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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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POTASH CORPORATION OF SASKATCHEWAN INC.
(Name of Registrant as specified in its Charter)
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(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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LOGO
March 27, 2000
Dear Shareholder:
On behalf of the Board of Directors of Potash Corporation of Saskatchewan
Inc., we invite you to attend the Annual Meeting of Shareholders, which will be
held on Thursday, May 11, 2000 at 10:30 a.m. (local time) at the Delta
Bessborough, 601 Spadina Crescent East, Saskatoon, Saskatchewan, Canada.
The Notice of Annual Meeting and Board of Directors Proxy Circular
describing the formal business of the meeting and related proxy are enclosed.
If you are unable to attend this year's meeting, please consider carefully
the information described in the Proxy Circular and then complete and return
your proxy in the envelope provided.
<TABLE>
<S> <C>
Sincerely,
[C.E. Childers Signature] [W.J. Doyle Signature]
C. E. CHILDERS W. J. DOYLE
President and Chief Executive
Chairman Officer
</TABLE>
POTASH CORPORATION OF SASKATCHEWAN INC.
PCS TOWER, SUITE 500, 122 - 1ST AVENUE
SOUTH, SASKATOON, SASKATCHEWAN S7K 7G3
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LOGO
POTASH CORPORATION OF SASKATCHEWAN INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of shareholders of Potash
Corporation of Saskatchewan Inc. (the "Corporation"), a Saskatchewan
corporation, will be held on Thursday, May 11, 2000 at 10:30 a.m. (local time)
at the Delta Bessborough, 601 Spadina Crescent East, Saskatoon, Saskatchewan,
Canada for the following purposes:
1. to receive the financial statements of the Corporation for the year ended
December 31, 1999 and the report of the auditors thereon;
2. to elect directors;
3. to appoint auditors for the Corporation; and
4. to transact such other business as may properly come before the meeting or
any adjournments thereof.
DATED at Saskatoon, Saskatchewan this 27th day of March, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
[John Hampton Signature]
JOHN L.M. HAMPTON
Secretary
Shareholders who are unable to attend in person are requested to date, sign and
return, as soon as possible and in the envelope enclosed for that purpose, the
enclosed form of proxy.
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LOGO
POTASH CORPORATION OF SASKATCHEWAN INC.
BOARD OF DIRECTORS PROXY CIRCULAR
ANNUAL MEETING OF SHAREHOLDERS
SOLICITATION OF PROXIES
THIS PROXY CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF
PROXIES BY THE BOARD OF DIRECTORS (THE "BOARD") OF POTASH CORPORATION OF
SASKATCHEWAN INC. (THE "CORPORATION"), A SASKATCHEWAN CORPORATION, AND
CONSTITUTES A SOLICITATION BY OR ON BEHALF OF THE MANAGEMENT OF THE CORPORATION
UNDER THE BUSINESS CORPORATIONS ACT (SASKATCHEWAN), FOR USE AT THE ANNUAL
MEETING OF SHAREHOLDERS OF THE CORPORATION (THE "MEETING") TO BE HELD ON MAY 11,
2000 AND ANY ADJOURNMENTS THEREOF. All costs of solicitation will be borne by
the Corporation. In addition to the mail, proxies may be solicited by telephone
or in person by employees of the Corporation who will receive no additional
compensation for such services. The Corporation has retained Georgeson
Shareholder Communications Inc. to assist in the solicitation of proxies in
Canada and the United States for total estimated fees of $17,500. In addition,
the Corporation will reimburse brokers, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy material to the beneficial owners of
common shares of the Corporation (the "Shares") held by such persons.
A shareholder who has given a proxy may revoke it at any time before it is
exercised by attending the Meeting and voting in person or by replacing it with
a duly executed proxy bearing a later date. In addition to revocation in either
such manner, a shareholder giving a proxy may revoke the proxy by instrument in
writing executed by the shareholder or by his attorney authorized in writing and
deposited either at the registered and principal executive office of the
Corporation, Suite 500, 122 - 1st Avenue South, Saskatoon, Saskatchewan, Canada,
S7K 7G3, at any time up to and including the last business day preceding the day
of the Meeting, or any adjournment thereof, or with the chairman of the Meeting
on the day of the Meeting or any adjournment thereof.
This proxy circular and the accompanying Notice of Annual Meeting of
Shareholders and proxy will first be sent or given to shareholders on or about
March 27, 2000.
Except as otherwise stated, the information contained herein is given as of
February 29, 2000.
Unless otherwise specified, all dollar amounts are expressed in United
States dollars.
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VOTING SHARES
There are 53,345,072 Shares of the Corporation outstanding as of February
29, 2000, each Share carrying the right to one vote.
Each shareholder of record at the close of business on March 23, 2000 is
entitled to vote at the Meeting the Shares registered in his or her name on that
date except to the extent that he or she has transferred any of those Shares and
the transferee has both established the transferee's ownership of the
transferred Shares and demanded, not later than 10 days prior to the Meeting,
that the Corporation recognize the transferee as the person entitled to vote the
transferred Shares at the Meeting.
The quorum for any meeting of shareholders is one or more persons present
and holding or representing by proxy not less than 5% of the total number of
outstanding Shares.
OWNERSHIP OF SHARES
The following table sets forth information as of February 29, 2000, with
respect to the beneficial ownership of Shares held by the executive officers of
the Corporation named in the Summary Compensation Table herein and by all
directors and executive officers of the Corporation.
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AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
NAME (1)(2)(3)
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<S> <C> <C>
William J. Doyle 194,298
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Charles E. Childers 311,088
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Gary E. Carlson 52,929
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James F. Dietz 33,173
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John Gugulyn 106,508
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Thomas J. Regan 18,750
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All directors and executive officers as a group, including
the above-named persons (24 persons) 1,347,393
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</TABLE>
(1) The number of Shares beneficially owned is reported on the basis of
regulations of the Securities and Exchange Commission, and includes Shares
that the individual has the right to acquire at any time within 60 days
after February 29, 2000 and Shares directly or indirectly held by the
individual or by certain family members over which the individual has sole
or shared voting or investment power.
(2) Each of the directors and executive officers of the Corporation owned less
than 1% of the Shares issued and outstanding as at February 29, 2000. The
directors and executive officers of the Corporation as a group beneficially
owned approximately 2.52% of the Shares issued and outstanding as at
February 29, 2000.
(3) Includes Shares purchasable within 60 days after February 29, 2000 through
the exercise of options granted by the Corporation, as follows: Mr. Doyle
153,500 Shares; Mr. Childers 310,000 Shares; Mr. Carlson 50,000 Shares; Mr.
Dietz 27,500 Shares; Mr. Gugulyn 106,250 shares; Mr. Regan 18,750 Shares and
directors and executive officers as a group, including the foregoing,
1,274,450 Shares.
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Listed below is the name and other information concerning persons known to
the Corporation (from Corporation records and reports filed with the U.S.
Securities and Exchange Commission on Schedule 13G) which owned, as of February
29, 2000, more than 5% of any class of the Corporation's voting securities:
<TABLE>
<CAPTION>
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NAME AND ADDRESS OF AMOUNT AND NATURE OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS(1)
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<S> <C> <C> <C>
Common Shares Mackenzie Financial 3,216,800(2)(3) 6.0%
Corporation
150 Bloor Street West Suite
M111
Toronto, Ontario M5S 3B5
Common Shares Philips, Hager & North 3,214,750(4)(5) 6.0%
Investment Management Ltd.
200 Burrard Street
Vancouver, B.C. V6C 3N5
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</TABLE>
(1) Represents percent of Shares outstanding as of February 29, 2000.
(2) Such person has sole voting and dispositive power as to all 3,216,800
Shares.
(3) As set forth in a Schedule 13G dated February 10, 2000.
(4) Such person has sole voting and dispositive power as to all 3,214,750
Shares.
(5) As set forth in a Schedule 13G dated January 12, 1999.
On November 15, 1999, the Corporation gave notice of its intention to make
a normal course issuer bid. Under the bid, the Corporation may purchase on The
Toronto Stock Exchange and the New York Stock Exchange, up to an aggregate of
2,700,000 Shares, representing approximately five percent of its Shares
outstanding on November 15, 1999. The Corporation currently intends to
repurchase its Shares when and if such purchases constitute an appropriate use
of corporate funds. Shares purchased by the Corporation will be cancelled. To
and including February 29, 2000, 986,800 shares have been repurchased by the
Corporation. The repurchases will be made in accordance with applicable
regulations over a maximum period of 12 months commencing November 19, 1999 and
ending November 18, 2000. Shareholders may obtain a copy of the Corporation's
notice of such bid, without charge, by contacting the Corporation's Senior Vice
President, Corporate Relations.
ELECTION OF DIRECTORS
The articles of the Corporation provide that the Board shall consist of a
minimum of 6 directors and a maximum of 20, with the actual number to be
determined from time to time by the Board. The Board has determined that at the
present time there will be 13 directors.
Proxies solicited hereby will be voted for the following proposed nominees
(or for substitute nominees in the event of contingencies not known at present)
who will, subject to the bylaws of the Corporation and applicable corporate law,
hold office until the next annual meeting of shareholders or until their
successors are elected or appointed in accordance with the bylaws or applicable
corporate law. The affirmative vote of a plurality of the Shares present in
person or by proxy at the Meeting and voted in respect of the election of
directors is required to elect directors.
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The following table states the names and ages of all the persons to be
nominated for election as directors, all other positions and offices with the
Corporation now held by them, their present principal occupation or employment,
the period during which present directors of the Corporation have served as
directors, and the number of Shares beneficially owned, directly or indirectly,
or over which control or direction is exercised, by each of them.
<TABLE>
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[Photo of I. ISABEL B. ANDERSON Director Since 1989
Anderson] Number of Shares Beneficially Owned -- 17,506*
Ms. Anderson, 60, of Calgary, Alberta, is a former
University of Saskatchewan economics professor and a
specialist in international economics and Canadian public
policy. She is President and Chief Executive Officer of A&L
Information Brokers, a consulting company.
Ms. Anderson is a member of the Executive Committee.
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[Photo of D. DOUGLAS J. BOURNE Director Since 1990
Bourne] Number of Shares Beneficially Owned -- 9,918*
Mr. Bourne, 76, of Houston, Texas, is former Chairman and
CEO of Battle Mountain Gold Company, a gold mining company,
and of Duval Corporation, the mining subsidiary of Pennzoil
Company. He has held many positions in various fertilizer
and mining associations and is a director of Battle Mountain
Gold Company.
Mr. Bourne is Chairman of the Environmental Affairs
Committee.
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[Photo of C. CHARLES E. CHILDERS Director Since 1989
Childers] Number of Shares Beneficially Owned -- 311,088*
Mr. Childers, 67, of Tucson, Arizona, was Chief Executive
Officer of the Corporation from 1987 until his retirement on
June 30, 1999. He continues as Chairman of the Board. He has
held many positions with fertilizer associations, including
the presidency of the International Fertilizer Industry
Association. He is a director of Battle Mountain Gold
Company.
Mr. Childers is Chairman of the Executive Committee.
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[Photo of W. Doyle] WILLIAM J. DOYLE Director Since 1989
Number of Shares Beneficially Owned -- 194,298*
Mr. Doyle, 49, is President and Chief Executive Officer of
the Corporation. He became President of PCS Sales in 1987,
after a career with International Minerals and Chemical
Corporation. Active in fertilizer industry associations, he
was elected chairman of the Potash & Phosphate Institute in
1999.
Mr. Doyle is a member of the Executive Committee.
</TABLE>
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<TABLE>
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[Photo of W. Estey] HONOURABLE WILLARD Z. ESTEY, Q.C. Director Since 1990
Number of Shares Beneficially Owned -- 25,200*
Mr. Estey, 80, of Toronto, Ontario, is counsel to Davies
Ward & Beck, and is a former Chief Justice of Ontario and
Justice of the Supreme Court of Canada and was named
Companion, Order of Canada, in 1991. He is a director of
CamVec Corporation.
Mr. Estey is a member of the Audit Committee and Chairman of
the Corporate Governance and Nominating Committee.
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[Photo of D. Howe] DALLAS J. HOWE Director Since 1991
Number of Shares Beneficially Owned -- 12,500*
Mr. Howe, 55, of Calgary, Alberta, is President and CEO of
Advanced DataSystems Ltd. and BDM Information Systems Group
of Companies, each an international computer systems
supplier. President, CEO and founder of high technology
information and data systems companies over twenty-five
years, he served on the Board of Potash Corporation of
Saskatchewan, the Crown corporation, from 1982 to 1989.
Mr. Howe is a member of the Audit Committee and the
Corporate Governance and Nominating Committee.
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[Photo of D. DONALD E. PHILLIPS Director Since 1991
Phillips] Number of Shares Beneficially Owned -- 10,500*
Mr. Phillips, 67, of Brandon, Mississippi, is a former
President and CEO of Pitman-Moore Inc., a producer and
marketer of animal feed and health products. He is Chairman
of the board of directors of Synbiotics Inc., San Diego,
California, and a director of Great Lakes REIT Inc., Oak
Brook, Illinois.
Mr. Phillips is Chairman of the Compensation Committee.
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[Photo of P. PAUL J. SCHOENHALS Director Since 1992
Schoenhals] Number of Shares Beneficially Owned -- 9,900*
Mr. Schoenhals, 58, of Calgary, Alberta, President of
Petroleum Industry Training Service, was Chairman of Potash
Corporation of Saskatchewan, the Crown corporation, from
1987 to 1989. He is a former Member of the Legislative
Assembly and Cabinet Minister in Saskatchewan.
Mr. Schoenhals is a member of the Environmental Affairs
Committee.
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[Photo of D. Seaman] DARYL K. SEAMAN Director Since 1989
Number of Shares Beneficially Owned -- 7,000*
Mr. Seaman, 77, is Chairman and President of Dox Investments
Inc., a private holding company, in Calgary, Alberta. He is
a former Chairman and CEO of Bow Valley Industries Ltd. and
is a director of Bow Valley Energy Ltd., Encal Energy Ltd.
and Renaissance Energy Ltd., and is co-owner and a director
of the Calgary Flames Hockey Club.
Mr. Seaman is a member of the Compensation Committee and the
Corporate Governance and Nominating Committee.
</TABLE>
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<TABLE>
<S> <C>
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[Photo of E. E. ROBERT STROMBERG, Q.C. Director Since 1991
Stromberg] Number of Shares Beneficially Owned -- 15,221*
Mr. Stromberg, 58, is a partner in the Saskatchewan law firm
Robertson Stromberg. He is a director of NorSask Forest
Products Inc. and Hitachi Canadian Industries Ltd., a member
of the Provincial Court Commission, and Chairman of the
Saskatoon Airport Authority.
Mr. Stromberg is a member of the Executive Committee.
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[Photo of J. Vicq] JACK G. VICQ Director Since 1989
Number of Shares Beneficially Owned -- 13,793*
Mr. Vicq, 60, a Professor in the College of Commerce,
University of Saskatchewan, was formerly Associate Dean and
responsible for the Centre for International Business
Studies. He sits on committees of the Saskatchewan and
Canadian Institutes of Chartered Accountants.
Mr. Vicq is Chairman of the Audit Committee.
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[Photo of B. Wigmore] BARRIE A. WIGMORE Director Since 1989
Number of Shares Beneficially Owned -- 12,500*
Mr. Wigmore, 58, a retired Limited Partner with New York
investment banking firm Goldman, Sachs Group, Inc., headed
its corporate finance activities in the electric, gas,
pipelines and telecommunications industries. He writes on
financial history and current financial markets. He is a
director of National Service Industries, Inc.
Mr. Wigmore is a member of the Compensation Committee and
the Corporate Governance and Nominating Committee.
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[Photo of T. Wright] THOMAS J. WRIGHT Director Since 1999
Number of Shares Beneficially Owned -- 70,000*
Mr. Wright, 67, of Raleigh, North Carolina, retired as
President of PCS Phosphate on June 30, 1999. Formerly
President and CEO of Texasgulf Inc., the predecessor to PCS
Phosphate, he has been active in many fertilizer industry
associations.
Mr. Wright is a member of the Environmental Affairs
Committee and the Corporate Governance and Nominating
Committee.
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</TABLE>
* The number of shares indicated above as beneficially owned by the nominated
directors includes Shares purchasable by such directors within 60 days of
February 29, 2000 through the exercise of options granted by the Corporation,
as follows: Isabel B. Anderson 11,500 Shares; Douglas J. Bourne 9,500 Shares;
Charles E. Childers 310,000 Shares; William J. Doyle 153,500 Shares; Willard
Z. Estey 21,500 Shares; Dallas J. Howe 11,500 Shares; Donald E. Phillips
9,500 Shares; Paul J. Schoenhals 9,500 Shares; Daryl K. Seaman 6,000 Shares;
E. Robert Stromberg 13,500 Shares; Jack G. Vicq 13,200 Shares; Barrie A.
Wigmore 11,500 Shares; and Thomas J. Wright 70,000 Shares.
All of the above directors have had the principal occupation described
above for the previous five years except as follows: Mr. Estey was Counsel to
McCarthy Tetrault (law firm) from 1988 to 1996; Mr. Doyle was Executive Vice
President, Potash and Sales, of the Corporation from 1995 to March 1997,
President of PCS Sales from March 1997 to July 1998, and President and Chief
Operating Officer of the Corporation from
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July 1998 to July 1999; Mr. Wright was Executive Vice President of PCS Phosphate
from 1995 to March 1997.
The law firm of Robertson Stromberg has provided and continues to provide
legal services to the Corporation. E. Robert Stromberg is a partner of Robertson
Stromberg.
During 1999, there were 11 meetings of the Board and the number of meetings
held by committees of the Board were: (i) Executive Committee -- 8; (ii) Audit
Committee -- 9; (iii) Compensation Committee -- 3; (iv) Environmental Affairs
Committee -- 5; and (v) Corporate Governance and Nominating Committee -- 2. Each
of the Corporation's directors attended at least 80% of the total of the
meetings of the committees on which the director served and the meetings of the
Board.
Denis J. Cote had served on the Board since 1989 until his death in
November 1999. John L.M. Hampton, Secretary to the Board, was appointed on
December 21, 1999 to serve as a director and ceased to be a director on February
28, 2000. Paul S. Wise, who has served on the Board since 1989, is not seeking
re-election to the Board and, therefore, his term will expire on May 11, 2000.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the periods indicated, all compensation
earned by each individual who served as Chief Executive Officer of the
Corporation during 1999 and by each of the Corporation's other four most highly
compensated executive officers as of the end of calendar year 1999 for services
rendered to the Corporation and its subsidiaries (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS PAYOUTS
ANNUAL COMPENSATION -------------------------
------------------------------------- SECURITIES
OTHER UNDERLYING
ANNUAL OPTIONS LTIP ALL OTHER
SALARY BONUS COMPENSATION GRANTED(3) PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $(2) $ # $ $
<S> <C> <C> <C> <C> <C> <C> <C>
William J. Doyle 1999 622,500 230,000 8,059 70,000 187,250 40,651(6)
President and Chief 1998 475,000 450,000 260,319(5) 50,000 63,625 8,157(6)
Executive Officer(4) 1997 374,083 280,000 147,392(5) 40,000 81,938 8,072(6)
Charles E. Childers 1999 650,000 0 62,761(8) 3,600 585,156 902,094(9)
Chairman of 1998 1,200,000 2,100,000 2,040,428(8) 80,000 265,104 5,624(9)
the Board(7) 1997 1,100,000 2,100,000 1,009,660(8) 80,000 1,677,671 10,961(9)
Gary E. Carlson 1999 340,000 82,500 -- 30,000 140,438 9,061(13)
President, 1998 325,000 235,000 -- 25,000 47,718 8,476(13)
PCS Sales(10)(11)(12) 1997 246,800 225,000 -- 37,500 61,453 7,553(13)
James F. Dietz 1999 307,500 85,000 -- 30,000 87,383 8,781(16)
President, PCS Nitrogen, 1998 277,500 200,000 -- 25,000 29,692 9,290(16)
Inc.(14)(15) 1997 207,333 140,000 -- 15,000 38,238 8,852(16)
John Gugulyn 1999 266,896 90,000 1,091 30,000 109,229 19,120(18)
Senior Vice President, 1998 213,089 138,231 52,519(17) 25,000 37,114 6,452(18)
Administration 1997 199,031 135,342 -- 25,000 47,797 6,428(18)
Thomas J. Regan 1999 250,800 80,000 -- 30,000 78,021 9,727(20)
President, PCS Phosphate 1998 192,000 110,000 -- 10,000 26,511 8,909(20)
Company, Inc.(19) 1997 180,800 103,000 -- 10,000 34,141 8,785(20)
</TABLE>
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(1) Those amounts which were paid in Canadian dollars have been converted to
United States dollars using the average exchange rate for the month prior
to the date of payment.
(2) Reports amounts awarded pursuant to the Corporation's Short-Term Incentive
Plan and, where applicable, contractual bonuses. See "Compensation
Committee -- Short-Term Incentive Compensation".
(3) Options granted pursuant to the Corporation's Stock Option Plan -- Officers
and Key Employees or the Stock Option Plan -- Directors, as applicable.
(4) Prior to July 1, 1999 Mr. Doyle's principal position was President and
Chief Operating Officer of the Corporation. Prior to July 1, 1998, Mr.
Doyle's principal position was President, PCS Sales, and prior to March 6,
1997, Executive Vice President, Potash and Sales, of the Corporation.
(5) The amounts reported for 1998 and 1997 include payments to Mr. Doyle to
reimburse him in respect of the differential between Canadian and U.S.
income taxes payable by him. In addition, of the other annual compensation
indicated for 1998, $63,194 reflects a 1998 payment made by the Corporation
to Revenue Canada in settlement of a benefits audit for the years 1994
through 1996.
(6) The reported amounts for 1999, 1998 and 1997 consist, respectively, of:
(i) $35,529, $4,708 and $4,981 which represents the Corporation's
contribution to the Corporation's defined contribution pension and
savings plans on behalf of the indicated Named Executive Officer; and
(ii) $5,122, $3,449 and $3,091 which represents the value of the benefit
for group term life insurance premiums paid by the Corporation on
behalf of the indicated Named Executive Officer.
(7) Mr. Childers served as Chief Executive Officer of the Corporation until his
retirement on June 30, 1999.
(8) Mr. Childers' contract provides for reimbursement to him in respect of the
differential between Canadian and U.S. income taxes paid by him. See
"Employment Contracts and Termination of Employment". The amount of such
reimbursement for 1999 is not presently calculable and will be determined
following the filing of Mr. Childers' Canadian and U.S. income tax returns.
Of the other annual compensation indicated for 1999, $26,425 related to
personal tax planning services and $24,988 related to personal travel
benefits. Of the other annual compensation indicated for 1998, $546,186
reflects a payment made by the Corporation to Revenue Canada in settlement
of a benefits audit for the years 1994 through 1996. Of the other annual
compensation indicated for 1997, $122,018 related to personal travel
benefits.
(9) The reported amounts for 1999, 1998 and 1997 consist, respectively, of:
(i) $32,500, $0 and $4,957 which represents the Corporation's
contribution to the Corporation's defined contribution pension and
savings plans on behalf of the indicated Named Executive Officer; and
(ii) $4,594, $5,624 and $6,004 which represents the value of the benefit
for group term life insurance premiums paid by the Corporation on
behalf of the indicated Named Executive Officer; and
(iii) $715,000 for 1999 which represents a lump sum pay-out to satisfy the
Corporation's obligation to the indicated Named Executive Officer for
earned but unused vacation; and
(iv) $150,000 for 1999 which represents fees paid to the indicated Named
Executive Officer for services rendered as special advisor to the
Corporation.
(10) Prior to July 1, 1998, Mr. Carlson's principal position was President, PCS
Nitrogen, Inc. ("PCS Nitrogen").
(11) On March 6, 1997, the Corporation acquired Arcadian Corporation (now PCS
Nitrogen). The compensation reported for Mr. Carlson for 1997 is for the
period from March 1, 1997 to December 31, 1997.
(12) Mr. Carlson resigned from PCS Sales effective March 15, 2000 and is no
longer an officer of the Corporation or its subsidiaries.
(13) The reported amounts for 1999, 1998 and 1997 consist, respectively, of:
(i) $8,000, $6,400 and $6,651 which represents contributions by the
Corporation's subsidiary to its defined contribution pension plan on
behalf of the indicated Named Executive Officer; and
(ii) $1,061, $2,076 and $902 which represents the value of the benefit for
group term life insurance premiums paid by the Corporation's
subsidiary on behalf of the indicated Named Executive Officer.
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(14) Prior to July 1, 1998, Mr. Dietz's principal position was Executive Vice
President, PCS Nitrogen.
(15) On March 6, 1997, the Corporation acquired Arcadian Corporation (now PCS
Nitrogen). The compensation for Mr. Dietz for 1997 is for the period from
March 1, 1997 to December 31, 1997.
(16) The reported amounts for 1999, 1998 and 1997 consist, respectively, of:
(i) $6,400, $6,400 and $6,709 which represents contributions by the
Corporation's subsidiary to its defined contribution pension plan on
behalf of the indicated Named Executive Officer; and
(ii) $2,381, $2,890 and $2,143 which represents the value of the benefit
for group term life insurance premiums paid by the Corporation's
subsidiary on behalf of the indicated Named Executive Officer.
(17) Of the other annual compensation indicated for 1998, $33,964 reflects a
payment by the Corporation to Revenue Canada in settlement of a benefits
audit for the years 1994 through 1996.
(18) The reported amounts for 1999, 1998 and 1997 consist, respectively, of:
(i) $17,132, $4,721 and $4,930 which represents the Corporation's
contribution to its defined contribution pension and savings plans on
behalf of the indicated Named Executive Officer; and
(ii) $1,988, $1,731, and $1,498 which represents the value of the benefit
for group term life insurance premiums paid by the Corporation on
behalf of the indicated Named Executive Officer.
(19) Prior to July 1, 1999, Mr. Regan's principal position was Executive Vice
President, PCS Phosphate Company, Inc. and prior to April 1, 1997, Vice
President Administration, PCS Phosphate Company, Inc.
(20) The reported amounts for 1999, 1998 and 1997 consist, respectively, of:
(i) $8,000, $8,000 and $8,000 which represents contributions by the
Corporation's subsidiary to its defined contribution pension plan on
behalf of the indicated Named Executive Officer; and
(ii) $1,727, $909, and $785 which represents the value of the benefit for
group term life insurance premiums paid by the Corporation's
subsidiary on behalf of the indicated Named Executive Officer.
OPTIONS
The following table sets forth information concerning the grants of stock
options to the Named Executive Officers during the year ended December 31, 1999.
OPTION GRANTS DURING THE
MOST RECENTLY COMPLETED FISCAL YEAR
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
NUMBER OF
SECURITIES % OF TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN FISCAL BASE PRICE PRESENT VALUE
NAME GRANTED(3)# YEAR $/SHARE EXPIRATION DATE (4)(5)$
<S> <C> <C> <C> <C> <C>
William J. Doyle(1) 70,000 8.68 43.6875 Nov. 9, 2009 948,500
Charles E. Childers(2) 3,600 -- 43.6875 Nov. 9, 2009 48,780
Gary E. Carlson(1) 30,000 3.72 43.6875 Nov. 9, 2009 406,500
James F. Dietz(1) 30,000 3.72 43.6875 Nov. 9, 2009 406,500
John Gugulyn(1) 30,000 3.72 Cdn. 64.20 Nov. 9, 2009 406,907
Thomas J. Regan(1) 30,000 3.72 43.6875 Nov. 9, 2009 406,500
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options granted pursuant to the Corporation's Stock Option Plan -- Officers
and Key Employees.
(2) Options granted pursuant to the Corporation's Stock Option Plan --
Directors.
(3) Options granted on November 9, 1999. Subject to the terms of the applicable
plan, each option is exercisable with respect to one-half of the indicated
number on or after November 9, 2000 and with respect to the balance of the
indicated number on or after November 9, 2001 (or earlier in the event of a
"change of control" of the Corporation as defined in the Corporation's
Stock Option Plan -- Officers
11
<PAGE> 13
and Key Employees or Stock Option Plan -- Directors, as applicable). All
options are transferable (without consideration) to the spouse, children
and grandchildren of the original optionee (or to a trust, partnership or
limited liability company, the entire beneficial interest of which is held
by one or more of the foregoing persons), in accordance with the terms and
conditions of the Stock Option Plan -- Officers and Key Employees or Stock
Option Plan -- Directors, as applicable.
(4) The Modified Black-Scholes Option Pricing Model was used to determine the
grant date present value of the stock options granted in November, 1999 by
the Corporation to the Named Executive Officers. Under the Modified
Black-Scholes Option Pricing Model, the grant date present value of the
stock options referred to in the table was Cdn. $19.99 per Share for Mr.
Gugulyn and $13.55 per Share for Mr. Doyle, Mr. Childers, Mr. Carlson, Mr.
Dietz and Mr. Regan. The material assumptions and adjustments incorporated
in the Modified Black-Scholes Option Pricing Model in estimating the value
of options reflected in the above table include the following:
(i) an option term of 8 years; with respect to the options granted to Mr.
Gugulyn, an interest rate of 6.02% (representing the interest rate on
a Canadian Treasury security with a maturity date corresponding to
that of the option term) and with respect to options granted to Mr.
Doyle, Mr. Childers, Mr. Carlson, Mr. Dietz and Mr. Regan, an
interest rate of 6.03% (representing the interest rate on a U.S.
Treasury security with a maturity date corresponding to that of the
option term);
(ii) with respect to the options granted to Mr. Gugulyn, volatility of
27.76% (calculated using daily stock prices on The Toronto Stock
Exchange for the three-year period prior to the grant date) and with
respect to options granted to Mr. Doyle, Mr. Childers, Mr. Carlson,
Mr. Dietz and Mr. Regan, volatility of 27.88% (calculated using daily
stock prices on the New York Stock Exchange for the three-year period
prior to the grant date);
(iii) with respect to the options granted to Mr. Gugulyn, dividends at the
rate of Cdn. $1.44 per Share and with respect to options granted to
Mr. Doyle, Mr. Childers, Mr. Carlson, Mr. Dietz and Mr. Regan,
dividends at the rate of $1.00 per Share (representing the annualized
dividends paid with respect to a Share at the date of grant); and
(iv) a reduction of approximately 10% to reflect the probability of
forfeiture due to termination prior to vesting and the probability of
a shortened option term due to termination of employment prior to the
option expiration date.
The ultimate values of the options will depend on the future market price
of the Shares, which cannot be forecast with reasonable accuracy. The
actual value, if any, an optionee will realize upon exercise of an option
will depend on the excess of the market value of the Shares over the
exercise price on the date the option is exercised.
(5) Amounts denominated in Canadian dollars are converted to United States
dollars at the exchange rate in effect at the date of grant of the options.
On November 3, 1999, the Board of the Corporation approved certain
amendments to the Corporation's Stock Option Plan -- Officers & Key Employees
and the Corporation's Stock Option Plan -- Directors. These amendments apply to
any grant of options made on or after November 3, 1999 and, with the consent of
the optionee, also apply to currently outstanding options granted pursuant to
either plan, whether held by active employees, directors, or retirees.
The first amendment extends the period during which an option is
exercisable in the event that an optionee ceases to be a director, officer or
employee of the Corporation by reason of his or her death or if an optionee who
is a retiree pursuant to either of the plans dies. Following the amendment, the
legal personal representative of the optionee is entitled to exercise any
unexercised options, including such options that may vest after the date of
death, during the period ending at the end of the twelfth calendar month
following the calendar month in which the optionee dies, provided such options
have not otherwise expired, failing which exercise the options terminate.
The second amendment extends the period during which an option is
exercisable in the event that an optionee ceases to be a director, officer or
employee of the Corporation by reason of retirement in accordance with
prevailing retirement policies of the Corporation. Following the amendment, the
optionee is entitled to exercise any unexercised options until the expiry date
of such options or the date on which such options are otherwise terminated in
accordance with the provisions of the applicable plan.
12
<PAGE> 14
The following table sets forth the options exercised during the year ended
December 31, 1999 by the Named Executive Officers and the year-end value of
unexercised in-the-money options held by such individuals at December 31, 1999.
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
OPTIONS AT FY-END AT FY-END(1)
SECURITIES ---------------------------------------------------------------
ACQUIRED ON AGGREGATE VALUE # $
EXERCISE REALIZED # NOT $ NOT
NAME # $ EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Doyle 30,000 360,000 153,500 95,000 224,719 315,630
- ------------------------------------------------------------------------------------------------------------------------------
Charles E. Childers -- -- 310,000 43,600 889,421 16,200
- ------------------------------------------------------------------------------------------------------------------------------
Gary E. Carlson -- -- 50,000 42,500 -- 135,270
- ------------------------------------------------------------------------------------------------------------------------------
James F. Dietz -- -- 27,500 42,500 -- 135,270
- ------------------------------------------------------------------------------------------------------------------------------
John Gugulyn -- -- 106,250 42,500 911,779 111,183
- ------------------------------------------------------------------------------------------------------------------------------
Thomas J. Regan -- -- 18,750 35,000 -- 135,270
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Values are calculated by determining the amount by which the market value
of the Shares underlying the options on December 31, 1999 exceeded the
exercise prices of the options and converting Canadian dollar amounts to
United States dollars using the December 31, 1999 exchange rate of $0.6929.
PENSION PLANS
The Corporation maintains the Potash Corporation of Saskatchewan Inc.
Pension Plan (the "PCS Plan") which generally requires all participating
employees to contribute 5.5% of their earnings (or such lesser amount as is
deductible for Canadian Income Tax purposes) to the PCS Plan and the Corporation
to contribute an equal amount. When an individual retires, the full amount in
the individual's account is used to produce the pension.
The Corporation maintains a Supplemental Retirement Income Plan (the
"Supplemental Plan") which is unfunded and non-contributory and which provides a
supplementary pension benefit for the Corporation's officers and certain other
key managers. Under the basic terms of the Supplemental Plan a pension benefit
is provided in an amount equal to 2% of the participant's average three highest
years' earnings multiplied by the participant's years of pensionable service (to
a maximum of 35 years), minus any annual retirement benefit payable under the
PCS Plan or certain other tax qualified plans maintained by the Corporation or
any of its subsidiaries. Benefits under the Supplemental Plan are paid in the
currency in which the participant's earnings are denominated. For a designated
group of senior officers of the Corporation, including Mr. Doyle and Mr.
Gugulyn, the benefit payable is an amount equal to: (i) 5% of the senior
officer's average three highest years' earnings multiplied by the senior
officer's years of pensionable service (to a maximum of 10 years), plus (ii) 2%
of the senior officer's average three highest years of earnings multiplied by
the senior officer's years of pensionable service in excess of 25 years to a
maximum of 10 additional years, minus (iii) any annual retirement benefit
payable under the PCS Plan and certain other tax qualified plans maintained by
the Corporation or any of its subsidiaries. Benefits payable to employees who
have reached the minimum age (55) for retirement pursuant to the Supplemental
Plan are secured by letters of credit provided by the Corporation and are
generally paid in the form of an annuity for life, or at a participant's
election, in a single lump sum payment equal to the actuarial present value of
the annual benefit provided by the Supplemental Plan.
13
<PAGE> 15
The following table shows the estimated annual benefits payable upon
retirement to Mr. Doyle and Mr. Gugulyn pursuant to the Supplemental Plan.
Estimated benefits payable pursuant to the Supplemental Plan will be reduced by
any benefits payable for Mr. Doyle and Mr. Gugulyn pursuant to the PCS Plan and
certain other tax qualified plans, maintained by the Corporation or any of its
subsidiaries.
SUPPLEMENTAL RETIREMENT INCOME PLAN TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
REMUNERATION YEARS OF SERVICE
- ------------------------------------------------------------------------------------------------------------
$ 10 15 20 25 30
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 250,000 $ 125,000 $ 125,000 $ 125,000 $ 150,000 $ 175,000
500,000 250,000 250,000 250,000 300,000 350,000
1,000,000 500,000 500,000 500,000 600,000 700,000
1,500,000 750,000 750,000 750,000 900,000 1,050,000
2,000,000 1,000,000 1,000,000 1,000,000 1,200,000 1,400,000
3,000,000 1,500,000 1,500,000 1,500,000 1,800,000 2,100,000
4,000,000 2,000,000 2,000,000 2,000,000 2,400,000 2,800,000
</TABLE>
For the purposes of the Supplemental Plan, earnings are defined as the
executive's "annual base pay plus 100% of all bonuses paid or payable to the
executive in a calendar year". The normal retirement age pursuant to the
Supplemental Plan is 65, with a reduction in benefits for early retirement prior
to age 62. No benefits pursuant to the Supplemental Plan are payable if
termination occurs prior to age 55.
As of December 31, 1999, the three highest year average earnings for
purposes of the Supplemental Plan for each Named Executive Officer participating
in the Supplemental Plan were as follows: $1,218,530 for Mr. Doyle and $500,175
for Mr. Gugulyn. The estimated credited years of service at assumed retirement
age of 65 for each of the Named Executive Officers participating in the
Supplemental Plan are as follows: 28 years for Mr. Doyle and 13 years for Mr.
Gugulyn. Mr. Childers retired from his position as Chief Executive Officer of
the Corporation on June 30, 1999. In lieu of an annual benefit pursuant to the
Plan, he elected to receive a lump sum payment of $16,489,000 which represents
the actuarial net present value of Mr. Childers annual benefits accrued under
the Supplemental Plan.
Prior to January 1, 1999, PCS Phosphate and PCS Nitrogen maintained
separate defined benefit pension plans for their respective eligible U.S.
employees, including Mr. Regan, Mr. Carlson and Mr. Dietz. Effective January 1,
1999 the Corporation consolidated its pension plans for U.S. employees and the
Nitrogen Pension Plan was merged with and into the Phosphate Pension Plan to
form a new U.S. Pension Plan (the "U.S. Pension Plan").
Under the U.S. Pension Plan, participants age 62 or older with at least 20
years of service, receive a retirement benefit of 1 1/2% of the participant's
final average compensation (as defined below) multiplied by the participant's
years of service accrued after December 31, 1998 (maximum 35 years) in the form
of a life annuity. Participants with service accrued prior to January 1, 1999
under the Phosphate Pension Plan or the Nitrogen Pension Plan have a portion of
their retirement benefit calculated in accordance with the applicable benefit
formula as in effect on December 31, 1998. Employees not meeting the minimum age
or years of service requirement at termination receive a reduced benefit.
Pursuant to the U.S. Pension Plan, final average compensation is defined as
compensation for the highest paid 60 consecutive months of service out of the
last 120 months of service. Compensation is defined as a participant's base pay
plus bonus. The benefits available under the U.S. Pension Plan are not subject
to offset for other retirement benefits.
The retirement benefits from the U.S. Pension Plan for Mr. Regan, Mr.
Carlson and Mr. Dietz are subject to certain limitations on the amount of
retirement benefits that may be provided under U.S. tax
14
<PAGE> 16
qualified pension plans. PCS Phosphate maintains a supplemental benefits plan
(the "Phosphate Supplemental Plan") which is an unfunded and non-qualified plan
intended to provide participants therein, including Mr. Regan, the same
aggregate retirement benefits such participant would have received had there
been no legal limitations on the benefits provided by the U.S. plan. Mr. Carlson
and Mr. Dietz do not currently participate in a supplemental plan. However, the
Company is continuing to develop an appropriate supplemental retirement plan to
address such limitations.
For Messrs. Regan, Carlson and Dietz, the following table represents an
estimate of the retirement income calculated pursuant to the U.S. Pension Plan
for service on or after January 1, 1999 (assuming the implementation of a
supplemental plan to address applicable limitations under the Internal Revenue
Code for Mr. Carlson and Mr. Dietz, and taking into account Mr. Regan's benefit
under the Phosphate Supplemental Plan).
POST-1998 SERVICE TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
REMUNERATION YEARS OF SERVICE
- ------------------------------------------------------------------------------------------------------------
$ 10 15 20 25 30
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$200,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000
300,000 45,000 67,500 90,000 112,500 135,000
400,000 60,000 90,000 120,000 150,000 180,000
500,000 75,000 112,500 150,000 187,500 225,000
600,000 90,000 135,000 180,000 225,000 270,000
</TABLE>
As of December 31, 1999 the final average compensation for the purposes of
the U.S. Pension Plan and any applicable supplemental plan for Mr. Regan was
$283,286, for Mr. Carlson was $459,633, and for Mr. Dietz was $366,601. The
estimated credited years of post-1998 service at normal retirement age of 65 for
Mr. Regan is 11 years, for Mr. Carlson 20 years, and for Mr. Dietz 13 years.
As of December 31, 1998, the PCS Phosphate Plan benefit formula provided a
retirement benefit of 2% of the participant's final average compensation
multiplied by the participant's years of service (maximum 35 years). The
following table represents an estimate of the pre-1999 service component
retirement income of Mr. Regan at the levels of average compensation and years
of service shown, calculated pursuant to the benefit formulas in the PCS
Phosphate Plan and the Phosphate Supplemental Plan.
PRE-1999 SERVICE TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
REMUNERATION YEARS OF SERVICE
- ------------------------------------------------------------------------------------------------------------
$ 10 15 20 25 30
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$150,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000
200,000 40,000 60,000 80,000 100,000 120,000
250,000 50,000 75,000 100,000 125,000 150,000
300,000 60,000 90,000 120,000 150,000 180,000
400,000 80,000 120,000 160,000 200,000 240,000
</TABLE>
As of December 31, 1999, estimated credited years of pre-1999 service at a
retirement age of 65 for Mr. Regan is 11 years and final average compensation is
$192,586. Final average compensation is calculated in the same manner as the
U.S. Pension Plan and post-1998 service, but compensation is defined as a
participant's base pay only.
15
<PAGE> 17
As of December 31, 1998, the Nitrogen Pension Plan provided a normal
monthly retirement benefit equal to the sum of (i) 1.1% of the participant's
average monthly pay during the highest paid 60 consecutive calendar months of
the last 120 calendar months of employment multiplied by the participant's
credited service and (ii) 0.4% of (a) the excess of such average monthly pay
over the participant's Social Security earnings limit multiplied by (b) the
participant's credited service (up to a maximum of 35 years).
The following table represents an estimate of the pre-1999 service
component of the retirement income of Mr. Carlson and Mr. Dietz at the levels of
average compensation and years of service shown calculated pursuant to the
formula in the Nitrogen Pension Plan (assuming the implementation of a
supplemental plan to address applicable limitations under the Internal Revenue
Code). The following calculations use the applicable social security earning
limit based on Mr. Carlson's year of birth, 1953, which limit does not differ
materially from that applicable to Mr. Dietz.
PRE-1999 SERVICE TABLE
<TABLE>
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
REMUNERATION YEARS OF SERVICE
- -------------------------------------------------------------------------------------------------------------
$ 10 15 20 25 30
- -------------------------------------------------------------------------------------------------------------
$200,000 $ 14,000 $ 27,000 $ 41,000 $ 55,000 $ 69,000
300,000 22,000 35,000 64,000 85,000 106,000
400,000 29,000 42,000 86,000 115,000 144,000
500,000 37,000 50,000 109,000 145,000 181,000
600,000 44,000 57,000 131,000 175,000 219,000
</TABLE>
As of December 31, 1999, the estimated credited years of pre-1999 service
at normal retirement age of 65 for Mr. Carlson is 7.5 years and for Mr. Dietz is
4 years. Final average compensation is the same as calculated for the purpose of
the U.S. Pension Plan and post-1998 service.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
Mr. Childers
Mr. Childers and the Corporation are parties to an agreement, the current
term of which expires June 30, 2002 and pursuant to which Mr. Childers served as
Chairman of the Board and Chief Executive Officer of the Corporation until June
30, 1999 and thereafter continues to serve as Chairman of the Board and as a
special advisor to the Corporation. Pursuant to the agreement, Mr. Childers
received salary compensation of $650,000 for the period January 1, 1999 to June
30, 1999 and for the period July 1, 1999 through June 30, 2002, Mr. Childers is
entitled to receive an annual fee of $300,000 (less any amount paid for his role
as Chairman and as a director). Mr. Childers' agreement provides for
reimbursement to him on an annual basis of the amount by which income taxes
payable in Canada exceed those which otherwise would have been payable by him in
the United States. The agreement authorizes the use of the principal corporate
aircraft for all business and personal travel.
The agreement with Mr. Childers provides for payment, upon termination
without cause, of an amount equal to the amounts payable for the remaining term
of the agreement. In the event of termination, for any reason, the Corporation
will provide a comprehensive medical, vision and dental insurance plan for Mr.
Childers equivalent to the medical, vision and dental plan currently in
existence, which plan shall remain in effect for the lifetime of Mr. Childers.
The Corporation will also pay reasonable moving expenses of Mr. Childers upon
termination of the agreement for any reason, including expiry of the term.
Pursuant to the agreement, in the event that the Corporation is sold, dissolved,
merged or amalgamated, Mr. Childers shall retain his position on the same terms
as in the agreement or, in the alternative, the Corporation shall compensate Mr.
Childers in the same manner as provided for in the agreement.
16
<PAGE> 18
Change in Control Agreements
Effective December 30, 1994, the Corporation, and where applicable, PCS
Sales, entered into Change in Control Agreements with certain senior executives,
including Mr. Doyle and Mr. Gugulyn. The initial term of each Change in Control
Agreement was to December 31, 1997; however, the Change in Control Agreements
were automatically renewed to December 31, 1998 and continue to be subject to
automatic renewal for successive one year terms until the employee reaches age
65 or unless either party gives notice of termination. A change in control of
the Corporation will be deemed to have occurred if:
(a) there is a significant (50 percent or more) change in the Board within
any two year period, not including replacement directors approved for
nomination by the Board;
(b) there occurs an amalgamation, merger, consolidation, or other
transaction whereby the control of the existing shareholders of the
Corporation is diluted to less than 50 percent control of the surviving
or consolidated entity;
(c) there occurs a significant (50 percent or more based on book value)
sale or other disposition of the fixed assets of the Corporation within
any twelve month period; or
(d) any party acquires 20 percent or more of the voting securities of the
Corporation.
Benefits pursuant to the Change in Control Agreements will be payable upon
termination of the executive's employment within two years following a change in
control. Termination of the executive's employment is defined to include the
executive ceasing to be employed for any reason, including constructive
dismissal, except by reason of death, disability, resignation or voluntary
retirement, or dismissal for dishonest or wilful misconduct.
The severance benefit entitlements upon termination of employment following
a change in control of the Corporation are:
(a) a lump sum payment of three times the executive's base salary and
average bonus for the last three years;
(b) a lump sum payment of the pro-rata target bonus for the short year in
which termination occurs;
(c) immediate vesting and cash out of all outstanding LTIP awards;
Payments to be made pursuant to the foregoing and relating to the
employee's bonus may be deferred by the executive for up to three years or for
such other period as may be permitted by the Income Tax Act (Canada);
(d) a credit of three additional years of service under the Supplemental
Plan;
(e) three year continuation of medical, disability, and group term life
insurance. These terminate, however, upon obtaining similar coverage
from a new employer or upon commencement of retiree benefits; and
(f) financial or outplacement counselling to a maximum of Cdn$10,000.
All outstanding non-exercisable options granted to the executive pursuant
to the Corporation's stock option plan for officers and key employees will
become exercisable upon the occurrence of a change in control. In the event no
public market for the shares exists, the Corporation (or PCS Sales as the case
may be) will compensate the executive for the value of his options on the basis
of a share value approved by the shareholders of the Corporation upon a change
in control, or, if no such value has been approved, then based upon the market
value of the Shares when last publicly traded. For Mr. Doyle, there is provision
for a "gross up" of payments to cover excise taxes if payable in respect of such
benefits.
17
<PAGE> 19
Other
The current severance policy of the Corporation for termination without
cause, which is applicable to all salaried employees including the Named
Executive Officers, is notice of impending termination, or payment of salary in
lieu of notice, equivalent to two weeks for each complete year of service. Such
policy is superseded by specific termination provisions contained in a written
agreement.
COMPENSATION COMMITTEE
COMPOSITION OF THE COMPENSATION COMMITTEE
The following individuals served as members of the Compensation Committee
during the fiscal year which ended on December 31, 1999.
Denis J. Cote
Donald E. Phillips
Daryl K. Seaman
Barrie A. Wigmore
Mr. Cote served as Chairman of the Committee until his death in November
1999. Following Mr. Cote's death, Mr. Phillips assumed the duties of Chairman.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board (the "Committee") is, at present,
composed of three directors who are neither officers nor former officers of the
Corporation. The Committee is charged with formulating and making
recommendations to the Board in respect of compensation issues relating to
directors and senior officers of the Corporation. The Committee also makes
recommendations regarding the Corporation's Stock Option Plans and administers
its Short and Long-Term Incentive Plans, each in accordance with its terms. In
addition, the Committee, in consultation with the Chief Executive Officer,
considers and reports to the Board regarding corporate succession matters.
Executive compensation policies are designed with the objective of
attracting and retaining qualified executives by providing compensation packages
which are competitive within the marketplace and by compensating them in a
manner which encourages individual performance consistent with shareholder
expectations.
Salary
The Corporation has adopted a "broad band" salary system for senior
executives (i.e. vice presidents and above, but not including the chief
executive officer or subsidiary presidents) of the Corporation. Currently, under
the broad band system a salary range is established by the Compensation
Committee for each senior executive level after consultation with independent
compensation consultants. Each individual's salary is then set within the
applicable range taking into account the individual's duties, performance and
experience. Individual executive salaries are subject to approval by the Chief
Executive Officer and the Compensation Committee of the Board.
The Corporation is currently completing a review of the broad band salary
system. It is expected that any modifications will be effective for the year
2000 and subsequent years.
Short-Term Incentive Compensation
The Corporation's Short-Term Incentive Plan is intended to aid in
developing strong corporate management by providing financial incentives to key
employees to achieve objectives which contribute materially to the Corporation's
success. The plan presently provides for incentive awards based on an
individual's performance, position with the Corporation and the financial
results of the Corporation. Ranges of incentive awards are established for each
position, which awards are expressed as a percentage of annual
18
<PAGE> 20
salary. The actual percentage used in calculating the award is generally
determined by the Corporation's return on equity in relation to a
pre-established target, subject to adjustment based upon the individual's
performance and such other factors as the Committee deems appropriate. Under the
terms of the plan, generally no payments are made when the return on equity is
less than 50% of the target set by the Board for that year. For senior
executives, which include the Named Executive Officers, incentive awards range
from 20% to 100% of salary depending upon actual return on equity as compared to
target return on equity once the minimum threshold requirement has been met, all
subject to adjustment based on the Executive's performance and such other
factors as the Committee deems appropriate.
The Corporation is currently completing a review of the Corporation's
Short-Term Incentive Plan with a view to ensuring it is best structured to meet
the stated objectives. It is expected that any modifications to the plan will be
effective for the year 2000 and subsequent years.
Long-Term Incentive Compensation
The Corporation's Long-Term Incentive Plan, as amended, is designed to
retain high-potential, high-value employees, to recognize and reward their
significant contributions to the long-term success of the Corporation, and to
align their interests more closely with the shareholders of the Corporation. The
plan provides for the discretionary grant of units to eligible employees
effective January 1, 1994 and January 1 every three years thereafter and on such
other dates as circumstances warrant. A unit is a notional amount equal to the
market value of a common share of the Corporation. The units are divided equally
into "part one" and "part two" units upon their grant. The number of units
granted to an eligible employee is approximately three times the amount
determined by dividing the employee's target bonus by the closing price of the
shares on the New York Stock Exchange on the first day preceding the date of the
grant of the units in which a round lot of shares was traded on such Exchange.
The units are redeemed for cash on the basis of their "market value" on a
redemption date. The "market value" of a unit is the closing price of the shares
on the New York Stock Exchange on the first day preceding the redemption date in
which a round lot of shares was traded on such Exchange. Cash amounts payable
under the plan to employees who receive salary in Canadian currency shall be
converted to Canadian currency on the redemption date, based on the published
exchange rate of the Bank of Canada in effect as of the close of business on the
business day immediately preceding the redemption date. Redemption dates are
determined by the Committee in accordance with the terms of the plan. The
redemption date for the part one units may not be later than the last day of the
second calendar year following the calendar year of the grant of the units.
One-third of the part two units must be redeemed on or before each of the first,
second and third anniversary of the grant of the units. However, in no event
shall the redemption date for the part two units be later than the end of the
second calendar year following the calendar year of the grant of the units.
The number of part one units eligible to be redeemed on a redemption date
is subject to adjustment based upon the performance of the Corporation and the
employee, in accordance with criteria established by the Committee from time to
time. The Committee may, on or before a redemption date for part one units,
reduce or increase an employee's part one units by a maximum of 50%.
As with the Short-Term Incentive Plan, the Corporation is also completing a
review of the Long-Term Incentive Plan with a view to ensuring it is best
structured to meet the stated objectives. It is expected that any modifications
to the plan will be effective for the year 2000 and subsequent years.
The interests of management are also tied to the interests of the
Corporation's shareholders through the annual grant of options to executives and
other key employees pursuant to the Corporation's Stock Option Plan -- Officers
and Key Employees. The options are granted at 100% of market value, become
exercisable over two years (or earlier in the event of a "change of control" as
defined in the plan) and expire after ten years. Options are granted having
regard to the position in and contribution made to the Corporation by the
individual involved. The number of shares subject to options granted to an
individual is a function of the individual's position within the Corporation and
his or her ability to affect corporate performance.
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<PAGE> 21
In considering whether to grant options and how many shares are to be
subject to options, the Committee considers the aggregate number of options
outstanding and is also guided in such matters by applicable regulatory
constraints.
In relative terms, greater emphasis within the compensation package is
given to annual cash compensation (salary and short-term incentives) than to
long-term incentives and options. However, each element of the package is
designed to complement the others in enabling the Corporation to achieve the
objectives of its compensation policies.
Chief Executive Officer Compensation
The terms and conditions of Mr. Childers' employment with the Corporation
as Chief Executive Officer were governed by an employment agreement. There is no
written employment agreement with Mr. Doyle.
The Committee reviews annually the CEO's salary, any awards under the Short
and Long-Term Incentive Plans and any grant of options under the Corporation's
Stock Option Plan -- Officers and Key Employees. The CEO's annual salary is
determined primarily on the basis of his individual performance and the
performance of the Corporation. While no mathematical weighting formula exists,
the Committee considers all factors which it deems relevant including the net
income of the Corporation, the Corporation's share price, the duties and
responsibilities of the CEO and current compensation levels. Awards pursuant to
the Short and Long-Term Incentive Plans and under the Corporation's Stock Option
Plan -- Officers and Key Employees are made in accordance with the plans as
outlined above.
Reference is also made to the compensation of chief executive officers of
an appropriate comparable group of companies selected by the Corporation. The
comparison of the Corporation's CEO compensation to the comparable group
incorporates many factors including the relative size of the companies, their
profitability and share price, the duties of the chief executive officer and any
other extenuating or special circumstances.
Messrs. Childers' and Doyle's compensation for 1999 as set forth in the
Summary Compensation Table was determined in accordance with the foregoing.
Submitted on behalf of the Compensation Committee: Donald E. Phillips,
Daryl K. Seaman, and Barrie A. Wigmore.
20
<PAGE> 22
PERFORMANCE GRAPHS
The following graph illustrates the Corporation's cumulative shareholder
return, assuming reinvestment of dividends, by comparing a Cdn$100 investment in
the Corporation's Shares at December 31, 1994 to the return on the TSE 300 Total
Return Index.
CUMULATIVE TOTAL RETURN
BASED ON REINVESTMENT OF CDN$100 BEGINNING DECEMBER 31, 1994
[Performance Graph]
<TABLE>
<CAPTION>
POTASH CORPORATION OF
SASKATCHEWAN INC. - TSE LISTING TSE 300
------------------------------- -------
<S> <C> <C>
1994/12 100 100
1995/12 207 115
1996/12 254 147
1997/12 262 169
1998/12 220 166
1999/12 160 219
</TABLE>
SOURCE: GEORGESON SHAREHOLDER COMMUNICATIONS INC.
21
<PAGE> 23
The following graph illustrates the Corporation's cumulative shareholder
return, assuming reinvestment of dividends, by comparing a $100 investment in
the Corporation's Shares at December 31, 1994 to the return on the Standard &
Poor's 500 Index and the shareholder return of two peer groups of fertilizer
producers and marketers selected by the Corporation.
CUMULATIVE TOTAL RETURN
BASED ON REINVESTMENT OF $100 BEGINNING DECEMBER 31, 1994
[Cumulative Total Return Graph]
<TABLE>
<CAPTION>
POTASH CORPORATION OF S&P 500
SASKATCHEWAN INC. SELF-SELECTED PEER ------- SELF-SELECTED PEER
NYSE LISTING GROUP GROUP 2
--------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
1994/12 100 100 100 100
1995/12 213 162 138 169
1996/12 259 163 169 166
1997/12 256 133 226 144
1998/12 200 97 290 97
1999/12 153 75 351 69
</TABLE>
SOURCE: GEORGESON SHAREHOLDER COMMUNICATIONS INC.
The Self-selected Peer Group consists of:
<TABLE>
<CAPTION>
COMPANY SYMBOL
------- ------
<S> <C>
Agrium Inc.* AGU
IMC Global Inc. IGL
Mississippi Chemical Corp. GRO
Phosphate Resource Partners LP** PLP
Terra Industries Inc. TRA
</TABLE>
* Toronto Stock Exchange listing.
** formerly Freeport McMoran Resource Partners LP.
22
<PAGE> 24
The Self-selected Peer Group 2 consists of:
<TABLE>
<CAPTION>
COMPANY SYMBOL
- ------- ------
<S> <C>
Agrium Inc.* AGU
IMC Global Inc. IGL
Mississippi Chemical Corp. GRO
Terra Industries Inc. TRA
</TABLE>
* Toronto Stock Exchange listing.
For this and future years, the Corporation has elected to remove Phosphate
Resource Partners LP (PLP) from its self-selected peer group. PLP is no longer
used by the Corporation internally as a comparator and given PLP's structure and
trading characteristics, the Corporation did not feel its continued inclusion in
the peer group was warranted. Therefore, Peer Group 2 will be the peer group
used in subsequent years.
COMPENSATION OF DIRECTORS
Each director who is not also an officer or employee of the Corporation (an
"outside director") receives from the Corporation an annual retainer of $25,000,
a per diem fee of $1,000 for meetings he or she attends and a travel fee of $500
per day where travel is required on a day or days on which a meeting does not
occur. Outside directors receive an additional $2,500 per year, if a chairman of
a Board committee. Each outside director who is a member of a Board committee
receives a per diem fee of $1,000 for meetings he or she attends, provided such
meetings are not held the same day as a Board meeting. Outside directors are
also reimbursed for expenses incurred in discharging their responsibilities.
On November 9, 1999, the Board granted options with limited transferability
(pursuant to the Stock Option Plan -- Directors) to purchase 3,600 Shares to
each of the 13 outside directors of the Corporation and to Mr. Childers, subject
to the terms of the plan. Such options have an exercise price equal to the fair
market value of the Shares at the time the options were granted (Cdn $64.20 per
Share for non-U.S. resident directors and $43.6875 for U.S. resident directors,
respectively), become exercisable over two years (or earlier in the event of a
"change in control" of the Corporation as defined in the Stock Option Plan --
Directors) and expire ten years after the date on which they were granted.
CORPORATE GOVERNANCE
This statement of corporate governance is made pursuant to the requirements
and guidelines (the "Guidelines") of The Toronto Stock Exchange relating to
disclosure of corporate governance practices.
MANDATE OF THE BOARD
The Board has the duty to direct the management of the business and affairs
of the Corporation pursuant to the powers vested in it by The Business
Corporations Act (Saskatchewan) and by the articles and bylaws of the
Corporation, and in accordance with obligations imposed by law.
In furtherance of the discharge of such duties and obligations, the Board
holds 8 regularly scheduled meetings annually and additional meetings to
consider particular issues as required. In 1999 the Board held 11 meetings.
The Board, either directly or through its committees, is called upon to:
(i) approve the Corporation's annual operating and capital budgets, all
material acquisitions and divestitures and the scope of its business
activities;
(ii) ensure that appropriate systems are in place to manage the
Corporation's principal business risks, including financial,
environmental, and regulatory risks;
23
<PAGE> 25
(iii) monitor and approve strategic planning, succession planning and
appointment and remuneration of senior management;
(iv) monitor and assess the integrity of the Corporation's internal
controls and management information systems; and
(v) establish and monitor a corporate disclosure policy.
BOARD COMPOSITION
As of February 29, 2000 fourteen directors comprised the Board. Of that
number twelve were non-management or outside directors (a director that is not
an officer or employee of the Corporation or its affiliates) and eleven were
unrelated directors (a director free from any relationship with the Corporation
which could, or could reasonably be perceived to, materially interfere with the
director's ability to act with a view to the best interests of the Corporation,
other than arising from shareholding). In determining whether directors were
related or unrelated the Board applied the test set forth in the Guidelines.
As of February 29, 2000 the Corporation did not have a significant
shareholder as defined in the Guidelines.
The Board has considered its size and has concluded that a target board
size of 12 members be established, to be achieved through a staged process which
would allow for an orderly retirement of existing board members and recruitment
of new board members. For 2000/2001, 13 individuals are being nominated for
election as directors.
INDEPENDENT BOARD ACTION
At present the Chairman of the Board is also an officer of the Corporation,
but is not a member of management.
The Board, with twelve outside directors, eleven of whom are unrelated
directors, can and does function independently of management. There are five
Committees of the Board, each of which plays a significant role in the discharge
of the Board's duties and obligations. Each Committee is composed wholly of
outside directors, except the Executive Committee which is chaired by the
Chairman and includes the Chief Executive Officer. Each Committee may, if and
when considered appropriate by it to do so, retain the services of outside
advisers. The Board has implemented a procedure for the Executive Committee to
authorize a director to engage an outside adviser at the Corporation's expense
in appropriate circumstances. The Board has established a policy of convening
in-camera (i.e. without management present) during each regularly scheduled
meeting of the Board.
COMMITTEES
Executive Committee
The Executive Committee is presently composed of four directors, one of
whom is, in accordance with the bylaws of the Corporation, the Chief Executive
Officer. Of the other three committee members, one is the Chairman and one is a
related director. Between meetings of the Board, the Executive Committee has
such powers as from time to time are vested in it by the Board.
Audit Committee
The Audit Committee is composed of three unrelated directors. The committee
meets with the Corporation's financial management personnel, internal auditor
and external auditor at least once each quarter to review the Corporation's
financial reporting practices, procedures and internal controls and to authorize
the release of unaudited quarterly financial statements, and reviews the
Corporation's annual financial statements prior to their submission to the Board
for approval. The committee also recommends to the Board the external auditors
to be proposed to the shareholders for appointment at the annual meeting of
shareholders.
24
<PAGE> 26
Compensation Committee
The Compensation Committee is presently composed of three unrelated
directors. This committee formulates and makes recommendations to the Board in
respect of compensation issues relating to senior management of the Corporation
and in respect of corporate salary and benefits policy. It reviews and approves,
on an annual basis, the Corporation's salary administration program. It is
responsible for the annual report on executive compensation, and in consultation
with the Chief Executive Officer, considers and reports to the Board regarding
corporate succession matters. The Committee, from time to time, reviews the
adequacy and form of directors' compensation and makes recommendations in this
regard to the Board.
Environmental Affairs Committee
The Environmental Affairs Committee is composed of four unrelated
directors. The committee works to ensure that the Corporation's commitment to
the protection of the environment is fulfilled. It routinely receives
environmental audit reports for review and discussion with senior management and
monitors environmental issues in other areas of corporate activity such as
off-site transportation, distribution and storage of product. The committee
reviews and discusses with management potential changes to regulatory
requirements and to corporate environmental policy.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee is presently composed of
5 unrelated directors. The committee is responsible for examining and reporting
to the Board on matters relating to governance of the Corporation and for
recommending nominees for election or appointment as directors. In addition, the
committee develops, reviews and recommends to the Board for approval policies
and procedures relating to corporate governance as are appropriate:
(i) to maintain trust and confidence in the balanced attention to the
different interests of the Corporation's shareholders, employees,
customers and other communities of interest; and
(ii) to ensure the effective and timely discharge by the Corporation's
directors, officers and senior management of the responsibilities and
duties of each.
DECISIONS REQUIRING BOARD APPROVAL
The Board is responsible for all decisions relating to the Corporation
which, by law, cannot be delegated to Board committees or management.
The Board reviews and approves, among other things, the Corporation's
annual budget, unbudgeted capital expenditures which exceed one million dollars
(Cdn), debt and equity financing, changes to capital structure, lease
commitments with a net present value in excess of $5 million, material
acquisitions and divestitures, appointment and remuneration of the Chief
Executive Officer, directors to be proposed for election at the Corporation's
annual meeting, directors compensation, and any other matter which is of
material significance to the Corporation.
DIRECTOR RECRUITMENT AND BOARD EFFECTIVENESS
The Corporate Governance and Nominating Committee acts as the nominating
committee of the Board. Prior to recruiting prospective board members it reviews
the strengths and weaknesses of the current Board and identifies the specific
expertise and other relevant attributes which new directors should possess.
A policy of the Corporation has been established which provides that, with
the exception of directors holding such office on January 24, 2000 (the date of
adoption of the policy), directors will not stand for re-election after reaching
the age of seventy years.
The Board has not established any formal measures for assessing Board,
committee and individual director effectiveness. An informal evaluation forms
part of the annual nominating process, with members of
25
<PAGE> 27
the Corporate Governance and Nominating Committee discussing individuals'
performance, as required, with the Chief Executive Officer and other members of
the Board.
New directors are provided such orientation or education programs regarding
the Corporation as is necessary or appropriate in the circumstances, including
briefings by senior management and the delivery of a package of relevant written
information.
SHAREHOLDER COMMUNICATION
The Corporation has adopted a corporate disclosure policy which calls for
the timely public dissemination of material information. Shareholder questions,
comments and concerns may be made to the Corporation's Senior Vice President,
Corporate Relations, who is responsible for implementing the disclosure policy,
to the Corporate Secretary, or to the Corporation's transfer agent.
BOARD'S EXPECTATIONS OF MANAGEMENT
The Board of Directors has adopted position descriptions for the Chairman
of the Board and for the Chief Executive Officer.
Management of the Corporation is expected to perform the following
functions:
(i) provide timely accurate reports to the Board on the business and
affairs of the Corporation, including annual reports regarding
strategic planning and risk management and control, and on other
matters of material significance to the Corporation;
(ii) conduct an annual budgeting process and monitor the Corporation's
performance as compared to the annual budget approved by the Board;
(iii) make such decisions and take, on a timely basis, such actions as are
necessary for the Corporation to discharge its obligations and meet
applicable requirements, while seeking to enhance shareholder value;
and
(iv) review on an ongoing basis the Corporation's strategies and their
implementation in all key areas of the Corporation's activities.
APPOINTMENT OF AUDITORS
Proxies solicited hereby will be voted to reappoint the firm of Deloitte &
Touche LLP, the present auditors, as auditors of the Corporation to hold office
until the next annual meeting of shareholders, unless the shareholder signing
such proxy specifies otherwise. The affirmative vote of a majority of Shares
voted on such matter is required to reappoint the firm of Deloitte & Touche LLP,
as auditors of the Corporation. A representative of Deloitte & Touche LLP is
expected to attend the Meeting. At that time the representative will have the
opportunity to make a statement if he or she desires and will be available to
respond to appropriate questions.
MANNER OF VOTING PROXIES
PROXIES SOLICITED HEREBY WILL BE VOTED OR WITHHELD FROM VOTING ON THE
ELECTION OF DIRECTORS AND VOTED FOR OR AGAINST OR WITHHELD FROM VOTING ON THE
APPOINTMENT OF AUDITORS, IN ACCORDANCE WITH ANY SPECIFICATIONS MADE ON THE
PROXY. IN THE ABSENCE OF ANY SUCH SPECIFICATION, SUCH PROXIES WILL BE VOTED FOR
THE ELECTION OF THE DIRECTORS AND THE APPOINTMENT OF THE AUDITORS SPECIFIED IN
THIS PROXY CIRCULAR.
The Board knows of no matters to come before the Meeting other than the
matters referred to in the Notice of Annual Meeting. However, if any other
matters which are not now known to the Board should properly come before the
Meeting or any adjournment thereof, or if amendments or variations to the
matters referred to in the Notice of Annual Meeting are presented for action at
the Meeting or any adjournment
26
<PAGE> 28
thereof, the proxies will be voted on such matters, amendments or variations in
accordance with the best judgement of the person voting the proxy which confers
such discretionary authority.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Corporation's
annual meeting of shareholders in 2001 and which such shareholders are entitled
to request be included in the management proxy circular for that meeting must be
received at the Corporation's principal executive offices not later than
February 10, 2001 under The Business Corporations Act (Saskatchewan) and not
later than November 28, 2000 under Rule 14a-8(e)(2) promulgated under the U.S.
Securities Exchange Act of 1934.
GENERAL
In respect of matters to be voted on at the Meeting, where a broker may not
be permitted to vote Shares held in street name in the absence of instructions
from the beneficial owner of the Shares, such Shares will be considered not
entitled to vote, although such Shares and Shares for which the holders abstain
from voting will count for purposes of determining the presence of a quorum.
Copies of the Corporation's most recent Form 10-K together with any
document incorporated by reference therein, the most recent annual financial
statements together with the accompanying report of the auditor, and any interim
financial statements filed subsequent to the filing of the most recent annual
financial statements may be obtained on request from the Secretary of the
Corporation.
The contents and the sending of this management proxy circular have been
approved by the Board.
[John Hampton signature]
JOHN L.M. HAMPTON
Secretary
March 27, 2000
27
<PAGE> 29
POTASH CORPORATION
OF SASKATCHEWAN INC. LOGO
<PAGE> 30
PROXY POTASH CORPORATION OF SASKATCHEWAN INC.
- --------------------------------------------------------------------------------
FOR USE AT THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 11, 2000.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE CORPORATION.
The undersigned holder of common shares
("Shares") of Potash Corporation of
Saskatchewan Inc. (the "Corporation")
hereby appoints Charles E. Childers,
Chairman of the Board, or failing him,
William J. Doyle, President and Chief
Executive Officer, or failing him, Wayne
R. Brownlee, Senior Vice President,
Finance and Treasurer and Chief Financial
Officer, or failing him, John L.M.
Hampton, Senior Vice President, General
Counsel and Secretary, or instead of any
of the foregoing,
- ------------------------------------------ ,
as proxy for the undersigned to attend,
vote and act for and on behalf of the
undersigned AT THE ANNUAL MEETING OF
SHAREHOLDERS OF THE CORPORATION TO BE HELD
AT THE DELTA BESSBOROUGH, 601 SPADINA
CRESCENT EAST, SASKATOON, SASKATCHEWAN,
CANADA ON THURSDAY, THE 11TH DAY OF MAY,
2000 (THE "MEETING") AT 10:30 A.M., and at
any adjournments thereof, and hereby
revokes any proxy previously given by the
undersigned.
1. A SHAREHOLDER HAS THE RIGHT TO APPOINT
A PERSON WHO NEED NOT BE A SHAREHOLDER, TO
REPRESENT HIM AND TO ATTEND AND ACT ON HIS
BEHALF AT THE MEETING, OTHER THAN THE
NOMINEES DESIGNATED ABOVE, AND MAY
EXERCISE SUCH RIGHT BY INSERTING THE NAME
OF HIS NOMINEE IN THE SPACE PROVIDED ABOVE
FOR THAT PURPOSE.
- -------------------------------------------
- -------------------------------------------
- -------------------------------------------
- -------------------------------------------
2. The Shares represented by this proxy
will be voted in accordance with any
choice specified in this proxy. IF NO
SPECIFICATION IS MADE, THE PERSONS NAMED
ABOVE WILL VOTE SUCH SHARES FOR THE
ELECTION OF THE DIRECTORS NAMED IN THIS
PROXY AND FOR THE APPOINTMENT OF DELOITTE
& TOUCHE LLP AS AUDITORS OF THE
CORPORATION.
3. If this proxy is not dated, it shall be
deemed to be dated on the date on which
this proxy was mailed by the Corporation.
Without limiting the general powers hereby conferred, the Shares represented by
this proxy are to be:
1. [ ] VOTED FOR the election as directors of all nominees listed below (except
as marked to the contrary below), or
[ ] WITHHELD FROM VOTING for all nominees listed below.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.
<TABLE>
<S> <C> <C> <C>
I.B. Anderson W.Z. Estey P.J. Schoenhals J.G. Vicq
D.J. Bourne D.J. Howe D.K. Seaman B.A. Wigmore
C.E. Childers D.E. Phillips E.R. Stromberg T.J. Wright
W.J. Doyle
</TABLE>
2. Voted FOR [ ], or AGAINST [ ], or WITHHELD FROM VOTING [ ] on, the
appointment of Deloitte & Touche LLP as auditors of the Corporation.
Dated the __________ day of _____________________________ , 2000.
- ------------------------------------------
Name of Shareholder (please print)
- ------------------------------------------
Signature of Shareholder
POTASH CORPORATION OF SASKATCHEWAN INC.
LOGO
