Plan of Arrangement



 







EXHIBIT 4.3




PLAN OF ARRANGEMENT MADE PURSUANT TO
SECTION 192



OF THE CANADA BUSINESS CORPORATIONS
ACT



1







 




TABLE OF CONTENTS



	 	 	 	 	 	 
					Page
					

	
    ARTICLE 1 — INTERPRETATION
    	 	
    3
    
	 	
    
    1.1
    

    	 	
    Definitions
    	 	
    3
    
	 	
    
    1.2
    

    	 	
    Certain Rules of Interpretation
    	 	
    8
    
	 	
    
    1.3
    

    	 	
    Schedules
    	 	
    9
    
	
    ARTICLE 2 — PURPOSE AND EFFECT OF THE
    ARRANGEMENT
    	 	
    9
    
	 	
    
    2.1
    

    	 	
    Arrangement
    	 	
    9
    
	 	
    
    2.2
    

    	 	
    Effectiveness
    	 	
    9
    
	
    ARTICLE 3 — ARRANGEMENT
    	 	
    9
    
	 	
    
    3.1
    

    	 	
    Events Occurring Within the Plan
    	 	
    9
    
	 	
    
    3.2
    

    	 	
    Adjustments to Cash Option and Unit Option
    Elections
    	 	
    13
    
	 	
    
    3.3
    

    	 	
    Manner of Making Elections
    	 	
    14
    
	
    ARTICLE 4 — STATED CAPITAL ADDITIONS
    	 	
    15
    
	 	
    
    4.1
    

    	 	
    Additions to Stated Capital
    	 	
    15
    
	
    ARTICLE 5 — NOTE AND PREFERRED SHARE
    DETERMINATION
    	 	
    15
    
	 	
    
    5.1
    

    	 	
    Subordinated Notes and Preferred Shares
    	 	
    15
    
	 	
    
    5.2
    

    	 	
    Luscar/ CONSOL Subordinated Note and Luscar/
    CONSOL Note
    	 	
    15
    
	
    ARTICLE 6 — DISSENTING SHAREHOLDERS
    	 	
    16
    
	 	
    
    6.1
    

    	 	
    Rights of Dissent
    	 	
    16
    
	 	
    
    6.2
    

    	 	
    Recognition of Dissenting Shareholders
    	 	
    16
    
	
    ARTICLE 7 — OUTSTANDING CERTIFICATES
    	 	
    16
    
	 	
    
    7.1
    

    	 	
    Outstanding Certificates
    	 	
    16
    
	 	
    
    7.2
    

    	 	
    Provision of Consideration
    	 	
    16
    
	 	
    
    7.3
    

    	 	
    Depository
    	 	
    17
    
	 	
    
    7.4
    

    	 	
    No Entitlement to Interest
    	 	
    17
    
	 	
    
    7.5
    

    	 	
    Certificates
    	 	
    17
    
	
    ARTICLE 8 — AMENDMENTS
    	 	
    17
    
	 	
    
    8.1
    

    	 	
    Amendments
    	 	
    17
    
	 	
    
    8.2
    

    	 	
    Proposed Amendments
    	 	
    17
    
	 	
    
    8.3
    

    	 	
    Effectiveness of Amendments
    	 	
    17
    
	
    SCHEDULE “A” FORDING CANADIAN COAL
    TRUST EXCHANGE OPTION PLAN
    	 	
    
    
	
    SCHEDULE “B” FORDING CANADIAN COAL
    TRUST NOTE
    	 	
    
    
	
    SCHEDULE “C” FORDING NEW VOTING SHARES
    AND NEW NON-VOTING SHARES
    	 	
    
    
	
    SCHEDULE “D” 4123212 CANADA LTD. COMMON
    SHARES
    	 	
    
    
	
    SCHEDULE “E” 4123212 CANADA LTD.
    NOMINAL NOTE
    	 	
    
    
	
    SCHEDULE “F” 4123212 CANADA LTD.
    PREFERRED SHARES
    	 	
    
    
	
    SCHEDULE “G” 4123212 CANADA LTD.
    PROMISSORY NOTE
    	 	
    
    
	
    SCHEDULE “H” LUSCAR/ CONSOL NOTE
    	 	
    
    
	
    SCHEDULE “I” FORDING COAL PARTNERSHIP
    PROMISSORY NOTE
    	 	
    
    




2







 




ARTICLE 1



INTERPRETATION




1.1 Definitions


     
In this Plan of Arrangement, the following terms
have the following respective meanings:




			
	 	(a)	
    “Arrangement”
    means the arrangement under Section 192 of the CBCA
    described in this Plan of Arrangement involving the Corporation,
    its Securityholders, FCL, Subco, the Fund, Teck, Westshore,
    TBCI, QCP, Luscar, CONSOL, Sherritt, SCPII and OTPP;
    
	 
	 	(b)	
    “Business
    Day” means a day, which is not a
    Saturday, Sunday or statutory holiday in the Provinces of
    Alberta, British Columbia and Ontario, on which the principal
    commercial banks in downtown Calgary, Toronto and Vancouver are
    generally open for the transaction of commercial banking
    business;
    
	 
	 	(c)	
    “Canadian Tax
    Act” means the Income Tax
    Act, R.S.C. 1985, c.1 (5th Supp.), as amended;
    
	 
	 	(d)	
    “Cash
    Option” means the alternative
    available to Participating Shareholders under the Arrangement to
    elect to receive $35.00 in cash for each Common Share held,
    subject to pro ration;
    
	 
	 	(e)	
    “CBCA”
    means the Canada Business Corporations Act, R.S.C. 1985,
    C.c-44, as amended;
    
	 
	 	(f)	
    “Certificate of
    Arrangement“ means the
    certificate or proof of filing of the Articles of Arrangement to
    be issued pursuant to Section 192(7) of the CBCA;
    
	 
	 	(g)	
    “Combination
    Agreement” means the combination
    agreement and schedules thereto dated January 12, 2003
    between the Corporation, Teck, Westshore, OTPP and Sherritt, as
    the same may be amended in accordance with its terms;
    
	 
	 	(h)	
    “Common
    Shares” means the common shares
    in the capital of the Corporation;
    
	 
	 	(i)	
    “Common Share Trading
    Price” means the weighted average
    trading price of the Common Shares on the TSX for the five
    trading days immediately preceding the earlier of the date upon
    which the election for the Cash Option or the Unit Option must
    be made and the Effective Date or such other formula approved by
    the board of directors of New Fording in the event such trading
    prices are not reflective of the fair market value of the
    Common Shares;
    
	 
	 	(j)	
    “CONSOL”
    means CONSOL Energy Inc., CONSOL Energy Canada Ltd. and/or
    CONSOL of Canada Inc., as the case may be;
    
	 
	 	(k)	
    “Corporation”
    or “Fording” means Fording Inc., a corporation
    existing under the CBCA;
    
	 
	 	(l)	
    “CP
    Transaction” means the
    transaction completed on October 1, 2001 pursuant to which
    Fording became a publicly traded corporation, a predecessor to
    Fording having previously been indirectly owned by a single
    shareholder, Canadian Pacific Limited;
    
	 
	 	(m)	
    “CP
    Optionholders” means the former
    Canadian Pacific Limited optionholders who held options and
    accompanying share appreciation rights under the key employee
    stock option plan of Canadian Pacific Limited, which options and
    stock appreciation rights were replaced, in part, by options and
    accompanying share appreciation rights issued under
    Fording’s key employee stock option plan pursuant to a plan
    of arrangement setting forth the steps comprising the CP
    Transaction;
    
	 
	 	(n)	
    “Depository”
    means Computershare Trust Company of Canada as the registrar and
    transfer agent of the Units;
    
	 
	 	(o)	
    “Director”
    means the Director appointed under Section 260 of the CBCA;
    




3






 




			
	 	(p)	
    “Dissenting
    Shareholder” means a registered
    Shareholder on January 23, 2003 who has duly exercised, and
    who does not, prior to the time at which the resolution of
    Securityholders authorizing the Arrangement is approved,
    withdraw or otherwise relinquish the dissent rights available to
    it in connection with the Arrangement;
    
	 
	 	(q)	
    “Effective
    Date” means the date shown on the
    Certificate of Arrangement;
    
	 
	 	(r)	
    “Effective
    Time” means the first moment in
    time on the Effective Date;
    
	 
	 	(s)	
    “Elected Cash
    Amount” has the meaning set out
    in Section 3.2(b)(i);
    
	 
	 	(t)	
    “Elected Unit
    Amount” means the aggregate
    number of Common Shares in respect of which holders of Common
    Shares have elected or are deemed to have elected to receive
    ultimately Units in respect of their Common Shares, prior to any
    pro ration hereunder;
    
	 
	 	(u)	
    “Election
    Form” means the green election
    form for use by Participating Shareholders respecting the
    election of the Cash Option, the Unit Option or a combination
    thereof;
    
	 
	 	(v)	
    “Exchange Option
    Plan” means the Unit option plan
    of the Fund created as part of the Arrangement pursuant to which
    Options will ultimately be exchanged for Exchange Options in the
    form attached to this Plan as Schedule “A”;
    
	 
	 	(w)	
    “Exchange
    Options” means options to
    purchase Units, and any accompanying unit appreciation rights,
    to be issued under the Exchange Option Plan;
    
	 
	 	(x)	
    “Excluded
    Assets” means all of the
    outstanding shares and debt of NYCO Minerals Inc. and 627066
    Alberta Ltd., the Initial Unit and Fording’s rights and
    obligations in connection with its interest in the Esquimault
    and Nanaimo railway lands including a former mining operation
    located at Mount Washington on Vancouver Island;
    
	 
	 	(y)	
    “Existing Option
    Plans” means, collectively, the
    Corporation’s Directors’ Stock Option Plan and its Key
    Employee Stock Option Plan;
    
	 
	 	(z)	
    “FCL”
    means Fording Coal Limited/Les Charbons Fording, Limitée, a
    corporation existing under the CBCA;
    
	 
	 	(aa)	
    “Fording
    Royalty” means the participation
    right retained by New Fording to receive a royalty to be
    determined on an arm’s length commercial basis in respect
    of expansion of production, if any, from lands forming part of
    the Prairie Operations beyond levels on January 12, 2003,
    such royalty not to exceed 5% of Gross Revenues from such
    expansion, excluding for this purpose only the planned 2005
    expansion of the Genesee mine;
    
	 
	 	(bb)	
    “Fund”
    means the Fording Canadian Coal Trust, a trust to be established
    under the laws of Alberta pursuant to a declaration of trust;
    
	 
	 	(cc)	
    “Fund
    Notes” means the demand
    non-interest bearing notes of the Fund, each with a principal
    amount of $35.00, issuable pursuant to the Plan of Arrangement,
    substantially in the form attached as Schedule “B”;
    
	 
	 	(dd)	
    “Gross
    Revenue” means, for the purpose
    of the definition of “Fording Royalty” above, the
    selling price of product without any deductions or, in the case
    of product that is deemed to be sold, the fair market value for
    such product;
    
	 
	 	(ee)	
    “Information
    Circular” means, collectively,
    the Notice of Special Meeting, Notice of Petition and
    Information Circular of the Corporation dated November 20,
    2002 as supplemented and amended by the first supplement thereto
    dated December 8, 2002, the second supplement thereto dated
    December 30, 2002 and the third supplement to which this
    Plan of Arrangement is attached;
    




4







 




			
	 	(ff)	
    “Initial
    Unit” means the Unit to be issued
    to FCL in consideration of the contribution of all of the issued
    and outstanding common shares of Subco upon the formation and
    settlement of the Fund;
    





			
	 	(gg)	
    “Long-Term
    Holder” means a Shareholder who:
    





			
	 	(i)	
    owned, or was deemed by the Canadian Tax Act to
    own, shares of Canadian Pacific Limited (“CPL”) on
    January 1, 1972, had a cost in such shares on
    January 1, 1972 that was less than $13.88, continued to
    hold such shares until October 1, 2001, being the date on which
    the CP Transaction occurred, and continues to hold the Common
    Shares received in exchange for such shares of CPL through to
    the Effective Date; or
    
	 
	 	(ii)	
    is an individual (other than a trust) resident in
    Canada who owned shares of CPL on February 22, 1994,
    continued to hold such shares until October 1, 2001, being
    the date on which the CP Transaction occurred, and continues to
    hold the Common Shares received in exchange for such shares of
    CPL through to the Effective Date;
    





			
	 	(hh)	
    “Luscar”
    means Luscar Ltd., a corporation existing under the laws of
    Alberta, except, in respect of paragraph 3.1(u) and
    paragraph 3.1(w), means Luscar Ltd. and/or affiliated
    entities of OTPP and Sherritt;
    
	 
	 	(ii)	
    “Luscar
    Assets” means the assets of the
    Luscar/CONSOL Joint Ventures which are described in the
    Luscar/CONSOL Term Sheet dated January 12, 2003 as being
    transferred, including the Line Creek mine, the Cheviot mine,
    the Luscar mine and the collective interest of Luscar and CONSOL
    in Neptune Bulk Terminals (Canada) Ltd.;
    
	 
	 	(jj)	
    “Luscar Asset
    Obligations” means all
    liabilities and obligations relating to the Luscar Assets, with
    the exception of those excluded liabilities and obligations that
    are described in the Luscar/CONSOL Term Sheet dated
    January 12, 2003, as that term sheet may be amended;
    
	 
	 	(kk)	
    “Luscar/CONSOL Joint
    Ventures” means the joint
    ventures in which Luscar and CONSOL are equal participants
    formed for the purpose of mining and preparing coal from the
    Luscar mine, the undeveloped Cheviot mine and the Line Creek
    mine;
    
	 
	 	(ll)	
    “Luscar/ CONSOL Note”
    means the demand non-interest bearing
    note of Subco substantially in the form attached as Schedule
    “H” having a principal amount determined in accordance
    with Section 5.2;
    
	 
	 	(mm)	
    “Luscar/ CONSOL Royalty”
    means the 2 1/2% of net revenues
    royalty retained by each of Luscar and CONSOL based on any coal
    mined at any time after the Effective Date from Cheviot, Folding
    Mountain, Cadomin East, Luscar North and any other reserves at
    the Luscar mine which are part of the Luscar Assets that are not
    currently defined as part of the A-6 pit at the Luscar mine;
    
	 
	 	(nn)	
    “Luscar/ CONSOL Subordinated Note”
    means the unsecured, subordinated note
    of Subco to be issued by Subco pursuant to the Arrangement
    having substantially the terms summarized in the third
    supplement to the Information Circular and having a principal
    amount determined in accordance with Section 5.2;
    
	 
	 	(oo)	
    “Luscar/ CONSOL Term Sheet”
    means the Purchase of Luscar/ CONSOL
    Joint Venture & Related Assets Term Sheet dated
    January 12, 2003 and signed by Fording, CONSOL and Luscar;
    
	 
	 	(pp)	
    “Maximum Cash
    Amount” means $1.05 billion;
    
	 
	 	(qq)	
    “Maximum Unit
    Amount” means that number of
    Units equal to the number of outstanding Common Shares at the
    Effective Time, less (a) 30,000,000 Units representing the
    Common Shares that will be effectively exchanged for cash, and
    (b) a number of Units equal to the
    




5







 


			
	 		
    number of Common Shares held by Small Non-Board
    Lot Holders and Dissenting Shareholders;
    
	 
	 	(rr)	
    “Meeting”
    means the special meeting of Securityholders to be held on
    February 19, 2003, including any adjournment(s) or
    postponement(s) thereof, to consider and to vote upon, among
    other things, the Amended Arrangement Resolution (as such term
    is defined in the Information Circular as modified by the third
    supplement to which this Plan of Arrangement is attached);
    
	 
	 	(ss)	
    “New Fording”
    means Fording Inc., the successor
    corporation to FCL, Fording and Subco following the commencement
    of the winding-up of FCL into Fording, the commencement of the
    winding-up of Fording into Subco and the renaming of Subco as
    “Fording Inc.”, all of which will occur as part of the
    Plan of Arrangement;
    
	 
	 	(tt)	
    “New Non-Voting
    Shares” means the New Non-Voting
    Shares in the capital of Fording having the rights, privileges,
    conditions and restrictions specified in Schedule “C”;
    
	 
	 	(uu)	
    “New
    Options” means options to
    purchase New Non-Voting Shares issued by Fording pursuant to the
    Arrangement in exchange for Options;
    
	 
	 	(vv)	
    “New Voting
    Shares” means the New Voting
    Preference Shares in the capital of Fording having the rights,
    privileges, conditions and restrictions specified in
    Schedule “C”;
    
	 
	 	(ww)	
    “Note
    Indenture” means the trust
    indenture providing for issuance of the Subordinated Notes to be
    dated the Effective Date and made between Fording and
    Computershare Trust Company of Canada as Trustee;
    
	 
	 	(xx)	
    “Options”
    means the outstanding options to purchase Common Shares issued
    pursuant to the Existing Option Plans;
    
	 
	 	(yy)	
    “OTPP”
    means the Ontario Teachers’ Pension Plan, a non-share
    capital corporation established under the laws of Ontario;
    
	 
	 	(zz)	
    “OTPP Unit
    Amount” means the 3,150,260
    Common Shares held by OTPP;
    
	 
	 	(aaa)	
    “Participating
    Shareholders” means at the
    Effective Time, holders of Common Shares other than Small
    Non-Board Lot Holders and Dissenting Shareholders;
    
	 
	 	(bbb)	
    “Partnership”
    means the Fording Coal Partnership, the general partnership to
    be formed under the laws of Alberta, the initial partners of
    which will be FCL, Teck, QCP and TBCI;
    
	 
	 	(ccc)	
    “Partnership Promissory Note”
    means the demand non-interest bearing
    promissory note of the Partnership with a principal amount of
    $125 million substantially in the form attached as
    Schedule “I”;
    
	 
	 	(ddd)	
    “Plan of
    Arrangement” or
    “Plan” means this plan of arrangement and any
    amendment or variation made in accordance with the terms hereof;
    
	 
	 	(eee)	
    “Prairie
    Operations” means the thermal
    coal mine business of Fording and its holdings of mineral
    properties and rights that will be purchased by SCPII or an
    affiliated entity of OTPP and Sherritt as described in the
    Prairie Operations Term Sheet. This business consists
    principally of Fording’s operations at Genesee, Whitewood
    and Highvale, Alberta, its undeveloped resource properties in
    Alberta, Manitoba and Saskatchewan, and the royalties receivable
    from third parties mining at Fording’s mineral properties
    at locations in Alberta and Saskatchewan. It excludes the rights
    and obligations of Fording in connection with its interest in
    the Esquimault and Nanaimo railway lands, including the former
    mining operation located at the Mount Washington mine site, as
    well as thermal coal produced incidentally to operations
    primarily involving Fording’s metallurgical coal business;
    




6







 




			
	 	(fff)	
    “Prairie Operations Term
    Sheet” means the term sheet set
    forth as Schedule 2.3(c) of the Combination Agreement
    describing the terms on which the Prairie Operations will be
    sold by Fording to SCPII or an affiliated entity of OTPP and
    Sherritt;
    
	 
	 	(ggg)	
    “Proceeds
    Date” means the second trading
    day on the TSX following the Effective Date or such other date
    as the board of directors of the Corporation may select;
    
	 
	 	(hhh)	
    “QCP”
    means Quintette Coal Partnership, a general partnership existing
    under the laws of British Columbia, having as its partners, Teck
    and TBCI;
    
	 
	 	(iii)	
    “QCP Mobile
    Equipment” means all mobile
    equipment owned by QCP other than mobile equipment owned by QCP
    and leased to Teck as at January 12, 2003;
    
	 
	 	(jjj)	
    “SCPII”
    means Sherritt Coal Partnership II, a general partnership
    existing under the laws of Ontario, the two partners of which
    are wholly-owned subsidiaries of each of OTPP and Sherritt;
    
	 
	 	(kkk)	
    “Securityholders”
    means, collectively, Shareholders and holders of Options;
    
	 
	 	(lll)	
    “Shareholder Rights
    Plan” means the existing Fording
    shareholder rights plan;
    
	 
	 	(mmm)	
    “Shareholders”
    means the holders of Common Shares shown from time to time on
    the register maintained by or on behalf of Fording in respect of
    such Common Shares;
    
	 
	 	(nnn)	
    “Sherritt”
    means Sherritt International Corporation, a corporation existing
    under the laws of New Brunswick;
    
	 
	 	(ooo)	
    “Small Non-Board Lot
    Holder” means a registered holder
    of Common Shares holding 20 Common Shares or less as of the
    close of business in Calgary, Alberta on November 19, 2002
    who continues to hold such Common Shares as a registered holder
    through to the Proceeds Date and who does not elect to receive
    Units pursuant to the Arrangement;
    
	 
	 	(ppp)	
    “Small Non-Board Lot Holder Retention of
    Interest Form” means the form
    enclosed in packages sent to registered Shareholders with the
    Information Circular of the Corporation dated November 20,
    2002, pursuant to which Shareholders of 20 Common Shares or
    less may elect to receive Units as consideration under the New
    Arrangement;
    
	 
	 	(qqq)	
    “Subco”
    means 4123212 Canada Ltd., a corporation existing under the CBCA
    into which Fording and FCL will be wound-up and which will
    become New Fording;
    
	 
	 	(rrr)	
    “Subco Common
    Shares” means the common shares
    in the capital of Subco having substantially the rights,
    privileges, conditions and restrictions set forth in Schedule
    “D”;
    
	 
	 	(sss)	
    “Subco Nominal
    Notes” means the demand,
    non-interest bearing notes of Subco, each with a principal
    amount of $0.01, issuable pursuant to the Arrangement
    substantially in the form attached as Schedule “E”;
    





			
	 	(ttt)	
    “Subco Preferred
    Shares” means the preferred
    shares in the capital of Subco having substantially the rights,
    privileges, conditions and restrictions set forth in Schedule
    “F”, and each having a redemption amount determined in
    accordance with Section 5.1;
    





			
	 	(uuu)	
    “Subco Promissory
    Notes” means the demand
    non-interest bearing promissory notes of Subco each with a
    principal amount equal to the amount obtained by dividing
    $445 million by the number of Common Shares held by
    Participating Shareholders immediately prior to the Effective
    Time substantially in the form attached as Schedule
    “G”;
    





			
	 	(vvv)	
    “Subordinated
    Notes” means the unsecured,
    subordinated notes of Subco to be issued by Subco pursuant to
    the Arrangement having substantially the terms summarized on
    page 59 of the Information Circular dated November 20, 2002
    under the heading “Subordinated Notes” and each having
    a principal amount determined in accordance with
    Section 5.1, and for greater certainty, do not include the
    Luscar/ CONSOL Subordinated Note;
    




7







 




			
	 	(www)	
    “TBCI”
    means Teck Bullmoose Coal Inc., a corporation existing under the
    laws of British Columbia;
    





			
	 	(xxx)	
    “Teck”
    means Teck Cominco Limited, a corporation existing under the
    CBCA;
    





			
	 	(yyy)	
    “Teck Contributed Assets”
    means all assets (other than cash) and
    liabilities associated with the Elkview Mine and all other
    properties with potential coal reserves or resources owned by
    Teck or its affiliates in North America and associated surface
    rights other than (a) the Quintette coal leases and
    licences and overlying surface tenures (the balance of which
    will be conveyed after completion of the reclamation);
    (b) mobile equipment and related parts owned by QCP (the
    balance of the QCP Mobile Equipment and related parts will be
    conveyed to the Partnership after completion of reclamation);
    (c) any assets related to the Bullmoose mine (the balance
    of which will be conveyed, subject to receipt of joint venture
    consent, when shutdown by TBCI has been completed and the mine
    reclaimed); and (d) for greater certainty, mobile equipment
    used at Elkview leased from QCP and Teck’s and TBCI’s
    interest in QCP;
    
	 
	 	(zzz)	
    “TSX”
    means the Toronto Stock Exchange;
    
	 
	 	(aaaa)	
    “Unit”
    means a trust unit of the Fund;
    
	 
	 	(bbbb)	
    “Unit
    Option” means the election
    available to Participating Shareholders pursuant to the
    Arrangement to ultimately receive a Unit for each Common Share
    in respect of which an election is made or deemed to be made
    under this Plan, subject to pro ration, instead of a Fund
    Note for the exchanges described herein which election is given
    effect under this Plan by such Participating Shareholder
    receiving a Unit;
    
	 
	 	(cccc)	
    “U.S. Tax Code”
    means the United States Internal
    Revenue Code of 1986, as amended; and
    
	 
	 	(dddd)	
    “Westshore”
    means Westshore Terminals Income Fund, an open-ended trust
    existing under the laws of British Columbia.
    





1.2 Certain Rules of
Interpretation


     
In this Plan:




			
	 	(a)	
    Currency —
    Unless otherwise specified, all references to money amounts are
    to the lawful currency of Canada.
    





			
	 	(b)	
    Headings —
    Headings of Articles and Sections are inserted for convenience
    of reference only and shall not affect the construction or
    interpretation of this Plan.
    





			
	 	(c)	
    Including —
    Where the word “including” or “includes” is
    used in this Plan, it means “including (or includes)
    without limitation”.
    
	 
	 	(d)	
    Number and Gender
    — Unless the context otherwise
    requires, words importing the singular include the plural and
    vice versa and words importing gender include all genders.
    
	 
	 	(e)	
    Statutory References
    — A reference to a statute
    includes all regulations made pursuant to such statute and,
    unless otherwise specified, the provisions of any statute or
    regulation which amends, supplements or supersedes any such
    statute or any such regulation.
    
	 
	 	(f)	
    Time Periods —
    Unless otherwise specified, time periods within or following
    which any payment is to be made or act is to be done shall be
    calculated by excluding the day on which the period commences
    and including the day on which the period ends and by extending
    the period to the next Business Day following if the last day of
    the period is not a Business Day.
    




8







 




1.3 Schedules


     
The Schedules to this Plan, as listed below, are
an integral part of this Plan:




	 	 	 
	Schedule		Description
	
		

	
    
    Schedule “A”
    

    	 	
    Exchange Option Plan
    
	
    
    Schedule “B”
    

    	 	
    Form of Fund Note
    
	
    
    Schedule “C”
    

    	 	
    Rights, Privileges, Conditions and Restrictions
    attaching to the New Voting Shares and the New Non-Voting Shares
    
	
    
    Schedule “D”
    

    	 	
    Rights, Privileges, Conditions and Restrictions
    attaching to the Subco Common Shares
    
	
    
    Schedule “E”
    

    	 	
    Form of Subco Nominal Note
    
	
    
    Schedule “F”
    

    	 	
    Rights, Privileges, Conditions and Restrictions
    attaching to the Subco Preferred Shares
    
	
    
    Schedule “G”
    

    	 	
    Form of Subco Promissory Note
    
	
    
    Schedule “H”
    

    	 	
    Form of Luscar/CONSOL Note
    
	
    
    Schedule “I”
    

    	 	
    Form of Partnership Promissory Note
    





ARTICLE 2



PURPOSE AND EFFECT OF THE
ARRANGEMENT




2.1 Arrangement


     
This Plan of Arrangement is made pursuant to, is
subject to the provisions of, and forms part of, the Combination
Agreement.




2.2 Effectiveness


     
Upon filing the Articles of Arrangement and the
issuance of the Certificate of Arrangement, this Plan of
Arrangement will become effective and will be binding without
any further authorization, act or formality on the part of the
parties participating in the Plan, the Court, the Director or
the Securityholders, from and after the Effective Time. Other
than as expressly provided in Article 3, no portion of this
Plan of Arrangement shall take effect with respect to any party
or person until the Effective Time. Furthermore, each of the
events listed in Section 3.1 shall be, without affecting
the timing set out in Section 3.1, mutually conditional,
such that no event may occur without all steps occurring and the
events together effect the integrated transaction which
constitutes the Arrangement.




ARTICLE 3



ARRANGEMENT



 


		
	3.1	
    Events Occurring Within the Plan



     
Commencing at the Effective Time, each of the
events set out below shall occur and shall be deemed to occur,
except as otherwise noted, one minute apart and in the following
order without any further act or formality:




			
	 	(a)	
    The Shareholder Rights Plan will be terminated;
    
	 
	 	(b)	
    Each outstanding Common Share held by a Small
    Non-Board Lot Holder will be cancelled by Fording in
    consideration for the payment of an amount in cash equal to the
    Common Share Trading Price;
    
	 
	 	(c)	
    The stated capital account maintained by FCL for
    its class of common shares will be reduced to $1.00 without any
    payment or other distribution of property by FCL therefor;
    




9







 




			
	 	(d)	
    FCL will transfer beneficial ownership in all of
    its inventories and an undivided 75% interest in all of its
    other assets, excluding the Excluded Assets and the Prairie
    Operations, into the Partnership as a capital contribution to
    the Partnership in exchange for:
    





			
	 	(i)	
    the Partnership Promissory Note;
    
	 
	 	(ii)	
    the assumption of that portion of the obligations
    relating to the assets, and the operation thereof, contributed
    to the Partnership as a capital contribution pursuant to this
    paragraph 3.1(d) and paragraph 3.1(aa) as is
    determined by FCL prior to the Effective Date; and
    
	 
	 	(iii)	
    an interest in the Partnership that will, after
    completion of all capital contributions to the Partnership made
    pursuant to this Section 3.1, equal the product obtained
    when 65% is multiplied by the quotient obtained when:
    





			
	 	(A)	
    the excess of the fair market value of the assets
    contributed to the Partnership as a capital contribution
    pursuant to this paragraph 3.1(d) over the total of the
    principal amount of the Partnership Promissory Note and the
    amount of obligations assumed pursuant to this
    paragraph 3.1(d);
    





		
	 	
     is divided by:
    





			
	 	(B)	
    the excess of the total fair market value of the
    assets contributed to the Partnership as a capital contribution
    pursuant to this paragraph 3.1(d) and
    paragraph 3.1(aa) over the total of the principal amount of
    the Partnership Promissory Note and the amount of obligations
    assumed pursuant to this paragraph 3.1(d) and
    paragraph 3.1(aa);
    





		
	 	
    which interest in the Partnership will, at such
    time, represent an overwhelming majority of the interests in the
    Partnership;
    





			
	 	(e)	
    Fording and FCL will adopt a plan of complete
    liquidation of FCL under section 332 of the U.S. Tax Code and,
    pursuant to subsection 210(3) of the CBCA, FCL will commence to
    wind-up and dissolve in accordance with subsection 88(1) of the
    Canadian Tax Act, and pursuant thereto, will transfer beneficial
    ownership in all of its property to Fording as its sole
    shareholder and Fording will assume all obligations of FCL;
    
	 
	 	(f)	
    The New Non-Voting Shares and the New Voting
    Shares will be created as authorized classes of shares of
    Fording;
    
	 
	 	(g)	
    Each outstanding Common Share held by a
    Participating Shareholder will be exchanged for one New Voting
    Share and one New Non-Voting Share, all such Common Shares so
    exchanged will be cancelled, and thereafter the Common Shares
    will cease to be an authorized class of shares of Fording;
    
	 
	 	(h)	
    Contemporaneously with the transaction set forth
    in paragraph 3.1(g), each outstanding Option will be exchanged
    for a New Option and the exercise price under the New Option
    will be equal to the exercise price of the outstanding Option,
    less the excess, if any, of (A) the fair market value of a
    Common Share immediately prior to the share exchange referred to
    in paragraph 3.1(g) over (B) the fair market value of a New
    Non-Voting Share immediately after the share exchange referred
    to in paragraph 3.1(g), and thereafter the outstanding Option
    will be cancelled;
    
	 
	 	(i)	
    Each New Voting Share held by a Participating
    Shareholder will be acquired by Subco in exchange for the
    issuance of one Subco Nominal Note;
    
	 
	 	(j)	
    Subject to Section 3.2, each New Non-Voting
    Share and Subco Nominal Note held by a Participating Shareholder
    (other than a Long-Term Holder) who has elected the Cash Option
    in respect of the relevant Common Share will be acquired by the
    Fund in exchange for the issuance of one Fund Note;
    
	 
	 	(k)	
    Subject to Section 3.2, and
    contemporaneously with the transaction set forth in paragraph
    3.1(j), each New Non-Voting Share and Subco Nominal Note held by
    a Participating Shareholder (other
    




10







 


			
	 		
    than a Long-Term Holder) who has elected the Unit
    Option in respect of the relevant Common Share will be acquired
    by the Fund in exchange for the issuance of one Unit;
    
	 
	 	(l)	
    Each New Non-Voting Share held by a Long-Term
    Holder will be acquired by Subco in exchange for the issuance of
    one Subco Promissory Note, one Subordinated Note and one Subco
    Preferred Share;
    
	 
	 	(m)	
    Subject to Section 3.2, the Subco Nominal
    Notes, Subco Promissory Notes, Subordinated Notes and Subco
    Preferred Shares held by each Long-Term Holder who has elected
    the Cash Option in respect of the relevant Common Share will be
    acquired by the Fund in exchange for the issuance of one Fund
    Note for each New Non-Voting Share held by the Long-Term Holder
    immediately before the exchange referred to in paragraph 3.1(l);
    
	 
	 	(n)	
    Subject to Section 3.2 and contemporaneously
    with the transaction set forth in paragraph 3.1(m), the Subco
    Nominal Notes, Subco Promissory Notes, Subordinated Notes and
    Subco Preferred Shares held by each Long-Term Holder who has
    elected the Unit Option in respect of the relevant Common Share
    will be acquired by the Fund in exchange for the issuance of one
    Unit for each New Non-Voting Share held by the Long-Term Holder
    immediately before the exchange referred to in paragraph 3.1(l);
    
	 
	 	(o)	
    The Exchange Option Plan will become effective;
    
	 
	 	(p)	
    Each outstanding New Option will be exchanged for
    an Exchange Option and the exercise price under the Exchange
    Option will be equal to the exercise price of the original
    Option for which the New Option was received pursuant to the
    exchange referred to in paragraph 3.1(h);
    





			
	 	(i)	
    less the excess, if any, of (A) the fair
    market value of a Common Share immediately prior to the share
    exchange referred to in paragraph 3.1(g) (determined by
    computing the weighted average trading price of a Common Share
    for the five trading days immediately preceding the Effective
    Date) over (B) the fair market value of a Unit immediately
    after the exchange referred to in paragraph 3.1(k) (determined
    by computing the weighted average trading price of a Unit for
    the five trading days beginning with the Effective Date), or
    
	 
	 	(ii)	
    plus the excess, if any, of (A) the fair
    market value of a Unit immediately after the exchange referred
    to in paragraph 3.1(k) (determined by computing the weighted
    average trading price of a Unit for the five trading days
    beginning with the Effective Date) over (B) the fair market
    value of a Common Share immediately prior to the share exchange
    referred to in paragraph 3.1(g) (determined by computing the
    weighted average trading price of a Common Share for the five
    trading days immediately preceding the Effective Date);
    





		
	 	
    or such other amount determined by the Trustees
    of the Fund as is required to ensure that the
    “in-the-money” amount of the Exchange Option,
    immediately after the exchange, will be equal to the
    “in-the-money” amount of the corresponding original
    Option immediately before the exchange referred to in paragraph
    3.1(h), and thereafter the New Option will be cancelled;
    





			
	 	(q)	
    The Initial Unit will be redeemed by the Fund for
    an amount equal to its fair market value;
    
	 
	 	(r)	
    Each New Non-Voting Share held by the Fund will
    be acquired by Subco in exchange for the issuance of one
    Subordinated Note, one Subco Preferred Share and one Subco
    Promissory Note;
    
	 
	 	(s)	
    The stated capital account maintained by Fording
    for its class of New Non-Voting Common Shares will be reduced to
    $1.00 without any payment or other distribution of property by
    Fording therefor;
    
	 
	 	(t)	
    Subco and Fording will adopt a plan of complete
    liquidation of Fording under section 332 of the U.S. Tax Code
    and, pursuant to subsection 210(3) of the CBCA, Fording will
    commence to wind-up and dissolve in accordance with subsection
    88(1) of the Canadian Tax Act, and pursuant thereto, will
    transfer beneficial ownership in all of its property to Subco as
    its sole shareholder and Subco will assume all obligations of
    Fording;
    




11







 




			
	 	(u)	
    Luscar and CONSOL
    





			
	 	(i)	
    will transfer or cause to be transferred to Subco
    all of their beneficial ownership in the Luscar Assets, subject
    to the Luscar/ CONSOL Royalty, which shall be retained by Luscar
    and CONSOL; and
    
	 
	 	(ii)	
    will, in the case of Luscar (and not CONSOL), pay
    to Subco in cash the amount, if any, described in that certain
    letter agreement regarding working capital between Fording, OTPP
    and Sherritt dated January 12, 2003;
    





		
	 	
    in consideration of:
    





			
	 	(iii)	
    the payment by Subco to Luscar of the amount, if
    any, described in that certain letter agreement regarding
    working capital between Fording, OTPP and Sherritt dated
    January 12, 2003;
    
	 
	 	(iv)	
    the payment by Subco to CONSOL of the amount due
    on account of working capital pursuant to the Luscar/CONSOL
    Term Sheet;
    
	 
	 	(v)	
    the issuance of the Luscar/ CONSOL Note and the
    Luscar/ CONSOL Subordinated Note; and
    
	 
	 	(vi)	
    the assumption of the Luscar Asset Obligations;
    





			
	 	(v)	
    Subco will transfer to SCPII (or an affiliated
    entity of OTPP and Sherritt) beneficial ownership of the Prairie
    Operations, subject to the Fording Royalty which shall be
    retained by Subco, in consideration of a cash payment by SCPII
    of $225 million, subject to a potential adjustment for
    working capital (such funds will be used to pay amounts
    associated with the implementation of the Plan, including
    ultimate payment of the Cash Option);
    
	 
	 	(w)	
    The Luscar/ CONSOL Note and the Luscar/ CONSOL
    Subordinated Note held by Luscar and CONSOL will be acquired by
    the Fund in exchange for the issuance to each of Luscar and
    CONSOL of 3.2 million Units;
    
	 
	 	(x)	
    The Luscar/ CONSOL Note held by the Fund will be
    repaid by Subco by the issuance of Subco Preferred Shares having
    an aggregate redemption amount equal to the principal amount of
    the Luscar/ CONSOL Note;
    
	 
	 	(y)	
    Each of Teck and Westshore will pay
    $150 million to the Fund to purchase 4,285,714 Units from
    the Fund, Sherritt will pay $100 million to the Fund to purchase
    2,857,142 Units from the Fund, and OTPP will pay
    $275 million to the Fund to purchase 7,857,142 Units from
    the Fund, in each case at a price of $35.00 per Unit;
    
	 
	 	(z)	
    The Existing Option Plans will be terminated and
    all rights and entitlements of participants under such plan will
    be terminated;
    
	 
	 	(aa)	
    Subco will, effective 11:55 p.m. on the
    Effective Date, transfer its beneficial ownership of the Luscar
    Assets and all of its other assets, excluding the Excluded
    Assets, into the Partnership as a capital contribution to the
    Partnership in exchange for the assumption of obligations
    relating to the assets, and the operation thereof, contributed
    to the Partnership in paragraph 3.1(d) and this paragraph
    3.1(aa) that were not assumed in subparagraph 3.1(d)(ii)
    and the Luscar Asset Obligations, the obligation of the
    Partnership to pay to Subco an amount equal to the amount, if
    any, described in subparagraph 3.1(u)(iii) and an interest
    in the Partnership that will, after completion of all capital
    contributions to the Partnership made pursuant to this
    Section 3.1, be equal to the excess of 65% over the
    interest in the Partnership described in
    subparagraph 3.1(d)(iii);
    
	 
	 	(bb)	
    Contemporaneously with the transaction set forth
    in paragraph 3.1(aa), Teck will contribute to the
    Partnership $125 million of cash and will transfer into the
    Partnership beneficial ownership of the Teck Contributed Assets
    (but excluding the Teck Contributed Assets to be contributed by
    TBCI
    




12







 


			
	 		
    and QCP) as a capital contribution to the
    Partnership in exchange for the assumption of obligations
    related to such assets and an interest in the Partnership which
    will, after completion of all capital contributions to the
    Partnership made pursuant to this Section 3.1, be a 34.833%
    interest in the Partnership;
    
	 
	 	(cc)	
    Contemporaneously with the transaction set forth
    in paragraph 3.1(aa), QCP will transfer to the Partnership
    beneficial ownership of all of its fee simple lands and related
    tenures including the fixtures thereon (excluding its coal lease
    and licences and overlying surface tenures) as a capital
    contribution to the Partnership in exchange for the assumption
    of obligations related to such assets and an interest in the
    Partnership which will, after completion of all capital
    contributions to the Partnership made pursuant to this
    Section 3.1, be a 0.164% interest in the Partnership, and
    for greater certainty, the consideration for the interest in the
    Partnership will include QCP’s obligation to convey the
    balance of the QCP Mobile Equipment and its coal lease and
    licences and overlying tenures to the Partnership after
    completion of reclamation;
    
	 
	 	(dd)	
    Contemporaneously with the transaction set forth
    in paragraph 3.1(aa), TBCI will acquire an interest in the
    Partnership which will, after completion of all capital
    contributions to the Partnership made pursuant to this
    Section 3.1, be a 0.003% interest in the Partnership, the
    consideration therefor being TBCI’s obligation, subject to
    receipt of joint venture consent, to transfer to the Partnership
    all coal properties comprising the Bullmoose Mine owned by TBCI
    after completion of reclamation at the Bullmoose Mine;
    
	 
	 	(ee)	
    Effective 11:56 p.m. on the Effective Date,
    the Partnership Promissory Note held by Subco will be repaid by
    the Partnership by the payment of cash equal to its principal
    amount;
    
	 
	 	(ff)	
    Effective 11:57 p.m. on the Effective Date,
    the Subco Nominal Notes held by the Fund will be repaid by Subco
    by the payment of cash equal to their principal amount;
    
	 
	 	(gg)	
    Contemporaneously with the transaction set forth
    in paragraph 3.1(ff), the Subco Promissory Notes held by the
    Fund will be repaid by Subco by the payment of cash equal to
    their principal amount;
    
	 
	 	(hh)	
    Effective 11:58 p.m. on the Effective Date,
    the Fund Notes will be repaid by the Fund by the payment of cash
    equal to their principal amount (and the Fund will hold such
    payment on behalf of the recipients until payment thereof in
    accordance with this Plan); and
    
	 
	 	(ii)	
    Effective 11:59 p.m. on the Effective Date,
    Subco will change its name to “Fording Inc.”.
    





3.2 Adjustments to Cash Option and Unit
Option Elections



			
	 	(a)	
    The Maximum Cash Amount will be paid, and a
    number of Units equal to the Maximum Unit Amount will be issued,
    in their entirety, as the consideration to Participating
    Shareholders under the Arrangement. If more than the Maximum
    Cash Amount is elected pursuant to the Cash Option, it will be
    necessary to pro rate the Maximum Cash Amount among those
    holders who elected to receive cash and pay the balance of the
    Elected Cash Amount in Units. If a number of Units greater than
    the Maximum Unit Amount is elected pursuant to the Unit Option
    at an issue price of $35.00 per Unit, it will be necessary to
    pro rate the Maximum Unit Amount (less the OTPP Unit Amount)
    among those holders (other than OTPP) who elect to receive Units
    and pay the balance of the Elected Unit Amount in cash in an
    amount equal to $35.00 per Common Share, subject to
    pro ration as described in this Section.
    
	 
	 	(b)	
    Notwithstanding the election of the Cash Option
    by a Participating Shareholder, the number of Common Shares in
    respect of which the holder will be deemed to have elected the
    Cash Option will be:
    





			
	 	(i)	
    subject to paragraph 3.2(c)(ii), if the product
    of the aggregate number of Common Shares in respect of which
    Participating Shareholders elect the Cash Option and $35.00 (the
    




13







 


			
	 		
    “Elected Cash Amount”) does not exceed
    the Maximum Cash Amount, the number of Common Shares in respect
    of which the holder elected the Cash Option;
    
	 
	 	(ii)	
    if the Elected Cash Amount exceeds the Maximum
    Cash Amount, that number of Common Shares determined by
    multiplying the total number of Common Shares in respect of
    which the holder elected the Cash Option by the quotient
    obtained by dividing the Maximum Cash Amount by the Elected Cash
    Amount, and such holder shall be deemed to have elected the Unit
    Option in respect of the balance of such holder’s Common
    Shares.
    





			
	 	(c)	
    Notwithstanding the election or deemed election
    of the Unit Option by a Participating Shareholder (other than
    OTPP), the number of Common Shares in respect of which the
    holder (other than OTPP) will be deemed to have elected the Unit
    Option will be:
    





			
	 	(i)	
    subject to paragraph 3.2(b)(ii), if the Elected
    Cash Amount exceeds the Maximum Cash Amount, the number of
    Common Shares in respect of which the holder elected, or is
    deemed to have elected pursuant to paragraph 3.3(a) or 3.3(b),
    the Unit Option; and
    
	 
	 	(ii)	
    if the Elected Cash Amount does not exceed the
    Maximum Cash Amount, that number of Common Shares determined by
    multiplying the total number of Common Shares in respect of
    which the holder elected or is deemed to have elected pursuant
    to paragraph 3.3(b), the Unit Option by the quotient
    





		
	 	
    obtained by dividing:
    





			
	 	(iii)	
    the excess of the Maximum Unit Amount over the
    OTPP Unit Amount, by
    





			
	 	(iv)	
    the excess of the Elected Unit Amount over the
    OTPP Unit Amount;
    





		
	 	
    and such holder shall be deemed to have elected
    the Cash Option in respect of the balance of such holder’s
    Common Shares.
    





3.3 Manner of Making Elections



			
	 	(a)	
    Each Participating Shareholder (other than OTPP)
    shall have the opportunity to elect either the Cash Option, the
    Unit Option or a combination thereof by depositing, or by
    causing its agent or other representative to deposit, with
    Computershare Trust Company of Canada on or before
    February 18, 2003, or such other date as is determined by
    the board of directors of the Corporation and publicly announced
    in advance thereof, a duly completed Election Form indicating
    such holder’s election together with the certificates
    representing such holder’s Common Shares.
    
	 
	 	(b)	
    Any holder who (i) does not deposit with
    Computershare Trust Company of Canada a duly completed Election
    Form prior to the date specified above, (ii) has properly
    submitted a Small Non-Board Lot Holder Retention of Interest
    Form, or (iii) otherwise fails to comply fully with the
    requirements of paragraph 3.3(a) and the Election Form in
    respect of such holder’s election of the Cash Option or
    Unit Option, shall be deemed to have elected the Unit Option in
    respect of its Common Shares.
    
	 
	 	(c)	
    Any deposit of an Election Form and accompanying
    certificates may be made at any of the offices of Computershare
    Trust Company of Canada specified in the Election Form.
    
	 
	 	(d)	
    For certainty, OTPP will be deemed to have
    elected to receive Units for all of its Common Shares, whether
    held directly or indirectly, and shall not be subject to
    pro ration in respect of such election.
    




14







 




ARTICLE 4



STATED CAPITAL ADDITIONS




4.1 Additions to Stated Capital


     
The amounts added to the stated capital accounts
maintained by Fording or Subco in respect of the issuances of
shares of the capital stock of Fording or Subco, as the case may
be, under the Plan will be as follows:




			
	 	(a)	
    in connection with the issuance of New Voting
    Shares pursuant to paragraph 3.1(g) of the Plan, the amount
    of $0.01 per share multiplied by the number of New Voting Shares
    so issued, shall be added to the stated capital account
    maintained by Fording in respect of the New Voting Shares (the
    “New Voting Capital Amount”);
    
	 
	 	(b)	
    in connection with the issuance of New Non-Voting
    Shares pursuant to paragraph 3.1(g) of the Plan, an amount
    equal the excess of the paid-up capital, under the Canadian Tax
    Act, of the Common Shares immediately prior to such share
    exchange over the New Voting Capital Amount shall be added to
    the stated capital account maintained by Fording in respect of
    the New Non-Voting Shares; and
    
	 
	 	(c)	
    in connection with the issuance of Subco
    Preferred Shares pursuant to the Plan, an amount equal to the
    aggregate redemption amount of the Subco Preferred Shares so
    issued shall be added to the stated capital account maintained
    by Subco in respect of the Subco Preferred Shares.
    





ARTICLE 5



NOTE AND PREFERRED SHARE
DETERMINATION




5.1 Subordinated Notes and Preferred
Shares


     
The aggregate principal amounts of the
Subordinated Notes and the aggregate redemption amounts of the
Subco Preferred Shares issued in connection with the Arrangement
will, in each case, be such amount as is determined by the board
of directors of Subco, except that:




			
	 	(a)	
    the aggregate of (i) the aggregate principal
    amounts of the Subordinated Notes plus
    (ii) $205 million, shall not exceed nine times the
    aggregate redemption amounts of the Subco Preferred Shares
    issued pursuant to paragraph 3.1(l) and
    paragraph 3.1(r);
    
	 
	 	(b)	
    the sum of the aggregate principal amounts of the
    Subordinated Notes, the aggregate redemption amounts of the
    Subco Preferred Shares issued pursuant to paragraph 3.1(l)
    and paragraph 3.1(r) and the principal amount of the Subco
    Promissory Notes shall reflect the fair market value of the
    consideration received by Subco for the issuance of the
    Subordinated Notes, the Subco Preferred Shares issued pursuant
    to paragraph 3.1(l) and paragraph 3.1(r) and the
    issuance of the Subco Promissory Notes; and
    
	 
	 	(c)	
    the sum of the aggregate principal amounts of the
    Subordinated Notes, the aggregate redemption amounts of the
    Subco Preferred Shares issued pursuant to paragraph 3.1(l)
    and paragraph 3.1(r) and $445 million shall equal the
    product of (i) the aggregate number of Common Shares held
    by Participating Shareholders and (ii) $35.00 or such other
    amount as may be determined by the board of directors of Subco
    to be the fair market value per share of the Common Shares at
    the Effective Time.
    





5.2 Luscar/ CONSOL Subordinated Note and
Luscar/ CONSOL Note


     
The principal amount of the Luscar/ CONSOL
Subordinated Note and the principal amount of the Luscar/ CONSOL
Note issued in connection with the Arrangement will, in each
case, be such amount as is determined by the board of directors
of Subco except that the principal amount of the Luscar/ CONSOL
Subordinated Note shall not exceed nine times the principal
amount of the Luscar/ CONSOL Note, and the



15







 




sum of the principal amount of the Luscar/ CONSOL
Subordinated Note and the principal amount of the Luscar/ CONSOL
Note shall be $224 million.





ARTICLE 6



DISSENTING SHAREHOLDERS




6.1 Rights of Dissent


     
Pursuant to the Plan of Arrangement, Dissenting
Shareholders who duly exercise their rights of dissent and who:




			
	 	(a)	
    are ultimately entitled to be paid fair value for
    their Common Shares shall have their Common Shares cancelled as
    of the Effective Time and prior to commencement of the
    transactions referenced to in Section 3.1 hereof in
    consideration of the fair value to be paid to them and will not
    be entitled to any other payment or consideration including any
    payment that would be payable under the Arrangement had such
    holders not exercised their rights of dissent; or
    
	 
	 	(b)	
    are ultimately not entitled, for any reason, to
    be paid fair value for their Common Shares will be deemed to
    have participated in the Arrangement on the same basis as any
    non-Dissenting Shareholder (other than OTPP) who elected the
    Unit Option.
    





6.2 Recognition of Dissenting
Shareholders


     
Neither the Corporation, Subco, any of the
parties to the Combination Agreement nor any other person shall
be required to recognize a Dissenting Shareholder as a holder of
Common Shares from and after the Effective Time, nor as having
any interest in the Fund other than in the circumstances where
Subco elects to deliver moneys-worth of Units in satisfaction of
its obligation to pay fair value to a Dissenting Shareholder.
From and after the Effective Time, the names of Dissenting
Shareholders shall be deleted from the register of holders of
Common Shares maintained by the Corporation.




ARTICLE 7



OUTSTANDING CERTIFICATES




7.1 Outstanding Certificates


     
From and after the Effective Time until and
including the Proceeds Date, share certificates representing
Common Shares (other than certificates in the name of a
Dissenting Shareholder or a Small Non-Board Lot Holder) will
represent the right to obtain the consideration issued pursuant
to the Plan of Arrangement, consisting of $35.00 or one Unit per
Common Share or a combination thereof in accordance with the
elections made by the holder, subject to pro ration
hereunder, if applicable.




7.2 Provision of Consideration


     
As soon as practicable after the Proceeds Date:




			
	 	(a)	
    there shall be delivered to each Participating
    Shareholder, certificates representing the Units and a cheque
    for the cash amount to which such holder is entitled pursuant to
    this Plan of Arrangement; and
    
	 
	 	(b)	
    there shall be delivered to each Small Non-Board
    Lot Holder a cheque for the cash amount to which such holder is
    entitled pursuant to this Plan of Arrangement, net of any
    required withholding on account of taxes.
    




     
For greater certainty, Shareholders will not be
required to send to the Depository the certificates representing
their Common Shares in order to receive the Unit certificates
and/or any cheque to which they are entitled to receive pursuant
to this Arrangement.



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7.3 Depository


     
All distributions made with respect to any Units
allotted and issued pursuant to this Arrangement but for which a
certificate has not been, or cannot be, delivered, shall be paid
and delivered to the Depository to be held by the Depository in
trust for the registered holder thereof. All monies received by
the Depository in respect of such Units shall be invested by it
in interest-bearing trust accounts upon such terms as the
Depository may reasonably deem appropriate. The Depository shall
pay and deliver to any such registered holder such distributions
and any interest thereon to which such holder is entitled, net
of applicable withholding and other taxes, upon delivery of the
certificate representing the Units issued to such holder in
connection with the Arrangement.




7.4 No Entitlement to Interest


     
The Participating Shareholders and Small
Non-Board Lot Holders shall not be entitled to any interest,
dividend, premium or other payment on or with respect to their
former Common Shares other than the certificates representing
the Units and/or the cheque that they are entitled to receive
pursuant to this Plan of Arrangement.




7.5 Certificates


     
After the Proceeds Date, the certificates
formerly representing Common Shares will not represent any
interest in the Fund, Subco or otherwise and shall be deemed to
be cancelled, null and void.




ARTICLE 8



AMENDMENTS




8.1 Amendments


     
Subject to the terms of the Combination
Agreement, Fording, FCL and Subco reserve the right to amend,
modify and/or supplement this Plan of Arrangement from time to
time at any time prior to the Effective Time provided that any
such amendment, modification or supplement must be contained in
a written document that is:




			
	 	(a)	
    filed with the Court and, if made following the
    Meeting, approved by the Court; and
    
	 
	 	(b)	
    communicated to Securityholders in the manner
    required by the Court (if so required).
    





8.2 Proposed Amendments


     
Subject to the Combination Agreement, any
amendment, modification or supplement to this Plan of
Arrangement may be proposed by Fording, FCL or Subco at any time
prior to or at the Meeting with or without any other prior
notice or communication, and if so proposed and accepted by the
Securityholders voting at the Meeting, in the manner required by
the Interim Order, shall become part of this Plan of Arrangement
for all purposes. In addition, Fording may amend, modify or
supplement this Plan of Arrangement in accordance with the terms
of the Combination Agreement.




8.3 Effectiveness of Amendments


     
Any amendment, modification or supplement to this
Plan of Arrangement which is approved by the Court following the
Meeting shall be effective only:




			
	 	(a)	
    if it is consented to by Fording, FCL and Subco;
    and
    
	 
	 	(b)	
    if required by the Court or applicable law, it is
    consented to by the Securityholders.
    




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