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EXHIBIT 10(bb)
POTASH CORPORATION OF SASKATCHEWAN INC.
STOCK OPTION PLAN -- DIRECTORS
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 directors of the Corporation 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").
2. ADMINISTRATION
This Plan shall be administered by the Board.
3. GRANT OF OPTIONS
From time to time the Board may designate individual directors of the
Corporation 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 January 24, 1995
pursuant to options under this Plan may not exceed 456,000 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.
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5. OPTION PRICE
The option price under this Plan to any optionee shall be 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.
6. TERMS OF OPTION
The period during which an option is exercisable may not exceed 10
years from the date the option is granted. 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 an optionee ceases to be a director of the Corporation by
reason of his or her death or 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 an optionee ceases
to be a director of the Corporation by reason of retirement in
accordance with the then prevailing retirement policy of the
Corporation, 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 an optionee ceases to be a director of the Corporation 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.
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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 ceasing
to be a director 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 to the authorized limits set forth in paragraph
4, in the number, class and/or type 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 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.
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10. CHANGE OF CONTROL
If a "change of control" of the Corporation occurs, each then
outstanding 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 this 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.
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.
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