##### 



Exhibit 99(b)




March 26, 2003

Dear Shareholder:

On behalf of the Board of Directors and
Management of Potash Corporation of Saskatchewan Inc., we invite
you to attend the 2003 Annual Meeting of Shareholders. The
meeting will be held on Thursday, May 8, 2003 at
10:30 a.m. (local time) at the Delta Bessborough,
601 Spadina Crescent East, Saskatoon, Saskatchewan, Canada.

The Notice of Annual 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, please complete, date and sign the
accompanying proxy and return it in the envelope provided.

|                          |  |                                      
|------------------------- |  | -------------------------------------
|Sincerely,                |  |                                      
|(D.E. Phillips Signature) |  | (W.J. Doyle Signature)               
|D. E. PHILLIPS            |  | W. J. DOYLE                          
|Chairman of the Board     |  | President and Chief Executive Officer

Potash Corporation of Saskatchewan Inc.

PCS
Tower,      Suite 500,      122  1st Avenue
South,      Saskatoon,
Saskatchewan      S7K 7G3




---



##### 






POTASH CORPORATION OF SASKATCHEWAN
INC.

NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS


NOTICE IS HEREBY GIVEN that the Annual Meeting
(the Meeting) of shareholders of Potash Corporation
of Saskatchewan Inc. (the Corporation), a Canadian
corporation, will be held on Thursday, May 8, 2003 at
10:30 a.m. (local time) at the Delta Bessborough,
601 Spadina Crescent East, Saskatoon, Saskatchewan, Canada
for the following purposes:



|   |                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------
|1. | to receive the financial statements of the
    Corporation for the year ended December 31, 2002 and the
    report of the auditors thereon;
|  
|2. | to elect directors;                                                                                                                        
|  
|3. | to appoint auditors for the Corporation; and                                                                                               
|  
|4. | to transact such other business as may properly
    come before the meeting or any adjournments thereof.                                   

DATED at Saskatoon, Saskatchewan this 26th day of
March, 2003.



| |                                   
| | ----------------------------------
| | BY ORDER OF THE BOARD OF DIRECTORS
|
| | (John Hampton Signature)          
| | JOHN L.M. HAMPTON                 
| | Secretary                         

Shareholders who are unable to attend in person
are requested to date, sign and return, as soon as possible and
in the envelope enclosed for that purpose, the enclosed form
of proxy.



---



##### 






POTASH CORPORATION OF SASKATCHEWAN
INC.

MANAGEMENT PROXY CIRCULAR


ANNUAL MEETING OF SHAREHOLDERS




SOLICITATION OF PROXIES

This Management Proxy Circular is furnished in
connection with the solicitation of proxies by the management of
Potash Corporation of Saskatchewan Inc. (the
Corporation), a Canadian corporation, and
constitutes a solicitation by or on behalf of the management of
the Corporation under The Canada Business Corporations Act, for
use at the Annual Meeting of shareholders of the Corporation
(the Meeting) to be held on May 8, 2003 and any
adjournments thereof.All costs of
solicitation will be borne by the Corporation. In addition to
the mail, proxies may be solicited by telephone or in person by
employees of the Corporation who will receive no additional
compensation for such services. The Corporation has retained
Georgeson Shareholder Communications Inc. to assist in the
solicitation of proxies in Canada and the United States for
total estimated fees of $18,000. In addition, the Corporation
will reimburse brokers, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to the
beneficial owners of common shares of the Corporation (the
Shares) held by such persons.

A shareholder who has given a proxy may revoke it
at any time before it is exercised by attending the Meeting and
voting in person or by replacing it with a duly executed proxy
bearing a later date. In addition to revocation in either such
manner, a shareholder giving a proxy may revoke the proxy by
instrument in writing executed by the shareholder or by his
attorney authorized in writing and deposited either at the
registered and principal executive office of the Corporation,
Suite 500, 122  1st Avenue South,
Saskatoon, Saskatchewan, Canada, S7K 7G3, at any time up to
and including the last business day preceding the day of the
Meeting, or any adjournment thereof, or with the chairman of the
Meeting on the day of the Meeting or any
adjournment thereof.

This Management Proxy Circular and the
accompanying Notice of Annual Meeting of Shareholders and proxy
will first be sent or given to shareholders on or about
March 26, 2003.

Except as otherwise stated, the information
contained herein is given as of March 15, 2003.

Unless otherwise specified, all dollar amounts
are expressed in United States dollars.

3



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##### 



VOTING SHARES

There are 52,094,982 Shares of the Corporation
outstanding as of March 15, 2003, each Share carrying the
right to one vote. Each shareholder of record at the close
of business on March 20, 2003 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
March 15, 2003, 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
|                                                                                                            |  | Beneficial Ownership
|Name                                                                                                        |  | (1)(2)(3)           
|                                                                                                           
|                                                                                                           
|William J. Doyle                                                                                            |  |                      | 396,443   | 
|                                                                                                           
|James F. Dietz                                                                                              |  |                      | 113,198   | 
|                                                                                                           
|Wayne R. Brownlee                                                                                           |  |                      | 169,747   | 
|                                                                                                           
|Barry E. Humphreys                                                                                          |  |                      | 168,559   | 
|                                                                                                           
|Barbara J. Irwin                                                                                            |  |                      | 47,500    | 
|                                                                                                           
|All directors and executive officers
    as a group, including the above-named individuals
    (25 persons) |  |                      | 1,857,996 | 
|                                                                                                           
|                                                                                                           



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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
    March 15, 2003 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 March 15, 2003. The directors and
    executive officers of the Corporation as a group beneficially
    owned approximately 3.56% of the Shares issued and outstanding
    as at March 15, 2003.                                                                                                               
|   
|(3) | Includes Shares purchasable within 60 days
    after March 15, 2003 through the exercise of options
    granted by the Corporation, as follows: Mr. Doyle 345,000
    Shares; Mr. Dietz 107,500 Shares; Mr. Brownlee 163,500
    Shares; Mr. Humphreys 168,000 Shares; Ms. Irwin 45,000
    Shares, and directors and executive officers as a group,
    including the foregoing individuals, 1,766,300 Shares.                                      

4



---



##### 



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 March 15,
2003 more than 5% of any class of the Corporations
voting securities:

|               |  |                                                                                                          |  |                      |                   |                     |  |  |       | 
|-------------- |  | -------------------------------------------------------------------------------------------------------- |  | -------------------- | ----------------- | ------------------- |  |  | ----- | 
|              
|              
|               |  | Name and Address of                                                                                      |  | Amount and Nature of |                   |                    
|Title of Class |  | Beneficial Owner                                                                                         |  | Beneficial Ownership |                   | Percent of Class(1)
|              
|              
|Common Shares  |  | Lord, Abbett & Co.
    90 Hudson Street
    Jersey City, New Jersey 07302                                |  |                      | 3,957,149(2)(3)   |                     |  |  | 7.59% | 
|              
|Common Shares  |  | Primecap Management Company
    225 South Lake Avenue
    Suite 400
    Pasadena, California 91101       |  |                      | 3,848,980(4)(5)   |                     |  |  | 7.38% | 
|              
|Common Shares  |  | Mackenzie Financial Corporation
    150 Bloor Street West
    Suite M111
    Toronto, Ontario M5S 3B5    |  |                      | 3,747,616(6)(7)   |                     |  |  | 7.19% | 
|              
|Common Shares  |  | Philips, Hager & North
    Investment Management Ltd.
    200 Burrard Street
    Vancouver, B.C. V6C 3N5 |  |                      | 3,214,750(8)(9)   |                     |  |  | 6.17% | 
|              
|Common Shares  |  | T. Rowe Price Associates, Inc.
    100 E. Pratt Street
    Baltimore, Maryland 21202                     |  |                      | 2,703,400(10)(11) |                     |  |  | 5.18% | 
|              
|Common Shares  |  | Jarislowky, Fraser Limited
    1010 Sherbrooke St. West
    Suite 2005
    Montreal, Quebec H3A 2R7      |  |                      | 2,697,202(12)(13) |                     |  |  | 5.17% | 
|              



|     |                                                                                                                                                                  
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)  | Represents percent of Shares outstanding as of
    March 15, 2003.                                                                                               
|    
|(2)  | Such person has sole voting and dispositive power
    as to all 3,957,149 Shares.                                                                                
|    
|(3)  | As set forth in a Schedule 13G dated
    January 28, 2003.                                                                                                       
|    
|(4)  | Such person has sole dispositive power as to all
    3,848,980 Shares and sole voting power as to
    847,180 Shares.                                            
|    
|(5)  | As set forth in a Schedule 13G (amendment)
    dated September 30, 2002.                                                                                         
|    
|(6)  | Such person has sole voting and dispositive power
    as to all 3,747,616 Shares.                                                                                
|    
|(7)  | As set forth in a Schedule 13G (amendment)
    dated February 13, 2003.                                                                                          
|    
|(8)  | Such person has sole voting and dispositive power
    as to all 3,214,750 Shares.                                                                                
|    
|(9)  | As set forth in a Schedule 13G dated
    January 12, 1999.                                                                                                       
|    
|(10) | Such person has sole dispositive power as to all
    2,703,400 Shares and sole voting power as to 559,200 Shares.                                                
|    
|(11) | As set forth in a Schedule 13G dated
    February 14, 2003.                                                                                                      
|    
|(12) | Such person has sole dispositive power as to all
    2,697,202 Shares, sole voting power as to 2,557,666 Shares and
    shared voting power as to 139,536 Shares.
|    
|(13) | As set forth in a Schedule 13G dated
    February 6, 2003.                                                                                                       

5



---



##### 



ELECTION 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 plurality of the Shares present in person or by proxy
at the Meeting and voted in respect of the election of directors
is required to elect directors.

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, including Shares over which any such
individual has or shares voting or investment power.

|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                    |                    
|------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | -------------------
|                   
|(Photo of F. Blesi) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | FREDERICK J. BLESI | Director Since 2001
|                    | Number of Shares Beneficially Owned  10,750*
Number of Share Units Held  1,021**                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                    | Mr. Blesi, 65, 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.
    Mr. Blesi is Chairman of the Compensation Committee and a
    member of the Audit Committee.                                       
|                   
|(Photo of W. Doyle) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | WILLIAM J. DOYLE   | Director Since 1989
|                    | Number of Shares Beneficially Owned  396,443*
Number of Share Units Held  0**                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                    | Mr. Doyle, 52, of Saskatoon, Saskatchewan, is President and
    CEO of the Corporation. He became President of PCS Sales in
    1987, after a career with International Minerals and Chemical
    Corporation. He is Chairman of Canpotex Limited, a director of
    the Potash and Phosphate Institute and The Fertilizer Institute
    and is on the College Board of Advisors at Georgetown
    University.
    Mr. Doyle is a member of the Executive Committee.                                               
|                   
|(Photo of J. Estey) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | JOHN W. ESTEY      |                    
|                    | Number of Shares Beneficially Owned  0*
Number of Share Units Held  0**                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                    | Mr. Estey, 52, of Glenview, Illinois is President and Chief
    Executive Officer of S&C Electric Company, Chicago,
    Illinois. With S&C Electric Company since 1972, he has been
    President and CEO since 1997. He has served on the IEEE/Power
    Engineering Society Governing Board since 1992 and is currently
    President of the Society. He is a member of the Board of
    Governors of the National Electrical Manufacturers Association
    and is a director of the Executives Club of Chicago.

6



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##### 



|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                   |                    
|-------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | -------------------
|                    
|(Photo of W. Fetzer) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | WADE FETZER III   | Director Since 2002
|                     | Number of Shares Beneficially Owned  1,000*
Number of Share Units Held  225**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                     | Mr. Fetzer, 65, of Glencoe, Illinois is a Retired Partner
    with the investment banking firm Goldman Sachs. With Goldman
    Sachs since 1971, he was responsible for investment banking
    services in the midwestern United States. He sits on the boards
    of Serologicals Corporation, Sphere Communications and Northern
    Star Broadcasting. He is also on the boards of 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
|                     | Number of Shares Beneficially Owned  19,400*
Number of Share Units Held  731**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                     | Mr. Howe, 58, of Calgary, Alberta, serves in a management
    role with GE Medical Systems Information Technology, of
    which the company he formerly owned, BDM Information
    Systems, is now a part. He is owner and CEO of DSTC Ltd., a
    technology investment company and a director of Advanced
    DataSystems Ltd. as well as a member 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.
    Mr. Howe is Chairman of the Corporate Governance and
    Nominating Committee and a member of the Compensation Committee.                                                                                                                                                               
|                    
|Photo of A. Laberge  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | ALICE D. LABERGE  |                    
|                     | Number of Shares Beneficially Owned  0*
Number of Share Units Held  0**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                     | Ms. Laberge, 46, of Vancouver, British Columbia, is the
    Chief Financial Officer of Fincentric Corporation, a leading
    provider of enterprise wealth management and core banking
    software to the global financial services industry. With
    Fincentric since October 2000, Ms. Laberge was previously
    the Senior Vice President and Chief Financial Officer of
    MacMillan Bloedel Limited, one of North Americas largest
    forest products companies and served as a member of the lead
    transition team when that company was acquired by Weyerhaeuser
    Company in November 1999. She is a director of BC Hydro and
    serves as chair of its audit committee. She is Vice Chair and
    Trustee of Healthcare Benefit Trust and serves as a director,
    United Way of the Lower Mainland.
|                    
|Photo of J. McCaig   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | JEFFREY J. McCAIG | Director Since 2001
|                     | Number of Shares Beneficially Owned  5,750*
Number of Share Units Held  1,023**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                     | Mr. McCaig, 51, of Calgary, Alberta is President, CEO and a
    director of Trimac Corporation, 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 BOVAR Corporation.
    Mr. McCaig is a member of the Audit Committee and the
    Compensation Committee.                                                                                                                                                                                                                                                                                                                                                                                                                          

7



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##### 



|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                           |                    
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------- | -------------------
|                      
|Photo of M. Mogford    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | MARY MOGFORD              | Director Since 2001
|                       | Number of Shares Beneficially Owned  6,750*
Number of Share Units Held  1,401**                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                       | Ms. Mogford, 58, of Newcastle, Ontario is a Corporate
    Director and Partner in Mogford Campbell Inc., a strategic
    business and financial consulting company. A former Deputy
    Minister of Finance and Deputy Minister of Natural Resources in
    the province of Ontario, she is a director of Empire Company
    Ltd., Falconbridge Ltd., MDS Inc., Sears Canada Inc., and is a
    member of the Altamira Advisory Council.
    Ms. Mogford is a member of the Audit Committee and the
    Corporate Governance and Nominating Committee.      
|                      
|Photo of P. Schoenhals |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | PAUL J. SCHOENHALS        | Director Since 1992
|                       | Number of Shares Beneficially Owned  17,550*
Number of Share Units Held  707**                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                       | Mr. Schoenhals, 61, of Calgary, Alberta, President of
    Petroleum Industry Training Service, was Chairman of Potash
    Corporation of Saskatchewan, the Crown corporation, from 1987 to
    1989. He is a former Member of the Legislative Assembly and
    Cabinet Minister in Saskatchewan.
    Mr. Schoenhals is Chairman of the Safety, Health &
    Environment Committee and is a member of the Compensation
    Committee.                                                                                                                        
|                      
|Photo of E. Stromberg  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | E. ROBERT STROMBERG, Q.C. | Director Since 1991
|                       | Number of Shares Beneficially Owned  27,852*
Number of Share Units Held  837**                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                       | Mr. Stromberg, 61, of Saskatoon, Saskatchewan, is
    associated with the Saskatchewan law firm Robertson Stromberg.
    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 and
    the Safety, Health & Environment Committee.                                                                                                                                                                     
|                      
|Photo of J. Vicq       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | JACK G. VICQ              | Director Since 1989
|                       | Number of Shares Beneficially Owned  21,543*
Number of Share Units Held  550**                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                       | Mr. Vicq, 63, of Saskatoon, Saskatchewan, is a Professor
    Emeritus of Accounting in the College of Commerce, University of
    Saskatchewan and was formerly Associate Dean of Commerce and
    responsible for the Centre for International Business Studies.
    He held the A.W. Johnson Distinguished Chair in Public Policy in
    the Saskatchewan Finance Department until May 2002 and is
    currently Chairman of the Provincial Court Commission.
    Mr. Vicq is Chairman of the Audit Committee and a member of
    the Executive Committee.

8



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##### 



|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                         | 
|----------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | 
|                             
|Photo of E. Viyella de Paliza |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ELENA VIYELLA DE PALIZA | 
|                              | Number of Shares Beneficially Owned  0*
Number of Share Units Held  0**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                              | Ms. Viyella de Paliza, 48, of the Dominican Republic, is
    President of Inter-Quimica, S.A., a company dedicated to the
    import and distribution of bulk industrial chemicals. She is
    also President and founder of Monte Rio Power Corp., a power
    generation company, and President of Indescorp S.A., a
    management and financial consulting company. Until 1998,
    Ms. Viyella de Paliza was Executive Vice President of
    FERSAN, the leading fertilizer bulk blender and distributor of
    agrochemicals in the Caribbean. Formerly, she also held the
    Presidency of the Dominican Stock Exchange, the Dominican
    Manufacturers Association and the National Agribusiness Board.
|                             



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*  | The number of Shares indicated above as
    beneficially owned by the nominated directors includes Shares
    purchasable by such directors within 60 days of
    March 15, 2003 through the exercise of options granted by
    the Corporation, as follows: Frederick J. Blesi 10,750
    Shares; William J. Doyle 345,000 Shares; Dallas J.
    Howe 18,400 Shares; Jeffrey J. McCaig 5,750 Shares; Mary
    Mogford 5,750 Shares; Paul J. Schoenhals 17,150 Shares;
    E. Robert Stromberg 20,950 Shares; and Jack G. Vicq
    20,950 Shares.
|  
|** | See Compensation 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 except as
follows: Mr. Doyle was President of PCS Sales from March
1997 to July 1998, and President and Chief Operating Officer of
the Corporation from July 1998 to July 1999.

The law firm of Robertson Stromberg has provided
and continues to provide legal services to the Corporation.
E. Robert Stromberg was, during 2002, and continues to be
associated with Robertson Stromberg.

Mr. Doyle is Chairman of Canpotex Limited, a
potash export, sales and marketing company owned in equal shares
by the three potash producers in Saskatchewan. In 2002, sales to
Canpotex Limited amounted to $241 million.

During 2002, there were 8 meetings of the
Board and the number of meetings held by committees of the Board
were: (i) Executive Committee  0;
(ii) Audit Committee  8;
(iii) Compensation Committee  5;
(iv) Safety, Health & Environment
Committee  6; and (v) Corporate Governance
and Nominating Committee  5. Each of the
Corporations current directors attended at least 75% of
the total of the meetings of the committees on which the
director served and the meetings of the Board, with the
exception of Mr. Fetzer (70%) and Mr. Wright (68.42%).

Mr. Phillips and Mr. Wright, having
reached the retirement age for directors of age 70, will be
retiring from the Board on May 8, 2003. Mr. Bourne
will also be retiring from the Board on that date.

9



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##### 



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 2002 and by
each of the Corporations other four most highly
compensated executive officers as of the end of calendar year
2002 for services rendered to the Corporation and its
subsidiaries (the Named Executive Officers).

SUMMARY COMPENSATION TABLE(1)

|                               |  |                     |      |            |  |              |         |            |  |            |           |              |  |   |           |  |  |  |        |  |  |  |           |  |  |  |            | 
|------------------------------ |  | ------------------- | ---- | ---------- |  | ------------ | ------- | ---------- |  | ---------- | --------- | ------------ |  | - | --------- |  |  |  | ------ |  |  |  | --------- |  |  |  | ---------- | 
|                              
|                              
|                              
|                              
|                               |  |                     |      |           
|                               |  | Long-Term           |      |           
|                               |  | Compensation        |      |           
|                               |  |                     |      |           
|                               |  |                     |      |            |  |             
|                               |  | Annual Compensation |      | Awards     |  | Payouts      |         |           
|                               |  |                     |      |           
|                               |  |                     |      |           
|                               |  |                     |      | Securities |  |              |         |           
|                               |  |                     |      | Other      |  | Underlying   |         |            |  |           
|                               |  |                     |      | Annual     |  | Options      |         | LTIP       |  | All Other 
|                               |  | Salary              |      | Bonus(2)   |  | Compensation |         | Granted(3) |  | Payouts(4) |           | Compensation
|Name and Principal Position    |  | Year                |      | $          |  | $            |         | $          |  | #          |           | $            |  | $
|                              
|                              
|William J. Doyle               |  |                     | 2002 |            |  |              | 812,500 |            |  |            | 476,000   |              |  |   |          |  |  |  | 70,000 |  |  |  | 2,937,000 |  |  |  | 52,778(6)  | 
|President and Chief            |  |                     | 2001 |            |  |              | 787,500 |            |  |            | 425,000   |              |  |   | 53,464(5) |  |  |  | 70,000 |  |  |  |          |  |  |  | 51,895(6)  | 
|Executive Officer              |  |                     | 2000 |            |  |              | 725,000 |            |  |            | 1,000,000 |              |  |   | 1,163     |  |  |  | 70,000 |  |  |  |          |  |  |  | 69,074(6)  | 
|                              
|James F. Dietz                 |  |                     | 2002 |            |  |              | 395,719 |            |  |            | 150,000   |              |  |   |          |  |  |  | 35,000 |  |  |  | 908,000   |  |  |  | 12,533(8)  | 
|Executive Vice President       |  |                     | 2001 |            |  |              | 378,125 |            |  |            | 128,000   |              |  |   |          |  |  |  | 35,000 |  |  |  |          |  |  |  | 23,237(8)  | 
|and Chief Operating Officer(7) |  |                     | 2000 |            |  |              | 325,000 |            |  |            | 305,000   |              |  |   | 14,466    |  |  |  | 35,000 |  |  |  |          |  |  |  | 40,641(8)  | 
|                              
|Wayne R. Brownlee              |  |                     | 2002 |            |  |              | 367,640 |            |  |            | 121,000   |              |  |   |          |  |  |  | 30,000 |  |  |  | 790,000   |  |  |  | 26,155(9)  | 
|Senior Vice President,         |  |                     | 2001 |            |  |              | 350,065 |            |  |            | 110,000   |              |  |   | 1,241     |  |  |  | 30,000 |  |  |  |          |  |  |  | 25,193(9)  | 
|Treasurer and                  |  |                     | 2000 |            |  |              | 325,000 |            |  |            | 245,000   |              |  |   |          |  |  |  | 30,000 |  |  |  |          |  |  |  | 77,439(9)  | 
|Chief Financial Officer        |  |                     |      |            |  |              |         |            |  |            |           |              |  |   |           |  |  |  |        |  |  |  |           |  |  |  |            | 
|                              
|Barry E. Humphreys             |  |                     | 2002 |            |  |              | 325,690 |            |  |            | 107,000   |              |  |   |          |  |  |  | 30,000 |  |  |  | 721,000   |  |  |  | 24,240(10) | 
|Senior Vice President and      |  |                     | 2001 |            |  |              | 316,200 |            |  |            | 82,100    |              |  |   | 1,460     |  |  |  | 30,000 |  |  |  |          |  |  |  | 24,360(10) | 
|Chief Information Officer      |  |                     | 2000 |            |  |              | 310,000 |            |  |            | 200,000   |              |  |   |          |  |  |  | 30,000 |  |  |  |          |  |  |  | 74,905(10) | 
|                              
|Barbara J. Irwin               |  |                     | 2002 |            |  |              | 322,591 |            |  |            | 109,000   |              |  |   |          |  |  |  | 30,000 |  |  |  | 488,000   |  |  |  | 12,078(12) | 
|Senior Vice President,         |  |                     | 2001 |            |  |              | 295,981 |            |  |            | 90,300    |              |  |   |          |  |  |  | 30,000 |  |  |  |          |  |  |  | 10,347(12) | 
|Administration(11)             |  |                     | 2000 |            |  |              | 70,000  |            |  |            | 50,000    |              |  |   |          |  |  |  | 30,000 |  |  |  |          |  |  |  | 3,937(12)  | 
|                              
|                              



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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
    Corporations Stock Option Plan  Officers and
    Employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(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

10



---



##### 



| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

|                     |  |            |       |        |  |         |        |          |  |            |       |            |  |         |        |    |  |  |       |   |  |  |        |    |  |  |        |     
|-------------------- |  | ---------- | ----- | ------ |  | ------- | ------ | -------- |  | ---------- | ----- | ---------- |  | ------- | ------ | -- |  |  | ----- | - |  |  | ------ | -- |  |  | ------ | ----
|                    
|                    
|                     |  | Agrium     |       |       
|                     |  | PotashCorp |       | IMC    |  | (TSX)   |        |          |  | Terra      |       | Peer Group |  |        
|                     |  | (NYSE)     |       | Global |  | ($ Cdn) |        | MissChem |  | Industries |       | Average    |  | S&P 500
|                    
|Opening 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 detail regarding the LTIP in place for the
    performance period January 1, 2003 to December 31,
    2005 and the award of units thereunder, see Long-Term
    Incentive Plan.



|    |                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Of the other annual compensation indicated for
    2001, $24,806 reflects a payment made for personal tax
    preparation and administration and $16,296 reflects a membership
    allowance.
|   
|(6) | The reported amounts for 2002, 2001 and 2000
    consist, respectively, of:                                                                                                                  



| |       |                                                                                                                                                                                                                 
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | $44,895, $43,820 and $40,857 which represents the
    Corporations contribution to the Corporations
    defined contribution pension and savings plans on behalf of the
    indicated Named Executive Officer;
|
| | (ii)  | $7,883, $8,075 and $7,448 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) | $20,769 for 2000 which represents a lump sum
    pay-out to satisfy the Corporations obligation to the
    indicated Named Executive Officer for earned but unused vacation.                                   



|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Prior to November 1, 2000,
    Mr. Dietzs principal position was President, PCS
    Nitrogen, Inc. (PCS Nitrogen), a subsidiary of the
    Corporation.
|   
|(8) | The reported amounts for 2002, 2001 and 2000
    consist, respectively, of:                                                                               



| |       |                                                                                                                                                                                                                    
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | $10,000, $8,500 and $8,500 which represents
    contributions by the Corporations subsidiary to its
    defined contribution pension plan on behalf of the indicated
    Named Executive Officer; and             
|
| | (ii)  | $2,533, $2,155 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) | $12,582 for 2001 and $30,113 for 2000 which
    represents reimbursement for moving expenses.                                                                                                                      



|    |                                                                            
|--- | ---------------------------------------------------------------------------
|(9) | The reported amounts for 2002, 2001 and 2000
    consist, respectively, of:



| |       |                                                                                                                                                                                                       
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | $22,626, $21,957 and $20,880 which represents the
    Corporations contribution to its defined contribution
    pension and savings plans on behalf of the indicated Named
    Executive Officer;    
|
| | (ii)  | $3,529, $3,236 and $2,617 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) | $53,942 for 2000 which represents a lump sum
    pay-out to satisfy the Corporations obligation to the
    indicated Named Executive Officer for earned but unused vacation.                         



|     |                                                                            
|---- | ---------------------------------------------------------------------------
|(10) | The reported amounts for 2002, 2001 and 2000
    consist, respectively, of:



| |       |                                                                                                                                                                                                       
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | $20,527, $20,260 and $20,130 which represents the
    Corporations contribution to its defined contribution
    pension and savings plans on behalf of the indicated Named
    Executive Officer;    
|
| | (ii)  | $3,713, $4,100 and $3,804 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) | $50,971 for 2000 which represents a lump sum
    pay-out to satisfy the Corporations obligation to the
    indicated Named Executive Officer for earned but unused vacation.                         

11



---



##### 





|     |                                                                            
|---- | ---------------------------------------------------------------------------
|(11) | Ms. Irwin joined the Company in October 2000.                              
|    
|(12) | The reported amounts for 2002, 2001 and 2000
    consist, respectively, of:



| |      |                                                                                                                                                                                                              
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)  | $10,000, $8,500 and $3,500 which represents
    contributions by the Corporations subsidiary to its
    defined contribution pension plan on behalf of the indicated
    Named Executive Officer; and       
|
| | (ii) | $2,078, $1,847 and $437 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.

Long-Term Incentive Plan

Each of the Named Executive Officers participates
in the Corporations Long-Term Incentive Plan, adopted in
November 2002 for the performance cycle January 1, 2003
through December 31, 2005. For a description of the
operation of the plan, see Compensation Committee Report
on Executive Compensation  Long-Term Incentive
Plan. The following table sets forth hypothetical
potential future payments under the plan following the end of
the current performance cycle (January 1, 2003 through
December 31, 2005).

LONG-TERM INCENTIVE PLAN

AWARDS IN LAST FISCAL YEAR


|                   |  |                                          |        |             |  |                                      |  |               |   |                |  |  |        |  |  |  |        |  |  | 
|------------------ |  | ---------------------------------------- | ------ | ----------- |  | ------------------------------------ |  | ------------- | - | -------------- |  |  | ------ |  |  |  | ------ |  |  | 
|                  
|                  
|                  
|                  
|                   |  |                                         
|                   |  | Estimated Future Payouts Under Non-Stock
|                   |  | Price-Based Plans (Number of Units)     
|                   |  | Number of                                |        | Performance |  |                                     
|                   |  | Units                                    |        | Period      |  |                                     
|Name               |  | (#)(1)                                   |        | (2)         |  | Threshold (#)                        |  | Target (#)(3) |   | Maximum (#)(3)
|                  
|                  
|William J. Doyle   |  |                                          | 27,074 |             |  | January 1, 2003 to December 31, 2005 |  |               | 0 |                |  |  | 27,074 |  |  |  | 40,611 | 
|                  
|James F. Dietz     |  |                                          | 8,556  |             |  | January 1, 2003 to December 31, 2005 |  |               | 0 |                |  |  | 8,556  |  |  |  | 12,834 | 
|                  
|Wayne R. Brownlee  |  |                                          | 7,094  |             |  | January 1, 2003 to December 31, 2005 |  |               | 0 |                |  |  | 7,094  |  |  |  | 10,641 | 
|                  
|Barry E. Humphreys |  |                                          | 6,108  |             |  | January 1, 2003 to December 31, 2005 |  |               | 0 |                |  |  | 6,108  |  |  |  | 9,162  | 
|                  
|Barbara J. Irwin   |  |                                          | 6,230  |             |  | January 1, 2003 to December 31, 2005 |  |               | 0 |                |  |  | 6,230  |  |  |  | 9,345  | 
|                  
|                  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Subject to achieving the performance objectives
    and other vesting criteria established under the Long-Term
    Incentive Plan, each unit represents the right to receive a cash
    payment equal to the market value of one Share generally as of
    the end of the three-year performance period. If none of the
    minimum performance objectives are achieved, no payout is made
    under the plan. Achievement of all of the target performance
    objectives entitles an eligible executive to payment of 100% of
    the units granted under the plan. Upon achievement of all of the
    maximum performance objectives, an eligible executive will be
    entitled to payment of 150% of the units granted under the plan.
|   
|(2) | The performance period for units awarded in
    November 2002 to the Named Executive Officers is the three-year
    period from January 1, 2003 through December 31, 2005.
    The performance period may end earlier in the event of an
    executives qualifying termination of employment prior to
    December 31, 2005 (and the executive would then be entitled
    to a pro rated award payment based on performance through the
    date of termination), as provided in the Long-Term Incentive
    Plan.                                                                                                                                                                                                                        
|   
|(3) | Cash payment in settlement of a vested unit may
    not exceed 300% of the market value of a Share at the
    commencement of a Performance Cycle.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

12



---



##### 



Options

The following table sets forth information
concerning the grants of stock options to the Named Executive
Officers during the year ended December 31, 2002.

OPTION GRANTS DURING THE

MOST RECENTLY COMPLETED FISCAL YEAR


|                   |  |                |        |              |  |             |      |                 |  |               |             |  |  |  |               |  |  |  |           | 
|------------------ |  | -------------- | ------ | ------------ |  | ----------- | ---- | --------------- |  | ------------- | ----------- |  |  |  | ------------- |  |  |  | --------- | 
|                  
|                  
|                  
|                  
|                  
|Individual Grants 
|                  
|                  
|                   |  | Number of      |        | % of Total   |  |            
|                   |  | Securities     |        | Options      |  |            
|                   |  | Underlying     |        | Granted to   |  | Exercise or |      |                 |  | Grant Date   
|                   |  | Options        |        | Employees in |  | Base Price  |      |                 |  | Present Value
|Name               |  | Granted(1)(2)# |        | Fiscal Year  |  | $/Share     |      | Expiration Date |  | (3)(4)$      
|                  
|                  
|William J. Doyle   |  |                | 70,000 |              |  |             | 7.87 |                 |  |               | 66.01       |  |  |  | Nov. 20, 2012 |  |  |  | 1,484,700 | 
|                  
|James F. Dietz     |  |                | 35,000 |              |  |             | 3.93 |                 |  |               | 66.01       |  |  |  | Nov. 20, 2012 |  |  |  | 742,350   | 
|                  
|Wayne R. Brownlee  |  |                | 30,000 |              |  |             | 3.37 |                 |  |               | Cdn. 104.66 |  |  |  | Nov. 20, 2012 |  |  |  | 700,044   | 
|                  
|Barry E. Humphreys |  |                | 30,000 |              |  |             | 3.37 |                 |  |               | Cdn. 104.66 |  |  |  | Nov. 20, 2012 |  |  |  | 700,044   | 
|                  
|Barbara J. Irwin   |  |                | 30,000 |              |  |             | 3.37 |                 |  |               | 66.01       |  |  |  | Nov. 20, 2012 |  |  |  | 636,300   | 
|                  
|                  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Options granted pursuant to the
    Corporations Stock Option Plan  Officers and
    Employees (the Option Plan).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(2) | Options granted on November 20, 2002.
    Subject to the terms of the Option Plan, each option is
    exercisable with respect to one-half of the indicated number on
    and after November 20, 2003 and with respect to the balance
    of the indicated number on and after November 20, 2004 (or
    earlier in the event of a change of control of the
    Corporation as defined in the Option Plan). All options are
    transferable (without consideration) to the spouse, children and
    grandchildren of the original optionee (or to a trust,
    partnership or limited liability company, the entire beneficial
    interest of which is held by one or more of the foregoing
    persons), in accordance with the terms and conditions of the
    Option Plan.
|   
|(3) | The Modified Black-Scholes Option Pricing Model
    was used to determine the grant date present value of the stock
    options granted in November, 2002 by the Corporation to the
    Named Executive Officers. Under the Modified Black-Scholes
    Option Pricing Model, the grant date present value of the stock
    options referred to in the table was Cdn$36.96 per Share for
    Mr. Brownlee and Mr. Humphreys and $21.21 per Share
    for Mr. Doyle, Mr. Dietz and Ms. Irwin. The
    material assumptions and adjustments incorporated in the
    Modified Black- Scholes Option Pricing Model in estimating the
    value of options reflected in the above table include the
    following:                                                                     



| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | an option term of 8 years; with respect to
    the options granted to Mr. Brownlee and Mr. Humphreys,
    an interest rate of 4.76% (representing the interest rate on a
    Canadian Treasury security with a maturity date corresponding to
    that of the option term) and with respect to options granted to
    Mr. Doyle, Mr. Dietz and Ms. Irwin, an interest
    rate of 3.78% (representing the interest rate on a
    U.S. Treasury security with a maturity date corresponding
    to that of the option term);
|
| | (ii)  | with respect to the options granted to
    Mr. Brownlee and Mr. Humphreys, volatility of 32.89%
    (calculated using daily stock prices on The Toronto Stock
    Exchange for the three-year period prior to the grant date) and
    with respect to options granted to Mr. Doyle,
    Mr. Dietz and Ms. Irwin, volatility of 31.35%
    (calculated using daily stock prices on the New York Stock
    Exchange for the three-year period prior to the grant date);                                                      
|
| | (iii) | with respect to the options granted to
    Mr. Brownlee and Mr. Humphreys, dividends at the rate
    of Cdn$1.583 per Share and with respect to options granted to
    Mr. Doyle, Mr. Dietz and Ms. Irwin, dividends at
    the rate of $1.00 per Share (representing the annualized
    dividends paid with respect to a Share at the date of
    grant); and                                                                                                                                                             
|
| | (iv)  | a reduction of approximately 10% to reflect the
    probability of forfeiture due to termination prior to vesting
    and the probability of a shortened option term due to
    termination of employment prior to the option expiration date.                                                                                                                                                                                                                                                                             

13



---



##### 





| |                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The ultimate values of the options will depend
    on the future market price of the Shares, which cannot be
    forecast with reasonable accuracy. The actual value, if any, an
    optionee will realize upon exercise of an option will depend on
    the excess of the market value of the Shares over the exercise
    price on the date the option is exercised.



|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Amounts denominated in Canadian dollars are
    converted to United States dollars at the exchange rate in
    effect at the date of grant of the options.

The following table sets forth the options
exercised during the year ended December 31, 2002 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, 2002.

AGGREGATED OPTION EXERCISES DURING THE MOST
RECENTLY COMPLETED

FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES


|                   |  |                       |       |                      |  |             |         |             |  |             |         |             |  |  |         |  |  |  |           |  |  |  |        | 
|------------------ |  | --------------------- | ----- | -------------------- |  | ----------- | ------- | ----------- |  | ----------- | ------- | ----------- |  |  | ------- |  |  |  | --------- |  |  |  | ------ | 
|                  
|                  
|                  
|                  
|                   |  |                       |       |                     
|                   |  | Number of             |       | Value of Unexercised
|                   |  | Securities Underlying |       | in-the-Money Options
|                   |  | Options At FY-End     |       | at FY-End(1)        
|                   |  |                      
|                   |  | Securities            |       |                      |  |            
|                   |  | Acquired on           |       | Aggregate Value      |  |             |         | #           |  |             |         | $          
|                   |  | Exercise              |       | Realized             |  | #           |         | Not         |  | $           |         | Not        
|Name               |  | #                     |       | $                    |  | Exercisable |         | Exercisable |  | Exercisable |         | Exercisable
|                  
|                  
|William J. Doyle   |  |                       | 8,500 |                      |  |             | 336,515 |             |  |             | 345,000 |             |  |  | 105,000 |  |  |  | 1,599,850 |  |  |  | 21,000 | 
|                  
|James F. Dietz     |  |                       |      |                      |  |             |        |             |  |             | 107,500 |             |  |  | 52,500  |  |  |  | 401,875   |  |  |  | 10,500 | 
|                  
|Wayne R. Brownlee  |  |                       |      |                      |  |             |        |             |  |             | 163,500 |             |  |  | 45,000  |  |  |  | 1,126,886 |  |  |  | 0      | 
|                  
|Barry E. Humphreys |  |                       |      |                      |  |             |        |             |  |             | 168,000 |             |  |  | 45,000  |  |  |  | 1,299,365 |  |  |  | 0      | 
|                  
|Barbara J. Irwin   |  |                       |      |                      |  |             |        |             |  |             | 45,000  |             |  |  | 45,000  |  |  |  | 88,575    |  |  |  | 9,000  | 
|                  
|                  



|    |                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Values are calculated by determining the amount
    by which the market value of the Shares underlying the options
    on December 31, 2002 exceeded the exercise prices of the
    options and converting Canadian dollar amounts to United States
    dollars using the December 31, 2002 exchange rate of $.6330.

Pension Plans

The Corporation maintains the Potash Corporation
of Saskatchewan Inc. Pension Plan (the PCS Plan)
which generally requires all participating employees to
contribute 5.5% of their earnings (or such lesser amount as is
deductible for Canadian income tax purposes) to the
PCS Plan and the Corporation to contribute an equal amount.
When an individual retires, the full amount in the
individuals account is used to produce the pension.

The Corporation maintains a Supplemental
Retirement Income Plan (the Supplemental Plan) which
is unfunded and non-contributory and which provides a
supplementary pension benefit for 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
maintained by the Corporation or any of its subsidiaries.
Benefits under the Supplemental Plan are paid in the currency in
which the participants earnings are denominated. For
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 of the
Corporation, including Mr. Doyle, Mr. Brownlee and
Mr. Humphreys, the benefit payable under the Supplemental
Plan is an amount equal to: (i) 5% of the

14



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##### 



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 maintained by the
Corporation or any of its subsidiaries.


The following table shows the range of estimated
annual benefits payable upon retirement to Mr. Doyle,
Mr. Brownlee and Mr. Humphreys 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. Humphreys
pursuant to the PCS Plan and certain other tax qualified plans
maintained by the Corporation or any of its subsidiaries.

SUPPLEMENTAL RETIREMENT INCOME PLAN
TABLE

|             |  |                  |  |           |  |           |  |           |  |          
|------------ |  | ---------------- |  | --------- |  | --------- |  | --------- |  | ---------
|             |  |                 
|Remuneration |  | Years of Service
|            
|            
|$            |  | 10               |  | 20        |  | 30        |  | 40        |  | 50       
|            
|            
|$ 250,000    |  | $ 125,000        |  | $ 125,000 |  | $ 150,000 |  | $ 175,000 |  | $ 175,000
|            
|500,000      |  | 250,000          |  | 250,000   |  | 300,000   |  | 350,000   |  | 350,000  
|            
|1,000,000    |  | 500,000          |  | 500,000   |  | 600,000   |  | 700,000   |  | 700,000  
|            
|1,500,000    |  | 750,000          |  | 750,000   |  | 900,000   |  | 1,050,000 |  | 1,050,000
|            
|2,000,000    |  | 1,000,000        |  | 1,000,000 |  | 1,200,000 |  | 1,400,000 |  | 1,400,000
|            
|3,000,000    |  | 1,500,000        |  | 1,500,000 |  | 1,800,000 |  | 2,100,000 |  | 2,100,000
|            

As of December 31, 2002, the average of the
three highest years earnings for purposes of the
Supplemental Plan for each Named Executive Officer participating
in the Supplemental Plan were as follows: $1,408,667 for
Mr. Doyle, $506,235 for Mr. Brownlee and $446,997 for
Mr. Humphreys. 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 40 years for Mr. Humphreys.

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. 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 the Phosphate Pension Plan or the
Nitrogen Pension Plan, including Mr. Dietz, will have a
portion of their retirement benefit calculated in accordance
with the applicable benefit formula as was in effect on
December 31, 1998. 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 benefits
available under the U.S. Pension Plan are not subject to
offset for other retirement benefits.

The retirement benefits from the
U.S. Pension Plan for Mr. Dietz and Ms. Irwin 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) which is an
unfunded and non-qualified plan intended to provide participants
therein, including Mr. Dietz and Ms. Irwin,

15



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##### 



with the same aggregate benefits based on
eligible service under the supplemental plan that such
participant would have received had there been no legal
limitations on the benefits provided by the U.S. Pension
Plan.


For Mr. Dietz and Ms. Irwin, the
following table represents an estimate of the range of
retirement income calculated pursuant to 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  |  |  | $ | 90,000  | 
|            
|             | 300,000 |                  |  |    | 45,000  |    |  |    | 67,500  |    |  |   | 90,000  |  |  |   | 112,500 |  |  |   | 135,000 | 
|            
|             | 400,000 |                  |  |    | 60,000  |    |  |    | 90,000  |    |  |   | 120,000 |  |  |   | 150,000 |  |  |   | 180,000 | 
|            
|             | 500,000 |                  |  |    | 75,000  |    |  |    | 112,500 |    |  |   | 150,000 |  |  |   | 187,500 |  |  |   | 225,000 | 
|            
|             | 600,000 |                  |  |    | 90,000  |    |  |    | 135,000 |    |  |   | 180,000 |  |  |   | 225,000 |  |  |   | 270,000 | 
|            
|             | 700,000 |                  |  |    | 105,000 |    |  |    | 157,500 |    |  |   | 210,000 |  |  |   | 262,500 |  |  |   | 315,000 | 
|            

As of December 31, 2002, the final average
compensation for the purposes of the U.S. Pension Plan and
any applicable supplemental plan for Mr. Dietz was $508,369
and for Ms. Irwin was $332,785. The estimated credited
years of post-1998 service under such plans at normal retirement
age of 65 for Mr. Dietz is 13 years and for
Ms. Irwin 20 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 an estimate of the
range of the pre-1999 service component of the retirement income
of Mr. Dietz, at the levels of average compensation and
years of service shown, calculated pursuant to the formula in
the Nitrogen Pension Plan and including benefits relating to
pre-1999 service under the U.S. Supplemental Plan. The
following calculations use the applicable social security
earning limit based on Mr. Dietzs year of
birth, 1946.

PRE-1999 SERVICE TABLE

|             |         |                  |  |    |        |    |  |    |         |    |  |   |         |  |  |   |         |  |  |   |         | 
|------------ | ------- | ---------------- |  | -- | ------ | -- |  | -- | ------- | -- |  | - | ------- |  |  | - | ------- |  |  | - | ------- | 
|             |         |                 
|Remuneration |         | Years of Service
|            
|            
|$            |         | 5                |  | 10 |        | 15 |  | 20 |         | 25
|            
|            
|$            | 200,000 |                  |  | $  | 13,000 |    |  | $  | 27,000  |    |  | $ | 41,000  |  |  | $ | 55,000  |  |  | $ | 68,000  | 
|            
|             | 300,000 |                  |  |    | 21,000 |    |  |    | 42,000  |    |  |   | 63,000  |  |  |   | 85,000  |  |  |   | 106,000 | 
|            
|             | 400,000 |                  |  |    | 28,000 |    |  |    | 57,000  |    |  |   | 86,000  |  |  |   | 115,000 |  |  |   | 143,000 | 
|            
|             | 500,000 |                  |  |    | 36,000 |    |  |    | 72,000  |    |  |   | 108,000 |  |  |   | 145,000 |  |  |   | 181,000 | 
|            
|             | 600,000 |                  |  |    | 43,000 |    |  |    | 87,000  |    |  |   | 131,000 |  |  |   | 175,000 |  |  |   | 218,000 | 
|            
|             | 700,000 |                  |  |    | 51,000 |    |  |    | 102,000 |    |  |   | 153,000 |  |  |   | 205,000 |  |  |   | 256,000 | 
|            

16



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##### 



As of December 31, 2002, 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.

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. Humphreys. 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 Corporations Stock Option
Plan for Officers and Employees 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

17



---



##### 



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 a written agreement.

COMPENSATION COMMITTEE

Composition of the Compensation
Committee

The following individuals served as members of
the Compensation Committee during the year which ended on
December 31, 2002.

Frederick J. Blesi (Chairman)

Wade Fetzer III


Dallas J. Howe


Jeffrey J. McCaig


Paul J. Schoenhals


Barrie A. Wigmore


Mr. Wigmore was a member and Chairman of the
Committee until his retirement from the Board in May 2002.
Mr. Fetzer was appointed to the Committee and
Mr. Blesi was appointed Chairman of the Committee in
May 2002.

Compensation Committee Report on Executive
Compensation

The Compensation Committee of the Board (the
Committee) is, at present, composed of five
independent directors. The Committee is charged with formulating
and making recommendations to the Board in respect of
compensation issues relating to directors and senior officers of
the Corporation. The Committee also makes recommendations
regarding the Corporations Stock Option Plans and
administers its Short and Long-Term Incentive Plans, each in
accordance with its terms. 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.

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 which encourages individual
performance consistent with shareholder expectations.

Salary

The Corporation has established a system of
tiered salary levels for senior executives (i.e. vice president
and above) of the Corporation. Currently, each senior executive
position is assigned to the appropriate salary tier, considering
the positions internal value as well as external
competitive comparisons. The external competitive comparisons
are prepared by independent compensation consultants and consist
of a group of approximately 20 companies selected on the
basis of a number of factors, including similar industry
characteristics and market capitalization (the Executive
Comparator Group). Each individuals salary is

18



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##### 



then generally set at the 50th percentile within
the applicable range determined for the tier, taking into
account the individuals duties, performance and
experience. Individual executive salaries are subject to
approval by the Chief Executive Officer and the Compensation
Committee of the Board, except for the Chief Executive
Officers salary, which is subject to approval by the
Compensation Committee and the Board.


Short-Term Incentive Compensation

The Corporations Short-Term Incentive Plan
is intended to aid in developing strong corporate management by
providing financial incentives to key employees to achieve
objectives which contribute materially to the Corporations
success. The plan presently provides for incentive awards based
on an individuals performance, position with the
Corporation and the financial results of the Corporation. Ranges
of incentive awards are established for each position, which
awards are expressed as a percentage of annual salary. The
actual percentage used in calculating the award is generally
determined by the Corporations cashflow return (as
defined) in relation to a pre-established target, subject to
adjustment based upon the individuals performance and such
other factors as the Committee deems appropriate. For certain
participants in the plan employed at particular operating
facilities, the award percentage is adjusted pursuant to a
formula designed to reflect the actual results of the operating
facility compared to an approved target for that facility. Under
the terms of the plan, generally no payments are made if the
cashflow 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 range from 15% to 140% of
salary, depending upon actual cashflow 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.

Long-Term Incentive Compensation

The Corporations Long-Term Incentive Plan
is intended to reward senior executives and other key employees
for superior performance over an extended 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 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, 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 awards 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 awards 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 generally 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.

19



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##### 



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 are 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
at the commencement of a performance cycle.


The interests of management are also tied to the
interests of the Corporations shareholders through the
annual grant of options to executives and other key employees
pursuant to the Corporations Stock Option Plan 
Officers and Employees. The options are granted at 100% of
market value, become exercisable over two years (or earlier in
the event of a change of control as defined in the
plan) and expire after ten years. Options are granted
considering the position in and contribution made to the
Corporation by the individual involved. The number of Shares
subject to options granted to an individual is a function of the
individuals position within the Corporation and his or her
ability to affect corporate performance.

In considering whether to grant options and how
many Shares are to be subject to options, the Committee
considers the aggregate number of options outstanding and is
also guided in such matters by applicable regulatory constraints.

In relative terms, greater value within the
compensation package is delivered through incentive compensation
(short-term incentives, long-term incentives and options) than
annual base salary. However, each element of the package is
designed to complement the others in enabling the Corporation to
achieve the objectives of its compensation policies.

Chief Executive Officer Compensation

The Committee reviews annually the CEOs
salary, any awards under the Short and Long-Term Incentive Plans
and any grant of options under the Corporations Stock
Option Plan  Officers and Employees. The CEOs
annual salary is determined primarily on the basis of his
individual performance and the performance of the Corporation.
While no mathematical weighting formula exists, the Committee
considers all factors which it deems relevant including the net
income of the Corporation, the Corporations share price,
the duties and responsibilities of the CEO, the CEOs
individual performance relative to established objectives, and
current compensation levels. Awards pursuant to the Short and
Long-Term Incentive Plans and under the Corporations Stock
Option Plan  Officers and Employees 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 CEO compensation to the
comparator group incorporates many factors including the
relative size of the companies, their profitability and share
price, the duties of the chief executive officer and any other
extenuating or special circumstances. In general, the CEOs
compensation is set at the 50th percentile of the
applicable range.

Mr. Doyles compensation for 2002 as
set forth in the Summary Compensation Table was determined in
accordance with the foregoing.

Submitted on behalf of the Compensation
Committee: Frederick J. Blesi, Wade Fetzer III,
Dallas J. Howe, Jeffrey J. McCaig, and Paul J.
Schoenhals.

20



---



##### 



PERFORMANCE GRAPHS

The following graph illustrates the
Corporations cumulative shareholder return, assuming
reinvestment of dividends, by comparing a Cdn$100 investment in
the Corporations Shares at December 31, 1997 to the
return on the S&P/TSX Composite Index.

(Performance Graph)

|                                                          |  |        |      |        |  |        |     |        |  |        |      |        |  |  |      |  |  |  |      |  |  |  |      | 
|--------------------------------------------------------- |  | ------ | ---- | ------ |  | ------ | --- | ------ |  | ------ | ---- | ------ |  |  | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                                          |  |       
|                                                          |  |       
|                                                          |  | Dec-97 |      | Dec-98 |  | Dec-99 |     | Dec-00 |  | Dec-01 |      | Dec-02
|                                                         
|                                                         
|Potash Corporation of Saskatchewan
    Inc.  TSX Listing |  |        | $100 |        |  |        | $84 |        |  |        | $61  |        |  |  | $106 |  |  |  | $89  |  |  |  | $93  | 
|                                                         
|S&P/TSX Composite Index                                   |  |        | $100 |        |  |        | $98 |        |  |        | $130 |        |  |  | $139 |  |  |  | $122 |  |  |  | $107 | 
|                                                         

21



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##### 



The following graph illustrates the
Corporations cumulative shareholder return, assuming
reinvestment of dividends, by comparing a $100 investment in the
Corporations Shares at December 31, 1997 to the
return on the Standard & Poors 500 Index, the
shareholder return of a peer group of fertilizer producers and
marketers selected by the Corporation and the Dow Jones Basic
Materials Companies Index (DJBMCI).

(Cumulative Total Return Graph)

|                                                           |  |        |      |        |  |        |      |        |  |        |      |        |  |  |      |  |  |  |      |  |  |  |      | 
|---------------------------------------------------------- |  | ------ | ---- | ------ |  | ------ | ---- | ------ |  | ------ | ---- | ------ |  |  | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                                           |  |       
|                                                           |  |       
|                                                           |  | Dec-97 |      | Dec-98 |  | Dec-99 |      | Dec-00 |  | Dec-01 |      | Dec-02
|                                                          
|                                                          
|Potash Corporation of Saskatchewan
    Inc.  NYSE Listing |  |        | $100 |        |  |        | $78  |        |  |        | $60  |        |  |  | $99  |  |  |  | $79  |  |  |  | $83  | 
|                                                          
|Self-selected Peer Group                                   |  |        | $100 |        |  |        | $67  |        |  |        | $47  |        |  |  | $61  |  |  |  | $52  |  |  |  | $45  | 
|                                                          
|S&P 500®                                                   |  |        | $100 |        |  |        | $129 |        |  |        | $156 |        |  |  | $141 |  |  |  | $125 |  |  |  | $97  | 
|                                                          
|Dow Jones US Basic Materials Companies Index               |  |        | $100 |        |  |        | $97  |        |  |        | $130 |        |  |  | $71  |  |  |  | $124 |  |  |  | $105 | 
|                                                          

The Self-selected Peer Group consists of:

|                           |  |        |     |  |  | 
|-------------------------- |  | ------ | --- |  |  | 
|Company                    |  | Symbol |     | 
|                           |  |        |     | 
|Agrium Inc.*               |  |        | AGU |  |  | 
|IMC Global Inc.            |  |        | IGL |  |  | 
|Mississippi Chemical Corp. |  |        | GRO |  |  | 
|Terra Industries Inc.      |  |        | TRA |  |  | 



|  |                                
|- | -------------------------------
|* | Toronto Stock Exchange listing.

Commencing next year, the Corporation intends to
only utilize the DJBMCI as its peer group comparator and no
longer use the self-selected peer group referenced above.
Management considers the DJBMCI to be an appropriate peer group
comparator. The Corporations LTIP now uses the DJBMCI as
such a peer group comparator.

22



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##### 



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 such
insurance is $50 million per occurrence and
$50 million in the annual aggregate. The Corporation has
entered into a one-year contract ending June 30, 2003.
Premiums of $208,417 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
$1 million deductible for any one loss.

COMPENSATION OF DIRECTORS

Directors of the Corporation are compensated
through the cash payment of an annual retainer plus other fees,
the grant of stock options and the grant of Share Units (as
hereinafter defined). Each outside directors compensation
package, comprised of the above components, approximates
$100,000 annually, with the Board Chairs compensation
package approximating $300,000 annually. Details regarding each
component of the compensation packages are as follows.

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 an
annual retainer of $30,000, a per diem fee of $1,000 for
meetings he or she attends and a travel fee of $500 per day
where travel is required on a day or days on which a meeting
does not occur. Outside directors receive an additional
$3,500 per year if they serve as a chair of a Board
committee. Each outside director who is a member of a Board
committee receives a per diem fee of $1,000 for meetings he
or she attends, provided such meetings are not held the same day
as a Board meeting. Outside directors are also reimbursed for
expenses incurred in discharging their responsibilities.
Mr. Phillips, as Board Chair, receives an annual retainer
of $100,000 (as opposed to $30,000).

On November 20, 2002, the Board granted
options with limited transferability (pursuant to the Stock
Option Plan  Directors) to purchase 1,500 Shares
to each director of the Corporation, with the exception of
Mr. Doyle and Mr. Phillips. Mr. Phillips, as
Board Chair, received an option to purchase 4,000 Shares.
All such options have an exercise price equal to the fair market
value of the Shares at the time the options were granted
(Cdn$104.66 per Share for non-U.S. resident directors and
$66.01 for U.S. resident directors, respectively), become
exercisable over two years (or earlier in the event of a
change in control of the Corporation as defined in
the Stock Option Plan  Directors) and expire ten
years after the date on which they were granted. A Black-Scholes
valuation methodology, resulting in a value of $24.02 per share,
was applied to these options to determine their present value
for the purposes of calculating this component of the annual
compensation package.

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 a 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
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

23



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##### 



subsidiary and the director is neither an
employee of the Corporation nor of any subsidiary. At such time,
the director will receive, at the discretion of the Compensation
Committee and as approved by the Board, either 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), or a cash payment equal
to the market value of the directors Share Unit
entitlement (less applicable withholding taxes).


On November 20, 2002, each non-employee
director received a discretionary grant of 225 Share Units,
with the exception of the Board Chair, Mr. Phillips, who
was granted 1,307 Share Units.

CORPORATE GOVERNANCE

A statement of corporate governance pursuant to
the requirements and guidelines (the Guidelines) of
the Toronto Stock Exchange relating to disclosure of corporate
governance practices is attached hereto as Appendix A.

REPORT OF AUDIT COMMITTEE

The following independent directors served as
members of the Audit Committee during the year ended
December 31, 2002:

Jack G. Vicq (Chairman)

Frederick J. Blesi


Jeffrey J. McCaig


Mary Mogford


In accordance with the Audit Committee charter
adopted by the Board of Directors, 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, 2002, the committee met 8 times.

In overseeing the audit process, the Audit
Committee obtained from the independent auditors their letter
dated February 7, 2003 as required by the Independent
Standards Board Standard No. 1 describing all relationships
between the auditors and the company 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. 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
examination of the financial statements and all 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.

The Audit Committee reviewed and discussed the
audited financial statements of the Corporation as of and for
the fiscal year ended December 31, 2002, 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.

Based on the above-mentioned review and
discussions with management and the independent auditors, the
Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the
Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2002, for

24



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##### 



filing with the Securities and Exchange
Commission. The Audit Committee also recommended the
reappointment, subject to shareholder approval, of the
independent auditors.


The Audit Committee reviews the
Corporations Disclosure Controls and Procedures on an
annual basis. In addition, it has reviewed and updated its
committee charter, a copy of which is attached as
Appendix B.

Submitted on behalf of the Audit Committee,
Jack G. Vicq, Frederick J. Blesi, Jeffrey J.
McCaig and Mary Mogford.

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 (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, 2002, and
December 31, 2001, Deloitte & Touche LLP received
the following fees:

|                   |  |                         |           |      |  |  |           | 
|------------------ |  | ----------------------- | --------- | ---- |  |  | --------- | 
|                   |  |                        
|                   |  |                        
|                   |  |                        
|                   |  | Year ended December 31,
|                  
|                  
|                   |  | 2002                    |           | 2001
|                   |  | $                       |           | $   
|                  
|                  
|Audit Fees         |  |                         | 1,062,202 |      |  |  | 1,094,507 | 
|                  
|Audit Related Fees |  |                         | 185,971   |      |  |  | 137,942   | 
|                  
|Tax Fees           |  |                         | 277,476   |      |  |  | 773,340   | 
|                  
|All Other Fees     |  |                         | 55,135    |      |  |  | 0         | 
|                  

Audit Fees

Deloitte & Touche LLP billed the
Corporation $1,062,202 and $1,094,507 for 2002 and 2001,
respectively, for the following audit services: (i) audit
of the annual consolidated financial statements of the
Corporation for the fiscal years ended December 31, 2002
and 2001; (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, 2002 and 2001; (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.

Audit-Related Fees

Deloitte & Touche LLP billed the
Corporation $185,971 and $137,942 for 2002 and 2001,
respectively, for the following audit 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 $277,476 and $773,340 for 2002 and 2001,
respectively, for the following audit services: (i) tax
compliance; (ii) tax planning; and (iii) tax advice,
including minimizing tax exposure or liability.

25



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##### 



All Other Fees

Deloitte & Touche LLP billed the
Corporation $55,135 and $0 for 2002 and 2001, respectively, for
all other fees.

The Audit Committee monitors and reviews the
independence of its auditors on an on-going basis. In addition,
the committee is evaluating its processes for the pre-approval
of engagements for services of its external auditors in
anticipation of the new pre-approval requirements under the
Sarbanes-Oxley Act of 2002 and the related rules issued by the
Securities and Exchange Commission.

MANNER OF VOTING PROXIES

Proxies solicited hereby will be voted or
withheld from voting on the election of directors and voted for
or against or withheld from voting on the appointment of
auditors, in accordance with any specifications made on the
proxy. In the absence of any such specification, such proxies
will be voted for the election of the directors and the
appointment of the auditors specified in this Management
Proxy Circular.

The Board knows of no matters to come before the
Meeting other than the matters referred to in the Notice of
Annual Meeting. However, if any other matters which are not now
known to the Board should properly come before the Meeting or
any adjournment thereof, or if amendments or variations to the
matters referred to in the Notice of Annual Meeting are
presented for action at the Meeting or any adjournment thereof,
the proxies will be voted on such matters, amendments or
variations in accordance with the best judgment of the person
voting the proxy which confers such discretionary authority.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be
presented at the Corporations annual meeting of
shareholders in 2004 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 27, 2003.

GENERAL

In respect of matters to be voted on at the
Meeting, where a broker may not be permitted to vote Shares held
in street name in the absence of instructions from the
beneficial owner of the Shares, such Shares will be considered
not entitled to vote, although such Shares and Shares for which
the holders abstain from voting will count for purposes of
determining the presence of a quorum.

Copies of the Corporations most recent
Form 10-K together with any document incorporated by
reference therein, the most recent annual financial statements
together with the accompanying report of the auditor, and any
interim financial statements filed subsequent to the filing of
the most recent annual financial statements may be obtained on
request from the Secretary of the Corporation.

The contents and the sending of this Management
Proxy Circular have been approved by the Board.



| |                         
| | ------------------------
| | (John Hampton signature)
| | JOHN L.M. HAMPTON       
| | Secretary               
| | March 26, 2003          

26



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##### 



APPENDIX A

Corporate Governance

Corporate governance received unprecedented
attention in 2002. Major reforms were initiated in both Canada
and the United States. Many of the final rules relating to those
reforms are pending.

The Board of Directors, through its Corporate
Governance and Nominating Committee which met 5 times in
2002, is focused on new threshold regulatory standards (both
proposed and implemented) as well as best practices which go
beyond the requirements mandated by regulation.

To comply with those standards and achieve those
best practices, the Board has adopted a comprehensive package of
governance principles which build on and enhance the
Corporations governance reforms of 2001. The complete text
of PotashCorps Governance Principles can be found at
www.potashcorp.com.

In keeping with the Toronto Stock Exchange
Guidelines on Corporate Governance, the following table
describes the Corporations position on each of the
enumerated areas.

|                               |  |                                                                                                                                                                                   |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                                                                   |  | Does     |     | 
|                               |  | PCS                                                                                                                                                                               |  |         
|TSX Guidelines for             |  | Currently                                                                                                                                                                         |  |         
|Effective Corporate Governance |  | Align?                                                                                                                                                                            |  | Comments
|                               |  |                                                                                                                                                                                   |  |         
|1.                             |  | 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 of Director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 devotes a significant portion of its annual three day
    mid-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 calendar. It
    provides a well-defined strategic planning process with specific
    activities, events and deliverables throughout a repeating
    12-month cycle.

A-1



---



##### 



|                               |  |                                                                                                                                       |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                       |  | Does     |     | 
|                               |  | PCS                                                                                                                                   |  |         
|TSX Guidelines for             |  | Currently                                                                                                                             |  |         
|Effective Corporate Governance |  | Align?                                                                                                                                |  | Comments
|                               |  |                                                                                                                                       |  |         
|                               |  | (b) Identification of the principal risks of
    the Corporations business and implementing appropriate
    risk management systems; |  |          | Yes |  |  | The Board has established a comprehensive
    approach to risk identification and management. A comprehensive
    risk universe, divided into four parts on the basis
    of Committee areas of responsibility, has been developed. Senior
    management, working with the appropriate Committees, identify
    significant risks from the risk universe. Senior executives are
    assigned responsibility for each significant risk and, working
    with a multi-disciplinary project team, they:       
|                              
|                               |  |                                                                                                                                       |  |          |     |  |  | (i)   evaluate the risk exposure
    of each significant risk;                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                              
|                               |  |                                                                                                                                       |  |          |     |  |  | (ii)  recommend response modifications
    to achieve the appropriate level of exposure; and                                                                                                                                                                                                                                                                                                                                                                                                                  
|                              
|                               |  |                                                                                                                                       |  |          |     |  |  | (iii) refine the risk evaluation process for
    subsequent use.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                              
|                               |  |                                                                                                                                       |  |          |     |  |  | The results of such activities are reviewed with
    the appropriate Committees and are reported to the Board
    annually in November at a meeting convened for that purpose.                                                                                                                                                                                                                                                                                                                                
|                              
|                               |  | (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.
|                              

A-2



---



##### 



|                               |  |                                                                                                                                    |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                    |  | Does     |     | 
|                               |  | PCS                                                                                                                                |  |         
|TSX Guidelines for             |  | Currently                                                                                                                          |  |         
|Effective Corporate Governance |  | Align?                                                                                                                             |  | Comments
|                               |  |                                                                                                                                    |  |         
|                               |  | (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 postings, 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 8 times in
    2002, 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.                                                                                                                                                                                                                                                                                                
|                              
|2.                             |  | A majority of Directors should be
    unrelated (that is, independent of management and
    free from any conflict of interest). |  |          | Yes |  |  | As of March 15, 2003 twelve Directors
    comprised the Board. Of that number ten were independent
    Directors.
    The Boards definition of an independent Director is a
    person who has no relationship to the Corporation that may
    interfere with the Directors exercise of independence from
    management and the Corporation.                                                                                                                                                                                                                                                                                                                                                                             
|                              
|                               |  |                                                                                                                                    |  |          |     |  |  | The Board has concluded that Directors who are
    independent under the proposed New York Stock Exchange standard
    are also unrelated Directors for the purposes of the Guidelines
    with the result that ten Directors are unrelated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

A-3



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##### 



|                               |  |                                                                                                                                               |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                         
|------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                               |  | Does     |     | 
|                               |  | PCS                                                                                                                                           |  |         
|TSX Guidelines for             |  | Currently                                                                                                                                     |  |         
|Effective Corporate Governance |  | Align?                                                                                                                                        |  | Comments
|                               |  |                                                                                                                                               |  |         
|                               |  |                                                                                                                                               |  |          |     |  |  | As of March 15, 2003 the Corporation did not
    have a significant shareholder as defined in the Guidelines.                                                                                                                                                                                                                                           
|                              
|                               |  |                                                                                                                                               |  |          |     |  |  | A Policy has been established which provides that
    Directors will not stand for re-election after reaching the age
    of seventy years.                                                                                                                                                                                                             
|                              
|3.                             |  | Disclose for each Director whether the Director
    is related and how that conclusion was reached.                                           |  |          | Yes |  |  | The Board has applied the proposed New York Stock
    Exchange standard of independence and concluded that ten of its
    Directors are independent. Of the remaining two Directors,
    Mr. Doyle, as an executive and employee of the Corporation,
    and Mr. Wright, as a former executive and employee of the
    Corporation, are not independent.
|                              
|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
    Chairman and the Chief Executive Officer;                                                                                                                                                                                                           
|                              

A-4



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##### 



|                               |  |                                                                                                                    |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------ |  | ------------------------------------------------------------------------------------------------------------------ |  | -------- | --- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                    |  | Does     |     | 
|                               |  | PCS                                                                                                                |  |         
|TSX Guidelines for             |  | Currently                                                                                                          |  |         
|Effective Corporate Governance |  | Align?                                                                                                             |  | Comments
|                               |  |                                                                                                                    |  |         
|                               |  |                                                                                                                    |  |          |     |  |  | (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 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, four of whom are
    independent and unrelated.                                                                                                                                                                                                                          
|                              
|5.                             |  | Implement a process for assessing the
    effectiveness of the board, its committees and individual
    Directors. |  |          | Yes |  |  | The Board has adopted a policy requiring annual
    Board assessment and annual Director self-assessment. The Board
    assessment includes an assessment of the Board against its
    Charter and of its Committees. The results of such assessment
    are reported regularly to the full Board and forms a basis for
    continuous improvement in board practices.
|                              
|                               |  |                                                                                                                    |  |          |     |  |  | Responsibility for the assessment process and any
    follow-up action lies with the Corporate Governance and
    Nominating Committee and the Board Chair.                                                                                                                                                                                                           
|                              
|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.                                                                                                                                                                                                                                  
|                              

A-5



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##### 



|                               |  |                                                                                                                                                       |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                                       |  | Does     |     | 
|                               |  | PCS                                                                                                                                                   |  |         
|TSX Guidelines for             |  | Currently                                                                                                                                             |  |         
|Effective Corporate Governance |  | Align?                                                                                                                                                |  | Comments
|                               |  |                                                                                                                                                       |  |         
|                               |  |                                                                                                                                                       |  |          |     |  |  | The 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.                                                                                                                                                                                                                                                                                                          
|                              
|                               |  |                                                                                                                                                       |  |          |     |  |  | The Board has determined that a portion of the
    total annual compensation package should be paid in the form of
    Deferred Share Units (DSUs). As well, each Director
    can elect to take some or all of his or her annual and per diem
    fees in the form of DSUs. Each DSU 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 DSU component to more
    closely align the economic interests of Directors with those of
    the Corporations shareholders.                                                                                                                                                                                                                                                                                                                                   
|                              
|9.                             |  | Board committees should generally be composed of
    outside Directors, a majority of whom are unrelated.                                             |  |          | Yes |  |  | Of the five committees of the Board, two (the
    Audit and Compensation Committees) are composed entirely of
    independent and unrelated Directors. Two others (the Corporate
    Governance and Nominating Committee and the Safety, Health and
    Environment Committee) are composed entirely of outside
    Directors, one of whom is a non-independent Director. The
    Executive Committee is composed of four independent unrelated
    Directors and one inside Director.
|                              
|                               |  |                                                                                                                                                       |  |          |     |  |  | Each Committee of the Board has a written Charter
    which details the Committees duties and responsibilities.                                                                                                                                                                                                                                                                                                                                                                      
|                              

A-6



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##### 



|                               |  |                                                                                                                                      |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | --- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                      |  | Does     |     | 
|                               |  | PCS                                                                                                                                  |  |         
|TSX Guidelines for             |  | Currently                                                                                                                            |  |         
|Effective Corporate Governance |  | Align?                                                                                                                               |  | Comments
|                               |  |                                                                                                                                      |  |         
|10.                            |  | 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, four of whom are independent and
    unrelated. The Committee is responsible for examining and
    reporting to the Board on matters relating to governance of the
    Corporation and for recommending nominees for election or
    appointment as Directors. In addition, the Committee develops,
    reviews and recommends to the Board for approval policies and
    procedures relating to corporate governance as
    are appropriate:
|                              
|                               |  |                                                                                                                                      |  |          |     |  |  | (i)   to maintain trust and
    confidence in the balanced attention to the different interests
    of the Corporations shareholders, employees, customers and
    other communities of interest; and                                                                                                                                                                                                                                                                                                                                                                                            
|                              
|                               |  |                                                                                                                                      |  |          |     |  |  | (ii)  to ensure the effective and
    timely discharge by the Corporations Directors, officers
    and senior management of the responsibilities and duties
    of each.                                                                                                                                                                                                                                                                                                                                                                                                                         
|                              
|11.                            |  | (a) Define limits to Managements
    responsibilities by developing position
    descriptions for:
    (i)   the Board; and         |  |          | 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:                                                                                                                                                                                                                                                                                                                                                                                                                              
|                               |  |                                                                                                                                      |  |          |     |  |  | (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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                              

A-7



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##### 



|                               |  |                                                                                                       |  |          |     |  |  |                                                                                                                                                                                                                                                                              
|------------------------------ |  | ----------------------------------------------------------------------------------------------------- |  | -------- | --- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                       |  | Does     |     | 
|                               |  | PCS                                                                                                   |  |         
|TSX Guidelines for             |  | Currently                                                                                             |  |         
|Effective Corporate Governance |  | Align?                                                                                                |  | Comments
|                               |  |                                                                                                       |  |         
|                               |  |                                                                                                       |  |          |     |  |  | (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 position description for the Chief Executive
    Officer has been developed and approved by the Board.                                                                                                                                                                     
|                              
|                               |  | (b) Board should approve the Chief Executive
    Officers corporate objectives.                      |  |          | Yes |  |  | The Compensation Committee annually reviews the
    Chief Executive Officers performance and, in consultation
    with the Chief Executive Officer, establishes objectives for the
    fiscal year.                                                                         
|                              
|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                                                                                                                                                                        
|                              

A-8



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##### 



|                               |  |                                                                                                                                                       |  |          |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                                       |  | Does     |     | 
|                               |  | PCS                                                                                                                                                   |  |         
|TSX Guidelines for             |  | Currently                                                                                                                                             |  |         
|Effective Corporate Governance |  | Align?                                                                                                                                                |  | Comments
|                               |  |                                                                                                                                                       |  |         
|                               |  |                                                                                                                                                       |  |          |     |  |  | (v)  act as an effective liaison
    between the Board and management.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                              
|                               |  |                                                                                                                                                       |  |          |     |  |  | The Board has also adopted a policy of meeting
    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.                                                                                                                                                                                                                                                    
|                              
|13.                            |  | (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 fully reviewed and amended in 2003.
    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
    approved a test of financial literacy and has established
    standards to determine accounting or related financial
    expertise.               
|                              
|                               |  |                                                                                                                                                       |  |          |     |  |  | The Charter explicitly affirms that the external
    auditor is ultimately accountable to the shareholders through
    the Board of Directors and Audit Committee. The Committee
    regularly assesses the independence of the external auditor and
    in its review of annual and quarterly financial statements,
    there is included a discussion of the quality of the
    Corporations accounting principles and the relevance,
    reliability, comparability and understandability of the
    financial statements.
|                              
|                               |  | (b) All members should be outside Directors.                                                                                                          |  |          | Yes |  |  | The Audit Committee is composed of four members,
    all of whom are independent and unrelated. At least one member
    of the Committee has accounting or related financial management
    expertise and all members of the Committee are financially
    literate.                                                                                                                                                                                                                                                          
|                              
|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.                                                                                                                                                                                                                                                                                                                                                                                        

A-9



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##### 



APPENDIX B

Audit Committee Charter

Objectives

The Audit Committee will assist the Board of
Directors in fulfilling its financial oversight
responsibilities. The Audit Committee will review the financial
statements, the system of internal control, the financial
reporting process and management of financial risks, the audit
process and the Corporations disclosure controls and
procedures. In performing its duties, the Committee will
maintain effective working relationships, including engaging in
full and frank discussions, with the Board of Directors,
management, and the internal and External Auditors. To perform
his or her role effectively, each Committee member will obtain
an understanding of the detailed responsibilities of Committee
membership as well as the Corporations business,
operations and risk.

In discharging its responsibilities, the Audit
Committee is not itself responsible for the planning or conduct
of audits or for any determination that the Corporations
financial statements are complete and accurate or in accordance
with Canadian or U.S. generally accepted accounting
principles.

External Auditor Independence

The Corporations External Auditor is
ultimately accountable to the shareholders through the Board of
Directors and Audit Committee.

The Committees responsibilities regarding
the independence of the External Auditor are identified under
the heading Duties, Powers and Responsibilities:
External Audit.

Membership

The Board of Directors shall elect annually from
among its members an Audit Committee to hold office for the
ensuing year or until their successors are elected
or appointed.

The Audit Committee shall consist of not less
than three and not more than five members, none of whom are
current or former officers or employees of the Corporation or
any of its affiliates and none of whom have any relationship to
the Corporation that may interfere with the exercise of their
independence from management and the Corporation. In addition,
members must be financially literate and at least one member
should be an Audit Committee Financial Expert. Each member shall
meet the independence, experience and financial literacy
requirements of applicable law and listing standards.

The Board of Directors may from time to time
designate one of the members of the Audit Committee to be the
Committee Chair and the Secretary of the Corporation shall be
the Secretary of the Audit Committee.

Any member of the Audit Committee may be removed
or replaced at any time by the Board of Directors and shall
cease to be a member of the Audit Committee on ceasing to be a
Director. The Board of Directors may fill vacancies on the Audit
Committee by election from among the Board of Directors. If and
whenever a vacancy shall exist on the Audit Committee, the
remaining members may exercise all its powers so long as a
quorum remains in office. Subject to the above, each member of
the Audit Committee shall hold office as such until the next
Annual Meeting of Shareholders after his or her election.

Meetings and Participation

Meetings of the Audit Committee shall provide a
framework for a full and frank discussion of all relevant
matters, including: financial statement disclosures, accounting,
internal controls and auditing. To accomplish this:



| |   |                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Audit Committee shall meet at least once each
    quarter. Meeting agendas will be prepared and provided in
    advance to members, along with appropriate briefing materials.

B-1



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##### 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Corporations internal auditor shall be
    entitled to receive notice of every meeting of the Audit
    Committee, and shall attend such meetings at the invitation of
    the Audit Committee. The External Auditor shall be entitled to
    receive notice of every meeting of the Audit Committee and to
    attend and be heard thereat. The Audit Committee expects that
    both the internal and External Auditors will have independent
    communication and information flow with it or the
    Committee Chair.
|
| |  | The Audit Committee may invite such officers,
    directors and employees of the Corporation as it may see fit, or
    any external counsel, from time to time to attend meetings of
    the Audit Committee and assist in the discussion and
    consideration of the duties of the Audit Committee. The Audit
    Committee shall have full authority to investigate any matter
    brought to its attention with full access to all books, records,
    facilities and personnel of the Corporation.                        
|
| |  | The time at which and place where the meetings of
    the Audit Committee shall be held and the calling of meetings
    and the procedure in all things at such meetings shall be
    determined by the Audit Committee; provided that meetings of the
    Audit Committee shall be convened whenever requested by the
    External Auditor or any member of the Audit Committee in
    accordance with the Canada Business Corporations Act.                                                                                  
|
| |  | No business may be transacted by the Audit
    Committee except at a meeting of its members at which a quorum
    of the Audit Committee is present. A majority of the members of
    the Audit Committee shall constitute a quorum.                                                                                                                                                                                                                                                                                           
|
| |  | At least once each quarter, in the absence of any
    management representatives, the Audit Committee shall meet
    separately with both the Corporations internal and
    external auditors (in camera meetings).                                                                                                                                                                                                                                                                                                         
|
| |  | The Audit Committee shall keep minutes of its
    meetings in which shall be recorded all action taken by it,
    which minutes shall be available as soon as possible to the
    Board of Directors and provided to each Director who so
    requests. Items discussed in the in camera portion (with the
    External Auditor and the internal auditor) of Audit Committee
    meetings will not be recorded in the minutes of
    that meeting.                                                                             

Duties, Powers and Responsibilities

There is hereby delegated to the Audit Committee
the duties and powers specified in section 171 of the
Canada Business Corporations Act and, without limiting these
duties and powers, the Audit Committee shall:

Financial Statements



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In the discussion of the external audit plan with
    the External Auditor and management, members of the Committee
    shall satisfy themselves that both quantitative and appropriate
    qualitative factors have been taken into account in the
    determination of whether or not amounts or disclosures are
    material to financial statements.                                                                                                                                                                                                                                                                                           
|
| |  | Review the annual audited Financial Statements,
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations, and Selected Eleven-Year Data with
    management and the External Auditor prior to their submission to
    the Board of Directors for approval, and make a determination
    whether to recommend to the Board of Directors that the audited
    Financial Statements be included in the Corporations
    Form 10-K.                                                                                                                                                                              
|
| |  | Review, prior to publication, the unaudited
    quarterly financial statements of the Corporation and other
    financial information to be included in the Corporations
    Form 10-Q with management and the External Auditor and, if
    such statements and information are found to conform to the
    accounting practices and standards of the Corporation, authorize
    the release and publication of such statements and information.
    The Audit Committee shall also discuss the results of the
    External Auditors review of the Corporations
    quarterly financial statements conducted in accordance with
    Statement of

B-2



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##### 



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | Auditing Standards (SAS) No. 71. The
    Committee shall also review the quarterly Management Discussion
    and Analysis of Financial Conditions and Results of Operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | In the review of annual and quarterly financial
    statements, discuss the quality of the Corporations
    accounting principles, the reasonableness of significant
    judgments, the clarity of the disclosures in the financial
    statements and the adequacy of internal controls. The Audit
    Committee shall also discuss the results of the annual audit and
    any other matters required to be communicated to the Audit
    Committee by the External Auditor under Canadian generally
    accepted auditing standards, U.S. generally accepted
    auditing standards, applicable law or listing standards,
    including matters required to be discussed by SAS No. 61,
    as amended by SAS No. 90. The framework for discussion will
    be from the perspective of those who use the statements and will
    include reference to relevance, reliability, comparability and
    understandability of these statements.
|
| |  | Review in detail the result of the External
    Auditors review of the Corporations financial
    records, including the management letter, and report to the
    Board of Directors any matters that remain unresolved. Such
    review shall address any problems or difficulties the External
    Auditor may have encountered in connection with the annual audit
    or otherwise, including any restrictions on the scope of
    activities or access to required information, any disagreements
    with management regarding generally accepted accounting
    principles and other matters, material adjustments to the
    financial statements recommended by the External Auditor and
    adjustments that were proposed but passed,
    regardless of materiality.                                                                                                                                                           
|
| |  | Review periodically with management, the internal
    auditor and the External Auditor the effect of new or proposed
    regulatory and accounting initiatives on the Corporations
    financial statements and other public disclosures and procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Review with the External Auditor (i) the
    Corporations critical accounting policies and estimates,
    and (ii) any alternative treatments of financial
    information under Canadian or U.S. generally accepted
    accounting principles that have been discussed with management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Internal and Disclosure Controls



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Audit Committee shall discuss with
    management, the internal auditor and the External Auditor the
    Corporation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 and manage legal
    compliance programs, among other considerations that may be
    relevant to their respective audits.                                                                                                                                                                                                                                                                                                 
|
| |  | Review on an annual basis with management and the
    External Auditor the Corporations internal controls and
    procedures and managements internal control report,
    including any attestation of such report by the External
    Auditor. Management and the internal auditor shall report
    periodically to the Audit Committee regarding any significant
    deficiencies in the design or operation of the
    Corporations internal controls, material weaknesses in
    internal controls and any fraud (regardless of materiality)
    involving persons having a significant role in the internal
    controls, as well as any significant changes in internal
    controls implemented by management during the most recent
    reporting period of the Corporation.
|
| |  | Review with the Chief Executive Officer, the
    Chief Financial Officer and the General Counsel on an annual
    basis the Corporations disclosure controls and procedures,
    including any significant deficiencies in, or material
    non-compliance with, such controls and procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Discuss with the Chief Executive Officer and the
    Chief Financial Officer all elements of the certification
    required pursuant to Sections 302 and 906 of the
    Sarbanes-Oxley Act. The Chair of the Audit Committee shall
    participate in the quarterly Sarbanes-Oxley Due Diligence
    Conference Call meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                          

B-3



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##### 



Internal Audit



| |   |                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Review with management, the External Auditor and
    the internal auditor, audit scope, audit plans, activities and
    staffing of the internal audit function.                                                                  
|
| |  | Review with management, the External Auditor and
    the internal auditor, the internal auditors periodic
    activity reports.                                                                                                  
|
| |  | Review on an annual basis the experience and
    qualifications of the senior members of the internal auditors
    and the overall effectiveness of the internal audit function
    including comparison with external benchmarks.
|
| |  | Review internal audit costs annually.                                                                                                                                                                                             
|
| |  | Discuss with the Chief Executive Officer any
    proposed dismissal, appointment or replacement of the
    internal auditor.                                                                                                      

External Audit



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Review with the External Auditor, management and
    the internal auditor the External Auditors proposed audit
    plan and approach, including coordination with the internal
    auditor and the relationship between areas of audit emphasis and
    quantum of risk.                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Review with the External Auditor annually their
    written statement regarding relationships and services which may
    affect the External Auditors objectivity and independence.
    The Audit Committee shall approve guidelines for the retention
    of the External Auditor for any non-audit service and the fee
    for such service and shall determine procedures for the approval
    of audit and non-audit services in advance. The Audit Committee
    shall, in accordance with such procedures, approve in advance
    any audit or non-audit service provided to the Corporation by
    the External Auditor, all as required by applicable law or
    listing standards.
|
| |  | At least annually, receive a report by the
    External Auditor describing any material issues raised by the
    most recent internal quality control review of the local
    practice office or by any inquiry or investigation by
    governmental or professional authorities of the local practice
    office, within the preceding two years, and steps taken to
    address any such issues. The report shall also include any
    similar matters pertaining to offices other than the local
    practice office, to the extent the audit partner is aware of
    such matters.                                                                                                      
|
| |  | Ensure the regular rotation of the lead partner
    and the reviewing partner to the extent required by law, and
    regularly consider whether or not there should be a rotation of
    the Corporations External Auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | With management, evaluate the performance of the
    External Auditor annually.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Recommend the appointment, reappointment or
    replacement of the External Auditor to the Board for
    recommendation to the shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | Review External Audit fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | Approve guidelines for the Corporations
    hiring of former employees and partners of the External Auditor,
    which shall meet the requirements of applicable law and listing
    standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Compliance



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Review periodically with management, including
    the General Counsel, and the External Auditor any correspondence
    with, or other action by, regulators or government agencies and
    any employee complaints or published reports that raise concerns
    regarding the Corporations financial statements,
    accounting or auditing matters or compliance with the
    Corporations Code of Business Conduct. The Audit Committee
    shall also meet periodically and separately with the General
    Counsel and other

B-4



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##### 



| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | appropriate legal staff of the Corporation or
    external counsel to review material legal affairs of the
    Corporation and the Corporations compliance with
    applicable law and listing standards.
|
| |  | Review a summary of compliance with the
    Corporations Code of Business Conduct on an annual basis.                                                                                                    

Reporting Responsibilities



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Regularly update the Board about Committee
    activities and ensure the Board is aware of matters which may
    significantly impact the financial condition or affairs of the
    Corporation.                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Prepare annually a report for inclusion in the
    proxy statement. This report will disclose the Committees
    activities that resulted from its financial reporting oversight
    responsibilities. Specifically, the report will deal with its
    review of the financial statements with management, the
    discussions it has had with the External Auditor regarding their
    written disclosures pertaining to independence and other matters
    required to be discussed and will contain disclosure of all
    audit and non-audit fees paid to the External Auditor.
|
| |  | Prepare a report to the Board regarding the
    result of its annual self-assessment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Other Responsibilities



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintain procedures for the receipt, retention
    and treatment of complaints received by the Corporation
    regarding financial statement disclosures, accounting, internal
    accounting controls or auditing matters, and the confidential,
    anonymous submission by employees of the Corporation of concerns
    regarding financial statement disclosures, accounting, internal
    accounting controls and auditing matters.
|
| |  | Review and address any complaints received by the
    Corporation regarding financial statement disclosures,
    accounting, internal accounting controls or auditing matters,
    and any confidential, anonymous submissions by employees of the
    Corporation of concerns regarding questionable accounting or
    auditing matters.                                                                                               
|
| |  | Review annually a summary of the
    Corporations transactions with directors and officers and
    with firms that employ directors, as well as any other material
    related party transactions.                                                                                                                                                                                                                                     
|
| |  | Review quarterly the report prepared by the
    Natural Gas Hedging Committee. If the hedged position is outside
    of the guidelines approved by the Natural Gas Hedging Committee,
    determine the reasons for this deviation and the actions that
    will be taken as a result.                                                                                                                                                  
|
| |  | Evaluate its performance under this Charter. The
    Committee shall address all matters that the Committee considers
    relevant to its performance, including the following:                                                                                                                                                                                                                                                         



| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The adequacy, appropriateness and quality of the
    information and recommendations presented by the Committee to
    the Board;                                    
|
| |  | The adequacy of information provided to the
    Committee by management, the internal auditor and the
    External Auditor;                                          
|
| |  | Whether or not members have adequate opportunity
    to discuss issues and ask probing and/or challenging questions
    of management, where necessary;              
|
| |  | Whether or not the Audit Committee is kept
    apprised of the significant operational, financial and
    regulatory issues currently being faced by the Corporation;
|
| |  | Whether or not the membership of the Committee
    contains the proper mix of relevant financial, legal and
    business talent; and,                                
|
| |  | Whether or not management are proactive in
    assisting the Committee in keeping current on important
    business, financial, operational and regulatory matters.  

B-5



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| |   |                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In assessing its own performance, the Audit
    Committee shall solicit feedback from the Board, CEO, CFO, the
    internal auditor and the External Auditor on specific
    opportunities to improve Audit Committee effectiveness.
|
| |  | Review and assess the adequacy of the Audit
    Committee Charter on an annual basis.                                                                                                                                               
|
| |  | Carry out such other duties as may be delegated
    to it by the Board of Directors from time to time.                                                                                                                              

Delegation

The Audit Committee may delegate any of its
responsibilities to a subcommittee comprised of one or more
members of the Committee.

Outside Experts

The Audit Committee may, if and when considered
appropriate to do so, institute, direct and supervise an
investigation into any matter related to the mandate of the
Committee and may, for the purposes of such investigation,
retain the services of outside legal counsel or other
professionals, as required.

Remuneration

The members of the Audit Committee shall be
entitled to receive such remuneration for acting as members of
the Audit Committee as the Board of Directors may from time to
time determine, subject to such limitations as may be imposed by
applicable independence requirements.

B-6



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PRINTED IN CANADA




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Potash
Corporation

of Saskatchewan
Inc.


(Potash Logo)




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|      |                                        
|----- | ---------------------------------------
|Proxy | Potash Corporation of Saskatchewan Inc.




|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS
    TO BE HELD ON MAY 8, 2003.
     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
    Donald E. Phillips, Chairman of the Board, 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, John L.M. Hampton,
    Senior Vice President, General Counsel and Secretary, or instead
    of any of the foregoing,
    --------------------------------------------------,
    as proxy for the undersigned to attend, vote and act for and on
    behalf of the undersigned at the annual meeting of
    shareholders of the Corporation to be held at the Delta
    Bessborough, 601 Spadina Crescent East, Saskatoon, Saskatchewan,
    Canada on Thursday, the 8th day of May, 2003 (the
    Meeting) at 10:30 a.m., and at any
    adjournments thereof, and hereby revokes any proxy previously
    given by the undersigned.1. A shareholder has the right to appoint a person who
    need not be a shareholder, to represent him and to attend and
    act on his behalf at the Meeting, other than the nominees
    designated above, and may exercise such right by inserting the
    name of his nominee in the space provided above for that
    purpose.      2. The
    Shares represented by this proxy will be voted in accordance
    with any choice specified in this proxy. If no specification
    is made, the persons named above will vote such Shares for the
    election of the directors named in this proxy and for the
    appointment of Deloitte & Touche LLP as auditors of
    the Corporation. |  | 3.If this
    proxy is not dated, it shall be deemed to be dated on the date
    on which this proxy was mailed by the Corporation.
     Without limiting the general powers hereby conferred, the
    Shares represented by this proxy are to be:1. o VOTED
    FORthe election as directors of all nominees listed below
    (except as marked to the contrary below), or
       o 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.
    F.J. Blesi       W.
    Fetzer III    J.J.
    McCaig      E.R. Stromberg
    W.J. Doyle     D.J.
    Howe       M.
    Mogford J.G. Vicq
    J.W. Estey      A.D.
    Laberge    P.J. Schoenhals  E.
    Viyella de Paliza2. Voted FORo, or AGAINSTo, or
    WITHHELD FROM VOTINGo
    on, the appointment of Deloitte & Touche LLP as
    auditors of the Corporation.
    Dated
    the              day
    of              ,
    2003.
    --------------------------------------------------
     Name of Shareholder (please print)
    --------------------------------------------------
    Signature of ShareholderPotash
    Corporation                               
    of Saskatchewan
    Inc.                             (Potash Logo)