##### Table of Contents



POTASH CORPORATION OF SASKATCHEWAN
    INC.
  
 NOTICE OF ANNUAL AND SPECIAL
    MEETING OF SHAREHOLDERS
 AND MANAGEMENT PROXY CIRCULAR
  ANNUAL AND SPECIAL MEETING
 May 8, 2008




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##### 



Table of
    Contents
  
  PageLetter to Shareholders


1Notice of Annual and Special Meeting of
    Shareholders


2Questions and Answers on Voting and Proxies


3Business of the Meeting


6Board of Directors


7Appointment of Auditors and Report of Audit
    Committee


19Adoption of 2008 Performance Option Plan


23Corporate Governance


27Compensation


31Ownership of Shares


59Directors and Officers Liability
    Insurance


60Voting Shares


60Shareholder Proposal


602009 Shareholder Proposals


60Additional Information


60Directors Approval


60Appendices


61Appendix A  Disclosure of
    Corporate Governance Practices


62Appendix B  Resolution of
    Shareholders  2008 Performance Option Plan


69Appendix C  2008 Performance
    Option Plan


70Appendix D  Shareholder
    Proposal


76Appendix E  Board of Directors
    Charter


79Appendix F  Audit Committee
    Charter


82




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##### Table of Contents





Potash Corporation of Saskatchewan Inc.
   February 20,
    2008
   Dear Shareholder:
  3522 nd
    Your vote and participation are very important.
      Sincerely,-s- D. J. Howe

-s- W. J. DoyleD. J. HOWE
    Board Chair

W. J. DOYLE
    President and
    Chief Executive Officer   PCS Tower, Suite 500, 122
     1st Avenue South, Saskatoon, Saskatchewan Canada S7K 7G3
  LETTER TO SHAREHOLDERS
 Page  1




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##### Table of Contents



Notice of Annual
    and Special Meeting of Shareholders    nd
    1.
    to receive the consolidated financial statements of the
    Corporation for the fiscal year ended December 31, 2007 and
    the report of the auditors thereon;2.
    to elect the Board of Directors for 2008;3.
    to appoint auditors for 2008;4.
    to consider and, if deemed appropriate, adopt, with or without
    variation, a resolution (the full text of which is reproduced in
    Appendix B to the accompanying Management Proxy Circular)
    authorizing the Corporation to implement a new performance
    option plan, which is attached as Appendix C to the
    accompanying Management Proxy Circular;5.
    to consider the shareholder proposal attached as Appendix D
    to the accompanying Management Proxy Circular; and6.
    to transact such other business as may properly come before the
    Meeting or any adjournments thereof.  th
    
    POTASH CORPORATION OF
    SASKATCHEWAN INC.
 SUITE 500, 122 
    1ST
    AVENUE SOUTH, SASKATOON, SK CANADA S7K 7G3
  NOTICE OF MEETING
 Page  2




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##### Table of Contents





Questions and
    Answers on Voting
    and Proxies  1.
    Who can I call if I have
    questions about the information contained in this Management
    Proxy Circular or require assistance in completing my proxy
    form?  1-866-425-8527,
  2.
    Who is soliciting my
    proxy?  .
  3.
    On what am I voting?    (1)
    the election of directors;(2)
    the appointment of auditors;(3)
    a resolution authorizing the Corporation to implement a new
    performance option plan; and(4)
    the consideration of the shareholder proposal.  FOR AGAINST
  4.
    Who is entitled to
    vote?      5.
    By when must I vote?    (1)
    If you are a Registered Shareholder planning to attend the
    Meeting and wish to vote your Shares in person at the Meeting,
    your vote will be taken and counted at the Meeting.(2)
    If you are a Registered Shareholder and voting using the proxy
    form, your proxy form should be received at the Toronto office
    of CIBC Mellon Trust Company by mail or facsimile prior to
    the commencement of the Meeting, or hand-delivered at the
    registration table on the day of the Meeting prior to the
    commencement of the Meeting.(3)
    If you are a Registered Shareholder and voting your proxy by
    telephone or Internet, your vote should be received by CIBC
    Mellon Trust Company no later than 11:00 p.m.
    (Saskatoon time) on Tuesday, May 6, 2008.(4)
    If you are a Non-Registered Shareholder and wish to attend the
    Meeting or vote by proxy, you should refer to Item 11.    6.
    How do I vote if I am a
    Registered Shareholder?      (1)
    By Proxy    (a)
    By Telephone  1-866-271-1207
    QUESTIONS AND ANSWERS ON VOTING AND
    PROXIES
 Page  3




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##### Table of Contents



(b)
    On the Internet        (c)
    By Mail    (d)
    By Fax  1-866-781-3111 1-416-368-2502
    (2)
    By Attending the Meeting in Person    7.
    What if I sign the proxy form as
    described in this Management Proxy Circular?    must be in writing
  8.
    Can I appoint someone other than
    these people to vote my Shares?    You cannot appoint a person to vote your Shares other than
    our directors or officers whose printed names appear on the
    proxy form if you decide to vote by telephone or Internet
  It is important to ensure that any other person you appoint
    is attending the Meeting and is aware that his or her
    appointment has been made to vote your Shares.
  9.
    How will my Shares be voted if I
    vote by proxy?  FOR FOR FOR AGAINST FOR
  10.
    If I change my mind, can I take
    back my proxy once I have given it?  st
  QUESTIONS AND ANSWERS ON VOTING AND
    PROXIES
 Page  4




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##### Table of Contents



11.
    How do I vote if I am a
    Non-Registered Shareholder?        (1)
    By Providing Voting Instructions to Your Nominee        (2)
    By Attending the Meeting in Person      12.
    What if amendments are made to
    these matters or if other matters are brought before the
    Meeting?  The person named in the proxy form has discretionary
    authority with respect to amendments or variations to matters
    identified in the Notice of the Meeting and to other matters
    which may properly come before the Meeting.
    13.
    How will the votes be
    counted?    14.
    How can I contact the transfer
    agent?      
    1-800-387-0825
  1-416-643-5500
    1-416-643-5501
      Except as otherwise stated, the
    information contained herein is given as of February 20,
    2008.
 Unless otherwise specified, all
    dollar amounts are expressed in United States dollars.
 Share and per-share data have
    been adjusted to reflect our
    three-for-one
    stock split in May 2007.
  QUESTIONS AND ANSWERS ON VOTING AND
    PROXIES
 Page  5




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##### Table of Contents



Business of the
    Meeting  Financial
    Statements
  Form 10-K
  Nominees
    for Election to the Board of Directors
      Appointment
    of Auditors
      Adoption
    of 2008 Performance Option Plan
      Shareholder
    Proposal
      MANAGEMENT PROXY
    CIRCULAR ï Business
    of the Meeting
 Page  6




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##### 





Board of Directors  PageNominees for Election to the Board of
    Directors


7Director Independence and Other Relationships


11Attendance of Directors


13Director Compensation


14At Risk Investment and Year Over Year
    Changes


18










Nominees
    for Election to the Board of Directors




















WILLIAM J. DOYLE
 Age: 57
 Winnetka, Illinois, USA
 Director since 1989
   Non-independent(2)
 Mr. Doyle is President and Chief
    Executive Officer of the Corporation. He joined PotashCorp as
    President of PCS Sales in 1987, after a career with
    International Minerals and Chemical Corporation. He is Chairman
    of Canpotex Limited, on the boards of The Fertilizer Institute
    and International Plant Nutrition Institute, as well as a member
    of the Executive Management group of the International
    Fertilizer Industry Association. Mr. Doyle is on the
    College Board of Advisors at Georgetown University.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Fertilizer/Mining/Chemical Industry

February
    2008(4):
    $46,095,271Global/International CommerceBusiness Management   Board Committee Membership:

Board & Committee
    Attendance(6):none

100%




MANAGEMENT
    PROXY
    CIRCULAR ï Board
    of Directors


Page  7




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##### Table of Contents



JOHN W. ESTEY
 Age: 57
 Glenview, Illinois, USA
 Director since 2003
   Independent(2)
 Mr. Estey is President and
    Chief Executive Officer of S&C Electric Company. He is a
    member of the Board of Governors of the National Electrical
    Manufacturers Association, a director of the Executives
    Club of Chicago, a member of the Deans Advisory Board at
    the Kellogg School of Management at Northwestern University and
    a member of the Board of Trustees of the Adler Planetarium.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Global/International Commerce

February
    2008(4):
    $4,546,464Business Management   Board Committee Membership:

Board & Committee
    Attendance(6):Compensation (chair)

100%Safety, Health and Environment   WADE FETZER
    III (1)
 Age: 70
 Glencoe, Illinois, USA
 Director since 2002
   Independent(2)
  Mr. Fetzer is a Retired Partner
    with the investment banking firm Goldman Sachs. He sits on the
    boards of Northern Star Broadcasting, University of Wisconsin
    Foundation and Rush-Presbyterian St. Lukes Medical Center.
    He is also on the Kellogg Alumni Advisory Board. Mr. Fetzer
    currently serves on the Board of Directors of Sinofert Holdings
    Limited.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Finance

February
    2008(4):
    $6,341,244Investment Banking   Board Committee Membership:

Board & Committee
    Attendance(6):Corporate Governance and

100%NominatingCompensation   CHARLES S. HOFFMAN
 Age: 59
 Lincolnshire, Illinois, USA
   Independent(2)
 Mr. Hoffman is an export
    consultant and a former senior executive of IMC Global Inc. With
    over 22 years of global fertilizer sales and marketing
    management experience, he retired as Senior Vice President and
    President, Sales and Marketing of IMC Global upon completion of
    the IMC Global and Cargill Fertilizer merger, creating the
    Mosaic Company. He is a former Chairman and President of the
    Phosphate Chemical Export Association (Phoschem) and
    a former Chairman of Canpotex.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Fertilizer/Mining/Chemical Industry

February
    2008(4):
    $0Global/International CommerceBusiness Management   Board Committee Membership:

Board & Committee
    Attendance(6):n/a

n/a   DALLAS J. HOWE
 Age: 63
 Calgary, Alberta, Canada
 Director since 1991
   Independent(2)
 Mr. Howe is owner and Chief
    Executive Officer of DSTC Ltd., a technology investment company,
    and a director of Advanced Data Systems Ltd. and Viterra
    (formerly Saskatchewan Wheat Pool). A director of the PCS Crown
    corporation from 1982 to 1989, he joined the Corporations
    Board in 1991 and was elected Chair in 2003.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):e-Commerce/Technology

February
    2008(4):
    $13,743,444Business Management   Board Committee Membership:

Board & Committee
    Attendance(6):Board Chair

100%Corporate Governance and Nominating
  MANAGEMENT
    PROXY
    CIRCULAR ï Board
    of Directors
 Page  8




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ALICE D. LABERGE
 Age: 51
 Vancouver, British Columbia,
 Canada
 Director since 2003
   Independent(2)
 Ms. Laberge is a Corporate
    Director and the former President and Chief Executive Officer of
    Fincentric Corporation, a global provider of software solutions
    to financial institutions. She was previously Senior Vice
    President and Chief Financial Officer of MacMillan Bloedel
    Limited and is a director of the Royal Bank of Canada, Russel
    Metals Inc., Healthcare Benefit Trust, the United Way of the
    Lower Mainland and St. Pauls Hospital Foundation in
    Vancouver.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):e-Commerce/Technology

February
    2008(4):
    $3,351,504FinanceAccounting   Board Committee Membership:

Board & Committee
    Attendance(6):Audit (chair)

100%Safety, Health and Environment   KEITH G. MARTELL
 Age: 45
 Saskatoon, Saskatchewan,
 Canada
 Director since 2007
   Independent(2)
 Mr. Martell is Executive
    Chairman of First Nations Bank of Canada. He is director of the
    Public Sector Pension Investment Board of Canada, The North West
    Company Inc. and Saskatoon Friendship Inn. He is a trustee of
    The North West Company Fund, Primrose Lake Trust and Flying Dust
    First Nations Treaty Land Entitlement Trust.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Finance/Accounting

February
    2008(4):
    $132,912First NationsBusiness Management   Board Committee Membership:

Board & Committee
    Attendance(6):Audit

100%   JEFFREY J. MCCAIG
 Age: 56
 Calgary, Alberta, Canada
 Director since 2001
   Independent(2)
 Mr. McCaig is Chairman and
    Chief Executive Officer of the Trimac Group of Companies, North
    Americas premier provider of bulk trucking and third-party
    logistics services. Prior to that, he practiced law,
    specializing in corporate financing and securities. He is a
    director of Orbus Pharma Inc., Stoneham Administration Inc., The
    Standard Life Assurance Company of Canada and a director and
    co-owner of the Calgary Flames Hockey Club.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Transportation Industry

February
    2008(4):
    $4,758,624LegalBusiness Management   Board Committee Membership:

Board & Committee
    Attendance(6):Audit

100%Compensation   MARY MOGFORD
 Age: 63
 Newcastle, Ontario, Canada
 Director since 2001
   Independent(2)
 Ms. Mogford is a Corporate
    Director and a former Ontario Deputy Minister of Finance and
    Deputy Minister of Natural Resources. She is a director of MDS
    Inc., the Institute of Corporate Directors of Canada and the
    SickKids Foundation. She is a Fellow of the Institute of
    Corporate Directors (ICD) and an accredited director under
    the ICD/Rotman School of Business Directors Education
    Program.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(2):Finance

February
    2008(3):
    $5,612,880Public PolicyCorporate Governance   Board Committee Membership:

Board & Committee
    Attendance(6):Corporate Governance and Nominating (chair)

96%Audit




MANAGEMENT
    PROXY
    CIRCULAR ï Board
    of Directors


Page  9




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PAUL J. SCHOENHALS
 Age: 66
 Calgary, Alberta, Canada
 Director since 1992
   Independent(2)
 Mr. Schoenhals recently
    retired as President and Chief Executive Officer of Enform, a
    petroleum industry safety and training service. He is a former
    Member of the Legislative Assembly and Cabinet Minister in
    Saskatchewan and was Chairman of Potash Corporation of
    Saskatchewan, the Crown corporation, from 1987 to 1989.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Public Policy

February
    2008(4):
    $3,649,776Business Management   Board Committee Membership:

Board & Committee
    Attendance(6):Safety, Health and Environment (chair)

100%Compensation   E. ROBERT STROMBERG,
    Q.C.
 Age: 66
 Jackfish Lake, Saskatchewan,
 Canada
 Director since 1991
   Non-independent(2)
 Mr. Stromberg was formerly
    associated with the Saskatchewan law firm Robertson Stromberg
    Pedersen. He is a director of NorSask Forest Products Inc. and
    Hitachi Canadian Industries Ltd. and holds the rank of Honorary
    Lieutenant-Colonel of the North Saskatchewan Regiment.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Global/International Commerce

February
    2008(4):
    $7,884,708Legal   Board Committee
    Membership(5):

Board & Committee
    Attendance(6):Safety, Health and Environment

100%   Mr. Stromberg is not
    considered independent because of a business relationship in a
    company in which Mr. Strombergs sons are interested
    parties but in which Mr. Stromberg has no interest. This
    relationship is described in greater detail below.
  ELENA VIYELLA DE
    PALIZA
 Age: 53
 Dominican Republic
 Director since 2003
   Non-independent(2)
 Ms. Viyella de Paliza is
    President of Inter-Quimica, S.A., a chemicals importer and
    distributor, Monte Rio Power Corp. and Indescorp, S.A. She is a
    member of the board of the
    Inter-American
    Dialogue and past president of the Dominican Business Council,
    the Dominican Stock Exchange, Dominican Manufacturers
    Association and the National Agribusiness Board.
  Principal Areas of Expertise/Experience:

Value of At Risk
    Holdings(3):Fertilizer Industry

February
    2008(4):
    $3,700,320FinanceBusiness Management   Board Committee Membership:

Board & Committee
    Attendance(6):Safety, Health and Environment

100%




Ms. Paliza is not
    considered independent because of a business relationship in a
    company in which Ms. Palizas father and brother are
    interested parties but in which Ms. Paliza has no interest.
    This relationship is described in greater detail
    below.








|    |                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Mr Fetzer is 70 as of the date of this Management Proxy
    Circular, the retirement age for directors. The Board has
    evaluated its guideline relating to the retirement age for
    directors and determined that it is appropriate for
    Mr. Fetzer to serve for an additional year to accommodate
    the Boards succession plan relating to his area of
    expertise.
|   
|(2) | See Director Independence and Other Relationships.                                                                                                                                                                                                                                                                                                                             
|   
|(3) | See At Risk Investments and Year Over Year Changes
    for additional detail.                                                                                                                                                                                                                                                                                                  
|   
|(4) | Based on the closing price per Share on the New York Stock
    Exchange of $156.00 on February 20, 2008.                                                                                                                                                                                                                                                                         
|   
|(5) | Mr. Stromberg served on the Corporate Governance and
    Nominating Committee during 2007. In connection with the year
    end review of director independence, Mr. Stromberg is no
    longer a member of this committee. See Director
    Independence and Other Relationships for additional detail.                                                                        
|   
|(6) | See Attendance of Directors for additional detail.                                                                                                                                                                                                                                                                                                                             



MANAGEMENT
    PROXY
    CIRCULAR ï Board
    of Directors


Page  10




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Director
    Independence and Other Relationships  Independence Status of Director NomineesNot


Reason forName

Management


Independent


Independent


Non-independent StatusFrederick J. Blesi






xWilliam J. Doyle


xJohn W. Estey






xWade Fetzer III






xCharles S. Hoffman






xDallas J. Howe






xAlice D. Laberge






xKeith G. Martell






xJeffrey J. McCaig






xMary Mogford






xPaul J. Schoenhals






xE. Robert Stromberg










x



family business relationshipElena Viyella de Paliza










x



family business relationship   58-101 (NI 58-101),
  Regulation S-K Securities Exchange Act of 1934 Exchange Act
    1.
    A director will not be considered independent if, currently
    or within the preceding three years, as applicable:  (a)
    the director is, or was, an employee or executive officer of
    the Corporation, including any affiliated entity of the
    Corporation;  (b)
    an immediate family member of the director is, or was, an
    executive officer of the Corporation, including any affiliated
    entity of the Corporation;(c)
    the director is, or was, a partner of, employed by or
    affiliated with any of the Corporations present or former
    internal or external auditors;(d)
    an immediate family member of the director is, or was, a
    partner of, employed by or affiliated with any of the
    Corporations present or former internal or external
    auditors as a partner, principal, manager or in any other
    capacity; or  MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
 Page  11




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##### Table of Contents



(e)
    an executive officer of the Corporation serves or served on
    the compensation committee of an entity which, in turn, employs
    or employed either (i) the particular director as an
    executive officer or (ii) an immediate family member of
    such director as an executive officer.  2.
    A director will not be considered independent if the director
    received any direct compensation, or an immediate family member
    of the director received more than $100,000 in direct
    compensation, within the past three fiscal years from the
    Corporation, other than director and committee fees and pension
    or other forms of deferred compensation for prior service
    (provided that such compensation is not contingent in any way on
    continued service).3.
    A director will not be considered independent if the director
    has any of the following commercial or charitable
    relationships:  (a)
    the director has served as an executive officer or employee
    of, or any of his or her immediate family members has served as
    an executive officer of, another company that makes payments to,
    or receives payments from, the Corporation for property or
    services in an amount that, in any one of the three most recent
    fiscal years, exceeds the greater of (x) $1,000,000 and
    (y) 2 percent of the annual consolidated gross
    revenues of the company for which such director, or any of his
    or her immediate family members, has served as an executive
    officer (or as an employee in the case of the director); or(b)
    the director has served as an officer, director or trustee of
    a charitable organization, and the Corporations
    discretionary charitable contributions to that organization
    exceeds 1.5 percent of that organizations total
    annual consolidated gross revenues within any one of the three
    most recent fiscal years (provided that the Corporations
    matching of employee charitable contributions will not be
    included in the amount of the Corporations contributions
    for this purpose).  4.
    Where a relationship exists as a result of a director who is
    a limited partner, a non-managing member or who occupies a
    similar position in an entity that does business with the
    Corporation, or who has a shareholding in such entity which is
    not significant, and who, in each case, has no active role in
    sales to, purchases from, or in providing services to the
    Corporation and derives no direct material benefit from same,
    such relationship shall be considered not to be material.        MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
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##### Table of Contents



Regulation S-K Exchange Act,
 Attendance
    of Directors    Type of Meeting Held

Number of MeetingsBoard of Directors


9Audit Committee (AUD)


9Compensation Committee (COMP)


6Corporate Governance and Nominating Committee (GOV)


5Safety, Health and Environment Committee (SHE)


4   Total Board/CommitteeDirector

Board meetings attended


Committee meetings attended


meetings attendedFrederick J. Blesi

9 of 9


100
%

9 of 9 AUD


100%


22 of 23


100%5 of 5 GOV


100%William J.
    Doyle(1)

9 of 9


100
%







9 of 9


100%John W. Estey

9 of 9


100
%

6 of 6 COMP (Chair)


100%


19 of 19


100%4 of 4 SHE


100%Wade Fetzer III

9 of 9


100
%

6 of 6 COMP


100%


20 of 20


100%5 of 5 GOV


100%Dallas J.
    Howe(2)

9 of 9 (Chair)


100
%

5 of 5 GOV


100%


14 of 14


100%Alice D. Laberge

9 of 9


100
%

9 of 9 AUD
    (Chair)


100%


22 of 22


100%4 of 4 SHE


100%Keith G.
    Martell(3)

5 of 5


100
%

4 of 4 AUD


100%


9 of 9


100%Jeffrey J. McCaig

9 of 9


100
%

9 of 9 AUD


100%


24 of 24


100%6 of 6 COMP


100%Mary Mogford

9 of 9


100
%

8 of 9 AUD


89%


22 of 23


96%5 of 5 GOV (Chair)


100%Paul J. Schoenhals

9 of 9


100
%

6 of 6 COMP


100%


19 of 19


100%4 of 4 SHE (Chair)


100%E. Robert Stromberg, Q.C.

9 of 9


100
%

5 of 5 GOV


100%


18 of 18


100%4 of 4 SHE


100%Jack G.
    Vicq(4)

4 of 4


100
%

5 of 5 AUD


100%


9 of 9


100%Elena Viyella de Paliza

9 of 9


100
%

4 of 4 SHE


100%


12 of 13


100%   (1)
    At the invitation of applicable committees, Mr. Doyle
    attended all or a portion of many of the committee meetings held
    in 2007.(2)
    In addition to the committees of which he is a member,
    Mr. Howe, as Board Chair, regularly attends other committee
    meetings as well. Mr. Howe attended all of the 19 such
    committee meetings held in 2007.(3)
    Appointed a member of the Board and a member of the Audit
    Committee on May 3, 2007.(4)
    Served as a member of the Board and a member of the Audit
    Committee until his retirement from the Board on May 3,
    2007.    MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
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##### Table of Contents



Director
    Compensation  2007
    Director Compensation Package
      Cash
    Compensation
      (1)
    Incorporated Board meeting fees into, and further increased, the
    annual retainer to an annual rate of $135,000;(2)
    Increased the additional amount payable to the chair of the
    Compensation Committee from $10,000 to $15,000; and(3)
    Increased the annual retainer of the Board Chair from $280,000
    to $320,000.      Stock-Based
    Compensation
      MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
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##### Table of Contents



Stock
    Ownership Guidelines
  1 2
  Other
    Benefits
    MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
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##### Table of Contents



in accordance with
    Item 402(k) of
    Regulation S-K. The amounts set forth for each director in the Stock
    Awards and Total columns include the
    appreciation in value of Deferred Share Units received prior
    to, and during, 2007 pursuant to the Plan.
  2007 Director
    Compensation
 (see explanatory notes)
  Change inPensionFees Earned















Value andor











Non-Equity



NonqualifiedPaid in











Incentive Plan



Deferred



All OtherCash



Stock Awards



Option Awards



Compensation



Compensation



Compensation



TotalName


($)(2)



($)(2)(3)(4)



($)(5)



($)



Earnings



($)(6)



($)(a)


(b)



(c)



(d)



(e)



(f)



(g)



(h)Frederick J. Blesi



148,500




2,211,233



















1,861




2,361,594William J.
    Doyle(7)

































John W. Estey



26,500




2,200,310



















1,952




2,228,762Wade Fetzer III



137,000




1,024,946



















1,904




1,163,850Dallas J. Howe



300,000




3,511,515



















2,323




3,813,838Alice D. Laberge



118,375




1,514,968



















324




1,633,667Keith G. Martell*



4,155




122,628



















2,676




129,459Jeffrey J. McCaig



25,500




2,426,119



















1,901




2,453,520Mary Mogford



162,000




2,244,524



















342




2,406,866Paul J. Schoenhals



151,500




1,781,670



















4,356




1,937,526E. Robert Stromberg, Q.C.



139,000




1,612,525



















2,835




1,754,360Jack G. Vicq**



57,972




403,571



















68




461,611Elena Viyella de Paliza



139,000




1,416,741



















2,347




1,558,088   *
    Elected to the Board on May 3, 2007.**
    Retired from the Board on May 3, 2007.  (1)
    Those amounts that 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)
    The following table sets forth each directors annual
    retainer, meeting and other fees for fiscal year 2007 that were
    received in the form of cash or deferred to Deferred Share Units.  Remuneration
    of Directors
 For the Fiscal Year Ended December 31, 2007
  Meeting and







Percentage ofAnnual Retainer



Other Fees







TotalRemunerationDeferred







Deferred



Total



in DeferredCash



Share Units



Cash



Share Units



Remuneration



Share UnitsName


($)



($)



($)



($)



($)



(%)Frederick J. Blesi



122,500









26,000









148,500




William J. Doyle




























John W. Estey








127,500




26,500









154,000




82.79Wade Fetzer III



120,000









17,000









137,000




Dallas J. Howe



300,000



















300,000




Alice D. Laberge



82,875




44,625




35,500









163,000




27.38Keith G. Martell








87,019




4,155




4,155




95,329




95.64Jeffrey J. McCaig








122,500




25,500









148,000




82.77Mary Mogford



127,500









34,500









162,000




Paul J. Schoenhals



125,000









26,500









151,500




E. Robert Stromberg, Q.C.



120,000









19,000









139,000




Jack G. Vicq



35,769









22,203









57,972




Elena Viyella de Paliza



120,000









19,000









139,000




Total



1,153,644




381,644




255,858




4,155




1,795,301




21.53   (3)
    Reports the amounts recognized for fiscal year 2007 US GAAP
    financial statement reporting purposes in accordance with
    FAS 123R for Deferred Share Units received pursuant to the
    Plan. Deferred Share Units are settled in cash upon a
    directors retirement and, therefore, are considered a
    liability award  MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
 Page  16




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##### Table of Contents



under FAS 123R. As such, we
    recognize amounts attributable to (1) the annual increase
    or decrease in the value of outstanding Deferred Share Units
    received prior to 2007, which value is based on the annual
    increase or decrease in the market price of our common shares as
    measured on the last trading day of each year, and (2) the
    value of Deferred Share Units received in 2007, which value is
    based on the market price of our Shares on the last trading day
    of the year.  The amounts set forth in column (c) above primarily reflect
    amounts recognized for the 2007 increase in the value of
    outstanding Deferred Share Units received prior to 2007. This
    increase in value is based on the 2007 increase in the price of
    our Shares on the NYSE from $47.83 to $143.96. The amounts set
    forth in column (c) also reflect amounts recognized for the
    value of Deferred Share Units received in 2007, which value is
    based on $143.96, the price of our Shares on the NYSE on the
    last trading day of 2007. Each outside director was permitted to
    defer, in the form of Deferred 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, which we would otherwise
    have paid in cash. See Remuneration of Directors in
    footnote (2) above. The number of Deferred Share Units that
    each director elected to receive in Deferred Share Units, as
    opposed to cash, was determined by the closing price of our
    Shares on the last trading day of the quarter in which such fees
    were earned (on the basis of the closing price on the TSX for
    residents of Canada and on the basis of the closing price on the
    NYSE for all other participants) (Cdn$61.37 and $53.31 for the
    quarter ended March 31, 2007, Cdn$83.28 and $77.97 for the
    quarter ended June 30, 2007, Cdn$105.05 and $105.70 for the
    quarter ended September 30, 2007 and Cdn$143.49 and $143.96
    for the quarter ended December 31, 2007).The following table sets forth the amounts recognized for fiscal
    year 2007 US GAAP financial statement reporting purposes that
    are attributable to (a) appreciation in the value of
    Deferred Share Units received prior to, and during, 2007,
    (b) the value of Deferred Share Units received in 2007 for
    the deferral of the annual retainer and other fees and
    (c) the value of dividends received in 2007 in the form of
    Deferred Share Units.  Frederick J.


John W.


Wade


Dallas J.


Alice D.


Keith G.


Jeffrey J.


Mary


Paul J.


E. Robert


Jack G.


Elena ViyellaBlesi


Estey


Fetzer III


Howe


Laberge


Martell


McCaig


Mogford


Schoenhals


Stromberg, Q.C.


Vicq(a)


de PalizaAppreciation


$2,204,360


$2,066,392


$1,021,760


$3,500,564


$1,465,769


$31,369


$2,296,428


$2,237,499


$1,776,113


$1,607,496


$402,294


$1,412,337Deferred Fees





127,500








44,626


91,174


122,500














Dividends


6,873


6,418


3,186


10,951


4,573


85


7,191


6,976


5,557


5,029


1,277


4,404Total


$2,211,233


$2,200,310


$1,024,946


$3,511,515


$1,514,968


$122,628


$2,426,119


$2,244,524


$1,781,670


$1,612,525


$403,571


$1,416,741   (a)
    Mr. Vicq, who served since 1989, retired from the Board on
    May 3, 2007. As such, Mr. Vicq received the payout
    value of his 12,641.77 outstanding Deferred Share Units in cash
    on August 2, 2007 in accordance with the Plan. Pursuant to
    the Plan, the payout value of each of Mr. Vicqs
    Deferred Share Units was equal to $79.67, which represents the
    closing price of our Shares on the NYSE on August 1, 2007,
    the fourth trading day following the release of our quarterly
    results immediately following termination of Board service by
    Mr. Vicq.  (4)
    As of December 31, 2007, the total number of all Deferred
    Share Units held by each outside director is as follows:
    Mr. Blesi, 22,958; Mr. Estey, 22,129; Mr. Fetzer,
    10,642; Mr. Howe, 36,458; Ms. Laberge, 15,473;
    Mr. Martell, 852; Mr. McCaig, 24,486;
    Ms. Mogford, 23,304; Mr. Schoenhals, 18,498;
    Mr. Stromberg, 16,742; Mr. Vicq, 0; and
    Ms. Viyella de Paliza, 14,709.    February 12,

March 31,

May 11,

June 30,

August 10,

September 30,

November 12,

December 31,2007

2007

2007

2007

2007

2007

2007

2007Name


(Dividend)

(Deferred Fees)

(Dividend)

(Deferred Fees)

(Dividend)

(Deferred Fees)

(Dividend)

(Deferred Fees)Frederick J. Blesi


$1,143



$1,145



$2,291



$2,294

(22.85 units)



(17.51 units)



(26.56 units)



(22.18 units)

John W. Estey


$1,030

$26,250

$1,056

$26,250

$2,147

$37,500

$2,185

$37,500(20.59 units)

(492.40 units)

(16.15 units)

(336.67 units)

(24.89 units)

(354.75 units)

(21.13 units)

(260.49 units)Wade Fetzer III


$530



$531



$1,062



$1,063

(10.59 units)



(8.11 units)



(12.31 units)



(10.28 units)

Dallas J. Howe


$1,820



$1,856



$3,598



$3,677

(36.36 units)



(28.39 units)



(41.72 units)



(35.56 units)

Alice D. Laberge


$746

$9,188

$770

$9,188

$1,505

$13,125

$1,552

$13,125(14.92 units)

(175.27 units)

(11.78 units)

(120.79 units)

(17.45 units)

(132.21 units)

(15.00 units)

(88.46 units)Keith G. Martell








$18,174

$24

$36,000

$61

$37,000





(238.94 units)

(0.27 units)

(362.60 units)

(0.59 units)

(249.37 units)Jeffrey J. McCaig


$1,149

$26,250

$1,175

$26,250

$2,490

$35,000

$2,377

$35,000(22.96 units)

(492.40 units)

(17.97 units)

(336.67 units)

(28.87 units)

(352.52 units)

(22.98 units)

(235.89 units)Mary Mogford


$1,163



$1,187



$2,300



$2,350

(23.24 units)



(18.15 units)



(26.67 units)



(22.73 units)

Paul J. Schoenhals


$923



$942



$1,826



$1,866

(18.45 units)



(14.41 units)



(21.17 units)



(18.04 units)

E. Robert Stromberg, Q.C.


$836



$852



$1,652



$1,689

(16.70 units)



(13.04 units)



(19.16 units)



(16.33 units)

Jack G. Vicq


$632



$645









(12.64 units)



(9.87 units)









Elena Viyella de Paliza


$733



$733



$1,468



$1,470

(14.64 units)



(11.22 units)



(17.02 units)



(14.21 units)

   (5)
    As of December 31, 2007, the total number of outstanding
    options held by each outside director is as follows:
    Mr. Blesi, 15,500; Mr. Estey, 0; Mr. Fetzer,
    9,000; Mr. Howe, 79,200; Ms. Laberge, 0;
    Mr. Martell, 0; Mr. McCaig, 78,000; Ms. Mogford,
    18,000; Mr. Schoenhals, 0; Mr. Stromberg, 39,600;
    Mr. Vicq, 0; and Ms. Viyella de Paliza, 0.(6)
    Reports the cost of tax
    gross-ups
    for taxable benefits and life insurance premiums paid for the
    benefit of each director.(7)
    As CEO, any compensation Mr. Doyle receives is disclosed in
    the Summary Compensation Table for Named Executive Officers. See
    Executive Compensation  Summary Compensation
    Table.  MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
 Page  17




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##### Table of Contents



At
    Risk Investment and Year Over Year Changes
  three-for-one
  Value ofCommonTotal At Risk


Shares/DSUs





Equity at


SharesCommon


Value of


Needed to





Risk


Deemed toShares


Common


Meet 2008





Multiple


beCommon





and


Shares and


Ownership


Ownership


of 2008


BeneficiallyDirector




Shares


DSUs


DSUs


DSUs


Guideline


Guideline


Annual


OwnedSince


Year

(#)


(#)(1)


(#)


($)(2)


($)


Compliance(3)


Retainer


(#)(4)(5)Frederick J. Blesi


2001


2008


8,500



22,974



31,474



4,909,944



700,000



Yes



35.1



24,0002007


6,000



22,890



28,890



1,607,452















24,000Change


+2,500



+84



+2,584



















William J.
    Doyle(6)


1989


2008


295,613







295,613



46,115,698



n/a



n/a



n/a



2,868,0182007


234,756







234,756



13,072,125















3,497,491Change


+60,857



n/a



+60,857



















−629,473John W. Estey


2003


2008


7,000



22,144



29,144



4,546,464



750,000



Yes



30.3



7,0002007


6,000



20,622



26,622



1,481,192















6,000Change


+1,000



+1,522



+2,522



















+1,000Wade Fetzer III


2002


2008


30,000



10,649



40,649



6,341,244



675,000



Yes



47.0



39,0002007


27,000



10,608



37,608



2,092,541















36,000Change


+3,000



+41



+3,041



















+3,000Charles S. Hoffman





2008






n/a











675,000



Yes



n/a



2007


n/a



n/a



n/a



n/a







(to be fully met by



n/a



n/aChange


n/a



n/a



n/a



n/a







May 8, 2013
)






n/aDallas J. Howe


1991


2008


51,615



36,484



88,099



13,743,444



1,600,000



Yes



42.9



130,8152007


42,000



36,351



78,351



4,359,271















139,200Change


+9,615



+133



+9,748



















−8,385Alice D. Laberge


2003


2008


6,000



15,484



21,484



3,351,504



750,000



Yes



22.3



6,0002007


6,000



14,910



20,910



1,163,477















6,000Change






+574



+574



















Keith G. Martell


2007


2008






852



852



132,912



700,000



Yes



0.9



2007






















(to be fully met by







n/aChange






+852



+852











May 3, 2012
)






Jeffrey M. McCaig


2001


2008


6,000



24,504



30,504



4,758,624



700,000



Yes



34.0



84,0002007


6,000



22,998



28,998



1,613,412















84,000Change






+1,506



+1,506



















Mary Mogford


2001


2008


12,660



23,320



35,980



5,612,880



750,000



Yes



37.4



30,6602007


12,000



23,235



35,235



1,960,420















30,000Change


+660



+85



+745



















+660Paul J. Schoenhals


1992


2008


4,885



18,511



23,396



3,649,776



725,000



Yes



25.2



6,0002007


6,000



18,444



24,444



1,360,010















6,000Change


−1,115



+54



−1,048



















E. Robert Stromberg


1991


2008


33,790



16,754



50,544



7,884,864



675,000



Yes



58.4



73,3902007


34,665



16,692



51,357



2,856,990















74,265Change


−875



+62



−813



















−875Elena Viyella de Paliza


2003


2008


9,000



14,720



23,720



3,700,320



675,000



Yes



27.4



9,0002007


7,500



14,664



22,164



1,233,293















7,500Change


+1,500



+56



+1,556



















+1,500   (1)
    Deferred Share Units do not carry any voting rights. The number
    of Deferred Share Units held by each director has been rounded
    down to the nearest whole number.(2)
    Based on the closing price per Share on the NYSE of $55.63 on
    February 20, 2007 and $156.00 on February 20, 2008.(3)
    By the time a director has served on the Board for 5 years,
    he or she must own Shares and/or Deferred Share Units with a
    value at least five times the annual retainer paid to directors.
    One-half of the ownership threshold is required to be achieved
    within
    21/2 years.(4)
    For 2008, the number of Shares indicated above as deemed to be
    beneficially owned by the nominated directors includes Shares
    purchasable by such directors within 60 days of
    February 20, 2008 through the exercise of options granted
    by the Corporation, as follows: Frederick J. Blesi 15,500
    Shares; William J. Doyle 2,572,536 Shares; Wade Fetzer III 9,000
    Shares; Dallas J. Howe 79,200 Shares; Jeffrey J. McCaig 78,000
    Shares; Mary Mogford 18,000 Shares; and E. Robert Stromberg
    39,600 Shares. No stock options have been granted to the
    Corporations non-employee directors since November 2002.    (5)
    No Shares beneficially owned by any of the directors are pledged
    as security.(6)
    Includes 60,000 shares held in the William J. Doyle 2007
    Family Descendents Trust and 19,898 shares held in the
    William & Kathy Doyle Foundation.  MANAGEMENT PROXY
    CIRCULAR ï Board
    of Directors
 Page  18




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##### 



Appointment of
    Auditors and
    Report of Audit Committee  
  PageAppointment of Auditors


19Report of Audit Committee


21








Appointment
    of Auditors
















Auditors
    Fees








|                   |  |                         |           |  |      |   |           | 
|------------------ |  | ----------------------- | --------- |  | ---- | - | --------- | 
|                   |  | Year ended December 31, |          
|                   |  | 2007                    |           |  | 2006 |  
|                  
|Audit Fees         |  | $                       | 2,263,000 |  |      | $ | 2,361,000 | 
|Audit Related Fees |  |                         | 314,000   |  |      |   | 255,000   | 
|Tax Fees           |  |                         | 33,000    |  |      |   | 57,000    | 
|All Other Fees     |  |                         | 0         |  |      |   | 0         | 





Audit
    Fees




Form 10-Q




Audit-Related
    Fees








Tax
    Fees








MANAGEMENT PROXY
    CIRCULAR ï Appointment
    of Auditors and Report of Audit Committee


Page  19




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##### Table of Contents



All
    Other Fees
    Pre-Approval
    Policy for External Auditor Services
      (1)
    Audit and audit-related services  these are
    identified in the annual Audit Service Plan presented by the
    external auditor and require annual approval. The Audit
    Committee monitors the audit services engagement at least
    quarterly.(2)
    Pre-approved list of non-audit services  non-audit
    services which are reasonably likely to occur have been
    identified and receive general pre-approval of the Audit
    Committee, and as such do not require specific pre-approvals.
    The term of any general pre-approval is 12 months from
    approval unless otherwise specified. The Audit Committee
    annually reviews and pre-approves the services on this list.(3)
    Other proposed services  all proposed services not
    categorized above are brought forward on a
    case-by-case
    basis and specifically pre-approved by the Chair of the Audit
    Committee, to whom pre-approval authority has been delegated.  All fees paid to the independent auditors for 2007 were
    approved in accordance with the pre-approval policy.
  MANAGEMENT PROXY
    CIRCULAR ï Appointment
    of Auditors and Report of Audit Committee
 Page  20




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##### Table of Contents



Report
    of the Audit Committee  52-110 52-110),
  
  52-110.
                  MANAGEMENT PROXY
    CIRCULAR ï Appointment
    of Auditors and Report of Audit Committee
 Page  21




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##### Table of Contents



Sarbanes-Oxley Act of
    2002
  Form 10-K
    
    the receipt, retention and treatment of complaints received by
    the Corporation regarding accounting, internal accounting
    controls or auditing matters; and
    the confidential, anonymous submission by employees of the
    Corporation of concerns regarding questionable accounting or
    auditing matters.    MANAGEMENT PROXY
    CIRCULAR ï Appointment
    of Auditors and Report of Audit Committee
 Page  22




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##### Table of Contents



Adoption of 2008
    Performance Option Plan               th th
      MANAGEMENT PROXY
    CIRCULAR ï Adoption
    of 2008 Performance Option Plan
 Page  23




---



##### Table of Contents



(a)
    if the employment of an optionee as an officer or employee of
    the Corporation or a subsidiary terminates by reason of his or
    her death, or if an optionee who is a retiree pursuant to
    paragraph (b) below dies during the
    36-month
    period following retirement, the legal personal representatives
    of the optionee will be entitled to exercise any unexercised
    vested options, including such stock options that may vest after
    the date of death, during the period ending at the end of the
    twelfth calendar month following the calendar month in which the
    optionee dies, failing which exercise the stock options will
    terminate;(b)
    subject to the terms of paragraph (a) above, if the
    employment of an optionee as an officer or employee of the
    Corporation or a subsidiary terminates by reason of retirement
    in accordance with the then prevailing retirement policy of the
    Corporation or subsidiary, the optionee will be entitled to
    exercise any unexercised vested stock options, including such
    stock options that may vest after the date of retirement, during
    the period ending at the end of the
    36th month
    following the calendar month in which the optionee retires,
    failing which exercise the stock options will terminate;(c)
    if the employment of an optionee as an officer or employee of
    the Corporation or a subsidiary terminates for any reason other
    than as provided in paragraphs (a) or (b) above, the
    optionee will be entitled to exercise any unexercised vested
    stock options, to the extent vested and exercisable at the date
    of such event, during the period ending at the end of the
    calendar month immediately following the calendar month in which
    the event occurs, failing which exercise the stock options will
    terminate; and(d)
    each stock option is personal to the optionee and is not
    assignable, except (i) as provided in paragraph
    (a) above, and (ii) at the election of the Board, a
    stock option may be assignable to the spouse, children and
    grandchildren of the original optionee and to a trust,
    partnership or limited liability company, the entire beneficial
    interest of which is held by one or more of the foregoing.          MANAGEMENT PROXY
    CIRCULAR ï Adoption
    of 2008 Performance Option Plan
 Page  24




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##### Table of Contents



UNLESS A PROXY SPECIFIES THAT THE SHARES IT REPRESENTS
    SHOULD BE VOTED AGAINST THE RESOLUTION TO APPROVE THE 2008
    PERFORMANCE OPTION PLAN, THE PROXY-HOLDERS NAMED IN THE
    ACCOMPANYING FORM OF PROXY INTEND TO VOTE FOR THE
    RESOLUTION.
  Securities
    Authorized for Issuance Under Equity Compensation
    Plans
        MANAGEMENT PROXY
    CIRCULAR ï Adoption
    of 2008 Performance Option Plan
 Page  25




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##### Table of Contents



Equity
    Compensation Plan Information
 (c) Number of Shares(a) Number of Shares

(b) Weighted-

remaining available forto be issued upon

average exercise

future issuance underexercise of

price of outstanding

equity compensationoutstanding options,

options, warrants

plans (excluding SharesPlan Category

warrants and rights

and rights

reflected in column (a))December 31, 2007Equity compensation plans approved by shareholders

14,006,984
    (1)

$28.47

0Equity compensation plans not approved by shareholders

n/a

n/a

n/aFebruary 20, 2008Equity compensation plans approved by shareholders

13,945,992(2)

$28.54

0Equity compensation plans not approved by shareholders

n/a

n/a

n/a
   (1)
    Of this amount, 3,507,000 options were outstanding pursuant to
    the 2005 Performance Option Plan, 2,667,300 options were
    outstanding pursuant to the 2006 Performance Option Plan,
    1,722,300 options were outstanding pursuant to the 2007
    Performance Option Plan, 5,809,884 options were outstanding
    pursuant to the Stock Option Plan  Officers and
    Employees and 300,500 options were outstanding pursuant to the
    Stock Option Plan  Directors.(2)
    Of this amount, 3,507,000 options were outstanding pursuant to
    the 2005 Performance Option Plan, 2,667,300 options were
    outstanding pursuant to the 2006 Performance Option Plan,
    1,722,300 options were outstanding pursuant to the 2007
    Performance Option Plan, 5,748,892 options were outstanding
    pursuant to the Stock Option Plan  Officers and
    Employees and 300,500 options were outstanding pursuant to the
    Stock Option Plan  Directors.  MANAGEMENT PROXY
    CIRCULAR ï Adoption
    of 2008 Performance Option Plan
 Page  26




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##### Table of Contents



Corporate Governance  PageStatement of Corporate Governance Practices


27Corporate Governance and Nominating Committee
    Report


28






Statement
    of Corporate Governance Practices












58-101 58-201




Sarbanes-Oxley Act








58-101, 58-101,








MANAGEMENT PROXY
    CIRCULAR ï Corporate
    Governance


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##### Table of Contents



Corporate
    Governance and Nominating Committee Report  General
  58-101,
  
    Disclosure
    Regarding Governance Procedures
    2007
    Governance Activities
        MANAGEMENT PROXY
    CIRCULAR ï Corporate
    Governance
 Page  28




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##### Table of Contents



Disclosure
    Regarding Nominating Processes
  Canada Business Corporations Act Act Act st
    Act
  
    fertilizer industry
    global agriculture
    global and international commerce
    transportation industry
    e-commerce
    and technology
    finance
    investment banking
    legal
    accounting
    mining industry
    chemical industry
    general business management
    public policy          MANAGEMENT PROXY
    CIRCULAR ï Corporate
    Governance
 Page  29




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##### Table of Contents



Disclosure
    Regarding Director Orientation and Continuing
    Education
    (a)
    provide each new director with a baseline of knowledge about the
    Corporation that will serve as a basis for informed
    decision-making;(b)
    tailor the program for each new director to take into account
    his or her unique mix of skills, experience, education,
    knowledge and needs; and(c)
    deliver information over a period of time to minimize the
    likelihood of overload and maximize the lasting educational
    impact.  one-on-one
    (a)
    maintains a directors intranet site to facilitate the
    exchange of views and published information;(b)
    maintains a membership for each director in an organization
    dedicated to corporate governance and ongoing director education;(c)
    each year encourages and funds the attendance of each director
    at one seminar or conference of interest and relevance and funds
    the attendance of each committee Chair at one additional seminar
    or conference. In all cases, approval for attendance is
    obtained, in advance, from the Board Chair;(d)
    encourages presentations by outside experts to the Board or
    committees on matters of particular import or emerging
    significance; and(e)
    at least annually, schedules a site visit in conjunction with a
    Board meeting.    Disclosure
    Regarding the Ability of Shareholders to Communicate With the
    Board of Directors
    st
  e-mail
        MANAGEMENT PROXY
    CIRCULAR ï Corporate
    Governance
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##### Table of Contents



Compensation  PageReport of the Compensation Committee and
    Compensation Committee
    Responsibilities and Procedures


31Compensation Discussion and Analysis


33Executive Compensation


48Performance Graphs


57






Report
    of the Compensation Committee and
    Compensation Committee Responsibilities and Procedures




Composition
    of the Compensation Committee




58-101,




Compensation
    Committee Responsibilities and Procedures












|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Review and approve on an annual basis the corporate goals and
    objectives relevant to the compensation of our CEO. The
    Committee evaluates at least once a year the CEOs
    performance in light of established goals and objectives and,
    based on such evaluation, together with all other independent
    members of the Board, determines and approves the CEOs
    annual compensation, including, as appropriate, salary, bonus,
    incentive and equity compensation;
|  
|2. | Review and approve on an annual basis the evaluation process and
    compensation structure for our executive officers, including an
    annual Executive Salary Administration Program under which the
    parameters for salary adjustments (at the discretion of the CEO)
    for officers are established;                                                                                                                                                                            
|  
|3. | Review and make recommendations to the Board with respect to the
    adoption, amendment and termination of our management
    incentive-compensation and equity-compensation plans, oversee
    their administration and discharge any duties imposed on the
    Committee by any of those plans;                                                                                                                                                                                        



MANAGEMENT PROXY
    CIRCULAR ï Compensation


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##### Table of Contents



4.
    Assess the competitiveness and appropriateness of our policies
    relating to the compensation of the executive officers;5.
    Review managements long-range planning for executive
    development and succession, and develop a CEO succession plan;6.
    Approve the Committees annual report on executive
    compensation for inclusion in our proxy statement, in accordance
    with applicable rules and regulations, and review and approve,
    prior to publication, the compensation sections of the proxy
    statement;7.
    Review the general design and
    make-up of
    our broadly applicable benefit programs as to their general
    adequacy, competitiveness, internal equity and cost
    effectiveness;8.
    Annually review the performance of our pension plans;9.
    Review periodically executive officer transactions in our
    securities and approve such transactions as appropriate for
    their exemption from short-swing profit liability under
    Section 16(b) of the Exchange Act;10.
    Annually review and recommend to the Board a compensation
    package for our directors. In considering the director
    compensation package, the Committee may take into consideration
    the relative responsibilities of directors in serving on the
    Board and its various Committees. The Committee may request that
    management report to the Committee periodically on the status of
    the compensation package of the Board in relation to other
    similarly situated companies. Directors who are our employees
    shall not be compensated for their services as directors. The
    Committee shall review annually any stock ownership guidelines
    applicable to directors and shall recommend to the Board
    revisions to any such guidelines as appropriate; and11.
    Perform other review functions relating to management
    compensation and human resources policies as the Committee deems
    appropriate.    Compensation
    Committee Interlocks and Insider Participation
    Report
    of the Compensation Committee
    Form 10-K
    
  MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  32




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##### Table of Contents



Compensation
    Discussion and Analysis  Executive
    Summary
                Compensation
    Structure and Policies
    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  33




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##### Table of Contents



Compensation
    Principles
  
    To emphasize performance-based compensation, we maintain total
    cash compensation levels (salary and annual short-term incentive
    targets) at the median (50th percentile) of the relevant group
    of comparable companies. We provide the opportunity to achieve
    compensation above the median through medium-term and long-term
    incentive plans (performance units and stock options) if our
    performance exceeds the median performance of comparable
    companies.
    We determine competitive and median levels of compensation with
    the assistance of independent compensation consultants that
    prepare, at least annually, analyses of external competitive
    compensation. Such analyses currently consist of (1) a
    group of publicly traded U.S. companies with similar industry
    characteristics and market capitalization, which we refer to
    herein as the Comparator Group, and
    (2) additional
    U.S.-based
    company executive compensation survey information, which we
    refer to herein as the Additional Surveys. We refer
    to the Comparator Group and the Additional Surveys collectively
    as the Comparative Compensation Information. See
     Compensation Consultants and Comparator
    Groups.
    For the purpose of total cash compensation comparisons, we
    calculate the median of the Comparative Compensation Information
    by applying a regression analysis based upon revenues to the
    salaries and annual short-term incentive targets for each
    position studied.
    We provide the opportunity to earn total compensation above the
    median through medium-term and long-term incentive plans. We
    design these plans with measures (total shareholder return and
    internal performance measures historically linked with total
    shareholder return) that require company performance above the
    median, relative to other basic materials companies, to deliver
    total compensation above the median. We use the total
    shareholder return of the DJUSBMI as a benchmark for determining
    the relative performance of our company.
    For purposes of total compensation, including salary, annual
    short-term incentives, medium-term incentives and long-term
    incentives, we calculate the median and upper quartile by using
    the range between competitive levels based upon a comparative
    revenues regression analysis and a comparative market
    capitalization regression analysis.
    We establish the overall value of retirement and welfare
    benefits at approximately the median of comparable companies.  Elements
    of Executive Compensation
        MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  34




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##### Table of Contents



Our
    CEOs Compensation
  Our CEOs Compensation

CEO Compensation of Comparator Group(regression analysis based on sales)(PIE CHART)

(PIE CHART)CEO Compensation of Comparator Group(regression analysis based on market capitalization)(PIE CHART)Our NEOs
    CompensationOur NEOs Compensation

Executive Officer Compensation of Comparator Group(regression analysis based on
    sales)(1)(PIE CHART)

(PIE CHART)   (1)
    Information necessary to complete a regression analysis based on
    market capitalization is unavailable for executive officers of
    the Comparator Group, and therefore, that chart has been
    omitted. In addition, due to insufficient data regarding the
    compensation of Chief Operating Officers of the Comparator
    Group, the Executive Officer Compensation of Comparator Group
    chart incorporates Additional Survey data regarding the
    compensation of Chief Operating Officers.    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  35




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##### Table of Contents



Current





PerformanceCompensation

Form

Eligibility

Period

DeterminationBase salary

Cash

All salaried
    employees

Annual

 For executive officers, we set base salary targets
    at the median of the Comparative Compensation Information,
    adjusted to reflect individual performance and internal equity.Short-term
    incentives

Cash

All executives
    and most salaried
    staff and union
    and non-union
    hourly employees

1 year

 We base awards on achievement of predetermined goals for corporate performance or a combination of corporate and operating group performance. We establish targets at the median of the Comparative Compensation Information. Individual awards may be adjusted (± 20%) to recognize individual performance, provided the total adjusted awards approximate
the total awards at mid-point. We extended award eligibility to Canadian and U.S. hourly employees effective January 1, 2008.Medium-term
    incentives

Performance
    Share Units

All executives
    and senior
    management
    (approximately
    67 individuals)

3 years

 On January 1, 2006, we issued units at a price equal to the average closing price of our common stock for the last 30 trading days of 2005. Each award vests and is paid out at the end of the three-year performance period (December 31, 2008). One-half of the units vest based on our total shareholder return, or TSR, and one-half of the units vest based on our TSR relative
to the DJUSBMIs TSR. The value at payout equals the number of vested units multiplied by the average closing price of our common stock for the last 30 trading days of 2008, subject to a maximum value per unit of three times the average closing price of our common stock for the last 30 trading days of 2005.Long-term
    incentives

Performance
    Options

All executives,
    senior management
    and other selected
    managers
    (approximately
    241 individuals)

3 year vesting
    10 year option
    term

 Options granted under our Performance Option Plans vest based on our cash flow return on investment and weighted average cost of capital during the three-year performance period. The value of vested options is based on appreciation of our common stock during the ten-year option period.    MANAGEMENT PROXY
    CIRCULAR ï Compensation
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##### Table of Contents



Post-Retirementand Termination





MeasurementCompensation

Form

Eligibility

Period

DeterminationPension BenefitsCanadian Pension
    Plan

Cash

All Canadian
    salaried staff and certain union and non-union hourly employees

Pensionable
    service period

 Benefits are based on the participants
    required contributions (up to 5.5% of earnings) and equivalent
    matching contributions by our company.Canadian
    Supplemental
    Retirement
    Income Plan

Cash

Selected
    senior executives
    (23 individuals)

Pensionable
    service period to
    a maximum of
    35 years

 Benefits are based on 2% of the average of the participants three highest years earnings multiplied by years of pensionable service, minus the benefit payable under the Canadian Pension Plan. Certain senior executives benefits are calculated differently.  See  Pension Benefits below. No benefits are payable if the participant is
not at least age 55 at retirement; benefits are reduced if the participant is not at least age 62 at retirement.U.S. Pension Plan

Cash

All U.S. salaried
    and non-union
    hourly employees

Pensionable
    service period to
    a maximum of
    35 years

 Benefits are based on 1.5% of the participants final average compensation, which is calculated using the highest paid 60 consecutive months of service out of the last 120 months, multiplied by years of service accrued after December 31, 1998. Participants with service accrued prior to January 1, 1999 under previous plans will have a portion of their benefit calculated pursuant
to such plans.  See  Pension Benefits below. Benefits are reduced if the participant is not at least age 65, or age 62 with 20 years of service, at termination.U.S. Supplemental
    Plan

Cash

Eligible U.S.
    salaried and
    non-union hourly
    employees

Pensionable
    service period to
    a maximum of
    35 years

 Benefits are intended to provide participants with the same aggregate benefits they would have received under the U.S. Pension Plan had there been no legal limitations on those benefits. No benefits are payable if the participant is not at least age 55 at termination.  MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  37




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##### Table of Contents



Post-Retirementand Termination





MeasurementCompensation

Form

Eligibility

Period

DeterminationSeverance
    BenefitsChange in control
    severance benefits

Cash,
    Insurance and
    Other Benefits

Selected
    senior executives
    (3 individuals)

Upon termination
    of employment

 Benefits are awarded in connection with termination within two years of a change of control. Termination includes 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.General severance
    benefits

Cash

All salaried
    employees

Upon termination
    of employment

 Benefits are awarded in connection with termination without cause. Benefits are generally based on two weeks of salary for each complete year of service, subject to a minimum of 4 weeks and a maximum of 52 weeks.     Salary
    Incentive
    Plan Compensation
      MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  38




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##### Table of Contents



non-U.S.
  Short-Term
    Incentive Plan
              MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  39




---



##### Table of Contents



Medium-Term
    Incentive Plan
              Long-Term
    Incentives (Stock Options)
     Performance
    Option Plans
    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  40




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##### Table of Contents



10-year
       Stock
    Option Plan  Officers and Employees
      Post-Retirement
    and Termination Compensation
  Pension
    Benefits
    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  41




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##### Table of Contents



MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  42




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##### Table of Contents



Severance
    Benefits
    Change
    in Control Agreements
      1.
    a lump-sum payment of three times the executives current
    base salary and average bonus for the last three years;2.
    a lump-sum payment of the pro-rata target bonus for the year in
    which the termination occurs;3.
    immediate vesting and cash out of all outstanding Medium-Term
    Incentive Plan awards;4.
    a credit of three additional years of service under the Canadian
    Supplemental Plan;5.
    a 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; and6.
    financial or outplacement counseling to a maximum of Cdn$10,000.  Income Tax Act
    Form 10-K
  Compensation
    Consultants and Comparator Groups
    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  43




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##### Table of Contents



U.S.-based
    
  Executive
    Share Ownership Guidelines
    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  44




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##### Table of Contents



Share OwnershipTitle

GuidelineChief Executive Officer

5 times base salaryChief Financial Officer, Chief Operating Officer, Senior Vice
    Presidents and Division Presidents

3 times base salaryDesignated Senior Vice Presidents and Vice Presidents

1 times base salary     Named Executive


Number of Shares



Value of Shares



Value Required to



Value Held asOfficer


Held



Held



Meet Guidelines



Multiple of SalaryWilliam J. Doyle



295,613(1)




$46,115,628




$5,460,000




42.2xWayne R. Brownlee



52,497




$  8,189,532




$1,483,200




16.6xJames F. Dietz



52,829




$  8,241,324




$1,458,600




17.0xGarth W. Moore



27,869




$  4,347,564




$1,206,300




10.8xThomas J. Regan, Jr.



36,203




$  5,647,668




$1,188,900




14.3x   (1)
    Includes 60,000 shares held in the William J. Doyle 2007
    Family Descendents Trust and 19,898 shares held in the
    William & Kathy Doyle Foundation.  Chief
    Executive Officer Compensation
        1.
    Improve all measurable safety indices with the emphasis on
    reducing serious injuries so we can achieve our goal of
    providing the safest work environment for our employees.  MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  45




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##### Table of Contents



2.
    Meet or exceed the budget approved for 2007, including
    earnings per share (EPS) and cash flow per share
    (CFPS) targets.    3.
    Continue to drive the Potash First strategy by
    staying on top of all global opportunities while at the same
    time being open to strategic alternatives for phosphate and
    nitrogen should an attractive alternative present itself.    4.
    Outperform our peer group of basic materials companies.    5.
    Continue to implement the Board approved strategic plan to
    decommoditize our company with the focus on creating a better
    return on our phosphate business.  2 5
    6.
    Grow the revenue base and bottom line for our company through
    strategic use of capital.    (1)
    Potash capacity expansion and compaction projects completed at
    Allan (Cdn$210 million) and continued at Lanigan
    (Cdn$410 million);(2)
    Debottlenecking and expansion projects at Patience Lake
    (Cdn$110 million), Cory (Cdn$890 million),
    New Brunswick (Cdn$1.7 billion) and Rocanville
    (Cdn$1.8 billion) evaluated and commenced in 2007;(3)
    First STF plant completed in 2007 and executed a deal to
    construct an additional three STF plants;(4)
    Nitric acid expansion at Geismar commenced in 2007; and(5)
    Second warehouse completed in Brazil for total investment of
    Cdn$9.7 million.  7.
    Show measurable success in leadership development and
    succession planning for our employees.    8.
    Lead managements effort to make sure it does its part
    in the pursuit of the best possible corporate governance for our
    company.    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  46




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##### Table of Contents



The Globe & Mail, th
  9.
    Improve product quality through strict adherence to size
    guide number (SGN) and uniformity index (UI) measurements so we
    can provide the highest quality products to our customers.    10.
    Provide leadership for our company with the investment
    community, within our industry and in the communities in which
    our people work and reside.  IR Magazine
  Vice-President,
    11.
    Find new ways to make it easier for our customers to do
    business with us.    
    Upgraded and expanded our North American and international
    transportation and distribution system to: (i) improve
    loading, unloading and delivery times; (ii) increase
    storage capacity and rail fleet; (iii) offer additional
    transportation mode alternatives; and (iv) bring our
    product closer to our customers;
    Collaborated with customers in developing market placement and
    terminal strategies to optimize their supply chain and reduce
    rail cycle times and seasonality in their business;
    Partnered with customers in our operational Best Practices
    workshops to discuss and share information to ensure product
    quality, reliability and service excellence;
    Recertified all of our feed operations as American Feed Industry
    Association, or AFIA, Safe Feed/Safe Food facilities,
    demonstrating our pledge to food safety and enhancing consumer
    confidence in the products we provide; and
    Expanded our electronic commerce initiatives and enhanced our
    report customization capabilities to make it simpler and quicker
    for our customers to do business with us.    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  47




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##### Table of Contents



Executive
    Compensation  Summary
    Compensation
    Table(1)
    Change inPension andNon-Equity



NonqualifiedIncentive



DeferredStock



Option



Plan



Compensation


All OtherName and






Salary



Bonus


Awards(2)



Awards(3)



Compensation(4)



Earnings


Compensation(5)



TotalPrincipal Position


Year



($)



($)


($)



($)



($)



($)


($)



($)(a)


(b)



(c)



(d)


(e)



(f)



(g)



(h)


(i)



(j)William J. DoylePresident and Chief
    Executive Officer



2007
    2006




1,040,000
    1,000,000







3,830,786
    1,120,382




7,652,960
    5,797,500




2,190,000
    750,000




2,340,578(6)94,917(6)




134,297
    180,958




17,188,621
    8,943,757Wayne R. BrownleeExecutive Vice President Treasurer and Chief Financial
    Officer



2007
    2006




480,000
    460,000







1,132,709
    331,281




2,018,887
    1,913,173




578,000
    300,000




406,802(7)276,707(7)




44,114
    58,556




4,660,512
    3,339,717James F. DietzExecutive Vice President and Chief Operating Officer



2007
    2006




463,000
    445,000







1,095,729
    320,466




2,049,900
    1,932,500




621,000
    270,000




62,363(8)179,240(8)




40,133
    41,397




4,332,125
    3,188,603Garth W. MoorePresident,
    PCS Potash



2007
    2006




382,900
    366,400







802,169
    234,609




1,049,821
    918,323




400,000
    171,000




395,746(9)(9)




23,997
    34,704




3,054,633
    1,725,036Thomas J. Regan, Jr.President,
    PCS Phosphate and PCS Nitrogen



2007
    2006




374,396
    355,045







763,768
    223,378




1,065,948
    927,600




400,000
    177,000




20,809(10)388,434(10)




24,686
    23,490




2,649,607
    2,094,947   (1)
    Those amounts that 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 calculated in accordance with revised Statement
    of Financial Accounting Standards No. 123R,
    Share-Based Payment, or FAS 123R, under
    generally accepted accounting principles in the United States,
    or US GAAP, for performance share units granted pursuant to our
    Medium-Term Incentive Plan in effect for the three-year
    performance period January 1, 2006 to December 31,
    2008. See Compensation Discussion and Analysis 
    Medium-Term Incentive Plan. For the FAS 123R
    calculations, the value of the performance share units was
    estimated quarterly using a Monte Carlo valuation model with the
    following assumptions:  Quarter Ended


Quarter Ended


Quarter Ended


Quarter Ended


Quarter Ended


Quarter Ended


Quarter Ended


Quarter EndedMarch 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2006


2006


2006


2006


2007


2007


2007


2007Risk-Free Interest Rate



4.816
%



5.122
%



4.614
%



4.808
%



4.574
%



4.858
%



3.984
%



3.177
%Dividend Yield



1.24
%



1.18
%



1.15
%



1.12
%



1.09
%



1.02
%



0.97
%



0.90
%Correlation Between our
    Common Share Price and
    DJUSBMI



0.52




0.56




0.58




0.48




0.49




0.50




0.52




0.68Volatility of our Common
    Share Price



27.87
%



30.85
%



29.83
%



31.53
%



32.58
%



33.36
%



35.16
%



43.61
%Volatility of DJUSBMI



16.68
%



17.79
%



17.73
%



17.75
%



17.90
%



17.22
%



18.85
%



22.60
%   (3)
    Reports amounts calculated in accordance with FAS 123R for
    options granted pursuant to the 2007 Performance Option Plan and
    the 2006 Performance Option Plan, respectively. The amounts
    reported represent the full grant date fair value of the awards
    in accordance with FAS 123R, because each of the Named
    Executive Officers are eligible for retirement. See
    Compensation Discussion and Analysis  Long-Term
    Incentives. For a discussion of the assumptions made in
    the valuation of the awards, see Notes 27 and 33 to our
    consolidated financial statements for the fiscal year ended
    December 31, 2007 and Notes 26 and 32 to our
    consolidated financial statements for the fiscal year ended
    December 31, 2006.(4)
    Reports amounts awarded pursuant to our Short-Term Incentive
    Plan for 2007 and 2006 performance, which amounts were paid in
    2008 and 2007, respectively. See Compensation Discussion
    and Analysis  Short-Term Incentive Plan.  MANAGEMENT PROXY
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##### Table of Contents



(5)
    The following table sets forth the amounts attributable to each
    of the compensation items included in All Other
    Compensation for each Named Executive Officer.  William J.


Wayne R.


James F.


Garth W.


Thomas J.Doyle


Brownlee


Dietz


Moore


Regan, Jr.Company Contributions to Canadian



2007



$
8,590



$
8,568








$
8,614




Pension Plan



2006




8,195




8,218









8,233




Company Contributions to Savings



2007




31,200




14,400



$
20,039
(a)



11,487



$
17,489
(b)

Plan or 401(k) Plan



2006




60,000




27,600




19,807




21,984




17,251Life Insurance Premiums Paid for the
    Benefit of NEO



2007
    2006




10,122
    10,601




3,690
    4,240




7,354
    7,459




3,744
    4,006




7,197
    6,239Medical Insurance Premiums Paid on
    Behalf of NEO



2007
    2006




17,014
    14,040





    6,743





    





    





    Tax
    Gross-ups
    for Taxable Benefits



2007
    2006




11,663
    19,614




6,192
    





    2,365




152
    481





    Perquisites(c)



2007
    2006




55,708
    68,508




11,264
    11,755




12,740
    11,766





    





    Total



2007



$
134,297



$
44,114



$
40,133



$
23,997



$
24,6862006




180,958




58,556




41,397




34,704




23,490   (a)
    For 2007, includes $13,289 in contributions to the 401(k) Plan
    on behalf of Mr. Dietz and $6,750 that exceeds the 401(k) Plan
    statutory limit and is therefore immediately taxable and paid to
    Mr. Dietz in cash. For 2006, includes $13,057 in contributions
    to the 401(k) Plan on behalf of Mr. Dietz and $6,750 that
    exceeds the 401(k) Plan statutory limit and is therefore
    immediately taxable and paid to Mr. Dietz in cash.(b)
    For 2007, includes $13,438 in contributions to the 401(k) Plan
    on behalf of Mr. Regan and $4,051 that exceeds the 401(k)
    Plan statutory limit and is therefore immediately taxable and
    paid to Mr. Regan in cash. For 2006, includes $13,200 in
    contributions to the 401(k) Plan on behalf of Mr. Regan and
    $4,051 that exceeds the 401(k) Plan statutory limit and is
    therefore immediately taxable and paid to Mr. Regan in cash.(c)
    Perquisites include, for Mr. Doyle, country club
    memberships, financial and tax planning services, spousal travel
    benefits (while accompanying the executive on corporation
    business) and parking; for Mr. Brownlee, country club
    memberships, spousal travel benefits (while accompanying the
    executive on corporation business) and parking; and for
    Mr. Dietz, country club memberships and reimbursement for
    spousal travel benefits (while accompanying the executive on
    corporation business). The aggregate incremental cost of the
    financial and tax planning services paid for the benefit of
    Mr. Doyle was $29,506 in 2007 and $38,412 in 2006.  (6)
    Reports the aggregate annual change of $2,340,578 and $94,917 in
    the actuarial present value of Mr. Doyles accumulated
    benefit under the Canadian Supplemental Plan during 2007 and
    2006, respectively.(7)
    Reports the aggregate annual change of $406,802 and $276,707 in
    the actuarial present value of Mr. Brownlees
    accumulated benefit under the Canadian Supplemental Plan during
    2007 and 2006, respectively.(8)
    Reports the aggregate annual change of a decline of $27,946 in
    the actuarial present value of Mr. Dietzs accumulated
    benefit under the U.S. Pension Plan during 2007 and an increase
    of $90,309 in the actuarial present value of
    Mr. Dietzs accumulated benefit under the U.S.
    Supplemental Plan during 2007, and reports the aggregate annual
    change of $98,885 in the actuarial present value of
    Mr. Dietzs accumulated benefit under the U.S. Pension
    Plan during 2006 and $80,354 in the actuarial present value of
    Mr. Dietzs accumulated benefit under the U.S.
    Supplemental Plan during 2006.(9)
    Reports the aggregate annual change of $395,746 in the actuarial
    present value of Mr. Moores accumulated benefit under
    the Canadian Supplemental Plan during 2007. The actuarial
    present value of Mr. Moores accumulated benefit under
    the Canadian Supplemental Plan declined by $42,931 in 2006.  (10)
    Reports the aggregate annual change of a decline of $13,270 in
    the actuarial present value of Mr. Regans accumulated
    benefit under the U.S. Pension Plan during 2007 and an increase
    of $34,079 in the actuarial present value of
    Mr. Regans accumulated benefit under the U.S.
    Supplemental Plan during 2007. Reports the aggregate annual
    change of $203,512 in the actuarial present value of
    Mr. Regans accumulated benefit under the U.S. Pension
    Plan during 2006 and $184,922 in the actuarial present value of
    Mr. Regans accumulated benefit under the U.S.
    Supplemental Plan during 2006.  Salary
    and Bonus
    Stock
    Awards
    MANAGEMENT PROXY
    CIRCULAR ï Compensation
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##### Table of Contents



TSR Vesting ScheduleTSR


Vesting Percentage0% or less


0%10%


50%20%


75%30%


100%40%


125%50% or more


150%   Relative TSR Vesting ScheduleTSR minus DJUSBMI TSR


Vesting PercentageLess than 0%


0%0%


50%5%


100%10% or more


150%   30-day
  Option
    Awards
    Non-Equity
    Incentive Plan Compensation
    Award Percentage





Maximum AwardWhen ACFR is


Award Percentage


Percentage (ACFROfficers


Less than 1


When ACFR is Equal to or Greater than 1


Greater than 1.5)Tier I: Corporate President, CEO


100% multiplied by ACFR


(200% multiplied by ACFR) minus 100%


200%Tier II: Executive Level 7 (Executive VP and COO,
    Executive VP and CFO)


70% multiplied by ACFR


(140% multiplied by ACFR) minus 70%


140%Tier III: Executive Level 6 (Senior VP Admin.,
    Subsidiary Presidents)


55% multiplied by ACFR


(100% multiplied by ACFR) minus 55%


110%   Form 10-K
  Total
    Compensation
    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  50




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##### Table of Contents



Employment
    Agreements
    Grants
    of Plan-Based Awards
    Estimated Possible Payouts
    Under


Estimated Future Payouts
    UnderNon-Equity Incentive Plan
    Awards(1)


Equity Incentive Plan Awards





GrantExercise


Date Fairor Base


Value ofPrice of


Stock andOption


OptionGrant



Threshold



Target


Maximum


Threshold



Target


Maximum


Awards(2)


AwardsName


Date



($)



($)


($)


(#)



(#)


(#)


($/Sh)


($)(a)


(b)



(c)



(d)


(e)


(f)



(g)


(h)


(k)


(l)William J. DoyleShort-Term Incentive Plan
    Performance Option Plan



5/3/2007




520,000



1,040,000


2,080,000



0



336,000


336,000


$62.73



7,652,960Wayne R. BrownleeShort-Term Incentive Plan
    Performance Option Plan



5/3/2007




168,000



336,000


672,000



0



90,000


90,000


Cdn$69.48



2,018,887James F. DietzShort-Term Incentive Plan
    Performance Option Plan



5/3/2007




162,050



324,100


648,200



0



90,000


90,000


$62.73



2,049,900Garth W. MooreShort-Term Incentive Plan
    Performance Option Plan



5/3/2007




105,298



210,595


421,190



0



46,800


46,800


Cdn$69.48



1,049,821Thomas J. Regan, Jr.Short-Term Incentive Plan
    Performance Option Plan



5/3/2007




102,959



205,918


411,836



0



46,800


46,800


$62.73



1,065,948   (1)
    The amounts in columns (c), (d) and (e) set forth the
    threshold, target and maximum values of the 2007 Short-Term
    Incentive Plan awards based on respective cash flow returns of
    50%, 100% and 150% of target cash flow return for 2007. The
    actual amount of each Named Executive Officers 2007
    Short-Term Incentive Plan award is set forth in column
    (g) of the Summary Compensation Table above.(2)
    Pursuant to the terms of the plan, options under the 2007
    Performance Option Plan were granted with an exercise price
    equal to the closing market price per common share on the NYSE
    for Mr. Doyle, Mr. Dietz and Mr. Regan and on the
    TSX for Mr. Brownlee and Mr. Moore, in each case on
    the day prior to the grant date.  Option
    Awards
  10-year
    after-tax
  MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  51




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##### Table of Contents



Form 10-Q Form 10-K
    TSR Vesting Schedule3 Year Average ofCFROI Minus WACC


Vesting PercentageLess than 0%


0%0.20%


30%1.20%


70%2.20%


90%2.50%


100%     MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  52




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##### Table of Contents



Outstanding
    Equity Awards at Fiscal Year-End
    Option Awards


Stock AwardsEquityEquity








Equity


Incentive PlanIncentive








Incentive Plan


Awards:Plan








Awards:


Market orAwards:








Number of


Payout ValueNumber of


Number of


Number of








Unearned


of UnearnedSecurities


Securities


Securities








Shares, Units


Shares, UnitsUnderlying


Underlying


Underlying








or Other


or OtherUnexercised


Unexercised


Unexercised


Option


Option


Rights That


Rights ThatOptions


Options


Unearned


Exercise


Expiration


Have Not


Have NotName


Exercisable


Unexercisable


Options(1)


Price


Date


Vested(2)


Vested(3)(a)


(b)


(c)


(d)


(e)


(f)


(i)


(j)William J. Doyle



300,000











$11.31



11/5/2008420,000











$10.16



11/21/2010420,000











$10.50



11/20/2011420,000











$11.00



11/20/2012




121,203



$
9,450,198337,536











$13.17



11/20/2013675,000











$29.41



5/5/2015450,000


$33.67



5/4/2016336,000


$62.73



5/3/2017Wayne R. Brownlee



180,000











Cdn$16.65



11/20/2011180,000











Cdn$17.44



11/20/2012144,660











Cdn$17.17



11/20/2013




35,838



$
2,794,289195,000











Cdn$36.64



5/5/2015150,000


Cdn$37.27



5/4/201690,000


Cdn$69.48



5/3/2017James F. Dietz



50,000











$10.50



11/20/2011210,000











$11.00



11/20/2012168,756











$13.17



11/20/2013




34,668



$
2,703,064195,000











$29.41



5/5/2015150,000


$33.67



5/4/201690,000


$62.73



5/3/2017Garth W. Moore



64,660











Cdn$17.17



11/20/2013105,000











Cdn$36.64



5/5/2015




25,380



$
1,978,87972,000


Cdn$37.27



5/4/201646,800


Cdn$69.48



5/3/2017Thomas J. Regan, Jr.



105,000











$29.41



5/5/2015



72,000


$33.67



5/4/2016




24,165



$
1,884,14546,800


$62.73



5/3/2017   (1)
    The outstanding equity incentive plan awards reported in column
    (d) represent unearned options pursuant to our 2006 and
    2007 Performance Option Plans. Options granted pursuant to the
    2006 Performance Option Plan vest at the end of the performance
    period ending December 31, 2008, and options granted
    pursuant to the 2007 Performance Option Plan vest at the end of
    the performance period ending December 31, 2009. The
    reported number of shares underlying the options is based on
    achievement of the plans maximum performance levels.(2)
    The outstanding equity incentive plan awards reported in column
    (i) represent outstanding awards pursuant to our
    Medium-Term Incentive Plan, which vest at the end of the
    performance period ending December 31, 2008. The reported
    number of units is based on achievement of the plans
    maximum performance level.(3)
    Based on the average maximum allowable payout value of the
    Medium-Term Incentive Plan awards of $77.97 in accordance with
    the plan. The average closing price of our common shares on the
    NYSE for the last 30 trading days of 2007 was $124.87.  MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  53




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##### Table of Contents



Option
    Exercises and Stock Vested
    Option Awards



Stock AwardsNumber ofShares







Number ofAcquired on



Value Realized



Shares Acquired



Value RealizedExercise



Upon Exercise



on Vesting



Upon VestingName


(#)



($)



(#)



($)(a)


(b)



(c)



(d)



(e)William J. Doyle



240,000




15,153,800









Wayne R.
    Brownlee(1)



180,000




7,787,768









James F. Dietz



160,000




13,432,226









Garth W.
    Moore(1)



80,000




5,982,775









Thomas J. Regan, Jr.


















   (1)
    The value realized upon exercise was converted to U.S. dollars
    using the average Canadian exchange rate of 1.0740 for fiscal
    year 2007.  Pension
    Benefits
    Present Value ofNumber of Years



Accumulated



Payments DuringCredited Service



Benefit(1)



Last Fiscal YearName


Plan Name


(#)



($)



($)William J. Doyle


Canadian Supplemental Plan



20.67




10,643,963




Wayne R. Brownlee


Canadian Supplemental Plan



30.67(2)




2,793,521




James F. Dietz


U.S. Pension Plan



14.5




349,930




U.S. Supplemental Plan



10.83(3)




583,844Garth W. Moore


Canadian Supplemental Plan



25.58




2,217,385




Thomas J. Regan, Jr.


U.S. Pension Plan



20.75




854,298




U.S. Supplemental Plan



20.75




767,320   (1)
    The present value of accumulated benefit assumes retirement at
    the earliest age that does not require a reduction in benefits.
    For the Canadian Supplemental Plan, such age is 62. For the U.S.
    Pension Plan and U.S. Supplemental Plan, such age is 65 or
    age 62 with 20 years of service.(2)
    Mr. Brownlees years of credited service includes
    11.6 years of service, from May 1977 to December 1988, with
    the government of Saskatchewan prior to the privatization of our
    company in 1989 and 19.1 years of service, from December
    1988 to the present, with our company and our predecessors.(3)
    The difference in Mr. Dietzs years of credited
    service under the U.S. Pension Plan and the U.S. Supplemental
    Plan relates to the plans differing treatment of
    Mr. Dietzs years of credited service under the
    Nitrogen Pension Plan, a predecessor to the U.S. Pension Plan.    Interest Rate


5.50% per annumRetirement Age


Age 62Mortality Rates


1994 Unisex Pensioner Mortality Table     MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  54




---



##### Table of Contents



Estimated
    Termination Payments and Benefits


William J.



Wayne R.



James F.



Garth W.



Thomas J.Doyle



Brownlee



Dietz



Moore



Regan, Jr.($)



($)



($)



($)



($)Involuntary Termination/Termination Without CauseSalary/Severance
    Medium-Term Incentive Plan
    Supplemental
    Plan(1)(2)Executive Health & Welfare Benefits



7,522,948828,137
    6,300,132
    380,283
    14,396




4,465,633704,303
    1,862,859
    1,898,471
    0




2,169,646258,963
    1,802,043
    108,640
    0




3,754,720753,296
    1,319,253
    1,682,171
    0




1,554,747298,650
    1,256,097
    0
    0Termination Following Change in ControlSalary/Severance
    Medium-Term Incentive Plan
    Stock Options (Accelerated)
    Supplemental
    Plan(1)(2)Executive Health & Welfare Benefits
    Tax Gross-up



188,302,7257,116,000
    9,450,198
    154,245,030
    380,283
    54,398
    17,056,816




46,071,5972,670,000
    2,794,289
    38,708,837
    1,898,471
    0
    0




48,361,096258,963
    1,802,043
    46,191,450
    108,640
    0
    0




25,478,9871,914,700
    1,978,879
    19,903,237
    1,682,171
    0
    0




25,324,941298,650
    1,256,097
    23,770,194
    0
    0
    0Death or DisabilityMedium-Term Incentive Plan



6,300,1326,300,132




1,862,8591,862,859




1,802,0431,802,043




1,319,2531,319,253




1,256,0971,256,097RetirementMedium-Term Incentive Plan
    Stock Options (36 Month Continued Vesting)
    Supplemental
    Plan(1)(2)



160,925,4456,300,132
    154,245,030
    380,283




42,470,1671,862,859
    38,708,837
    1,898,471




48,102,1331,802,043
    46,191,450
    108,640




22,904,6611,319,253
    19,903,237
    1,682,171




25,026,2911,256,097
    23,770,194
    0


(1)
    Supplemental Plan refers to the Canadian Supplemental Plan for
    Mr. Doyle, Mr. Brownlee and Mr. Moore and to the
    U.S. Supplemental Plan for Mr. Dietz and Mr. Regan.
    The Supplemental Plan benefits set forth for each Named
    Executive Officer reflect the incremental value of benefits for
    each termination event that exceeds the present value of
    benefits set forth in the Pension Benefits table
    above.(2)
    As of December 31, 2007, Mr. Regan was age 63
    with 20 years of service and eligible to receive full
    benefits under the U.S. Supplemental Plan. As such, the present
    value of benefits set forth in the Pension Benefits
    table above is equal to the value of benefits Mr. Regan
    would have received if he had retired December 31, 2007.  Payments
    Made Upon Involuntary Termination or Termination Without
    Cause
    Payments
    Made Upon Termination Following a Change in Control
  gross-up
  MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  55




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##### Table of Contents



Payments
    Made Upon Death or Disability
      Payments
    Made Upon Retirement
      William J.



Wayne R.



James F.



Garth W.



Thomas J.Doyle



Brownlee



Dietz



Moore



Regan, Jr.($)



($)



($)



($)



($)Canadian/U.S. Pension Plan


Annual
    Aggregate



1,440,100
    16,750,632




746,738
    8,685,732




189,060
    1,458,640




427,607
    4,473,738




180,050
    1,057,642Savings/401(k) Plan


Annual
    Aggregate



84,188
    979,236




41,625
    484,169




75,041
    795,748




31,566
    367,166




169,984
    1,802,540Total


Annual
    Aggregate



1,524,288
    17,729,868




788,363
    9,169,901




264,101
    2,254,388




459,173
    5,340,904




350,034
    2,860,182   MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  56




---



##### Table of Contents



Performance
    Graphs  ®
  
  Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07PotashCorp-NYSE Listing

$
100


$
142


$
283


$
279


$
508


$
1,536Self-Selected Peer Group

$
100


$
125


$
211


$
300


$
495


$
915S&P
    500®

$
100


$
129


$
143


$
150


$
173


$
183DJUSBMI

$
100


$
136


$
153


$
161


$
189


$
252
       The self-selected peer group consists of:

SymbolAgrium Inc.*

AGUMosaic Co (formerly IMC Global Inc) (through 4Q04)

IGLYara International ASA

YAR NOIsrael Chemicals Limited

CHIM ITSociedad Quimica Y Minera de Chile S.A.

SQM/B CIK + S AG

SDF/GR    MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  57




---



##### Table of Contents






Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07PotashCorp-TSX Listing

$
100


$
118


$
217


$
206


$
377


$
977S&P/TSX Composite Index

$
100


$
127


$
145


$
180


$
211


$
232


® ©
  MANAGEMENT PROXY
    CIRCULAR ï Compensation
 Page  58




---



##### Table of Contents



Ownership of Shares    Number of


PercentageShares


ofNumber of


Beneficially


OutstandingName


Shares Held


Owned(1)(2)(3)(4)


SharesWilliam J. Doyle,
    Director, President and
    Chief Executive Officer



295,613
(5)



2,868,149
(5)



0.94
%Wayne R. Brownlee,
    Executive Vice President,
    Treasurer and Chief
    Financial Officer



52,497




752,157




0.17
%James F. Dietz,
    Executive Vice President
    and Chief Operating
    Officer



52,829




676,585




0.17
%Thomas J. Regan, Jr.
    President, PCS
    Phosphate and PCS
    Nitrogen



36,203




141,203




0.11
%Garth W. Moore,
    President, PCS Potash



27,869




197,529




0.09
%All directors and
    executive officers as a
    group, including the
    above-named individuals
    (25 persons)



770,843




6,605,215




2.44
%   (1)
    The number of Shares beneficially owned is reported on the basis
    of regulations of the SEC, and includes Shares that the
    individual has the right to acquire at any time within
    60 days after February 20, 2008 and Shares directly or
    indirectly held by the individual or by certain family members
    or others over which the individual has sole or shared voting or
    investment power.(2)
    Each of the directors and executive officers of the Corporation
    owned less than 1% of the Shares issued and outstanding as at
    February 20, 2008. The directors and executive officers of
    the Corporation as a group beneficially owned approximately
    2.087% of the Shares issued and outstanding as at
    February 20, 2008.(3)
    Includes Shares purchasable within 60 days after
    February 20, 2008 through the exercise of options granted
    by the Corporation, as follows: Mr. Doyle 2,572,536 Shares;
    Mr. Brownlee 699,660 Shares; Mr. Dietz 623,756 Shares;
    Mr. Regan 105,000 Shares; Mr. Moore 169,660 Shares and
    directors and executive officers as a group, including the
    foregoing individuals, 5,834,372 Shares.(4)
    No Shares beneficially owned by any of the directors or Named
    Executive Officers are pledged as security.(5)
    Includes 60,000 shares held in the William J. Doyle 2007
    Family Descendents Trust and 19,898 shares held in the
    William & Kathy Doyle Foundation.    Name and Address of


Amount and Nature of


Percent ofBeneficial Owner


Beneficial Ownership


Class(1)Capital Group International, Inc.
    11100 Santa Monica Blvd.
    Los Angeles, California 90025



22,664,420
(2)(3)(4)



7.18
%Janus Capital Management LLC
    151 Detroit Street.
    Denver, Colorado 80206



20,067,468
(5)(6)



6.36
%FMR LLC (Fidelity)
    82 Devonshire Street
    Boston, Massachusetts 02109



17,101,643
(7)(8)



5.42
%PRIMECAP Management
    Company
    225 S. Lake Ave., #400
    Pasadena, California 91101



17,062,059
(9)(10)



5.41
%Capital Guardian Trust Company
    11100 Santa Monica Blvd.
    Los Angeles, California 90025



16,596,320
(4)(11)(12)



5.26
%   (1)
    Represents percent of Shares outstanding as of February 20,
    2008.(2)
    Such person has sole dispositive power as to all 22,664,420
    Shares and sole voting power as to 18,912,540 Shares.(3)
    As set forth in a Schedule 13G dated February 12, 2008.(4)
    Capital Group International, Inc. may be deemed the beneficial
    owner of the Shares of its subsidiaries, including the
    16,596,320 Shares beneficially owned by Capital Guardian
    Trust Company.(5)
    Such person has sole dispositive power as to all 20,607,468
    Shares and sole voting power as to all 20,607,468 Shares.(6)
    As set forth in a Schedule 13G dated February 14, 2008.(7)
    Such person has sole dispositive power as to all 17,101,643
    Shares and sole voting power as to 9,778,343 Shares.(8)
    As set forth in a Schedule 13G dated February 14, 2008.(9)
    Such person has sole dispositive power as to all 17,062,059
    Shares and sole voting power as to 3,522,639 Shares.  (10)
    As set forth in a Schedule 13G dated February 14, 2008.(11)
    Such person has sole dispositive power as to all 16,596,320
    Shares and sole voting power as to 13,421,590 Shares.(12)
    As set forth in a Schedule 13G dated February 12, 2008.  MANAGEMENT PROXY
    CIRCULAR ï Ownership
    of Shares
 Page  59




---



##### Table of Contents



Directors
    and Officers
 Liability
    Insurance
     Voting
    Shares
       Shareholder
    Proposal
     2009
    Shareholder Proposals
     Additional
    Information
   Form 10-K st
  Directors
    Approval
     
     MANAGEMENT PROXY
    CIRCULAR ï Ownership
    of Shares
 Page  60




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##### Table of Contents



Appendices  PageAppendix A  Disclosure of
    Corporate Governance Practices


62Appendix B  Resolution of
    Shareholders  2008 Performance Option Plan


69Appendix C  2008 Performance
    Option Plan


70Appendix D  Shareholder
    Proposal


76Appendix E  Board of Directors
    Charter


79Appendix F  Audit Committee
    Charter


82






MANAGEMENT PROXY
    CIRCULAR ï Appendices


Page  61




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##### Table of Contents



Appendix
    A
    Disclosure of Corporate Governance Practices  58-101.
  PotashCorpDisclosure Requirement under Form 58-101F1

Compliance

Comments & Discussion1.

(a)

Disclose the identity of directors who are independent.

Yes

The Board has determined that all of the directors of the
    Corporation with the exception of Mr. Doyle, Ms. Paliza and Mr.
    Stromberg are independent. See disclosure under the
    Director Independence and Other Relationships
    section of this Management Proxy Circular.(b)

Disclose the identity of directors who are not independent, and
    describe the basis of that determination.

Yes

See disclosure under the Director Independence and Other
    Relationships section of this Management Proxy Circular.(c)

Disclose whether or not a majority of directors are independent.
    If a majority of directors are not independent, describe what
    the board of directors (the board) does to facilitate its
    exercise of independent judgment in carrying out its
    responsibilities.

Yes

Nine of twelve, or 75%, of the Corporations current
    directors are independent.(d)

If a director is presently a director of any other issuer that
    is a reporting issuer (or the equivalent) in a jurisdiction or a
    foreign jurisdiction, identify both the director and the other
    issuer.

Yes

Such other directorships have been disclosed in the
    Nominees for Election to the Board of Directors
    section of this Management Proxy Circular.(e)

Disclose whether or not the independent directors hold regularly
    scheduled meetings at which members of management are not in
    attendance. If the independent directors hold such meetings,
    disclose the number of meetings held during the preceding
    12 months. If the independent directors do not hold such
    meetings, describe what the board does to facilitate open and
    candid discussion among its independent directors.

Yes

The Board has adopted a policy for the independent members of
    the Board to meet without management present at each regularly
    scheduled meeting of the Board. These sessions are of no fixed
    duration and participating directors are encouraged to raise and
    discuss any issues of concern. This policy was complied with for
    all meetings of the Board in 2007.(f)

Disclose whether or not the chair of the board is an independent
    director. If the board has a chair or lead director who is an
    independent director, disclose the identity of the independent
    chair or lead director, and describe his or her role and
    responsibilities. If the board has neither a chair that is
    independent nor a lead director that is independent, describe
    what the board does to provide leadership for its independent
    directors.

Yes

Dallas J. Howe serves as the Board Chair, and is an independent director. He has served as Board Chair since 2003. A position description for the Board Chair has been developed and approved by the Board. Amongst other things the Board Chair is expected to:
(a)   provide leadership to ensure effective functioning of the Board;
(b)   lead in the assessment of Board performance;
(c)   assist the Compensation Committee in monitoring and evaluating the performance of the Chief Executive Officer and senior officers of the Corporation;
(d)   lead the Board in ensuring succession plans are in place at the senior management level; and
(e)   act as an effective liaison among the Board and management.(g)

Disclose the attendance record of each director for all board
    meetings held since the beginning of the issuers most
    recently completed financial year.

Yes

Attendance records are fully disclosed in the Attendance
    of Directors section of this Management Proxy Circular.
    Pursuant to the Potash Corp Governance Principles,
    directors are expected to attend all meetings of the Board and
    Board committees upon which they serve, to come to such meetings
    fully prepared, and to remain in attendance for the duration of
    the meetings. Where a directors absence from a meeting is
    unavoidable, the director should, as soon as practicable after
    the meeting, contact the Board Chair, the Chief Executive
    Officer or the Corporate Secretary for a briefing on the
    substantive elements of the meeting.2.



Disclose the text of the boards written mandate. If the
    board does not have a written mandate, describe how the board
    delineates its role and responsibilities.

Yes

The Board of Directors Charter is attached to this Management
    Proxy Circular as Appendix E.  MANAGEMENT PROXY
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PotashCorpDisclosure Requirement under Form 58-101F1

Compliance

Comments & Discussion3.

(a)

Disclose whether or not the board has developed written position
    descriptions for the chair and the chair of each board
    committee. If the board has not developed written position
    descriptions for the chair and/or the chair of each board
    committee, briefly describe how the board delineates the role
    and responsibilities of each such position.

Yes

A position description for the Board Chair and each Board
    Committee Chair (which are attached to the relevant Board
    Committee Charters) has been developed and approved by the Board
    and can be found on the Corporations website at
    www.potashcorp.com.(b)

Disclose whether or not the board and CEO have developed a
    written position description for the CEO. If the board and CEO
    have not developed such a position description, briefly describe
    how the board delineates the role and responsibilities of the
    CEO.

Yes

A written position description for the Chief Executive Officer has been developed and approved by the Board.
The Chief Executive Officer reports to the Board and has general supervision and control over the business and affairs of the Corporation. Amongst other things, the Chief Executive Officer is expected to:
(a)   foster a corporate culture that promotes ethical practices, encourages individual integrity and fulfils social responsibility;
(b)   develop and recommend to the Board a long-term strategy and vision for the Corporation that leads to creation of shareholder value;
(c)   develop and recommend to the Board annual business plans and budgets that support the Corporations long-term strategy; and
(d)   consistently strive to achieve the Corporations financial and operating goals and objectives.4.

(a)

Briefly describe what measures the board takes to orient new
    directors regarding the role of the board, its committees and
    its directors, and the nature and operation of the issuers
    business.

Yes

The Board has adopted a written New Director Orientation Policy
    designed to:
    (a)   provide each new director with a baseline
    of knowledge about the Corporation that will serve as a basis
    for informed decision-making;
    (b)   tailor the program for each new director,
    taking into account his or her unique mix of skills, experience,
    education, knowledge and needs; and
    (c)   deliver information over a period of time
    to minimize the likelihood of overload and maximize the lasting
    educational impact.
    The orientation program is tailored to the needs of each new
    director, and consists of a combination of written materials,
    one-on-one meetings with senior management, site visits and
    other briefings and training as appropriate.(b)

Briefly describe what measures, if any, the board takes to
    provide continuing education for its directors. If the board
    does not provide continuing education, describe how the board
    ensures that its directors maintain the skill and knowledge
    necessary for them to meet their obligations as directors.

Yes

The Board recognizes the importance of ongoing director education and the need for each director to take personal responsibility for this process. To facilitate ongoing education, the Corporation:
(a)   maintains a directors intranet site to facilitate the exchange of views and published information;
(b)   maintains a membership for each director in an organization dedicated to corporate governance and ongoing director education;
(c)   each year encourages and funds the attendance of each director at one seminar or conference of interest and relevance and funds the attendance of each Committee Chair at one additional seminar or conference. In all cases, approval for attendance is obtained, in advance, from the Board Chair;
(d)   encourages presentations by outside experts to the Board or Committees on matters of particular import or emerging significance; and
(e)   at least annually, schedules a site visit in conjunction with a Board meeting.  MANAGEMENT PROXY
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PotashCorpDisclosure Requirement under Form 58-101F1

Compliance

Comments & Discussion5.

(a)

(i)   Disclose whether or not the board has
    adopted a written code for its directors, officers and
    employees. If the board has adopted a written code, disclose how
    a person or company may obtain a copy of the written code.

Yes

The Board has adopted the PotashCorp Code of
    Conduct. The complete text of the PotashCorp Code of
    Conduct, as well as other governance related documents,
    can be found at www.potashcorp.com and are available in print to
    any shareholder who requests them.(ii)   Describe how the board monitors compliance
    with its code, or if the board does not monitor compliance,
    explain whether and how the board ensures compliance with its
    code.

Yes

The Audit Committee reviews the process for communicating the PotashCorp Code of Conduct to the Corporations personnel, and for monitoring compliance therewith. The Board, through the Audit Committee, receives regular reports from management directly responsible for compliance-related matters (the General Counsel, Vice President Internal Audit and Senior Vice President Administration).
In addition, annual compliance sign offs are sought from each employee. The Board, through the Audit Committee Chair, also receives reports of all financial or accounting issues raised through the Corporations anonymous toll-free hotline.(iii)  If the board has adopted a written code,
    provide a cross-reference to any material change report filed
    since the beginning of the issuers most recently completed
    financial year that pertains to any conduct of a director or
    executive officer that constitutes a departure from the code.

Yes

The Corporation has not filed any material change reports since
    the beginning of the 2007 financial year that pertains to any
    conduct of a director or executive officer that constitutes a
    departure from the PotashCorp Code of Conduct.
    Pursuant to the PotashCorp Governance Principles, no
    waiver of the application of the PotashCorp Code of
    Conduct to directors or senior officers is permitted.(b)

Describe any steps the board takes to ensure directors exercise
    independent judgment in considering transactions and agreements
    in respect of which a director or executive officer has a
    material interest.

Yes

Pursuant to the PotashCorp Governance Principles,
    each director of the Corporation must possess and exhibit the
    highest degree of integrity, professionalism and values, and
    must never be in a conflict of interest with the Corporation. A
    director who has a conflict of interest regarding any particular
    matter under consideration should advise the Board, refrain from
    debate on the matter and abstain from any vote regarding it. The
    Board has also developed categorical independence standards to
    assist it in determining when individual directors are free from
    conflicts of interests and are exercising independent judgment
    in discharging their responsibilities. All directors and senior
    officers are bound by the PotashCorp Code of Conduct
    and no waiver of the application of that Code to directors or
    senior officers is permitted.(c)

Describe any other steps the board takes to encourage and
    promote a culture of ethical business conduct.

Yes

The Corporations Statement of Core Values and Code
    of Conduct was redistributed to all employees in December
    2006 and is continually reinforced with on-line training
    programs. At the end of 2007, all directors and employees were
    asked to sign a written confirmation of their compliance with
    the Code of Conduct. The Board, through the Audit Committee,
    requires the management Compliance Committee to annually report
    on the status of the corporations ethics and compliance
    programs, including receipt of the Compliance Risk Assessment,
    Summary of Ethics and Compliance Training during the current
    year and plans for ethics and compliance training in the coming
    year.  MANAGEMENT PROXY
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PotashCorpDisclosure Requirement under Form 58-101F1

Compliance

Comments & Discussion6.

(a)

Describe the process by which the board identifies new
    candidates for board nomination.

Yes

The Corporate Governance and Nominating Committee (the CG&N Committee) is responsible for recruiting and proposing to the full Board new nominees for directors. The CG&N Committee, in the discharge of its duties:
(a)   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;
(b)   assesses the attributes new directors should have for the appropriate mix to be maintained;
(c)   in consultation with the Board and Chief Executive Officer and, on an ongoing basis, maintains a database of potential candidates;
(d)   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;
(e)   develops a short-list of candidates and arranges for each candidate to meet with the CG&N Committee, the Board Chair and the Chief Executive Officer;
(f)   recommends to the Board as a whole proposed nominee(s) and arranges for their introduction to as many Board members as practicable;
(g)   ensures that prospective candidates are informed of the degree of energy and commitment the Corporation expects of its directors; and
(h)   encourages diversity in the composition of the Board.(b)

Disclose whether or not the board has a nominating committee
    composed entirely of independent directors. If the board does
    not have a nominating committee composed entirely of independent
    directors, describe what steps the board takes to encourage an
    objective nomination process.

Yes

The Corporation has a standing CG&N Committee. Each of the directors who comprise the CG&N Committee is independent. Please refer to Director Independence and Other Relationships and the Report on Corporate Governance and Nominating Matters sections of this Management Proxy Circular for additional information.(c)

If the board has a nominating committee, describe the
    responsibilities, powers and operation of the nominating
    committee.

Yes

The responsibilities, powers and operation of the CG&N
    Committee are set out in its charter, which is available on the
    Corporations website at www.potashcorp.com. Pursuant to
    the CG&N Committee Charter, the purpose of the CG&N
    Committee is to identify the individuals qualified to become
    members of the Board, to recommend to the Board nominees for
    election to the Board at each annual meeting of shareholders or
    to fill vacancies on the Board and to address related matters.
    Please refer to the Report on Corporate Governance and
    Nominating Matters section of this Management Proxy
    Circular for additional information.7.

(a)

Describe the process by which the board determines the
    compensation for your companys directors and officers.

Yes

Director and officer compensation is established on the advice
    of independent consultants, with a view to establishing target
    compensation at the median of the applicable comparator group.
    Please refer to the Compensation Discussion and
    Analysis and the Director Compensation
    sections of this Management Proxy Circular, as well as the
    response to 7(d) below for additional information.(b)

Disclose whether or not the board has a compensation committee
    composed entirely of independent directors. If the board does
    not have a compensation committee composed entirely of
    independent directors, describe what steps the board takes to
    ensure an objective process for determining such compensation.

Yes

The Corporation has a standing Compensation Committee. Each of
    the four directors who comprise the Compensation Committee is
    independent. Please refer to the Director Independence and
    Other Relationships and Compensation Discussion and
    Analysis sections of this Management Proxy Circular for
    additional information.  MANAGEMENT PROXY
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PotashCorpDisclosure Requirement under Form 58-101F1

Compliance

Comments & Discussion(c)

If the board has a compensation committee, describe the
    responsibilities, powers and operation of the compensation
    committee.

Yes

The responsibilities, powers and operation of the Compensation
    Committee are set out in its charter, which is available on the
    Corporations website at www.potashcorp.com. Pursuant to
    the Compensation Committee Charter, the purpose of the
    Compensation Committee is to carry out the Boards
    responsibility for: (i) executive compensation (including
    philosophy and programs); (ii) management development and
    succession; (iii) Board compensation; and (iv) broadly
    applicable compensation and benefit programs. Please refer to
    the Compensation Discussion and Analysis section of
    this Management Proxy Circular for additional information.(d)

If a compensation consultant or advisor has, at any time since
    the beginning of the issuers most recently completed
    financial year, been retained to assist in determining
    compensation for any of the issuers directors and
    officers, disclose the identity of the consultant or advisor and
    briefly summarize the mandate for which they have been retained.
    If the consultant or advisor has been retained to perform any
    other work for the issuer, state that fact and briefly describe
    the nature of the work.

Yes

In 2005, the Compensation Committee of the Board of Directors
    engaged Watson Wyatt as executive compensation consultants.
    Watson Wyatt provides input to the Committee on the philosophy
    and competitiveness of the design and award values for certain
    executive and director compensation programs. In addition,
    Watson Wyatt assists in the evaluation of compensation
    arrangements associated with certain strategic opportunities. In
    accordance with the Committees adherence to the best
    practice of retaining independent executive compensation
    consulting, Watson Wyatt does not perform any other consulting
    services for the Corporation. Any work other than executive
    compensation consulting services performed for the Corporation
    by Watson Wyatt must be approved in advance by the Chair of the
    Committee. Additionally, Hewitt Associates has historically
    provided executive compensation and human resources consulting
    services for the Corporation, including actuarial consulting,
    employee benefits design, finance consulting and recordkeeping
    services. The Committee continues to use Hewitt Associates
    proprietary Total Compensation Measurement data services to
    provide specific compensation data for selected executive and
    director positions. This information has been and will continue
    to be supplemented with other compensation survey data available
    through Watson Wyatt.8.



If the board has standing committees other than the audit,
    compensation and nominating committees, identify the committees
    and describe their function.

Yes

In addition to the Audit Committee, Compensation Committee and
    CG&N Committee, the Board also has a Safety, Health and
    Environment Committee. The Safety, Health and Environment
    Committee assists the Board review and recommend for approval
    policies, management systems and performance with respect to
    safety, health and environment matters affecting the Corporation.  MANAGEMENT PROXY
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PotashCorpDisclosure Requirement under Form 58-101F1

Compliance

Comments & Discussion9.



Disclose whether or not the board, its committees and individual
    directors are regularly assessed with respect to their
    effectiveness and contribution. If assessments are regularly
    conducted, describe the process used for the assessments. If
    assessments are not regularly conducted, describe how the board
    satisfies itself that it, its committees, and individual
    directors are performing effectively.

Yes

Pursuant to the PotashCorp Governance Principles,
    which is available on the Corporations website at
    www.potashcorp.com, the Board has adopted the following
    five-part effectiveness evaluation program:1.    Annual Board Assessment by all Members of the BoardEach year Board members complete a detailed questionnaire which a) provides for quantitative ratings in key areas and b) seeks subjective comment in each of those areas. The questionnaire is administered by the Corporate Secretary. Responses are reviewed by the Corporate Secretary and the Chair of the CG&
N Committee. A summary report is then prepared and provided to the Board Chair, the CG&N Committee and the Chief Executive Officer, and then reported to the full Board by the CG&N Committee Chair. Attribution of comments to individual directors in the summary report is made only if authorized by that director. In assessing the responses to the questionnaire, the focus is on continuous improvement.
Matters requiring follow-up are identified, action plans are developed and there is ongoing monitoring by the CG&N Committee to ensure satisfactory results. As part of the annual Board assessment, the Board reviews and considers any proposed changes to the Board of Directors Charter.2.    Annual Assessment of each Committee by Members of that CommitteeEach year members of each Committee complete a detailed questionnaire designed to allow Committee members to evaluate how well each Committee is operating and to make suggestions for improvement. The questionnaire is administered by the Corporate Secretary who receives responses and reviews them
with the appropriate Committee Chair. A summary report is then prepared and provided to the Board Chair, the Chair of the CG&N Committee, the appropriate Committee and the Chief Executive Officer and then reported to the full Board by the appropriate Committee Chair. As part of the annual Committee assessment, the Board reviews and considers any proposed changes to the Committee Charters.
As with the Board assessment, the focus is on continuous improvement. Chairs of each Committee are expected to follow up on matters raised in the Committee assessments and take such action as appropriate.  MANAGEMENT PROXY
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PotashCorpDisclosure Requirement under Form 58-101F1

Compliance

Comments & Discussion3.    Annual Assessment of the Board Chair by Members of the BoardEach year members of the Board are asked to assess and comment on the discharge, by the Board Chair, of his duties. Individual responses are received by the Chair of the CG&N Committee. A summary report is then provided to the Board Chair and the full Board, with no attribution of comments to individual
directors without their consent. As part of the annual Board Chair assessment, the Board reviews and considers any proposed changes to the Board Chair position description.4.    Annual Assessment of Each Committee Chair by Members of each CommitteeEach year, members of each Committee are asked to assess and comment on the discharge, by each Committee Chair, of his or her duties. Responses are received by the Corporate Secretary and the Committee Chair under review. A summary report is then provided to the appropriate Committee and to
the full Board, with no attribution of comments to individual directors without their consent. As part of the annual Committee Chair assessment, the Board reviews and considers any proposed changes to the Committee Chair position descriptions.5.    Annual Assessment of Individual
    DirectorsEach year during the period from May to September, the Board
    Chair (and, as in the opinion of the Board Chair is desirable,
    the Chair of the CG&N Committee) formally meets with each
    director individually to engage in full and frank two-way
    discussion of any and all issues that either wish to raise, with
    a focus on maximizing the contribution of each director to the
    Board and Committees. In completing the review, the Board Chair
    will employ a checklist, discuss both short-term and long-term
    goals, and establish action items to allow individual directors
    to enhance both his or her personal contributions and overall
    Board effectiveness. The Board Chair will share peer feedback
    with each director as appropriate and will review progress and
    action taken. Each director, during such formal review, shall be
    prepared to discuss with the Board Chair how the directors, both
    individually and collectively, could operate more effectively.
    The Board Chair will discuss the results of the individual
    evaluations with the Chair of the CG&N Committee and report
    summary findings to both that Committee and to the full Board at
    the November meeting.   MANAGEMENT PROXY
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Appendix
    B
    Resolution of Shareholders  2008 Performance Option
    Plan      1.
    the 2008 Performance Option Plan is hereby adopted and approved
    by the shareholders of the Corporation;2.
    any officer of the Corporation be and is hereby authorized and
    directed for and on behalf of the Corporation to do such things
    and to take such actions as may be necessary or desirable to
    carry out the intent of the foregoing resolution and the matters
    authorized thereby.  MANAGEMENT PROXY
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Appendix
    C
    2008 Performance Option Plan  1.
    PURPOSE OF
    PLAN    2.
    DURATION OF THIS
    PLAN    3.
    ADMINISTRATION  Internal Revenue
    Code
  4.
    AUTHORITY OF THE
    COMMITTEE    5.
    SHARES SUBJECT
    TO STOCK OPTIONS      MANAGEMENT PROXY
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6.
    GRANT OF STOCK
    OPTIONS    7.
    OPTION
    PRICE    8.
    VESTING OF STOCK
    OPTIONS    9.
    PERFORMANCE
    MEASURES FOR VESTING OF STOCK OPTIONS  (a)
    The Performance Measures which will be used to determine the
    degree to which stock options will vest over the three-year
    period beginning the first day of the fiscal year in which they
    are granted (the Performance Period) shall be cash
    flow return on investment (CFROI) and weighted
    average cost of net debt and equity capital (WACC).  (i)
    CFROI is the ratio of after tax operating cash flow to average
    gross investment over the fiscal year, calculated as A divided
    by B, where (1) A equals operating income less/plus
    nonrecurring or unusual items plus accrued incentive awards plus
    depreciation and amortization less current taxes, and (2) B
    equals the average of total assets less/plus the fair value
    adjustment for investments in available for sale securities less
    the fair value of derivative instrument assets plus accumulated
    depreciation plus accumulated amortization less cash and cash
    equivalents less non interest bearing current liabilities.(ii)
    WACC is the weighted average cost of net debt and equity
    capital, calculated as [A times the product of B divided by C]
    plus [D times the product of E divided by C], where (1) A
    equals the after-tax market yield cost of debt, (2) B
    equals the market value of debt less cash and cash equivalents
    (3) C equals the market value of debt less cash and cash
    equivalents, plus the market value of equity, (4) D equals
    the cost of equity, and (5) E equals the market value of
    equity.  (b)
    In determining the number of stock options that will actually
    vest based on the degree to which the Performance Measures have
    been attained during the applicable Performance Period, the
    following chart  MANAGEMENT PROXY
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shall be utilized which shows the three year average excess of
    CFROI being greater than WACC and the respective portion of the
    stock option that will vest:  Performance Measure




Vesting Scale3 year average excess of




% of Stock OptionCFROI > WACC




Grant Vesting<0%





0%0.20%





30%1.20%





70%2.20%





90%2.50%





100%   (c)
    In assessing the portion of the stock options that shall vest in
    accordance with the above chart, the following shall be done:  (i)
    Each year, the CFROI and WACC will be calculated in accordance
    with the definitions herein, based on the audited financial
    statements and approved by the Audit Committee.(ii)
    In each Performance Period, the average of the three fiscal
    years shall be calculated by taking the simple average of the
    individual years results.(iii)
    The resulting three-year average will then be applied, using the
    scale above to determine the number of stock options, if any,
    that will vest as of the end of the Performance Period.(iv)
    For results falling between the reference points in the chart
    above, the level of vesting shall be mathematically interpolated
    between the reference points.  10.
    TERMS OF STOCK
    OPTIONS    (a)
    if the employment of an optionee as an officer or employee of
    the Corporation or a subsidiary terminates, by reason of his or
    her death, or if an optionee who is a retiree pursuant to
    Section 10(b) dies, the legal personal representatives of
    the optionee will be entitled to exercise any unexercised vested
    options, including such stock options that may vest after the
    date of death, during the period ending at the end of the
    twelfth calendar month following the calendar month in which the
    optionee dies, failing which exercise the stock options
    terminate;(b)
    subject to the terms of Section 10(a) above, if the
    employment of an optionee as an officer or employee of the
    Corporation or a subsidiary terminates, by reason of retirement
    in accordance with the then prevailing retirement policy of the
    Corporation or subsidiary, the optionee will be entitled to
    exercise any unexercised vested stock options, including such
    stock options that may vest after the date of retirement, during
    the period ending at the end of the 36th month following the
    calendar month in which the optionee retires, failing which
    exercise the stock options terminate;(c)
    if the employment of an optionee as an officer or employee of
    the Corporation or a subsidiary terminates, for any reason other
    than as provided in Sections 10(a) or (b), the optionee
    will be entitled to exercise any unexercised vested stock
    options, to the extent exercisable at the date of such event,
    during the period ending at the end of the calendar month
    immediately following the calendar month in which the event
    occurs, failing which exercise the stock options terminate;  MANAGEMENT PROXY
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(d)
    for greater certainty and for these purposes, an optionees
    employment with the Corporation or a subsidiary shall be
    considered to have terminated effective on the last day of the
    optionees actual and active employment with the
    Corporation or subsidiary whether such day is selected by
    agreement with the optionee or unilaterally by the Corporation
    or subsidiary and whether with or without advance notice to the
    optionee. For the avoidance of doubt, no period of notice that
    is given or ought to have been given under applicable law in
    respect of such termination of employment will be utilized in
    determining an optionees entitlement under the Plan. The
    employment of an optionee with the Corporation shall be deemed
    to have terminated for all purposes of the Plan if such person
    is employed by or provides services to a person that is a
    subsidiary of the Corporation and such person ceases to be a
    subsidiary of the Corporation, unless the Committee determines
    otherwise; and(e)
    each stock option is personal to the optionee and is not
    assignable, except (i) as provided in Section 10(a),
    and (ii) at the election of the Board, a stock option may
    be assignable to the spouse, children and grandchildren of the
    original optionee and to a trust, partnership or limited
    liability company, the entire beneficial interest of which is
    held by one or more of the foregoing.      11.
    EXERCISE OF STOCK
    OPTIONS    12.
    ADJUSTMENTS    13.
    MERGERS    14.
    CHANGE OF
    CONTROL    MANAGEMENT PROXY
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(a)
    within any period of two consecutive years, individuals who at
    the beginning of such period constituted the Board and any new
    directors whose appointment by the Board or nomination for
    election by shareholders of the Corporation was approved by a
    vote of at least a majority of the directors then still in
    office who either were directors at the beginning of the period
    or whose appointment or nomination for election was previously
    so approved, cease for any reason to constitute a majority of
    the Board;(b)
    there occurs an amalgamation, merger, consolidation,
    wind-up,
    reorganization or restructuring of the Corporation with or into
    any other entity, or a similar event or series of such events,
    other than any such event or series of events which results in
    securities of the surviving or consolidated corporation
    representing 50% or more of the combined voting power of the
    surviving or consolidated corporations then outstanding
    securities entitled to vote in the election of directors of the
    surviving or consolidated corporation being beneficially owned,
    directly or indirectly, by the persons who were the holders of
    the Corporations outstanding securities entitled to vote
    in the election of directors of the Corporation prior to such
    event or series of events in substantially the same proportions
    as their ownership immediately prior to such event of the
    Corporations then outstanding securities entitled to vote
    in the election of directors of the Corporation;(c)
    50% or more of the fixed assets (based on book value as shown on
    the most recent available audited annual or unaudited quarterly
    consolidated financial statements) of the Corporation are sold
    or otherwise disposed of (by liquidation, dissolution, dividend
    or otherwise) in one transaction or series of transactions
    within any twelve month period;(d)
    any party, including persons acting jointly or in concert with
    that party, becomes (through a take-over bid or otherwise) the
    beneficial owner, directly or indirectly, of securities of the
    Corporation representing 20% or more of the combined voting
    power of the Corporations then outstanding securities
    entitled to vote in the election of directors of the
    Corporation, unless in any particular situation the Board
    determines in advance of such event that such event shall not
    constitute a change of control; or(e)
    the Board approves and/or recommends that shareholders accept,
    approve or adopt any transaction that would constitute a change
    of control under clause (b), (c) or (d) above and
    determines that the change of control resulting from such
    transaction will be deemed to have occurred as of a specified
    date earlier than the date under (b), (c) or (d), as
    applicable.  15.
    AMENDMENT OR
    DISCONTINUANCE OF THIS PLAN    16.
    EVIDENCE OF STOCK
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17.
    WITHHOLDING    MANAGEMENT PROXY
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Appendix D
    Shareholder Proposal on Executive Compensation      Proposal
  Be it Resolved: The shareholders of Potash
    Corporation of Saskatchewan Inc. (Company) herby
    request that the Board of Directors establish a policy regarding
    the Companys supplemental executive retirement plan that
    provides the following: (1) an exclusion of all incentive
    pay from inclusion in the plans definition of covered
    compensation used to establish benefits, and (2) a
    prohibition on the granting of past service credits or
    accelerated service benefits to participating executives. This
    action should be implemented in a manner so as not to interfere
    with existing contractual rights of any supplemental plan
    participant.
  Supporting
    Statement:
  We believe that one of the most troubling aspects of the
    sharp rise in executive compensation is the excessive pension
    benefits provided to senior corporate executives through the use
    of supplemental executive retirement plans (SERPs).
    Our Company has established a supplemental pension benefit
    program for selected senior executives. This SERP provides
    senior executives retirement benefits far greater than those
    permitted under the Companys tax-qualified pension plan.
    Our proposal seeks to limit excessive pension benefits by
    limiting the type of compensation used to calculate pension
    benefits under the SERP plan and also by prohibiting the grants
    of extra service credits.
  According to the Companys most recent proxy
    circular:
  For the purposes of the Canadian 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.
  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
    the annually paid bonus under our Short-Term Incentive Plan.
  It is our position that the inclusion of an executives
    annual bonus along with his or her full salary in the pension
    calculation is overly generous and unjustifiable. The only type
    of compensation used in the SERP for establishing the level of
    additional pension benefits should be an executives annual
    salary. No variable incentive pay should be included in a senior
    executives pension calculation under the SERP. The
    inclusion of annual bonus or incentive payments in determining
    increased pension benefits can dramatically increase the pension
    benefit afforded senior executives and has the additional
    undesirable effect of converting one-time incentive compensation
    into guaranteed lifetime pension income.
  The proposals limitation on the type of compensation
    that can be considered in determining senior executives
    retirement benefits to only the executives salary, as well
    as its prohibition on the granting of additional years of
    credited service, provides a necessary and reasonable
    restriction on the excessiveness of supplemental retirement
    benefits. We urge your support for this important executive
    compensation reform.
  THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE
    PROPOSAL FOR THE FOLLOWING REASONS:
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The Board
    strongly recommends that shareholders vote AGAINST the
    Proposal.
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Appendix E
    Board of Directors Charter  1.
    PURPOSE AND
    ROLE        2.
    COMPOSITION    3.
    MEETINGS        4.
    CHAIR    5.
    RESPONSIBILITIES    
    Overseeing and approving on an ongoing basis the
    Corporations business strategy and strategic planning
    process;
    Selection of the management;
    Setting goals and standards for management, monitoring their
    performance and taking corrective action where necessary;
    Approving policies, procedures and systems for implementing
    strategy, managing risk, and ensuring the integrity of the
    Corporations internal control and management information
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
    Adopting a communications policy and reporting to shareholders
    on the performance of the business;
    Approval and completion of routine legal requirements.  5.1
    Strategy
    Determination  (a)
    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 the associated risks, and the
    strategy by which it proposes to reach those goals and mitigate
    such risks. The Board shall adopt a strategic planning process
    and shall approve, on an annual basis, a strategic plan which
    takes into account, among other things, the opportunities and
    risks of the business.(b)
    The Board has the responsibility to ensure congruence between
    shareholder expectations, company plans and management
    performance.  5.2
    Selection of the
    Management  (a)
    The Board retains the responsibility for managing its own
    affairs, including planning its composition, selecting its
    Chair, nominating candidates for election to the Board,
    appointing Committees and determining Director compensation.(b)
    The Board has the responsibility for the appointment and
    replacement of a Chief Executive Officer (CEO) of
    the Corporation, for monitoring CEO performance, determining CEO
    compensation, and providing advice and counsel in the execution
    of the CEOs duties.  (c)
    The Board has the responsibility for approving the appointment
    and remuneration of all corporate officers, acting upon the
    advice of the CEO.  (d)
    The Board has the responsibility for, to the extent feasible,
    satisfying itself as to the integrity of the CEO and the other
    executive officers and that the CEO and other executive officers
    create a culture of integrity throughout the Corporation.(e)
    The Board has the responsibility for ensuring that adequate
    provision has been made for management succession (including
    appointing, training and monitoring senior management).  5.3
    Monitoring and
    Acting  (a)
    The Board has the responsibility for monitoring the
    Corporations progress towards its goals, and revising and
    altering its direction in light of changing circumstances.(b)
    The Board has the responsibility for taking action when
    performance falls short of its goals or when other special
    circumstances (for example mergers and acquisitions or changes
    in control) warrant it.  5.4
    Policies and
    Procedures  (a)
    The Board has the responsibility for developing the
    Corporations approach to corporate governance, including
    developing a set of corporate governance principles and
    guidelines that are specifically applicable to the Corporation.(b)
    The Board has the responsibility for approving and monitoring
    compliance with all significant policies, procedures and
    internal control and management systems by which the Corporation
    is operated.  (c)
    The Board has responsibility for ensuring that the Corporation
    operates at all times within applicable laws and regulations,
    and to high ethical and moral standards.  5.5
    Reporting to
    Shareholders  (a)
    The Board has the responsibility for adopting a communications
    policy for the Corporation, including adopting measures for
    receiving feedback from stakeholders.(b)
    The Board has the responsibility for ensuring that the financial
    performance of the Corporation is reported to shareholders on a
    timely, regular and non-selective basis.  MANAGEMENT PROXY
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(c)
    The Board has the responsibility for ensuring that the financial
    results are reported fairly, and in accordance with generally
    accepted accounting principles.(d)
    The Board has the responsibility for timely and non-selective
    reporting of any other developments that have a significant and
    material impact on the value of the shareholders assets.(e)
    The Board has the responsibility for reporting annually to
    shareholders on its stewardship for the preceding year.(f)
    The Board has the responsibility for approving any payment of
    dividends to shareholders.  5.6
    Legal
    Requirements  (a)
    The Board is responsible for ensuring that legal requirements,
    documents and records have been properly prepared, approved and
    maintained.  5.7
    Other  (a)
    On an annual basis, this Board Charter shall be reviewed and
    assessed, and any proposed changes shall be submitted to the
    Board for consideration.(b)
    Any security holder may contact the Board by email or by writing
    to the Board c/o the Corporate Secretary. Matters relating to
    the Corporations accounting, internal accounting controls
    or auditing matters will be referred to the Audit Committee.
    Other matters will be referred to the Board Chair.  MANAGEMENT PROXY
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Appendix F
    Audit Committee Charter  1.
    PURPOSE  1.1.
    The Audit Committee (the Committee) is a standing
    committee of the Board of Directors of Potash Corporation of
    Saskatchewan Inc. (the Corporation). Its purpose is
    to assist the Board of Directors in fulfilling its oversight
    responsibilities for (i) the integrity of the
    Corporations financial statements, (ii) the
    Corporations compliance with legal and regulatory
    requirements, (iii) the qualifications and independence of
    the auditors of the Corporation (the external
    auditors), and (iv) the performance of the
    Corporations internal audit function and external
    auditors. The Committee will also prepare the report that is,
    under applicable legislation and regulation, required to be
    included in the Corporations annual proxy statement and
    circular.  2.
    AUTHORITY  2.1.
    The Committee has authority to conduct or authorize
    investigations into any matter within its scope of
    responsibility. It is empowered to:  (a)
    Determine the public accounting firm to be recommended to the
    Corporations shareholders for appointment as external
    auditors, and, subject to applicable law, be directly
    responsible for the compensation and oversight of the work of
    the external auditors. The external auditors will report
    directly to the Committee.(b)
    Resolve any disagreements between management and the external
    auditors regarding financial reporting.  (c)
    Pre-approve all auditing and permitted non-audit services
    performed by the Corporations external auditors.  (d)
    Retain independent counsel, accountants, or others to advise the
    Committee or assist in its duties.(e)
    Seek any information it requires from employees  all
    of whom are directed to cooperate with the Committees
    requests  or external parties.(f)
    Meet with Corporations officers, external auditors or
    outside counsel, as necessary.(g)
    Delegate authority, to the extent permitted by applicable
    legislation and regulation, to one or more designated members of
    the Committee, including the authority to pre-approve all
    auditing and permitted non-audit services, providing that such
    decisions are presented to the full Committee at its next
    scheduled meeting.  3.
    COMPOSITION  3.1.
    The Committee shall consist of at least three and no more than
    six members of the Board of Directors.3.2.
    The Corporate Governance and Nominating Committee will recommend
    to the Board of Directors members for appointment to the
    Committee and the Chair of the Committee. Only independent
    Directors shall be entitled to vote on any Board resolution
    approving such recommendations.3.3.
    If and whenever a vacancy shall exist on the Committee, the
    remaining members may exercise all its powers so long as a
    quorum remains in office.3.4.
    Each Committee member shall be independent according to the
    independence standards established by the Board of Directors,
    and all applicable corporate and securities laws and stock
    exchange listing standards.3.5.
    Each Committee member will also be financially literate. At
    least one member shall be designated as the financial
    expert, as defined by applicable legislation and
    regulation. No Committee member shall simultaneously serve on
    the audit committees of more than two other public companies.  MANAGEMENT PROXY
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4.
    MEETINGS  4.1.
    A majority of the members of the Committee shall constitute a
    quorum. All determinations of the Committee shall be made by a
    majority of its members present at a meeting duly called and
    held. All Committee members are expected to attend each meeting,
    in person or via tele- or video-conference. Any decision or
    determination of the Committee reduced to writing and signed by
    all of the members of the Committee shall be fully as effective
    as if it had been made at a meeting duly called and held.4.2.
    The Committee will meet at least once each fiscal quarter, with
    authority to convene additional meetings, as circumstances
    require. The Committee will invite other members of the Board of
    Directors, members of management, internal auditors or others to
    attend meetings and provide pertinent information, as necessary.
    External auditors shall be entitled to receive notice of every
    meeting of the Committee and to attend and be heard thereat. The
    Committee will meet separately, periodically, with management,
    with internal audit and with external auditors. The Committee
    will also meet periodically in camera. Meeting agendas
    will be prepared and provided in advance to members, along with
    appropriate briefing materials.4.3.
    The time at which and place where the meetings of the Committee
    shall be held and the calling of meetings and the procedure in
    all things at such meetings shall be determined by the
    Committee; provided that meetings of the Committee shall be
    convened whenever requested by the external auditors or any
    member of the Committee in accordance with the Canada
    Business Corporations Act. Following a Committee meeting,
    the Committee Chair shall report on the Committees
    activities to the Board of Directors at the next Board of
    Directors meeting. The Committee shall keep and approve minutes
    of its meetings in which shall be recorded all action taken by
    it, which minutes shall be available as soon as practicable to
    the Board of Directors.  5.
    CHAIR  5.1.
    The Chair of the Committee shall have the duties and
    responsibilities set forth in Appendix A.  6.
    RESPONSIBILITIES  Canada Business
    Corporations Act
  6.1.
    Financial Statements  (a)
    Review significant accounting and reporting issues and
    understand their impact on the financial statements. These
    issues include:   (i)
    complex or unusual transactions and highly judgmental areas;   (ii)
    major issues regarding accounting principles and financial
    statement presentations, including any significant changes in
    the Corporations selection or application of accounting
    principles; and   (iii)
    the effect of regulatory and accounting initiatives, as well as
    off-balance sheet structures, on the financial statements of the
    Corporation.  (b)
    Review analyses prepared by management and/or the external
    auditors, setting forth significant financial reporting issues
    and judgments made in connection with the preparation of the
    financial statements, including analyses of the effects of
    alternative GAAP methods on the financial statements.  (c)
    Review both U.S. GAAP and Canadian GAAP issues and any
    reconciliation issues from Canadian GAAP to U.S. GAAP.  (d)
    Review with management and the external auditors the results of
    the audit, including any difficulties encountered. This review
    will include any restrictions on the scope of the external
    auditors activities or on access to requested information,
    and any significant disagreements with management.(e)
    Review and discuss the annual audited financial statements and
    quarterly financial statements with management and the external
    auditors, including the Corporations disclosures under
    Managements  MANAGEMENT PROXY
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Discussion and Analysis of Financial Condition and Results of
    Operations (MD&A), including the
    discussion of critical accounting estimates included therein.  (f)
    Review and discuss the unaudited annual financial statements
    prior to the Corporations year-end earnings release.(g)
    Review the annual financial statements and MD&A and make a
    determination whether to recommend their approval by the Board
    of Directors.(h)
    Approve the quarterly financial statements and MD&A prior
    to their release.(i)
    Review disclosures made by the Chief Executive Officer and the
    Chief Financial Officer during the
    Forms 10-K
    and 10-Q
    certification process about significant deficiencies or material
    weaknesses in the design or operation of internal controls or
    any fraud that involves management or other employees who have a
    significant role in the Corporations internal controls.(j)
    Review and discuss earnings press releases (particularly use of
    pro forma information or other non-GAAP financial
    measures), as well as financial information and earnings
    guidance provided externally, including to analysts and rating
    agencies.(k)
    Review managements internal control report and the related
    attestation report of the external auditors when required by
    Section 404 of the Sarbanes-Oxley Act of 2002 (the
    Sarbanes-Oxley Act ).  6.2.
    Internal Control  (a)
    Consider the effectiveness of the Corporations internal
    control system, including information technology security and
    control.(b)
    Understand the scope of internal audits and external
    auditors review of internal control over financial
    reporting, and obtain reports on significant findings and
    recommendations, together with managements responses.  (c)
    Review external auditors management letters and
    managements responses to such letters.  (d)
    As requested by the Board of Directors, discuss with management,
    internal audit and the external auditors the 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.(e)
    Annually review the Corporations disclosure controls and
    procedures, including any significant deficiencies in, or
    material non-compliance with, such controls and procedures.(f)
    Discuss with the Chief Financial Officer and, as is in the
    Committees opinion appropriate, the Chief Executive
    Officer, all elements of the certification required pursuant to
    Sections 302 and 906 of the Sarbanes-Oxley Act which
    duties may be discharged through the participation by the Chair
    of the Committee in the quarterly Sarbanes-Oxley Due Diligence
    Conference Call meeting.  6.3.
    Internal Audit  (a)
    Review with management, the external auditors and internal audit
    the charter, plans, activities, staffing and organizational
    structure of the internal audit function.(b)
    Ensure there are no unjustified restrictions or limitations on
    the functioning of the internal audit department, and review and
    concur in the appointment, replacement, or dismissal of the Vice
    President, Internal Audit.  (c)
    Review the effectiveness of the internal audit function,
    including compliance with The Institute of Internal
    Auditors Standards for the Professional Practice of
    Internal Auditing.  (d)
    On a regular basis, meet separately with the Vice President,
    Internal Audit to discuss any matters that the Committee or the
    Vice President, Internal Audit believes should be discussed
    privately.  MANAGEMENT PROXY
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6.4.
    External Audit  (a)
    Review the external auditors proposed audit scope and
    approach, (including coordination of audit effort with internal
    audit) and budget.(b)
    Review the performance of the external auditors, and make
    recommendations to the Board regarding the appointment or
    discharge of the external auditors. In performing this review,
    the Committee will:  (i)
    At least annually, obtain and review a report by the external
    auditors describing (i) the external auditors
    internal quality control procedures; (ii) any material
    issues raised by the most recent internal quality control
    review, or peer review, of the external auditors, or by any
    inquiry or investigation by governmental or professional
    authorities, within the preceding five years, respecting one or
    more independent audits carried out by the external auditors,
    and any steps taken to deal with any such issues; and (iii) (to
    assess the auditors independence) all relationships
    between the external auditors and the Corporation.(ii)
    Take into account the opinions of management and internal audit.(iii)
    Review and evaluate the lead partner of the external auditors.  (c)
    On an annual basis receive and review from the external auditors
    a report on items required to be communicated to the Committee
    by Audit Guideline 11 of the Canadian Institute of Chartered
    Accountants.(d)
    Ensure the rotation of the lead audit partner every five years
    and other audit partners every seven years, and consider whether
    there should be regular rotation of the audit firm itself.(e)
    Present its conclusions with respect to the external auditors to
    the full Board of Directors.(f)
    Set clear hiring policies for employees or former employees of
    the external auditors.(g)
    On a regular basis, meet separately with the external auditors
    to discuss any matters that the Committee or external auditors
    believe should be discussed privately.  6.5.
    Compliance  (a)
    Review the effectiveness of the system for monitoring compliance
    with laws and regulations and the results of managements
    investigation and
    follow-up
    (including disciplinary action) of any instances of
    non-compliance.(b)
    Establish procedures for: (i) the receipt, retention and
    treatment of complaints received by the Corporation regarding
    accounting, internal accounting controls or auditing matters;
    and (ii) the confidential, anonymous submission by
    employees of the Corporation of concerns regarding questionable
    accounting or auditing matters.(c)
    Review the findings of any examinations by regulatory agencies,
    and any external auditors observations made regarding those
    findings.(d)
    Review the process for communicating the Code of Conduct to
    Corporation personnel, and for monitoring compliance therewith.(e)
    Obtain regular updates from management and Corporation legal
    counsel regarding compliance matters.  6.6.
    Reporting Responsibilities  (a)
    Regularly report to the Board of Directors about Committee
    activities and issues that arise with respect to the quality or
    integrity of the Corporations financial statements, the
    Corporations compliance with legal or regulatory
    requirements, the performance and independence of the
    Corporations external auditors, and the performance of the
    internal audit function.(b)
    Provide an open avenue of communication between internal audit,
    the external auditors, and the Board of Directors.  MANAGEMENT PROXY
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(c)
    Report annually to shareholders, describing the Committees
    composition, responsibilities and how they were discharged, and
    any other information required by applicable legislation or
    regulation, including approval of non-audit services.  (d)
    Review any other reports the Corporation issues that relate to
    Committee responsibilities.  6.7.
    Other Responsibilities  (a)
    Discuss with management the Corporations major policies
    with respect to risk assessment and risk management.(b)
    Perform other activities related to this Committee Charter as
    requested by the Board of Directors.(c)
    Institute and oversee special investigations as needed.(d)
    Ensure appropriate disclosure of this Committee Charter as may
    be required by applicable legislation or regulation.(e)
    Confirm annually that all responsibilities outlined in this
    Committee Charter have been carried out.(f)
    Receive and review, at least quarterly, a report prepared by the
    Corporations Natural Gas Hedging Committee and, if the
    Corporations hedged position is outside approved
    guidelines, determine the reasons for the deviation and any
    action which will be taken as a result.(g)
    Annually review the Corporations natural gas hedging
    policy.(h)
    Receive and review, at least annually and in conjunction with
    the Compensation Committee, a report on pension plan governance
    including a fund review and retirement plan accruals.  7.
    FUNDING  7.1.
    The Corporation shall provide for appropriate funding, as
    determined by the Committee, for (i) compensation to the
    external auditors for the purpose of preparing or issuing an
    audit report or performing other audit review or attest services
    as pre-approved by the Committee; (ii) compensation to any
    outside experts employed by the Committee; and (iii) ordinary
    administrative expenses of the Committee that are necessary or
    appropriate in carrying out its duties.  8.
    OTHER  8.1.
    The Committee shall conduct an evaluation of the
    Committees performance and this Audit Committee Charter,
    including Appendix A attached hereto, at least
    annually, and recommend to the Board of Directors such Committee
    Charter changes as the Committee deems appropriate.8.2.
    Authority to make minor technical amendments to this Committee
    Charter is hereby delegated to the Secretary of the Corporation
    who will report any amendments to the Board of Directors at its
    next meeting.  APPENDIX
    A
    POTASH CORPORATION OF SASKATCHEWAN INC.
    Audit Committee Chair Position Description
    1.
    Provide overall leadership to facilitate the effective
    functioning of the Committee, including:  (a)
    overseeing the structure, composition, membership and activities
    delegated to the Committee;(b)
    chairing every meeting of the Committee and encouraging free and
    open discussion at meetings of the Committee;(c)
    scheduling and setting the agenda for Committee meetings with
    input from other Committee members, the Chair of the Board of
    Directors and management as appropriate;  MANAGEMENT PROXY
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(d)
    facilitating the timely, accurate and proper flow of information
    to and from the Committee;(e)
    arranging for management, internal and external auditors and
    others to attend and present at Committee meetings as
    appropriate;(f)
    arranging sufficient time during Committee meetings to fully
    discuss agenda items;(g)
    encouraging Committee members to ask questions and express
    viewpoints during meetings; and(h)
    taking all other reasonable steps to ensure that the
    responsibilities and duties of the Committee, as outlined in its
    Charter, are well understood by the Committee members and
    executed as effectively as possible.  2.
    Foster ethical and responsible decision making by the Committee
    and its individual members.3.
    Encourage the Committee to meet in separate, regularly
    scheduled, non-management, closed sessions with the internal
    auditor and the independent auditors.4.
    Following each meeting of the Committee, report to the Board of
    Directors on the activities, findings and any recommendations of
    the Committee.5.
    Carry out such other duties as may reasonably be requested by
    the Board of Directors.  MANAGEMENT PROXY
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(POTASH CORPORATION OF SASKATCHEWAN INC. LOGO)

Potash Corporation
    of Saskatchewan Inc.

Proxy   For use at the Annual and Special
    Meeting
 of Shareholders to be held on
    May 8, 2008.
  THIS PROXY IS SOLICITED ON BEHALF
    OF MANAGEMENT OF THE CORPORATION.
  The undersigned holder of common
    shares (Shares) of Potash Corporation of
    Saskatchewan Inc. (the Corporation) hereby appoints
    Dallas J. Howe, Board Chair, or failing him, William J. Doyle,
    President and Chief Executive Officer, or failing him, Wayne R.
    Brownlee, Executive Vice President, Treasurer and Chief
    Financial Officer, or failing him, Joseph A. Podwika, 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 and special meeting of shareholders of the Corporation to
    be held:
  Thursday, the
    8th
    day of May, 2008 (the Meeting)
 10:30 a.m. (local time)
 Grand Salon, TCU Place
 35 
    22nd
    Street East
 Saskatoon, Saskatchewan, Canada
  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  [Mailing Label
    Placement]
  will vote such Shares FOR
    the election of the directors named in this proxy, FOR the
    appointment of Deloitte & Touche LLP as auditors of
    the Corporation, FOR the resolution (attached as Appendix B
    to the accompanying Management Proxy Circular) approving the
    adoption of a new performance option plan, the full text of
    which is attached as Appendix C to the accompanying
    Management Proxy Circular and AGAINST the shareholder proposal
    (attached as Appendix D to the accompanying Management
    Proxy Circular). This proxy confers authority to vote in the
    proxyholders discretion with respect to amendments to
    matters identified in the accompanying Notice of Meeting and
    with respect to other matters that may properly come before the
    Meeting.  3.
    If this proxy is not dated, it
    shall be deemed to be dated on the date on which this proxy was
    mailed by the Corporation.4.
    Reference is made to the
    accompanying Management Proxy Circular of the Corporation for
    further information regarding the completion and use of this
    proxy and other information pertaining to the Meeting.  Without limiting the general powers
    hereby conferred, the Shares represented by this proxy are to be:
 1.

Voted FOR, or WITHHELD FROM VOTING, the nominees for directors
    listed below.For

Withhold



For

Withhold(01) W. J. Doyle





(07) K. G. Martell(02) J. W. Estey





(08) J. J. McCaig(03) W. Fetzer III





(09) M. Mogford(04) C. S. Hoffman





(10) P. J. Schoenhals(05) D. J. Howe





(11) E. R. Stromberg(06) A. D. Laberge





(12) E. Viyella de Paliza   For

Withhold2.

Voted FOR, or WITHHELD FROM VOTING, on the appointment of
    Deloitte & Touche LLP as auditors of the Corporation.For

Against3.

Voted FOR or AGAINST the resolution (attached as Appendix B
    to the accompanying Management Proxy Circular) approving the
    adoption of a new performance option plan, the full text of
    which is attached as Appendix C to the accompanying
    Management Proxy Circular.For

Against4.

Voted FOR or AGAINST the shareholder proposal (attached as
    Appendix D to the accompanying Management Proxy Circular).     Dated the
    ­
    ­ 
    day of
    ­
    ­ 
    2008.
  Name of Shareholder

Signature of Shareholder