Document:

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                                                                    EXHIBIT 10.6

                                               --------------------------------
Escrow No. 1999-16269 TD                       COPY has not been compared
Order No. 1999-16269 RB                        with the Original Document. WCP.
                                               --------------------------------

                         ASSIGNMENT OF RENTS AND LEASES

         A. FITZGERALDS RENO, INC., a Nevada corporation ("Assignor") whose
address for notice hereunder is 300 E. Second Street, Suite 1500, Reno, Nevada
89501, by Deed of Trust and Security Agreement of even date herewith
(hereinafter the "Deed of Trust"), mortgaged to SCOUT DEVELOPMENT CORPORATION, a
Missouri corporation, as mortgagee ("Assignee"), whose address for notice is
1350 South Boulder, Tulsa, Oklahoma 74119, the property (the "Property") more
fully described on Exhibit A, attached hereto and made a part hereof for all
purposes.

         B. The Deed of Trust was given to secure the payment of a promissory
note in the original principal amount of $2,250,000.00 of even date herewith,
executed by Assignor and payable to Assignee in one-hundred twenty (120)
consecutive monthly installments commencing one (1) month from the date thereof
(the "Note"). The Deed of Trust and the Note are incorporated herein by
reference for all purposes.

         C. Assignor, as lessor has acquired the Property subject to certain
leases and intends to enter into leases in the future in connection with the
improvements located on the Property (the "Leases").

         NOW, THEREFORE, for value received, Assignor hereby absolutely and
unconditionally assigns and transfers to Assignee (i) all rents, revenues and
any other income of the Property, including those now due, or to become due by
virtue of the Leases, or any other agreement for the occupancy or use of all or
any part of the Property, regardless of the party to whom the rents and revenues
of the Property are payable; and (ii) all the Leases and any other agreements
for the use or occupancy of all or any part of the Property, including any and
all extensions, renewals and replacement thereof. All Leases, other agreements
for use or occupancy, and all extensions, renewals and replacements thereof, and
all future leases and other agreements for use or occupancy, extensions,
renewals and replacements thereof, are hereby incorporated to be included in all
references to "Leases" herein.

         This assignment and agreement shall be under the following terms and
conditions:

         1. Until the Note, and all renewals, rearrangements and extensions
thereof, are paid in full, or, until the Property is released by Assignee as
security for the Note, Assignor shall transfer, sell and assign, and hereby
transfers, sells and assigns, unto Assignee all subsequent leases of the
Property, or any part thereof.

         2. Assignor acknowledges that this assignment in no way affects or
alters the Note and Deed of Trust. Assignor hereby agrees to make or cause to be
made:

          (a) all payments of principal and interest on the Note and any
     amendments, extensions or renewals thereof,

          (b) payment of all other sums, with interest thereon, becoming due and
     payable to Assignee under the provisions of this Assignment, the Note, the
     Deed of Trust or in any other instrument executed by Assignor in connection
     with the Note; and

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          (c) punctual performance and discharge of each and every obligation,
     covenant and agreement contained in the Note, the Deed of Trust or in any
     other instrument executed by Assignor in connection with the Note.

         3. Assignor warrants and represents that Assignor has not previously
assigned the Leases or the rents and revenues of the Property, or executed any
other instrument which would interfere with or in any manner prevent Assignee
from obtaining the full benefits of the provisions of this Assignment.

         4. Assignor hereby authorizes Assignee or Assignee's agents to collect
the rents and revenues from the Property and hereby directs each tenant of the
Leases to pay such rents and revenues to Assignee or Assignee's agents;
provided, however, so long as there shall exist no default by Assignor in the
payment of the Note, or in the performance of any obligation, covenant or
agreement contained herein, in the Note, the Deed of Trust, or in any other
instrument executed by Assignor in connection with the Note, Assignor shall have
the right to collect and receive as trustee for the benefit of Assignee all
rents and revenues arising under the Leases or from the Property and to apply
the rents and revenues so collected to the sums secured by the Deed of Trust,
with the balance, so long as no such default exists, to the account of Assignor;
it being the intention of Assignor and Assignee that this Agreement constitutes
an absolute assignment and not an assignment for additional security only, but
is an assignment intended as a pro tanto payment of the Note and all other
indebtedness secured by the lien of the Deed of Trust.

         5. Assignor covenants and agrees with Assignee:

          (a) not to collect any of the rent, income and profits from the
     Property more than one month in advance of the time that the same shall
     become due under the provisions of the Lease (other than for security
     deposits made under the Leases);

          (b) not to execute any other assignment of the rents, income or
     profits arising or accruing from the Leases or the property,

          (c) to assign and transfer to the Assignee any and all other leases
     entered into after the date of this Assignment upon all or any part of the
     Property and to execute and deliver, at the request of the Assignee, all
     such further assignments in the premises as the Assignee shall from time to
     time require.

          (d) that if any act shall be done by the Assignor in breach of the
     foregoing, then such act shall be null and void and without force or effect
     unless specifically agreed to in writing by the Assignee.

         6. Upon or at any time after default by the Assignor in the payment of
the principal and interest on the Note, in the performance of any obligation,
covenant or agreement contained herein, in the Note, the Deed of Trust, or in
any other instrument executed by the Assignor in connection with the Note,
Assignor's right to collect and receive as trustee for the benefit of Assignee
all rents and revenues arising under the Leases shall terminate without notice
to Assignor. Further, the Assignee may, but is not obligated or required at its
option, without notice and without regard to the adequacy of the security for
the Note, either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court take possession of the
Property and hold, manage, lease and

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operate the same on such terms and for such period of time as Assignee may deem
proper. Additionally, Assignee may demand, sue for or otherwise collect and
receive all rents, income and revenues of the Property, including those past due
and unpaid, without taking possession of the Property, Assignee shall also have
full power to make, from time to time, all alterations, renovations, repairs or
replacements to the Property as may seem proper to Assignee, and to apply such
rents, income and profits to the payment of:

         a) all expenses of managing the Property, including, without
         limitation, the salaries, fees, and wages of a managing agent and such
         other employees as Assignee may deem necessary or desirable, and all
         expenses of operating and maintaining the Property, including all taxes
         charges, claims, assessments, and any other liens, and premiums for all
         insurance which the Assignee may deem necessary or desirable, the cost
         of all alterations, renovations, repairs or replacements, and all
         expenses incident to taking and regaining possession of the Property,
         and

         (b) the principal and interest on the Note, together with all costs and
         attorneys' fees incurred by Assignee in enforcing Assignor's
         obligations hereunder, under the Note, the Deed of Trust, or in any
         other instrument executed by Assignor in connection with the Note, all
         in such order of priority as to any of the items mentioned in this
         paragraph as the Assignee in its sole discretion may determine.

         No credit shall be given by Assignee for any sum or sums received from
the rents, income and revenues of the Property until the money collected is
actually received by Assignee; and no credits shall be given for any uncollected
rents or other uncollected amounts or bills nor shall credit on any
indebtedness; secured by the lien of the Deed of Trust be given for any rents,
income and revenues derived from the Property after Assignee obtains title to
the Property by foreclosure, order of a court or by operation of law or
otherwise. The exercise by Assignee of the option granted in this paragraph to
take possession of the Property, and Assignee's collection of the rents, income
and revenues and the application thereof as herein provided shall not be
considered a waiver of any default by Assignor under the Note, Deed of Trust,
this Assignment or any other instrument executed by Assignor in connection with
the Note.

         7. Assignee shall not be liable for any loss sustained by Assignor
resulting from Assignee's failure to let the Property or portions thereof after
default or from any other act or omission of Assignee in managing the Property
after default unless such loss is caused by the willful misconduct and bad faith
of Assignee. Furthermore, it is understood that Assignee shall not be obligated
to assume, perform or discharge nor does Assignee undertake to assume, perform
or discharge, any obligation, duty or liability of Assignor under Leases it
being agreed that Assignee shall be treated as agreeing to assume, perform or
discharge such obligations, duty or liability only if:

                  (a) Assignee shall, by written notice sent to the tenants
         named in the Leases, specifically so elect; or

                  (b) Assignee shall foreclose judicially or under the Deed of
         Trust and take possession of the Property.

         In no event shall Assignee be liable for the performance or discharge
of any obligations not expressly assumed by it, or in any assignment or other
transfer by Assignee of its interests in the Leases or the Property to any other
party. Assignor shall, and hereby agrees to, defend (with counsel

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acceptable to Assignee), indemnify and hold Assignee harmless from and against
any and all liability, low cost, damage or expenses which may be or is incurred
by Assignee under the Leases or under or by reason of this Assignment and from
any and all claims and demands whatsoever which may be asserted against Assignee
or by reason of any alleged obligations or undertakings on the part of Assignee
to perform or discharge any of the terms, covenants or agreements contained in
the Leases, except such obligations or undertakings expressly assumed by
Assignee. If Assignee should incur any such liability, or be subject to any such
claims, all expenses incurred or expended by Assignee in connection therewith
(including attorneys' fees) shall be deemed secured by the Deed of Trust and
Assignor shall reimburse Assignee immediately upon demand. Upon the failure of
Assignor to reimburse Assignee, Assignee may, at its option, declare all sums
evidenced by the Note and secured by the Deed of Trust immediately due and
payable. It is further understood that this Assignment shall not operate to
place responsibility upon Assignee, except as otherwise specifically provided,
for the control, care, management or repair of the Property, nor for the
carrying out of any of the terms and conditions of the Leases nor shall it
operate to make Assignee responsible or liable for any waste committed on the
Property by any tenant thereof or any other parties, or for any dangerous or
defective condition of the Property, or for any negligence in the management,
upkeep, repair or control of the Property resulting in loss, injury or death to
any tenant, licensee, employee or stranger.

         8. In the event there shall have been made payment in full of the
principal and interest on the Note or any other indebtedness secured by the lien
of the Deed of Trust, and Assignor shall make, or cause to have been made, full
performance of all of Assignor's obligations under the Deed of Trust, this
Assignment, and all other instruments executed by Assignor in connection with
the Note, then this Assignment shall become and be void and of no further force
or effect. An affidavit, certificate, letter or statement of any officer, agent
or attorney of Assignee indicating that any part of the principal or interest on
the Note remains unpaid or that Assignor's obligations remain unperformed shall
be conclusive evidence of the continuing validity and effectiveness of this
Agreement and any person may, and is authorized to, rely thereon.

         9. Assignor authorizes and directs the tenants named in the Leases,
upon receipt from Assignee of written notice to the effect that (i) Assignee is
then the holder of the Note, Deed of Trust and this Assignment, and (ii) that a
default exists under any of the provisions of one or all of such instruments, to
pay over to Assignee all rents, income and revenues arising or accruing under
the Leases and to continue to do so until otherwise notified by Assignee.
Assignor agrees that (i) any tenant or occupant of the Property shall have the
right to rely upon notice by Assignee without obligation or right to inquire as
to whether default actually exists; and (ii) Assignor shall have no right or
claim against any such tenant or occupant for any such rents paid by any tenant
or occupant to Assignee following receipt of such notice.

         10. Nothing contained in this Assignment and no act done or omitted by
Assignee pursuant to the powers and rights granted it hereunder shall be deemed
to be a waiver by Assignee of its rights and remedies under the Note, Deed of
Trust or under any other instrument executed by Assignor in connection with the
Note, and this Assignment is made and accepted without prejudice to any of the
rights and remedies possessed by Assignee under the terms of any instrument
executed by Assignor in connection with the Note. The collection and application
of the rents, income and revenues from the Property to the Note, or as otherwise
provided above, shall not constitute a waiver by Assignee of any default which
might at the time of such application or thereafter exist under any documents
executed by Assignor in connection with the Note. The Note may be accelerated in
accordance with its terms, notwithstanding the application of rents, income and
revenues.

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         11. In the event of foreclosure of the Deed of Trust by sale or
otherwise, Assignee is authorized (i) to sell Assignor's interest in the Leases
as lessor together with the Property; or (ii) to assign the same without the
Property, or (iii) to assign the some without consideration to the purchaser at
any such sale or to any other claimant to title to the Property by virtue of
foreclosure of the lien of the Deed of Trust. There shall be no liability to
account to Assignor for any rents, revenues, income or profits accruing after
the foreclosure of the Deed of Trust.

         12. Assignor agrees to execute and deliver to Assignee such further
instruments and documents as, from time to time during the existence of this
Assignment, Assignee may reasonably require in order to perfect the interest and
rights of Assignee under this Assignment.

         13. No remedy or right conferred upon Assignee by operation of law, by
this Assignment, the Note, the Deed of Trust or by any other instrument
executed by Assignor in connection with the Note is intended to be, nor shall it
be, inclusive of any other right or remedy, but each and every remedy or right
shall be cumulative and shall be in addition to every other remedy or right
conferred upon Assignor and each and every such remedy or right may be pursued
by Assignee in such manner and order, together or separately, and at such times
as Assignee may elect.

         14. If any term or provision of this Assignment, or the application
thereof to any person or circumstances shall, to any extent be invalid or
unenforceable, the remainder of this Assignment, or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Assignment shall be valid and be enforced to the fullest
extent permitted by law.

         15. Notice provided for in this Agreement must be in writing, and shall
be given or served, unless otherwise expressly provided herein, by depositing
the same in the United States Mail, postpaid and certified and addressed to the
party to be notified, with return receipt requested, or by delivering the sum by
courier or in person to such party (or, if the party or parties to be notified
be incorporated, to an officer of such party), or by prepaid telegram addressed
to the party to be notified. Notice deposited in the mail, postpaid and
certified with return receipt requested, shall be deemed received upon deposit
in a proper United States mail depository. Notice given in any other manner
shall be effective only if and when received by the party to be notified. For
the purposes of notice, the addresses of the parties are as stated in paragraph
A of this Assignment. The parties and their respective successors and assigns
shall have the right from time to time and at any time, to change their
respective addresses and agents for the receipt of notice and shall have the
right to specify as their respective addresses and agents any other by giving at
least ten (10) days prior written notice to the other party.

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           EXECUTED this the 31st day of January 2000, effective the 1st day of
February, 2000.

                                  FITZGERALDS RENO, INC., a Nevada corporation

                                  By: /s/ MICHAEL E. MCPHERSON
                                      ----------------------------------------
                                  Name: Michael E. McPherson
                                        --------------------------------------
                                  Title: Executive Vice President/CFO
                                         -------------------------------------

STATE OF NEVADA

COUNTY OF WASHOE

     This instrument was acknowledged before me on the 31st day of January,
2000, by Michael E. McPherson, Executive Vice President and Chief Financial
Officer of FITZGERALDS RENO, INC. a Nevada corporation, for and on behalf of
said Nevada corporation.

(SEAL)                                  /s/ CAROLE EDWARDS
                                        ---------------------------------
                                        Notary Public, State of Nevada

                                        [NOTARY STAMP]

After Recording Return to:

John R. Jones
1301 McKinney, Suite 3550
Houston, TX 77010

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                                  EXHIBIT "A"
                                  DESCRIPTION

All that certain lot, piece or parcel of land situate in the County of Washoe,
State of Nevada, described as follows:

PARCEL 1: (ADJUSTED PARCEL A)

A parcel of land situated within the NE 1/4 of Section 11, T19N, R19E, M.D.M.,
Reno, Washoe County, Nevada, being all of "Adjusted Parcel A" as shown on the
Record of Survey showing a boundary line adjustment for Union Pacific Railroad
Company, Scout Development Corporation, and G and S Investment Company, as
recorded on January 26, 2000 in the official records of Washoe County, Nevada,
File No. 2417487 and being further described as follows:

Beginning at the Northeast corner of Parcel A of Parcel Map No. 2461, File No.
1422392 of the Official Records of Washoe County, Nevada; thence S
13(degree)48'25"E, 105.50 feet along the Easterly line of said Parcel A; thence
S 76(degree)10'00"W, 300.64 feet; thence N 13(degree)47'50"W, 105.67 feet along
the Westerly line of said Parcel to the Northwest corner of said Parcel A;
thence N 76(degree)11'59"E, 300.62 feet along the Northerly line of said Parcel
A, to the Point of Beginning.

The above described parcel contains an area of approximately 31,743 sq ft.

BASIS OF BEARINGS: Parcel Map No. 2461 for Southern Pacific Transportation
Company, File No. 1422392 of the Official Records of Washoe County, Nevada.

PARCEL 2: (ADJUSTED PARCEL B)

A parcel consisting of air rights situated within the NE 1/4 of Section 11,
T19N, R19E, M.D.M., Reno, Washoe County, Nevada, being all of "Adjusted Parcel
B" as shown on the Record of Survey showing a boundary line adjustment for
Union Pacific Railroad Company, Scout Development Corporation, and G and S
Investment Company, as recorded on January 26, 2000 in the official records of
Washoe County, Nevada, File No. 2417487 and being further described as follows:

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Parcel 2 Legal Continued

Beginning at a point on the Easterly line of Parcel A of Parcel Map No. 2461,
File No. 1422392 of the Official Records of Washoe County, Nevada; from which
the Northeast corner of said Parcel A bears N 13(degree)48'25"W, 105.50 feet
said point of beginning having an elevation of 4522.50 feet; thence S
13(degree)48'25"E, 53.65 feet said point having an elevation of 4522.50 feet;
thence S 76(degree)10'00"W, 300.65 feet said point having an elevation of 4525.1
feet; thence N 13(degree)47'50"W, 53.65 feet said point having an elevation of
4525.1 feet, thence N 76(degree)10'00" E, 300.64 feet to the Point Beginning.
Said surface shall be formed such that it maintains a constant slope between the
elevations described for the four corners.

The above described land parcel (above which the air rights are situated)
contains an area of approximately 16,130 sq.ft.

EXCEPTING THEREFROM a parcel of land situated within the NE 1/4 of Section 11,
T19N, R19E, M.D.M., Reno, Washoe County, Nevada, and being all that real
property located below a surface which has vertices defined as follows:

Beginning at a point on the Easterly line of Parcel A of Parcel Map No. 2461,
File No. 1422392 of the Official Records of Washoe County, Nevada; from which
the Northeast corner of said Parcel A bears N 13(degree)48'25"W, 106.30 feet
said point of beginning having an elevation of 4524.00 feet; thence S
13(degree)48'25"E, 52.05 feet said point having an elevation of 4524.00 feet;
thence S 76(degree)10'00"W, 300.65 feet said point having an elevation of 4526.6
feet; thence N 13(degree)47'50"W, 52.05 feet said point having an elevation of
4526.6 feet; thence N 76(degree)10'00"E, 300.64 feet to the Point of Beginning.
Said surface shall be formed such that it maintains a constant slope between the
elevations described for the four corners.

BASIS OF BEARINGS: Parcel Map No. 2461 for Southern Pacific Transportation
Company, File No. 1422392 of the Official Records of Washoe County, Nevada.

BASIS OF ELEVATIONS: City Reno benchmark No. 96, a nail and washer located in
the top of the curb at the Northeast corner of East Fourth Street and North
Center Street, Elevation = 4496.46 feet.

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PARCEL 3: (ADJUSTED PARCEL C)

A parcel of land situated within the NE 1/4 of Section 11, T19N, R19E, M.D.M.,
Reno, Washoe County, Nevada, being all of "Adjusted Parcel C" as shown on the
Record of Survey showing a boundary line adjustment for Union Pacific Railroad
Company, Scout Development Corporation, and G and S Investment Company, as
recorded on January 26, 2000 in the official records of Washoe County, Nevada,
File No. 2417487 and being further described as follows:

Beginning at the Southeast corner of Parcel C of Parcel Map No. 2461, File No.
1422392 of the Official Records of Washoe County, Nevada; thence S
76(degree)10'00"W, 300.65 feet along the Southerly line of said Parcel C; thence
N 13(degree)47'50"W, 20.82 feet; thence N 76(degree)10'00"E, 300.65 feet; thence
S 13(degree)48'25"E, 20.82 feet to the Point of Beginning.

The above described parcel contains an area of approximately 6,260 sq. ft.

BASIS OF BEARINGS: Parcel Map No. 2461 for Southern Pacific Transportation
Company, File No. 1422392 of the Official Records of Washoe County, Nevada.

PARCEL 4:

All buildings and improvements located on the real property described in Parcels
1 through 3 above.

                                                       [STAMP]<PAGE>   1

                                                                   EXHIBIT 10(Z)

                           SHORT-TERM INCENTIVE PLAN

                             Effective January 2000

                    Potash Corporation of Saskatchewan Inc.
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CONTENTS

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<TABLE>
<S>                                                           <C>
SECTION 1 -- ESTABLISHMENT OF THE PLAN......................    1
  1.01   Purpose............................................    1
  1.02   Effective Date.....................................    1
SECTION 2 -- DEFINITIONS....................................    2
  2.01   Adjusted Cash Flow Return (ACFR)...................    2
  2.02   Average Accumulated Amortization...................    2
  2.03   Average Accumulated Depreciation...................    2
  2.04   Average Assets.....................................    2
  2.05   Average Non-Interest Bearing Current Liabilities...    3
  2.06   Award Payment......................................    3
  2.07   Award Percentage...................................    3
  2.08   Board..............................................    3
  2.09   Cash Flow Return (CFR).............................    3
  2.10   Cash Taxes.........................................    3
  2.11   CEO................................................    3
  2.12   Committee..........................................    4
  2.13   Corporation........................................    4
  2.14   Depreciation and Amortization......................    4
  2.15   Eligible Employee..................................    4
  2.16   Entitled Employee..................................    4
  2.17   Operating Income...................................    4
  2.18   PCS Inc............................................    4
  2.19   Plan...............................................    4
  2.20   Salary.............................................    4
  2.21   Target CFR.........................................    4
  2.22   Target Percentage..................................    4
  2.23   Year...............................................    4
SECTION 3 -- PARTICIPATION..................................    5
  3.01   Participation Requirements.........................    5
SECTION 4 -- AWARD PAYMENTS.................................    6
  4.01   Eligibility........................................    6
  4.02   Calculation of Award Payment.......................    6
  4.03   Entitled Operations Employees......................    6
  4.04   Limitation of Award Payments and General
         Discretion.........................................    7
  4.05   Timing of Award Payments...........................    7
SECTION 5 -- ADMINISTRATION OF THE PLAN.....................    8
  5.01   Administration.....................................    8
SECTION 6 -- TRANSFER OF EMPLOYMENT.........................    9
  6.01   Transfer of Employment.............................    9
SECTION 7 -- GENERAL PROVISIONS.............................   10
  7.01   Assignment or Alienation...........................   10
  7.02   Amendment or Termination...........................   10
  7.03   Effect of Amendment or Termination.................   10
  7.04   No Enlargement of Contractual Rights...............   10
  7.05   Interpretation.....................................   10
  7.06   Withholding of Taxes...............................   10
  7.07   Binding on Successors..............................   10
  7.08   Currency...........................................   10
APPENDIX "A" -- AWARD PERCENTAGE............................   11
</TABLE>

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                                        i
<PAGE>   3

SECTION 1 -- ESTABLISHMENT OF THE PLAN
--------------------------------------------------------------------------------

1.01 PURPOSE

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

1.02 EFFECTIVE DATE

     Subject to Section 7.02 (Amendment or Termination), this Plan shall be
     effective on and after January 1, 2000.

--------------------------------------------------------------------------------

                                        1
<PAGE>   4

SECTION 2 -- DEFINITIONS
--------------------------------------------------------------------------------

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

2.01 ADJUSTED CASH FLOW RETURN (ACFR)

     "Adjusted Cash Flow Return" or "ACFR" means an amount derived from the
     following formula:

     ACFR = (CFR divided by Target CFR) multiplied by 100,

     and used in the table at Appendix "A" to calculate an Entitled Employee's
     Award Percentage for a given Year.

2.02 AVERAGE ACCUMULATED AMORTIZATION

     "Average Accumulated Amortization" means the average consolidated
     accumulated amortization of PCS Inc. during a given Year, calculated by
     dividing (a) by (b) where:

         (a)  equals the sum of the consolidated accumulated amortization of PCS
              Inc. at the beginning of the Year, the consolidated accumulated
              amortization of PCS Inc. at the beginning of the second quarter of
              the Year, the consolidated accumulated amortization of PCS Inc. at
              the beginning of the third quarter of the Year, the consolidated
              accumulated amortization of PCS Inc. at the beginning of the
              fourth quarter of the Year and the consolidated accumulated
              amortization of PCS Inc. at the end of the Year; and,

         (b)  equals five (5).

2.03 AVERAGE ACCUMULATED DEPRECIATION

     "Average Accumulated Depreciation" means the average consolidated
     accumulated depreciation of PCS Inc. during a given Year, calculated by
     dividing (a) by (b) where:

         (a)  equals the sum of consolidated accumulated depreciation of PCS
              Inc. at the beginning of the Year, consolidated accumulated
              depreciation of PCS Inc. at the beginning of the second quarter of
              the Year, the consolidated accumulated depreciation of PCS Inc. at
              the beginning of the third quarter of the Year, the consolidated
              accumulated depreciation of PCS Inc. at the beginning of the
              fourth quarter of the Year and the consolidated accumulated
              depreciation of PCS Inc. at the end of the Year; and,

         (b)  equals five (5).

2.04 AVERAGE ASSETS

     "Average Assets" means the average book value of PCS Inc.'s consolidated
     assets during a given Year, calculated by dividing (a) by (b) where:

         (a)  equals the sum of the book value of the consolidated assets of PCS
              Inc. at the beginning of the Year, the book value of the
              consolidated assets of PCS Inc. at the beginning of the second
              quarter of the Year, the book value of the consolidated assets of
              PCS Inc. at the beginning of the third quarter of the Year, the
              book value of the consolidated assets of PCS Inc. at the beginning
              of the fourth quarter of the Year and the book value of the
              consolidated assets of PCS Inc. at the end of the Year; and,

         (b)  equals five (5).

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                                        2
<PAGE>   5

2.05 AVERAGE NON-INTEREST BEARING CURRENT LIABILITIES

     "Average Non-Interest Bearing Current Liabilities" means the average
     consolidated non-interest bearing current liabilities of PCS Inc. during a
     given Year, calculated by dividing (a) by (b) where:

         (a)  equals the sum of the consolidated non-interest bearing current
              liabilities of PCS Inc. at the beginning of the Year, the
              consolidated non-interest bearing current liabilities of PCS Inc.
              at the beginning of the second quarter of the Year, the
              consolidated non-interest bearing current liabilities of PCS Inc.
              at the beginning of the third quarter of the Year, the
              consolidated non-interest bearing current liabilities of PCS Inc.
              at the beginning of the fourth quarter of the Year and the
              consolidated non-interest bearing current liabilities of PCS Inc.
              at the end of the Year; and,

         (b)  equals five (5).

2.06 AWARD PAYMENT

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

2.07 AWARD PERCENTAGE

     "Award Percentage" means the percentage of an Entitled Employee's Salary
     derived from the table contained in Appendix "A". The Award Percentages
     applicable to an Entitled Employee, as set out in the table in Appendix
     "A", shall be recommended by the CEO and approved by the Committee.

2.08 BOARD

     "Board" means the Board of Directors of PCS Inc.

2.09 CASH FLOW RETURN (CFR)

     "Cash Flow Return" or "CFR" means the amount derived from the following
     formula:

         (a)  Operating Income, plus

              Depreciation and Amortization, minus

              Cash Taxes

                        DIVIDED BY

         (b)  Average Assets, plus

              Average Accumulated Depreciation, plus

              Average Accumulated Amortization, minus

              Average Non-Interest Bearing Current Liabilities,

     and used in the table at Appendix "A" to calculate an Entitled Employee's
     Award Percentage for a given Year.

2.10 CASH TAXES

     "Cash Taxes" means the cash income tax expense for a given Year, as set out
     in the audited consolidated financial statements of PCS Inc. for that Year.

2.11 CEO

     "CEO" means the Chief Executive Officer of PCS Inc.

--------------------------------------------------------------------------------

                                        3
<PAGE>   6

2.12 COMMITTEE

     "Committee" means the Compensation Committee of the Board.

2.13 CORPORATION

     "Corporation" means Potash Corporation of Saskatchewan Inc. and its direct
     and indirect subsidiaries.

2.14 DEPRECIATION AND AMORTIZATION

     "Depreciation and Amortization" means the depreciation and amortization
     expense for a given Year, as set out in the audited consolidated financial
     statements of PCS Inc. for that Year.

2.15 ELIGIBLE EMPLOYEE

     "Eligible Employee" means an employee who has satisfied the eligibility
     requirements set out in Section 4.01 (Eligibility).

2.16 ENTITLED EMPLOYEE

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

         (A)  ENTITLED OPERATIONS EMPLOYEE
              "Entitled Operations Employee" means an Entitled Employee who is
              attached to one of the operating facilities of PCS Inc. or its
              direct or indirect subsidiaries.

2.17 OPERATING INCOME

     "Operating Income" means the operating income for a given Year, as set out
     in the audited consolidated financial statements of PCS Inc. for that Year.

2.18 PCS INC.

     "PCS Inc." means Potash Corporation of Saskatchewan Inc.

2.19 PLAN

     "Plan" means this Annual Incentive Plan, as amended from time to time.

2.20 SALARY

     "Salary" means the annual base salary in effect for an Entitled Employee at
     the end of a given Year.

2.21 TARGET CFR

     "Target CFR" means the CFR projected in the annual budget approved by the
     Board and used in the table at Appendix "A" to calculate an Entitled
     Employee's Award Percentage for a given Year.

2.22 TARGET PERCENTAGE

     "Target Percentage" means the Award Percentage of an Entitled Employee when
     CFR equals Target CFR, as shown in the table contained in Appendix "A".

2.23 YEAR

     "Year" means the fiscal year of PCS Inc.

--------------------------------------------------------------------------------

                                        4
<PAGE>   7

SECTION 3 -- PARTICIPATION
--------------------------------------------------------------------------------

3.01 PARTICIPATION REQUIREMENTS

     Participation in the Plan is limited to Eligible Employees.

--------------------------------------------------------------------------------

                                        5
<PAGE>   8

SECTION 4 -- AWARD PAYMENTS
--------------------------------------------------------------------------------

4.01 ELIGIBILITY

     An employee of the Corporation who is employed for at least three months
     during a Year, and who is in the employ of the Corporation at the end of a
     Year shall become an Eligible Employee.

4.02 CALCULATION OF AWARD PAYMENT

     Subject to Section 4.04 (Limitation of Award Payments and General
     Discretion), an Entitled Employee, other than Entitled Operations
     Employees, shall receive an Award Payment equal to the Entitled Employee's
     Award Percentage multiplied by his or her Salary.

     The Award Payment calculated in accordance with this Section 4.02 is
     subject to an adjustment of plus or minus 10% depending upon the Entitled
     Employee's job performance, as determined by his or her supervisor, and
     approved in accordance with the provisions of this Plan.

4.03 ENTITLED OPERATIONS EMPLOYEES

     Subject to Section 4.04 (Limitation of Award Payments and General
     Discretion), an Entitled Operations Employee shall be entitled to an Award
     Payment equal to the sum of paragraphs (a) and (b) below:

         (a)  the award calculated pursuant to Section 4.02 (Calculation of
              Award Payment), divided by two (2); and,

         (b)  an amount equal to the Target Percentage of the Salary of the
              Entitled Operations Employee, adjusted by applying a formula to be
              developed from time to time by the CEO in consultation with the
              Senior Vice-President, Administration and the appropriate
              subsidiary President which formula shall reasonably reflect the
              actual results of the operating facility to which the employee is
              attached compared to the approved target for that operating
              facility, and thereafter dividing such amount by two (2).

--------------------------------------------------------------------------------

                                       6

<PAGE>   9

4.04 LIMITATION OF AWARD PAYMENTS AND GENERAL DISCRETION

         (a)  Generally, no Award Payment shall be granted under this Plan with
              respect to any Year in which the CFR is less than 50% of the
              Target CFR. However, the Committee may elect, in its discretion,
              to grant Award Payments in any Year, regardless of the CFR.

         (b)  The Award Payment for any Entitled Employee may exceed or be below
              the amount calculated in accordance with this Section 4. Award
              Payments falling outside the established range shall be
              recommended by the CEO and shall be approved by the Committee in
              the normal course of administering this Plan.

         (c)  An Entitled Employee who has been employed by the Corporation for
              less than one year shall have his or her Award Payment prorated in
              accordance with his or her period of employment.

         (d)  An Entitled Employee who was, during a Year, promoted to a
              position included in a Group set forth in Appendix "A", shall have
              his or her Award Payment prorated in accordance with the period of
              time he or she held such position.

         (e)  An Entitled Employee who was, during a Year, promoted from one
              Group to another Group set forth in Appendix "A", shall have his
              or her Award Payment calculated on the basis of his or her Group
              as at the end of the Year.

         (f)  Notwithstanding the Groups established in Appendix "A", the
              Committee may on the recommendation of the CEO, designate an
              Eligible Employee for inclusion in one of such Groups when, but
              for such designation, the Eligible Employee would not otherwise be
              included in such Group.

4.05 TIMING OF AWARD PAYMENTS

     The Committee shall, on the recommendation of the CEO and within 30 days of
     the end of a Year, approve the amount of Award Payments for each Entitled
     Employee for any given Year. The Award Payments shall be paid to Entitled
     Employees within 30 days of the approval thereof by the Committee.

--------------------------------------------------------------------------------

                                       7
<PAGE>   10

SECTION 5 -- ADMINISTRATION OF THE PLAN
--------------------------------------------------------------------------------

5.01 ADMINISTRATION

     The Committee shall conclusively interpret the provisions of this Plan and
     decide all questions of fact arising in the application of the Plan.
     Determinations and interpretations in individual cases may be made by the
     CEO with due regard to consistency with any prior action by the Committee
     and such determination shall be binding and conclusive upon the individual
     employees concerned and persons claiming under them. The Committee shall be
     advised of any such determination or interpretation made by the CEO.

--------------------------------------------------------------------------------

                                       8
<PAGE>   11

SECTION 6 -- TRANSFER OF EMPLOYMENT
--------------------------------------------------------------------------------

6.01 TRANSFER OF EMPLOYMENT

     If an Entitled Employee's employment is transferred, during a Year, within
     the Corporation the Senior Vice-President, Administration and the CEO shall
     determine whether the Entitled Employee's Award Payment is calculated in
     accordance with Section 4.02 (Calculation of Award Payment), Section 4.03
     (Entitled Operations Employees), or a combination of those sections.

--------------------------------------------------------------------------------

                                        9
<PAGE>   12

SECTION 7 -- GENERAL PROVISIONS
--------------------------------------------------------------------------------

7.01 ASSIGNMENT OR ALIENATION

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

         (a)  given as security;

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

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

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

7.02 AMENDMENT OR TERMINATION

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

7.03 EFFECT OF AMENDMENT OR TERMINATION

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

7.04 NO ENLARGEMENT OF CONTRACTUAL RIGHTS

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

7.05 INTERPRETATION

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

7.06 WITHHOLDING OF TAXES

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

7.07 BINDING ON SUCCESSORS

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

7.08 CURRENCY

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

--------------------------------------------------------------------------------

                                       10
<PAGE>   13

APPENDIX "A" -- AWARD PERCENTAGE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------

                                              AWARD PERCENTAGE   AWARD PERCENTAGE      AWARD PERCENTAGE
                                              WHEN CFR IS        WHEN CFR EQUALS       AT MAXIMUM CFR
                                              LESS THAN          OR IS GREATER THAN    (150% OF
TIER  GROUP                                   TARGET CFR         TARGET CFR            TARGET CFR)
-------------------------------------------------------------------------------------------------------
<S>   <C>                                     <C>                <C>                   <C>
I     Corporate President,                    50% multiplied     (100% multiplied by         100%
      and CEO                                 by ACFR            ACFR) minus 50%

II    Corporate Sr. VPs,                      40% multiplied     (80% multiplied by           80%
      Subsidiary Presidents                   by ACFR            ACFR) minus 40%

III   Corporate VPs,                          30% multiplied     (60% multiplied by           60%
      Subsidiary Executive VPs,               by ACFR            ACFR) minus 30%
      Selected Subsidiary VPs

IV    Selected Subsidiary VPs,                25% multiplied     (50% multiplied by           50%
      Selected Corporate Executive            by ACFR            ACFR) minus 25%
      employees

V     Subsidiary General Managers             20% multiplied     (40% multiplied by           40%
      Operations,                             by ACFR            ACFR) minus 20%
      Selected Subsidiary VPs,
      Selected Directors

VI    Corporate Director,                     15% multiplied     (30% multiplied by           30%
      Subsidiary Director,                    by ACFR            ACFR) minus 15%
      Selected Subsidiary Superintendents

VII   Selected Key Manager                    10% multiplied     (20% multiplied by           20%
                                              by ACFR            ACFR) minus 10%
</TABLE>

--------------------------------------------------------------------------------

NOTES:

1.  Where the ACFR is greater than 150 (i.e. the maximum CFR), the ACFR is
    deemed to be 150.

2.  Subject to Section 4.04 (Limitation of Award Payments and General
    Discretion) where the CFR is less than 50, the ACFR is deemed to be zero
    (0).
--------------------------------------------------------------------------------

                                       11

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