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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
<TABLE>
<S> <C> <C>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-10351
POTASH CORPORATION OF SASKATCHEWAN INC.
(Exact name of registrant as specified in its charter)
Saskatchewan, Canada N/A
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
122 - 1st Avenue South
Saskatoon, Saskatchewan S7K 7G3
(Address of principal executive (Zip Code)
offices)
</TABLE>
306-933-8500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As at April 30, 1996 45,540,656
Shares.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
These interim consolidated financial statements do not include all
disclosure normally provided in annual financial statements. In management's
opinion, the unaudited financial information includes all adjustments
(consisting solely of normal recurring adjustments) necessary to present fairly
such information. Interim results are not necessarily indicative of the results
expected for the fiscal year.
POTASH CORPORATION OF SASKATCHEWAN INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
---------------------
1996 1995
-------- --------
<S> <C> <C>
Net sales............................................................ $366,871 $135,977
Cost of goods sold................................................... 256,071 62,978
-------- --------
Gross Margin......................................................... 110,800 72,999
-------- --------
Research and development............................................. 257 347
Selling and administrative expenses.................................. 14,717 9,131
Provincial mining and other taxes.................................... 11,920 12,278
Other income......................................................... (3,216) (1,351)
-------- --------
23,678 20,405
-------- --------
Operating Income..................................................... 87,122 52,594
Interest Expense..................................................... 13,842 77
-------- --------
Income Before Income Taxes........................................... 73,280 52,517
Income Taxes......................................................... 9,602 1,042
-------- --------
Net Income........................................................... 63,678 51,475
Retained Earnings, Beginning of Period............................... 277,689 164,037
Dividends............................................................ (11,757) (10,673)
-------- --------
Retained Earnings, End of Period..................................... $329,610 $204,839
======== ========
Net Income Per Share (Note 3)........................................ $1.40 $1.20
======== ========
Dividends Per Share (Note 4)......................................... $.26 $.25
======== ========
</TABLE>
(See Notes to the Consolidated Financial Statements)
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POTASH CORPORATION OF SASKATCHEWAN INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER
1996 31, 1995
----------- -----------
<S> <C> <C>
(UNAUDITED)
ASSETS
Current Assets
Cash and short-term deposits.................................... $ -- $ 40,497
Accounts receivable............................................. 199,056 223,377
Inventories (Note 2)............................................ 235,380 221,911
Prepaid expenses................................................ 17,740 12,041
Other current assets............................................ 8,509 3,315
---------- ----------
460,685 501,141
Property, plant and equipment..................................... 2,016,607 2,032,339
Other assets...................................................... 47,807 48,337
---------- ----------
$2,525,099 $2,581,817
========== ==========
LIABILITIES
Current Liabilities
Bank indebtedness............................................... $ 3,280 $ --
Accounts payable and accrued charges............................ 174,860 199,222
Current portion of long-term debt............................... 70,755 164,971
Current obligations under capital leases........................ 871 870
---------- ----------
249,766 365,063
Long-term debt.................................................... 711,565 711,585
Obligations under capital leases.................................. 2,852 2,913
Deferred income tax liability..................................... 9,191 4,743
Accrued post-retirement/post-employment benefits.................. 91,313 89,570
Accrued reclamation costs......................................... 153,057 151,531
Other non-current liabilities and deferred credits................ 11,782 14,537
---------- ----------
1,229,526 1,339,942
---------- ----------
Shareholders' Equity
Share Capital..................................................... 629,477 627,700
Contributed Surplus............................................... 336,486 336,486
Retained Earnings................................................. 329,610 277,689
---------- ----------
1,295,573 1,241,875
---------- ----------
$2,525,099 $2,581,817
========== ==========
</TABLE>
(See Notes to the Consolidated Financial Statements)
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POTASH CORPORATION OF SASKATCHEWAN INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(IN THOUSANDS OF US DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-----------------------
1996 1995
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Working capital from operations
Net income....................................................... $ 63,678 $ 51,475
Depreciation and amortization.................................... 23,300 13,456
Loss (Gain) on disposal of property, plant and equipment......... 69 (1)
Provision for deferred income taxes.............................. 4,448 --
Provision for post-retirement/post-employment benefit............ 1,743 --
--------- ---------
93,238 64,930
Changes in non-cash operating working capital
Accounts receivable.............................................. 24,321 (10,619)
Inventories...................................................... (12,429) 3,683
Prepaid expenses................................................. (5,699) 4,189
Other current assets............................................. (5,194) --
Accounts payable and accrued charges............................. (24,362) 8,794
Accrued reclamation costs.......................................... 1,524 --
Other non-current liabilities and deferred credits................. (2,755) --
--------- ---------
Cash provided by operating activities.............................. 68,644 70,977
--------- ---------
Investing Activities
Additions to property, plant and equipment
-- Sustaining operations......................................... (8,384) (2,026)
Proceeds on disposal of property, plant and equipment............ 324 27
Additions to other assets........................................ (85) (2,824)
--------- ---------
Cash used in investing activities.................................. (8,145) (4,823)
--------- ---------
Cash before financing activities................................... 60,499 66,154
--------- ---------
Financing Activities
Repayment of long-term obligations............................... (94,296) (6)
Dividends........................................................ (11,757) (10,673)
Issuance of shares............................................... 1,777 325
--------- ---------
Cash used in financing activities.................................. (104,276) (10,354)
--------- ---------
(Decrease) Increase in Cash........................................ (43,777) 55,800
Cash, Beginning of Period.......................................... 40,497 16,576
--------- ---------
(Bank Indebtedness) Cash, End of Period............................ $ (3,280) $ 72,376
========= =========
Supplemental cash flow disclosure
Interest paid.................................................... $ 14,612 $ 6
========= =========
Income taxes paid................................................ $ 20,164 $ 2,432
========= =========
</TABLE>
(See Notes to the Consolidated Financial Statements)
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POTASH CORPORATION OF SASKATCHEWAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Company's accounting policies are in accordance with accounting
principles generally accepted in Canada. These policies are consistent with
accounting principles generally accepted in the United States except as outlined
in Note 5.
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of PCS and its
operating subsidiaries (the "Company" except to the extent the context otherwise
requires):
-- PCS Sales (Canada) Inc. (PCS Sales)
-- PCS Sales (Iowa), Inc.
-- PCS Sales (Indiana), Inc.
-- Potash Corporation of Saskatchewan (Florida) Inc. (PCS Florida)
-- Potash Corporation of Saskatchewan Transport Limited (PCS Transport)
-- PCS Sales (USA), Inc.
-- PCS Phosphate Company Inc. (PCS Phosphate)
-- White Springs Agricultural Chemicals, Inc. (White Springs)
2. INVENTORIES
<TABLE>
<CAPTION>
MARCH DECEMBER 31,
31, 1996 1995
-------- ------------
<S> <C> <C>
Finished product................................................... $118,482 $115,491
Materials and supplies............................................. 80,614 66,708
Raw materials...................................................... 8,988 11,954
Work in process.................................................... 27,296 27,758
-------- --------
$235,380 $221,911
======== ========
</TABLE>
3. EARNINGS PER SHARE
Earnings per share are calculated on the weighted average shares issued and
outstanding during the three months ended March 31, 1996 of 45,484,000 (1995 --
42,995,000).
4. DIVIDENDS
The Company declares its dividends in Canadian dollars.
5. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
A description of the accounting principles which differ significantly in
certain respects from generally accepted accounting principles in the United
States (US GAAP) follows:
Earnings per share: In computing primary earnings per share, under US GAAP,
the stock options are included in the calculation to the extent that they are
exercisable.
Deferred income taxes: Deferred tax assets have been recognized only to the
extent of reducing deferred tax liabilities. US GAAP would require that deferred
tax assets be recorded when their realization is more likely than not.
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The application of US GAAP, as described above, would have had the
following approximate effects on net income, net income per share, total assets
and shareholders' equity:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Net income as reported in the consolidated statements of income
and retained earnings......................................... $ 63,678 $ 51,475
Item decreasing reported net income
Deferred income taxes......................................... (3,227) --
---------- ----------
Approximate net income -- US GAAP............................... $ 60,451 $ 51,475
========== ==========
Weighted average shares outstanding -- US GAAP.................. 45,976,000 43,093,000
========== ==========
Net income per share -- US GAAP................................. $ 1.31 $ 1.19
========== ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER
MARCH 31, 31,
1996 1995
---------- ----------
<S> <C> <C>
Total assets as reported in the consolidated statements of
financial position............................................ $2,525,099 $2,581,817
Item increasing reported total assets
Deferred income tax asset..................................... 15,371 18,598
---------- ----------
Approximate total assets -- US GAAP............................. $2,540,470 $2,600,415
========== ==========
Shareholders' equity as reported in the consolidated statements
of financial position......................................... $1,295,573 $1,241,875
Item increasing reported shareholders' equity
Deferred income taxes......................................... 15,371 18,598
---------- ----------
Approximate shareholders' equity -- US GAAP..................... $1,310,944 $1,260,473
========== ==========
</TABLE>
6. COMPARATIVE FIGURES
Certain of the prior period's comparative figures have been reclassified to
conform with the current period's presentation. Results for the first quarter of
1995 do not include the operations of PCS Phosphate (formerly Texasgulf Inc.)
acquired April 10, 1995 or the operations of White Springs acquired October 31,
1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
When comparing the first quarter of 1996 to the first quarter of 1995 there
are two primary factors to consider. 1995 was a record first quarter in potash
during which the Company earned 32 percent of its net earnings compared to the
five year average of 14 percent for the years 1990 to 1994. In addition, the
Company did not own its phosphate operations one year ago so there are no prior
period results of the Company with which to compare.
Net sales and net income for the three months ended March 31, 1996 improved
170 percent and 24 percent, respectively, over the same period in 1995. Net
income for the first quarter of 1996 was $63.7 million (1995 -- $51.5 million)
on net sales of $366.9 million (1995 -- $136.0 million), or $1.40 per share
(1995 -- $1.20 per share). For the first quarter of 1996, gross margin and
operating income were $110.8 million and $87.1 million, respectively, compared
to a gross margin of $73.0 million and an operating income of $52.6 million for
the same period in 1995 (increases of 52 percent and 66 percent, respectively).
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For the three months ended March 31, 1996, North American and offshore net
sales were $230.9 million (1995 -- $44.1 million) and $136.0 million (1995 --
$91.9 million), respectively. North American net sales represented 63 percent
(1995 -- 32 percent) of total net sales, whereas offshore sales represented 37
percent of net sales (1995 -- 68 percent).
Gross margins for the first three months of 1996 increased $37.8 million or
52 percent over the same period in 1995. Potash and phosphate contributed
equally to earnings. Gross margin for potash was $55.1 million, a decrease of
$17.9 million when compared to first quarter 1995, the highest quarter for sales
volumes in the Company's history. This decrease was more than offset by a gross
margin of $55.7 million for phosphate, feed and ammonia. Of this $55.7 million
gross margin, 62 percent is attributable to phosphate fertilizer products, 23
percent is attributable to feed products, 13 percent is attributable to
industrial products and 2 percent is attributable to ammonia.
The $230.9 million increase in net sales is comprised as follows:
<TABLE>
<CAPTION>
($MILLIONS)
-----------
<S> <C>
POTASH......................................................... $ (32.1)
PHOSPHATES
Phosphate Rock................................................. 3.3
Phosphate Fertilizer........................................... 150.2
Non-fertilizer Products........................................ 70.6
AMMONIA........................................................ 38.9
-------
Total Increase in Sales Revenue................................ $ 230.9
=======
</TABLE>
The increase in net income of $12.2 million is largely attributable to
additional earnings from the phosphate acquisitions which were offset by an
increase in interest expense of $13.8 million relating to debt financing of
$878.8 million incurred to purchase PCS Phosphate and White Springs, and an $8.6
million increase in income taxes.
1996 VERSUS 1995
OVERALL REVENUE
Net sales revenue for the first quarter of 1996 was $366.9 million, an
increase of $230.9 million or 170 percent over the first three months of 1995.
Potash, phosphate and ammonia revenue for the first quarter of 1996 was $103.9
million, $224.1 million, and $38.9 million, respectively.
POTASH REVENUE
Potash net sales revenue for the first three months of 1996 decreased by
$32.1 million or 24 percent as compared to the first three months of 1995 (1996
- - -- $103.9 million; 1995 -- $136.0 million). In the first quarter of 1995, large
potash purchases by China and Brazil were supplemented by strong pre-season
buying in the U.S. While the first quarter of 1996 volumes were less than those
of the first quarter of 1995 they were the second highest first quarter volumes
in the Company's history and well above the five-year average. As a result, the
Company sold 1.457 million tonnes of potash in this year's first quarter,
compared to a record 1.944 million tonnes sold in the same period last year, a
decrease of .487 million tonnes or 25 percent. Potash prices experienced an
overall increase of 2 percent in the first quarter of 1996 as compared to the
first quarter of 1995. The overall decrease in potash volumes of 25 percent
resulted in a $33.8 million decrease in potash net sales revenue, while the 2
percent increase in overall potash prices resulted in a $1.7 million improvement
in potash net sales revenue.
In the first quarter of 1996, North American and offshore potash sales
volumes decreased 17 percent and 30 percent, respectively, over the same period
in 1995. Potash prices increased 5 percent in the offshore market where
customers agreed in February to a $5 increase. Price increases scheduled by the
Company for
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the domestic market were not attained and, as a result, realizations in this
market were down by 1 percent from the first quarter a year ago.
The decrease in North American potash sales volumes and prices resulted in
a $7.9 million decrease in North American potash net sales revenue. North
American potash sales volumes for the first quarter of 1996 decreased .119
million tonnes (1996 -- .589 million tonnes; 1995 -- .708 million tonnes)
compared to the first quarter of 1995. North American sales revenue from potash
operations represented 35 percent of the potash net sales revenue of the Company
during this year's first quarter. Strong pre-season buying in the United States
boosted last year's first quarter volumes and revenues to record levels. In 1995
field work began early, compared to the slow start to this year's spring season
due to weather.
The decrease in offshore sales volumes and the increase in overall offshore
selling price resulted in a $24.2 million decrease in offshore potash net sales
revenue. In the offshore market, the Company sold .868 million potash tonnes
during the first quarter (1995 -- 1.236 million tonnes), a decrease of 30
percent. Of the .868 million tonnes, .723 million tonnes were sold through
Canpotex and the remaining .145 million tonnes were produced by PCS New
Brunswick and sold and delivered to offshore markets, such as Brazil and Europe,
by PCS Sales. Canpotex delivered nearly 500,000 tonnes of potash to China
compared to 700,000 in the same period a year ago. In the first quarter of 1996,
offshore net sales revenue from potash operations represented 65 percent of net
potash sales revenue of the Company.
In the first quarter of 1995, the Company sold more than twice as much
tonnage to the offshore market as it did in 1994. First quarter 1996 offshore
volumes were less than 1995 but were still the second highest quarter sales
volumes in the Company's history and 76 percent above the average of the five
year period 1990 to 1994. Cold weather throughout the northern hemisphere has
slowed spring plantings in the first quarter of 1996, which affected shipments.
PHOSPHATE REVENUE
Phosphate net sales revenue for the three months ended March 31, 1996 was
$224.1 million. The distribution of this revenue was as follows: phosphate
fertilizer $150.2 million (67 percent); non-fertilizer products (animal feed and
industrial products) $70.6 million (32 percent); and phosphate rock $3.3 million
(1 percent). Gross margin for phosphate revenues was $54.6 million.
First quarter net sales revenue from liquid and solid fertilizers was
$150.2 million with sales volumes of .716 million tonnes. Solid phosphate
fertilizer (substantially all DAP) accounted for 61 percent or $91.2 million of
the total. Offshore sales of DAP accounted for 47 percent of solid fertilizer
net sales revenue while liquid fertilizers had a 72 percent share of net sales
revenue in the North American market. The average net sales price for these
fertilizers continued to improve throughout the first three months of 1996 when
compared to the fourth quarter of 1995.
Net sales from animal feed and industrial products during the first quarter
were $70.6 million with sales volumes of .275 million tonnes. Feed sales tonnage
was .210 million tonnes with 12 percent sold offshore while the remaining .065
million tonnes were industrial products sold to North American customers. When
compared to the fourth quarter of 1995, feed product prices continued to improve
while industrial product prices declined 2 percent.
Net sales revenue from phosphate rock was $3.3 million with sales volumes
of .081 million tonnes. The average net sales price improved throughout the
first quarter of 1996 when compared to the fourth quarter of 1995.
North American phosphate net sales revenue accounted for $155.8 million (70
percent) of total phosphate net sales revenue of $224.1 million. In the three
months ended March 31, 1996, 58 percent of the Company's North American
phosphate net sales revenue was earned from phosphate fertilizer products which
represented 62 percent of the Company's North American phosphate sales volumes.
PhosChem, a phosphate export association established under U.S. law, is the
principal vehicle through which the Company executes offshore marketing and
sales for its phosphate fertilizers. Offshore sales
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accounted for 30 percent of total phosphate product net sales revenue in 1996
and 39 percent of volumes. In the three months ended March 31, 1996, 87 percent
of the Company's offshore phosphate net sales revenue was earned from phosphate
fertilizer products which represented 74 percent of the Company's offshore
phosphate sales volumes.
AMMONIA REVENUE
First quarter ammonia sales contributed $38.9 million to sales revenue with
sales volumes of .187 million tonnes.
COST OF GOODS SOLD
For the three months ended March 31, 1996, the Company produced 1.699
million potassium chloride (KCl) tonnes, compared to 1.886 million tonnes in the
first quarter of 1995, a decrease of .187 million tonnes (10 percent) compared
to 1995 but still 53 percent above the 1994 first quarter level.
In this year's first quarter, the Company produced .514 million phosphoric
acid (P205) tonnes from its phosphate operations.
Potash unit cost of sales increased by 3 percent in the first three months
of 1996 compared to the same period in 1995 due to two additional shutdown
weeks.
The cold winter contributed to additional potash and phosphate operation
costs.
Depreciation expense for the first quarter of 1996 was $23.3 million
compared to $13.5 million in 1995, an increase of 73 percent. The increase is a
result of the additional depreciation from the acquired phosphate operations.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses during the first quarter of 1996 were
$14.7 million as compared to $9.1 million in 1995, an increase of $5.6 million.
The increase is attributable to the acquisitions of PCS Phosphate and White
Springs and to general increases in supplies, compensation and benefits.
PROVINCIAL MINING AND OTHER TAXES
Saskatchewan's potash production tax is comprised of a base tax per tonne
of product sold and an additional tax based on mine-by-mine profits. The New
Brunswick division and the Saskatchewan divisions pay a provincial crown
royalty, which is accounted for under cost of goods sold.
Increased profitability at certain of the mines increased the taxes paid to
the Saskatchewan government but taxes were reduced by lower potash sales
volumes. For the first quarter of 1996, Saskatchewan provincial mining and other
taxes were $11.9 million as compared to $12.3 million in the first quarter of
1995, a decrease of 3 percent. Potash production tax for the first quarter of
1996 was $8.5 million compared to $7.8 million in the same period in 1995, an
increase of 9 percent. The increase is explained by the Allan and Rocanville
mines having been joined by Esterhazy mine in incurring the profits tax as well
as by increased profitability on a per tonne basis. Saskatchewan capital tax was
$3.6 million in the three months ended March 31, 1996 compared to $4.5 million
in the prior comparable period, a decrease of 20 percent.
INTEREST EXPENSE
For the first quarter of 1996, interest expense was $13.8 million. The
increase in interest expense is the result of the debt incurred to finance the
phosphate acquisitions. The Company had virtually no debt in the first quarter
of 1995.
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INCOME TAXES
Income taxes in the first quarter of 1996 were $9.6 million, compared to
$1.0 million in the same period of 1995, an increase of $8.6 million. The
increase is largely attributable to US withholding taxes, alternative minimum
taxes and deferred income taxes relating to the Company's acquired phosphate
operations. The tax rate applicable to the U.S. operations for 1996 is
approximately 26 percent of income before taxes. This rate for 1995 was
approximately 24 percent of income before taxes.
ANALYSIS OF FINANCIAL CONDITION AND CASH FLOW
Working capital for the first quarter 1996 increased by $74.8 million. Cash
flow from operations was $68.6 million. Quick and current ratios were .80 and
1.84 at March 31, 1996. The Company paid down its debt by $94.3 million (of
which $36.0 million was voluntary) and paid dividends of $11.8 million. At the
end of the quarter, the debt to capital ratio was at 38 percent and the interest
coverage ratio was 6.3 to 1. The net debt to market capitalization at March 31,
1996 was 28 percent.
OUTLOOK
The statements in this "Management Discussion and Analysis", including
those in this "Outlook" section relating to the period after March 31, 1996, are
forward-looking statements subject to uncertainties. The Company's financial
performance continues to be affected by price, worldwide state of supply and
demand for potash and phosphate products, application rates, government
assistance programs, weather conditions, exchange rates and agricultural and
trade policies of producing and consuming nations which, among other things, are
influenced by domestic political conditions. The Company sells to a diverse
group of customers both by geography and by end product. Market conditions by
country will vary on a year over year basis and sales shift from one period to
another.
The rising world population and the demand for better diets in developing
nations will continue to drive consumption for fertilizer products over the
long-term. Over the short-term, there should be increased fertilizer usage over
the next few years as world grain stocks are critically low, crop prices
continue to rise, and governments around the world focus on food production. The
Company expects to be an important supplier to these markets. While the
consumption trend line is expected to continue to climb over the long-term,
there will be, at times, fluctuations in demand. For example, Brazil was a major
purchaser in the first quarter of 1995, but credit problems with farmers reduced
purchases for the remainder of the year. This has now been resolved and Brazil
has begun purchasing again. There are reports of high inventories in India of
potassium and phosphate which will affect purchases this year. China purchased
both products in the first quarter of 1996 but shipments have slowed. The
Chinese government continues to emphasize agricultural production which should
encourage purchases in the balance of 1996.
North American potash and phosphate demand in fertilizer is generally
considered mature but is expected to fluctuate slightly from year to year, as a
function of acres planted and application rates per acre which are influenced by
crop prices and weather. While the outlook for 1996 in the domestic market has
been bullish due to a new Farm Bill and no set asides, the late spring in 1996
is affecting consumption in some areas which is having a dampening effect on
demand and prices. However, some volumes are expected to be made up during the
second quarter.
PCS continues to operate its potash mines by matching production to sales
demand. Shutdowns at potash mines for inventory correction will influence potash
production costs.
Mining costs are not expected to increase at a rate greater than the
anticipated rate of inflation. Natural gas costs are expected to be reduced by
approximately 15 percent in the Saskatchewan operations based on existing
contracts for 1996. Sulphur and ammonia prices have moderated and are expected
to impact favourably upon phosphate processing input costs for 1996.
Capital expenditures in 1996 will exceed those in 1995 primarily due to a
full year of phosphate ownership and operation. Plans for such expenditures are
limited to sustaining capital.
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The narrative, included under this Management Discussion and Analysis, has
been prepared with reference to the financial statements reported under Canadian
Generally Accepted Accounting Principles (GAAP).
11
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PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS
CIVIL ANTITRUST COMPLAINTS
In June, 1993, the Company and a wholly-owned subsidiary, Potash
Corporation of Saskatchewan Sales Limited, whose name has been changed to PCS
Sales (Canada) Inc. ("PCS Sales"), were served with a complaint relating to a
suit filed in the United States District Court for Minnesota against most North
American potash producers, including the Company. The complaint alleges a
conspiracy among the defendants to fix the price of potash purchased by the
plaintiffs as well as potash purchased by the members of a class of certain
purchasers proposed by the plaintiffs. The complaint seeks treble damages in an
unspecified amount and other relief. Similar complaints were filed in the United
States District Courts for the Northern District of Illinois and the Western
District of Virginia. On motion of the defendants, all of the complaints were
transferred and consolidated for pre-trial purposes in the United States
District Court for Minnesota. Amended complaints were filed in March and April
1994. On January 12, 1995, the Minnesota Federal Court granted the plaintiffs'
motion for class certification. Merits discovery was completed in September
1995. Expert discovery was completed in November 1995. The Company and PCS Sales
filed a motion for summary judgment on December 22, 1995. The Court held oral
argument on that motion on April 18, 1996. The Court has issued an order
scheduling the trial to begin on August 20, 1996.
Additional complaints were filed in the California and Illinois State
Courts on behalf of purported classes of indirect purchasers of potash in those
states. The Company moved to dismiss the California State Court lawsuit for lack
of personal jurisdiction and the court ruled that it does not have personal
jurisdiction over the Company but that it does have personal jurisdiction over
PCS Sales. The case remains at an early stage; no merits discovery has taken
place. The Illinois State Court dismissed the Illinois State Court complaint for
failure to state a cause of action. The Illinois plaintiff has appealed that
dismissal.
In the litigation, the plaintiffs have retained an economist who has issued
a report in which he states that if the plaintiffs prevail, in his opinion, the
plaintiffs would be entitled to a total of approximately $311 million in damages
(subject to trebling) from all the defendants. However, the Company believes
that the approach used by the plaintiffs' economist is so seriously flawed as to
be untenable and insofar as the allegations of wrongdoing relate to the Company,
management of the Company, having consulted with legal counsel, believes that
the allegations are without merit, that the Company has valid defences and that
the lawsuits will not have a material adverse effect on the Company. However,
management of the Company cannot predict with certainty the outcome of the
litigation.
GRAND JURY PROCEEDINGS
PCS Sales received a grand jury subpoena on December 29, 1993 from the
Antitrust Division of the U.S. Department of Justice for certain documents
relating to its North American potash business activities. Document production
is ongoing. In addition, ten employees of PCS Sales have received grand jury
subpoenas. The Company believes the Antitrust Division's subpoenas are part of
the Division's ongoing investigation of the allegations made in the civil
antitrust complaints. Since the investigation is at a preliminary stage, it is
not possible to determine whether charges will be filed.
12
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- - ------- ------------------------------------------------------------------------------------
<C> <S>
2(i) Stock Purchase Agreement dated March 5, 1995, among Elf Aquitane, Inc., Williams
Acquisition Holding Company, Inc., the registrant, Reserveco, Inc. and Texasgulf,
Inc., incorporated by reference to Exhibit 2(i) to the registrant's report on Form
10-K for the year ended December 31, 1995.
2(ii) Stock Purchase Agreement dated as of September 11, 1995, between Phosphate Holding
Company, Inc. and Occidental Chemical Corporation, incorporated by reference to
Exhibit 2(ii) to the registrant's report on Form 10-K for the year ended December
31, 1995.
2(iii) Agreement dated as of October 25, 1995 amending the Stock Purchase Agreement dated
as of September 11, 1995.
2(iv) Agreement dated as of April 30, 1996 amending the Stock Purchase Agreement dated as
of September 11, 1995.
3(i) Restated Articles of Incorporation of the registrant dated October 31, 1989, as
amended May 11, 1995, incorporated by reference to Exhibit 3(i) to the registrant's
report on Form 10-K for the year ended December 31, 1995.
3(ii) Bylaws of the registrant dated March 2, 1995, incorporated by reference to Exhibit
3(ii) to the registrant's report on Form 10-K for the year ended December 31, 1995.
4(a) Shareholders Rights Agreement dated November 10, 1994, as amended on March 28, 1995,
and May 4, 1995, and approved by shareholders on May 11, 1995, incorporated by
reference to Exhibit 4(a) to the registrant's report on Form 10-K for the year ended
December 31, 1995.
4(b) Non-revolving Term Credit Facilities Agreement between The Bank of Nova Scotia and
other financial institutions and the registrant dated April 10, 1995, incorporated
by reference to Exhibit 4(b) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
4(c) First Amending Agreement between The Bank of Nova Scotia and other financial
institutions and the registrant dated May 23, 1995.
4(d) Second Amending Agreement between The Bank of Nova Scotia and other financial
institutions and the registrant dated October 18, 1995.
The registrant hereby undertakes to file with the Securities and Exchange
Commission, upon request, copies of any constituent instruments defining the
rights of holders of long-term debt of the registrant or its subsidiaries that
have not been filed herewith because the amounts represented thereby are less
than 10% of the total assets of the registrant and its subsidiaries on a
consolidated basis.
10(a) Suspension Agreement concerning Potassium Chloride from Canada dated January 7,
1988, among U.S. Department of Commerce, Potash Corporation of Saskatchewan,
International Minerals and Chemical (Canada) Limited, Noranda, Inc. (Central Canada
Potash Co.), Potash Company of America, a Division of Rio Algom Limited, S & P
Canada, II (Kalium Chemicals), Cominco Ltd., Potash Company of Canada Limited, Agent
for Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd., incorporated by
reference to Exhibit 10(a) to the registrant's Form F-1 (File No. 33-31303) (the
"F-1 Registration Statement").
10(b) Sixth Voting Agreement dated April 22, 1978, between Central Canada Potash, Division
of Noranda, Inc., Cominco Ltd., International Minerals and Chemical Corporation
(Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by reference to Exhibit
10(f) to the F-1 Registration Statement.
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- - ------- ------------------------------------------------------------------------------------
<C> <S>
10(c) Canpotex Limited Shareholders Seventh Memorandum of Agreement effective April 21,
1978, between Central Canada Potash, Division of Noranda Inc., Cominco Ltd.,
International Minerals and Chemical Corporation (Canada) Limited, PCS Sales,
Texasgulf Inc. and Canpotex Limited as amended by Canpotex S & P amending agreement
dated November 4, 1987, incorporated by reference to Exhibit 10(g) to the F-1
Registration Statement.
10(d) Producer Agreement dated April 21, 1978, between Canpotex Limited and PCS Sales,
incorporated by reference to Exhibit 10(h) to the F-1 Registration Statement.
10(e) PCS Sales -- Saskterra Special Canpotex Entitlement effective June 13, 1990,
incorporated by reference to Exhibit 10(n) to the registrant's Form S-1 (File No.
33-36283).
10(f) Canpotex/PCS Amending Agreement, dated with effect October 1, 1992, incorporated by
reference to Exhibit 10(f) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(g) Canpotex PCA Collateral Withdrawing/PCS Amending Agreement, dated with effect
October 7, 1993, incorporated by reference to Exhibit 10(g) to the registrant's
report on Form 10-K for the year ended December 31, 1995.
10(h) Esterhazy Restated Mining and Processing Agreement dated January 31, 1978, between
International Minerals and Chemical Corporation (Canada) Limited and the
registrant's predecessor, incorporated by reference to Exhibit 10(e) to the F-1
Registration Statement.
10(i) Agreement dated December 21, 1990, between International Minerals & Chemical
Corporation (Canada) Limited and the registrant, amending the Esterhazy Restated
Mining and Processing Agreement dated January 31, 1978, incorporated by reference to
Exhibit 10(p) to the registrant's report on Form 10-K for the year ended December
31, 1990.
10(j) Agreement dated October 13, 1995 between the registrant and Charles E. Childers,
incorporated by reference to Exhibit 10(j) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
10(k) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Unaffiliated Directors,
incorporated by reference to Exhibit 4.b. to post-effective amendment No. 5
("Amendment No. 5") to the registrant's Form S-8 (File No. 33-37855).
10(l) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers and Key
Employees, incorporated by reference to Exhibit 4.a. to Amendment No. 5.
10(m) Short Term Incentive Plan of the registrant, effective January 1, 1995, incorporated
by reference to Exhibit 10(m) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(n) Long-Term Incentive Plan of the registrant, as amended December 15, 1995,
incorporated by reference to Exhibit 10(n) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
10(o) Resolution and Forms of Agreement for Supplemental Retirement Income Plan, for
officers and key employees of the registrant, incorporated by reference to Exhibit
10(o) to the registrant's report on Form 10-K for the year ended December 31, 1995.
10(p) Forms of Agreement dated December 30, 1994, between the registrant and certain
officers of the registrant, concerning a change in control of the registrant,
incorporated by reference to Exhibit 10(p) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
10(q) Form of Agreement of Indemnification dated August 8, 1995, between the registrant
and certain officers and directors of the registrant, incorporated by reference to
Exhibit 10(q) to the registrant's report on Form 10-K for the year ended December
31, 1995.
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- - ------- ------------------------------------------------------------------------------------
<C> <S>
10(r) Deferred Compensation Plan, for certain officers of PCS Phosphate Company, Inc,
incorporated by reference to Exhibit 10(r) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
10(s) Supplemental Retirement Benefits Plan, for eligible employees of PCS Phosphate
Company, Inc., incorporated by reference to Exhibit 10(s) to the registrant's report
on Form 10-K for the year ended December 31, 1995.
10(t) Second Amended and Restated Membership Agreement dated January 1, 1995, among
Phosphate Chemicals Export Association, Inc. and members of such association,
including Texasgulf Inc. (now PCS Phosphate Company, Inc.), incorporated by
reference to Exhibit 10(t) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(u) International Agency Agreement dated January 1, 1995, between Phosphate Chemicals
Export Association, Inc. and Texasgulf Inc. (now PCS Phosphate Company, Inc.)
establishing Texasgulf Inc. as exclusive marketing agent for such association's wet
phosphatic materials, incorporated by reference to Exhibit 10(u) to the registrant's
report on Form 10-K for the year ended December 31, 1995.
10(v) General Partnership Agreement forming Albright & Wilson Company, dated July 29, 1988
and amended January 31, 1995, between Texasgulf Inc. (now PCS Phosphate Company,
Inc.) and Albright & Wilson Americas, Inc., incorporated by reference to Exhibit
10(v) to the registrant's report on Form 10-K for the year ended December 31, 1995.
10(w) Facility and Services Agreement dated October 31, 1995, by and between Occidental
Chemical Corporation and White Springs Agricultural Chemicals, Inc., incorporated by
reference to Exhibit 10(w) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(x) Agreement dated as of April 17, 1996 amending the Facility and Services Agreement
dated October 31, 1995.
10(y) Royalty Agreement dated October 7, 1993, by and between the registrant and Rio Algom
Limited, incorporated by reference to Exhibit 10(x) to the registrant's report on
Form 10-K for the year ended December 31, 1995.
11 Statement re Computation of Per Share Earnings.
27 Financial Data Schedule.
(b) No reports on Form 8-K were filed by the registrant during the first quarter of 1996.
</TABLE>
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
Potash Corporation of Saskatchewan Inc.
April 30, 1996 By: /s/ CHARLES E. CHILDERS
----------------------------------
Charles E. Childers
Chief Executive Officer
April 30, 1996 By: /s/ BARRY E. HUMPHREYS
----------------------------------
Barry E. Humphreys
Sr. Vice President, Finance and Treasurer
(Principal Financial and Accounting Officer)
</TABLE>
16
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- - ------- ------------------------------------------------------------------------------------
<C> <S>
2(i) Stock Purchase Agreement dated March 5, 1995, among Elf Aquitane, Inc., Williams
Acquisition Holding Company, Inc., the registrant, Reserveco, Inc. and Texasgulf,
Inc., incorporated by reference to Exhibit 2(i) to the registrant's report on Form
10-K for the year ended December 31, 1995.
2(ii) Stock Purchase Agreement dated as of September 11, 1995, between Phosphate Holding
Company, Inc. and Occidental Chemical Corporation, incorporated by reference to
Exhibit 2(ii) to the registrant's report on Form 10-K for the year ended December
31, 1995.
2(iii) Agreement dated as of October 25, 1995 amending the Stock Purchase Agreement dated
as of September 11, 1995.
2(iv) Agreement dated as of April 30, 1996 amending the Stock Purchase Agreement dated as
of September 11, 1995.
3(i) Restated Articles of Incorporation of the registrant dated October 31, 1989, as
amended May 11, 1995, incorporated by reference to Exhibit 3(i) to the registrant's
report on Form 10-K for the year ended December 31, 1995.
3(ii) Bylaws of the registrant dated March 2, 1995, incorporated by reference to Exhibit
3(ii) to the registrant's report on Form 10-K for the year ended December 31, 1995.
4(a) Shareholders Rights Agreement dated November 10, 1994, as amended on March 28, 1995,
and May 4, 1995, and approved by shareholders on May 11, 1995, incorporated by
reference to Exhibit 4(a) to the registrant's report on Form 10-K for the year ended
December 31, 1995.
4(b) Non-revolving Term Credit Facilities Agreement between The Bank of Nova Scotia and
other financial institutions and the registrant dated April 10, 1995, incorporated
by reference to Exhibit 4(b) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
4(c) First Amending Agreement between The Bank of Nova Scotia and other financial
institutions and the registrant dated May 23, 1995.
4(d) Second Amending Agreement between The Bank of Nova Scotia and other financial
institutions and the registrant dated October 18, 1995.
10(a) Suspension Agreement concerning Potassium Chloride from Canada dated January 7,
1988, among U.S. Department of Commerce, Potash Corporation of Saskatchewan,
International Minerals and Chemical (Canada) Limited, Noranda, Inc. (Central Canada
Potash Co.), Potash Company of America, a Division of Rio Algom Limited, S & P
Canada, II (Kalium Chemicals), Cominco Ltd., Potash Company of Canada Limited, Agent
for Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd., incorporated by
reference to Exhibit 10(a) to the registrant's Form F-1 (File No. 33-31303) (the
"F-1 Registration Statement").
10(b) Sixth Voting Agreement dated April 22, 1978, between Central Canada Potash, Division
of Noranda, Inc., Cominco Ltd., International Minerals and Chemical Corporation
(Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by reference to Exhibit
10(f) to the F-1 Registration Statement.
10(c) Canpotex Limited Shareholders Seventh Memorandum of Agreement effective April 21,
1978, between Central Canada Potash, Division of Noranda Inc., Cominco Ltd.,
International Minerals and Chemical Corporation (Canada) Limited, PCS Sales,
Texasgulf Inc. and Canpotex Limited as amended by Canpotex S & P amending agreement
dated November 4, 1987, incorporated by reference to Exhibit 10(g) to the F-1
Registration Statement.
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- - ------- ------------------------------------------------------------------------------------
<C> <S>
10(d) Producer Agreement dated April 21, 1978, between Canpotex Limited and PCS Sales,
incorporated by reference to Exhibit 10(h) to the F-1 Registration Statement.
10(e) PCS Sales -- Saskterra Special Canpotex Entitlement effective June 13, 1990,
incorporated by reference to Exhibit 10(n) to the registrant's Form S-1 (File No.
33-36283).
10(f) Canpotex/PCS Amending Agreement, dated with effect October 1, 1992, incorporated by
reference to Exhibit 10(f) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(g) Canpotex PCA Collateral Withdrawing/PCS Amending Agreement, dated with effect
October 7, 1993, incorporated by reference to Exhibit 10(g) to the registrant's
report on Form 10-K for the year ended December 31, 1995.
10(h) Esterhazy Restated Mining and Processing Agreement dated January 31, 1978, between
International Minerals and Chemical Corporation (Canada) Limited and the
registrant's predecessor, incorporated by reference to Exhibit 10(e) to the F-1
Registration Statement.
10(i) Agreement dated December 21, 1990, between International Minerals & Chemical
Corporation (Canada) Limited and the registrant, amending the Esterhazy Restated
Mining and Processing Agreement dated January 31, 1978, incorporated by reference to
Exhibit 10(p) to the registrant's report on Form 10-K for the year ended December
31, 1990.
10(j) Agreement dated October 13, 1995 between the registrant and Charles E. Childers,
incorporated by reference to Exhibit 10(j) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
10(k) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Unaffiliated Directors,
incorporated by reference to Exhibit 4.b. to post-effective amendment No. 5
("Amendment No. 5") to the registrant's Form S-8 (File No. 33-37855).
10(l) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers and Key
Employees, incorporated by reference to Exhibit 4.a. to Amendment No. 5.
10(m) Short Term Incentive Plan of the registrant, effective January 1, 1995, incorporated
by reference to Exhibit 10(m) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(n) Long-Term Incentive Plan of the registrant, as amended December 15, 1995,
incorporated by reference to Exhibit 10(n) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
10(o) Resolution and Forms of Agreement for Supplemental Retirement Income Plan, for
officers and key employees of the registrant, incorporated by reference to Exhibit
10(o) to the registrant's report on Form 10-K for the year ended December 31, 1995.
10(p) Forms of Agreement dated December 30, 1994, between the registrant and certain
officers of the registrant, concerning a change in control of the registrant,
incorporated by reference to Exhibit 10(p) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
10(q) Form of Agreement of Indemnification dated August 8, 1995, between the registrant
and certain officers and directors of the registrant, incorporated by reference to
Exhibit 10(q) to the registrant's report on Form 10-K for the year ended December
31, 1995.
10(r) Deferred Compensation Plan, for certain officers of PCS Phosphate Company, Inc,
incorporated by reference to Exhibit 10(r) to the registrant's report on Form 10-K
for the year ended December 31, 1995.
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- - ------- ------------------------------------------------------------------------------------
<C> <S>
10(s) Supplemental Retirement Benefits Plan, for eligible employees of PCS Phosphate
Company, Inc., incorporated by reference to Exhibit 10(s) to the registrant's report
on Form 10-K for the year ended December 31, 1995.
10(t) Second Amended and Restated Membership Agreement dated January 1, 1995, among
Phosphate Chemicals Export Association, Inc. and members of such association,
including Texasgulf Inc. (now PCS Phosphate Company, Inc.), incorporated by
reference to Exhibit 10(t) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(u) International Agency Agreement dated January 1, 1995, between Phosphate Chemicals
Export Association, Inc. and Texasgulf Inc. (now PCS Phosphate Company, Inc.)
establishing Texasgulf Inc. as exclusive marketing agent for such association's wet
phosphatic materials, incorporated by reference to Exhibit 10(u) to the registrant's
report on Form 10-K for the year ended December 31, 1995.
10(v) General Partnership Agreement forming Albright & Wilson Company, dated July 29, 1988
and amended January 31, 1995, between Texasgulf Inc. (now PCS Phosphate Company,
Inc.) and Albright & Wilson Americas, Inc., incorporated by reference to Exhibit
10(v) to the registrant's report on Form 10-K for the year ended December 31, 1995.
10(w) Facility and Services Agreement dated October 31, 1995, by and between Occidental
Chemical Corporation and White Springs Agricultural Chemicals, Inc., incorporated by
reference to Exhibit 10(w) to the registrant's report on Form 10-K for the year
ended December 31, 1995.
10(x) Agreement dated as of April 17, 1996 amending the Facility and Services Agreement
dated October 31, 1995.
10(y) Royalty Agreement dated October 7, 1993, by and between the registrant and Rio Algom
Limited, incorporated by reference to Exhibit 10(x) to the registrant's report on
Form 10-K for the year ended December 31, 1995.
11 Statement re Computation of Per Share Earnings.
27 Financial Data Schedule.
</TABLE>
<PAGE> 1
Exhibit 2(iii)
AMENDMENT NUMBER ONE
TO THE
STOCK PURCHASE AGREEMENT
This Amendment Number One, dated as of October 25, 1995, hereby amends the
Stock Purchase Agreement dated as of September 11, 1995 (the "Original Stock
Purchase Agreement"), by and among Occidental Chemical Corporation, a New York
corporation (the "Seller"), and Phosphate Holding Company, Inc., a Delaware
corporation (the "Purchaser").
WHEREAS, by letters dated September 11, 1995, September 28, 1995, October
13, 1995 and October 18, 1995 respectively, the Seller and the Purchaser agreed
under the circumstances described therein to enter into this Amendment Number
One to the Original Stock Purchase Agreement to include as part of the Original
Stock Purchase Agreement the "Missing Related Agreement" and the "Missing
Schedules," all as defined in the foregoing letters.
NOW THEREFORE, it is hereby agreed as follows:
Article I. The capitalized terms used in the Original Stock Purchase
Agreement and not otherwise defined herein are used herein as defined in the
Original Stock Purchase Agreement; provided, however, the capitalized term
"Agreement" shall mean the Original Stock Purchase Agreement as amended by this
Amendment Number One.
Article II. The definition of "Related Agreements" shall be amended to
substitute the following for Section 1.24 of the Agreement:
1.24 Related Agreements: The term "Related Agreements" shall mean the
following agreements in the forms of the Exhibits:
Exhibit A-1: Assignment and Assumption Agreement
Exhibit A-2: Amendment Number One to Assignment and Assumption Agreement
Exhibit B: Facility and Services Agreement
Exhibit C: Interim Services Agreement
Exhibit D: Non-Competition Agreement
Exhibit E: OPC Guarantee
Exhibit F: PCS Guarantee
Exhibit G-1
and G-2: Railcar Subleases
Exhibit H: Tax Lease Consents
The Related Agreements were not attached to the Original Stock Purchase
Agreement. Attached hereto are the Related Agreements which are Exhibits A-1
through H.
Article III. The Schedules referred to in the Original Stock Purchase
Agreement were not attached thereto and are hereby attached to the Agreement in
accordance with its terms.
The Schedule numbers on the attached schedules refer to the corresponding
Sections of the Agreement. All capitalized terms not defined in the Schedules
have the same meaning as the capitalized terms in the Agreement.
Article IV. The following Sections of the original Stock Purchase
Agreement shall be amended in the following manner:
Section 1.1 Substitute "WSP, WSOT and WSET" for "and WSP" in
the fourth line of Section 1.1
1
<PAGE> 2
Section 1.3 Substitute "Sections 6.18 and 6.19" for "Sections
6.16 and 6.17" in Section 1.3
Section 1.12 Substitute "Section 1.12" for "Section 1.11" in the
sixth line of Section 1.12.
Section 1.35(i) Delete "and" on the fifteenth line and add "and (6)
petty cash described on Schedule 1.5(xiii)" to the
end of the Subsection 1.35(i).
Section 1.91 Substitute "Section 6.7.2" for "Section 6.7.3" in
Section 1.91.
Section 1.112 Substitute "WSOT (successor to United States Trust
Company of New York)," for "United States Trust
Company of New York," in Section 1.112.
Sections 1.136 and 1.137 Add the following sections at the tope of page 33
before the first full paragraph:
"1.136 WSOT "WSOT" shall mean White Springs OT
L.L.C., a Delaware limited liability company.
"1.137 WSET "WSET" shall mean White Springs ET
L.L.C., a Delaware limited liability company.
Section 2.7 Substitute "by WSA, by WSP by WSOT or by WSET" for
"by WSA or by WSP" in Section 2.7.
Section 3.1.2 Substitute the following for Section 3.1.2(a):
"3.1.2 Organization and Good Standing of
Subsidiaries; Trust Organization. (a) WSA and WSP
are each a corporation duly incorporated, validly
existing and in good standing under the laws of the
state of Delaware, with the requisite corporate
power to own its assets and to carry on the
business in which it is presently engaged. WSOT and
WSET each has been duly formed and is validly
existing in good standing as a limited liability
company under the Delaware Limited Liability
Company Act. Under that Act and their respective
operating agreements, WSOT and WSET each has the
requisite limited liability company power to own
its assets and carry on the business in which it is
presently engaged.
WSA is duly qualified to do business in each
jurisdiction in which the character of its
properties and assets, or the nature of the
Business, makes such qualification necessary,
except where the failure to be so qualified would
not result either individually or in the aggregate
in a Material Adverse Effect with respect to WSA.
WSA has not conducted any business other than the
Business transferred to WSA pursuant to the
Assignment and Assumption Agreement. Schedule 3.1.2
sets forth all jurisdictions in which WSA is
qualified to do business. WSP, WSOT and WSET are
each duly qualified to do business in each
jurisdiction in which the character of their
respective properties and assets, or the nature of
their respective ownership and activities with
regard thereto, makes such qualification necessary.
WSP has not conducted any business other than the
ownership of the Properties specified under its
name on Schedule 3.1.2 and the leasing or licensing
of such Properties pursuant to the Contracts
referred to in that Schedule. WSOT and WSET have
not conducted any business other than acting as
Owner Trustee and Easement Trustee, respectively,
pursuant to the Trust
2
<PAGE> 3
Agreement dated as of October 23, 1979 as amended
for the Swift Creek Chemical Plant Lease and the
Easement Trust Agreement dated as of October 29,
1975 between Irving Trust Company, now known as The
Bank of New York, as owner Trustee and First Union
National Bank of Florida successor to Southeast
First National Bank of Miami, as Trustee. No
dissolution, liquidation or bankruptcy proceeding
is pending, contemplated or threatened against any
of WSA, WSP, WSOT or WSET. A copy of the
Certificate of Incorporation, the By-Laws, or the
other applicable organizational documents, and each
amendment, if any, thereto, for each of Seller,
WSA, WSP, WSOT and WSET have been furnished to the
Purchaser, and all of such documents are in effect
and are complete."
Section 3.1.4 Substitute "WSP, WSOT and WSET" for "and WSP" in
Section 3.1.4(ii).
Section 3.1.5 Substitute the following for Section 3.1.5:
"3.1.5 Equity Interests of WSA, WSP, WSOT and
WSET. The authorized capital stock of WSA consists
of 2,000 shares of common stock, par value of $1
per share, of which 1,000 shares (the "Stock") are
issued and outstanding and are owned beneficially
and of record by the Seller. Such Stock is validly
issued and outstanding, fully paid and
nonassessable, and owned, beneficially and of
record, by the Seller free and clear of all Liens.
The authorized capital stock of WSP consists of
2,000 shares of common stock, par value $1 per
share, of which 1,000 shares are validly issued and
outstanding. All outstanding shares of WSP are
fully paid and nonassessable and owned,
beneficially and of record, by WSA, free and clear
of all Liens. All of the equity interests of WSOT
and WSET are owned, beneficially and of record by
WSA and WSP, collectively, free and clear of all
Liens. There are no outstanding options, warrants,
rights to subscriptions, calls or commitments
requiring the issuance or transfer by WSA, WSP,
WSOT or WSET of any shares of capital stock or
other equity interests or any securities
convertible into or exchangeable or exercisable for
any rights to acquire capital stock or other equity
interests of WSA, WSP, WSOT or WSET. There are no
outstanding stock appreciation, phantom stock,
profit participation or similar rights with respect
to the Business."
Section 3.1.6 Substitute "WSP, WSOT and WSET" for "and WSP" in
the heading and in the text of Section 3.1.6.
Section 3.1.11 Substitute "WSA, WSP, WSOT or WSET" for "WSA or
WSP" wherever it appears in Section 3.1.11.
Section 3.1.18 Substitute "WSA, WSP, WSOT or WSET" for "WSA or
WSP" in Section 3.1.18.
Section 3.1.21 In the second sentence of Section 3.1.21(i) add
"any Person, or registration, declaration or
filing" after "authorization of", and (ii)
substitute "WSA, WSP, WSOT or WSET" for "WSA or
WSP" and "WSA, WSP, WSOT and WSET" for "WSA and
WSP" whenever it appears in Section 3.1.21.
Section 3.1.28 Substitute "WSA, WSP, WSOT or WSP" for "WSA or WSP"
and "WSA, WSP, WSOT and WSET" for "WSA and WSP"
whenever it appears in Section 3.1.28.
3
<PAGE> 4
Section 3.1.30 and 3.1.31 Substitute "WSA, WSP, WSOT nor WSET" for "WSA nor
WSP" in Sections 3.1.30 and 3.1.31.
Section 3.1.32 Substitute "WSA, WSP, WSOT and WSET" for "WSA and
WSP" and "WSA, WSP, WSOT or WSET" for "WSA or WSP"
in Section 3.1.32.
Section 5.2.7 Substitute "Section 6.7.2" for "Section 6.7.3" in
Section 5.2.7.
Section 6.1 Substitute "WSA, WSP, WSOT or WSET" for "WSA or
WSP" wherever it appears in Section 6.1.
Section 6.12 Substitute "excepted" for "expected" in the last
sentence of Section 6.12.
Section 6.17 Substitute "Section 6.17" for "Section 6.15" in
Section 6.17.
Section 6.18 Add "if" to the beginning of Section 6.18.1(g) and
substitute "transferee" for "transforee" in Section
6.18.1(g).
Section 6.18.6 Substitute "Section 5.2.8" for "Section 5.2.9" in
Section 6.18.6.
Section 6.19 Substitute "Section 6.19" for "Section 6.17" in
Section 6.19.
Section 6.20 Substitute "reasonable commercial efforts" for
"reasonably commercial efforts" in Section 6.20.
Section 6.21 Substitute "Sections 6.21(a) and 6.21(b)" for
"Sections 6.20(a) and 6.21(b)" in Section 6.21.
Section 7.1 Substitute "WSA, WSP, WSOT or WSET" for "WSA or
WSP" and "WSA, WSP, WSOT nor WSET" for "WSA nor
WSP" whenever it appears in Section 7.1.
Sections 7.2 and 7.3 Substitute "WSA, WSP, WSOT and WSET" for "WSA and
WSP" whenever it appears in Sections 7.2 and 7.3.
Sections 7.4, 7.5 and 7.7 Substitute "WSA, WSP, WSOT or WSET" for "WSA or
WSP" whenever it appears in Section 7.4, 7.5 and
7.7.
Section 7.6 Substitute "Each Party" for "The Parties" at the
beginning of the third sentence of the first and
second paragraphs of Section 7.6.
Section 7.10 Substitute "WSA, WSP, WSOT and/or WSET" for "WSA
and/or WSP", "WSA, WSP, WSOT or WSET" for "WSA or
WSP" and "WSA, WSP, WSOT and WSET" for "WSA and
WSP" in Section 7.10.
Section 9.2 Substitute "or (c)" for "and (c)" in the first
sentence of Section 9.2.
Section 9.4.4 Add ")" after "warranties" in the second sentence
of Section 9.4.4.
Section 9.4.5 Substitute "Sections 9.4.2, 9.4.3 or 9.4.4" for
"Sections 9.4.3, 9.4.4 or 9.4.5" in Section 9.4.5.
Section 10.16 Substitute "Section 9.4.5" for "Section 9.4.4" in
Section 10.16.
Article V. Purchaser hereby elects pursuant to Section 6.18(a) to waive
the requirement set forth in Section 6.18(a) that "such consent" be obtained
before Closing. Accordingly Seller and Purchaser agree that the Assets Used in
the Ammonia Operation Agreement will not be Excluded Assets.
4
<PAGE> 5
IN WITNESS WHEREOF, each of the Parties hereto has caused this Amendment
Number One to be signed in its corporate name by its duly authorized officer, as
of the date first above written.
OCCIDENTAL CHEMICAL CORPORATION
By: /s/
-----------------------------
Name: Richard A. Lorraine
Title: Executive Vice President
PHOSPHATE HOLDING COMPANY, INC.
By: /s/
-----------------------------
Name: John Hampton
Title: Secretary
5
<PAGE> 1
Exhibit 2(iv)
AMENDMENT NUMBER TWO
TO THE
STOCK PURCHASE AGREEMENT
This Amendment Number Two, dated as of April 30, 1996, hereby amends the
Stock Purchase Agreement dated as of September 11, 1995 by and among Occidental
Chemical Corporation, a New York corporation (the "Seller"), and Phosphate
Holding Company Inc., a Delaware corporation (the "Purchaser") as amended by
Amendment Number One dated as of October 25, 1995.
WHEREAS, the Seller and the Purchaser have agreed under Section 2.6 of the
Agreement upon the Working Capital as of the Closing Date and the prorations and
upon certain modifications to the Stock Purchase Agreement as heretofore amended
to reflect the understanding used to arrive at the Working Capital as of the
Closing Date.
NOW THEREFORE, it is hereby agreed as follows:
Article I. The capitalized terms used in the Stock Purchase Agreement or
as revised by Amendment Number One and not otherwise defined herein are used
herein as defined in the Stock Purchase Agreement as so amended; provided,
however, the capitalized term "Agreement" shall mean the Stock Purchase
Agreement as amended by Amendments Number One and Two.
Article II. The following Sections of the Stock Purchase Agreement shall
be amended in the following manner:
<TABLE>
<S> <C>
Section 1.133 Subpart 3(a) of Section 1.133 shall be deleted in its entirety. Seller
agrees to pay WSA an amount equal to all receivables existing at October 31,
1995 from Arcadian Corporation under sales arrangements which exist at that
date and were not paid by Arcadian Corporation by the date of this Amendment
Number Two. If any such receivable which has not been paid by the date
hereof are hereafter paid to WSA, Purchaser shall cause WSA to pay Seller
all amounts so received.
Section The Miscellaneous Excluded Assets on Schedule 1.35(xiv) shall be amended to
1.35(xiv) delete item 4 "the membership of the Seller in PhosChem". Seller hereby
transfers to WSA effective October 31, 1995 its entire right title and
interest in its membership in PhosChem subject however to the other
provisions of the Agreement. The dues for the months of November and
December 1995 are therefore prepaids pursuant to the definition of Working
Capital.
However, Schedule 1.35(xiv) shall be amended further to include as an
Excluded Asset all amounts due to, or held for the account of, Seller or WSA
and all amounts payable by Seller or WSA to PhosChem at October 31, 1995
including, but not limited to, (a) the price averaging rebate for the third
and fourth quarter of 1995, (b) the price averaging rebate for the second
semi-annual period ending December 31, 1995, (c) all amounts retained to
discharge claims for sales by Seller or WSA through PhosChem before October
31, 1995, and (d) all amounts due by Seller or WSA to PhosChem for a
building lease. Purchaser agrees to cause WSA (x) to pay promptly to Seller
any amounts received by WSA from PhosChem for these Excluded Assets and (y)
to instruct PhosChem to pay such amounts not heretofore received directly to
Seller. Seller shall indemnify Purchaser and WSA for liabilities relating to
these Excluded Assets.
</TABLE>
1
<PAGE> 2
Article III. Except as specifically modified by this Amendment Number Two,
the other terms and conditions of the Stock Purchase Agreement as amended by
Amendment Number One and as modified or waived by agreements in writing signed
by both Seller and Purchaser shall remain in full force and effect.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Amendment
Number Two to be signed in its corporate name by its duly authorized officer, as
of the date first above written.
OCCIDENTAL CHEMICAL CORPORATION
By: /s/
-------------------------------
Name: Fred J. Gruberth
Title: Vice President & Treasurer
PHOSPHATE HOLDING COMPANY, INC.
By: /s/
-------------------------------
Name: John L. M. Hampton
Title: Secretary
2
<PAGE> 1
Exhibit 4(c)
FIRST AMENDING AGREEMENT
THIS AGREEMENT made as of the 23rd day of May, 1995.
BETWEEN:
THE BANK OF NOVA SCOTIA, a Canadian chartered bank
(herein called the "Agent")
-- and --
THE BANK OF NOVA SCOTIA and one or more financial institutions to whom The
Bank of Nova Scotia or its assigns may from time to time assign an
undivided interest in Credit Facility A (as defined in the Credit
Agreement) and who agree to be bound by the terms hereof as a Facility A
Lender (as defined in the Credit Agreement)
(herein, in their capacities as lenders to the Borrower under Credit
Facility A, collectively called the "Facility A Lenders" and individually
called a "Facility A Lender")
-- and --
THE BANK OF NOVA SCOTIA and one or more financial institutions to whom The
Bank of Nova Scotia or its assigns may from time to time assign an
undivided interest in Credit Facility B (as defined in the Credit
Agreement) and who agree to be bound by the terms hereof as a Facility B
Lender (as defined in the Credit Agreement)
(herein, in their capacities as lenders to the Borrower under Credit
Facility B, collectively called the "Facility B Lenders" and individually
called a "Facility B Lender")
-- and --
POTASH CORPORATION OF SASKATCHEWAN INC., a corporation incorporated under
the laws of the Province of Saskatchewan
(herein called the "Borrower").
WHEREAS the parties hereto entered into a non-revolving term credit
facilities agreement made as of April 10, 1995 (the "Credit Agreement") and
pursuant to which certain non-revolving term credit facilities were established
in favour of the Borrower;
AND WHEREAS the parties hereto have agreed to effect certain amendments to
the Credit Agreement upon the terms set forth herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
mutual covenants and agreements and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties
hereto hereby agree as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.01. Capitalized Terms. All capitalized terms which are used herein
without being specifically defined herein shall have the meaning ascribed
thereto in the Credit Agreement.
1
<PAGE> 2
ARTICLE II
AMENDMENTS
SECTION 2.01. General Rule. The Credit Agreement is hereby amended to the
extent necessary to give full effect to the provisions of this agreement.
SECTION 2.02. Definitions. The definition of "BA Rate" in Section 1.01 of the
Credit Agreement is hereby amended by adding the following sentence thereto:
"If such a rate does not appear on such Page for a particular Reference
Lender as of such time, such rate for such Reference Lender shall be the
arithmetic average of the rates per annum for Canadian dollar bankers'
acceptances having such term for such Reference Lender which are quoted to
the Agent as of such time by three investment dealers chosen by the Agent
which appear on such Page provided that the Agent shall act in good faith
in order to obtain representative quotes."
SECTION 2.03. Use of Facsimile Signatures on Bankers' Acceptances. Article 3
of the Credit Agreement is hereby amended by adding the following Section
immediately after Section 3.02:
"3.02A Use of Facsimile Signatures on Bankers' Acceptances.
(a) Each Bankers' Acceptance shall be in the form attached as Schedule I
hereto and any Bankers' Acceptance may, at the option of the Borrower, be
executed in advance by the Borrower by mechanically reproduced or facsimile
signatures of any two officers of the Borrower who are properly so
designated and authorized by the Borrower from time to time. Any Bankers'
Acceptance so executed and delivered by the Borrower to a Facility A Lender
shall be valid and shall bind the Borrower and may be dealt with by the
Agent or any Facility A Lender to all intents and purposes as if the
Bankers' Acceptance had been signed in the executing officers' own
handwriting.
(b) The Borrower shall notify the Agent as to those officers whose
signatures may be reproduced and used to execute Bankers' Acceptances in
the manner provided in Section 3.02A(a). Bankers' Acceptances with the
mechanically reproduced or facsimile signatures of designated officers may
be used by each of the Facility A Lenders and the Agent and shall continue
to be valid, notwithstanding the death, termination of employment or
termination of authorization of either or both of such officers or any
other circumstance.
(c) The Borrower hereby indemnifies and agrees to hold harmless the Agent
and each Facility A Lender against and from all losses, damages, expenses
and other liabilities caused by or attributable to the use of the
mechanically reproduced or facsimile signature instead of the original
signature of an authorized officer of the Borrower on a Bankers' Acceptance
prepared, executed, issued and accepted pursuant to this agreement."
SECTION 2.04. Waivers and Amendments. Section 14.14(b)(vii) of the Credit
Agreement is hereby amended by changing the reference to Section 11.01(m)(ii)
therein to Section 11.03(f)(ii).
SECTION 2.05. Distribution of Notices. Section 14.17 of the Credit Agreement
is hereby deleted and replaced with the following:
"14.17 Distribution of Notices. With respect to each notice which is
delivered to the Agent hereunder on behalf of certain of or all of the
Lenders, the Agent shall provide a copy of such notice to each of such
Lenders no later than 5:00 p.m. (Toronto time) on the date it is received
by the Agent if such date is a Banking Day and it is received by the Agent
prior to noon (Toronto time) on such date; otherwise, the Agent shall
provide a copy of such notice to each of such Lenders within one Banking
Day of receipt by the Agent. With respect to each other document which is
delivered to the Agent hereunder on behalf of certain of or all of the
Lenders, the Agent shall provide a copy of such document to each of such
Lenders within one Banking Day of receipt by the Agent."
SECTION 2.06 Schedule I. The Credit Agreement is hereby amended by adding
Schedule I hereto as Schedule I to the Credit Agreement.
2
<PAGE> 3
SECTION 2.07. Deliveries Pursuant to Credit Agreement. For the purposes of the
Credit Agreement, this agreement and any document or instrument referred to
herein shall be deemed to be delivered pursuant to the Credit Agreement and to
be referred to in the Credit Agreement.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Future References. On and after the effective date of this
agreement, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", or words of like import referring to the Credit
Agreement, and each reference in any related document to the "Credit Agreement",
"thereunder", "thereof", or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended
hereby, and each such related document is hereby amended accordingly. The Credit
Agreement, as amended hereby, is and shall continue to be in full force and
effect and is hereby in all respects ratified and confirmed.
SECTION 3.02. Governing Law. This agreement shall be governed by and construed
in accordance with the laws of the Province of Ontario.
SECTION 3.03. Enurement. This agreement shall enure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
permitted assigns.
SECTION 3.04. Conflict. If any provision of this agreement is inconsistent or
conflicts with any provision of the Credit Agreement, the relevant provision of
this agreement shall prevail and be paramount.
SECTION 3.05. Further Assurances. The Borrower shall do, execute and deliver
or shall cause to be done, executed and delivered all such further acts,
documents and things as the Agent may reasonably request for the purpose of
giving effect to this agreement and to each and every provision hereof.
SECTION 3.06. Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this agreement.
THE BANK OF NOVA SCOTIA,
as Agent, as Facility A Lender
and as Facility B Lender
By: /s/
--------------------------------
By: /s/
--------------------------------
POTASH CORPORATION OF
SASKATCHEWAN INC.
By: /s/
--------------------------------
By: /s/
--------------------------------
3
<PAGE> 4
Schedule I
Form of Bankers' Acceptance
<TABLE>
<S> <C> <C> <C> <C>
ACCEPTED BANKERS' DUE B.A.
Acceptance DATE
FOR TERM BRANCH ISSUE
IN DAYS DOMICILE DATE
ON WITHOUT GRACE, FOR VALUE
Branch RECEIVED, PAY TO THE BEARER THE
SUM OF $
Manager DOLLARS
Officer in Charge of
Operations
POTASH CORPORATION OF SASKATCHEWAN INC.
PER _________________________________
Authorized Signature
[Serial Number]
PER _________________________________
Authorized Signature
</TABLE>
4
<PAGE> 1
Exhibit 4(d)
SECOND AMENDING AGREEMENT
THIS AGREEMENT made as of the 26th day of October, 1995.
BETWEEN:
THE BANK OF NOVA SCOTIA
(herein, in its capacity as agent of the Lenders, called the "Agent")
-- and --
THE FINANCIAL INSTITUTIONS WHO ARE INDICATED IN SCHEDULE A HERETO AS
HAVING AN INDIVIDUAL COMMITMENT WITH RESPECT TO CREDIT FACILITY A
(herein collectively called the "Facility A Lenders" and individually
called a "Facility A Lender")
-- and --
THE FINANCIAL INSTITUTIONS WHO ARE INDICATED IN SCHEDULE A HERETO AS
HAVING AN INDIVIDUAL COMMITMENT WITH RESPECT TO CREDIT FACILITY B
(herein collectively called the "Facility B Lenders" and individually
called a "Facility B Lender")
-- and --
POTASH CORPORATION OF SASKATCHEWAN INC., a corporation incorporated under
the laws of the Province of Saskatchewan
(herein called the "Borrower").
WHEREAS the parties hereto entered into a non-revolving term credit
facilities agreement made as of April 10, 1995, as amended by an agreement made
as of May 23, 1995 (the "Credit Agreement") and pursuant to which the Lenders
established certain non-revolving term credit facilities in favour of the
Borrower;
AND WHEREAS the parties hereto have agreed to increase the amount of each
Credit Facility and to effect certain other amendments to the Credit Agreement
upon the terms set forth herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
mutual covenants and agreements and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties
hereto hereby agree as follows:
ARTICLE I
DEFINED TERMS
1.01 Capitalized Terms. All capitalized terms which are used herein without
being specifically defined herein shall have the meaning ascribed thereto in the
Credit Agreement.
ARTICLE II
AMENDMENTS
2.01 General Rule. The Credit Agreement is hereby amended to the extent
necessary to give full effect to the provisions of this agreement.
2.02 Definitions. Section 1.01 of the Credit Agreement is hereby amended as
follows:
(i) the definition of "Actual Capital Expenditures" is deleted and
replaced by the following:
"Actual Capital Expenditures" means, for any particular period, the
aggregate of those expenditures of the Borrower which would, in
accordance with generally accepted accounting principles and on a
consolidated basis, be considered capital expenses of the Borrower
for such period (including those financed through capital leases) or
investments by the Borrower in any other entity, whether by way of
equity or otherwise, during such period (but specifically excluding
capital expenses incurred in connection with the transaction
contemplated by the Acquisition Agreement,
1
<PAGE> 2
capital expenses incurred in connection with the transaction
contemplated by the Purchase Agreement and Non-Cash Acquisitions).
(ii) the following is added following the definition of "Alternate Base
Rate Canada":
"Available Facility A Credit" means, at any particular time, the amount,
if any, of the aggregate of the unused Individual Commitments of the
Lenders at that time in respect of Credit Facility A.
"Available Facility B Credit" means, at any particular time, the amount,
if any, of the aggregate of the unused Individual Commitments of the
Lenders at that time in respect of Credit Facility B.
(iii) the definition of "Borrowing" is amended by changing the phrase "a
single drawdown" to "two separate drawdowns";
(iv) the definition of "Material Subsidiaries" is deleted and replaced by
the following:
"Material Subsidiaries" means Potash Corporation of Saskatchewan Sales
Limited, LLC, Texasgulf, any other subsidiary of the Borrower whose book
value of assets is greater than 20% of the book value of the assets of
the Borrower on a consolidated basis or whose gross sales are greater
than 20% of the gross sales of the Borrower on a consolidated basis and,
after the direct or indirect acquisition of all of the shares of White
Springs by the Borrower, also means Phosphate Holding Company, Inc.,
White Springs and WSP.
(v) the following is added following the definition of "Pro Rata Share":
"Purchase Agreement" means the agreement of purchase and sale dated as
of September 11, 1995 between Phosphate Holding Company, Inc. and
Occidental Chemical Corporation and pursuant to which Phosphate Holding
Company, Inc. agreed to purchase from Occidental Chemical Corporation
all of the issued and outstanding shares of White Springs.
(vi) the definition of "Texasgulf" is deleted and replaced by the
following:
"Texasgulf" means PCS Phosphate Company, Inc., the former name of which
is Texasgulf Inc., a corporation incorporated under the laws of the
State of Delaware, or any successor to its business.
(vii) the following is added following the definition of "Vendors":
"White Springs" means White Springs Agricultural Chemicals, Inc.
(viii) the following is added following the definition of "Withdrawal
Liability":
"WSP" means White Springs Phosphate, Inc.
2.03 Establishment of Credit Facility A. Section 2.02 of the Credit Agreement
is hereby amended by changing the reference to $380,000,000 therein to
$480,000,000.
2.04 Establishment of Credit Facility B. Section 2.03 of the Credit Agreement
is hereby amended by changing the reference to $380,000,000 therein to
$560,000,000.
2.04A Lenders' Commitments. Section 2.04 of the Credit Agreement is hereby
amended by changing the word "seven" to "ten" in the fourteenth line thereof.
2.05 Types of Accommodations. Section 3.01 of the Credit Agreement is hereby
deleted and replaced with the following:
"3.01 Types of Accommodations. Subject to the terms and conditions hereof,
the Borrower may obtain and maintain Accommodation under Credit Facility A
by way of one or more Bankers' Acceptances, Prime Rate Loans, Base Rate
Canada Loans and LIBOR Loans and under Credit Facility B by way of one or
more Base Rate Canada Loans and LIBOR Loans; provided, however, that the
first drawdown under each Credit Facility may only be made by way of Base
Rate Canada Loans on or before April 30, 1995 and the second drawdown under
each Credit Facility may only be made on or before December 27, 1995."
2
<PAGE> 3
2.06 Notice Periods. Section 3.07 of the Credit Agreement is hereby deleted
and replaced with the following:
"3.07 Notice Periods. Each Drawdown Notice, Rollover Notice, Conversion
Notice and Payment Notice shall be given to the Agent:
(a) prior to 11:30 a.m. (Toronto time) on the third Banking Day prior to
the date of a drawdown of, rollover of, conversion of, conversion into,
repayment of or prepayment of a LIBOR Loan; and
(b) prior to 11:30 a.m. (Toronto time) on the second Banking Day prior to
the date of any other drawdown, rollover, conversion, repayment or
prepayment."
2.07 Drawdown Notice. Section 4.01 of the Credit Agreement is hereby deleted
and replaced with the following:
"4.01 Drawdown Notice. Provided that all of the applicable conditions
precedent set forth in Article 12 have been fulfilled by the Borrower or
waived by the Majority Lenders, the Borrower may have Accommodation made
available to it under each of the Credit Facilities on two separate
occasions, in each case by way of simultaneous single drawdowns under each
of the Credit Facilities by giving to the Agent an irrevocable notice
("Drawdown Notice") in accordance with Section 3.07 and specifying
(i) the date such Accommodations are to be made available and the type
and aggregate amount of Accommodation to be made available under each
Credit Facility; and
(ii) the details of any irrevocable authorization and direction with
respect to the disbursement of the proceeds of such drawdowns."
2.08 Two Borrowings for each Credit Facility. Section 4.02 of the Credit
Agreement is hereby deleted and replaced with the following:
"4.02 Two Borrowings for each Credit Facility. For greater certainty,
there shall only be two Borrowings with respect to each Credit Facility
and, after the second of the drawdowns with respect to each Credit Facility
pursuant to this agreement, there shall continue to be only two Borrowings
with respect to each Credit Facility. Accommodations expressed from time to
time as Loans, rollovers of Accommodations pursuant to Article 5 and
conversions from one type of Accommodation to another pursuant to Article 6
represent variations only in the terms of the two outstanding Borrowings
with respect to each Credit Facility that are each continuous obligations."
2.09 Standby Fee. Article 7 of the Credit Agreement is hereby amended by
adding the following immediately after Section 7.06:
"7.07. Standby Fees. On the last day of each Fiscal Quarter,
(a) the Borrower shall pay to the Facility A Lenders, in arrears, a
standby fee calculated at the rate per annum, on the basis of a year of
365 days or 366 days in the case of a leap year, equal to 0.375% on the
average daily amount of the Available Facility A Credit, such fee to
accrue daily from November 15, 1995; and
(b) the Borrower shall pay to the Facility B Lenders, in arrears, a
standby fee calculated at the rate per annum, on the basis of a year of
365 days or 366 days in the case of a leap year, equal to 0.375% on the
average daily amount of the Available Facility B Credit, such fee to
accrue daily from November 15, 1995.
Each of such fees shall be non-refundable and shall be fully earned when
due."
2.10 Repayments under Credit Facility A. Section 9.01 of the Credit Agreement
is hereby amended to read as follows:
9.01 Repayments under Credit Facility A. Subject to Section 9.05, the
Borrower shall repay to the Facility A Lenders the outstanding
Accommodation under Credit Facility A in four semi-annual instalments of
U.S. $44,400,000 each on December 31 and June 30 in each year, the first of
such instalments being on December 31, 1995 and the last of such
instalments being on June 30, 1997, and six semi-annual instalments of U.S.
$50,400,000 each on December 31 and June 30 in each year, the first of
3
<PAGE> 4
such instalments being on December 31, 1997 and the last of such
instalments being on June 30, 2000. Amounts which are repaid as aforesaid
may not be reborrowed.
2.11 Repayments under Credit Facility B. Section 9.02 of the Credit Agreement
is hereby amended to read as follows:
9.02 Repayments under Credit Facility B. Subject to Section 9.05, the
Borrower shall repay to the Facility B Lenders the outstanding
Accommodation under Credit Facility B in the following instalments:
(a) four semi-annual instalments of U.S. $7,000,000 each on December 31
and June 30 in each year, the first of such instalments being on
December 31, 1995 and the last of such instalments being on June 30,
1997, and six semi-annual instalments of U.S. $14,930,000 each on
December 31 and June 30 in each year, the first of such instalments
being on December 31, 1997 and the last of such instalments being on
June 30, 2000; and
(b) the balance of the outstanding Accommodation under Credit Facility B
on December 28, 2000.
Amounts which are repaid as aforesaid may not be reborrowed.
2.12 Pro Rata Treatment of Repayments. Article 9 of the Credit Agreement is
hereby amended by adding the following immediately after Section 9.05:
"9.06 Pro Rata Treatment of Repayments. Subject to the next sentence, if
the Accommodation under Credit Facility B shall have been effected by more
than one drawdown (a "Credit Facility B Drawdown") hereunder, each
instalment in repayment of such Accommodation hereunder shall be and be
deemed to be applied to the amount of each such Credit Facility B Drawdown
pro rata according to the relative amounts of such Credit Facility B
Drawdowns. Notwithstanding anything to the contrary in this agreement,
other than pursuant to Section 13.01, no more than 25% of the principal
amount of a Credit Facility B Drawdown (such amount being the "Limited
Repayment Amount") shall be required to be repaid or prepaid or held by or
for the benefit of the Lenders such that such principal amount would be
actually, or be considered to have been constructively, repaid or prepaid
for purposes of paragraph 212(l)(b)(vii) of the Income Tax Act (Canada) on
or prior to the day following the fifth anniversary of the date of such
Credit Facility B Drawdown (the "Post Anniversary Day"). To the extent that
any provision of this agreement requires any repayment or prepayment
(actual or constructive) that would result in the aggregate repayment and
prepayment (actual or constructive) of any Credit Facility B Drawdown
exceeding the Limited Repayment Amount for such Credit Facility B Drawdown
on or prior to the Post Anniversary Day for such Credit Facility B
Drawdown, the provision shall be deemed to be modified so as to require the
repayment or prepayment of such amount in excess of the Limited Repayment
Amount on the Post Anniversary Day."
2.13 Financial Reporting. Section 11.01(a)(iv) of the Credit Agreement is
hereby deleted and replaced with the following:
"(iv) within 60 days after the end of each fiscal quarter of each of
Texasgulf, White Springs and Phosphate Holding Company, Inc., a copy of
the unaudited consolidated financial statements of Texasgulf and, after
the direct or indirect acquisition of all of the shares of White Springs
by the Borrower, White Springs and Phosphate Holding Company, Inc. with
respect thereto;"
2.14 Use of Proceeds. Section 11.01(d) of the Credit Agreement is hereby
deleted and replaced with the following:
(d) Use of Proceeds. The Borrower shall apply all of the proceeds of the
drawdowns pursuant to Section 4.01 to directly or indirectly acquire all
of the issued and outstanding shares of Texasgulf pursuant to the
Acquisition Agreement and all of the issued and outstanding shares of
White Springs pursuant to the Purchase Agreement. To the extent that the
Borrower applies available cash in the United States to fund a portion
of the cost of the acquisition pursuant to the Purchase Agreement, the
Borrower may retain an equivalent amount out of the proceeds of the
drawdowns.
2.15 Debt to Capital. Section 11.01(e) of the Credit Agreement is hereby
amended by changing the reference to 0.5:1 therein to 0.55:1.
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<PAGE> 5
2.16 Capital Expenditures. Section 11.03(c) of the Credit Agreement is hereby
amended by changing each reference to Cdn. $100,000,000 therein to U.S.
$150,000,000.
2.17 Events of Default. Section 13.01(n) of the Credit Agreement is hereby
amended by inserting the words "or, after the direct or indirect acquisition of
all of the shares thereof by the Borrower, White Springs" immediately after the
word "Texasgulf".
2.18 Individual Commitments. Schedule A to the Credit Agreement is hereby
deleted and replaced with Schedule A hereto.
2.19 Compliance Certificate. Schedule B to the Credit Agreement is hereby
amended as follows:
(a) paragraph 1 thereof is amended by inserting the phrase ", as amended"
in the fourth line immediately following the phrase "the Facility B
Lenders referred to therein"; and
(b) paragraph 4 thereof is deleted and replaced with the following:
4. As of the last day of or for the [Fiscal Quarter/Fiscal Year] ending
-- , 19 -- , the amounts and financial ratios referred to in
Sections 11.01(e) and 11.01(f) and Sections 11.03(c) and (d) of the
Credit Agreement are as follows:
<TABLE>
<CAPTION>
REQUIRED AMOUNT
ACTUAL AMOUNT OR LIMIT
------------------ ------------------
<S> <C> <C> <C>
(a) Debt to Capital........................ -- :1 0.55:1
(b) Fixed Charges Coverage................. -- Variable
(c) Actual Capital Expenditures............ U.S. $ -- U.S. $150,000,000
(d) Debt of Subsidiaries plus.............. U.S. $ -- U.S. $100,000,000
Debt secured by Permitted Liens........
</TABLE>
2.20 Form of Assignment. Schedule C to the Credit Agreement is hereby amended
by inserting the phrase ", as amended" in the second line immediately following
the phrase "April 10, 1995".
2.21 Organizational Chart. Schedule E to the Credit Agreement is hereby
deleted and replaced with Schedule E hereto.
2.22 Partnerships, Joint Ventures and Syndicates. Schedule F to the Credit
Agreement is hereby amended by adding thereto the contents of Schedule F hereto.
2.23 Specific Permitted Liens. Schedule G to the Credit Agreement is hereby
amended by adding thereto the contents of Schedule G hereto.
2.24 Outstanding Defaults. Schedule H to the Credit Agreement is hereby
amended by adding thereto the contents of Schedule H hereto.
2.25 Deliveries Pursuant to Credit Agreement. For the purposes of the Credit
Agreement, this agreement and any document or instrument referred to herein
shall be deemed to be delivered pursuant to the Credit Agreement and to be
referred to in the Credit Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Repeated Representations and Warranties. To induce the Lenders and the
Agent to enter into this agreement and to make additional Accommodation
available to the Borrower under the Credit Agreement, the Borrower hereby
represents and warrants to the Lenders and the Agent that the representations
and warranties of the Borrower which are contained in Sections 10.01(e) to (h)
and (j) to (l) of the Credit Agreement, as the same may be amended hereby, are
true and correct as at the date of this agreement.
3.02 New Representations and Warranties. To induce the Lenders and the Agent
to enter into this agreement and to make additional Accommodation available to
the Borrower under the Credit Agreement, the Borrower hereby represents and
warrants to the Lenders and the Agent as at the date of this agreement as
follows and acknowledges and confirms that the Lenders and the Agent are relying
upon such representations
5
<PAGE> 6
and warranties in executing this agreement and in making additional
Accommodation available under the Credit Agreement:
(a) Status and Power. The Borrower is a corporation duly incorporated and
organized and validly subsisting in good standing under the laws of the
Province of Saskatchewan. Immediately after the direct or indirect
acquisition of all of the shares of White Springs by the Borrower, each
of White Springs and WSP will be a corporation duly incorporated and
organized and validly subsisting in good standing under the laws of the
State of Delaware. The Borrower is and, immediately after the direct or
indirect acquisition of all of the shares of White Springs by the
Borrower, each of White Springs and WSP will be duly qualified,
registered or licensed in all jurisdictions where such qualification,
registration or licensing is required. The Borrower has and, immediately
after the direct or indirect acquisition of all of the shares of White
Springs by the Borrower, each of White Springs and WSP will have all
requisite corporate capacity, power and authority to own, hold under
licence or lease its properties and to carry on its business as now
conducted (in the case of the Borrower) or as then conducted (in the
case of White Springs and WSP). The Borrower has all requisite corporate
capacity, power and authority to enter into and carry out the
transactions contemplated by this agreement. Neither the Borrower nor,
immediately after the direct or indirect acquisition of all of the
shares of White Springs by the Borrower, White Springs or WSP is or will
be, as the case may be, an "investment company" within the meaning of
the Investment Company Act of 1940 of the United States, as amended, or
a "holding company", or a "subsidiary company" of a "holding company",
or an "affiliate" of a "holding company" or of a "subsidiary company" of
a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935 of the United States, as amended.
(b) Authorization and Enforcement. All necessary action, corporate or
otherwise, has been taken to authorize the execution, delivery and
performance by the Borrower of this agreement. The Borrower has duly
executed and delivered this agreement. This agreement is a legal, valid
and binding obligation of the Borrower enforceable against the Borrower
by the Agent and the Lenders in accordance with its terms, subject to
the qualifications contained in the opinion of the Borrower's counsel
delivered pursuant to Section 4.02(d)(vi) hereof.
(c) Compliance with Other Instruments. The execution, delivery and
performance by the Borrower of this agreement and the consummation of
the transactions contemplated herein do not conflict with, result in any
breach or violation of, or constitute a default under the terms,
conditions or provisions of the charter or constating documents or
by-laws of, or any unanimous shareholder agreement relating to, the
Borrower or of any law, regulation, judgment, decree or order binding on
or applicable to the Borrower or to which its property is subject or of
any material agreement, lease, licence, permit or other instrument to
which the Borrower is a party or is otherwise bound or by which the
Borrower benefits or to which its property is subject and do not require
the consent or approval of any Official Body or any other party except
for the consents or approvals which are required for the completion of
the transactions contemplated by the Purchase Agreement.
(d) Purchase Agreement. The Purchase Agreement is a legal, valid and
binding obligation of Occidental Chemical Corporation, enforceable by
Phosphate Holding Company, Inc. against Occidental Chemical Corporation
in accordance with its terms.
ARTICLE IV
CONDITIONS
4.01 Conditions Precedent to Borrowings. The obligation of the Lenders to make
Borrowings available under the Credit Facilities for the purpose of financing
the purchase of all the shares of White Springs is
6
<PAGE> 7
subject to fulfilment of the following conditions precedent at the time such
Borrowing is made available and Article 12 of the Credit Agreement is amended
accordingly:
(a) no Default has occurred and is continuing or would arise immediately
after giving effect to or as a result of such Borrowing being made
available;
(b) the Borrower shall have complied with the requirements of Article 4 of
the Credit Agreement in respect of such Borrowing and such Borrowing
shall be requested to be made available on or before December 27, 1995;
(c) the representations and warranties of the Borrower contained in
Article III hereof shall be true and correct in all material respects on
the date of such Borrowing as if such representations and warranties
were made on such date;
(d) the Agent has received, in form and substance satisfactory to the
Agent:
(i) a duly certified resolution of the executive committee of the
board of directors of the Borrower authorizing the Borrower to
execute, deliver and perform its obligations under this agreement;
(ii) a duly certified resolution of the board of directors of the
Borrower creating and establishing the authority of the executive
committee;
(iii) a certificate of a senior officer of the Borrower setting forth
specimen signatures of the individuals authorized to sign this
agreement on behalf of the Borrower;
(iv) a certificate of a senior officer of the Borrower certifying (A)
that, to the best of his knowledge after due inquiry, no Default
has occurred and is continuing or would arise immediately after
giving effect to or as a result of such Borrowing and (B) the ratio
of Debt to Capital after giving effect to such Borrowing and the
completion of the transaction contemplated by the Purchase
Agreement;
(v) an opinion of the Borrower's General Counsel in substantially the
form of Appendix 1 hereto;
(vi) an opinion of the Borrower's Ontario counsel in substantially the
form of Appendix 2 hereto;
(vii) a notarial copy of the Purchase Agreement; and
(viii) an opinion of the Agent's counsel with respect to such matters as
may be reasonably required in connection with the transactions
hereunder;
(e) the Borrower shall have paid a fee of U.S. $280,000 to the Agent for
distribution to each of the Lenders pro rata in accordance with the
relative increases in their Individual Commitments since September 13,
1995;
(f) Phosphate Holding Company, Inc. shall contemporaneously acquire all of
the issued and outstanding shares of White Springs in accordance with
the Purchase Agreement; such acquisition shall have been completed in
accordance with all applicable laws and all necessary consents,
approvals or authorizations from all Official Bodies with respect to
such acquisition shall have been obtained; and
(g) all aspects of the transaction under the Purchase Agreement will be
concurrently completed to the Agent's satisfaction.
4.02 Waiver. The terms and conditions of Section 4.01 are inserted for the
sole benefit of the Agent and the Lenders and the Agent with the approval of the
Majority Lenders may waive such terms and conditions in whole or in part, with
or without terms or conditions.
7
<PAGE> 8
ARTICLE V
MISCELLANEOUS
5.01 Future References. On and after the effective date of this agreement,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof ", or words of like import referring to the Credit Agreement, and each
reference in any related document to the "Credit Agreement", "thereunder",
"thereof ", or words of like import referring to the Credit Agreement, shall
mean and be a reference to the Credit Agreement as amended hereby, and each such
related document is hereby amended accordingly. The Credit Agreement, as amended
hereby, is and shall continue to be in full force and effect and is hereby in
all respects ratified and confirmed.
5.02 Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario.
5.03 Enurement. This agreement shall enure to the benefit of and shall be
binding upon the parties hereto and their respective successors and permitted
assigns.
5.04 Conflict. If any provision of this agreement is inconsistent or conflicts
with any provision of the Credit Agreement, the relevant provision of this
agreement shall prevail and be paramount.
5.05 Further Assurances. The Borrower shall do, execute and deliver or shall
cause to be done, executed and delivered all such further acts, documents and
things as the Agent may reasonably request for the purpose of giving effect to
this agreement and to each and every provision hereof.
5.06 Counterparts. This agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which taken together
shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this agreement.
THE BANK OF NOVA SCOTIA, as Agent,
as Facility A Lender and
as Facility B Lender
By: /s/
------------------------------
By: /s/
------------------------------
ABN AMRO BANK CANADA
By: /s/
------------------------------
By: /s/
------------------------------
BANK OF AMERICA CANADA
By: /s/
------------------------------
By:
------------------------------
8
<PAGE> 9
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By: /s/
------------------------------
By:
------------------------------
BANK OF MONTREAL
By: /s/
------------------------------
By:
------------------------------
BANQUE NATIONALE DE PARIS (CANADA)
By: /s/
------------------------------
By:
------------------------------
BANQUE NATIONALE DE PARIS
By: /s/
------------------------------
By:
------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/
------------------------------
By: /s/
------------------------------
CITIBANK CANADA
By: /s/
------------------------------
By:
------------------------------
CITIBANK, N.A.
By: /s/
------------------------------
By:
------------------------------
9
<PAGE> 10
CREDIT LYONNAIS CANADA
By: /s/
------------------------------
By:
------------------------------
CREDIT LYONNAIS ATLANTA AGENCY AND
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By: /s/
------------------------------
By:
------------------------------
CREDIT SUISSE CANADA
By: /s/
------------------------------
By: /s/
------------------------------
DAI-ICHI KANGYO BANK (CANADA)
By: /s/
------------------------------
By:
------------------------------
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/
------------------------------
By:
------------------------------
DEUTSCHE BANK CANADA
By: /s/
------------------------------
By: /s/
------------------------------
DRESDNER BANK CANADA
By: /s/
------------------------------
By: /s/
------------------------------
10
<PAGE> 11
FUJI BANK CANADA
By: /s/
------------------------------
By:
------------------------------
THE FUJI BANK, LIMITED
By: /s/
------------------------------
By:
------------------------------
HARRIS TRUST & SAVINGS BANK
By: /s/
------------------------------
By:
------------------------------
THE INDUSTRIAL BANK OF JAPAN (CANADA)
By: /s/
------------------------------
By:
------------------------------
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/
------------------------------
By:
------------------------------
MELLON BANK CANADA
By: /s/
------------------------------
By:
------------------------------
MITSUBISHI BANK OF CANADA
By: /s/
------------------------------
By:
------------------------------
11
<PAGE> 12
J.P. MORGAN CANADA
(Formerly MORGAN BANK OF CANADA)
By: /s/
------------------------------
By:
------------------------------
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK
By: /s/
------------------------------
By:
------------------------------
NBD BANK, CANADA
By: /s/
------------------------------
By: /s/
------------------------------
NBD BANK
By: /s/
------------------------------
By:
------------------------------
THE NIPPON CREDIT BANK, LTD.
By: /s/
------------------------------
By: /s/
------------------------------
ROYAL BANK OF CANADA
By: /s/
------------------------------
By:
------------------------------
SAKURA BANK (CANADA)
By: /s/
------------------------------
By: /s/
------------------------------
12
<PAGE> 13
SANWA BANK CANADA
By: /s/
--------------------------------------------
By:
--------------------------------------------
SOCIETE GENERALE (CANADA)
By: /s/
--------------------------------------------
By:
--------------------------------------------
THE SUMITOMO BANK OF CANADA
By: /s/
--------------------------------------------
By: /s/
--------------------------------------------
THE TORONTO-DOMINION BANK
By: /s/
--------------------------------------------
By:
--------------------------------------------
UNION BANK OF SWITZERLAND (CANADA)
By: /s/
--------------------------------------------
By: /s/
--------------------------------------------
POTASH CORPORATION OF SASKATCHEWAN
INC.
By: /s/
--------------------------------------------
By: /s/
--------------------------------------------
13
<PAGE> 14
Schedule A
Individual Commitments
<TABLE>
<CAPTION>
Name and Address of Lender Individual Commitment
- - ----------------------------------------------------- ----------------------------------------
<S> <C> <C> <C>
ABN AMRO Bank Canada Credit Facility A: $12,800,000
Suite 2500 Vancouver Centre Credit Facility B: $14,800,000
650 West Georgia Street
Vancouver, B.C. B6B 4N8
Attention: Robert Duffield
Assistant Vice President
Telefax: (604) 682-2936
- - -----------------------------------------------------------------------------------------------
Bank of America Canada Credit Facility A: $22,300,000
855 Second Street S.W. Credit Facility B: nil
Suite 1900
Calgary, Alberta T2P 4J7
Attention: Mr. Doug B. Linkletter
Vice President & Manager
Telefax: (403) 232-8848
- - -----------------------------------------------------------------------------------------------
Bank of America National Trust Credit Facility A: nil
& Savings Association Credit Facility B: $25,900,000
500 Ellinwood Way, Ste. 100
Pleasant Hill, California
U.S.A. 94523
Attention: Ms. Ines Romo, Loan Administrator
Telefax: (510) 603-3142
- - -----------------------------------------------------------------------------------------------
Bank of Montreal Credit Facility A: $25,600,000
First Canadian Place, 24th Floor Credit Facility B: nil
Toronto, Ontario M5X 1A1
Attention: Mr. Jim Baidacoff, Director
Natural Resources Lending
Telefax: (416) 867-5818
- - -----------------------------------------------------------------------------------------------
The Bank of Nova Scotia Credit Facility A: $32,000,000
Corporate Banking Credit Facility B: $37,100,000
3820, 700 2nd Street S.W. P.O. Box 2540
Calgary, Alberta T2P 2N7
Attention: Unit Head
Corporate Banking-Calgary
Telefax: (403) 221-6497
- - -----------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
Name and Address of Lender Individual Commitment
- - ----------------------------------------------------- ----------------------------------------
<S> <C> <C> <C>
Banque Nationale de Paris (Canada) Credit Facility A: $12,900,000
36 Toronto Street, Suite 750 Credit Facility B: nil
Toronto, Ontario M5C 2C5
Attention: Tanneguy de Carne, Vice-President
& Deputy General Manager
Telefax: (416) 947-3541
- - -----------------------------------------------------------------------------------------------
Banque Nationale de Paris Credit Facility A: nil
209 South LaSalle Street Credit Facility B: $14,800,000
Chicago, Illinois
U.S.A. 60604
Attention: Michelle Tolliver, Vice-President
Telefax: (312) 977-1380
- - -----------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce Credit Facility A: $22,300,000
701-201 21st Street East Credit Facility B: $25,900,000
Saskatoon, Saskatchewan S7K 0B8
Attention: Kevin Dyer
Senior Account Manager
Telefax: (306) 668-3360
- - -----------------------------------------------------------------------------------------------
Citibank Canada Credit Facility A: $25,200,000
Corporate Finance Credit Facility B: nil
Citibank Place
10th Floor, 123 Front Street West
Toronto, Ontario M5J 2M3
Attention: Wayne R. Townsend, Vice-President
Telefax: (416) 947-5674
- - -----------------------------------------------------------------------------------------------
Citibank N.A. Credit Facility A: nil
399 Park Avenue Credit Facility B: $29,400,000
New York, New York 10043
Attention: Olga R. Girod, Vice President
Telefax: (212) 793-3647
- - -----------------------------------------------------------------------------------------------
Credit Lyonnais Canada Credit Facility A: $22,300,000
1 Financial Place Credit Facility B: nil
1 Adelaide St. E., Suite 2505
Toronto, Ontario M5C 2V9
Attention: Mr. Mike Manion
Vice President
Telefax: (416) 947-9471
- - -----------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
Name and Address of Lender Individual Commitment
- - ----------------------------------------------------- ----------------------------------------
<S> <C> <C> <C>
Credit Lyonnais Atlanta Agency and Credit Facility A: nil
Credit Lyonnais Cayman Island Branch Credit Facility B: $25,700,000
One Peachtree Center
303 Peachtree Street, N.E.
Suite 4400
Atlanta, Georgia U.S.A. 30308
Attention: Gerald Finney, Assistant Treasurer
David Edge, Vice President
Telefax: (404) 584-5249
- - -----------------------------------------------------------------------------------------------
Credit Suisse Canada Credit Facility A: $12,800,000
400 Burrard Avenue Credit Facility B: $14,800,000
Suite 1610
Vancouver, B.C. V6C 3A6
Attention: Phil Lunn, Associate
Telefax: (604) 684-7917
- - -----------------------------------------------------------------------------------------------
Dai-Ichi Kangyo Bank (Canada) Credit Facility A: $10,000,000
Commerce Court West Credit Facility B: nil
Suite 5025, P.O. Box 295
Toronto, Ontario M5L 1H9
Attention: Robin E. Dunbar, Vice-President
Telefax: (416) 365-7314
- - -----------------------------------------------------------------------------------------------
The Dai-Ichi Kangyo Bank, Ltd. Credit Facility A: nil
One World Trade Center Credit Facility B: $14,800,000
48th Floor
New York, New York U.S.A. 10048
Attention: Mathew G. Murphy, Vice President
Telefax: (212) 524-0579
- - -----------------------------------------------------------------------------------------------
Deutsche Bank Canada Credit Facility A: $25,200,000
P.O. Box 196, Suite 1200 Credit Facility B: $29,400,000
222 Bay Street
Toronto, Ontario M5K 1H6
Attention: Francois Wentzel
Telefax: (416) 367-3290
- - -----------------------------------------------------------------------------------------------
Dresdner Bank Canada Credit Facility A: $12,600,000
Suite 1700 Credit Facility B: $25,700,000
2 First Canadian Place
P.O. Box 430
Toronto, Ontario M5X 1E3
Attention: John O'Connell
Telefax: (416) 369-8362
- - -----------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
Name and Address of Lender Individual Commitment
- - ----------------------------------------------------- ----------------------------------------
<S> <C> <C> <C>
Fuji Bank Canada Credit Facility A: $12,600,000
BCE Place, Canada Trust Tower Credit Facility B: nil
P.O. Box 609, Suite 2800
161 Bay Street
Toronto, Ontario M5J 2S1
Attention: John Bailey
Telefax: (416) 865-9618
- - -----------------------------------------------------------------------------------------------
The Fuji Bank, Limited Credit Facility A: nil
Marquis One Tower, Suite 2100 Credit Facility B: $14,700,000
245 Peachtree Center Avenue, N.E.
Atlanta, Georgia U.S.A. 30303-1208
Attention: Clarence J. Mahovlich
Telefax: (404) 653-2119
- - -----------------------------------------------------------------------------------------------
Harris Trust & Savings Bank Credit Facility A: nil
Agribusiness Division Credit Facility B: $29,600,000
111 West Monroe Street
Chicago, Illinois -- 60690-0755
U.S.A.
Attention: Mr. Carl A. Blackham, Vice President
Telefax: (312) 765-8095
- - -----------------------------------------------------------------------------------------------
The Industrial Bank of Japan (Canada) Credit Facility A: $22,100,000
Box 29, Suite 1102 Credit Facility B: nil
100 Yonge Street
Toronto, Ontario M5C 2W1
Attention: A. Mabuchi
Telefax: (416) 367-3452
- - -----------------------------------------------------------------------------------------------
The Industrial Bank of Japan, Limited, Credit Facility A: nil
Atlanta Agency Credit Facility B: $25,800,000
One Ninety One Peachtree Tower
Suite 3600, 191 Peachtree St. N.E.
Atlanta, Georgia U.S.A. 30303-1757
Attention: Harold LaCount, Vice President
Telefax: (404) 524-8509
- - -----------------------------------------------------------------------------------------------
Mellon Bank Canada Credit Facility A: $22,100,000
Royal Trust Tower Credit Facility B: nil
Suite 3200
Toronto-Dominion Centre
Toronto, Ontario M5K 1K2
Attention: Joe Cavanaugh
Telefax: (416) 860-2409
- - -----------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
Name and Address of Lender Individual Commitment
- - ----------------------------------------------------- ----------------------------------------
<S> <C> <C> <C>
Mitsubishi Bank of Canada Credit Facility A: $12,800,000
Suite 48, Granville Square Credit Facility B: $14,800,000
200 Granville Street
Vancouver, British Columbia V6C 1S4
Attention: Davis J. Stewart, Vice President
Telefax: (604) 683-4018
- - -----------------------------------------------------------------------------------------------
Morgan Bank of Canada Credit Facility A: $12,600,000
Suite 2200, South Tower Credit Facility B: nil
Royal Bank Plaza
Toronto, Ontario M5J 2J2
Attention: Andrew G. Shelton, President
Telefax: (416) 981-9278
- - -----------------------------------------------------------------------------------------------
Morgan Guaranty Trust Company of New York Credit Facility A: nil
60 Wall Street Credit Facility B: $14,700,000
New York, New York U.S.A. 10260-0060
Attention: Charles H. King, Vice President
Telefax: (212) 648-5336
- - -----------------------------------------------------------------------------------------------
NBD Bank, Canada Credit Facility A: $12,500,000
BCE Place, P.O. Box 613 Credit Facility B: nil
161 Bay Street, Suite 4240
Toronto, Ontario M5J 2S1
Attention: Janet A. Beadle
Assistant Vice President
Telefax: (416) 363-7574
- - -----------------------------------------------------------------------------------------------
NBD Bank Credit Facility A: nil
611 Woodward Avenue Credit Facility B: $14,800,000
Detroit, Michigan U.S.A. 48226
Attention: Mr. Carl Skoog, Second Vice President
Energy and Minerals Group
Telefax: (313) 225-2649
- - -----------------------------------------------------------------------------------------------
The Nippon Credit Bank, Ltd. Credit Facility A: nil
Los Angeles Agency Credit Facility B: $14,800,000
550 South Hope St.
Suite 2500
Los Angeles, CA 90071
Attention: Robert Combs, Vice President
Telefax: (213) 892-0111
- - -----------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 19
<TABLE>
<CAPTION>
Name and Address of Lender Individual Commitment
- - ----------------------------------------------------- ----------------------------------------
<S> <C> <C> <C>
Royal Bank of Canada Credit Facility A: $25,600,000
Saskatoon Business Centre Credit Facility B: $29,600,000
154-1st Avenue South
4th Floor
Saskatoon, Saskatchewan S7K 1K2
Attention: Phil K. Klein, Senior Account Manager
Telefax: (306) 665-0112
- - -----------------------------------------------------------------------------------------------
Sakura Bank (Canada) Credit Facility A: $12,800,000
Suite No. 3131 Credit Facility B: $14,800,000
Three Bentall Centre
P.O. Box 49331
595 Burrard Street
Vancouver, B.C. V7X 1L4
Attention: James M. Gallagher, Vice President
Telefax: (604) 668-3593
- - -----------------------------------------------------------------------------------------------
Sanwa Bank Canada Credit Facility A: $22,300,000
BCE Place, Canada Trust Tower Credit Facility B: $25,000,000
P.O. Box 525, Suite 4400
161 Bay Street
Toronto, Ontario M5J 2S1
Attention: Tony Baratta, Manager
Telefax: (416) 366-8599
- - -----------------------------------------------------------------------------------------------
Societe Generale (Canada) Credit Facility A: $25,200,000
100 Yonge Street, Suite 1002 Credit Facility B: $29,400,000
Toronto, Ontario M5C 2W1
Attention: Robert Sadokierski
Telefax: (416) 364-9996
- - -----------------------------------------------------------------------------------------------
The Sumitomo Bank of Canada Credit Facility A: $12,600,000
Ernst & Young Tower Credit Facility B: $14,700,000
Toronto Dominion Centre
Suite 1400, P.O. Box 172
Toronto, Ontario M5K 1H6
Attention: Alfred Lee, Vice President
Telefax: (416) 367-3565
- - -----------------------------------------------------------------------------------------------
The Toronto-Dominion Bank Credit Facility A: $25,600,000
Corporate and Investment Banking Group Credit Facility B: $29,600,000
55 King Street West
8th Floor, T-D Centre
Toronto, Ontario M5K 1A2
Attention: A.G. Fraser
Telefax: (416) 944-5630
- - -----------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 20
<TABLE>
<CAPTION>
Name and Address of Lender Individual Commitment
- - ----------------------------------------------------- ----------------------------------------
<S> <C> <C> <C>
Union Bank of Switzerland (Canada) Credit Facility A: $25,200,000
154 University Avenue Credit Facility B: $29,400,000
Toronto, Ontario M5H 3Z4
Attention: Larry Maloney, Vice President
Telefax: (416) 343-1700
- - -----------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 1
Exhibit 10(x)
AMENDMENT NUMBER ONE
TO
FACILITY AND SERVICES AGREEMENT
AMMONIA TERMINAL
PASADENA, TEXAS
This Amendment Number One dated as of April 17, 1996 by and between
OCCIDENTAL CHEMICAL CORPORATION, a New York corporation with offices at 5005 LBJ
Freeway, Dallas, Texas 75244, and WHITE SPRINGS AGRICULTURAL CHEMICALS, INC., a
Delaware corporation with offices at 183 County Road 137, White Springs, Florida
32096 hereby amends the Facility and Services Agreement dated as of October 31,
1995 (the "Facilities and Services Agreement") by and between the same parties.
WHEREAS, OxyChem (as such term and certain other terms used with initial or
solid capital letters in the Facilities and Services Agreement) and WSA have
entered into this Amendment Number One to provide that WSA shall complete
certain construction originally to be performed by OxyChem under the Facilities
and Services Agreement.
NOW THEREFORE, in consideration of the payment of $328,000 to WSA by
OxyChem concurrent with the execution hereof, the receipt and sufficiency of
which are hereby acknowledged, OxyChem and WSA mutually agree as follows:
ARTICLE I
The capitalized terms used in the Facilities and Services Agreement and not
otherwise defined herein are used herein as defined in the Facilities and
Services Agreement, provided, however, the capitalized term "Agreement" shall
mean the Facilities and Services Agreement as amended by this Amendment Number
One.
ARTICLE II
The following Sections of the Facilities and Services Agreement shall be
amended in the following manner.
Section 2.6.2 Substitute the following for the first sentence of
Section 2.6.2:
"WSA shall own the Ammonia Truck Loading Station
that OxyChem has commenced to build and that WSA
shall promptly complete as an improvement of a WSA
facility hereunder at WSA's sole cost and expense
for all costs and expenses incurred after October
31, 1995, on the Fee Property, provided, however,
that such ownership shall not entitle WSA (i) to
load more than one truck at any one time at both
the Ammonia Truck Loading Stations mentioned in
this Section 2.6, or (ii) to have more than three
trucks on the Plant Property at any one time."
Section 2.11.2 Substitute the following for Section 2.11.2:
"New Office Building". Notwithstanding anything to
the contrary in this Article II, WSA shall have the
exclusive right to use, operate and maintain the
Office Building that WSA shall promptly commence to
build and promptly complete as an improvement of a
WSA facility hereunder at WSA's sole cost and
expense, at the location indicated on Annex VI
attached hereto and incorporated herein.
1
<PAGE> 2
ARTICLE III
This Amendment Number One may be executed in any number of counterparts,
each of which when so executed shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE IV
Except as specifically modified by this Amendment Number One all of the
other terms and conditions of the Facilities and Services Agreement, as modified
by written agreement amongst the Parties, shall remain in full force and effect.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Amendment
Number One to be signed in its corporate name by its duly authorized officer, as
of the date first above written.
OCCIDENTAL CHEMICAL CORPORATION
By: /s/
------------------------------
Name: Fred J. Gruberth
Title: Vice-President & Treasurer
WHITE SPRINGS AGRICULTURAL
CHEMICALS, INC.
By: /s/
------------------------------
Name: John L. M. Hampton
Title: Secretary
2
<PAGE> 1
Exhibit 11
Potash Corporation of Saskatchewan Inc.
Computation of Per Share Earnings
For the Quarters ended March 31
(Figures and amounts expressed in thousands, except per share and per option
amounts)
<TABLE>
<CAPTION>
Q1- 1996 Q1- 1995
------- -------
<S> <C> <C> <C>
A Net Income as reported, Canadian GAAP............................. 63,678 51,475
B Items adjusting net income........................................ (3,227 ) 0
C Net income, US GAAP (A+B)......................................... 60,451 51,475
D Weighted average number of shares outstanding..................... 45,484 42,995
E Options outstanding to purchase equivalent shares................. 1,292 1,022
F Average exercise price per option................................. 43.57 34.74
G Average market price per share.................................... 70.35 38.42
H Period end market price per share................................. 62.50 44.50
I Rate of Return available on option proceeds....................... 0.05 0.05
Canadian GAAP
Basic earnings per share (A/D).................................... 1.40 1.20
Fully diluted earnings per share
J Imputed earnings on option proceeds (E*F*I)....................... 2,813 1,775
Fully diluted earnings per share ((A+J)/(D+E)).................... 1.42 1.21
United States GAAP
Primary earnings per share
K Net additional shares issuable (E-(E*F/G))........................ 492 98
Primary earnings per share (C/(D+K)).............................. 1.31 1.19
Fully diluted earnings per share
L Net additional shares issuable (E-(E*F/H))........................ 391 224
Fully diluted earnings per share (C/(D+L))........................ 1.32 1.19
D+K Weighted average shares for US GAAP............................... 45,976 43,093
</TABLE>
1
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 203,496
<ALLOWANCES> (4,440)
<INVENTORY> 235,380
<CURRENT-ASSETS> 460,685
<PP&E> 2,492,878
<DEPRECIATION> (476,271)
<TOTAL-ASSETS> 2,525,099
<CURRENT-LIABILITIES> 249,766
<BONDS> 714,417
0
0
<COMMON> 629,477
<OTHER-SE> 666,096
<TOTAL-LIABILITY-AND-EQUITY> 1,295,573
<SALES> 366,871
<TOTAL-REVENUES> 366,871
<CGS> 256,071
<TOTAL-COSTS> 256,071
<OTHER-EXPENSES> 23,678
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,842
<INCOME-PRETAX> 73,280
<INCOME-TAX> 9,602
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,678
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.42
</TABLE>
