ceases to consist of the existing membership
or successors nominated by the existing membership or their similar successors;
(iii) all or substantially all of the individuals and entities who were
the beneficial owners of the Corporation’s outstanding securities entitled to
vote do not own more than 50% of such securities in substantially the same
proportions following a shareholder approved reorganization, merger, or
consolidation; or (iv) shareholder approval of either (a) a complete
liquidation or dissolution of the Corporation or (b) a sale or other
disposition of all or substantially all of the assets of the Corporation, or a
transaction having a similar effect.  For
purposes of clause (iii) above, if an individual or entity owns stock in
both corporations that enter into a merger, consolidation, purchase or
acquisition of stock or similar transaction, such shareholder is considered to
be acting as a group with other shareholders only with respect to the ownership
in that corporation prior to the transaction giving rise to the change and not
with respect to the ownership interest in the other corporation.

 

4

 

6.                                      Termination
of Employment

 

(a)                                  If
the Participant ceases to be an employee (and, if the Participant is an
employee or officer of any Subsidiary, the Participant also ceases to be an
employee or officer of the Subsidiary) as a result of:

 

(i)            disability
(as defined in Section 7(j)(i) of the Plan);

 

(ii)           retirement
(as defined in Section 7(j)(2) of the Plan);

 

(iii)          termination
of employment after either:

 

(a)                                  attaining
sixty-five years of age or;

 

(b)                                 attaining
sixty-two years of age and completing five years of continuous employment; or

 

(iv)          death
of the Participant; or

 

(v)           such
other circumstance as may be approved by the Board of Directors.

 

All Performance Units subject to Performance
Objective II shall immediately vest.  For
Performance Units subject to Performance Objective I, the Participant shall
receive a pro-rata portion of the Performance Units awarded at the Commencement
Date calculated pursuant to Paragraph 3 hereof, based upon the whole number of
months employed prior to the cessation of employment pursuant to this Section 6(a) over
the number of months in the Performance Period.

 

(b)                                 If
the Participant ceases to be an employee of the Corporation or a Subsidiary in
any circumstance other than as described in Section 6(a) hereof
(including termination by the Corporation with or without cause, and
termination for any reason by the Participant) all of the Participant’s rights
and interest in and to such Performance Units and any dividend equivalents
related thereto, shall thereupon terminate without payment of consideration by
the Corporation.  For greater certainty,
the Participant’s employment shall not be considered to terminate where there
is a transfer of the Participant’s employment without an intervening period
from the Corporation to a Subsidiary or vice versa, or from one Subsidiary to
another, or by reason of an approved leave of absence under the circumstances
set forth in Section 12 below.

 

5

 

7.                                      Payment
of Performance Units and Dividend Equivalents

 

Upon vesting of the Performance Units in
accordance with Sections 3,  4 and 6
hereof, the Participant shall become entitled to payment in respect of the
Performance Units.  Payment shall be made
by delivery by the Corporation to the Participant of one newly issued Common
Share for each Performance Unit held by the Participant.  Payment shall be made as soon as practicable
after the date of vesting.

 

At the time payment is made by the
Corporation to the Participant under this Section 7, the Corporation shall
also pay to the Participant a dividend equivalent in an amount equal to the
number of the Participant’s Performance Units multiplied by the total dividends
per Common Share declared by the Corporation between the Commencement Date and
the applicable date of vesting.  Such
payment shall be made by the Corporation in cash as soon as practicable after
the Vesting Date.

 

Where the Participant has died, all
references in this Section 7 to “Participant” shall be deemed to include
the Participant’s legal representative.

 

8.                                      Non-Assignability
of Performance Units

 

The Performance Units granted hereunder shall
not be transferable or assignable (whether absolutely or by way of mortgage,
pledge or other charge) by the Participant other than by will or other
testamentary instrument, the laws of succession or other laws of general
application and during the lifetime of the Participant only the Participant shall
be entitled to payment hereunder.  The
foregoing provisions of this Section 8 shall not prevent any Performance
Unit from being forfeited pursuant to the terms and conditions of this
Agreement, and shall not prevent the Participant from designating a beneficiary
to receive the Performance Units in the event of the Participant’s death.  Any such beneficiary shall receive the
Performance Units subject to all of the terms, conditions and restrictions set
forth in this Agreement, including but not limited to the forfeiture provisions
set forth herein.

 

9.                                      Rights
of Participant

 

The Participant shall have no rights
whatsoever as a shareholder in respect of any Common Shares which are the
subject of the Performance Units held by the Participant (including, without
limitation, any right to receive dividends or other distributions from the
Corporation, voting rights, warrants or rights under any rights offering) until
such time as such Common Shares have been recorded on the Corporation’s
official shareholder records as having been issued to the Participant.

 

Nothing contained in this Agreement shall
give the Participant or any other person, any interest or title in or to any
Common Shares which are the subject of the Performance Units or any rights as a
shareholder of the Corporation or any 

 

6

 

other legal or equitable right against the Corporation whatsoever other
than as set forth in this Agreement.

 

10.                               Withholding
Taxes

 

Prior to the payment by the Corporation in respect
of the Performance Units pursuant to Section 7, the Participant shall pay
to the Corporation such amount as may be requested by the Corporation for the
purpose of satisfying any liability for federal, provincial, state or other
taxes with respect to such payment. 
Where the Participant is subject to income tax, the amount shall be paid
by the Participant to the Corporation in cash or by cheque.

 

11.                               Alterations
in Shares

 

In the event of a share dividend, share
split, issuance of shares or instruments convertible into shares (other than
pursuant to the Plan) for less than market value, share consolidation, share
reclassification, exchange of shares, recapitalization, amalgamation, merger,
consolidation, corporate arrangement, reorganization, liquidation or the like
of or by the Corporation, the Board of Directors may make such adjustment, if
any, of the number of Performance Units, as it shall deem appropriate to give
proper effect to such event, including to prevent, to the extent possible,
substantial dilution or enlargement of rights granted to the Participant.  If because of a proposed merger, amalgamation
or other corporate arrangement or reorganization, the exchange or replacement
of shares in the Corporation for those in another Corporation is imminent, the
Board of Directors may, in a fair and equitable manner, determine the manner in
which the Performance Units shall be treated including, for example, requiring
the acceleration of the time for payment by the Corporation in respect of the
Performance Units and of the time of fulfilment of the Performance
Objectives.  All determinations of the
Board of Directors under this Section 11 shall be conclusive and binding.

 

12.          Leave
of Absence

 

If the Participant is an employee of the
Corporation and is granted a temporary leave of absence by the Corporation,
such leave of absence shall be deemed a continuation of the employment of the
Participant provided if and so long as:

 

(a)                                  the
Corporation consents in writing to such leave of absence; and

 

(b)                                 the
Participant thereafter returns to full-time employment with the Corporation for
a period of six months, notwithstanding the possible expiration of the
Performance Period.

 

For greater certainty, the provisions of Section 12(b) hereof,
shall be subject always to (i) immediate vesting on the occurrence of a
Change of Control as 

 

7

 

described in Section 5 hereof, and (ii) the deemed continuous
employment provisions of Section 6.

 

13.                                    Notice

 

All notices, demands, payments or other
communications which may or are required to be given under this Agreement shall
be given in writing by personal delivery or ordinary prepaid mail:

 

(a)                                  to
the Company:

IPSCO Inc.

650
Warrenville Road

Suite 500

Lisle, IL
60532

Attention:
Vice President, General Counsel

and Corporate
Secretary

 

(b)                                 to
the Participant:

Regina, SK

 

or such other address as either party may give in writing from time to
time.  Such notices if given by mail
shall be deemed to have been received by the party to whom they are addressed
as described herein 72 hours after they have been put in the post, postage
prepaid, provided that if postal services are disrupted by labour disputes,
such mailed notices shall be deemed to have been given and received on the date
of actual receipt by the addressee.

 

14.                               Plan
to Apply

 

The Award is granted under the Plan and the
Award and this Agreement are subject to the terms and conditions of the
Plan.  In the event of any inconsistent
provisions between this Agreement and the Plan, the provisions of the Plan
shall control.  Capitalized terms used in
this Agreement without definition have the meaning assigned to them in the
Plan.  References to the sections of this
Agreement are intended solely for convenience and no provision of this
Agreement is to be construed by reference to any title of any section.  This Agreement shall also be subject to the
applicable requirements of the Toronto Stock Exchange, the Canadian Securities
Administrators, the United States Securities and Exchange Commission and the
New York Stock Exchange from time to time.

 

15.                               Compliance
With Law

 

The Corporation will make reasonable efforts
to comply with all applicable federal, state and provincial securities
laws.  However, the Corporation will not
issue any shares or other securities pursuant to this Agreement if their
issuance 

 

8

 

would result in a
violation of any such law.  If at any
time the Management Resources and Compensation Committee (the “Committee”) shall
determine, in its discretion, that the listing, registration or qualification
of any shares subject to this Award upon any securities exchange or under any
federal, state or provincial law, or the consent or approval of any government
or regulatory body is necessary or desirable the condition of, or in connection
with, the granting of this Award or the issuance of Common Shares hereunder, no
rights may be exercised and the Common Shares may not be delivered pursuant to
the Award, in full or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee and any delay caused shall in no way affect the
dates of vesting or forfeiture of the Award.

 

16.                               No
Implied Promises

 

By accepting the Award and executing this
Agreement, the Participant recognizes and agrees the Corporation and its
Subsidiaries, and each of their officers, directors, agents and employees,
including but not limited to the Board of Directors and the Committee in their
oversight or conduct of the business and affairs of the Corporation and its
Subsidiaries may, in good faith, cause the Corporation and/or a Subsidiary to
act or omit to act in a manner that will, directly or indirectly, prevent all
or part of the Performance Units from being non-forfeitable.  No provision of this Agreement shall be
interpreted or construed to impose any liability upon the Corporation, any
Subsidiary, or any officer, director, agent or employee of the Corporation or
Subsidiary, or the Board of Directors or the Committee for any forfeiture of
Performance Units that may result, directly or indirectly, from any such action
or omission, or shall be interpreted or construed to impose any obligation on
the part of any such entity or person to refrain from any such action or
omission.

 

17.                               Relation
to Other Benefits

 

The benefits received by Participant under
this Agreement will not be taken into account in determining any benefits to
which the Participant may be entitled under any profit sharing, retirement,
life insurance or other benefit or compensation plan maintained by the
Corporation or its Subsidiaries.

 

18.                               Dispute

 

The Committee shall interpret and construe
this Agreement and make all determinations hereunder, and any such
interpretation, construction or determination by the Committee shall be binding
and conclusive on the Corporation or a Subsidiary (as the case may be), the
Participant and on any person or entity claiming under or through either of
them.  Without limiting the generality of
the foregoing, any determination of whether the Participant’s employment
terminates by reason of “Retirement” or for “Disability” within the meaning of Section 4
hereof, shall be made by and in the sole discretion of the Committee, whose
decision shall 

 

9

 

be final and binding on the Corporation or Subsidiary (as the case may
be), the Participant and any person or entity claiming under or through any of
them.

 

19.                               Miscellaneous

 

(a)                                  Nothing
in this Agreement shall confer upon the Participant any right to continue in
the employ or other service of the Corporation or any Subsidiary, or shall
limit in any manner the right of the Corporation or any Subsidiary to terminate
the employment or other service of the Participant or adjust the compensation
of the Participant.

 

(b)                                 The
Participant shall forthwith and from time to time do all such acts and things
and execute and deliver all such instruments, writings and assurances as may be
necessary to carry out this Agreement in accordance with its true intent.

 

(c)                                  This
Agreement shall be binding upon the successors, assigns, executors and
administrators of the parties hereto and upon any beneficiary of the
Participant.

 

(d)                                 Any
waiver by a party of another party’s performance of, or compliance with, a term
or condition of this Agreement shall not operate or be construed as a waiver of
any subsequent failure by such party to perform or comply.

 

(e)                                  Any
term or provision of this Agreement that is invalid or unenforceable in any
jurisdiction shall not affect the validity or enforceability or the remaining
terms and provisions hereof, or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.

 

(f)                                    This
Agreement shall be governed by the laws of the Province of Saskatchewan without
regard to conflicts of law principles.

 

[signature page to follow]

 

10

 

IN WITNESS WHEREOF
the parties hereto have executed this Agreement as of the day and year first
above written.

 

 

	
   

  	
  IPSCO INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per: 

  	
  /s/ David S. Sutherland

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per: 

  	
  /s/ Leslie T. Lederer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Peter MacPhail

  	
   

  
	
   

  	
  Peter MacPhail

  	
   

  
							

 

11Exhibit 10.14

 

IPSCO Inc.

2005
Form 10-K

 

RESTRICTED SHARE AWARD
AGREEMENT

 

THIS
AGREEMENT made
the 1st day of October, 2004.

 

BETWEEN:

 

IPSCO INC., a corporation incorporated under the laws
of Canada,

 

(the
“Corporation”),

 

OF THE FIRST PART,

 

-and-

 

DAVID S. SUTHERLAND, of Naperville, Illinois,

 

(the
“Participant”),

 

OF
THE SECOND PART.

 

WHEREAS
the
Corporation has established an Incentive Share Option Plan (which, as amended
from time to time by the Board of Directors of the Corporation and approved by
Shareholders, is hereinafter referred to as the “Plan”) whereby certain
designated officers, employees and directors of the Corporation and its
Subsidiaries may from time to time be granted Awards;

 

AND
WHEREAS the
Participant, as an officer of the Corporation, has been designated to receive a
grant of shares of the Corporation (the “Restricted Shares”), being Common
Shares, which are to be issued subject to the restrictions set forth herein and
of the Plan;

 

NOW
THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants herein contained the parties do hereby agree as follows:

 

1.                                      Grant

 

Subject to and conditional upon
compliance with the applicable requirements of each stock exchange on which the
Common Shares of the Corporation are listed and of any governmental authority
or regulatory body to which the Corporation is subject, the Corporation hereby
awards, and issues to and in the name of the Participant an aggregate of 35,000
Restricted Shares of the Corporation on the terms set out in this Agreement.

 

 

2.                                      Restriction
Period

 

From the date hereof until the
restrictions on the Restricted Shares set forth herein terminate (the “Restriction
Period”), the Restricted Shares shall not be sold, exchanged, transferred,
pledged, hypothecated, or otherwise disposed of; provided, however, that any of
the Restricted Shares may be exchanged for any other Common Shares of the
Corporation that are similarly restricted.

 

The Restriction Period shall terminate
with respect to one percent (100%) of the Restricted Shares and upon the
earliest to occur of the following events:

 

(a)                                  the date of a Change
of Control;

 

(b)                                 July 29, 2007,
provided that the Performance Objective is met; and

 

(c)                                  the seventh
Anniversary of the Commencement Date (each, a “Vesting Date”);

 

provided further in each case that the
Participant is employed (or is deemed by Section 4 to be employed) by the
Corporation or a Subsidiary on the Vesting Date and has been (or is deemed by Section 4
to have been) continuously so employed since the date hereof.

 

3.                                      Change
of Control

 

For the purposes of this Agreement, the
date of a Change of Control means the date on which any one of the following
occurs:  (a) any person or group of
persons acting in concert acquires beneficial ownership (within the meaning of
The Securities Act (Saskatchewan)) of 20% or more of the outstanding Common
Shares of the Corporation, or securities convertible into 20% or more of the
outstanding Common Shares on a post-conversion basis; (b) during a period
of not more than 24 months, a majority of the Board of Directors ceases to
consist of the existing membership or successors nominated by the existing
membership or their similar successors; (c) all or substantially all of
the individuals and entities who were the beneficial owners of the Corporation’s
outstanding securities entitled to vote do not own more than 50% of such
securities in substantially the same proportions following a shareholder
approved reorganization, merger, or consolidation; or (d) shareholder
approval of either (i) a complete liquidation or dissolution of the
Corporation or (ii) a sale or other disposition of all or substantially
all of the assets of the Corporation, or a transaction having a similar
effect.  For purposes of clause (c) above,
if an individual or entity owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock or similar transaction,
such shareholder is considered to be 

 

2

 

acting as a group with other shareholders
only with respect to the ownership in that corporation prior to the transaction
giving rise to the change and not with respect to the ownership interest in the
other corporation.

 

4.                                      Performance
Period/Performance Objective

 

The performance period applicable to the
Restricted Shares (the “Performance Period”) shall be the period beginning on July 29,
2004, (the “Commencement Date”) and ending on July 29, 2007.  The performance objective applicable to the
Restricted Shares (the “Performance Objective”) shall be achieved if the
average of the Fair Market Value of the Common Shares equals or exceeds Cdn$35
per share over a Target Trading Period (as defined below) that ends prior to
expiration of the Performance Period. 
For purposes of this Agreement, the “Target Trading Period” shall be any
period of 10 consecutive days (each, a “Trading Day”) on which the Common
Shares are traded on the primary securities exchange on which the Common Shares
are traded.  The Trading Day on which the
Fair Market Value of the Common Shares is highest and the Trading Day on which
the Fair Market Value of the Common Shares is lowest shall be disregarded when
calculating the average Fair Market Value of the Common Shares in respect to a
Target Trading Period.

 

5.                                      Termination
of Employment

 

(a)           If the Participant ceases to be an
employee of the Corporation (and if the Participant is an employee or officer
of any Subsidiary, the Participant also ceases to be an employee or officer of
the Subsidiary) as a result of:

 

(i)                                     disability (as defined
in Section 7(j)(i) of the Plan);

 

(ii)                                  retirement (as defined
in Section 7(j)(2) of the Plan);

 

(iii)                               termination of
employment after either:

 

(A)                              attaining sixty-five
years of age or;

 

(B)                                attaining sixty-two
years of age and completing five years of continuous employment; or

 

(iv)                              death of the
Participant; or

 

(v)                                 such other
circumstance as may be approved by the Board of Directors;

 

3

 

the Participant shall be deemed, for the
purposes of Section 2 hereof (Restriction Period), to be employed by the
Corporation or Subsidiary on the Vesting Date and to have been continuously
employed since the Vesting Commencement Date.

 

(b)           If the Participant ceases to be an
employee of the Corporation or a Subsidiary in any circumstance other than as
described in Section 5(a) hereof (including termination by the
Corporation with or without cause, and termination for any reason by the
Participant) all of the Participant’s rights and interest in and to such
Restricted Shares, shall thereupon terminate without payment of consideration
by the Corporation.  For greater
certainty, the Participant’s employment shall not be considered to terminate
where there is a transfer of the Participant’s employment without an
intervening period from the Corporation to a Subsidiary or vice versa, or from
one Subsidiary to another, or by reason of an approved leave of absence under
the circumstances set forth in Section 10 below.

 

6.                                      Restricted
Share Certificates

 

The Participant agrees that at any time
prior to the termination of the Restricted Period, the Corporation may request
that a certificate representing the Restricted Shares be issued with such
legend thereon as the Corporation may require. 
Any such certificate shall be issued at the cost of the
Corporation.  The Corporation shall
retain possession of any certificates issued representing the Restricted Shares
until the later to occur of the termination of the Restricted Period and the
termination of the security interest described in Section 8.

 

7.                                      Rights
of Restricted Shareholder

 

Except as set forth in this Agreement,
upon the issuance of the Restricted Shares a Participant shall have all of the
rights of the Shareholder, including the right to vote the Restricted Shares
and the right to receive dividends thereon. 
The Corporation shall issue the Participant’s Restricted Shares upon
execution of this Agreement, the listing (or authorization of listing upon
official notice of issuance) of the Restricted Shares upon each stock exchange
on which the Common Shares are listed and there have been compliance with such
laws and regulations, as the Corporation may deem applicable.  The Corporation agrees to use reasonable commercial
efforts to effect such listing and compliance.

 

8.                                      Withholding
Taxes

 

The Participant agrees to pay the
Corporation, or otherwise make arrangements satisfactory to the Corporation
regarding the payment of any federal, state, or local taxes required or
authorized by law to be held with respect to the award of Restricted 

 

4

 

Shares or the termination of the
Restriction Period (the “Withholding Taxes”). 
The Corporation shall have, to the extent permitted by law, the right to
deduct from any payment of any kind otherwise due the Participant, any
Withholding Taxes and to condition the delivery of the Common Shares after the
termination of the Restriction Period on the payment to the Corporation of the
Withholding Taxes.  The Participant
hereby grants to the Corporation a security interest in the Restricted Shares
to secure reconveyance of the Restricted Shares to the Corporation upon any
deemed donation to the Corporation and to ensure adequate provision for the
Withholding Taxes.  The Corporation shall
release its security interest in respect of any Restricted Shares as to which (a) the
Restriction Period has terminated and (b) all Withholding Taxes have been
paid.  In lieu of payment of such amount
in cash, the Participant may pay all or a portion of the Withholding Taxes by (i) delivery
of Common Shares not subject to any Restriction Period, or (ii) having the
Corporation withhold a portion of the Common Shares otherwise to be delivered
upon expiration of the Restriction Period.

 

9.                                      Other
Distributions

 

If any distribution is made to the
holders of Common Shares other than a cash dividend, or if new, different, or
additional shares or other securities of the Corporation or of another
corporation are received by holders of Common Shares, or if any
recapitalization or reclassification, split-up or consolidation of the Common
Shares shall be effected, or, if in connection with a merger or consolidation
of the Corporation or a sale by the Corporation of all or a part of its assets,
the Common Shares are exchanged for a different number or class of shares of
stock or other securities of the Corporation or for shares of stock or
securities of any other corporation, then any such other security shall be
subject to similar restrictions as the Restricted Shares, shall be subject to
the security interest provided for in Section 8 and the number and class
of Restricted Shares, and restrictions, terms, and other conditions applicable
to any other securities shall be equally determined by the Committee.

 

10.                               Leave
of Absence

 

If the Participant is an employee of the
Corporation and is granted a temporary leave of absence by the Corporation,
such leave of absence shall be deemed a continuation of employment of the
Participant provided if and so long as:

 

(a)                                  the Corporation
consents in writing to such leave of absence; and

 

5

 

(b)                                 the Participant
thereafter returns to full time employment with the Corporation for a period of
six months, notwithstanding the possible expiration of the Performance Period.

 

For greater certainty, the provisions of Section 10(b) hereof,
shall be subject always to (i) immediate vesting on the occurrence of a
Change of Control as described in Section 3 hereof, and (ii) the
deemed continuous employment provisions of Section 4.

 

11.                               Notice

 

All notices, demands, payments or other
communications which may be or are required to be given under this Agreement
shall be given in writing by personal delivery or ordinary prepaid mail:

 

(a)                                  to the Corporation or
a Subsidiary:

650
Warrenville Road, Suite 500

Lisle,
IL 60532

Attention:  Vice President, General Counsel

and Corporate Secretary

 

(b)                                 to the Participant:

 

Naperville,
IL

 

or such other address as either party may
give in writing from time to time.  Such
notices if given by mail shall be deemed to have been received by the party to
whom they are addressed as described herein 72 hours after they have been put
in the post, postage prepaid, provided that if postal services are disrupted by
labour disputes, such mailed notices shall be deemed to have been given and
received on the date of actual receipt by the addressee.

 

12.                               Plan
to Apply

 

The Award is granted under the Plan and
the Award and this Agreement are subject to the terms and conditions of the
Plan.  In the event of any inconsistent
provisions between this Agreement and the Plan, the provisions of the Plan
shall control.  Capitalized terms used in
this Agreement without definition have the meaning assigned to them in the
Plan.  References to sections are to
sections of this Agreement unless otherwise noted.  The titles to sections of this Agreement are
intended solely for convenience and no provision of this Agreement is to be
construed by reference to any title of any section.  This Agreement shall also be 

 

6

 

subject to the applicable requirements of
the Toronto Stock Exchange, the Canadian Securities Administrators, the United
States Securities and Exchange Commission and the New York Stock Exchange from
time to time.

 

13.                               Compliance
with the Law

 

The Corporation shall make reasonable
efforts to comply with all applicable federal, state and provincial securities
laws.  However, the Corporation shall not
issue any shares or other securities pursuant to this Agreement if their
issuance would result in a violation of any such law.  If at any time the Committee shall determine,
in its discretion, that the listing, registration or qualification of any
shares subject to this Award upon any securities exchange or under any federal,
state or provincial law, or the consent or approval of any government or
regulatory body is necessary or desirable the condition of, or in connection
with, the granting of this Award or the issue of Common Shares hereunder, no
rights may be exercised and the Common Shares may not be delivered pursuant to
the Award, in full or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee and any delay caused shall in no way affect the
dates of vesting or forfeiture of the Award.

 

14.                               No
Implied Promises

 

By accepting the Award and executing this
Agreement, the Participant recognizes and agrees that the Corporation and its Subsidiaries,
and each of their officers, directors, agents and employees, including but not
limited to the Board of Directors and the Committee in their oversight or
conduct of the business and affairs of the Corporation and its Subsidiaries
may, in good faith, cause the Corporation and/or a Subsidiary to act or omit to
act in a manner that will, directly or indirectly, prevent all or part of the
Performance Units from being non-forfeitable. 
No provision of this Agreement shall be interpreted or construed to
impose any liability upon the Corporation, any Subsidiary, or any officer,
director, agent or employee of the Corporation or Subsidiary, or the Board of
Directors or the Committee for any forfeiture of Performance Units that may
result, directly or indirectly, from any such action or omission, or shall be
interpreted or construed to impose any obligation on the part of any such
entity or person to refrain from any such action or omission.

 

15.                               Relation
to Other Benefits

 

The benefits received by Participant
under this Agreement will not be taken into account in determining any benefits
to which the Participant may be entitled under any profit sharing, retirement,
life insurance or other benefit or compensation plan maintained by the
Corporation or its Subsidiaries.

 

7

 

16.                               Dispute

 

The Committee shall interpret and
construe this Agreement and make all determinations hereunder, and any such
interpretation, construction or determination by the Committee shall be binding
and conclusive on the Corporation or a Subsidiary (as the case may be), the
Participant and on any person or entity claiming under or through either of
them.  Without limiting the generality of
the foregoing, any determination of whether the Participant’s employment
terminates by reason of “Retirement” or for “Disability” within the meaning of Section 4
hereof, shall be made by and in the sole discretion of the Committee, whose
decision shall be final and binding on the Corporation or Subsidiary (as the
case may be), the Participant and any person or entity claiming under or
through any of them.

 

17.                               Miscellaneous

 

(a)                                  Nothing in this
Agreement shall confer upon the Participant any right to continue in the employ
or other service of the Corporation or any Subsidiary, or shall limit in any
manner the right of the Corporation or any Subsidiary to terminate the
employment or other service of the Participant or adjust the compensation of
the Participant.

 

(b)                                 The Participant shall
forthwith and from time to time do all such acts and things and execute and
deliver all such instruments, writings and assurances as may be necessary to
carry out this Agreement in accordance with its true intent.

 

(c)                                  This Agreement shall
be binding upon the successors, assigns, executors and administrators of the
parties hereto and upon any beneficiary of the Participant.

 

(d)                                 Any waiver by a party
of another party’s performance of, or compliance with, a term or condition of
this Agreement shall not operate or be construed as a waiver of any subsequent
failure by such party to perform or comply.

 

(e)                                  Any term or provision
of this Agreement that is invalid or unenforceable in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions
hereof, or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

 

8

 

(f)                                    This Agreement shall
be governed by the laws of the State of Illinois without regard to conflicts of
law principles.

 

 

[signature
page to follow]

 

9

 

IN
WITNESS WHEREOF
the parties hereto have executed this Agreement as of the day and year first
above written.

 

 

	
   

  	
  IPSCO INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ George H. Valentine

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Raymond J. Rarey

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David S. Sutherland

  	
   

  
	
   

  	
  David S. Sutherland

  
	
   

  	
   

  
						

 

10

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