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EXHIBIT 99  ANNUAL AND SPECIAL MEETING
MAY 5, 2005 (POTASH LOGO) POTASH CORPORATION OF SASKATCHEWAN INC.      NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS AND MANAGEMENT PROXY CIRCULAR




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TABLE OF CONTENTS PageLetter to Shareholders
    
    
    1Notice of Annual and Special Meeting of Shareholders
    
    
    2Management Proxy CircularQ&A on Proxy Voting
    
    
    3Business of the Meeting
    
    
    7Nominees for Election to the Board of Directors
    
    
    8Director Independence
    
    
    12Compensation/Attendance of Directors
    
    
    12Appointment of Auditors
    
    
    14Adoption of New Performance Option Plan
    
    
    15Corporate Governance
    
    
    18Director Independence Standards
    
    
    18Report of the Audit Committee
    
    
    19Report of the Compensation Committee
    
    
    19Report on Corporate Governance and Nominating
Matters
    
    
    25Executive Compensation
    
    
    27Performance Graphs
    
    
    34Directors and Officers Liability Insurance
    
    
    35Voting Shares
    
    
    35Ownership of Shares
    
    
    36Normal Course Issuer Bid
    
    
    372006 Shareholder Proposals
    
    
    37Additional Information
    
    
    37Directors Approval
    
    
    37Appendix A  Statement of Corporate Governance Practices
    
    
    A-1Appendix B  New Performance Option Plan
Resolution
    
    
    B-1Appendix C  New Performance Option Plan
    
    
    C-1Appendix D  Audit Committee Charter
    
    
    D-1




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(POTASH LOGO)  March 11, 2005 
 Dear Shareholder: We are pleased to invite you to join our Board
of Directors and senior management team at our 2005 Annual and Special
Meeting of Shareholders. The meeting will be held on May 5, 2005 at
10:30 a.m. (local time) at the Delta Bessborough, 601 Spadina
Crescent East, Saskatoon, Saskatchewan, Canada. The meeting provides you, the shareholder, with
an opportunity to meet, listen to and ask questions of the people who
are responsible for the performance of the Corporation. The Notice of
Annual and Special Meeting and Management Proxy Circular describing the
formal business of the meeting and related proxy are enclosed. Your vote is very important.Whether or not you
plan to attend the meeting, you can make your voice heard by completing
and sending us your proxy (full details are provided inside). If you are unable to attend in person, you will
be able to listen to a webcast of the meeting at www.potashcorp.com.
Prior to the meeting you may also wish to visit our website to view our
most recently filed public documents. We look forward to seeing you on May 5,
2005. Sincerely,-s- D.J. Howe
    
    -s- W.J. DoyleD.  J. Howe
    
    W.  J. DoyleBoard Chair
    
    President and
Chief Executive Officer
    Potash Corporation of Saskatchewan Inc.PCS
Tower,     Suite 500, 122  1st Avenue South,     Saskatoon, Saskatchewan Canada     S7K 7G3




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(POTASH LOGO) POTASH CORPORATION OF SASKATCHEWAN INC. 
 NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
 NOTICE IS HEREBY GIVEN that the Annual and
Special Meeting (the Meeting) of shareholders of Potash Corporation of
Saskatchewan Inc. (the Corporation), a Canadian corporation, will be
held on May 5, 2005 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 consolidated financial statements of the Corporation for the year ended
December 31, 2004 and the report of the auditors thereon;2.
    
    to elect the Board of Directors for 2005;3.
    
    to appoint auditors for 2005;4.
    
    to consider and, if deemed appropriate, adopt, with or without variation, a resolution (the
full text of which is reproduced as Appendix B to the accompanying Management Proxy
Circular) authorizing the Corporation to implement a new stock option plan, which is attached
as Appendix C to the accompanying Management Proxy Circular; and5.
    
    to transact such other business as may properly come before the Meeting or any adjournments
thereof. DATED at
Saskatoon, Saskatchewan this 11th day
of March, 2005. BY ORDER OF THE BOARD OF DIRECTORS-s- Joseph A. PodwikaJoseph A. Podwika
Secretary




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(POTASH LOGO) 
 POTASH CORPORATION OF SASKATCHEWAN INC.
MANAGEMENT PROXY CIRCULAR  QUESTIONS AND ANSWERS ON VOTING AND PROXIES Your vote is important to us, and you can vote whether you attend the Meeting or not. Here is how: 1.
    
    Q:
    
    WHO CAN I CALL IF I HAVE QUESTIONS ABOUT THE INFORMATION CONTAINED IN
THIS MANAGEMENT PROXY CIRCULAR OR REQUIRE ASSISTANCE IN COMPLETING
MY PROXY FORM?A:
    
    Georgeson Shareholder Communication Canada, Inc., the Corporations proxy solicitation
agent, at 1-888-288-7436, for service in English and in French.2.
    
    Q:
    
    WHO IS SOLICITING MY PROXY?A:
    
    The management of the Corporation. Solicitation of proxies will be primarily by mail,
supplemented by telephone or other contact by employees of the Corporation (who will
receive no additional compensation), and all such costs will be borne by the
Corporation. We have retained the services of Georgeson for the solicitation of
proxies in Canada and in the United States. Georgesons services are estimated to
cost $27,500.3.
    
    Q:
    
    ON WHAT AM I VOTING?A:
    
    Three items: (1)the election of directors, (2)the appointment of auditors, and (3)a
resolution authorizing the Corporation to implement a new stock option plan. The
Corporations Board of Directors and management recommend that you vote FOR
items (1), (2) and (3).4.
    
    Q:
    
    WHO IS ENTITLED TO VOTE?A:
    
    Common shareholders as at the close of business on March 17, 2005or their duly
appointed representatives will be entitled to cast a vote.As at
February 28, 2005, 111,290,020 common shares in the capital of the Corporation (the Shares) are entitled
to be voted at the Meeting.
 5.
    
    Q:
    
    BY WHEN MUST I VOTE?A:
    
    This will depend on the way in which you will be voting:(a) If you plan to attend
the Meeting and wish to vote your Shares in person at the Meeting, your vote will be
taken and counted at the Meeting. Non-Registered Shareholders wishing to attend the
Meeting or vote by proxy should refer to Voting by Non-Registered Shareholders on
page 5; (b) If you are a Registered Shareholder and voting using the proxy
form, your proxy form should be received at the Winnipeg office of CIBC Mellon Trust
Company by mail or facsimile prior to the commencement of the Meeting, or
hand-delivered at the registration table on the day of the Meeting prior to the
commencement of the Meeting; (c) If you are a Registered Shareholder and voting
your proxy by telephone or Internet, your vote should be received no later than 11:00
p.m. (Saskatoon time) on Tuesday, May 3, 2005.Please note that Items 6 to 9 below are only applicable to Registered Shareholders.
Non-Registered Shareholders should refer to Item 18 for further information on voting.6.
    
    Q:
    
    WHAT IF I SIGN THE PROXY FORM AS DESCRIBED IN THIS MANAGEMENT PROXY
CIRCULAR?A:
    
    Signing the proxy form gives authority to Mr. Dallas J. Howe, Mr. William J.
Doyle, Mr. Wayne R. Brownlee or Mr. Joseph A. Podwika, all of whom are
either directors or officers of the Corporation, to vote your Shares at the Meeting
in accordance with your voting instructions.A PROXY MUST BE IN WRITING AND MUST BE
EXECUTED BY YOU OR BY YOUR ATTORNEY AUTHORIZED IN WRITING OR, IF THE SHAREHOLDER IS
A CORPORATION OR OTHER LEGAL ENTITY, BY AN OFFICER OR ATTORNEY THEREOF DULY
AUTHORIZED. A PROXY MAY ALSO BE COMPLETED OVER THE TELEPHONE OR OVER THE INTERNET
(See Questions No. 17(1) (a) and (b).




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7.
    
    Q:
    
    CAN I APPOINT SOMEONE OTHER THAN THESE PEOPLE TO VOTE MY SHARES?A:
    
    Yes. You have the right to appoint some other person of your choice, who need not be a
shareholder, to attend and act on your behalf at the Meeting. If you wish to do so,
please strike out those four printed names appearing on the proxy form, and insert
the name of your chosen proxyholder in the space provided thereon.YOU CANNOT APPOINT A PERSON TO VOTE YOUR SHARES OTHER THAN OUR DIRECTORS OR OFFICERS
WHOSE PRINTED NAMES APPEAR ON THE PROXY FORM IF YOU DECIDE TO VOTE BY TELEPHONE OR INTERNET.IT IS IMPORTANT TO ENSURE THAT ANY OTHER PERSON YOU APPOINT IS ATTENDING THE MEETING AND IS
AWARE THAT HIS OR HER APPOINTMENT HAS BEEN MADE TO VOTE YOUR SHARES. PROXYHOLDERS SHOULD,
AT THE MEETING, PRESENT THEMSELVES TO A REPRESENTATIVE OF CIBC MELLON AT THE TABLE
IDENTIFIED AS REGISTERED SHAREHOLDERS.8.
    
    Q:
    
    HOW WILL MY SHARES BE VOTED IF I VOTE BY
PROXY?A:
    
    The persons named in the proxy form must vote or withhold from voting your Shares in
accordance with your instructions on the proxy form.In the absence of such
instructions, however, your Shares will be voted FOR the election to the
Corporations Board of Directors of the nominees proposed by management as described
in this Management Proxy Circular and on the proxy form, FOR the appointment of
Deloitte & Touche LLP as auditors until the close of the next annual meeting,
FOR the resolution authorizing the Corporation to implement a new stock option plan
and FOR managements proposals generally.9.
    
    Q:
    
    IF I CHANGE MY MIND, CAN I TAKE BACK MY
PROXY ONCE I HAVE GIVEN IT?A:
    
    Yes.A shareholder who has voted by proxy may revoke it by voting again in any manner
(telephone, Internet, mail or fax). In addition, you may revoke a voted proxy by
depositing an instrument in writing (which includes another proxy form with a later
date) executed by you or by your attorney authorized in writing with our Corporate
Secretary at Suite 500, 122  1st Avenue South, Saskatoon, Saskatchewan,
Canada, S7K 7G3, at any time up to
 and including the last business day preceding
the date of the Meeting, or any adjournment or postponement thereof or by depositing
it with the Meeting chair on the day of the Meeting, or any adjournment or
postponement thereof. You may also revoke a proxy in any other manner permitted by
law.Note that your participation in person in a vote by ballot at the Meeting will
automatically revoke any proxy previously given by you in respect of business covered by
that vote.10.
    
    Q:
    
    WHAT IF AMENDMENTS ARE MADE TO THESE MATTERS OR IF OTHER MATTERS ARE BROUGHT
BEFORE THE MEETING?A:
    
    The person named in the proxy form has discretionary authority with respect to
amendments or variations to matters identified in the Notice of the Meeting and to
other matters which may properly come before the Meeting.As of the date of this
Management Proxy Circular, our management knows of no such amendment, variation or
other matter expected to come before the Meeting. If any other matters properly come
before the Meeting, the persons named in the proxy form will vote on them in
accordance with their best judgment.11.
    
    Q:
    
    HOW WILL THE VOTES BE COUNTED?A:
    
    All matters to be considered at the Meeting will each be determined by a majority of
votes cast at the Meeting by proxy or in person.In the event of equal votes, the
Meeting chair is entitled to a second or casting vote.12.
    
    Q:
    
    HOW CAN I CONTACT THE TRANSFER AGENT?A:
    
    You can contact the transfer agent as follows:By mail:
CIBC Mellon Trust Company
Suite 750
1 Lombard Place
Winnipeg, Manitoba, Canada R3B 0X3By telephone:
1-800-387-0825 (toll-free within Canada and the United States)
or 1-416-643-5500 (from any country other than Canada and the United States)By fax:
1-416-643-5501 (all countries)By e-mail:
inquiries@cibcmellon.com




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13.
    
    Q:
    
    WHAT IS ELECTRONIC DELIVERY?A:
    
    A voluntary program that permits Registered Shareholders to receive their disclosure
documents electronically rather than by paper.Every year, we mail to our
shareholders documentation, such as this Management Proxy Circular and our Annual
Report, that must by law be delivered to shareholders of a public company.
Consenting Registered Shareholders will receive an email containing a link to
disclosure documentation on our website (www.potashcorp.com). We believe that
electronic delivery will benefit the environment and reduce our costs.14.
    
    Q:
    
    IS ELECTRONIC DELIVERY MANDATORY?A:
    
    No.Electronic delivery is voluntary for Registered Shareholders; if you do not consent,
you will continue to receive documentation by mail.15.
    
    Q:
    
    IF I CONSENT TO ELECTRONIC DELIVERY, WHEN WILL IT BECOME EFFECTIVE?A:
    
    If you are a Registered Shareholder and you consent to electronic delivery, you will be
notified by email of the availability on our website (www.potashcorp.com) of all
documentation which must be sent to you by law.16.
    
    Q:
    
    HOW CAN I CONSENT TO ELECTRONIC DELIVERY?A:
    
    (a) by completing and returning the accompanying form entitled Consent to Electronic
Delivery of Documents to our transfer agent CIBC Mellon Trust Company by mail or
by fax at 1-416-643-5501, or (b) by completing the online version of the form at
www.cibcmellon.com/electronicdelivery. If you have previously provided consent to
electronic delivery, no additional consent is required.
 VOTING BY REGISTERED SHAREHOLDERS You are a Registered Shareholder if your name appears on your share certificate. THE ENCLOSED
PROXY FORM INDICATES WHETHER YOU ARE A REGISTERED SHAREHOLDER. 17.
    
    
    Q:
    
    
    HOW DO I VOTE?A:
    
    
    You can vote your Shares by proxy or in person at the Meeting if you are a Registered
Shareholder:(1
    )
    
    BY PROXY
 There are four ways that you can vote by proxy:  (a)
    
    By Telephone Call 1-866-271-1207 from your touch-tone phone
and follow the instructions (only available to Registered
 Shareholders
resident in Canada or the United States).You will need the control
number located on the enclosed proxy form. You do not need to return
your proxy form.  (b)
    
    On the Internet Go to www.eproxyvoting.com/potash and follow
the instructions on screen. You will need the control number located on
the enclosed proxy form.You do not need to return your proxy form. At any time, CIBC Mellon may cease to provide telephone and Internet voting, in which case
shareholders can elect to vote by mail, by fax or by attending the Meeting in person, as
described below.  (c)
    
    By Mail By completing, dating and signing the enclosed
proxy form and returning same in the envelope provided.  (d)
    
    By Fax By completing, dating and signing the enclosed
proxy form and forwarding same by fax at 1-416-368-2502.IF YOUR SHARES
ARE NOT REGISTERED IN YOUR NAME (E.G. IF THEY ARE HELD THROUGH A BANK,
TRUST COMPANY, SECURITIES BROKER OR OTHER NOMINEE), DO NOT USE THE ABOVE
FAX NUMBER AS IT IS RESERVED FOR REGISTERED SHAREHOLDERS. INSTEAD,
USE THE FAX NUMBERS, IF ANY, PROVIDED BY YOUR NOMINEE (See Question No.
 18(1)). (2)  BY ATTENDING THE MEETING IN PERSON If you wish to vote in person at the Meeting, do not complete or return the proxy form. VOTING BY NON-REGISTERED SHAREHOLDERS You are a Non-Registered (or beneficial) Shareholder if your Shares are held through a bank,
trust company, securities broker or other nominee. FOR MOST OF YOU, THE PROXY FORM SENT OR TO
BE SENT BY YOUR NOMINEE INDICATES WHETHER YOU ARE A NON-REGISTERED (OR BENEFICIAL) SHAREHOLDER. 18.
    
    
    Q:
    
    
    HOW DO I VOTE?A:
    
    
    There are two ways that you can vote your Shares if you are a Non-Registered (or
beneficial) Shareholder:




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(1
    )
    
    BY
PROVIDING VOTING INSTRUCTIONS TO YOUR NOMINEE
 Your nominee is required to seek voting instructions from you in advance of the Meeting.
Accordingly, you will receive or have already received from your nominee either a request for
voting instructions or a proxy form for the number of Shares you hold. Every nominee has its own procedures which should be carefully followed by Non-Registered
Shareholders to ensure that their Shares are voted at the Meeting. These procedures generally
allow voting by telephone, on the Internet, by mail or by fax. Please contact your nominee for
instruction in this regard. IF YOUR
SHARES ARE NOT REGISTERED IN YOUR NAME DO NOT USE THE FAX NO. IN
17(1)(d) AS THIS NUMBER IS RESERVED FOR REGISTERED SHAREHOLDERS.
 (2)  BY ATTENDING THE MEETING IN PERSON If you wish to vote in person at the Meeting,
insert your own name in the space provided on the request for voting
instructions or proxy form to appoint yourself as proxyholder and follow
the instructions of your nominee. Non-Registered Shareholders who instruct their nominee to appoint themselves as proxyholders
should, at the Meeting, present themselves to a representative of CIBC Mellon at the table
identified as Beneficial Shareholders. Do not otherwise complete the form sent to you as
your vote will be taken and counted at the Meeting.
   Except as otherwise stated, the information
contained herein is given as of February 28, 2005. Unless otherwise
specified, all dollar amounts are expressed in United States dollars.




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BUSINESS OF THE MEETING  1.
    
    Financial Statements  The Consolidated Financial Statements for the
year ended December 31, 2004 are included in the Corporations
Annual Report on Form 10-K for the fiscal year ended December 31,
2004 filed with the U.S. Securities and Exchange Commission and
the Canadian securities regulatory authorities.  2.
    
    Nominees for Election to the Board of Directors The 12 nominees proposed for election as
directors of the Corporation are listed beginning on page 8. All are
currently directors of the Corporation. All nominees have established
their eligibility and willingness to serve as directors. Directors will
hold office until the next annual meeting of shareholders of the
Corporation or until their successors are elected or appointed. Unless otherwise instructed, the persons
designated in the form of proxy intend to vote for the election of the
nominees listed beginning on page 8. If, for any reason, at the time
of the Meeting any of the nominees are unable to serve, and unless
otherwise specified, it is intended that the persons
 designated in the
form of proxy will vote in their discretion for a substitute nominee or
nominees.  3.
    
    Appointment of Auditors Proxies solicited hereby will be voted to
reappoint the firm of Deloitte & Touche LLP, the present auditors of
the Corporation, as auditors of the Corporation to hold office until the
next annual meeting of shareholders of the Corporation, unless the
shareholder signing such proxy specifies otherwise.  4.
    
    Adoption of New Option Plan At the Meeting, shareholders will be asked to
consider and, if deemed appropriate, adopt, with or without variation, a
resolution (the full text of which is reproduced as Appendix B to
this Management Proxy Circular) authorizing the Corporation to implement
a new stock option plan, which is attached as Appendix C to this
Management Proxy Circular. Unless a proxy specifies otherwise, the
persons designated in the form of proxy intend to vote for the
resolution to approve the new stock option plan.




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NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS  The articles of the Corporation provide that
the Board of Directors of the Corporation (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 12 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 majority 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. 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, their business experience
over the last five years, the period during which present directors of
the Corporation have served as directors, and the number of Shares and
Share Units beneficially owned by each of them as of February 28,
2005, including Shares over which any such individual has or shares
voting or investment power.
   (PHOTO OF F. BLESI)
    
    FREDERICK J. BLESI
    
    Director since 2001
    
    
    February
    
    
    
    February2004*
    
    
    
    2005Number of Shares Beneficially Owned
    
    
    0
    
    
    
    2,000Number of Shares Deemed to be Beneficially Owned**
    
    
    24,500
    
    
    
    16,000Number of Share Units Held***
    
    
    4,146
    
    
    
    5,476Mr. Blesi, 67, of Glenview, Illinois is a retired Chairman and Chief
Executive Officer of the Phosphate Chemicals Export Association Inc. (PhosChem),
the principal vehicle for the export of U.S.  phosphate chemicals. Prior to
joining PhosChem in 1981, he was Vice President, International with International
Minerals and Chemical Corporation. He is a director of the Evans Scholars Foundation
and the Western Golf Association.Mr. Blesi is a member of the Audit Committee and the Corporate Governance
and Nominating Committee.(PHOTO OF W. DOYLE)
    
    WILLIAM J. DOYLE
    
    Director since 1989
    
    
    February
    
    
    
    February2004*
    
    
    
    2005Number of Shares Beneficially Owned
    
    
    104,182
    
    
    
    77,551Number of Shares Deemed to be Beneficially Owned**
    
    
    794,182
    
    
    
    893,807Number of Share Units Held***
    
    
    0
    
    
    
    0Mr. Doyle, 54, of Saskatoon, Saskatchewan, 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. He is Chairman
of the Potash & Phosphate Institute and the International Fertilizer Industry
Associations Production and International Trade Committee and Vice Chairman of
Canpotex Limited and the Fertilizer Institute. Mr. Doyle is on the College Board
of Advisors at Georgetown University.Mr. Doyle is a member of the Executive Committee.




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(PHOTO OF J. ESTEY)
    
    JOHN W. ESTEY
    
    Director since 2003
    
    
    February
    
    
    
    February2004*
    
    
    2005Number of Shares Beneficially Owned
    
    
    0
    
    
    
    2,000Number of Shares Deemed to be Beneficially Owned**
    
    
    0
    
    
    
    2,000Number of Share Units Held***
    
    
    2,074
    
    
    
    3,953Mr. Estey, 54, of Glenview, Illinois, is President and Chief Executive
Officer of S&C Electric Company, Chicago, Illinois. He is a director of the
Institute of Electrical and Electronics Engineers and a member of the Board of
Governors of the National Electrical Manufacturers Association. A director of the
Executives Club of Chicago, he is also a member of the Deans Advisory Board at the
Kellogg School of Management at Northwestern University.Mr. Estey is Chair of the Compensation Committee and a member of the
Safety, Health and Environment Committee.(PHOTO OF W. FETZER)
    
    WADE FETZER III
    
    Director since 2002
    
    
    February
    
    
    
    February2004*
    
    
    2005Number of Shares Beneficially Owned
    
    
    2,000
    
    
    
    3,000Number of Shares Deemed to be Beneficially Owned**
    
    
    3,500
    
    
    
    6,000Number of Share Units Held***
    
    
    1,702
    
    
    
    2,428Mr. Fetzer, 67, of Glencoe, Illinois, is a Retired Partner with the
investment banking firm Goldman Sachs. He sits on the boards of Serologicals
Corporation, Sphere Communications, Northern Star Broadcasting, the University of
Wisconsin Foundation, the Kellogg Alumni Advisory Board and Rush-Presbyterian St.
Lukes Medical Center.Mr. Fetzer is a member of the Corporate Governance and Nominating
Committee and the Compensation Committee.(PHOTO OF D. HOWE)
    
    DALLAS J. HOWE
    
    Director since 1991
    
    
    February
    
    
    
    February2004*
    
    
    2005Number of Shares Beneficially Owned
    
    
    6,000
    
    
    
    6,000Number of Shares Deemed to be Beneficially Owned**
    
    
    46,900
    
    
    
    48,400Number of Share Units Held***
    
    
    5,704
    
    
    
    8,539Mr. Howe, 60, of Calgary, Alberta, serves in a management role with GE
Medical Systems Information Technology, which now includes the company he formerly
owned, BDM Information Systems. He is owner and Chief Executive Officer of DSTC
Ltd., a technology investment company and a director of Advanced Data Systems Ltd.
as well as Chair of the University of Saskatchewan Board of Governors. He served on
the Board of Potash Corporation of Saskatchewan, the Crown corporation, from 1982 to
1989. He joined the Corporations Board in 1991 and was elected Chair in 2003.Mr. Howe is Board Chair, Chair of the Executive Committee and a member of
the Corporate Governance and Nominating Committee.




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(PHOTO OF A. LABERGE)
    
    ALICE D. LABERGE
    
    Director since 2003
    
    
    February
    
    
    
    February2004*
    
    
    
    2005Number of Shares Beneficially Owned
    
    
    400
    
    
    
    2,000Number of Shares Deemed to be Beneficially Owned**
    
    
    400
    
    
    
    2,000Number of Share Units Held***
    
    
    1,740
    
    
    
    3,594Ms. Laberge, 48, of Vancouver, British Columbia, is President and Chief
Executive Officer of Fincentric Corporation, a global provider of software solutions
to financial institutions. She was formerly Senior Vice President and Chief
Financial Officer of MacMillan Bloedel Limited and is a director of BC Hydro,
the United Way of the Lower Mainland and St. Pauls Hospital Foundation.Ms. Laberge is a member of the Audit Committee and the Safety, Health and
Environment Committee.(PHOTO OF J. MCCAIG)
    
    JEFFREY J. McCAIG
    
    Director since 2001
    
    
    February
    
    
    
    February2004*
    
    
    
    2005Number of Shares Beneficially Owned
    
    
    0
    
    
    
    2,000Number of Shares Deemed to be Beneficially Owned**
    
    
    24,500
    
    
    
    28,000Number of Share Units Held***
    
    
    4,168
    
    
    
    5,512Mr. McCaig, 53, of Houston, Texas, is Chairman, Chief Executive Officer and a
director of Trimac Holdings, a bulk trucking and third-party logistics company.
Before joining Trimac in 1983, he practiced law, specializing in corporate financing
and securities. He is a director of Orbus Pharma Inc. and the Standard Life
Assurance Company of Canada.Mr. McCaig is a member of the Audit Committee and the Compensation
Committee.(PHOTO OF M. MOGFORD)
    
    MARY MOGFORD
    
    Director since 2001
    
    
    February
    
    
    
    February2004*
    
    
    
    2005Number of Shares Beneficially Owned
    
    
    2,000
    
    
    
    4,000Number of Shares Deemed to be Beneficially Owned**
    
    
    26,500
    
    
    
    10,000Number of Share Units Held***
    
    
    5,818
    
    
    
    6,587Ms. Mogford, 60, of Newcastle, Ontario, a Corporate Director, is a former
Ontario Deputy Finance Minister and Deputy Minister of Natural Resources. She is a
director of Falconbridge Ltd., MDS Inc., Sears Canada Inc. and Sears Canada Bank and
a member of the Altamira Advisory Council. A Fellow of the Institute of Corporate
Directors (ICD), in 2004 she was accredited through the ICD/Rotman School of
Business Directors Training Program.Ms. Mogford is the Chair of the Corporate Governance and Nominating
Committee and a member of the Audit Committee.(PHOTO OF P. SCHOENHALS)
    
    PAUL J. SCHOENHALS
    
    Director since 1992
    
    
    February
    
    
    
    February2004*
    
    
    
    2005Number of Shares Beneficially Owned
    
    
    2,000
    
    
    
    2,000Number of Shares Deemed to be Beneficially Owned**
    
    
    39,300
    
    
    
    2,000Number of Share Units Held***
    
    
    3,258
    
    
    
    4,410Mr. Schoenhals, 63, of Calgary, Alberta, is President of Petroleum Industry
Training Service. He is a former member of the Legislative Assembly and Cabinet
Minister in Saskatchewan and was Chairman of Potash Corporation of Saskatchewan, the
Crown corporation, from 1987 to 1989.Mr. Schoenhals is the Chair of the Safety, Health & Environment
Committee and a member of the Compensation Committee.




---



##### 





(PHOTO OF E. STROMBERG)
    
    E. ROBERTSTROMBERG, Q.C.
    
    Director since 1991
    
    
    February
    
    
    
    February2004*
    
    
    2005Number of Shares Beneficially Owned
    
    
    13,854
    
    
    
    13,876Number of Shares Deemed to be Beneficially Owned**
    
    
    58,754
    
    
    
    46,277Number of Share Units Held***
    
    
    3,282
    
    
    
    4,262Mr. Stromberg, 63, of Saskatoon, Saskatchewan, is associated with the
Saskatchewan law firm Robertson Stromberg Pedersen. He is a director of NorSask
Forest Products Inc. and Hitachi Canadian Industries Ltd. and is Chairman of the
Saskatoon Airport Authority.Mr. Stromberg is a member of the Executive Committee, the Safety, Health
 & Environment Committee and the Corporate Governance and Nominating Committee.(PHOTO OF J. VICQ)
    
    JACK G. VICQ
    
    Director since 1989
    
    
    February
    
    
    
    February2004*
    
    
    2005Number of Shares Beneficially Owned
    
    
    3,186
    
    
    
    3,186Number of Shares Deemed to be Beneficially Owned**
    
    
    41,486
    
    
    
    15,186Number of Share Units Held***
    
    
    2,360
    
    
    
    3,094Mr. Vicq, 65, of Saskatoon, Saskatchewan, is Professor Emeritus of
Accounting in the College of Commerce, University of Saskatchewan. He is a past
Associate Dean of Commerce at the university and was responsible for the Centre for
International Business Studies. Formerly holder of the A.W. Johnson Distinguished
Chair in Public Policy in the Saskatchewan Department of Finance, he is currently
Chairman of the Provincial Court Commission.Mr. Vicq is the Chair of the Audit Committee and a member of the Executive
Committee.(PHOTO OF E. VIYELLA)
    
    ELENA VIYELLA DEPALIZA
    
    Director since 2003
    
    
    February
    
    
    
    February2004*
    
    
    2005Number of Shares Beneficially Owned
    
    
    0
    
    
    
    2,500Number of Shares Deemed to be Beneficially Owned**
    
    
    0
    
    
    
    2,500Number of Share Units Held***
    
    
    1,754
    
    
    
    3,243Ms. Viyella de Paliza, 50, of the Dominican Republic, is President of
Inter-Quimica, S.A., a chemicals importer and distributor. She is also President and
founder of Monte Rio Power Corp., a power generation company, and President of
Indescorp, S.A. She is President of the Dominican Business Council, a member of the
board of the Inter-American Dialogue and past president of the Dominican Stock
Exchange, the Dominican Manufacturers Association and the National Agribusiness
Board.Ms. Viyella de Paliza is a member of the Executive Committee and the
Safety, Health and Environment Committee.
  *
    
    February 2004 figures adjusted to reflect stock split which
occurred in August 2004.**
    
    The number of Shares indicated above as deemed to be beneficially owned
by the nominated directors includes Shares purchasable by such directors within
60 days of February 28, 2005 through the exercise of options granted by
the Corporation, as follows: Frederick J. Blesi 14,000 Shares; William J.
Doyle 816,256 Shares; Wade Fetzer III 3,000 Shares; Dallas J. Howe
42,400 Shares; Jeffrey J. McCaig 26,000 Shares; Mary Mogford 6,000 Shares;
E. Robert Stromberg 36,400 Shares; and Jack G. Vicq 12,000 Shares.
No stock options have been granted to the Corporations non-employee
directors since November, 2002.***
    
    See Compensation/Attendance of Directors. Share Units do not carry any
voting rights. The number of Share Units held by each director has been rounded
down to the nearest whole number.
 All of the above directors have had the principal occupation described above for the
previous five years other than Ms. Laberge, who was Chief Financial Officer of Fincentric
Corporation from October 2000 to November 2003. In 2004, the Corporation had sales of approximately $421.9 million to Canpotex Limited.
Mr. Doyle is Vice Chair of Canpotex. The Corporation retained Robertson Stromberg Pederson in
2004. Total billings for 2004 did not exceed $250,000 and Mr. Stromberg derived no material
benefit therefrom. In 2004, the Corporation made sales of
approximately $16.2 million to
Fertilizantes Santo Domingo, C. por A, (Fersan) a company in which Ms. Palizas father and
brother hold executive officer positions. Ms. Paliza has no direct or indirect interest in
the Corporations sales to and purchases by Fersan and all such transactions are completed on
normal trade terms.




---



##### 





Director Independence The Board has determined that all of the
directors of the Corporation with the exception of Mr. Doyle and Ms. Paliza
are independent within the meaning of the PotashCorp
Governance Principles and the New York Stock Exchange corporate governance rules. See
Corporate Governance  Director Independence Standards. Mr. Doyle is the Chief Executive Officer of
the Corporation and is therefore not independent. Ms. Palizas
father and brother are executive officers of Fertilizantes Santo
Domingo, C. por A (Fersan), a fertilizer bulk blender and distributor
of agrichemicals based in the Dominican Republic, which is a customer of
the Corporation. Although representing less than 0.5% of the
Corporations consolidated sales in 2004, sales to Fersan exceeded 2% of
Fersans 2004 consolidated gross revenues. As such, Ms. Paliza does
not meet the Corporations categorical independence standards which
incorporate in relevant part the NYSE corporate governance rules. Ms. Paliza
has no direct or indirect interest in the Corporations
sales to and purchases by Fersan and all such transactions are completed
on normal trade terms. Even though she does not meet the aforementioned
independence standards, Ms. Paliza provides a valuable contribution
to the Board through her industry knowledge and experience and
international business perspective. 
 Compensation/Attendance of Directors Directors of the Corporation who are not also
employees are compensated through the cash payment of an annual retainer
plus other fees and the grant of Share Units (as hereinafter defined).
In 2003, the Board decided to discontinue granting stock options to
directors. Except as set forth below, each director who is
not also an officer or employee of the Corporation (an outside
director) receives from the Corporation a retainer at an annual rate of
$40,000 (until July 1, 2004 the annual rate of the retainer was
$27,000, which reflected the voluntary 10% reduction taken in 2003),
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 $10,000 per
year if they serve as a chair of a Board committee, with the
exception of the Audit Committee Chair who receives an additional $15,000 per
year. As of July 1, 2004, all Audit Committee members
receive an additional $5,000 per year, with the exception of the
Audit Committee Chair. 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. Effective July 1, 2004, Mr. Howe,
as Board Chair, receives an annual retainer of $110,000, but does
not receive per diem or travel fees. Director compensation is
established on the advice
 of independent consultants, with a view to
establishing compensation at the median of the applicable comparator
group. Effective November 20, 2001, the
Corporation adopted a Deferred Share Unit Plan for Non-Employee
Directors (the Plan), which entitles non-employee directors to receive
discretionary grants of deferred share units (Share Units), each of
which has an initial value equal to the market value of a Share at the
time of its grant. The Plan also allows the director to defer, in the
form of Share Units, up to 100% of the annual retainer fees and any
other fees payable to such director in respect of serving as a director
(Fees), which would otherwise be payable in cash. The Plan is intended
to enhance the Corporations ability to attract and retain highly
qualified individuals to serve as directors and promote a greater
alignment of interests between such directors and the shareholders of
the Corporation. The number of Share Units credited to the
directors account with respect to Fees that the director elects to
allocate to the Plan is determined as of the last trading day of each
calendar quarter and is equal to the quotient obtained by dividing (a) the
aggregate amount of Fees allocated to the Plan for the relevant
calendar quarter by (b) the market value of a Share on such last
trading day (determined on the basis of the closing price on the Toronto
Stock Exchange for participants resident in Canada and on the basis of
the closing price on the New York Stock Exchange for all other
participants). Share Units earn dividends in the form of additional
Share Units at the same rate as dividends are paid on Shares. Each Share Unit is credited to the account of
an individual director and fully vests upon an award, but is distributed
only when the director has ceased to be a member of the Board or the
board of directors of any subsidiary and the director is neither an
employee of the Corporation nor of any subsidiary. At such time, the director will receive a cash
payment equal to the market value of a number of Shares purchased on the
open market equal to the number of Share Units recorded in the
directors account (reduced by the amount of applicable withholding
taxes). While the Compensation Committee, with Board approval, has the
discretion to distribute Shares in lieu of cash, the Committee has
determined that all distributions pursuant to the Plan will be made in
cash. On July 1, 2004, the Board determined that
the value of annual DSU discretionary grants be established at $55,000
for outside directors, with the exception of the Board Chair, Mr. Howe,
whose annual value of DSU grants is set at $140,000. On December 3,
2004, each non-employee director received a discretionary grant
of 709 Share Units, with the exception of the Board Chair, Mr. Howe,
who was granted 1,806 Share Units.




---



##### 





The Board believes that the economic interests
of directors should be aligned with those of shareholders. To achieve
this, all directors are expected to hold Shares and Share Units in the
Corporation. By the time a director has served on the Board for ten
months, he or she must own a minimum of 2,000 Shares. By the time a
director has served on the Board for three years, he or she must own
Shares and/or Share Units with a value at least five times the annual retainer paid to directors. The Board may make exceptions to this
standard where, as a result of the unique financial
 circumstances of a
director, compliance would result in an unacceptable hardship. As at
February  28, 2005, all of the Corporations directors were in
compliance with the minimum shareholding requirements described above. Directors also participate in the Corporations
group life insurance coverage (Cdn$50,000), supplemental business travel
medical coverage ($250,000) and Accidental Death and Dismemberment
coverage (Cdn$100,000).
   The following table sets forth all compensation
earned by the individuals who served as directors of the Corporation
during fiscal 2004. Remuneration of Directorsfor the financial year ended December 31, 2004 Annual Retainer ($)
    
    
    
    
    
    
    
    Meeting and Other Fees ($)Grant of
    
    
    
    
    
    
    
    
    
    
    
    
    TotalDeferral to
    
    
    Share Units
    
    
    
    
    
    
    
    Deferral to
    
    
    RemunerationDirector
    
    
    Cash
    
    
    Share Units
    
    
    ($)
    
    
    Cash
    
    
    Share Units
    
    
    ($)Frederick J. Blesi
    
    
    $
    
    
    
    
    $
    33,500.00
    
    
    
    $
    55,000.00
    
    
    
    $
    32,961.54
    
    
    
    $
    
    
    
    
    $
    121,461.54William J. Doyle
    
    
    $
    
    
    
    
    $
    
    
    
    
    $
    
    
    
    
    $
    
    
    
    
    $
    
    
    
    
    $
    John W. Estey
    
    
    $
    
    
    
    
    $
    33,500.00
    
    
    
    $
    55,000.00
    
    
    
    $
    
    
    
    
    $
    31,038.46
    
    
    
    $
    119,538.46Wade Fetzer III
    
    
    $
    33,500.00
    
    
    
    $
    
    
    
    
    $
    55,000.00
    
    
    
    $
    24,500.00
    
    
    
    $
    
    
    
    
    $
    113,000.00Dallas J. Howe
    
    
    $
    42,485.00
    
    
    
    $
    42,485.00
    
    
    
    $
    140,000.00
    
    
    
    $
    
    
    
    
    $
    10,000.00
    
    
    
    $
    234,970.00Alice D. Laberge
    
    
    $
    
    
    
    
    $
    33,500.00
    
    
    
    $
    55,000.00
    
    
    
    $
    
    
    
    
    $
    28,000.00
    
    
    
    $
    116,500.00Jeffrey J. McCaig
    
    
    $
    
    
    
    
    $
    33,500.00
    
    
    
    $
    55,000.00
    
    
    
    $
    30,000.00
    
    
    
    $
    
    
    
    
    $
    118,500.00Mary Mogford
    
    
    $
    33,500.00
    
    
    
    $
    
    
    
    
    $
    55,000.00
    
    
    
    $
    36,500.00
    
    
    
    $
    
    
    
    
    $
    125,000.00Paul J. Schoenhals
    
    
    $
    22,344.50
    
    
    
    $
    11,155.50
    
    
    
    $
    55,000.00
    
    
    
    $
    22,344.50
    
    
    
    $
    11,155.50
    
    
    
    $
    122,000.00E. Robert Stromberg, Q.C.
    
    
    $
    20,100.00
    
    
    
    $
    13,400.00
    
    
    
    $
    55,000.00
    
    
    
    $
    18,000.00
    
    
    
    $
    
    
    
    
    $
    106,500.00Jack G. Vicq
    
    
    $
    33,500.00
    
    
    
    $
    
    
    
    
    $
    55,000.00
    
    
    
    $
    33,000.00
    
    
    
    $
    
    
    
    
    $
    121,500.00Elena Viyella De Paliza
    
    
    $
    16,750.00
    
    
    
    $
    16,750.00
    
    
    
    $
    55,000.00
    
    
    
    $
    
    
    
    
    $
    25,000.00
    
    
    
    $
    113,500.00Total
    
    
    $
    202,179.50
    
    
    
    $
    217,790.50
    
    
    
    $
    690,000.00
    
    
    
    $
    197,306.04
    
    
    
    $
    105,193.96
    
    
    
    $
    1,412,470.00




---



##### 





The following table provides a summary of Board
and Committee meetings held during fiscal 2004. Summary of Board and Committee Meetings Held
For the 12-month period ended December 31, 2004Board of Directors
    
    
    
    9Audit Committee
    
    
    
    9Compensation Committee
    
    
    
    10Corporate Governance and Nominating Committee
    
    
    
    5Executive Committee
    
    
    
    0Safety, Health and Environment Committee
    
    
    
    4Total number of meetings held
    
    
    
    37
 The following table provides a summary of
Attendance for Board and Committee members during fiscal 2004. Summary of Attendance of Directors
For the 12-month period ended December 31, 2004Board
    
    
    Committeemeetings
    
    
    meetingsDirector
    
    
    attended
    
    
    attendedFrederick J. Blesi
    
    
    9 of 9
    
    
    15 of 15William J. Doyle
    
    
    9 of 9
    
    
    *John W. Estey
    
    
    9 of 9
    
    
    14 of 14Wade Fetzer III
    
    
    9 of 9
    
    
    15 of 15Dallas J. Howe
    
    
    9 of 9
    
    
    5 of 5 **Alice D. Laberge
    
    
    9 of 9
    
    
    13 of 13Jeffrey J. McCaig
    
    
    9 of 9
    
    
    18 of 19Mary Mogford
    
    
    9 of 9
    
    
    14 of 14Paul J. Schoenhals
    
    
    9 of 9
    
    
    14 of 14E. Robert Stromberg, Q.C.
    
    
    9 of 9
    
    
    9 of 9Jack G. Vicq
    
    
    9 of 9
    
    
    9 of 9Elena Viyella de Paliza
    
    
    9 of 9
    
    
    9 of 9
  *
    
    Mr. Doyle was a member of only the Executive
Committee, which did not meet in 2004. However, upon invitation of the
applicable Committees, he did attend all or a portion of many of the
Committee meetings held.**
    
    In addition to the Committees of which he is a member,
Mr. Howe, as Board Chair, regularly attends other Committee meetings
as well. 
 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. Since the Corporations
initial public offering in 1989, Deloitte & Touche LLP (or its
predecessors) have been the Corporations auditors. 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. For the years ended December 31, 2004 and
December 31, 2003, Deloitte & Touche LLP received the following
fees: Year ended December 31,2004
    
    
    2003$
    
    
    $Audit Fees
    
    
    
    2,301,000
    
    
    
    
    1,291,000Audit Related Fees
    
    
    
    165,000
    
    
    
    
    363,000Tax Fees
    
    
    
    79,000
    
    
    
    
    62,000All Other Fees
    
    
    
    121,000
    
    
    
    
    27,000
 Audit Fees Deloitte & Touche LLP billed the
Corporation $2,301,000 and $1,291,000 for 2004 and 2003, respectively,
for the following audit services: (i) audit of the annual
consolidated financial statements of the Corporation for the fiscal
years ended December 31, 2004 and 2003; (ii) review of the
interim financial statements of the Corporation included in quarterly
reports on Form 10-Q for the periods ended March 31, June 30
and September 30, 2004 and 2003; (iii) audits of individual
statutory financial statements; (iv) attest services and the
provision of comfort letters; (v) the provision of consent letters;
and (vi) review and advice in respect of accounting matters in
connection with the Corporations shelf registration statement and
prospectus filings. The amounts billed for 2004 were significantly
impacted by the Sarbanes-Oxley 404 requirements. Audit-Related Fees Deloitte & Touche LLP billed the
Corporation $165,000 and $363,000 for 2004 and 2003, respectively, for
the following services: (i) internal control reviews; (ii) accounting
consultations regarding financial accounting and reporting
standards; (iii) employee benefit plan audits; and (iv) due
diligence related to mergers and acquisitions. Tax Fees Deloitte & Touche LLP billed the
Corporation $79,000 and $62,000 for 2004 and 2003, respectively, for
the following services: (i) tax compliance; (ii) tax planning;
and (iii) tax advice, including minimizing tax exposure or liability.




---



##### 





All Other Fees Deloitte & Touche LLP billed the
Corporation US$121,000 and $27,000 for 2004 and 2003, respectively, for
provision of risk and knowledge datasets and implementation of a risk
control tracking system and reports on conducting business in foreign
jurisdictions. Pre-Approval Policy for External Auditor Services The Audit Committee monitors and reviews the
independence of its auditors on an on-going basis. In addition, the
Committee has adopted processes for the pre-approval of engagements for
services of its external auditors. The Audit Committees policy requires
pre-approval of all audit and non-audit services provided by the
external auditor. The policy identifies three categories of external
auditor services and the pre-approval procedures applicable to each
category, as follows:  (1)
    
    Audit and audit-related services  these are identified in the annual Audit
Service Plan presented by the external auditor and require annual approval. The
Audit Committee monitors the audit services engagement at least quarterly.(2)
    
    Pre-approved list of non-audit services  non-audit services which are
reasonably likely to occur have been identified and receive general pre-approval of
the Audit Committee, and as such do not require specific pre-approvals. The term of
any general pre-approval is 12 months from approval unless otherwise specified.
The Audit Committee annually reviews and pre-approves the services on this list.(3)
    
    Other proposed services  all proposed services not categorized above are
brought forward on a case by case basis and specifically pre-approved by the Chair
of the Audit Committee, to whom pre-approval authority has been delegated. All fees paid to the independent auditors for
2004 were approved in accordance with the pre-approval policy. 
 ADOPTION OF NEW PERFORMANCE OPTION PLAN 2005 Performance Option Plan On February 28, 2005, the Board adopted a
new stock option plan (the 2005 Performance Option plan), subject to
the approval of the 2005 Performance Option plan by the Corporations
shareholders at the Meeting. If approved, the 2005 Performance Option
plan will be deemed effective as of January 1, 2005 and will permit
the grant of options to purchase up to 1,200,000 Shares to
individual officers and employees of the Corporation and its
subsidiaries. Non-employee directors and other non-employee contractors
and third party vendors will not be eligible to participate in the 2005
Performance Option plan.
 Options to purchase Shares may be granted under
the terms of the 2005 Performance Option plan only during 2005 and no
options will be granted prior to the Meeting. Unless sooner terminated
as provided therein, the 2005 Performance Option plan will terminate on
January 1, 2006, although the terms of the plan will continue to
govern options granted thereunder prior to termination. The 2005 Performance Option plan will be
administered by the Compensation Committee or any other Board committee
designated by the Board. A copy of the 2005 Performance Option plan is
attached hereto as Appendix C. This description of the 2005
Performance Option plan is qualified, in its entirety, by the terms of
the attached plan document. If approved, the 2005 Performance Option plan
will result in up to 1.08% (as at February 28, 2005)
of the outstanding share capital of the Corporation being available for
issue pursuant to the exercise of options granted under the 2005
Performance Option plan. The aggregate number of Shares in respect of
which stock options may be granted to any one person pursuant to the
2005 Performance Option plan and which remain outstanding may not at any
time exceed 300,000 Shares, representing .27% (as at
February 28, 2005) of the outstanding share capital of the
Corporation. Under the terms of the 2005 Performance Option
plan, options will have a term of 10 years and will vest at the end
of the 3 year performance cycle ending December 31, 2007,
subject to the Corporations achievement of the performance criteria
described in the 2005 Performance Option plan (see Appendix C). The
performance metrics and vesting scale have been designed in accordance
with the Corporations compensation philosophy. See Compensation
Committee Report on Executive Compensation. In general, options will
vest as determined by a schedule that references the Corporations
performance during the performance cycle as measured by reference to
cash flow return on investment and weighted average cost of capital.
Based upon historical data, the vesting schedule was developed to
deliver value represented by the number of options vested that is in
accordance with the Companys performance relative to its peer group
defined as the corporations included in the Dow Jones US Basic Materials
Index for such period. Any options that do not become vested will
terminate at the end of the performance cycle. The number of options granted to each
individual optionee will be targeted to deliver total compensation in
the 75th percentile (of the Executive Comparator Group) for corporate
performance above the 75th percentile (of the Dow Jones index, as
described above). Similarly, for corporate performance in the 50th
percentile (of the Dow Jones index), the number of options granted will
be targeted to deliver total compensation in the 50th percentile (of the
Executive Comparator Group).




---



##### 





It is anticipated that there will be
approximately 215 participants in the 2005 Performance Option plan.
Following shareholder approval of the 2005 Performance Option plan at
the Meeting, a determination will be made as to the number of options to
be granted to executive officers and other participants, which options
will be granted in accordance with the criteria described below. The option price for any option granted under
the 2005 Performance Option plan to any optionee shall be fixed by the
Board when the option is granted and shall not be less than the fair
market value of a Share at such time which, for optionees resident in
the United States and any other optionees designated by the Board, shall
be deemed to be the closing price per Share on the New York Stock
Exchange on the last trading day immediately preceding the day the stock
option is granted and, for all other optionees, shall be deemed to be
the closing price per Share on the Toronto Stock Exchange on the last
trading day immediately preceding the day the stock option is granted,
provided that, in either case, if the Shares did not trade on such
exchange on such day the option price shall be the closing price per
Share on such exchange on the last day on which the Shares traded on
such exchange prior to the day the stock option is granted. The 2005 Performance Option plan requires all
options to be subject to provisions to the effect that:  (a)
    
    if the employment of an optionee as an officer or employee of the Corporation or a
subsidiary terminates by reason of his or her death, or if an optionee who is a retiree
pursuant to paragraph (b) below dies during the 36 month period following
retirement, the legal personal representatives of the optionee will be entitled to
exercise any unexercised vested options, including such stock options that may vest
after the date of death, during the period ending at the end of the twelfth calendar
month following the calendar month in which the optionee dies, failing which exercise
the stock options will terminate;(b)
    
    subject to the terms of paragraph (a) above, if the employment of an optionee
as an officer or employee of the Corporation or a subsidiary terminates by reason of
retirement in accordance with the then prevailing retirement policy of the Corporation
or subsidiary, the optionee will be entitled to exercise any unexercised vested stock
options, including such stock options that may vest after the date of retirement, during
the period ending at the end of the 36th month following the calendar month in which the
optionee retires, failing which exercise the stock options will terminate;(c)
    
    if the employment of an optionee as an officer or employee of the Corporation or a
subsidiary
 terminates for any reason other than as provided in paragraphs (a) or
(b) above, the optionee will be entitled to exercise any unexercised vested stock
options, to the extent vested and exercisable at the date of such event, during the
period ending at the end of the calendar month immediately following the calendar month
in which the event occurs, failing which exercise the stock options will terminate; and(d)
    
    each stock option is personal to the optionee and is not assignable, except (i) 
as provided in paragraph (a) above, and (ii) at the election of the Board, a
stock option may be assignable to the spouse, children and grandchildren of the original
optionee and to a trust, partnership or limited liability company, the entire beneficial
interest of which is held by one or more of the foregoing. Nothing contained in paragraphs (a), (b) or
(c) above shall extend the period during which a stock
option may be exercised beyond its ten year term or any earlier date on
which it is otherwise terminated in accordance with the provisions of
the 2005 Performance Option plan. If a stock option is assigned pursuant to
paragraph (d)(ii) above, the references in paragraphs (a), (b) and
(c) above to the termination of employment or death of an
optionee shall not relate to the assignee of a stock option but shall
relate to the original optionee. In the event of such assignment, legal
personal representatives of the original optionee shall not be entitled
to exercise the assigned stock option, but the assignee of the stock
option or the legal personal representatives of the assignee may
exercise the stock option during the applicable specified period. The Board may amend or discontinue the 2005
Performance Option plan at any time but no such amendment may increase
the aggregate maximum number of Shares that may be subject to stock
options granted under the 2005 Performance Option plan, change the
manner of determining the minimum option price, extend the option term
under any option beyond 10 years or, without the consent of the
holder of the option, alter or impair any option previously granted to
an optionee under the 2005 Performance Option plan; and, provided
further, that, without the prior approval of the Corporations
shareholders, stock options issued under the 2005 Performance Option
plan shall not be repriced, replaced, or regranted through cancellation,
or by lowering the option price of a previously granted stock option. In
the event of certain transactions affecting the capitalization of the
Corporation, including a merger, the Board may make such adjustments in
the number or option price of outstanding options or the number of
Shares available for grant and other authorized limits under the 2005
Performance Option plan it deems appropriate to reflect such
transaction. In the event of change of control (as defined in the 2005
Performance Option




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##### 





plan), all unvested options then outstanding will
become fully vested. A participant in the 2005 Performance Option
plan who is employed and resident in Canada will be deemed to receive a
benefit from employment in the year he or she exercises options under
the 2005 Performance Option plan. One-half of the difference between the
exercise price and the market price of the Shares at the time of
exercise, multiplied by the number of Shares over which options are
exercised, will be included in the participants taxable income in the
year of exercise. If the participant so elects, and subject to certain
limitations, taxation of the said benefit may be deferred from the year
of exercise until the earliest of the year the participant disposes of
the Shares, dies, or ceases to be resident in Canada for tax purposes.
The participant will have a cost base in the optioned Shares equal to
their market value on the date of exercise for purposes of computing any
capital gain or capital loss on any subsequent disposition of the
Shares. The Corporation may not take any tax deduction in respect of the
benefits deemed to be received by participants under the 2005
Performance Option plan in Canada. All of the options granted under the 2005
Performance Option plan will be treated as non-qualified stock options
for U.S. federal income tax purposes. A participant in the 2005
Performance Option plan who is employed and resident in the U.S. will
not be deemed to receive any income at the time an option is
granted, nor will the Corporations applicable subsidiary be entitled to a deduction at that
time. However, when any part of an option is exercised, the participant
will be deemed to have
 received ordinary income in an amount equal to
the difference between the exercise price of the option and the fair
market value of the Shares received on the exercise of the option. The
Corporations applicable subsidiary will be entitled to a tax deduction in an amount equal to
the amount of ordinary income realized by such participants. Upon any
subsequent sale of the Shares acquired upon the exercise of an option,
any gain (the excess of the amount received over the fair market value
of the Shares on the date ordinary income was recognized) or loss (the
excess of the fair market value of the Shares on the date ordinary
income was recognized over the amount received) will be a long-term
capital gain or loss if the sale occurs more than one year after such
date of recognition and otherwise will be a short-term capital gain or
loss. Grants under the 2005 Performance Option plan
shall be made after shareholder approval is obtained and during fiscal
2005 only. A new plan is expected to be presented for shareholder
approval at the 2006 annual meeting. The Corporation has an existing Stock Option
Plan  Officers and Employees with 135,582 options remaining
available for grant as at February 28, 2005 (102,796 at December 31,
2004) and a Stock Option Plan  Directors with 28,600 options
remaining available for grant as at February 28, 2005 (28,600 at
December 31, 2004). The following table provides information about
securities that may be issued under the Corporations existing equity
compensation plans, as of December 31, 2004 and February 28,
2005:
   Equity Compensation Plan Information (c)Number of Sharesremaining available for(a)
    
    (b)
    
    future issuance underNumber of Shares to be
    
    Weighted-average exercise
    
    equity compensationissued upon exercise of
    
    price of outstanding
    
    plans (excluding Sharesoutstanding options,
    
    options,
    
    reflected inPlan Category
    
    warrants and rights
    
    warrants and rights
    
    column (a))December 31, 2004Equity compensation plans approved by shareholders
    
    
    6,400,730
    *
    
    $
    34.97
    
    
    
    131,396Equity compensation plans not approved by shareholders
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aFebruary 28, 2005Equity compensation plans approved by shareholders
    
    
    5,440,532
    **
    
    $
    34.94
    
    
    
    164,182Equity compensation plans not approved by shareholders
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
  *
    
    Of this amount, 6,150,730 options
were outstanding pursuant to the Stock Option Plan  Officers and Employees
and 250,000 options were outstanding pursuant to
the Stock Option Plan  Directors.**
    
    Of this amount, 5,234,732 options were
outstanding pursuant to the Stock Option Plan  Officers and Employees and
205,800 options were outstanding pursuant to the
Stock Option Plan  Directors.  In order for the 2005 Performance Option plan
to become effective, the resolution to approve the 2005 Performance
Option plan must be passed by a majority of the votes cast by the
shareholders who vote in respect of the resolution.
 UNLESS A PROXY SPECIFIES THAT THE SHARES IT
REPRESENTS SHOULD BE VOTED AGAINST THE RESOLUTION TO APPROVE THE 2005
PERFORMANCE OPTION PLAN, THE PROXYHOLDERS NAMED IN THE ACCOMPANYING FORM
OF PROXY INTEND TO VOTE FOR THE RESOLUTION.




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##### 





CORPORATE GOVERNANCE In accordance with the rules of the Toronto
Stock Exchange, the Corporation annually discloses information relating
to its system of corporate governance. Details of the Corporations
corporate governance practices are described in Appendix A to this
Management Proxy Circular. In addition, the recent activities of certain
of the Committees of the Board are described in part below in the Committee
Reports. The PotashCorp Governance Principles, described below and the
Board committee charters are also available on the Corporations website
and in print to any shareholder who requests a copy from the Corporate
Secretary of the Corporation. As a Canadian reporting issuer with securities
listed on the Toronto Stock Exchange and the New York Stock Exchange,
the Corporation has in place corporate governance practices that are not
only consistent with the requirements of both of those stock exchanges
but in many cases go beyond those requirements. The Corporation is also
in compliance with applicable rules adopted by the Canadian Securities
Administrators and the U.S. Securities and Exchange Commission. 
 Director Independence Standards For a director to be considered independent,
the Board must determine that the director does not have any material
relationship with the Corporation (either directly or as a partner,
shareholder or officer of an organization that has a relationship with the Corporation). As permitted by the
corporate governance rules of the New York Stock Exchange (the NYSE),
the Board has adopted categorical standards to assist it in making
determinations of independence. These standards are set out in the
PotashCorp Governance Principles, the full text of which is available
on the Corporations website. The independence standards
established by the Board are as follows:  1.
    
    A director will not be independent if, within the preceding three years:  (a)
    
    the director was employed by the Corporation, including any subsidiary or affiliated
entity of the Corporation;(b)
    
    an immediate family member of the director was employed by the Corporation, including
any subsidiary or affiliated entity of the Corporation, as an executive officer;(c)
    
    the director was employed by or affiliated with any of the Corporations present or
former internal or external auditors;(d)
    
    an immediate family member of the director was employed by or affiliated with any of
the Corporations present or former internal or independent auditors as a partner,
principal, manager or in any other professional capacity; or
 (e)
    
    an executive officer of the Corporation has served on the compensation committee of the
board of directors of a company which, in turn, employed either (i) the particular
director as an executive officer or (ii) an immediate family member of such director
as an executive officer.  2.
    
    If a director has any of the following commercial or charitable relationships, such
director will not be considered to be independent:  (a)
    
    the director has served as an executive officer or employee of, or any of his or her
immediate family members has served as an executive officer of, another company that
makes payments to, or receives payments from, the Corporation for property or services in
an amount that, in any of the three most recent fiscal years, exceeds the greater of (x) U.S. $1,000,000
and (y) 2 percent of the annual consolidated gross
revenues of the company for which such director, or any of his or her immediate family
members, has served as an executive officer (or as an employee in the case of the
director);(b)
    
    the director has served as an officer, director or trustee of a charitable
organization, and the Corporations discretionary charitable contributions to that
organization exceeds 1.5 percent of that organizations total annual consolidated
gross revenues within any of the three most recent fiscal years (provided that the
Corporations matching of employee charitable contributions will not be included in the
amount of the Corporations contributions for this
purpose); or(c)
    
    a director will not be considered to be independent if the director, within the past
three fiscal years, receives any direct compensation from the Corporation, other than
director and committee fees and pension or other forms of deferred compensation for prior
service (provided that such compensation is not contingent in any way on continued
service).  3.
    
    Where a relationship exists as a result of a director who is a limited partner, a
non-managing member or who occupies a similar position in an entity that does business with
the Corporation, or who has a shareholding in such entity which is not significant, and who,
in each case, has no active role in sales to, purchases from, or in
providing services to the Corporation and derives no direct material benefit from same, such relationship shall be considered not to be
material. The Board has determined that all of the
directors of the Corporation with the exception of Mr. Doyle and Ms. Paliza
are independent within the meaning of the PotashCorp
Governance Principles and the NYSE corporate governance rules.




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Report of the Audit Committee The Board has determined that each of the
following directors, who served as members of the Audit Committee (the
Committee) during the year ended December 31, 2004, is independent
according to the Boards independence standards as set out in the
PotashCorp Governance Principles, which is available on the
Corporations website, applicable rules of the U.S. Securities and
Exchange Commission (the SEC) and the corporate governance rules of
the New York Stock Exchange (the NYSE). See also
Corporate Governance  Director Independence Standards: Jack G. Vicq (Chair)
Frederick J. Blesi
Alice D. Laberge
Jeffrey J. McCaig
Mary Mogford The Board has determined that Mr. Vicq
qualifies as an audit committee financial expert under the rules of
the SEC and thereby has the requisite accounting and/or related
financial management expertise required under the rules of the NYSE. In
addition, the Board in its business judgment has determined that each
member of the Committee is financially literate. In accordance with the Audit Committee Charter
adopted by the Board, the Audit Committee has responsibility for the
oversight of the Corporations financial reporting and audit processes
and related internal controls on behalf of the Board. During the fiscal
year ended December 31, 2004, the Committee met 9 times. In overseeing the audit process, the Audit
Committee obtained from the independent auditors their letter dated
February 17, 2005 as required by the Independent Standards Board
Standard No. 1 describing all relationships between the auditors and
the Corporation that might bear on the auditors independence and the
auditors judgment that they are, in fact, independent and discussed
with the auditors the disclosures therein. The Committee also reviewed
the organizational structure, procedure and practices that support the
objectivity of the internal audit department and reviewed and approved
the Internal Audit Department Charter. The Committee reviewed with both
the independent and the internal auditors their audit plans, audit scope
and identification of audit risks. The Committee discussed, with and
without management present, the results of the independent auditors
communications required by generally accepted auditing standards,
including those described in Statement on Auditing Standards No. 61,
as amended, Communication with Audit Committees. The Committee also
discussed the results of the internal audit examinations. In meetings with financial management, internal
audit and the independent auditors, the Audit Committee reviewed and
discussed quarterly interim financial information prior to
 the earnings
release for the applicable quarter. The Committee also reviewed the
quarterly and annual MD&As. The Audit Committee reviewed and discussed the
audited financial statements of the Corporation as of and for the fiscal
year ended December 31, 2004, with management and the independent
auditors, including the quality, not just the acceptability, of the
Corporations financial reporting practices and the completeness and
clarity of the related financial disclosures. Management is responsible
for the preparation of the Corporations financial statements and the
independent auditors are responsible for auditing those financial
statements. The Audit Committee reviewed the processes
involved in evaluating the Corporations internal control environment
and the Committee also oversaw and monitored the 2004 compliance process
related to the Sarbanes-Oxley 404 certification and attestation
requirements. Based on the above-mentioned review and
discussions with management and the independent auditors, the Audit
Committee recommended to the Board that the audited consolidated
financial statements be included in the Corporations Annual Report on
Form 10-K for the fiscal year ended December 31, 2004, for
filing with the SEC. The Audit Committee also recommended the
reappointment, subject to shareholder approval, of the independent
auditors. The Committee reviews the Corporations
Disclosure Controls and Procedures on an annual basis. In addition, in
November, 2004, it reviewed and updated its Committee Charter, a copy of
which is attached as Appendix D hereto. The Committee has
established procedures for:  
    
    the receipt, retention and treatment of complaints received by the Corporation
regarding accounting, internal accounting controls or auditing matters; and
    
    the confidential, anonymous submission by employees of the Corporation of concerns
regarding questionable accounting or auditing matters. Submitted on behalf of the Audit Committee,
Jack G. Vicq, Frederick J. Blesi, Alice D. Laberge, Jeffrey J. McCaig
and Mary Mogford. 
 Report of the Compensation Committee Composition of the
Compensation Committee The Board has determined that, with the
exception of Ms. Paliza, who is no longer on the Committee, each of
the following directors who served as members of the Compensation
Committee during the year ended December 31, 2004, is independent
according to the Boards independence standards as set out in the
PotashCorp Governance Principles, which is available on the
Corporations website, applicable rules of the SEC and the corporate
governance rules of the NYSE. See also Corporate Governance 
Director Independence Standards.




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The following individuals served as members of
the Compensation Committee during the year which ended on December 31,
2004. John W. Estey (Chair)
Wade Fetzer III
Jeffrey J. McCaig
Paul J. Schoenhals
Elena Viyella de Paliza (joined Committee in May 2004)
Frederick J. Blesi (member and Chair of Committee until May 2004) Compensation Committee
Report on Executive Compensation The Compensation Committee of the Board (the
Committee) is, at present, composed of four independent directors. The
Committee held 10 meetings in the last fiscal year. 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 the Short and Long-Term Incentive plans,
each in accordance with its terms. The Committee reviews and makes
recommendations regarding the general merit increase budget for salaried
and non-bargaining hourly employees and has general oversight of
employee benefit programs. In addition, the Committee, in consultation
with the Chief Executive Officer, considers and reports to the Board
regarding corporate succession matters. Compensation Structure and Policies Executive compensation policies, as described
more fully below, 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 that encourages individual performance consistent with
shareholder expectations. Compensation Principles  
    
    Provide emphasis on performance-based-compensation by maintaining total cash
compensation levels (salary and annual short-term incentives) at the median (50th
percentile) of the relevant comparator group with the opportunity to achieve above median
compensation through the long-term incentive plans (stock options and performance units)
by achieving above median company performance.
 
    
    External competitive compensation comparisons prepared by independent compensation
consultants currently consist of a group of 22 publicly traded companies selected on the
basis of a number of factors, including similar industry characteristics and market
capitalization (the Executive Comparator Group).
    
    In order to determine the median for the purpose of total cash compensation
comparisons, regression based upon sales size is applied to the salaries and annual
short-term incentive targets of the Executive Comparator Group for each position studied.
    
    The opportunity to earn total compensation above the median is provided through
long-term incentive plans. These plans are designed with measures (total shareholder
return and internal performance measures that have been linked historically with total
shareholder return TSR) that will require above median company performance relative to
other basic materials companies in order to deliver above median total compensation. The
total shareholder return of the Dow Jones U.S. Basic Materials Companies Index (the
DJUSBMI) has been established as a benchmark for determining the relative performance
of the Corporation.
    
    In order to determine the median and upper quartile for purposes of total compensation
(salary, annual short-term incentives and long term incentives), the range between
competitive levels based upon comparative sales size regression and comparative market
capitalization regression is utilized.
    
    Establish the value of retirement and welfare benefits at the median of comparator
companies.




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##### 



- 21 - Elements of Executive Compensation  Executive compensation consists of four main
elements: base salary, cash, short-term incentives, performance
units issued under the Long-Term Incentive
 Plan which measures a
performance period of three years and stock options issued as long-term
incentives. These are described in the table below.
   Compensation
    
    
    
    
    
    
    
    
    PerformanceElement
    
    
    Form
    
    
    Eligibility
    
    
    Period
    
    
    DeterminationBase salary
    
    
    Cash
    
    
    All executives
    
    
    Annual
    
    
       Base salary targets are set at the median of the Executive
Comparator Group, adjusted to reflect individual performance and
internal equity.Short-term incentives
    
    
    Cash
    
    
    All executives and other selected managers (approximately 215 individuals)
    
    
    1 year
    
    
       Awards are based on the achievement of predetermined goals
for corporate performance or a combination of corporate and operating
group performance.
   Individual awards can be adjusted (+/- 10%)
to recognize individual performance.*LTIP (3-year performance period)
    
    
    Performance share units
    
    
    All executives and senior management (approximately 65 individuals)
    
    
    3 years
    
    
       Units issued at a price equal to the average market price of
the Shares at award date (January 1, 2003).
   Each award vests and is paid out at the end of the
three-year performance period (December 31, 2005) in relation to
a vesting schedule whereby 1⁄2 of the units are vested in accordance
with corporate TSR targets and 1⁄2 of the units are vested in
accordance with corporate TSR relative to a selected competitive
groups TSR.
   The value at payout is based on the number of vested units
multiplied by the 30-day average Share price at the end of the
performance period.Long-term incentives
    
    
    Stock options
    
    
    All executives and other selected managers (approximately 215 individuals)
    
    
    10 years
    
    
       Based on Share price appreciation over the 10-year term.
   Proposed new Performance Option Plan
will incorporate performance vesting.
 * +/- 20% beginning with the 2005 year.  The Corporation does not have any non-qualified deferred
compensation arrangements in place for management. Salary The Corporation has established a system of
tiered salary levels for senior executives (i.e. vice president and
above) of the Corporation. Senior executive positions are assigned to an
appropriate salary tier, considering the positions internal value as
well as external comparisons to comparable positions
 in the Executive
Comparator Group. The Compensation Committee generally establishes
salary guidelines at levels that approximate the median (the 50th
percentile) of the Executive Comparator Group, adjusted through a
regression analysis utilizing sales size. Individual executive salaries
for the direct reports to the Chief Executive Officer are subject to
approval by the Chief Executive Officer and the Compensation Committee.
The Chief Executive Officers salary is subject to approval by the
Compensation Committee and the Board.




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Short-Term Incentive Compensation The Corporations Short-Term Incentive Plan is
intended to aid in developing strong corporate management by providing
annual financial incentives to key employees to achieve 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. Currently there are about 215 participants in this
plan. Eligible positions are assigned an incentive award range with a
target expressed as a percentage of salary. The Corporations
performance as determined by cash flow return (defined in the plan) in
relation to a pre-established target provides a corporate measure of
achievement expressed as a percentage and applied to the potential
target award. Individual awards are also adjusted in accordance with
individual performance and such other factors as the Committee deems
appropriate. For certain participants employed at operating facilities,
1⁄2 of the award is based upon achievement of the corporate performance
target and 1⁄2 based upon achievement of annually determined operating
facility targets, including safety, environmental performance and
productivity. Under the terms of the plan, generally no
payments are made if the cash flow return 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 can range from 15% to 140% of
salary, depending upon actual cash flow return as compared to target
return above the minimum threshold requirement, and subject to
adjustment based on the Executives performance and such other factors
as the Committee deems appropriate. Effective for the 2005 plan year, the targets
for all plan participants have been adjusted. In accordance with the
Committees principle that cash compensation, including base pay and
annual short-term incentives, should be at the median of the Executive
Comparator Group, the targets for senior executives, which include the
Named Executive Officers, are adjusted to deliver awards ranging from
15% to 200% of salary depending upon actual cash flow return as compared
to the target return above the minimum threshold and subject to
adjustment based on the Executives performance and such other factors
as the Committee deems appropriate. Also effective for the 2005 plan
year, the recognition factor for individual performance has been
increased from +/- 10% to +/- 20%. Long-Term Incentive Plan The Corporations Long-Term Incentive Plan is
intended to award senior executives and other key employees for superior
performance over a three-year measurement period and for their continued
contributions to the long-term success of the Corporation. The
performance objectives under the plan are designed to further align the
interests of executives and key employees with those of shareholders by
linking the vesting of awards to the total return to
 shareholders over
the three-year performance period beginning January 1, 2003 and
ending December 31, 2005 (called Total Shareholder Return or TSR).
TSR measures the capital appreciation in the Shares, including dividends
paid over the performance period, and thereby simulates the actual
investment performance of the Shares. A participant is awarded a number of units
under the Long-Term Incentive Plan generally based on the participants
salary at the beginning of the performance period (multiplied by three),
target award percentage and the Share price at the beginning of the
performance period. The target award percentages range from 20% to 70%,
depending upon the executives position with and potential for
contribution to the success of the Corporation. Under the Long-Term Incentive Plan, vesting of
one-half of the units is based on increases in the TSR over the
three-year performance period ending December 31, 2005. Vesting of
the remaining one-half of the units is based on the extent to which the
TSR matches or exceeds the TSR of the common shares of a group of peer
companies over the performance period. The peer group of companies
consists of those companies that are included in the Dow Jones U.S. Basic
Materials Companies Index. Participants are generally required to continue
in a qualifying position with the Corporation throughout the performance
period as one of the conditions to vesting. However, if a participants
employment terminates earlier due to the participants retirement,
disability or death or the Corporation terminates a participants
employment without just cause, the participant will be entitled to a
cash payment in settlement of a pro rata number of units, with vesting
determined based on the achievement of performance objectives as of the
date of termination. A participant who resigns or whose employment is
terminated for just cause forfeits all rights to any units granted under
the plan. Vested units are settled in cash based on the
Share price at the end of the performance period. Depending on the
extent to which the performance objectives are achieved, an amount
ranging from 25% to 150% of the units granted under the Long-Term
Incentive Plan may become vested. Achievement of all target performance
objectives entitles an eligible executive to payout of 100% of the units
awarded under the plan. The target performance objective for one-half of
the units is a TSR of 30% over the performance period. The target
performance objective for the remaining units is to outperform the peer
group index by 5% over the performance period. No units will vest if
none of the minimum performance objectives is achieved. The minimum
performance requirement for one-half of the units is a positive TSR. The
minimum performance requirement for the remaining units is for the TSR
to have matched the peer group index. The cash payout in settlement of a
vested unit may not exceed 300% of the market value of a Share as at the
commencement of a performance cycle.




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##### 





Stock Option Plan-Officers
and Employees The November 20, 2003 grant was the last
full grant made under the Stock Option Plan-Officers and Employees (the
Existing Plan) described immediately below. See the section Proposed
Performance Option Plan for a description of the new plan that is
subject to shareholder approval. Beginning in the fourth quarter of
2003, the Corporation began to expense stock options. As at February 28, 2005, options for a
total of 5,234,732 Shares had been granted and were outstanding
under the Existing Plan, representing approximately 4.7% of
the total number of Shares outstanding. Options were granted at
100% of market value at the date of the grant, become exercisable over
two years (or earlier in the event of a change of control, as defined
in the Existing Plan) and expire after ten years. 135,582 options are
still available for grant under the Existing Plan. If the employment of an Optionee terminates, by
reason of his or her death, or if a retired Optionee dies, his or her
legal personal representatives will be entitled to exercise any
unexercised options, including options that may vest after the date of
death, at any time until the end of the twelfth calendar month following
the calendar month in which the Optionee dies, failing which, the
options terminate. Unless the Board at the time of the grant of an
option provides otherwise, if the employment of an Optionee terminates,
by reason of retirement in accordance with the applicable retirement
policy, the Optionee is entitled to exercise any options, including
options that vest after the date of retirement, until the expiry date of
such options or the date on which such options are otherwise terminated
in accordance with the provisions of the Existing Plan, failing which,
the options terminate. If the employment of an Optionee terminates, for
any other reason, the Optionee will be entitled to exercise unexercised
vested options, to the extent exercisable at the date of such event, at
any time until the end of the calendar month immediately following the
calendar month in which the event occurs, failing which exercise the
options terminate. Options granted under the Existing Plan are not
assignable, except where the Optionees employment terminates by reason
of his or her death, or if a retired Optionee dies, provided that an
option may be assigned to the spouse, children and grandchildren of the
original optionee and to a trust, partnership or limited liability
company, the entire beneficial interest of which is held by one or more
of the foregoing if the Board so elects. If a change of control of the
Corporation occurs (as defined in the Existing Plan), each outstanding
option granted under the Existing Plan may be exercised, even if such
option is not otherwise exercisable by its terms. The Board may amend or discontinue the Existing
Plan at any time but, except in certain limited circumstances, no such
amendment may increase the aggregate maximum
 number of Shares that may
be subject to option under the Existing Plan, change the manner of
determining the minimum option price, extend the option period under any
option beyond 10 years or, without the consent of the holder of the
option, alter or impair any option previously granted to an optionee
under the Existing Plan. Proposed Performance
Option Plan Subject to approval by the Corporations
shareholders at the Meeting, the Committee has proposed and the Board
has approved the establishment of a new performance option plan. See
Adoption of New Performance Option Plan. The key design difference between the proposed
plan and the Existing Plan is the performance-based vesting feature.
This feature was developed to support the Committees principles, as
defined above, that the opportunity to earn pay above the median should
be delivered through long-term compensation that requires achieving
performance goals aligned with shareholder interests. Under the proposed plan, option vesting will be
determined by achieving company performance goals that link to the
Corporations total shareholder return performance (TSR), and, in turn,
to the Dow Jones U.S. Basic Materials Index (DJUSBMI) TSR
performance. Performance will be measured over a three-year vesting
period. The performance-based vesting schedule
determines the percentage of options vested and ties the level of
Corporation performance to the level of total compensation delivered. Using 10-year historical data, the Committee
worked with its independent outside compensation consultant to analyze
the linkage between PotashCorp cash flow return on investment (CFROI) minus
its weighted average cost of capital (WACC), PotashCorp TSR
and the Corporations performance relative to the DJUSBMI performance.
Having established the link between PotashCorp CFROI-WACC and TSR
performance levels of the DJUSBMI, a schedule was developed based upon
the Corporations CFROI-WACC levels to vest appropriate amounts of
Shares at different performance levels. In order to deliver a level of total
compensation that is synchronized with the level of corporate
performance achieved, data on compensation provided by the Executive
Comparator Group was analyzed to determine the 25th, 50th, and 75th
percentile compensation levels for the Corporations management
positions. These compensation study results and the vesting schedule
will then be linked to determine option grant levels that will deliver
the appropriate compensation for the performance delivered. The Corporation is requesting shareholder
approval of an amount of 1,200,000 options to be available for grant
under the provisions of the new plan. It is expected that this amount
will be sufficient for one annual grant to be made during 2005.




---



##### 





Executive Share Ownership
Guidelines The Committee strongly supports Share ownership
by its executives. In November 2004 the Corporation introduced minimum
shareholding guidelines, which are to be met by November 2009 for the
current executive officer group. These guidelines are applicable to the
Corporate Officers and Key Management as designated in the Annual Report
to shareholders. The shareholding requirements reflect the value of
Shares held and can be met through direct
or beneficial ownership of Shares including Shares held through the
Corporations qualified defined contribution savings plans. Options and
performance units are not included in the definition of Share ownership
for purposes of the guidelines. Any individual who is promoted into a
position subject to these Guidelines will have a five-year period within
which to meet the Share ownership requirements. The Guidelines are: ShareTitle
    
    
    Ownership GuidelineChief Executive Officer
    
    
    5 times base salaryChief Operating Officer, Senior Vice Presidents and Division
Presidents
    
    
    3 times base salaryDesignated Senior Vice Presidents and Vice Presidents
    
    
    1 times base salary
 Of the Named Executive Officers, Mr. Doyle
and Ms. Irwin held Shares with a value in excess of the ownership guidelines as of February 28, 2005. Chief Executive Officer
Compensation The Committee reviews annually the Chief
Executive Officers salary, any awards under the Short and Long-Term
Incentive Plans and any grant of options under the Corporations option
plans and makes its recommendations to the Board. The Chief Executive
Officer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 Corporations financial
results, the Corporations total shareholder return and performance
relative to its comparator group, the duties and responsibilities of the
Chief Executive Officer, the Chief Executive Officers individual
performance relative to written objectives established at the beginning
of each year, and current compensation levels. Awards pursuant to the
Short and Long-Term Incentive Plans and under the option plans are made
in accordance with the plans as outlined above. Reference is also made to the compensation of
Chief Executive Officers of the Executive Comparator Group. The
comparison of the Corporations Chief Executive Officer compensation to
the comparator group incorporates many
 factors including the relative
sales and market capitalization of the companies, their profitability
and shareholder return history, the duties of the Chief Executive
Officer and any other extenuating or special circumstances. In general,
the Chief Executive Officers compensation is set at the 50th percentile
of the applicable range. On July 1, 2003, the salaries of the senior
management team, including Mr. Doyle and the other Named Executive
Officers, were reduced 10%, to be effective for a full year, as part of
a series of cost savings efforts in light of difficult market conditions
affecting the Corporation at that time. In January 2004, the
Compensation Committee favourably reviewed Mr. Doyles performance
against his annual written objectives, but no salary increase was
provided. After the expiration of the one-year period on
July 1, 2004, the 10% reductions were restored to all of the senior
management team, reflective of much improved financial conditions for
the Corporation. In addition to the restoration of the 10% pay
reduction, the Board approved an increase to Mr. Doyles salary to
$875,000, effective July 1, 2004 for the remainder of 2004, to
recognize achievement of his 2003 performance goals (reviewed in the
January 2004 Committee meeting), the continued improved company
performance during 2004, and to maintain a competitive base pay level. In January 2005, the Compensation Committee and
the Board reviewed Mr. Doyles performance relative to his 2004
performance goals for the purpose of determining his 2005 base pay level
and 2004 short term incentive bonus award. At that time, a salary of
$950,000 and short term incentive bonus award of $1,375,000 for 2004
performance were recommended by the Committee and approved by the Board.
The goals and related achievements upon which the decision was based
were:  
    
    Improvement in all safety indices.
    
    Meet or exceed approved 2004 budget including earnings per share (EPS) and cash
flow per share (CFPS) targets.
    
    Outperform our peer group of basic materials companies in total shareholder return. Each of the above 3 goals were achieved (see
pages 9 and 10 of Annual Report to shareholders for additional
detail).  
    
    Continue to implement strategic plan to decommoditize selected product lines:During
2004, the Board approved and work commenced on a purified acid train 4 expansion in
Aurora, NC to continue efforts to meet the needs for higher margin products sold to
industrial customers.
    
    Increase the revenue base and bottom line through strategic use of capital for
acquisitions, joint ventures and new plant and equipment:Investments in purified
phosphoric acid plant train 3 in Aurora, NC




---



##### 





and the acquisition of a 26% interest in Arab
Potash Company, both of which took place during 2003, have had positive impacts on 2004
performance. Strategic deployment of capital during 2004 included investment in
Rocanville and engineering design work to consider expansions in either New Brunswick or
Saskatchewan. The Corporation also increased its interests in both SQM and APC and key
debottleneck expansion projects were initiated in Trinidad.
    
    Continue to lead the effort to increase public awareness of the importance and benefits
of fertilizer to the world community:The Corporation transferred its highly successful
Fertile Minds program to The Fertilizer Institute to broaden its audience. Also, the
Corporation has been a leader in the efforts of the International Fertilizer Association
to establish an International Plant Nutrition Institute.
    
    Cultivate and develop leadership throughout the Corporation to ensure a future of
superior management:Senior management addressed key talent and succession management
planning as part of its planning processes, made several key promotions that recognized
skills and leadership potential across divisions, and strengthened internal efforts to
support career development opportunities.
    
    Foster a culture of individual integrity and social responsibility:The Corporations
Statement of Core Values and Code of Business Conduct, distributed to all employees in
September 2003, was reinforced with on-line training programs and a video of Mr. 
Doyle presenting his views on the importance of the Core Values which was distributed to
all locations. External presentations and speeches by Mr. Doyle on the subject of
ethical business conduct were made to a variety of stakeholder groups throughout 2004.
    
    Emphasize customer service throughout the Corporation:In the 2004 employee engagement
survey, the companys focus on customer service was identified as the best-implemented
lever of employee engagement, with the companys reputation for integrity as second, both
exceeding the median of the survey comparator group. Innovations in the customer service
department and throughout the sales, marketing, procurement, production and distribution
groups were adopted to continue to support focus on customer service.
    
    Develop Best Practices programs throughout the Corporation:The Corporations annual
reporting, sustainability report and website all garnered top awards for reporting from
the CICA and other review
 organizations. The Corporations Risk Management Framework
includes recognition of reputation and interdependencies among all risks.
    
    Provide leadership for the Company with all stakeholder groups:Mr. Doyles
involvement in meetings with investors, leadership within the fertilizer industry, and
leadership within our communities, including chairing the recently announced University
of Saskatchewan capital campaign were recognized by formal surveys and informal feedback
as contributing to a favourable perception of the Company with our stakeholder groups. Mr. Doyles compensation for 2004 as set
forth in the Summary Compensation Table and salary for 2005 were
determined in accordance with the foregoing and approved by the
Committee together with all other independent members of the Board. Submitted on behalf of the Compensation
Committee:John W. Estey, Wade Fetzer III, Jeffrey J. McCaig and Paul J.
Schoenhals. 
 Report on Corporate Governance
and Nominating Matters Disclosure regarding
Nominating Committee Processes The Corporation has a standing Corporate
Governance and Nominating Committee (the CG&N Committee). At present,
Ms. Mogford (Chair), Mr. Blesi, Mr. Fetzer, Mr. Howe and
Mr. Stromberg comprise the CG&N Committee. The CG&N Committee has a
charter which is available to security holders and others at the
Corporations website, www.potashcorp.com. Each of the five directors
who comprise the CG&N Committee is independent according to the Boards
independence standards as set out in the PotashCorp Governance
Principles, which is available on the Corporations website, applicable
rules of the SEC and the corporate governance rules of the NYSE. See
also Corporate Governance  Director Independence Standards. Shareholders may propose individuals to be
nominated for election as directors (a Proposal) in accordance with
the provisions of Section 137 of the Canada Business Corporations
Act(the Act). Shareholders wishing to make a Proposal should refer to
the relevant sections of the Act for a description of the procedures to
be followed. For additional information regarding shareholder proposals,
see 2006 Shareholder Proposals. Security holders who do not meet
the threshold criteria for making, or otherwise choose not to make, a
Proposal, may at any time suggest nominees for election to the Board.
Names of and supporting information regarding such nominees should be
submitted to: Corporate Secretary, Potash Corporation of Saskatchewan
Inc., 500  122 1st Avenue South, Saskatoon,
Saskatchewan, S7K 7G3, Canada.




---



##### 





A CG&N Committee-recommended nominee for a
position on the Board must, at a minimum, meet the qualification
standards for directors established by Section 105 of the Act. In
addition, such nominee must possess and exhibit the highest degree of
integrity, professionalism, values and independent judgment. The CG&N
Committee believes that one or more of the Corporations directors
should possess extensive experience and expertise in each of the
following areas:  
    
    fertilizer industry
    
    global and international commerce
    
    transportation industry
    
    e-commerce and technology
    
    finance
    
    law
    
    accounting
    
    mining industry
    
    chemical industry
    
    general business management
    
    public policy On an ongoing basis the CG&N Committee asks
incumbent directors and senior management to suggest individuals who
should be considered as proposed nominees to the Board. The Corporate
Secretary maintains a list of all individuals suggested by incumbent
directors, senior management or security holders and biographical
information for each such individual. When it becomes apparent that a
vacancy on the Board will arise, either from mandatory or elective
retirement or otherwise, the CG&N Committee reviews its list of proposed
nominees as against the skill sets of incumbent Board members and the
range of experience and expertise necessary for the Board. Proposed
nominees who
 have, in the opinion of the CG&N Committee, the desired
expertise are identified. Those who have the requisite qualifications
and meet the Corporations standards are ranked by the CG&N Committee in
order of preference and contacted to determine their interest in serving
on the Board. If this process does not result in the identification of
suitable nominees, the CG&N Committee may engage the services of a
search firm to assist in the identification of director candidates. The
CG&N Committee evaluates all proposed nominees in the manner described,
no matter what the source of the recommendation. Disclosure Regarding the Ability of Security Holders to
Communicate with the Board of Directors The Corporation has a process for security
holders to communicate with the Board. Communications in writing should
be sent to: PotashCorp Board of Directors
c/o Corporate Secretary
500  122 1st Avenue South
Saskatoon, Saskatchewan S7K 7G3
CANADA Communications by email should be sent to
directors@potashcorp.com. Matters relating to the Corporations
accounting, internal accounting controls or auditing matters will be
referred to the Audit Committee. Other matters will be referred to the
Board Chair. To further facilitate communications between
the Corporations security holders and the Board, the Corporation has
adopted a policy that all directors standing for re-election and all new
director nominees are expected to attend the annual meeting of
shareholders. In 2004, all such directors and nominees attended the
annual meeting.




---



##### 





EXECUTIVE COMPENSATION  Summary Compensation Table The following table sets forth, for the periods
indicated, all compensation earned by the individual who served as Chief
Executive Officer of the Corporation during 2004, the Chief Financial
Officer and by each of the Corporations other
 four most highly
compensated executive officers as of the end of calendar year 2004 for
services rendered to the Corporation and its subsidiaries (the Named
Executive Officers).
   SUMMARY COMPENSATION TABLE(1) Long-TermCompensationAnnual Compensation
    
    
    Awards
    
    
    PayoutsSecuritiesOther
    
    
    UnderlyingAnnual
    
    
    Options
    
    
    LTIP
    
    
    All OtherSalary
    
    
    Bonus(2)
    
    
    Compensation
    
    
    Granted(3)
    
    
    Payouts(4)
    
    
    CompensationName and Principal Position
    
    
    Year
    
    
    $
    
    
    $
    
    
    $
    
    
    #
    
    
    $
    
    
    $William J. Doyle
    
    
    
    2004
    
    
    
    
    808,750
    
    
    
    
    1,375,000
    
    
    
    
    139,431
    (5)
    
    
    
    0
    
    
    
    
    
    
    
    
    
    25,500
    (6)President and
    
    
    
    2003
    
    
    
    
    783,750
    
    
    
    
    535,000
    
    
    
    
    51,579
    (5)
    
    
    
    112,512
    
    
    
    
    
    
    
    
    
    81,822
    (6)Chief Executive Officer
    
    
    
    2002
    
    
    
    
    812,500
    
    
    
    
    476,000
    
    
    
    
    
    
    
    
    
    140,000
    
    
    
    
    2,937,000
    
    
    
    
    52,778
    (6)James F. Dietz
    
    
    
    2004
    
    
    
    
    385,288
    
    
    
    
    370,000
    
    
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    4,614
    (7)Executive Vice President
    
    
    
    2003
    
    
    
    
    385,288
    
    
    
    
    164,000
    
    
    
    
    
    
    
    
    
    56,252
    
    
    
    
    
    
    
    
    
    12,284
    (7)and Chief Operating Officer
    
    
    
    2002
    
    
    
    
    395,719
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    70,000
    
    
    
    
    908,000
    
    
    
    
    94,407
    (7)Wayne R. Brownlee
    
    
    
    2004
    
    
    
    
    359,385
    
    
    
    
    350,000
    
    
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    13,727
    (8)Senior Vice President,
    
    
    
    2003
    
    
    
    
    359,385
    
    
    
    
    144,000
    
    
    
    
    
    
    
    
    
    48,220
    
    
    
    
    
    
    
    
    
    19,321
    (8)Treasurer and Chief Financial Officer
    
    
    
    2002
    
    
    
    
    367,640
    
    
    
    
    121,000
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    790,000
    
    
    
    
    26,155
    (8)Barbara J. Irwin
    
    
    
    2004
    
    
    
    
    324,741
    
    
    
    
    275,000
    
    
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    2,253
    (9)Senior Vice President,
    
    
    
    2003
    
    
    
    
    322,333
    
    
    
    
    126,000
    
    
    
    
    
    
    
    
    
    48,220
    
    
    
    
    
    
    
    
    
    11,629
    (9)Administration
    
    
    
    2002
    
    
    
    
    322,591
    
    
    
    
    109,000
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    488,000
    
    
    
    
    12,078
    (9)Garth W. Moore
    
    
    
    2004
    
    
    
    
    317,216
    
    
    
    
    267,000
    
    
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    13,417
    (10)President,
    
    
    
    2003
    
    
    
    
    317,216
    
    
    
    
    123,000
    
    
    
    
    
    
    
    
    
    48,220
    
    
    
    
    
    
    
    
    
    18,437
    (10)PCS Potash
    
    
    
    2002
    
    
    
    
    324,500
    
    
    
    
    107,000
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    712,000
    
    
    
    
    23,967
    (10)Thomas J. Regan
    
    
    
    2004
    
    
    
    
    317,216
    
    
    
    
    267,000
    
    
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    6,349
    (11)President,
    
    
    
    2003
    
    
    
    
    317,216
    
    
    
    
    123,000
    
    
    
    
    
    
    
    
    
    48,220
    
    
    
    
    
    
    
    
    
    10,226
    (11)PCS Phosphate
    
    
    
    2002
    
    
    
    
    324,500
    
    
    
    
    107,000
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    712,000
    
    
    
    
    94,395
    (11)
  (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. See Compensation Committee Report on Executive Compensation 
Short-Term Incentive Compensation.(3)
    
    Options granted pursuant to the Stock Option Plan  Officers and
Employees. All amounts adjusted to reflect the stock split which occurred in
August 2004.(4)
    
    Reflects payouts pursuant to the terms of the Long-Term Incentive Plan in
effect for the performance period January 1, 2000 to
 December 31, 2002.
The calculation was based on performance over the three-year period, measured by
reference to Total Shareholder Return (TSR). TSR of the Corporation measured the
capital appreciation of the Shares over the performance period and included
dividends paid. As such, it simulated the actual investment performance realized
by shareholders. The plan considered both the TSR of the Corporation, and the TSR
performance relative to a peer group of companies (Agrium Inc., IMC Global Inc.,
Mississippi Chemical Corporation, and Terra Industries Inc.).




---



##### 





The following table sets forth rates of return over the performance period. AgriumPotash Corp
    
    
    IMC
    
    
    (TSX)
    
    
    
    
    
    Terra
    
    
    Peer Group(NYSE)
    
    
    Global
    
    
    ($ Cdn)
    
    
    MissChem
    
    
    Industries
    
    
    Average
    
    
    S&P 500Opening Share Price*
(Jan. 2000)
    
    
    47.38
    
    
    16.09
    
    
    11.61
    
    
    5.73
    
    
    1.38
    
    
    
    
    
    Closing Share Price*
(Dec. 2002)
    
    
    63.99
    
    
    10.63
    
    
    17.43
    
    
    0.31
    
    
    1.60
    
    
    
    
    
    TSR
    
    
    41.41%
    
    
    (30.97%)
    
    
    54.45%
    
    
    (93.05%)
    
    
    16.36%
    
    
    (13.30%)
    
    
    (37.61%)
 * 5-day average
** Source: Georgeson & Co. (dividends reinvested) For details regarding the LTIP in place for the performance period January 1, 2003 to
December 31, 2005, see Compensation Committee Report on Executive Compensation 
Long-Term Incentive Plan.  (5)
    
    Of the other annual compensation indicated for 2004, $84,820 reflects a
membership allowance. Of the other annual compensation indicated for 2003, $34,854
reflects a payment made for personal tax preparation and administration.(6)
    
    The reported amounts for 2004, 2003 and 2002 consist, respectively, of:  (i)
    
    $17,259, $28,740 and $44,895 which represents the Corporations
contribution to the Corporations defined contribution pension and savings plan
on behalf of the indicated Named Executive Officer;(ii)
    
    $8,241, $8,532 and $7,883 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)
    
    $44,550 for 2003 which represents moving expenses.  (7)
    
    The reported amounts for 2004, 2003 and 2002 consist, respectively of:  (i)
    
    $0, $10,000 and $10,000 which represents contributions by the
Corporations subsidiary to its defined contribution pension plan on behalf of
the indicated Named Executive Officer;(ii)
    
    $4,614, $2,284 and $2,533 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; and(iii)
    
    $81,874 for 2002 which represents reimbursement for moving and
relocation expenses.  (8)
    
    The reported amounts for 2004, 2003 and 2002 consist, respectively, of:  (i)
    
    $10,995, $15,944 and $22,626 which represents the Corporations
contribution to its defined contribution pension and savings plans on behalf of
the indicated Named Executive Officer; and
 (ii)
    
    $2,732, $3,377 and $3,529 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.  (9)
    
    The reported amounts for 2004, 2003 and 2002 consist, respectively of:  (i)
    
    $681, $9,707 and $10,000 which represents contributions by the
Corporations subsidiary to its defined contribution pension plan on behalf of
the indicated Named Executive Officer; and(ii)
    
    $1,572, $1,922 and $2,078 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.  (10)
    
    The reported amounts for 2004, 2003 and 2002 consist, respectively, of:  (i)
    
    $10,426, $14,682 and $20,468 which represents the Corporations
contribution to its defined contribution pension and savings plans on behalf of
the indicated Named Executive Officer; and(ii)
    
    $2,991, $3,755 and $3,499 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.  (11)
    
    The reported amounts for 2004, 2003 and 2002 consist, respectively of:  (i)
    
    $1,615, $8,348 and $10,000 which represents contributions by the
Corporations subsidiary to its defined contribution pension plan on behalf of
the indicated Named Executive Officer;(ii)
    
    $4,734, $1,878 and $2,028 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; and(iii)
    
    $82,367 for 2002 which represents reimbursement for moving and
relocation expenses.




---



##### 





Options The following table sets forth the options
exercised during the year ended December 31, 2004 by the Named
Executive Officers, the number of options held by the Named
 Executive Officers at year end, and the year-end value of unexercised, in-the-money options held
by such individuals at December 31, 2004.
   AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES Number of
    
    
    Value of UnexercisedSecurities Underlying
    
    
    in-the-Money OptionsSecurities
    
    
    
    
    
    
    
    Options at FY-End
    
    
    at FY-End(1)Acquired on
    
    
    Aggregate Value
    
    
    
    
    
    
    
    #
    
    
    
    
    
    
    
    $Exercise
    
    
    Realized
    
    
    #
    
    
    Not
    
    
    $
    
    
    NotName
    
    
    #
    
    
    $
    
    
    Exercisable
    
    
    Exercisable
    
    
    Exercisable
    
    
    ExercisableWilliam J. Doyle
    
    
    
    0
    
    
    
    
    0
    
    
    
    
    816,256
    
    
    
    
    56,256
    
    
    
    
    39,186,905
    
    
    
    
    2,450,511James F. Dietz
    
    
    
    70,000
    
    
    
    
    2,226,345
    
    
    
    
    248,126
    
    
    
    
    28,126
    
    
    
    
    12,010,243
    
    
    
    
    1,225,168Wayne R. Brownlee
    
    
    
    43,200
    
    
    
    
    1,407,456
    
    
    
    
    390,410
    
    
    
    
    24,110
    
    
    
    
    16,635,862
    
    
    
    
    970,550Barbara J. Irwin
    
    
    
    15,800
    
    
    
    
    462,644
    
    
    
    
    164,110
    
    
    
    
    24,110
    
    
    
    
    8,199,256
    
    
    
    
    1,050,231Garth W. Moore
    
    
    
    201,000
    
    
    
    
    4,066,062
    
    
    
    
    164,110
    
    
    
    
    24,110
    
    
    
    
    6,707,956
    
    
    
    
    970,550Thomas J. Regan
    
    
    
    57,500
    
    
    
    
    1,802,361
    
    
    
    
    74,110
    
    
    
    
    24,110
    
    
    
    
    3,345,581
    
    
    
    
    1,050,231
  (1)
    
    Values are calculated by determining the amount by which the market value
of the Shares underlying the options on December 31, 2004 exceeded the exercise
prices of the options and converting Canadian
 dollar amounts to United States
dollars using the December 31, 2004 exchange rate of $0.8308.
   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 provides a
supplementary pension benefit for certain of the Corporations officers
and key managers. Under the basic terms of the Supplemental Plan, a
pension benefit is provided in an amount equal to 2% of the average of
the participants 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. For the purposes of the
Supplemental Plan, earnings are defined as the participants annual base
pay plus 100% of all bonuses paid or payable for such year pursuant to
the Short-Term Incentive Plan. 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. 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. For a designated group of senior officers,
including Mr. Doyle, Mr. Brownlee and Mr. Moore, the benefit
payable under the Supplemental Plan is an amount equal to: (i) 5% of
the average of the senior officers 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 average of the senior
officers 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.




---



##### 





The following table shows the range of
estimated annual benefits to Mr. Doyle, Mr. Brownlee and Mr. Moore
pursuant to the Supplemental Plan. Estimated benefits payable
pursuant to the Supplemental Plan will be reduced by any
 benefits
payable to Mr. Doyle, Mr. Brownlee and Mr. Moore pursuant to
the PCS Plan and certain other tax qualified plans.
   SUPPLEMENTAL RETIREMENT INCOME PLAN TABLE Remuneration
    
    
    Years of Service$
    
    
    10
    
    
    20
    
    
    30
    
    
    40
    
    
    50$
    250,000
    
    
    $
    125,000
    
    
    
    $
    125,000
    
    
    
    $
    150,000
    
    
    
    $
    175,000
    
    
    
    $
    175,000500,000
    
    
    
    250,000
    
    
    
    
    250,000
    
    
    
    
    300,000
    
    
    
    
    350,000
    
    
    
    
    350,0001,000,000
    
    
    
    500,000
    
    
    
    
    500,000
    
    
    
    
    600,000
    
    
    
    
    700,000
    
    
    
    
    700,0001,500,000
    
    
    
    750,000
    
    
    
    
    750,000
    
    
    
    
    900,000
    
    
    
    
    1,050,000
    
    
    
    
    1,050,0002,000,000
    
    
    
    1,000,000
    
    
    
    
    1,000,000
    
    
    
    
    1,200,000
    
    
    
    
    1,400,000
    
    
    
    
    1,400,0003,000,000
    
    
    
    1,500,000
    
    
    
    
    1,500,000
    
    
    
    
    1,800,000
    
    
    
    
    2,100,000
    
    
    
    
    2,100,000
  As of December 31, 2004, the average of the
three highest years earnings for purposes of the Supplemental Plan for
each Named Executive Officer participating in the Supplemental Plan were
as follows: $1,742,500 for Mr. Doyle, $594,257 for Mr. Brownlee
and $512,477 for Mr. Moore. 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, 41 years for Mr. Brownlee and 31 years for Mr.
 Moore. The cost of the future pension benefits is
calculated each year by independent actuaries. The 2004 annual service
cost and total accrued pension obligations for the Supplemental Plan as at December 31, 2004
respectively, for Mr. Doyle is $222,729 and $4,273,000, for Mr. Brownlee
$97,591 and $1,973,000 and for Mr. Moore $73,901 and
$1,424,000. The annual service cost represents the value of the projected
Supplemental Plan benefit, earned during the year. The total accrued pension
obligation represents the value of the projected Supplemental Plan benefit earned
for all service to date. The annual service cost and total accrued
pension obligations described above are based on estimates solely
related to this plan, and represent contractual entitlements which may
change over time. The methods used to determine such estimated amounts
will not be identical to the methods used by other companies and, as a
result, these figures may not be directly comparable across companies.
The assumptions for this plan also differ from the assumptions
disclosed in Note 14 to
the consolidated financial statements relating to the Corporations
significant pension plans. The key assumptions made in determining these
amounts are as follows:
 Assumptions Used
    
    
    Assumptions Usedat the End of the
    
    
    at the End of theYear 2004 and for
    
    
    Year 2003 and forthe 2005 Expense
    
    
    the 2004 ExpenseInterest Rate
    
    
    6.00% per annum
    
    
    7.00% per annumIncrease in Pensionable Earnings
    
    
    5.00% per annum
    
    
    5.00% per annumIncrease in the Income Tax Act Maximum Contribution Limits
    
    
    2.00% per annum
    
    
    2.00% per annumExpected Return on Plan Assets
    
    
    N/A
    
    
    N/ARetirement Age
    
    
    Age 62
    
    
    Age 62Mortality Rates
    
    
    1994 Unisex Pensioner Mortality Table
    
    
    1983 Group Annuity Mortality Table
 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. Dietz in the
case of PCS Nitrogen and Mr. Regan in the case of PCS Phosphate.
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 1.5% 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 previous plans, including Mr. Dietz and Mr. Regan,
will have a portion of their retirement benefit calculated
under the formulas for




---



##### 





such plans. Employees not meeting the minimum age or years of
service requirement at termination will 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 annual bonus.
The retirement benefits from the U.S. Pension Plan for Mr. Dietz,
Ms. Irwin and Mr. Regan
 are subject to certain
limitations on the amount of retirement benefits that may be provided
under U.S. tax qualified pension plans. The Corporation maintains a
supplemental pension plan (the U.S. Supplemental Plan) intended to
provide participants with the same aggregate benefits that such
participant would have received had there been no legal limitations on
the benefits provided by the U.S. Pension Plan. No benefits
pursuant to the U.S. Supplemental Plan are payable if
termination occurs prior to age 55.
   For Mr. Dietz, Ms. Irwin and Mr. Regan,
the following table represents the range of estimated annual
benefits under the U.S. Pension Plan and the U.S. Supplemental
Plan for service on or after January 1, 1999. POST-1998 SERVICE TABLE Remuneration
    
    
    Years of Service$
    
    
    10
    
    
    15
    
    
    20
    
    
    25
    
    
    30$
    200,000
    
    
    $
    30,000
    
    
    
    $
    45,000
    
    
    
    $
    60,000
    
    
    
    $
    75,000
    
    
    
    $
    90,000300,000
    
    
    
    45,000
    
    
    
    
    67,500
    
    
    
    
    90,000
    
    
    
    
    112,500
    
    
    
    
    135,000400,000
    
    
    
    60,000
    
    
    
    
    90,000
    
    
    
    
    120,000
    
    
    
    
    150,000
    
    
    
    
    180,000500,000
    
    
    
    75,000
    
    
    
    
    112,500
    
    
    
    
    150,000
    
    
    
    
    187,500
    
    
    
    
    225,000600,000
    
    
    
    90,000
    
    
    
    
    135,000
    
    
    
    
    180,000
    
    
    
    
    225,000
    
    
    
    
    270,000700,000
    
    
    
    105,000
    
    
    
    
    157,500
    
    
    
    
    210,000
    
    
    
    
    262,500
    
    
    
    
    315,000
  As of December 31, 2004, the final
average compensation for the purposes of the U.S. Pension Plan and
U.S. Supplemental Plan for Mr. Dietz was $540,284, for Ms. Irwin
was $402,576 and for Mr. Regan was $434,966. The estimated
credited years of post-1998 service under such plans at normal
retirement age of 65 for Mr. Dietz is 13 years, for Ms. Irwin
20 years and for Mr. Regan 10 years. 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 covered compensation multiplied by (b) the
participants credited service (up to a maximum of 35 years).
Covered compensation is defined as the 35-year average of the U.S. Social
Security wage bases measured from the year in which the
participant reaches Social Security retirement age. The following table represents the range of
estimated annual benefits for Mr. Dietz pursuant to the formula in
the Nitrogen Pension Plan (including benefits relating to pre-1999
service under the U.S. Supplemental Plan).
   NITROGEN PRE-1999 SERVICE TABLE Remuneration
    
    
    Years of Service$
    
    
    5
    
    
    10
    
    
    15
    
    
    20
    
    
    25$
    200,000
    
    
    $
    14,000
    
    
    
    $
    28,000
    
    
    
    $
    41,000
    
    
    
    $
    55,000
    
    
    
    $
    69,000300,000
    
    
    
    21,000
    
    
    
    
    43,000
    
    
    
    
    64,000
    
    
    
    
    85,000
    
    
    
    
    106,000400,000
    
    
    
    29,000
    
    
    
    
    58,000
    
    
    
    
    86,000
    
    
    
    
    115,000
    
    
    
    
    144,000500,000
    
    
    
    36,000
    
    
    
    
    73,000
    
    
    
    
    109,000
    
    
    
    
    145,000
    
    
    
    
    181,000600,000
    
    
    
    44,000
    
    
    
    
    88,000
    
    
    
    
    131,000
    
    
    
    
    175,000
    
    
    
    
    219,000700,000
    
    
    
    51,000
    
    
    
    
    103,000
    
    
    
    
    154,000
    
    
    
    
    205,000
    
    
    
    
    256,000
  As of December 31, 2004, the estimated
credited years of pre-1999 service at normal retirement age of 65 for
 Mr. Dietz
is 6 years for the purposes of the U.S. Pension Plan, and
2 years for purposes of the U.S. Supplemental Plan. Final




---



##### 





average compensation is the same as that calculated for the purpose of
the U.S. Pension Plan and post-1998 service. As of December 31, 1998, the PCS Phosphate
Plan provided a retirement benefit of 2% of the participants final
 average compensation multiplied by the participants years
of service
(maximum 35 years). Prior to 1999, participants in the PCS Phosphate
Plan were required to contribute 1% of base monthly compensation to the
plan.
   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 U.S. Supplemental Plan, and includes the 1% participant
contribution. PHOSPHATE PRE-1999 SERVICE TABLE Remuneration
    
    
    Years of Service$
    
    
    10
    
    
    15
    
    
    20
    
    
    25
    
    
    30$
    200,000
    
    
    $
    40,000
    
    
    
    $
    60,000
    
    
    
    $
    80,000
    
    
    
    $
    100,000
    
    
    
    $
    120,000300,000
    
    
    
    60,000
    
    
    
    
    90,000
    
    
    
    
    120,000
    
    
    
    
    150,000
    
    
    
    
    180,000400,000
    
    
    
    80,000
    
    
    
    
    120,000
    
    
    
    
    160,000
    
    
    
    
    200,000
    
    
    
    
    240,000500,000
    
    
    
    100,000
    
    
    
    
    150,000
    
    
    
    
    200,000
    
    
    
    
    250,000
    
    
    
    
    300,000600,000
    
    
    
    120,000
    
    
    
    
    180,000
    
    
    
    
    240,000
    
    
    
    
    300,000
    
    
    
    
    360,000700,000
    
    
    
    140,000
    
    
    
    
    210,000
    
    
    
    
    280,000
    
    
    
    
    350,000
    
    
    
    
    420,000
 As of December 31, 2004, the credited years
of pre-1999 service at normal retirement age of 65 for Mr. Regan is
12 years and final average compensation is $314,786. Final average
compensation is calculated in the same manner as the U.S. Pension
Plan and post-1998 service, except that compensation is defined as a
participants base pay only. The 2004 annual service cost and the total
accrued pension obligation for the Supplemental Plan as at December 31, 2004, respectively for
Mr. Dietz is $34,109 and $202,082, for Ms. Irwin is $20,896 and
$88,884, and for Mr. Regan is $20,932 and $325,388. The annual
service cost represents the value of the projected
U.S. Supplemental Plan benefit,
earned during the year. The total accrued pension obligation represents
the value of the projected U.S. Supplemental Plan benefit earned for all service to
date. The assumptions used in calculating such obligations are those as
used in Note 14 to the consolidated financial statements.  Employment Contracts and Termination of Employment 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,
Mr. Brownlee and Mr. Moore. The initial term of each
Change in Control Agreement was through December 31, 1997; however,
the term of the Change in Control Agreements has been automatically
renewed for successive one-year periods since December 31, 1997 and
continues 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 willful 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 current 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 the
termination occurs;  (c)
    
    immediate vesting and cash out of all outstanding Long-Term Incentive Plan awards;(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,
provided that these benefits terminate 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. 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).
 All outstanding non-exercisable options granted
to the executive pursuant to the option plan 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 or her 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. 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 to provide notice
of impending termination, or payment of salary in lieu of notice,
equivalent to two weeks for each complete year of service (subject to a
minimum of 4 weeks and a maximum of 52 weeks). Such policy is
superseded by specific termination provisions contained in any
applicable written agreement.




---



##### 





PERFORMANCE GRAPHS  The following graph illustrates the
Corporations cumulative shareholder return, assuming reinvestment of
dividends, by comparing a $100 investment in the Shares at
 December 31,
1999 to the return on the Standard & Poors 500 Index, the Dow
Jones US Basic Materials Companies Index and a self-selected peer group.
   (PERFORMANCE GRAPH) Dec-99
    
    
    Dec-00
    
    
    Dec-01
    
    
    Dec-02
    
    
    Dec-03
    
    
    Dec-04Potash Corporation of Saskatchewan Inc.  NYSE Listing
    
    
    $
    100
    
    
    
    $
    166
    
    
    
    $
    132
    
    
    
    $
    139
    
    
    
    $
    192
    
    
    
    $
    373Self-Selected Peer Group
    
    
    $
    100
    
    
    
    $
    132
    
    
    
    $
    139
    
    
    
    $
    143
    
    
    
    $
    180
    
    
    
    $
    285S&P 500®
    
    
    $
    100
    
    
    
    $
    91
    
    
    
    $
    80
    
    
    
    $
    62
    
    
    
    $
    80
    
    
    
    $
    89Dow Jones US Basic Materials Companies Index
    
    
    $
    100
    
    
    
    $
    54
    
    
    
    $
    96
    
    
    
    $
    81
    
    
    
    $
    125
    
    
    
    $
    134
 The Self-selected Peer Group consists of: Company
    
    
    SymbolAgrium Inc.*
    
    
    AGUMosaic Co (formerly IMC Global Inc.)
    
    
    MOSYara International ASA
    
    
    YAR NOIsrael Chemicals Limited
    
    
    CHIM ITSociedad Quimica Y Minera de Chile S.A.
    
    
    SQM/B CIK&S AG
    
    
    SDF GR
 * TSX listing. Copyright © 2005, Standard & Poors, a division of The McGraw Hill Companies, Inc. All
rights reserved.




---



##### 





The following graph illustrates the
Corporations cumulative shareholder return, assuming reinvestment of
dividends, by comparing a Cdn$100 investment in the Shares
 at December 31,
1999 to the return on the S&P/TSX Composite Index.
   (PERFORMANCE GRAPH) Dec-99
    
    
    Dec-00
    
    
    Dec-01
    
    
    Dec-02
    
    
    Dec-03
    
    
    Dec-04Potash Corporation of Saskatchewan Inc.  TSX Listing
    
    
    $
    100
    
    
    
    $
    177
    
    
    
    $
    151
    
    
    
    $
    156
    
    
    
    $
    179
    
    
    
    $
    321S&P/TSX Composite Index
    
    
    $
    100
    
    
    
    $
    107
    
    
    
    $
    94
    
    
    
    $
    82
    
    
    
    $
    104
    
    
    
    $
    119
 
  DIRECTORS AND OFFICERS
LIABILITY INSURANCE The Corporation has acquired and maintains
liability insurance for its directors and officers as well as those of
its subsidiaries as a group. The coverage limit of each insurance is $75 million
per claim and $75 million in the annual aggregate.
The Corporation has entered into a one-year contract ending June 30,
2005. Premiums of $666,016 were paid by the Corporation for the last
fiscal year. Claims for which the Corporation grants indemnification to
the insured persons are subject to a $5 million deductible for any
one loss.
 VOTING SHARES There are
111,290,020 Shares
of the Corporation
outstanding as of February 28,
2005, each Share carrying the right to one vote.
Each shareholder of record at the close of business on March 17,
2005 is entitled to vote at the Meeting the Shares registered in his or
her name on that date. 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 28, 2005, 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. Amount and Nature of
    
    
    Percentage ofBeneficial Ownership
    
    
    OutstandingName
    
    
    (1)(2)(3)
    
    
    SharesWilliam J. Doyle,
Director, President
and Chief Executive Officer
    
    
    

893,807
    
    
    

.803%James F. Dietz,
Executive Vice President and
Chief Operating Officer
    
    
    

259,544
    
    
    

.233%Wayne R. Brownlee,
Senior Vice President,
Treasurer and
Chief Financial Officer
    
    
    
    376,607
    
    
    

.338%Barbara J. Irwin,
Senior Vice President,
Administration
    
    
    
    161,167
    
    
    

.144%Garth W. Moore,
President,
PCS Potash
    
    
    

96,231
    
    
    

.086%Thomas J. Regan,
President,
PCS Phosphate
    
    
    

78,409
    
    
    

.070%All directors and executive officers as a group, including the
above-named individuals (25 persons)
    
    
    

1,999,656
    
    
    

1.796%
  (1)
    
    The number of Shares beneficially owned is reported on the basis of
regulations of the U.S. Securities and Exchange Commission, and includes
Shares that the individual has the right to acquire at any time within 60 days
after February 28, 2005 and Shares directly or indirectly held by the
individual or by certain family members or others 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 28, 2005. The
directors and executive officers of the Corporation as a group beneficially owned
approximately 1.796% of the Shares issued and outstanding as at February  28,
2005.(3)
    
    Includes Shares purchasable within 60 days after February 28, 2005
through the exercise of options granted by the Corporation, as follows: Mr. Doyle
816,256 Shares; Mr. Dietz 248,126 Shares; Mr. Brownlee
364,110 Shares; Ms. Irwin 149,110 Shares;
Mr. Moore 94,110 Shares;
Mr. Regan 74,110 Shares and directors and executive officers as a
group, including the foregoing individuals, 1,867,416 Shares.
 Listed below is the name and other information concerning
persons known to the Corporation (from the Corporations records and reports
filed with the U.S. Securities and Exchange Commission on Schedule 13D
or 13G) who owned, as of February 28, 2005 more than 5% of any class
of the Corporations voting securities: Name and Address of
    
    Amount and Nature of
    
    Percent ofBeneficial Owner
    
    Beneficial Ownership
    
    Class(1)FMR Corp. (Fidelity)
82 Devonshire Street
Boston, Massachusetts
02109
    
    
    12,995,566
    (2)(3)
    
    

11.67
    %Primecap Management Company
225 South Lake Avenue
Suite 400
Pasadena, California
91101
    
    
    8,762,198
    (4)(5)
    
    

7.87
    %Lord, Abbett & Co.
90 Hudson Street
Jersey City, New Jersey
07302
    
    
    8,129,487
    (6)(7)
    
    

7.30
    %Capital Research and Management Company
333 South Hope Street
Los Angeles, California
90071
    
    
    7,406,400
    (8)(9)
    
    

6.65
    %Jarislowky, Fraser Limited
1010 Sherbrooke St. West
Suite 2005
Montreal, Quebec
H3A 2R7
    
    
    5,993,676
    (10)(11)
    
    

5.38
    %T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, Maryland
21202
    
    
    5,585,435

(12)(13)
    
    

5.02
    %
  (1)
    
    Represents percent of Shares outstanding as of February 28, 2005.(2)
    
    Such person has sole dispositive power as to all 12,995,566 Shares and
sole voting power as to 4,220,891 Shares.(3)
    
    As set forth in a Schedule 13G dated February 14, 2005.(4)
    
    Such person has sole dispositive power as to all 8,762,198 Shares and
sole voting power as to 2,010,898 Shares.(5)
    
    As set forth in a Schedule 13G dated July 22, 2004 (adjusted to
reflect stock split which occurred in August 2004).(6)
    
    Such person has sole voting and dispositive power as to all 8,129,487 
Shares.(7)
    
    As set forth in a Schedule 13G dated February 14, 2005.(8)
    
    Such person has sole dispositive power as to all 7,406,400 Shares and
sole voting power as to no shares.(9)
    
    As set
forth in a Schedule 13G dated February 9, 2005.(10)
    
    Such person has sole dispositive power as to all 5,993,676 Shares,
and sole voting power as to 5,081,576 Shares.(11)
    
    As set forth in a Schedule 13G dated February 11, 2005.(12)
    
    Such person has sole dispositive power as to all 5,585,435 Shares and
sole voting power as to 1,044,035 Shares.(13)
    
    As set forth in a Schedule 13G dated February 14, 2005.




---



##### 





NORMAL COURSE ISSUER BID The Corporation has filed a notice of intention
with the TSX to make a normal course issuer bid to enable it to purchase
up to 5,500,000 Shares. The notice provides that the Corporation may
purchase these Shares between February  15, 2005, and February 14,
2006, at prevailing market prices in amounts and at times to be
determined by the Corporation. The purchases will be made through the
facilities of the TSX and the NYSE. Shares purchased under the bid will
be cancelled. A copy of the notice may be obtained from the Corporate
Secretary, Potash Corporation of Saskatchewan Inc., 500  122 1st Avenue
South, Saskatoon, Saskatchewan, S7K 7G3, Canada. 
 2006 SHAREHOLDER PROPOSALS Proposals of shareholders intended to be
presented at the Corporations annual meeting of shareholders in 2006
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 December 12,
2005. 
 ADDITIONAL INFORMATION 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. 
 DIRECTORS APPROVAL The contents and the sending of this Management
Proxy Circular have been approved by the Board.
    -s- Joseph PodwikaJoseph A. Podwika
Secretary
March 11, 2005




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##### 



APPENDIX A STATEMENT OF
CORPORATE GOVERNANCE PRACTICES The Board, through its Corporate Governance and
Nominating Committee, which met five times in 2004, is focused on new
threshold regulatory standards (both proposed and implemented) as well
as best practices that go beyond the requirements mandated by regulation. To comply with those standards and achieve
those best practices, the Board has adopted the PotashCorp Governance
Principles and Statement of Core Values & Code of Business
Conduct. The complete text of the PotashCorp Governance Principles,
the Statement of Core Values & Code of Business Conduct and each
Committee Charter, as well as other governance related documents, can be
found at www.potashcorp.com and are available in print to any
shareholder who requests them. On October 29, 2004 the Canadian Securities
Administrators (CSA) published for comment proposed National Policy 58-201
Corporate Governance Guidelines and proposed National
Instrument 58-101 Disclosure of Corporate Governance Practices.
The Corporations current governance practices are substantially in
compliance with the CSAs proposed corporate governance guidelines. When
this proposed policy and proposed instrument are finalized, the Board
will reassess the Corporations governance practices. Since the CSA
rules relating to disclosure of corporate governance practices are not
yet in effect, a comparison of the Corporations governance practices
against the governance disclosure guidelines
(the TSX Guidelines) is
set out below as required by the TSX Guidelines. Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    Comments1.
    
    The Board of Directors should explicitly assume responsibility for
stewardship of the corporation and specifically for:(a)  Adoption of a strategic planning process;
    
    Yes
    
    The Boards Charter provides that the Board has the responsibility to
participate, as a whole and through its Committees, in identifying
the objectives and goals of the business as well as associated risks,
and the strategy by which it proposes to reach those goals and
mitigate those risks. The Board, either directly or through Board
Committees, assumes responsibility for overseeing the operation of
the Corporations business and for supervising management.The Board
devotes a significant portion of its annual two-day winter
meeting to strategic planning, including a review of the plan and
special presentations on matters of particular strategic significance.The Board has formalized its approach to strategic planning through
the adoption of a strategic planning process with activities, events
and deliverables throughout the year.(b)  Identification of the principal risks of the Corporations
business and ensuring the implementation of appropriate risk
management systems;
    
    Yes
    
    The Board has established a comprehensive approach to risk
identification and management. A comprehensive risk universe has
been developed. Senior management identifies significant risks from
the risk universe and a multi-disciplinary project team:(i)     evaluates, on a company-wide basis, the risk
exposure of each significant risk;(ii)    recommends response modifications to achieve the
appropriate level of exposure; and(iii)   refines the integrated risk evaluation process for
subsequent use.The results of such activities are reported to the Board annually in
September at a meeting convened for that purpose.




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##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    Comments(c)  Succession planning, including appointing, training and
monitoring senior management;
    
    Yes
    
    The Board Charter provides that the Board has responsibility for
succession planning, both for the Chief Executive Officer and for
other management. Regular reviews of succession planning are made to
the Board by management and the Compensation Committee regularly
reviews Chief Executive Officer succession planning. The Board is
also responsible for developing procedures and ensuring their
implementation for appointing, training and monitoring senior
management.(d)  Communications policy; and
    
    Yes
    
    The Board has adopted a comprehensive policy on corporate disclosure.
A Disclosure Committee, composed of the Senior Vice President
Corporate Relations, the Chief Operating Officer, the Chief Financial
Officer, the President, PCS Sales, and the General Counsel has been
created to oversee the application of the Disclosure Policy. The
Disclosure Policy confirms the Corporations commitment to timely,
consistent, credible, non-selective dissemination of material
information and establishes procedures to effect such ends. The
Disclosure Policy encompasses website posting, electronic
communications, and dealings with regulators, analysts and the media.(e)  Integrity of internal control and management information
systems.
    
    Yes
    
    The Audit
Committee, which met nine times in 2004, regularly reviews
the integrity of the Corporations internal control and management
information systems. Such reviews include receiving reports from the
Chief Financial Officer, the Chief Information Officer, the
Controller and the Internal Auditor and discussions with external
auditors. Findings are summarized and reported to the Board. The
Audit Committee also oversaw and monitored the 2004 compliance
process related to the Sarbanes-Oxley 404 certification and
attestation requirements.2.
    
    A majority of directors should be unrelated (that is, independent
of management and free from any interest and any business or other
relationship 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 interests and
relationships arising from shareholding.)
    
    Yes
    
    All directors standing for election on May 5, 2005, with the
exception of Mr. Doyle and Ms. Paliza, are unrelated within
the meaning of the TSX Guidelines and independent according to the
Boards independence standards as set out in the PotashCorp
Governance Principles, which is available on the Corporations
website, applicable rules of the SEC and the corporate governance
rules of the NYSE.As of February 28, 2005 the Corporation did not have a
significant shareholder as defined in the TSX Guidelines.A Policy has been established which provides that directors will not
stand for re-election after reaching the age of 70 years.3.
    
    The Board is responsible for applying the definition of unrelated
director to each individual director and for disclosing annually
whether the Board has a majority of unrelated directors and an
analysis of the principles supporting this conclusion.
    
    Yes
    
    As set out in the PotashCorp Governance Principles, which is
available on the Corporations website, the Board has adopted
categorical standards for determining whether a director is
independent within the meaning of the applicable rules of the SEC
and the corporate governance rules of the NYSE.




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##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    CommentsThe Board has concluded that directors who are independent under
the PotashCorp Governance Principles and the corporate governance
rules of the NYSE are also unrelated directors for the purposes of
the TSX Guidelines. To assist the Board with its determination, all
directors annually complete a detailed questionnaire about their
business relationships and shareholdings.Based on information provided by directors as to their individual
circumstances, the Board has determined that of the 12 persons
proposed for election to the Board for 2005, all are unrelated and
independent except for Mr. Doyle and Ms. Paliza. See
Corporate Governance  Director Independence Standards in the
attached Management Proxy Circular.4.
    
    The Board of Directors should appoint a Committee:(a)  responsible for proposing new nominees to the full Board for
election; and
    
    Yes
    
    The Corporate Governance and Nominating Committee is responsible for
recruiting and proposing to the full Board new nominees for
directors. The Committee, in the discharge of its duties:(i)      in consultation with the Board and Chief Executive
Officer and, on an ongoing basis, identifies the mix of expertise and
qualities required for the Board;(ii)     assesses the attributes new directors should have for
the appropriate mix to be maintained;(iii)    in consultation with the Board and Chief Executive Officer
and, on an ongoing basis, maintains a database of potential
candidates;(iv)    has implemented a procedure to identify, with as much
advance notice as practicable, impending Board vacancies, so as to
allow sufficient time for recruitment and for introduction of
proposed nominees to the existing Board;(v)    develops a short-list of candidates and arranges for
each candidate to meet with the Chair and the Chief Executive Officer;(vi)   recommends to the Board as a whole proposed nominee(s) and
arranges for their introduction to as many Board members as
practicable;(vii)  ensures that prospective candidates are informed of the
degree of time, energy and commitment the Corporation expects of its
directors; and(viii) encourages diversity in the composition of the Board.(b)  Composed exclusively of outside (non-management) directors, a
majority of whom are unrelated.
    
    Yes
    
    The Corporate Governance and Nominating Committee is composed of five
outside directors, each of whom is independent and unrelated.




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##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    Comments5.
    
    Implement a process for assessing the effectiveness of the Board, its
committees and individual directors.
    
    Yes
    
    Pursuant to the PotashCorp Governance Principles, which is
available on the Corporations website, the Board has adopted the
following five-part effectiveness evaluation program:1.   Annual Board Assessment by all Members of the BoardEach year Board members complete a detailed questionnaire which (a) provides
for quantitative ratings in key areas, and (b) seeks
subjective comment in each of those areas. The questionnaire is
administered by the Corporate Secretary. Responses are reviewed by
the Corporate Secretary and the Chair of the Corporate Governance and
Nominating Committee. A summary report is then prepared and provided
to the Board Chair, the Corporate Governance and Nominating Committee
and the Chief Executive Officer and then reported to the full Board
by the Corporate Governance and Nominating Committee Chair.
Attribution of comments to individual directors in the summary report
is made only if authorized by that director. In assessing the
responses to the questionnaire, the focus is on continuous
improvement. Matters requiring follow-up are identified, action plans
are developed and there is ongoing monitoring by the Corporate
Governance and Nominating Committee to ensure satisfactory results.2.   Annual Assessment of each Committee* by members of
that CommitteeEach year members of each Committee* complete a detailed
questionnaire designed to allow Committee members to evaluate how
well each Committee is operating and to make suggestions for
improvement. The questionnaire is administered by the Corporate
Secretary who receives responses and reviews them with the
appropriate Committee Chair. A summary report is then prepared and
provided to the Board Chair, the chair of the Corporate Governance
and Nominating Committee, the appropriate Committee and the Chief
Executive Officer and then reported to the full Board by the
appropriate Committee Chair.As with the Board assessment, the focus is on continuous improvement.
Chairs of each Committee* are expected to follow up on matters raised
in the Committee assessments and take such action as appropriate.
  
  *
    
    Each of the Audit, Compensation, Corporate Governance and Nominating and Safety, Health and Environment Committees participate in this process. Because of its limited activity, the Executive Committee does not.




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##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    Comments3.   Annual Assessment of the Board Chair by Members of
the BoardEach year members of the Board are asked to assess and comment on the
discharge, by the Board Chair, of his or her duties. Individual
responses are received by the Corporate Secretary and the Chair of
the Corporate Governance and Nominating Committee. A summary report
is then provided to the Board Chair and the full Board, with no
attribution of comments to individual directors without their consent.4.   Annual Assessment of Each Committee Chair by Members
of each CommitteeEach year, members of each Committee are asked to assess and comment
on the discharge, by each Committee Chair, of his or her duties.
Responses are received by the Corporate Secretary and the Committee
Chair under review. A summary report is then provided to the
appropriate Committee and to the full Board, with no attribution of
comments to individual directors without their consent.5.   Annual Assessment of Individual DirectorsEach year, the Board Chair (and, as in the opinion of the Board Chair
is desirable, the Chair of the Corporate Governance and Nominating
Committee) meets with each director individually to engage in full
and frank two-way discussion of any and all issues which either wish
to raise. Each director, during such review, shall be prepared to
discuss with the Board Chair how the directors, both individually and
collectively, could operate more effectively.The Chair will share peer feedback with each director as appropriate
as constructive input and will review progress and action taken in
concert with the Chair of the Corporate Governance and Nominating
Committee. Each director is encouraged to view such feedback as
constructive advice to enhance both their individual contribution and
overall Board effectiveness.6.
    
    Provide orientation and education programs for new directors.
    
    Yes
    
    The Board has adopted a written New Director Orientation Policy
designed to:(i)      provide each new director with a baseline of
knowledge about the Corporation which will serve as a basis for
informed decision-making;(ii)     tailor the program for each new director to take into
account his or her unique mix of skills, experience, education,
knowledge and needs; and(iii)    be delivered over a period of time to minimize the
likelihood of overload and maximize the lasting educational impact.




---



##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    CommentsThe orientation program is tailored to the needs of each new
director, and will consist of a combination of written material,
one-on-one meetings with senior management, site visits and other
briefings and training as appropriate.7.
    
    Consider size of Board with a view to facilitating effective decision-making.
    
    Yes
    
    The Board has considered its size and has concluded that a board
comprising 12 members (its current size) allows it to most
effectively discharge its duties.8.
    
    Review the adequacy and form of compensation of directors in light of the responsibilities and risks involved
in being an effective director.
    
    Yes
    
    The Compensation Committee regularly reviews both the amount and
components of the Corporations director compensation package and the
Chairs compensation package and believes that the current
compensation is appropriate for the responsibilities and risks
assumed by the directors.The Board has determined that a portion of the total annual
compensation package should be paid in the form of Deferred Share
Units (Share Units). As well, each director can elect to take some
or all of his or her annual and per diem fees in the form of Share
Units. Each Share Unit has a floating value equivalent to one common
share of the Corporation and cannot be paid out until the director
retires from the Board. The Board adopted the Share Unit component to
more closely align the economic interests of directors with those of
the Corporations shareholders.The Board believes that the economic interests of directors should be
aligned with those of shareholders. To achieve this, all directors
are expected to hold shares and/or Share Units in the Corporation. By
the time a director has served on the Board for ten months, he or she
must own a minimum of 2,000 shares in the Corporation. By the
time a director has served on the Board for three years, he or she
must own shares and/or Share Units with a value at least five times
the annual retainer paid to directors. The Board may make exceptions
to this standard where, as a result of the unique financial
circumstances of a director, compliance would result in an
unacceptable hardship.9.
    
    Board committees should generally be composed of outside directors, a majority of whom are unrelated.
    
    Yes
    
    Of the five Committees of the Board, three (the Audit, Compensation
and Corporate Governance and Nominating Committees) are composed
entirely of independent and unrelated directors. The Safety, Health
and Environment Committee is composed of four independent unrelated
directors and one related director. The Executive Committee is
composed of three independent unrelated directors and two related
directors.Each Committee of the Board has a written Charter which details the
Committees duties and responsibilities. The Charter of each
Committee can be found at the Corporations website,
www.potashcorp.com, and is available upon request to any shareholder
of the Corporation.




---



##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    Comments10.
    
    Appoint a committee responsible for developing the Corporations approach to corporate governance issues and
the Guidelines.
    
    Yes
    
    The Board has established a Corporate Governance and Nominating
Committee. At present, that Committee is composed of five outside
directors, each of whom is independent and unrelated. The purpose of
the Committee is to identify individuals qualified to become members
of the Board consistent with the criteria approved by the Board, to
recommend to the Board director nominees for each annual meeting of
shareholders and nominees for election to fill vacancies on the Board
and to address related matters. The Committee shall also develop and
recommend to the Board corporate governance principles applicable to
the Corporation and be responsible for leading the annual review of
the Boards performance.11.
    
    (a)  Define limits to Managements responsibilities by developing position descriptions for:
    
    Yes
    
    The Board has adopted a Charter which sets out its responsibilities
and the limits to managements responsibilities. The Board is
specifically charged with:(i)  the Board; and
    
    
    
    (a)   oversight and approval on an ongoing basis of the
Corporations business strategy;(b)   appointment of the Chief Executive Officer and monitoring his
or her performance;(c)   approving the appointment of all corporate officers and
ensuring that adequate provision has been made for management
succession;(d)   establishing standards for management and monitoring
performance;(e)   approving procedures for strategy implementation, for
identifying and managing risks and for insuring the integrity of
internal control and management information systems; and(f)    reporting to shareholders on the performance of the business.The Board has specifically retained responsibility for managing its
own affairs, including planning its composition, selecting the Board
Chair, nominating candidates for election to the Board, appointing
committees and determining director compensation.(ii) the Chief Executive Officer.
    
    Yes
    
    A written position description for the Chief Executive Officer has
been developed and approved by the Board.The Chief Executive Officer reports to the Board and has general
supervision and control over the business and affairs of the
Corporation. Amongst other things, the Chief Executive Officer is
expected to:(i)    foster a corporate culture that promotes ethical
practices, encourages individual integrity and fulfills social
responsibility;




---



##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    Comments(ii)     develop and recommend to the Board a long-term strategy
and vision for the Corporation that leads to creation of shareholder
value;(iii)    develop and recommend to the Board annual business plans
and budgets that support the Corporations long term strategy; and(iv)    consistently strive to achieve the Corporations financial
and operating goals and objectives.(b)  Board should approve the Chief Executive Officers corporate objectives.
    
    Yes
    
    The Compensation Committee annually reviews the Chief Executive
Officers performance as against specific written objectives
established at the beginning of each year and together with all other
independent members of the Board approves annually the Chief
Executive Officers compensation package.12.
    
    Establish structures and procedures to ensure the Board can function independently of management.
    
    Yes
    
    The Board has determined that the Corporation is best served by
dividing the responsibilities of Board Chair and Chief Executive
Officer. The Board Chair is independent and unrelated and is chosen
by the full Board. A position description for the Board Chair has
been developed and approved by the Board. Amongst other things the
Chair is expected to:(i)      provide leadership necessary for effective
functioning of the Board;(ii)     lead in the assessment of Board performance;(iii)    assist the Compensation Committee in monitoring and
evaluating the performance of the Chief Executive Officer;(iv)    lead the Board in ensuring succession plans are in place at
the senior management level; and(v)     act as an effective liaison between the Board and
management.The Board has also adopted a policy for the independent members of
the Board to meet without management present at each regularly
scheduled meeting of the Board. These sessions are of no fixed
duration and participating directors are encouraged to raise and
discuss any issues of concern.




---



##### 





Does PCSTSX Guidelines for
    
    CurrentlyEffective Corporate Governance
    
    Align?
    
    Comments13.
    
    (a)  The Audit Committee should have a mandate which specifically defines the roles and
responsibility of the Audit Committee;
    
    Yes
    
    The Audit Committee has a comprehensive written Charter which was
last reviewed and amended in November 2004. A copy of the Charter is
attached as Appendix D to the attached Management Proxy Circular, and
section 5 of the Charter describes the Committees
responsibilities.The Committee is composed solely of independent, unrelated directors.
All members of the Committee must be financially literate and at
least one member of the Committee must have accounting or related
financial expertise. The Board has concluded that all members of the
Committee are financially literate and Mr. Vicq is an Audit
Committee Financial Expert within the rules of the U.S. Securities
and Exchange Commission relating to audit committees.(b)  All members should be outside directors.
    
    Yes
    
    The Audit Committee is at present composed of five members, all of
whom are independent and unrelated.14.
    
    Implement a system to enable individual directors to engage outside advisors, at the expense of the Corporation
in appropriate circumstances.
    
    Yes
    
    Individual directors may engage outside advisors, at the
Corporations expense, upon authorization of the Executive Committee.




---



##### 





APPENDIX B POTASH CORPORATION OF SASKATCHEWAN INC. RESOLUTION OF SHAREHOLDERS WHEREASthe Board of Directors of Potash
Corporation of Saskatchewan Inc. (the Corporation) has, inter alia,
approved a new stock option plan (the 2005 Performance Option plan), a
copy of which is attached as Appendix C to the management proxy
circular of the Corporation sent to the shareholders of the Corporation
in connection with the annual and special meeting of the Corporation to
be held May 5, 2005; NOW THEREFORE, BE IT RESOLVED that:  1.
    
    the 2005 Performance Option plan is hereby adopted and approved by the shareholders of the
Corporation; and2.
    
    any officer of the Corporation be and is hereby authorized and directed for and on behalf
of the Corporation to do such things and to take such actions as may be necessary or
desirable to carry out the intent of the foregoing resolution and the matters authorized
thereby.




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##### 





APPENDIX C POTASH CORPORATION OF SASKATCHEWAN INC. 2005 PERFORMANCE
OPTION PLAN  1.
    
    Purpose of Plan Potash Corporation of Saskatchewan Inc. (the
Corporation) by resolution of its Board of Directors (the Board) has
established, subject to shareholder approval at the Corporations 2005
Annual and Special Meeting of shareholders, this Potash Corporation of
Saskatchewan Inc. 2005 Performance Option Plan (the Plan) to support
the Corporations compensation philosophy of providing selected
employees and officers with an opportunity to: promote the growth and
profitability of the Corporation; align their interests with
shareholders; and, earn compensation commensurate with corporate
performance. The Corporation believes this Plan will directly assist in
supporting the Corporations compensation philosophy by providing
participants with the opportunity through stock options, which will
vest, if at all, based on corporate performance over a three-year
period, to acquire Common Shares of the Corporation (Common Shares).  2.
    
    Duration of this Plan This Plan was adopted by the Board on February 28,
2005 to be effective as of January 1, 2005 (the Effective
Date), subject to shareholder approval at the Corporations 2005 Annual
and Special Meeting of shareholders, and shall remain in effect, unless
sooner terminated as provided herein, until one (1) year from the
Effective Date, at which time it will terminate. After this Plan is
terminated, no stock options may be granted but stock options previously
granted shall remain outstanding in accordance with their applicable
terms and conditions and this Plans terms and conditions.  3.
    
    Administration This Plan shall be administered by the
Compensation Committee of the Board or any other committee designated by
the Board to administer this Plan (the Committee). The Committee shall
be responsible for administering this Plan, subject to this Section 3
and the other provisions of this Plan. The Committee may employ
attorneys, consultants, accountants, agents, and other individuals, any
of whom may be an employee, and the Committee, the Corporation, and its
officers and directors shall be entitled to rely upon the advice,
opinions, or valuations of any such individuals. All actions taken and
all interpretations and determinations made by the Committee shall be
made in the Committees sole discretion and shall be final and binding
upon the participants, the Corporation, and all other interested
individuals.  4.
    
    Authority of the Committee The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of this Plan
and any Stock Option Award Agreement or other agreement or document
ancillary to or in connection with this Plan, to determine eligibility
for stock options and to adopt such rules, regulations, forms,
instruments, and guidelines for administering this Plan as the Committee
may deem necessary or proper. Such authority shall include adopting
modifications and amendments to any Stock Option Award Agreement that
are necessary to comply with the laws of the countries and other
jurisdictions in which the Corporation and/or its subsidiaries operate.  5.
    
    Shares Subject to Stock Options The aggregate number of Common Shares issuable
after February 28, 2005 pursuant to stock options under this Plan
may not exceed 1,200,000 Common Shares. The aggregate number of
Common Shares in respect of which stock options have been granted to any
one person pursuant to this Plan and which remain outstanding shall not
at any time exceed 300,000. The authorized limits under this Plan shall
be subject to adjustment under Sections 12 and 13. If any stock option granted under this Plan, or
any portion thereof, expires or terminates for any reason without having
been exercised in full, the Common Shares with respect to which such
option has not been exercised shall again be available for further stock
options under this Plan; provided, however, that any stock option that
is granted under this Plan that does not vest as a result of a failure
to satisfy the Performance Measures, shall not be again available for
grant under this Plan.  6.
    
    Grant of Stock Options From time to time the Board may designate
individual officers and employees of the Corporation and its
subsidiaries eligible to be granted options to purchase Common Shares
and the number of Common Shares which each such person will be granted a
stock




---



##### 





option to purchase; provided that the aggregate number of Common
Shares subject to such stock options may not exceed the number provided
for in Section 5 of this Plan. Non-employee directors and other
non-employee contractors and third party vendors are not eligible to
participate in this Plan.  7.
    
    Option Price The option price for any option granted under
this Plan to any optionee shall be fixed by the Board when the option is
granted and shall be not less than the fair market value of the Common
Shares at such time which, for optionees resident in the United States
and any other optionees designated by the Board, shall be deemed to be
the closing price per Common Share on the New York Stock Exchange on the
last trading day immediately preceding the day the option is granted
and, for all other optionees, shall be deemed to be the closing price
per Common Share on the Toronto Stock Exchange on the last trading day
immediately preceding the day the option is granted; provided that, in
either case, if the Common Shares did not trade on such exchange on such
day the option price shall be the closing price per share on such
exchange on the last day on which the Common Shares traded on such
exchange prior to the day the option is granted.  8.
    
    Vesting of Stock Options Subject to achievement of Performance Measures
as certified and approved by the Audit Committee of the Board, stock
options granted under this Plan will vest no later than thirty (30) days
after the audited financial statements for the applicable
Performance Period have been approved by the Board.  9.
    
    Performance Measures for Vesting of Stock Options  (a)
    
    The Performance Measures which will be used to determine the degree to which stock options
will vest over the three-year period beginning the first day of the fiscal year in which
they are granted (the Performance Period) shall be cash flow return on investment
(CFROI) and weighted average cost of debt and equity capital (WACC).  (i)
    
    CFROI is the ratio of after tax operating cash flow to average gross investment over
the fiscal year, calculated as A divided by B, where (1) A equals operating income
plus nonrecurring or unusual items plus accrued incentive awards plus depreciation and
amortization less cash taxes, and (2) B equals the average of total assets plus
accumulated depreciation plus accumulated amortization less cash and cash equivalents
less non interest bearing current liabilities.(ii)
    
    WACC is the weighted average cost of debt and equity capital, calculated as [A times
the product of B divided by C] plus [D times the product of E divided by C], where (1) A
equals the after-tax market yield cost of debt, (2) B equals the market
value of debt less cash and cash equivalents (3) C equals the market value of debt
less cash and cash equivalents, plus the market value of equity, (4) D equals the
cost of equity, and (5) E equals the market value of equity.  (b)
    
    In determining the number of stock options that will actually vest based on the degree to
which the Performance Measures have been attained during the applicable Performance Period,
the following chart shall be utilized which shows the three year average excess of CFROI
being greater than WACC and the respective portion of the stock option that will vest: Performance Measure
    
    
    Vesting Scale3 year average excess of
CFROI > WACC
    
    
    % of Stock Option Grant
Vesting<0%
    
    
    
    0
    %0.20%
    
    
    
    30
    %1.20%
    
    
    
    70
    %2.20%
    
    
    
    90
    %2.50%
    
    
    
    100
    %
  (c)
    
    In assessing the portion of the stock options that shall vest in accordance with the above
chart, the following shall be done:  (i)
    
    Each year, the CFROI and WACC will be calculated in accordance with the definitions
herein, based on the audited financial statements and approved by the Audit Committee.(ii)
    
    In each Performance Period, the average of the three fiscal years shall be calculated
by taking the simple average of the individual years results.




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##### 





(iii)
    
    The resulting three-year average will then be applied, using the scale above to
determine the number of stock options, if any, that will vest as of the end of the
Performance Period.(iv)
    
    For results falling between the reference points in the chart above, the level of
vesting shall be mathematically interpolated between the reference points.  10.
    
    Terms of Stock Options The period during which a stock option is
exercisable may not exceed 10 years from the date the stock option
is granted, and the Stock Option Award Agreement may contain provisions
limiting the number of Common Shares with respect to which the stock
option may be exercised in any one year. Each stock option agreement
shall contain provisions to the effect that:  (a)
    
    if the employment of an optionee as an officer or employee of the Corporation or a
subsidiary terminates, by reason of his or her death, or if an optionee who is a retiree
pursuant to Section 10(b) dies, the legal personal representatives of the optionee will
be entitled to exercise any unexercised vested options, including such stock options that
may vest after the date of death, during the period ending at the end of the twelfth
calendar month following the calendar month in which the optionee dies, failing which
exercise the stock options terminate;(b)
    
    subject to the terms of Section 10(a) above, if the employment of an optionee as an
officer or employee of the Corporation or a subsidiary terminates, by reason of retirement
in accordance with the then prevailing retirement policy of the Corporation or subsidiary,
the optionee will be entitled to exercise any unexercised vested stock options, including
such stock options that may vest after the date of retirement, during the period ending at
the end of the 36th month following the calendar month in which the optionee retires,
failing which exercise the stock options terminate;(c)
    
    if the employment of an optionee as an officer or employee of the Corporation or a
subsidiary terminates, for any reason other than as provided in Sections 10(a) or (b),
the optionee will be entitled to exercise any unexercised vested stock options, to the
extent exercisable at the date of such event, during the period ending at the end of the
calendar month immediately following the calendar month in which the event occurs, failing
which exercise the stock options terminate;(d)
    
    for greater certainty and for these purposes, an optionees employment with the
Corporation or a subsidiary shall be considered to have terminated effective on the last day
of the optionees actual and active employment with the Corporation or subsidiary whether
such day is selected by agreement with the optionee or unilaterally by the Corporation or
subsidiary and whether with or without advance notice to the optionee. For the avoidance of
doubt, no period of notice that is given or ought to have been given under applicable law in
respect of such termination of employment will be utilized in determining an optionees
entitlement under the Plan. The employment of an optionee with the Corporation shall be
deemed to have terminated for all purposes of the Plan if such person is employed by or
provides services to a person that is a subsidiary of the Corporation and such person ceases
to be a subsidiary of the Corporation, unless the Committee determines otherwise; and(e)
    
    each stock option is personal to the optionee and is not assignable, except (i) as
provided in Section 10(a), and (ii) at the election of the Board, a stock option may
be assignable to the spouse, children and grandchildren of the original optionee and to a
trust, partnership or limited liability company, the entire beneficial interest of which is
held by one or more of the foregoing. Nothing contained in Sections 10(a), (b) or
(c) shall extend the period during which a stock option may
be exercised beyond its stipulated expiration date or the date on which
it is otherwise terminated in accordance with the provisions of this
Plan. If a stock option is assigned pursuant to
Section 10(e)(ii), the references in Sections 10(a), (b) and
(c) to the termination of employment or death of an optionee shall
not relate to the assignee of a stock option but shall relate to the
original optionee. In the event of such assignment, legal personal
representatives of the original optionee shall not be entitled to
exercise the assigned stock option, but the assignee of the stock option
or the legal personal representatives of the assignee may exercise the
stock option during the applicable specified period.  11.
    
    Exercise of Stock Options Subject to the provisions of this Plan, a
vested stock option may be exercised from time to time by delivering to
the Corporation at its registered office a written notice of exercise
specifying the number of Common Shares with respect to which the stock
option is being exercised and accompanied by payment in cash or
certified cheque in full of the purchase price of the Common Shares then
being purchased.




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##### 





12.
    
    Adjustments Appropriate adjustments to the authorized
limits set forth in Section 5, in the number, class and/or type of
Common Shares optioned and in the option price per share, both as to
stock options granted or to be granted, may be made by the Board in its
discretion to give effect to adjustments in the number of Common Shares
which result from subdivisions, consolidations or reclassifications of
the Common Shares, the payment of share dividends by the Corporation,
the reconstruction, reorganization or recapitalization of the
Corporation or other relevant changes in the capital of the Corporation.  13.
    
    Mergers If the Corporation proposes to amalgamate or
merge with another body corporate, the Corporation shall give written
notice thereof to optionees in sufficient time to enable them to
exercise outstanding vested stock options, to the extent they are
otherwise exercisable by their terms, prior to the effective date of
such amalgamation or merger if they so elect. The Corporation shall use
its best efforts to provide for the reservation and issuance by the
amalgamated or continuing corporation of an appropriate number of Common
Shares, with appropriate adjustments, so as to give effect to the
continuance of the stock options to the extent reasonably practicable.
In the event that the Board determines in good faith that such
continuance is not in the circumstances practicable, it may upon 30 days
notice to optionees terminate the stock options.  14.
    
    Change of Control If a change of control of the Corporation
occurs, each then outstanding stock option granted under this Plan may
be exercised, in whole or in part, even if such option is not otherwise
exercisable by its terms. For purposes of this Plan, a change of control
of the Corporation shall be deemed to have occurred if any of the
following occur, unless the Board adopts a plan after the Effective Date
of this Plan that has a different definition (in which case such
definition shall be applied), or the Committee decides to modify or
amend the following definition through an amendment of this Plan:  (a)
    
    within any period of two consecutive years, individuals who at the beginning of such
period constituted the Board and any new directors whose appointment by the Board or
nomination for election by shareholders of the Corporation was approved by a vote of at
least a majority of the directors then still in office who either were directors at the
beginning of the period or whose appointment or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board;(b)
    
    there occurs an amalgamation, merger, consolidation, wind-up, reorganization or
restructuring of the Corporation with or into any other entity, or a similar event or series
of such events, other than any such event or series of events which results in securities of
the surviving or consolidated corporation representing 50% or more of the combined voting
power of the surviving or consolidated corporations then outstanding securities entitled to
vote in the election of directors of the surviving or consolidated corporation being
beneficially owned, directly or indirectly, by the persons who were the holders of the
Corporations outstanding securities entitled to vote in the election of directors of the
Corporation prior to such event or series of events in substantially the same proportions as
their ownership immediately prior to such event of the Corporations then outstanding
securities entitled to vote in the election of directors of the Corporation;(c)
    
    50% or more of the fixed assets (based on book value as shown on the most recent available
audited annual or unaudited quarterly consolidated financial statements) of the Corporation
are sold or otherwise disposed of (by liquidation, dissolution, dividend or otherwise) in
one transaction or series of transactions within any twelve month period;(d)
    
    any party, including persons acting jointly or in concert with that party, becomes
(through a take-over bid or otherwise) the beneficial owner, directly or indirectly, of
securities of the Corporation representing 20% or more of the combined voting power of the
Corporations then outstanding securities entitled to vote in the election of directors of
the Corporation, unless in any particular situation the Board determines in advance of such
event that such event shall not constitute a change of control; or(e)
    
    the Board approves and/or recommends that shareholders accept, approve or adopt any
transaction that would constitute a change of control under clause b, c or d above and
determines that the change of control resulting from such transaction will be deemed to have
occurred as of a specified date earlier than the date under b, c or d, as applicable.  15.
    
    Amendment or Discontinuance of this Plan The Board may amend or discontinue the Plan at
any time but, subject to Sections 12, 13, and 14, no such
amendment may increase the aggregate maximum number of Common Shares
that may be subject to stock options under this Plan, change the manner
of determining the minimum option price, extend the option period under
any option beyond 10 years or, without the consent of the holder of
the option, alter or impair any option previously granted to an optionee
under this Plan; and, provided further, that, without the prior approval
of the Corporations shareholders, stock options issued under this Plan
shall not be repriced, replaced, or




---



##### 





regranted through cancellation, or
by lowering the option price of a previously granted stock option.
Pre-clearance of the Toronto Stock Exchange of amendments to the Plan
will be required to the extent provided under the relevant rules of the
Toronto Stock Exchange.  16.
    
    Evidence of Stock Options Each stock option granted under this Plan shall
be evidenced by a written stock option agreement between the Corporation
and the optionee which shall give effect to the provisions of this Plan
and include such other terms as the Committee shall determine (Stock
Option Award Agreement).




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##### 



APPENDIX D POTASH CORPORATION OF SASKATCHEWAN INC. AUDIT COMMITTEE CHARTER  1.
    
    PURPOSE  1.1
    
    To assist the Board of Directors in fulfilling its oversight responsibilities for (1) the
integrity of the Companys financial statements, (2) the Companys
compliance with legal and regulatory requirements, (3) the qualifications and
independence of the auditors of the Company (the external auditors), and (4) the
performance of the Companys internal audit function and external auditors. The Audit
Committee (the Committee) will also prepare the report that is, under applicable
legislation and regulation, required to be included in the Companys annual proxy
statement and circular.  2.
    
    AUTHORITY  2.1
    
    The Committee has authority to conduct or authorize investigations into any matters
within its scope of responsibility. It is empowered to:  (a)
    
    Determine the public accounting firm to be recommended to the Companys
shareholders for appointment as external auditors, and, subject to applicable law,
be directly responsible for the compensation and oversight of the work of the
external auditors. The external auditors will report directly to the Committee.(b)
    
    Resolve any disagreements between management and the external auditors regarding
financial reporting.(c)
    
    Pre-approve all auditing and permitted non-audit services performed by the
Companys external auditors.(d)
    
    Retain independent counsel, accountants, or others to advise the Committee or
assist in its duties.(e)
    
    Seek any information it requires from employees  all of whom are directed to
cooperate with the Committees requests  or external parties.(f)
    
    Meet with Company officers, external auditors, or outside counsel, as necessary.(g)
    
    Delegate authority, to the extent permitted by applicable legislation and
regulation, to one or more designated members of the Committee, including the
authority to pre-approve all auditing and permitted non-audit services, providing
that such decisions are presented to the full Committee at its next scheduled
meeting.  3.
    
    COMPOSITION  3.1
    
    The Committee will consist of at least three and no more than six members of the Board
of Directors. The Corporate Governance and Nominating Committee of the board will
recommend to the board members for appointment to the Committee and
the Committee chair.
Only independent directors shall be entitled to vote on any board resolution approving
such recommendations.3.2
    
    If and whenever a vacancy shall exist on the Committee, the remaining members may
exercise all its powers so long as a quorum remains in office.3.3
    
    Each Committee member will be both independent and financially literate. At least one
member shall be designated as the financial expert, as defined by applicable
legislation and regulation. No Committee member shall simultaneously serve on the audit
committees of more than two other public companies.  4.
    
    MEETINGS  4.1
    
    The Committee will meet at least once each fiscal quarter, with authority to convene
additional meetings, as circumstances require. All Committee members are expected to
attend each meeting, in person or via tele- or video-conference. The Committee will
invite other members of the board, members of management, internal auditors or others to
attend meetings and provide pertinent information, as necessary. External auditors shall
be entitled to receive notice of every meeting of the Committee and to attend and be
heard thereat. It will meet separately, periodically, with management, with internal
audit and with external auditors. It will also meet periodically in camera. Meeting
agendas will be prepared and provided in advance to members, along with appropriate
briefing materials. Minutes will be prepared.




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##### 





4.2
    
    The time at which and place where the meetings of the Committee shall be held and the
calling of meetings and the procedure in all things at such meetings shall be determined
by the Committee; provided that meetings of the Committee shall be convened whenever
requested by the external auditors or any member of the Committee in accordance with the
Canada Business Corporations Act.4.3
    
    No business may be transacted by the Committee except at a meeting of its members at
which a quorum of the Committee is present. A majority of the members of the Committee
shall constitute a quorum.  5.
    
    RESPONSIBILITIES There is hereby delegated to the Committee the
duties and powers specified in section 171 of the Canada Business
Corporations Actand, without limiting these duties and powers, the
Committee will carry out the following responsibilities:  5.1
    
    Financial Statements(a)
    
    Review significant accounting and reporting issues and understand their impact on the
financial statements. These issues include:  (i)
    
    Complex or unusual transactions and highly judgmental areas;(ii)
    
    Major issues regarding accounting principles and financial statement
presentations, including any significant changes in the Companys selection or
application of accounting principles; and(iii)
    
    The effect of regulatory and accounting initiatives, as well as off-balance
sheet structures, on the financial statements of the Company.  (b)
    
    Review analyses prepared by management and/or the external auditors, setting forth
significant financial reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of the effects of
alternative GAAP methods on the financial statements.(c)
    
    Review both U.S. GAAP and Canadian GAAP issues and any reconciliation issues from
Canadian GAAP to U.S. GAAP.(d)
    
    Review with management and the external auditors the results of the audit, including
any difficulties encountered. This review will include any restrictions on the scope of
the external auditors auditors activities or on access to requested information, and
any significant disagreements with management.(e)
    
    Review and discuss the annual audited financial statements and quarterly financial
statements with management and the external auditors, including the Companys
disclosures under Managements Discussion and Analysis of Financial Condition and
Results of Operations (MD&A) including the discussion of critical accounting
estimates included therein.(f)
    
    Review and discuss the unaudited annual financial statements prior to the Companys
year-end earnings release.(g)
    
    Review the annual financial statements and MD&A and make a determination whether to
recommend their approval by the Board of Directors.(h)
    
    Approve the quarterly financial statements and MD&A prior to their release.(i)
    
    Review disclosures made by the Chief Executive Officer and the Chief Financial Officer
during the Forms 10-K and 10-Q certification process about significant
deficiencies or material weaknesses in the design or operation of internal controls or
any fraud that involves management or other employees who have a significant role in the
Companys internal controls.(j)
    
    Discuss earnings press releases (particularly use of pro forma information or other
non-GAAP financial measures), as well as financial information and earnings guidance
provided externally, including to analysts and rating agencies. This review may be
general (i.e., the types of information to be disclosed and the type of presentations to
be made). The Committee does not need to discuss each release in advance.(k)
    
    Review managements Sarbanes-Oxley Act Section 404 internal control report and the
related attestation report of the external auditors when required.  5.2
    
    Internal Control  (a)
    
    Consider the effectiveness of the Companys internal control system, including
information technology security and control.




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##### 





(b)
    
    Understand the scope of internal audits and external auditors review of internal
control over financial reporting, and obtain reports on significant findings and
recommendations, together with managements responses.(c)
    
    Review external auditors management letters and managements responses to such
letters.(d)
    
    As requested by the Board of Directors, discuss with management, internal audit and
the external auditors the Companys major risk exposures (whether financial, operational
or otherwise), the adequacy and effectiveness of the accounting and financial controls,
and the steps management has taken to monitor and control such exposures.(e)
    
    Annually review the Corporations disclosure controls and procedures, including any
significant deficiencies in, or material non-compliance with, such controls and
procedures.(f)
    
    Discuss with the Chief Financial Officer and, as is in the Committees opinion
appropriate, the Chief Executive Officer, all elements of the certification required
pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act which duties may be
discharged through the participation by the Chair of the Committee in the quarterly
Sarbanes-Oxley Due Diligence Conference Call meeting.  5.3
    
    Internal Audit  (a)
    
    Review with management, the external auditors and internal audit the charter,
plans, activities, staffing and organizational structure of the internal audit function.(b)
    
    Ensure there are no unjustified restrictions or limitations on the functioning of the
internal audit department, and review and concur in the appointment, replacement, or
dismissal of the Vice President, Internal Audit.(c)
    
    Review the effectiveness of the internal audit function, including compliance with The
Institute of Internal Auditors Standards for the Professional Practice of Internal
Auditing.(d)
    
    On a regular basis, meet separately with the Vice President, Internal Audit to discuss
any matters that the Committee or the Vice President, Internal Audit believes should be
discussed privately.  5.4
    
    External Audit  (a)
    
    Review the external auditors proposed audit scope and approach, (including
coordination of audit effort with internal audit) and budget.(b)
    
    Review the performance of the external auditors, and exercise final approval on the
recommendation to shareholders regarding the appointment or discharge of the external
auditors. In performing this review, the Committee will:  (i)
    
    At least annually, obtain and review a report by the external auditors describing:
the external auditors internal quality control procedures; any material issues
raised by the most recent internal quality control review, or peer review, of the
external auditors, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years as, respecting one or more
independent audits carried out by the external auditors, and any steps taken to deal
with any such issues; and (to assess the auditors independence) all relationships
between the external auditors and the Company.(ii)
    
    Take into account the opinions of management and internal audit.(iii)
    
    Review and evaluate the lead partner of the external auditors.  (c)
    
    On an annual basis receive from the external auditors and review a report on items
required to be communicated to the Committee by Audit Guideline 11 of the Canadian
Institute of Chartered Accountants.(d)
    
    Ensure the rotation of the lead audit partner every five years and other audit
partners every seven years, and consider whether there should be regular rotation of the
audit firm itself.(e)
    
    Present its conclusions with respect to the external auditors to the full board.(f)
    
    Set clear hiring policies for employees or former employees of the external auditors.(g)
    
    On a regular basis, meet separately with the external auditors to discuss any matters
that the Committee or external auditors believe should be discussed privately.




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##### 





5.5
    
    Compliance  (a)
    
    Review the effectiveness of the system for monitoring compliance with laws and
regulations and the results of managements investigation and follow-up (including
disciplinary action) of any instances of non-compliance.(b)
    
    Establish procedures for: (i) the receipt, retention, and treatment of complaints
received by the Company regarding accounting, internal accounting controls, or auditing
matters; and (ii) the confidential, anonymous submission by employees of the Company
of concerns regarding questionable accounting or auditing matters.(c)
    
    Review the findings of any examinations by regulatory agencies, and any external
auditors observations made regarding those findings.(d)
    
    Review the process for communicating the Code of Conduct to Company personnel, and for
monitoring compliance therewith.(e)
    
    Obtain regular updates from management and Company legal counsel regarding compliance
matters.  5.6
    
    Reporting Responsibilities  (a)
    
    Regularly report to the Board of Directors about Committee activities and issues that
arise with respect to the quality or integrity of the Companys financial statements,
the Companys compliance with legal or regulatory requirements, the performance and
independence of the Companys external auditors, and the performance of the internal
audit function.(b)
    
    Provide an open avenue of communication between internal audit, the external auditors,
and the Board of Directors.(c)
    
    Report annually to shareholders, describing the Committees composition,
responsibilities and how they were discharged, and any other information required by
applicable legislation or regulation, including approval of non-audit services.(d)
    
    Review any other reports the Company issues that relate to Committee responsibilities.  5.7
    
    Other Responsibilities  (a)
    
    Discuss with management the Companys major policies with respect to risk assessment
and risk management.(b)
    
    Perform other activities related to this charter as requested by the Board of
Directors.(c)
    
    Institute and oversee special investigations as needed.(d)
    
    Review and assess the adequacy of the Committee charter annually, requesting board
approval for proposed changes, and ensure appropriate disclosure as may be required by
applicable legislation or regulation.(e)
    
    Confirm annually that all responsibilities outlined in this charter have been carried
out.(f)
    
    Evaluate the Committees performance at least annually.(g)
    
    Receive and review, at least quarterly, a report prepared by the Companys Natural Gas
Hedging Committee and, if the Companys hedged position is outside approved guidelines,
determine the reasons for the deviation and any action which will be taken as a result.(h)
    
    Annually review the Companys natural gas hedging policy.(i)
    
    Receive and review, at least annually and in conjunction with the Compensation
Committee, a report on pension plan governance including a fund review and retirement
plan accruals.  6.
    
    FUNDING The Corporation shall provide for appropriate
funding, as determined by the Committee, for (i) compensation to the
external auditors for the purpose of preparing or issuing an audit
report or performing other audit review or attest services as
pre-approved by the Committee; (ii) compensation to any outside
experts employed by the Committee; and (iii) ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying
out its duties.




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##### 



Proxy
    
    Potash Corporation of Saskatchewan Inc.
  FOR USE AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 2005. THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT OF THE
 CORPORATION. The undersigned holder of common shares (Shares) of Potash Corporation of Saskatchewan Inc. (the Corporation)
hereby appoints Dallas J. Howe, Board Chair, or failing him, William J. Doyle, President and Chief Executive
Officer, or failing him, Wayne R. Brownlee, Senior Vice President, Treasurer and Chief Financial Officer, or
failing him, Joseph A. Podwika, Secretary, or instead of any of the foregoing, ,
 at the annual and special
meeting of shareholders of the Corporation to be held at the Delta Bessborough, 601 Spadina Crescent East,
Saskatoon, Saskatchewan, Canada on Thursday, the 5th day of May, 2005 (the Meeting) at 10:30 a.m. (local time),
 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. (BOX) 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, for the appointment of Deloitte & Touche LLP as auditors of the Corporation and for the
resolution (attached as Appendix B to the accompanying Management Proxy Circular) approving the adoption of a new
stock option plan, the full text of which is attached as
Appendix C to the accompanying Management Proxy Circular. This
proxy confers authority to vote in the proxyholders discretion with respect to
amendments to matters identified in the accompanying Notice of Meeting and with
respect to other matters that may properly come before the Meeting.
 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.
    
    o
    
    VOTED FORthe election as directors of all nominees listed below (except as marked to the contrary below), oro
    
    WITHHELD FROM VOTINGfor 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. (01)
    
    F.J. Blesi
    
    
    (05
    )
    
    D.J. Howe
    
    
    (09
    )
    
    P.J. Schoenhals(02)
    
    W.J. Doyle
    
    
    (06
    )
    
    A.D. Laberge
    
    
    (10
    )
    
    E.R. Stromberg(03)
    
    J.W. Estey
    
    
    (07
    )
    
    J.J. McCaig
    
    
    (11
    )
    
    J.G. Vicq(04)
    
    W. Fetzer III
    
    
    (08
    )
    
    M. Mogford
    
    
    (12
    )
    
    E. Viyella de Paliza
  2.
    
    Voted FORo or WITHHELD FROM VOTINGo on, the
appointment of Deloitte & Touche LLP as auditors of the Corporation.3.
    
    Voted FORo or AGAINSTo the resolution
(attached as Appendix B to the accompanying Management
Proxy Circular) approving the adoption of a new stock
option plan, the full text of which is attached as Appendix C
to the accompanying Management Proxy Circular. Dated the  day of , 2005.       Potash Corporation
of Saskatchewan Inc.
    
    (Potash Logo)