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Exhibit 10(m)
POTASH CORPORATION OF SASKATCHEWAN INC.
SHORT TERM INCENTIVE PLAN
This Short-Term Incentive Plan (the "Plan") is intended to aid in
maintaining and developing strong management in the Potash Corporation of
Saskatchewan Inc. and its direct and indirect subsidiaries (the "Corporation")
by providing financial incentives to key employees, in addition to their basic
salaries, in recognition of their achievement of objectives which contribute
materially to the success of the Corporation's business interests.
1. DEFINITIONS
In this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Award Percentage" means a percentage based on the table
contained in Schedule I and calculated in accordance with the
formulae contained in Schedule I;
(b) "Board" means Board of Directors of Potash Corporation of
Saskatchewan Inc.;
(c) "CEO" means the Chief Executive Officer, from time to time, of
Potash Corporation of Saskatchewan Inc.;
(d) "Committee" means the Compensation Committee of the Board;
(e) "Entitled Employee" means a key employee of the Corporation who
is among the managerial, professional, technical or
administrative employees of the Corporation and is designated by
the Committee as eligible to receive an Incentive Award under
this Plan and which employee is in the employ of the Corporation
as of the end of the year for which awards are to be granted;
(f) "Entitled Mine Employee" means an Entitled Employee who is
attached to one of the potash or phosphate mining divisions of
the Corporation;
(g) "Equity" for any year means the average of the opening and
closing balances (after adding to the closing balance any amount
accrued in such year in respect of Incentive Awards) for the
fiscal year as reported in the audited financial statements of
the Corporation for such year;
(h) "Incentive Awards" means financial incentives awarded to
Entitled Employees pursuant to the Plan;
(i) "Net Income" for any year means the amount reported as net
income in the audited financial statement of the Corporation
plus research and development
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expenditures, tax expenditures, plus any amount accrued in such
year in respect of Incentive Awards, as adjusted by the Committee
at its discretion to account for the effect of any extraordinary
nonrecurring charges or credits;
(j) "Return on Equity" or "ROE" means the product obtained by first
dividing Net Income in any year by Equity and multiplying the
resulting quotient by 100;
(k) "Target ROE" means the Return on Equity projected in the approved
budget;
(l) "Target Percentage" means the Award percentage at Target ROE as
shown in the table contained in Schedule I.
(m) "Termination of Employment" means the cessation of employment with
the Corporation;
(n) "Year" means any given fiscal year of the Corporation;
2. LIMITATION OF AWARD OF INCENTIVES
Generally, no Incentive Award shall be granted under this Plan with
respect to any year in which the Return on Equity is less than 50% of
the Target ROE; provided, however, that the Committee may elect, in its
discretion, to make Incentive Awards in any year in which circumstances
have prevented the Corporation from achieving 50% of the Target ROE.
3. AWARDS GRANTABLE
An Incentive Award is grantable with respect to any Year to any Entitled
Employee who has not less than three months' employment with the
Corporation during such Year. Entitled Employees who have been employed
by the Corporation for less than one year shall have their Incentive
Awards prorated in accordance with their period of employment.
4. METHOD OF DETERMINING INCENTIVE AWARDS
(a) Entitled Employees shall be divided into five groups as follows:
Senior Executive Group - Senior Vice Presidents and above
Executive Group - Vice Presidents
Senior Management Group - Salary grade 1,200 to 1,499 (Hay Points)
Middle Management Group - Salary grade 900 to 1,199 (Hay Points)
Junior Management Group - Salary grade 775 to 899 (Hay Points)
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Provided that the CEO may, from time to time, designate an
employee for inclusion in one of the above-mentioned groups
when, but for such designation, the employee would otherwise not
be included in such group.
(b) Entitled Employees (except Entitled Mine Employees)
The Incentive Award for each Entitled Employee who is not an
Entitled Mine Employee will be the Award Percentage of the
annual salary of such employee, with a deviation of plus or
minus 10% of the award so determined, which deviation will be
dependent upon the Entitled Employee's performance as determined
by his or her supervisor and approved in accordance with the
provisions of this Plan.
(c) Entitled Mine Employees
Incentive Awards for each Entitled Mine Employee shall be the
sum of (i) and (ii) below which amounts shall be arrived at by
calculating:
(i) The award payable if calculated in accordance with the
provisions of paragraph 4(b), and thereafter dividing
the award so calculated by 2.
(ii) An award arrived at by calculating the Target Percentage
of the annual salary of such employee and adjusting that
award 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 senior
group executive, which formula shall reasonably reflect
the actual results of the mining division to which the
employee is attached as compared to the approved budget
for that division, and thereafter dividing the adjusted
award by 2.
(d) General
The Incentive Award for any Entitled Employee may exceed or be
below the amount calculated in accordance with the foregoing
formulae at the discretion of the CEO. Incentive Awards falling
outside the established range shall be recommended by the CEO
and shall be approved by the Committee in the normal course of
administering the Incentive Compensation Plan.
5. GRANTING AUTHORITY AND ADMINISTRATION
The Committee shall, on the recommendation of the CEO, approve the
number and amount of Incentive Awards for any given year within the
three months after the end of such year. The Committee shall
conclusively interpret the provisions of this Plan and
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decide all questions of fact arising in the application. 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.
6. NON-ASSIGNMENT
Rights and Incentive Awards granted under this Plan are not assignable,
except that in the case of the death of an Entitled Employee any
Incentive Award which would otherwise be paid to such employee shall be
paid to his or her estate. Incentive Awards are not subject, in whole
or in part, to attachment, execution or levy of any kind.
7. AMENDMENTS
The Board may from time to time amend this Plan, or any provision
thereof, except that the terms and conditions of Incentive Awards which
have been granted cannot be amended so as to adversely affect the rights
of the grantee without his or her consent.
8. TERM
This Plan shall be effective on and from January 1, 1995, shall apply to
Incentive Awards for fiscal year 1995 and thereafter, and shall
terminate only by appropriate action of the Board.
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SCHEDULE I
AWARD PERCENTAGE AT AWARD AWARD PERCENTAGE AT
THRESHOLD ROE PERCENTAGE AT MAXIMUM
GROUP (50% OF TARGET ROE) TARGET ROE (150% OF TARGET ROE)
Senior Executive 20% 40% 80%
Executive 15% 30% 60%
Senior Management 15% 20% 40%
Middle Management 10% 15% 30%
Junior Management 5% 10% 20%
--- --- ---
FORMULA
The Award Percentage shall be calculated in accordance with the
following formulae:
(i) Where the ROE is less than the Target ROE:
Senior Executive (40%)(AROE)
Executive (30%)(AROE)
Senior Management (10%)(AROE) +10%
Management (10%)(AROE) + 5%
Junior Management (10%)(AROE)
(ii) Where the ROE is equal to or greater than the Target ROE:
Senior Executive (80%)(AROE) -40%
Executive (60%)(AROE) -30%
Senior Management (40%)(AROE) -20%
Management (30%)(AROE) -15%
Junior Management (20%)(AROE) -10%
NOTES
(i) Adjusted ROE (AROE) = ROE x 100
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Target ROE
(ii) Where AROE is greater than 150 (i.e. the maximum return on
equity) the AROE is deemed to be 150.