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EXHIBIT 10(Z)
POTASH CORPORATION OF SASKATCHEWAN INC.
STOCK OPTION PLAN -- OFFICERS AND KEY EMPLOYEES
1. PURPOSE OF PLAN
Potash Corporation of Saskatchewan Inc. (the "Corporation") by resolution
of its Board of Directors (the "Board") has established this Plan to
encourage officers and key employees of the Corporation and its
subsidiaries to promote the growth and profitability of the Corporation by
providing them with the opportunity through options to acquire Common
Shares of the Corporation ("Common Shares"). The Corporation's Stock Option
Incentive Plan, previously in effect, has been bifurcated into this Plan
and the Corporation's Stock Option Plan -- Directors.
2. ADMINISTRATION
This Plan shall be administered by the Board.
3. GRANT OF OPTIONS
From time to time the Board may designate individual officers and key
employees of the Corporation and its subsidiaries eligible to be granted
options to purchase Common Shares and the number of Common Shares which
each such person will be granted an option to purchase; provided that the
aggregate number of Common Shares subject to such options may not exceed
the number provided for in paragraph 4 of this Plan.
4. SHARES SUBJECT TO OPTION
The aggregate number of Common Shares issuable after February 3, 1998
pursuant to options under this Plan may not exceed 6,926,125 shares. The
number of Common Shares issuable pursuant to options under this Plan shall
be subject to adjustment under paragraphs 8 and 9.
The aggregate number of Common Shares in respect of which options have been
granted to any one person and which remain outstanding shall not at any
time exceed 5% of the number of issued and outstanding Common Shares (on a
non-diluted basis) at that time.
If any option granted under this Plan, or any portion thereof, expires or
terminates for any reason without having been exercised in full, the Common
Shares with respect to which such option has not been exercised shall again
be available for further options under this Plan.
5. OPTION PRICE
The option price under this Plan to any optionee shall be fixed by the
Board when the option is granted and shall be not less than the fair market
value of the Common Shares at such time which, for optionees resident in
the United States and any other optionees designated by the Board, shall be
deemed to be the closing price per share of the Common Shares on the New
York Stock Exchange on the last trading day immediately preceding the day
the option is granted and, for all other optionees, shall be deemed to be
the closing price per share of the Common Shares on The Toronto Stock
Exchange on the last trading day immediately preceding the day the option
is granted; provided that, in either case, if the Common Shares did not
trade on such exchange on such day the option price shall be the closing
price per share on such exchange on the last day on which the Common Shares
traded on such exchange prior to the day the option is granted.
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6. TERMS OF OPTION
The period during which an option is exercisable may not exceed 10 years
from the date the option is granted, and the option agreement may contain
provisions limiting the number of Common Shares with respect to which the
option may be exercised in any one year. Each option agreement shall
contain provisions to the effect that:
(a) if the employment of an optionee as an officer or employee of the
Corporation or a subsidiary terminates, by reason of his or her death,
or if an optionee who is a retiree pursuant to clause (b) below dies,
the legal personal representatives of the optionee will be entitled to
exercise any unexercised options, including such options that may vest
after the date of death, during the period ending at the end of the
twelfth calendar month following the calendar month in which the
optionee dies, failing which exercise the options terminate;
(b) subject to the terms of clause (a) above, if the employment of an
optionee as an officer or employee of the Corporation or a subsidiary
terminates, by reason of retirement in accordance with then prevailing
retirement policy of the Corporation or subsidiary, the optionee will
be entitled to exercise any unexercised options, including such
options as may vest after the date of retirement, until the expiry
date of such options or the date on which such options are otherwise
terminated in accordance with the provisions of this Plan, failing
which exercise the options terminate;
(c) if the employment of an optionee as an officer or employee of the
Corporation or a subsidiary terminates, for any reason other than as
provided in the preceding clauses (a) or (b), the optionee will be
entitled to exercise any unexercised options, to the extent
exercisable at the date of such event, during the period ending at the
end of the calendar month immediately following the calendar month in
which the event occurs, failing which exercise the options terminate;
and
(d) each option is personal to the optionee and is not assignable, except
(i) as provided in the preceding clause (a), and (ii) at the election
of the Board, an option may be assignable to the spouse, children and
grandchildren of the original optionee and to a trust, partnership or
limited liability company, the entire beneficial interest of which is
held by one or more of the foregoing.
Nothing contained in the preceding clauses (a), (b), or (c) shall extend
the period during which an option may be exercised beyond its stipulated
expiry date or the date on which it is otherwise terminated in accordance
with the provisions of this Plan.
If an option is assigned pursuant to the preceding subclause (ii) of clause
(d), the references in the preceding clauses (a), (b) and (c) to the
termination of employment or death of an optionee shall not relate to the
assignee of an option but shall relate to the original optionee. In the
event of such assignment, legal personal representatives of the original
optionee shall not be entitled to exercise the assigned option, but the
assignee of the option or the legal personal representatives of the
assignee may exercise the option during the applicable specified period.
7. EXERCISE OF OPTIONS
Subject to the provisions of this Plan, an option may be exercised from
time to time by delivering to the Corporation at its registered office a
written notice of exercise specifying the number of shares with respect to
which the option is being exercised and accompanied by payment in cash or
certified cheque in full of the purchase price of the shares then being
purchased.
8. ADJUSTMENTS
Appropriate adjustments in the number of shares optioned and in the option
price per share, both as to options granted or to be granted, may be made
by the Board in its discretion to give effect to adjustments in the number
of Common Shares which result from subdivisions, consolidations or
reclassifications of the Common Shares, the payment of share dividends by
the Corporation, the reconstruction, reorganization or recapitalization of
the Corporation or other relevant changes in the capital of the
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Corporation. If the Corporation sells all or substantially all of its
assets as an entirety or substantially as an entirety, options under this
Plan may be exercised, in whole or in part, at any time up to and including
(but not after) a date 30 days following the date of completion of such
sales or prior to the close of business on the date the option expires,
whichever is earlier.
9. MERGERS
If the Corporation proposes to amalgamate or merge with another body
corporate, the Corporation shall give written notice thereof to optionees
in sufficient time to enable them to exercise outstanding options, to the
extent they are otherwise exercisable by their terms, prior to the
effective date of such amalgamation or merger if they so elect. The
Corporation shall use its best efforts to provide for the reservation and
issuance by the amalgamated or continuing corporation of an appropriate
number of shares, with appropriate adjustments, so as to give effect to the
continuance of the options to the extent reasonably practicable. In the
event that the Board determines in good faith that such continuance is not
in the circumstances practicable, it may upon 30 days' notice to optionees
terminate the options.
10. CHANGE OF CONTROL
If a "change of control" of the Corporation occurs, each option granted
under this Plan may be exercised, in whole or in part, even if such option
is not otherwise exercisable by its terms. For purposes of this paragraph
10, a change of control of the Corporation shall be deemed to have occurred
if:
(a) within any period of two consecutive years, individuals who at the
beginning of such period constituted the Board and any new directors
whose appointment by the Board or nomination for election by
shareholders of the Corporation was approved by a vote of at least a
majority of the directors then still in office who either were
directors at the beginning of the period or whose appointment or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board;
(b) there occurs an amalgamation, merger, consolidation, wind-up,
reorganization or restructuring of the Corporation with or into any
other entity, or a similar event or series of such events, other than
any such event or series of events which results in securities of the
surviving or consolidated corporation representing 50% or more of the
combined voting power of the surviving or consolidated corporation's
then outstanding securities entitled to vote in the election of
directors of the surviving or consolidated corporation being
beneficially owned, directly or indirectly, by the persons who were
the holders of the Corporation's outstanding securities entitled to
vote in the election of directors of the Corporation prior to such
event or series of events in substantially the same proportions as
their ownership immediately prior to such event of the Corporation's
then outstanding securities entitled to vote in the election of
directors of the Corporation;
(c) 50% or more of the fixed assets (based on book value as shown on the
most recent available audited annual or unaudited quarterly
consolidated financial statements) of the Corporation are sold or
otherwise disposed of (by liquidation, dissolution, dividend or
otherwise) in one transaction or series of transactions within any
twelve month period;
(d) any party, including persons acting jointly or in concert with that
party, becomes (through a take-over bid or otherwise) the beneficial
owner, directly or indirectly, of securities of the Corporation
representing 20% or more of the combined voting power of the
Corporation's then outstanding securities entitled to vote in the
election of directors of the Corporation, unless in any particular
situation the Board determines in advance of such event that such
event shall not constitute a change of control; or
(e) the Board approves and/or recommends that shareholders accept, approve
or adopt any transaction that would constitute a change of control
under clause (b), (c) or (d) above.
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11. AMENDMENT OR DISCONTINUANCE OF THIS PLAN
The Board may amend or discontinue the Plan at any time but, subject to
paragraphs 8, 9, and 10, no such amendment may increase the aggregate
maximum number of shares that may be subject to option under this Plan,
change the manner of determining the minimum option price, extend the
option period under any option beyond 10 years or, without the consent of
the holder of the option, alter or impair any option previously granted to
an optionee under this Plan. Amendments to the Plan require pre-clearance
of The Toronto Stock Exchange and the Montreal Exchange.
12. EVIDENCE OF OPTIONS
Each option granted under this Plan shall be embodied in a written option
agreement between the Corporation and the optionee which shall give effect
to the provisions of this Plan.