To: Nick Morvay who wrote (721 ) 12/12/2001 5:34:29 AM From: Al Collard Respond to of 4470 FMO-t ...in the news:Foremost proposed arrangement and shareholder election TSE bulletin 2001-1528 Foremost Industries Inc. has mailed a notice of special meeting of shareholders to be held on Dec. 18, 2001, at which time shareholders will vote on a proposed arrangement involving the company, Foremost Industries Income Fund. Pursuant to the proposed arrangement, it is contemplated that if the aforementioned transaction proceeds, on the effective date (expected to be on or about Dec. 26, 2001), shareholders, at their option, will elect to receive for each share held either cash in the amount of $4 or one common trust unit of the fund, or a combination of both. The maximum total amount of cash available under the cash option is $5-million. In the event that the cash payment to shareholders under the cash option exceeds the maximum amount, shareholders holding less than 100 common shares will be given priority to receive the cash consideration under the cash option. The remaining shareholders who chose or are deemed to have chosen the cash option will be deemed on a pro rata basis to have made an election for a lesser amount of cash and the balance of the consideration will be payable to such shareholders in common trust units. Shareholders who wish to elect to receive the trust unit option are required to deposit a duly completed and executed election letter and letter of transmittal, together with their common share certificates with Computershare Trust Company at its principal offices in Calgary or Toronto to be received prior to 4:30 p.m. (local time) on Dec. 17, 2001. Any shareholder who fails to properly make such election by the election deadline, will be deemed to have elected to receive the cash option, subject to proration. Upon completion of the arrangement, the shareholders (other than those shareholders who chose or were deemed to have chosen cash or who dissented) will be holders of all of the outstanding common trust units of the fund and the fund will be a limited partner of, and hold a 99.99-per-cent partnership interest in Foremost Industries Limited Partnership, which partnership will hold all the assets of the company and will continue to carry the business currently carried on by the company. Accordingly, shareholders who receive common trust units will continue to own, indirectly, substantially all of the interest in the business of the company and will participate in distributions of income from the limited partnership. The Toronto Stock Exchange has conditionally approved the listing of the common trust units of the fund, subject to the fund filing the required documentation with the exchange. If the arrangement is implemented, the exchange will issue a further bulletin to confirm the delisting of the common shares of the company and the listing of the common trust units of the fund.