Management Information Circular April 27, 2010

MANAGEMENT INFORMATION CIRCULAR APRIL 27, 2010

AND NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

March 2, 2010

Dear Shareholder:

On behalf of the Board of Directors and Management of Canadian National Railway Company (the “Company”), we cordially invite you to attend the annual meeting of shareholders that will be held this year at Le Windsor, Salon Windsor, First Floor, 1170 Peel Street, Montréal, Quebec (Canada), on Tuesday, April 27, 2010, at 10:00 a.m. (Eastern Daylight Time).

This Information Circular describes the business to be conducted at the meeting and provides information on executive compensation and CN’s governance practices. In addition to these items, we will discuss, at the meeting, highlights of our 2009 performance and our plans for the future. You will have the opportunity to meet and interact with your directors and the senior ofﬁ cers of the Company.

Your participation in the affairs of the Company is important to us. If you are unable to attend in person, we encourage you to complete and return the enclosed proxy form or voting instruction form in the envelope provided for this purpose so that your views can be represented. Also, it is possible for you to vote over the Internet by following the instructions on the enclosed forms. Even if you plan to attend the meeting, you may ﬁ nd it convenient to express your views in advance by completing and returning the proxy form or voting instruction form or by voting over the Internet.

If your shares are not registered in your name but are held in the name of a nominee, you may wish to consult the information on page 5 of the Information Circular with respect to how to vote your shares.

A live webcast of the meeting will be available on the Company’s website at www.cn.ca.

We look forward to seeing you at the meeting.

Sincerely,

Claude Mongeau David G.A. McLean PRESIDENT AND CHIEF EXECUTIVE OFFICER CHAIRMAN OF THE BOARD NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Our annual meeting of holders of common shares will be held at

LE WINDSOR SALON WINDSOR, FIRST FLOOR 1170 PEEL STREET MONTRÉAL, QUEBEC (CANADA) on Tuesday, April 27, 2010, at 10:00 a.m. (Eastern Daylight Time) for the purposes of:

1. receiving the consolidated ﬁ nancial statements for the year ended December 31, 2009 and the auditors’ reports thereon;

2. electing the directors;

3. appointing the auditors; and

4. transacting such other business as may properly be brought before the Meeting or any adjournment or postponement thereof.

The directors have ﬁ xed March 15, 2010, as the record date for the determination of the holders of common shares entitled to receive notice of the Meeting.

By order of the Board of Directors

Sean Finn EXECUTIVE VICE-PRESIDENT CORPORATE SERVICES AND CHIEF LEGAL OFFICER

March 2, 2010 Montréal, Quebec Information Circular. I voteifamanon-registeredshareholder?”onpage5ofthis shareholder, referenceismadetothesectionentitled“Howdo adjourned orpostponedmeeting.Ifyouareanon-registered Daylight Time)onthebusinessdaypriortoﬁ adjourned orpostponed,bynolaterthan5:00p.m.(Eastern (Eastern DaylightTime)onApril26,2010,or, iftheMeetingis envelope, orbyvotingovertheInternetnolaterthan5:00p.m. Computershare Trust CompanyofCanadaintheenclosed is deﬁ shareholders andholdersofEmployeeShares(assuchterm proxy orvotinginstructionformand,inthecaseofregistered exercise yourrighttovotebysigningtheenclosedformof IMPORTANT except asindicatedotherwise. information containedhereinisgivenasatFebruary 26,2010, purposes setforthintheforegoingNoticeofMeeting. April 27,2010,at10:00a.m.(EasternDaylightTime)forthe 1170 Peel Street,Montréal,Quebec(Canada),onTuesday, Meeting willbeheldatLeWindsor, “our” referto,CanadianNationalRailwayCompany. shareholders of, and“CN”,the“Company”or“we”,“us”, “Meeting”). Inthisdocument“you”and“your”refertothe or atanyadjournmentpostponementthereof(the Company foruseattheannualmeetingofitsshareholders of proxiesbymanagementCanadianNationalRailway Circular”) isprovidedinconnectionwiththesolicitation This managementinformationcircular(the“Information INFORMATION CIRCULAR nedinthisInformationCircular)byreturningitto –IfyouarenotabletoattendtheMeeting,please SalonWindsor, xedforthe FirstFloor,

The

28 27 27 Board Compensation 26 Board Performance 24 Director Selection 24 22 22 22 Position Descriptions 21 21 20 20 General 20 19 Additional Disclosure 18 14 8 Nominees 8 for Election 7 7 7 BusinessoftheMeeting 7 QuestionsandAnswers– 4 What’s StatementofCorporate Audit CommitteeDisclosure Continuing Education Director Orientationand Assessment Meetings Board andCommittee Committees oftheBoard Election ofDirectors the Board Independent Chairmanof Independence ofDirectors Code ofBusinessConduct Governance Practices Relating toDirectors Attendance Board andCommittee Compensation Board ofDirectors Description ofNominees to theBoard Appointment ofAuditors Election ofDirectors Financial Statements Voting andProxies Inside

56 56 56 Other Information 55 Currency Exchange 53 49 48 Employment Contracts/ 44 42 Summary Compensation 33 Compensation Discussion 32 StatementofExecutive 32 57 56 Approval 56 56 Shareholder Proposals 56 56 59 SCHEDULE“A” – SCHEDULE“B”– and ExecutiveOffi Indebtedness ofDirectors Compensation Plans Issuance UnderEquity Securities Authorizedfor Information Control Benefi Termination and Changeof Pension PlanBenefi Arrangements Incentive PlanAwards Table and Analysis Compensation Committee Human Resourcesand Compensation Availability ofDocuments Insurance Directors’ andOffi Transactions and OthersinMaterial Interest ofInformedPersons Mandate oftheBoard Reports oftheCommittees ts

cers cers’ ts

3 CN MANAGEMENT INFORMATION CIRCULAR 4 CN MANAGEMENT INFORMATION CIRCULAR toll-free at1-866-879-7649. Services Inc.,theCompany’sproxysolicitationagent, your formofproxy, pleasecallKingsdaleShareholder this InformationCircularorrequireassistanceincompleting If youhavequestionsabouttheinformationcontainedin Who canIcallwithquestions? out-of-pocket expenses. estimated tobeCAD$28,500plusadditionalcostsrelating proxies inCanadaandtheUnitedStates,atanaggregatecost of KingsdaleShareholderServicesInc.forthesolicitation cost totheCompany. TheCompanyhasretainedtheservices offi solicitation isbeingmadeprimarilybymail,butourdirectors, Management oftheCompanyissolicitingyourproxy. The Who issolicitingmyproxy? will constituteapprovalofthesematters. A simplemajorityofthevotescast,inpersonorbyproxy, How willthesemattersbedecidedatthemeeting? that shareholdersvoteFORitems(i)and(ii). Board ofDirectorsandourmanagementarerecommending and (ii)toappointKPMGLLPasauditorsoftheCompany. Our Shareholders willbevoting(i)toelectdirectorsoftheCompany, What willIbevotingon? of theCompany. or moreofthevotingrightsattachedtoanyclassshares or exercisedcontroldirectionoversharescarrying10% information, noinvestor, asatFebruary 26,2010,owned the Company, basedonthemostrecentpubliclyavailable To theknowledgeofdirectorsandsenioroffi common sharecarriestherighttoonevote. value. Subjecttothevotingrestrictionsdescribedbelow, each had outstanding470,795,172commonshareswithoutpar As oftheclosebusinessonFebruary 26,2010,theCompany either inpersonorbyproxy. the Meetingoratanyadjournmentpostponementthereof, March 15,2010(the“recorddate Shareholders whoareregisteredasatthecloseofbusinesson Who canvote? to voteyourshares. The followingquestionsandanswersprovideguidanceonhow Voting andProxies QUESTIONS ANDANSWERS cers or employees may also solicit proxies at a nominal cersoremployeesmayalsosolicitproxiesatanominal ”), will be entitled to vote at ”), willbeentitledtovoteat cers of cersof How doIvoteifamaregisteredshareholder? her associates. controlled, directlyorindirectly, bysuchpersonorhis attached tothevotingsharesheld,benefi person shall,inorbyproxy, exercisethevotingrights with hisorherassociatesexceedssuch15%maximum,no or controlled,directlyindirectly, byanyonepersontogether the totalnumberofvotingsharesheld,benefi be casttoelectdirectorsoftheCompany. Inaddition,where the votesattachedtoallourvotingsharesthatmayordinarily to whichareattachedmorethan15%intheaggregateof benefi no person,togetherwithhisorherassociates,shallhold, Our articlesofincorporation,asamended,providethat What arethevotingrestrictions? I amanon-registeredshareholder?”. please seetheinstructionsbelowunder“HowdoIvoteif If yourcommonsharesareheldinthenameofanominee, in personattheMeetingorbyproxy, asexplainedbelow. registered inyourname,youcanvotecommonshares If youareeligibletovoteandyourcommonshares How doIvote? [email protected]. at 1-800-564-6253,byfax1-888-453-0330oremail 9th Floor, NorthTower, Toronto, OntarioM5J2Y1,bytelephone Computershare Trust CompanyofCanada,100UniversityAve, You cancontactthetransferagenteitherbymailat How canIcontactthetransferagent? . VOTINGBY PROXY 1. • How canIsendmyformofproxy? appointed andattendstheMeeting. that thepersonyouappointisawareheorshe completing anotherproperformofproxy. Makesure in theblankspaceprovidedformofproxyorby exercised bywritingthenameofsuchpersonorcompany and actonyourbehalfattheMeeting.Thatrightmaybe or company(whoneednotbeashareholder)toattend However, youhavetherighttoappointanyotherperson the PresidentandChiefExecutiveOffi as proxiesinsuchformofproxyaretheBoardchairand the enclosedformofproxy. Thepersonscurrentlynamed someone elsetovoteforyouasyourproxyholderbyusing your sharecertifi You arearegisteredshareholderifyournameappearson ciallyownorcontrol,directlyindirectly, votingshares on theformofproxy. can voteovertheInternetbyfollowinginstructions Company ofCanada,intheenvelopeprovided,oryou the Company’scommonshares,ComputershareTrust form ofproxytothetransferagentandregistrarfor You caneitherreturnadulycompletedandexecuted cate. If this is the case, you may appoint cate.Ifthisisthecase,youmayappoint ceroftheCompany. cially owned or ciallyownedor cially owned ciallyowned • If Ichangemymind,howcanrevokeproxy? • • What isthedeadlineforreceivingformofproxy? over theInternet,bywayofasubsequentInternetvote. other mannerpermittedbylaworinthecaseofavote or anyadjournmentpostponementthereof, orinany with thechairofMeetingonday or anyadjournmentpostponementthereof, or(ii)fi the lastbusinessdayprecedingofMeeting up toandincluding5:00p.m.(EasternDaylightTime)on West, Montréal,Quebec,Canada,H3B2M9)atanytime offi Corporate SecretaryoftheCompanyatregistered (duly authorizedinwriting),and(i)depositedwiththe a laterdate)executedbyyou,oryourattorney in writing(whichincludesanotherformofproxywith You mayrevokeyourproxyatanytimebyaninstrument be broughtbeforetheMeeting. not awareofanyamendmentorotherbusinesslikelyto unable toserveifelectedoffi that anyofthenomineesforelectionasdirectorswillbe may recommend.Managementhasnoreasontobelieve of suchotherpersonasmanagementtheCompany management willvotefortheelectioninhisorherstead intended thatthepersonactingunderproxyinfavourof become unabletoacceptnominationforelection,itis any nomineenamedhereinforelectionasadirector may properlybebroughtbeforetheMeeting. the foregoingmattersoronsuchotherbusinessas proxy holderinrespectofamendmentstoany KPMG LLPasauditorsandatthediscretionof nominees asdirectorsandFORtheappointmentof Offi the BoardchairorPresidentandChiefExecutive common sharesrepresentedbyproxiesinfavourof on theproxy. Ifnoinstructionsareindicated,your voting inaccordancewithyourinstructionsindicated Your commonshareswillbevotedorwithheldfrom my proxy? How willmycommonsharesbevotedifIgive adjourned orpostponedmeeting. Time) onthebusinessdaypriortofi postponed, bynolaterthan5:00p.m.(EasternDaylight Time) onApril26,2010,oriftheMeetingisadjourned or avoteovertheInternetis5:00p.m.(EasternDaylight The deadlineforreceivingdulycompletedformsofproxy ce of the Company (935 de La Gauchetière Street ceoftheCompany(935deLaGauchetièreStreet cer will be voted FOR the election of management’s cer willbevotedFORtheelectionofmanagement’s ce and management is ceandmanagementis xed for the xedforthe Should Should led led ways, listedbelow, thatyoucanvoteyourcommonshares: client. Ifyouareanon-registeredshareholder, therearetwo nominees areprohibitedfromvotingsharesforthebroker’s specifi the nameofyourbrokeroranagentthatbroker. Without Such commonshareswillmorelikelyberegisteredunder shares will,inalllikelihood,notberegisteredyourname. statement providedtoyoubyyourbroker, thosecommon shareholder”. Ifyourcommonsharesarelistedinanaccount institution orsecuritiesbroker, youarea“non-registered are heldinthenameofanomineesuchastrustee,fi If yourcommonsharesarenotregisteredinnameand How doIvoteifamanon-registeredshareholder? . VOTINGINPERSON 2. GIVINGYOUR VOTINGINSTRUCTIONS 1. VOTINGINPERSON 2. you willbevotingattheMeeting. complete therequestforvotinginstructionssenttoyouas Computershare Trust CompanyofCanada.Donototherwise present themselvesattheMeetingtoarepresentativeof shareholders whoappointthemselvesasproxyholdersshould and returninstructionsofyournominee.Non-registered appoint yourselfasproxyholderandfollowthesignature for votinginstructionsprovidedbyyournomineeto insert yourownnameinthespaceprovidedonrequest However, ifyouwishtovoteinpersonattheMeeting, shares arevotedattheMeeting. by non-registeredshareholderstoensurethattheircommon return instructions,whichshouldbecarefullyfollowed mailing proceduresandprovidesitsownsignature of commonsharesyouhold.Everynomineehasitsown your nomineearequestforvotinginstructionsthenumber Accordingly, youwillreceiveorhavealreadyreceivedfrom voting instructionsfromyouinadvanceoftheMeeting. Applicable securitieslawsrequireyournomineetoseek the Meeting,donotcompleteorreturnformofproxy. counted attheMeeting. Canada attheregistrationtable.Your votewillbetakenand to arepresentativeofComputershareTrust Companyof If youwishtovoteinperson,maypresentyourself c instructions, Canadian brokers and their agents or cinstructions,Canadianbrokersandtheiragentsor If you wish to vote in person at If youwishtovoteinpersonat nancial nancial

5 CN MANAGEMENT INFORMATION CIRCULAR 6 CN MANAGEMENT INFORMATION CIRCULAR will bevoted. given votinginstructionsbytelephoneorovertheInternet) signed andreturned(orinrespectofwhichtheemployeehas Shares inrespectofwhichavotinginstructionformhasbeen may properlybebroughtbeforetheMeeting.OnlyEmployee enclosed votinginstructionformoronsuchotherbusinessas in respectofamendmentstotheitemsmentionedon the discretionofcustodianorsuchotherpersonindicated, management’s recommendationsmentionedaboveandat an item,theEmployeeShareswillbevotedinaccordancewith directions ofthebenefi Internet. TheEmployeeShareswillbevotedpursuanttothe may alsogivesuchvotinginstructionsbytelephoneoroverthe be votedattheMeeting.Benefi be ashareholder)astohowtheywishtheirEmployeeShares to thecustodianoranyotherpersoncompany(whoneednot on theenclosedvotinginstructionformnecessarydirections employees, ortheirattorneysauthorizedinwriting,byindicating registered inthenameofcustodiancanbeexercisedby Voting rightsattachedtotheEmployeeSharesthatare accordance withtheirprovisions. have withdrawntheircommonsharesfromthePlansin the Plans’custodian(the“ Shares U.S. Operations(the“ Plans anditsUnionManagementSavingsfor under itsCanadianandU.S.EmployeeShareInvestment Common sharespurchasedbyemployeesoftheCompany How doIvoteifamanemployeeshareholder? ”. Employee Shares remain registered in the name of ”. EmployeeSharesremainregisteredinthenameof Plans cialowner. Ifnochoiceisspecifi custodian Employee ”), areknownas“Employee cial owners of Employee Shares cialownersofEmployeeShares ”), unless the employees ”), unlesstheemployees ed for edfor Employee Shares. shares. Noformofproxyistobecompletedwithrespect enclosed formofproxywithrespecttosuchadditionalcommon shares outsidethePlans,heorshemustalsocomplete Employee Shares.Intheeventthatanemployeeholdscommon The votinginstructionformmustbeusedonlywithrespectto subsequent telephoneorInternetdirections. of directionsgivenbytelephoneorovertheInternet,way thereof, orinanyothermannerpermittedbylaw, orinthecase on thedayofMeetingoranyadjournmentpostponement postponement thereof, or(ii)fi day precedingtheofMeetingoranyadjournment including 5:00p.m.(EasternDaylightTime)onthelastbusiness of CNattheregisteredoffi intention torevokeis(i)depositedwiththeCorporateSecretary provided suchwritteninstrumentindicatingtheholder’s Shares, orbytheholder’sattorneydulyauthorizedinwriting, instrument inwritingexecutedbytheholderofEmployee as indicatedonavotinginstructionform,atanytimebyan A holderofEmployeeSharesmayrevokehisorherdirections, ce of CN at any time up to and ceofCNatanytimeuptoand led with the chair of the Meeting ledwiththechairofMeeting and amaximumof21directors(hereinafterthe“ our BoardofDirectorsshallconsistaminimumseven Our articlesofincorporation,asamended,providethat Election ofDirectors by contactingourCorporateSecretaryorInvestorRelations. free ofcharge,toanyshareholderwhorequestscopies at www.sedar.com, onEDGARatwww.sec.gov andinprint, Company, availableonourwebsiteatwww.cn.ca, onSEDAR thereon, areincludedinthe2009AnnualReportof December 31,2009,togetherwiththeauditors’reports Our consolidatedfi Financial Statements BUSINESS OFTHEMEETING as management’s nominees. Unless authority is withheld, as management’snominees.Unlessauthorityiswithheld, of Nominees”willbepresentedforelectionattheMeeting entitled “NomineesforElectiontotheBoard–Description the closeofMeeting. The termofoffi or appointed. of shareholdersoruntilsuchperson’ssuccessoriselected current year, eachtoholdoffi of Directors,11 personsaretobeelectedasdirectorsforthe “ Board ofDirectors ce of each of the present directors expires at ceofeachthepresentdirectorsexpiresat nancial statements for the year ended nancialstatementsfortheyearended ”). Pursuant to a resolution of the Board ”). PursuanttoaresolutionoftheBoard The persons named in the section The personsnamedinthesection ce until the next annual meeting ceuntilthenextannualmeeting Board ” or ” or hold offi appointment ofKPMGLLPasauditorstheCompanyto of proxyorvotinginstructionformintendtovoteFORthe withheld, thepersonsdesignatedinaccompanyingform the nextannualmeetingofshareholders. that KPMGLLPbeappointedtoserveasourauditorsuntil The BoardofDirectorsandtheAuditCommitteerecommend Appointment ofAuditors the directors. shares bewithheldfromvotingontheelectionofany proxy orvotinginstructionformhasdirectedthatthecommon at theirdiscretionunlesstheshareholderwhohasgivensuch instruction formreservetherighttovoteforanothernominee designated intheaccompanyingformofproxyorvoting that occurforanyreasonbeforetheMeeting,persons these nomineeswillbeunabletoserveasadirector, butshould of Directorsandmanagementdonotcontemplatethatany act asdirectorsoftheCompanyforensuingyear. TheBoard of theBoardDirectorsandmanagement,wellqualifi of thesenominees. or votinginstructionformintendtovoteFORtheelection the personsdesignatedinaccompanyingformofproxy ce untilthenextannualmeetingofshareholders. The persons nominated are, in the opinion The personsnominatedare,intheopinion Unless authority is Unless authorityis ed to edto

7 CN MANAGEMENT INFORMATION CIRCULAR 8 CN MANAGEMENT INFORMATION CIRCULAR as directors.AllnomineesarecurrentdirectorsoftheCompany. The followingtablessetoutinformationasofFebruary 26,2010,unlessotherwiseindicated,regardingthenomineesforelecti Description ofNominees ELECTION TOTHEBOARD NOMINEES FOR or 0%Gog etnLmtd (2003-present) GeorgeWeston Limited 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS 100% ATTENDANCE 100% 100% Investment CommitteeofCN’sPension Trust Funds Environment, SafetyandSecurityCommittee Strategic PlanningCommittee Human ResourcesandCompensationCommittee Audit Committee Finance Committee(Chair) Board 133,776 MEMBER OF 147,279 February 2009 February 2010 OR CONTROLLED N/A COMMON SHARESOWNED 100% 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE 100% Investment CommitteeofCN’sPension Trust Funds Finance Committee Audit Committee Strategic PlanningCommittee(Chair) Board 106,650 MEMBER OF 111,150 February 2009 February 2010 OR CONTROLLED COMMON SHARESOWNED (2) (2) (4) SECURITIES ANDOPTIONSHELD SECURITIES ANDOPTIONSHELD

(6) (5) Independent Director since:April15,2003 Toronto, Ontario, Canada Age: 70 CHARLESBAILLIE,O.C.,A. LL.D. Independent Director since:May7, 1996 Fort Lee,NewJersey, U.S.A. Age: 70 MICHAEL R.ARMELLINO, CFA eray20 Nil Nil February 2009 February 2010 OPTIONS HELD eray20 N/A N/A February 2009 February 2010 OPTIONS HELD (1) (1) (3) (3)

(4) (4) 100% 100% 100% 2002 andwasappointedanOffi Conservancy ofCanada.HewasawardedtheQueen’sJubileeMedalin directors ofCanada’sOutstandingCEOtheYear andtheNature Chair oftheArtGalleryOntario.Heisonnationalboard heavily involvedintheartsformanyyearsandiscurrentlyHonourary Executives andChancellorEmeritusofQueen’sUniversity. Hehasbeen Mr. Baillieisapast chairmanoftheCanadianCouncilChief is alsoadirectorofGeorgeWeston LimitedandTELUS Corporation. directors ofAlbertaInvestmentManagementCorporation(AIMCo)and bank thatspannedfi and asChiefExecutiveOffi Mr. BaillieretiredaschairofTheToronto-Dominion BankinApril2003, New Jersey. free healthcareforthosewithouthealthcareinBergenCounty, Volunteer MedicalInitiative,aprivatelyfundedorganizationproviding Center Foundation andFounder andsenioradvisoroftheBergen of thePeddie School,aTrustee oftheHackensackUniversityMedical Mr. ArmellinoisaTrustee andmemberoftheExecutiveCommittee Charge ofResearch. Sachs &Co.,includingseniortransportationanalystandPartner in Management. Priorto1991,hehadheldvariouspositionsatGoldman, was chairandChiefExecutiveOffi The GoldmanSachsGroup,LP. From 1991to1994,Mr. Armellino Mr. Armellino,acharteredfi aaCroain (1998-2008) (2003-present) Dana Corporation TELUS Corporation vedecades.Mr. Baillieischairoftheboard cer in December 2002 after a career at the cerinDecember2002afteracareeratthe nancialanalyst,isaRetiredPartner, ceroftheOrderCanadain2006. cer of Goldman Sachs Asset cerofGoldmanSachsAsset on on or 0%Js nryIcm ud (2006-present) JustEnergyIncomeFund 100% 100% 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE 100% Audit Committee Strategic PlanningCommittee Human ResourcesandCompensationCommittee (2009-present) Finance Committee Environment, SafetyandSecurityCommittee 37,412 Board 42,165 MEMBER OF February 2009 February 2010 OR CONTROLLED CapitalPower Corporation COMMON SHARESOWNED 82% 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE 100% 80% Strategic PlanningCommittee Human ResourcesandCompensationCommittee Corporate GovernanceandNominatingCommittee Audit Committee Board MEMBER OF 37,346 42,478 February 2009 February 2010 OR CONTROLLED COMMON SHARESOWNED (2) (2) SECURITIES ANDOPTIONSHELD SECURITIES ANDOPTIONSHELD

(6) (5) (6) (5) Independent Director since:May1,2001 Atlanta, Georgia,U.S.A. Age: 60 GORDOND.GIFFIN AMBASSADOR Independent Director since:April15,2003 Edmonton, Alberta,Canada Age: 71 HUGH J.BOLTON, FCA eray20 27,000 12,000 February 2009 February 2010 OPTIONS HELD N/A N/A February 2009 February 2010 OPTIONS HELD (1) (1) (4) (3) (3) 100% Just EnergyIncomeFund. Canadian NaturalResourcesLimited,TransAlta Corporationand Mr. Giffi He ischairmanoftheboardFriends oftheNationalArtsCentre. American BusinessCouncilandtheCanada-USFulbright Program. Presidential CenterandtheboardofdirectorsCanadian- Mr. Giffi States AmbassadortoCanadafromAugust1997April2001. government serviceformorethanthirtyyears.Mr. Giffi and publicpolicy. Hehasbeenengagedinthepracticeoflawor practice focusesoninternationaltransactionsandtradematters where hemaintainsoffi Mr. Giffi Junior AchievementofCanadaandtheCanadianTax Foundation. He haspreviouslyservedasamemberoftheBoardGovernors was electedasafellowoftheInstituteCorporateDirectorsin2006. the AlbertaBoardofGovernorsMillerThomsonFoundation. He Alberta, easternBritishColumbiaandwesternSaskatchewan,of providing emergencymedicaltransportusingmedivachelicoptersin Shock Trauma Air RescueSociety(STARS), anon-profi Financial GroupandWestJet AirlinesLtd.Heisalsoadirectorofthe of CapitalPower Corporation,Teck ResourcesLimited,TDBank capping aforty-year careerwiththefi Partner ofCoopers&Lybrand Canada(nowPricewaterhouseCoopers), From 1992to1997,Mr. BoltonwasChairmanandChiefExecutive industrial ITsolutions). the chairmanofboarddirectorsMatrikonInc.(supplier (energy andenergy-related servicesprovider, notpubliclytraded),and Mr. BoltonisthechairofboarddirectorsEPCORUtilitiesInc. btbBwtrIc (2003-2009) (2002-present) (2001-present) (2002-present) AbitibiBowater Inc. Canadian ImperialBankofCommerce TransAlta Corporation Canadian NaturalResourcesLimited (2001-present) (2001-present) (2005-present) (2003-present) Teck Resources Limited Matrikon Inc. TD BankFinancialGroup WestJet AirlinesLtd. nisSeniorPartner ofthelawfi n is also a director of the Canadian Imperial Bank of Commerce, nisalsoadirectoroftheCanadianImperialBankCommerce, nisamemberoftheBoardTrustees oftheJimmyCarter cesinWashington, D.C.andAtlanta.His rm.Mr. Boltonisalsoadirector rmofMcKenna Long&Aldridge, t organization torganization n was United nwasUnited

9 CN MANAGEMENT INFORMATION CIRCULAR 10 CN MANAGEMENT INFORMATION CIRCULAR or 0%Brookfi 100% 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE Strategic PlanningCommittee 100% Investment CommitteeofCN’sPension Trust Funds Finance Committee Environment, SafetyandSecurityCommittee(Chair) Board 64,577 MEMBER OF 70,505 February 2009 (2004-present) February 2010 OR CONTROLLED COMMON SHARESOWNED WhiteMountainsInsuranceGroup,Ltd. 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE 100% 100% Strategic PlanningCommittee Investment CommitteeofCN’sPension Trust Funds 100% Human ResourcesandCompensationCommittee Environment, SafetyandSecurityCommittee Corporate GovernanceandNominatingCommittee 35,717 Board 40,278 MEMBER OF February 2009 February 2010 OR CONTROLLED COMMON SHARESOWNED (2) (2) SECURITIES ANDOPTIONSHELD SECURITIES ANDOPTIONSHELD (6) (5) (6) (5) Independent Director since:March29,1995 Weston, Florida,U.S.A. Age: 61 O.C., D.COMM.,LL.D. V. MAUREEN KEMPSTONDARKES, Independent Director since:June1,2001 Washington, D.C.,U.S.A. Age: 58 EDITH E.HOLIDAY eray20 40,000 27,000 February 2009 February 2010 OPTIONS HELD 27,000 12,000 February 2009 February 2010 OPTIONS HELD (1) (1) (3) (3) (4) (4) 100% 100% for IrvingOil. Management Inc.andFort Reliance,theprivateholdingcompany Mrs. Kempston DarkesisalsoadirectorofBrookfi International AlumniCouncil. Mrs. Kempston DarkesisamemberoftheUniversityToronto’s was therecipientofGovernorGeneralCanada’sPersons Award. 12th MostPowerful Woman inInternationalBusiness.In2006,she of OntarioandwasrankedbyFortune magazinein2009asthe She isanOffi of CanadaLimitedandVice-PresidentGeneralMotorsCorporation. to 2001,shewasPresidentandGeneralManagerofMotors the highestoperatingposteverbyawomanatGM.From 1994 In 2009sheendeda35-yearcareeratGMduringwhichattained Latin America,AfricaandMiddleEast,GeneralMotorsCorporation. Mrs. Kempston DarkesistheretiredGroupVice-PresidentandPresident and theDistrictofColumbia. Mrs. HolidayisadmittedtothebarsofstatesFlorida,Georgia of diversityintheworkplace. distinction ontheboardofapubliccompanyandadvancedvalue Board ExcellenceAward,whichhonourswomenwhohaveservedwith She istherecipientofDirectWomen’s 2009SandraDayO’Connor of theFranklin Templeton GroupofFunds. Ltd. Sheisalsoadirectorortrusteeofvariousinvestmentcompanies RTI InternationalMetals,Inc.andWhiteMountainsInsuranceGroup, Mrs. HolidayisadirectorofH.J.HeinzCompany, HessCorporation, Cabinet, TheWhiteHouse. Counsel, UnitedStatesTreasury DepartmentandSecretaryofthe Mrs. HolidayisaCorporateDirectorandTrustee andaformerGeneral oad n. (1998-2005) (2005-2006) (1996-2008) Noranda Inc. Falconbridge Limited Thomson Corporation esCroain (1993-present) (1994-present) (1999-present) Hess Corporation H.J. HeinzCompany Franklin Templeton GroupofFunds RTI InternationalMetals,Inc. vroscmais (1996-present) (various companies) edAstMngmn n. (2008-present) eldAssetManagementInc. cer of the Order of Canada, a member of the Order ceroftheOrderCanada,amember eld Asset eldAsset iac omte 100% 100% 100% 100% Strategic PlanningCommittee Human ResourcesandCompensationCommittee Finance Committee Environment, SafetyandSecurityCommittee or 0%BEIc (2003-present) Inc. BCE 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE Investment CommitteeofCN’sPension Trust (2007-present) 87,431 Board 93,527 MEMBER OF February 2009 February 2010 OR CONTROLLED PlazacorpRetailPropertiesLtd. COMMON SHARESOWNED 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS 100% ATTENDANCE 100% Strategic PlanningCommittee Investment CommitteeofCN’sPension Trust Funds Corporate GovernanceandNominatingCommittee Audit Committee(Chair) 87,441 Board MEMBER OF 105,631 February 2009 February 2010 OR CONTROLLED COMMON SHARESOWNED Funds (Chair) (2) (2) (4) 100% SECURITIES ANDOPTIONSHELD SECURITIES ANDOPTIONSHELD (6) (5) (6) (5) Independent Director since:July4,1996 South Lancaster, Ontario,Canada Age: 70 P.C., LL.D. THE HON.EDWARD C.LUMLEY, Independent Director since:October25,1994 Moncton, NewBrunswick,Canada Age: 57 THE HON.DENISLOSIER, P.C., LL.D. eray20 Nil Nil February 2009 February 2010 OPTIONS HELD 39,000 27,000 February 2009 February 2010 OPTIONS HELD (1) (1) (3) (3) (4) 100% Group, Inc. Inc.,BellCanadaandDollar-Thriftyand adirectorofBCE Automotive of Canada.HeiscurrentlyChancellortheUniversityWindsor which timeheheldvariouscabinetportfoliosintheGovernment Mr. LumleywasaMemberofParliament from1974to1984,during Group Inc. From 1986to1991,heservedaschairofNorandaManufacturing Mr. LumleyisVice-Chairman,BMOCapitalMarkets(investmentbank). Enbridge GasNewBrunswickandPlazacorpRetailPropertiesLtd. New BrunswickBusinessCouncilandadirectorofNAV CANADA, such, becameamemberofthePrivyCouncil.Heis of theSecurityIntelligenceReviewCommitteeCanada,and,as of Moncton’sExcellenceCampaign.In2008,hewasnamedamember Discoveries fundraisingcampaignandwasco-chairoftheUniversity Mr. LosierisChairmanoftheAtlanticCancerResearchInstitute’s and MinisterofCommerceTechnology. of NewBrunswick,includingMinisterFisheriesandAquaculture various cabinetlevelpositionswiththegovernmentofProvince (life insurancecompany).Between1989and1994,Mr. Losierheld Mr. LosierisPresidentandChiefExecutiveOffi nirAtmtv n. (2001-2005) (1989-2008) (1989-2008) (1997-present) Intier AutomotiveInc. Magna InternationalInc. Magna EntertainmentCorp. Dollar-Thrifty Automotive Group,Inc. (2004-present) NAV CANADA cer, AssumptionLife

11 CN MANAGEMENT INFORMATION CIRCULAR 12 CN MANAGEMENT INFORMATION CIRCULAR or 0%SCLvlnGopIc (2003-present) GroupInc. SNC-Lavalin 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE 100% Strategic PlanningCommittee Board MEMBER OF 205,287 216,200 February 2009 February 2010 OR CONTROLLED COMMON SHARESOWNED N/A 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE 100% 100% Strategic PlanningCommittee Investment CommitteeofCN’sPension Trust Funds Human ResourcesandCompensationCommittee Environment, SafetyandSecurityCommittee Corporate GovernanceandNominating Board (Chair) 177,989 MEMBER OF 191,262 February 2009 February 2010 OR CONTROLLED COMMON SHARESOWNED omte Car 100% Committee (Chair) (2) (2) SECURITIES ANDOPTIONSHELD SECURITIES ANDOPTIONSHELD (6) (5) Not Independent Director since:October20,2009 Montréal, Quebec,Canada Age: 48 CLAUDE MONGEAU Independent Director since:August31,1994 Vancouver, BritishColumbia,Canada Age: 71 DAVID McLEAN,O.B.C., G.A. LL.D. eray20 735,000 863,000 February 2009 February 2010 OPTIONS HELD Nil Nil February 2009 February 2010 OPTIONS HELD (1) (1) (3) (3) (4) 100% Mr. GroupInc. Mongeauisalso adirectorofSNC-Lavalin bursaries toQuebecuniversitystudents. Archaeology andHistoryofForces Avenir, whichawardsannual Mr. Mongeauhas beenadirectoroftheMontréalMuseum at Bain&Company. in thebusinessdevelopmentunitofImascoInc.andasaconsultant a Montréal-basedmanagementconsultingfi Prior tojoiningCN,Mr. MongeauwasapartnerwithSecorGroup, independent committeeofprominentCanadianbusinessleaders. in 1994.In2005,hewasselectedCanada’sCFOoftheYear byan Vice-President, CorporateDevelopmentuponjoiningtheCompany of Vice-President,StrategicandFinancialPlanningAssistant such positionuntilJune1,2009.Priortothisheheldthepositions Vice-President andChiefFinancialOffi Company onJanuary1,2010.In2000,hewasappointedExecutive Mr. MongeaubecamePresidentandChiefExecutiveOffi British Columbiain1999. Directors ofCanadain2006andwasappointedtotheOrder Mr. McLeanwaselectedasafellowoftheInstituteCorporate of Trade andthe CanadianChamberofCommerce. governors oftheUniversityBritishColumbia,Vancouver Board Seaforth HighlandersofCanadaandpastchairtheboard Studies attheUniversityofCaliforniaBerkeley, aPatron ofthe of DucksUnlimited.HeisamembertheInstituteCanadian He isatrusteeoftheWetlands AmericaTrust, Inc.,theU.S.foundation television facilities,communicationsandaircraftcharters). Executive Offi Mr. McLeanisboardchairoftheCompanyandChief otlNtok (2006-2009) Nortel Networks cer, TheMcLeanGroup(realestateinvestment,fi cer of the Company and held ceroftheCompanyandheld rm. He also worked rm.Healsoworked cer of the cerofthe lm and lmand 5 IncludesDirectorsRestrictedShareUnitsasatFebruary CharlesBaillie:45,679;Hug 26,2010inthefollowingamounts:A. (5) Theinformationregardingcommonsharesbenefi (2) TheageofthedirectorsisprovidedasatdateMeeting(i.e.,onApril27,2010). (1) 3 TheinformationregardingoptionscomprisesthegrantedunderManagementLong-Term IncentivePlan.Mr. Baillie (3) 6 IncludesDirectorsRestrictedShareUnitsasatFebruary CharlesBaillie:39,176;Hug 27,2009 inthefollowingamounts:A. (6) TheInvestmentCommitteeofCN’sPension Trust Funds isamixedcommitteecomposedofbothmemberstheBoardDirector (4) or 0%HdoOeIc (2007-present) HydroOneInc. 100% 100% 100% OTHERPUBLICBOARDSDURINGPAST 5YEARS ATTENDANCE 100% Strategic PlanningCommittee Investment CommitteeofCN’sPension Trust Funds Corporate GovernanceandNominatingCommittee Audit Committee Human ResourcesandCompensation 94,975 Board MEMBER OF 110,550 February 2009 February 2010 OR CONTROLLED COMMON SHARESOWNED omte Car 100% Committee (Chair) elected ascompensationbydirectors,wellDeferredShareUnits(“ Environment, SafetyandSecurityCommitteetojointheAuditinJune2009. is suffi which willvestoveraperiodoffouryears.TheelectiontoreceiveeligibleincentivepaymentsinDSUsisnolongeravailable the 20tradingdayspriortoandincludingdateofincentivepayment.For eachparticipant,theCompany willgrantafu incentive paymentsinDSUspayablecashuponretirementorterminationofemployment.Thenumberreceivedbyeachpa include commonsharesunderoptions.TheVIDPprovideseligibleseniormanagementemployeestheopportunitytoelectreceive please seepage48ofthisInformationCircular. Pursuant tothetermsofDirectorsRestrictedShareUnits,directorsortheirestatescanonlyaccessRestr Edith E.Holiday:6,828;V. MaureenKempston Darkes:24,005;TheHon.DenisLosier:38,678;Edward C.Lumley:40,727; Committee inMay2009tojointheEnvironment,SafetyandSecurityCommittee.Mr. BailliealsojoinedtheInvestmentCommittee under suchplancouldnolongerbemadetonon-executivedirectors. were granted.Nooptionshavebeengrantedtonon-executivedirectorssince2002.OnMarch8,2005,theManagementLong-Term In Pursuant tothetermsofDirectorsRestrictedShareUnits,directorsortheirestatescanonlyaccessRestr Edith E.Holiday:4,517;V. MaureenKempston Darkes:23,577;TheHon.DenisLosier:33,569;EdwardC.Lumley:34,631; cienttomeettheCompany’sstockownershipguidelines.Thevalueofeachparticipant’sDSUsispayableincashattime (2) SECURITIES ANDOPTIONSHELD (6) (5) Independent Director since:October25,1994 Halifax, NovaScotia,Canada Age: 55 ROBERT PACE eray20 51,000 27,000 February 2009 February 2010 OPTIONS HELD ciallyowned,controlledordirectedhasbeenfurnishedbytherespectivenomineesindividuallyandincludesDirectorsRestric (1) (3) (4) DSUs ”) undertheCompany’sVoluntary IncentiveDeferralPlan(“ 100% Hydro OneInc.andboardchairofOverlandRealtyLimited. Mr. Pace isalsoadirectorofHighLinerFoods Incorporatedand Foundation. He isadirectoroftheAtlanticSalmonFederation andtheAsiaPacifi Canada AdvisortothePrimeMinisterofCanada. Mr. Pace beganhiscareerasalawyerinHalifaxandworkedAtlantic (radio broadcasting,realestateandenvironmentalservices). Mr. Pace isPresidentandChiefExecutiveOffi vradRat iie (2006-present) (1998-present) High LinerFoods Incorporated Overland RealtyLimited icted ShareUnitsuponretirement,resignationordeath. icted ShareUnitsuponretirement,resignationordeath. h J.Bolton:39,978;AmbassadorGordonD.Giffi h J.Bolton:34,846;AmbassadorGordonD.Giffi to a participant when the value of the participant’s vested DSUs toaparticipantwhenthevalueofparticipant’svestedDSUs rther 25% (Company match) of the amount elected in DSUs, rther 25%(Companymatch)oftheamountelectedinDSUs, and Mr. BoltonwerenotmembersoftheBoardwhenoptions s aswelloffi of CN’sPension Trust Funds inMay2009.Mr. Giffi their annual incentive bonus payment and other eligible theirannualincentivebonuspaymentandothereligible David G.A. McLean:83,352;andRobertPace:David G.A. 42,176. David G.A. McLean:70,079;andRobertPace:David G.A. 36,101. cessationofemployment.For furtherdetailsontheVIDP, rticipant is established using the average closing price for rticipant isestablishedusingtheaverageclosingpricefor centive Plan was amended to provide that option grants centive Planwasamendedtoprovidethatoptiongrants VIDP ”) in the case of Claude Mongeau, but does not ”) inthecaseofClaudeMongeau,butdoesnot cersoftheCompany. Mr. BaillielefttheAudit cer, ThePace Group n: 18,265; n:18,265; n: 14,637; n:14,637; ted Share Units ted ShareUnits n left the nleftthe c

13 CN MANAGEMENT INFORMATION CIRCULAR 14 CN MANAGEMENT INFORMATION CIRCULAR tends to be comparable to that of large U.S.-based companies. tends tobecomparablethatoflargeU.S.-basedcompanies. compensation ofthenon-executivedirectorsCompany executive directornomineesarefromtheUnitedStatesand extensive operationsintheUnitedStates,threeofnon- of beinganeffectivedirector. To refl committees andtakesintoaccounttherisksresponsibilities retain themostqualifi The directors’compensationprogramisdesignedtoattractand refl Company purchasedontheopenmarket,plusadditionalDRSUs resignation, retirementordeath,onecommonshareofthe Each DRSUentitlesthebenefi also electtoreceivetheircommonshareretainersinDRSUs. Company purchasedontheopenmarketorDRSUs.Theymay chair cashretainerseitherincash,commonsharesofthe their director, committeemember, Boardchairandcommittee Information Circular, directorsmayelecttoreceiveallorpartof Shareholding Requirementasdefi Restricted ShareUnits(“ for 2009wasintheformofcommonsharesorDirectors of thetotalannualremunerationnon-executivedirectors investment intheCompany. Inaddition,approximately69% Ownership” onpage16,thedirectorshaveasubstantial to theBoard–ofDirectorsCompensationShare shareholder value.Asindicatedunder“NomineesforElection The directorsoftheCompanyplayacentralroleinenhancing Board ofDirectorsCompensation ectingdividendequivalents. ed people to serve on CN’s Board and edpeopletoserveonCN’sBoardand DRSUs ciary thereof to receive upon ciarythereoftoreceiveupon ”). Subject to the Minimum ”). SubjecttotheMinimum ned on page 16 of this nedonpage16ofthis ect the Company’s ecttheCompany’s indicated inthetablebelow: it wasdeterminedthateachdirectorbecompensatedas In considerationforservingontheBoardofDirectorsin2009, (4) Committee chairs (other than the Board chair) also receive, as members of a committee, Committeechairs(otherthantheBoardchair)alsoreceive,asmembersofacommittee, (4) Mr. MongeaudoesnotandMr. Harrisondidnotreceiveanycompensationtoserve (3) Directorsmaychoosetoreceiveallorpartoftheircashretainerincommonshares (2) TheBoardchairreceivesnoadditionalDirectorRetainernorCommitteeChairor (1) Travel AttendanceFee Committee MeetingAttendanceFee Board MeetingAttendanceFee Committee MemberRetainer Committee ChairRetainer Director Retainer Board ChairRetainer TYPE OFFEE a retainerofUS$3,500. as directorbecauseMr. HarrisonwasandMr. Mongeauisanoffi shares arepurchasedontheopenmarket. DRSUs andtheircommonshareretainercanalsobereceivedinDRSUs.The Committee MemberRetainer. (3) (1) (4) US$1,500 US$1,500 US$1,500 US$3,500 US$15,000 US$15,000 US$120,000 AMOUNTANDNUMBER OF SHARES (2) (2) ceroftheCompany. and12,000Shares and4,500Shares (2) (2) (2) (2) 7 Thispercentageiscalculatedbydividingtheaggregateofcashretainerelectednon-executivedirectorstoberecei (7) 6 Includesthevaluefor2009ofinsurancepremiumslife,accidentaldeathanddismembermentaswellme (6) Represents4,500commonsharesorDRSUsreceivedbyeachnon-executivedirectoraspartoftheDirectorRetainer(and12,00 (4) IncludestravelfeeswhichamountedtoatotalofCAD$143,892,inaggregate,foralldirectors. (3) 5 Suchvaluesrepresentcommitteeattendancefeesreceivedincashfortomeetingsofboardcommitteeswhichth (5) 2 AlldirectorsearnedcompensationinU.S.currency. CompensationreceivedincashwasconvertedtoCanadiandollarsusingt (2) JamesK.GrayandRobertH.LeeretiredfromtheBoardondateoflastannualmeetingshareholdersheldApril (1) The tablebelowrefl ei oir1,3 17,130 19,985 17,130 Robert Pace McLean David G.A. – Edward C.Lumley The Hon. Denis Losier The Hon. 17,130 Robert H.Lee Kempston Darkes V. Maureen Edith E.Holiday TOTAL 15,988 – 18,362 17,130 James K.Gray 18,362 Gordon D.Giffi Ambassador Hugh J.Bolton CharlesBaillie A. Armellino Michael R. DIRECTOR NAME OF value providedundertheshare-basedawardscolumn,bytotalcolumn. the U.S.ThetotalcosttoCompanyforsuchbenefi to CanadiandollarsusingtheaveragerateofexchangeBankCanadafor2009(1.142CAD/USD). CAD$5,139 andAmbassadorGordonD.Giffi Stock Exchange(US$34.17)andconvertedusingtheclosingexchangerateonsamedate(1.2241CAD/USD)forMichaelR.Armell of theBoardChairRetainer).ThevaluesuchgrantwascalculatedasatJanuary26,2009usingclosingpriceondat (CAD$58,146) andRobertPace (CAD$58,146).TheamountofcashretainerselectedtobereceivedincommonsharesorDRSUsisinc common sharesorDRSUs.Thefollowingdirectorsmadesuchelectionwithrespecttotheamountssetforthbesidetheirname:A. shares orDRSUsreceivedbythedirectorsandBoardchairasdescribedinnote(4)below, thedirectorsandBoardchair (1.2241 CAD/USD),onthefi (1.142 CAD/USD).CompensationelectedtobereceivedincommonsharesorDRSUswasconvertedCanadiandollarsusingtheclos (1) (1) n1,3 5985,5 8,2 ,3 8,3 66% 286,436 5,139 188,224 59,955 15,988 – 17,130 n (CAD$) RETAINER BOARD DIRECTOR CHAIR AND ects indetailthecompensationearnedbynon-employeedirectors12-monthperiodendedDecember31,2009. rstdayopenedfortradingfollowingthedateonwhichBoardofDirectorsapprovedDirectors’Compensation(January26,20 3,4 70552901,5 2,0 69% 729,501 69% 12,456 502,920 3,991,752 86,115 77,085 2,576,352 – 741,729 174,754 – 306,326 106,476 137,040 8321,6 1428,1 8,9 ,1 2,6 75% 75% 328,965 328,965 1,713 60% 6,852 188,595 312,502 188,595 80,511 13,704 75,372 21,422 188,595 21,422 18,362 59,955 18,362 18,362 15,988 18,362 17,130 17,130 7101,3 5986,8 8,2 028321160% 312,131 10,278 188,224 63,381 15,988 17,130 17,130 ,1 ,2 0561855855287582% 228,755 83% 8,565 228,375 188,595 3,426 20,556 188,595 5,329 23,982 – 6,662 – 5,710 5,710 2 2 (2) (2) (2) (CAD$) CHAIR COMMITTEE RETAINER nreceivedCAD$1,713fortheirparticipationinmeetingsof tsisequaltoCAD$2,178.39. FEES EARNED (CAD$) RETAINER MEMBER COMMITTEE 5986,9 8,9 028342560% 314,215 10,278 188,595 65,094 15,988 9947,7 8,9 ,5 2,3 75% 327,537 6,852 188,595 75,372 19,994 AND ATTENDANCE TRAVEL COMMITTEE BOARD AND 5321824519358062% 305,850 5,139 188,224 75,372 5041855173285065% 288,520 1,713 188,595 65,094 (CAD$) FEES (3) the Company’sDonationsandSponsorshipsCommittee.Suchvalueswe SHARE-BASED AWARDS (CAD$) ved in common shares or DRSUs described in note (2) above and the ved incommonsharesorDRSUsdescribednote(2)aboveandthe 21,2009. (4) he average rate of exchange of the Bank of Canada for 2009 he averagerateofexchangetheBankCanadafor2009 may choose to receive all or part of their cash retainers in maychoosetoreceiveallorpartoftheircashretainersin e ontheToronto StockExchange(CAD$41.91)ortheNewYork 0 common shares or DRSUs received by the Board Chair as part 0 commonsharesorDRSUsreceivedbytheBoardChairaspart dical and dental coverage for David G.A. McLean in Canada and McLeaninCanadaand dical anddentalcoverageforDavidG.A. ey were not members. In addition, David G.A. McLean received McLeanreceived ey werenotmembers.Inaddition,DavidG.A. ALL OTHER COMPENSATION Charles Baillie (CAD$56,718), The Hon. Edward C. Lumley Charles Baillie(CAD$56,718),TheHon.EdwardC.Lumley luded inthesecolumns. ino, AmbassadorGordonD.Giffi ing rate of exchange of the Bank of Canada ing rateofexchangetheBankCanada (CAD$) (5) (5,6) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (CAD$) TOTAL 09). In addition to the common 09). Inadditiontothecommon nandEdithE.Holiday. SHARES AND/OR IN RECEIVED COMMON TOTAL PERCENTAGE OF FEES re converted re converted DRSUs (7)

15 CN MANAGEMENT INFORMATION CIRCULAR 16 CN MANAGEMENT INFORMATION CIRCULAR to hisorherholding. or otherhedgingprocedurestoreducetheexposurerelated shall notbetheobjectofspecifi held tocomplywiththeMinimumShareholdingRequirement the commonshares,DRSUsorsimilarshareequivalentofCN hold suchvaluethroughouthisorhertenureasadirectorand Requirement common shareorDRSUgrant)(the“ of theBoardChairannualretainerincashand share orDRSUgrant(andfortheBoardChair, theaggregate the annualDirectorretainerincashandcommon of: (i)CAD$250,000,or(ii)three(3)timestheaggregateof equivalents ofCN,ifany, withavalueofatleastthehigher joining theBoard,commonshares,DRSUsorsimilarshare executive directorshouldown,withinthree(3)yearsof The Boardhasadoptedaguidelinestatingthateachnon- Share Ownership ThevalueofoutstandingDRSUsisbasedontheclosingpricecommonsharesDecember31,2009Toronto Stock (5) ShowsinformationregardingDRSUsheldbynon-executivedirectorsasofDecember31,2009.Themaychoosetorece (4) Thevalueofunexercisedin-the-moneyoptionsatfi (3) Showsinformationregardingoptionsheldbynon-executivedirectorsundertheManagementLong-Term IncentivePlanasofDec (2) JamesK.GrayandRobertH.LeeretiredfromtheBoardondateoflastannualmeetingshareholdersheldApril (1) The tablebelowrefl Outstanding Option-basedAwardsandShare-based reln – N/A N/A N/A – N/A James K.Gray Gordon D.Giffi Ambassador Hugh J.Bolton CharlesBaillie A. Armellino Michael R. NAME OFDIRECTOR ai ..MLa – – – – Robert P McLean David G.A. Edward C.Lumley The Hon. Denis Losier The Hon. Robert H.Lee Kempston Darkes V. Maureen Edith E.Holiday retirement orresignationfromtheCompany’sBoard,death. DRSUs andtheircommonshareretainercanalsobereceivedinDRSUs.PursuanttothetermsofDirectorsRestrictedShareUn the exerciseprice. (CAD$57.34) ortheNewYork StockExchange(US$54.36)forAmbassador GordonD.Giffi members oftheBoardwhenoptionsweregrantedunderManagementLong-Term IncentivePlan. While theyremainparticipantsinthePlanforpreviousgrants,lasttimenon-executivedirectorsreceivedoptionswas2 exercisable. OnMarch8,2005,theManagementLong-Term IncentivePlanwasamendedtoprovidethatoptiongrantsunderthe (US$54.36) forAmbassadorGordonD.Giffi c 2001/01/26 ace (1) (1) n20/12 2002.921/12 7,0 476 844,188 14,776 378,508 2012/01/25 25.59 12,000 2002/01/25 n ”). Each non-executive director shall continue to ”). Eachnon-executivedirectorshallcontinueto 2001/01/26 2002/01/25 2001/01/26 OFSECURITIESUNDERLYING DATE ANDNUMBER OFGRANT (#) UNEXERCISED OPTIONS ects all awards outstanding as at December 31, 2009 with respect to non-executive directors. ectsallawardsoutstandingasatDecember31,2009withrespecttonon-executivedirectors. 020/51,0 55 020/538584,567260,923 378,508 2002/01/25 2012/01/25 25.59 2002/01/25 12,000 2002/01/25 / / / / / –– – N/A N/A N/A ––––––– c monetization procedures cmonetizationprocedures nandEdithE.Holiday, usingtheDecember31,2009closingexchangerate(1.051CAD/USD). Minimum Shareholding Minimum Shareholding nancialyear-end isthedifferencebetweenclosingpriceofcommonsharesonDecember31,2009Toronto StockEx 12,000 15,000 12,000 15,000 12,000 15,000 OPTION-BASED AWARDS OPTION EXERCISE PRICE 16.67 25.59 25.59 16.67 25.59 16.67 (CAD$) / / / 5182,015,960 2,284,884 N/A 35,158 N/A 39,848 ––––– – – 70,707 34,985 4,054,339 2,006,040 nandEdithE.Holiday, usingtheDecember31,2009closingexchangerate(1.051CAD/USD),and (2) DATE EXPIRATION OPTION for U.S.directors.) (CAD$55.30), ortheNewYork StockExchange(USD$52.66) shares oftheCompanyonToronto StockExchangeof on theFebruary 26,2010,closingpriceofthecommon by non-executivedirectorsisapproximatelyCAD$5.3M(based common shares(includingDRSUs)oftheCompanyowned or DRSUsofCN.Asthedatehereof, theaveragevalueof hundred percent(100%)ofsuchretainersincommonshares Requirement ismet,directorsmayelecttoreceiveupone Requirement ismet.OncetheMinimumShareholding shares orDRSUsofCNuntilhisherMinimumShareholding one hundredpercent(100%)ofsuchretainersincommon shares orDRSUsofCNandmayelecttoreceiveup Board chairandcommitteecashretainersincommon fi Each non-executivedirectorisrequiredtoreceiveatleast ftypercent(50%)ofhisorherannualDirector, committee, 2012/01/25 2011/01/26 2012/01/25 2011/01/26 2012/01/25 2011/01/26 IN-THE-MONEY UNEXERCISED VALUE OF 21,2009. 002. A. Charles Baillie, Hugh J. Bolton and Robert H. Lee were not CharlesBaillie,HughJ.BoltonandRobertH.Leewerenot 002. A. ive all or part of their cash retainers in common shares or ive allorpartoftheircashretainersincommonshares ember 31,2009.Asofthedatehereof, alltheseoptionsare 381,000 610,050 381,000 610,050 381,000 610,050 its, directors or their estates can only access their DRSUs upon its, directorsortheirestatescanonlyaccessDRSUsupon Exchange(CAD$57.34)ortheNewYork StockExchange OPTIONS (CAD$) could no longer be made to non-executive directors. couldnolongerbemadetonon-executivedirectors. 3 (5) (3) (#) ORUNITSOF NOT SHARESTHAT HAVE NUMBEROFSHARES VESTED SHARE-BASED AWARDS 3781,364,004 23,788 6452,088,610 36,425 1,942,048 33,869 AWARDS SHARE-BASED VALUE THAT MARKETORPAYOUT OF HAVE NOTVESTED (4) change change (CAD$) 3 ThetotalvalueisbasedontheFebruary 26,2010closingpriceofthe commonsharesontheToronto StockExchange(CAD$55. (3) IncludesDRSUselectedaspartofdirectorscompensationandDSUsundertheCompany’sVIDPheldbyClaudeMongeau. (2) ThenumberofcommonsharesandDRSUsheldbyeachdirectorfor2010isasatFebruary 26,2010andfor2009isasatFebru (1) Shareholding Requirement. directors, thevalueatriskasamultipleofeachdirector’sannualretainerandamountneededtomeetMinimum The followingtableprovidesinformationonthevalueofcommonsharesandDRSUsownedbyCompany’scurrent IETRYEAR Armellino Michael R. DIRECTOR ai ..MLa 2010 McLean David G.A. Edward C.Lumley The Hon. Denis Losier The Hon. 2010 Kempston Darkes V. Maureen Edith E.Holiday 2010 Gordon D.Giffi Ambassador 2010 Hugh J.Bolton CharlesBaillie A. oetPc 2010 2010 Robert Pace Claude Mongeau Michael R.Armellino,AmbassadorGordonD.Giffi n Net change Net change Net change Net change Net change Net change Net change Net change Net change Net change Net change 2009 2010 2009 2009 2010 2009 2010 2009 2010 2009 2009 2009 2009 2009 2009 2010

1 (2) (1) OR CONTROLLED OWNED, DIRECTED COMMON SHARES NUMBER OF n,EdithE.HolidayandClaudeMongeau,usingtheclosingexchangerate(1.0525CAD/USD)onsamedate. 106,650 111,150 107,910 107,910 101,600 52,800 52,800 13,081 53,872 66,953 41,000 46,500 31,200 33,450 94,600 58,874 68,374 25,271 26,750 22,775 23,900 4,500 2,500 2,500 5,500 2,250 7,000 9,500 1,479 1,125 – – – NUMBER OF DRSUs HELD 180,016 189,450 34,846 39,978 13,273 70,079 83,352 34,631 40,727 33,569 38,678 23,577 24,005 39,176 45,679 36,101 42,176 14,637 18,265 5,132 6,096 5,109 2,311 4,517 6,828 6,503 9,434 6,075 3,628 428 – – – AND DIRECTED CONTROLLED DRSUs SHARES OR OF OWNED, TOTAL COMMON NUMBER 106,650 111,150 177,989 191,262 105,631 133,776 147,279 205,287 216,200 110,550 37,346 42,478 13,273 87,431 93,527 18,190 87,441 64,577 70,505 35,717 40,278 13,503 10,913 15,575 94,975 37,412 42,165 4,500 5,132 6,096 5,928 4,561 4,753 GUIDELINE REQUIREDTOMEET OR GUIDELINEMET(✓ INVESTMENT 30) ortheNewYork StockExchange(US$52.66)for ary 27,2009. (CAD$) ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ) (VALUE AT RISK) SHARESANDDRSUs OF TOTAL COMMON VALUE 19289N/A 13 11,982,809 10,576,789 ,1,1 23 6,113,415 20 5,172,043 15 8 3,898,927 9 2,232,394 9 2,336,980 31 2,349,033 23 8,144,529 6,160,450 ,4,9 22 5,841,394 (CAD$) (3) ASMULTIPLE OF VALUE AT RISK ANNUAL RETAINER

17 CN MANAGEMENT INFORMATION CIRCULAR 18 CN MANAGEMENT INFORMATION CIRCULAR 2 E.HunterHarrisonretiredasPresidentandChiefExecutiveOffi (2) 3 ClaudeMongeauwasappointedtotheBoardonOctober20,2009. (3) 1 Inadditiontocommitteemembers,allnon-executiveboardmembersattendedtheJanuary2009meetingofCorporateGovern (1) of Boardandcommitteemeetingsheldduringthe12-monthperiodendedDecember31,2009. The tablesbelowshowtherecordofattendancebydirectorsatmeetingsBoardanditscommittees,aswellnumber Board andCommitteeAttendance taei lnigCmite3 4 11 5 5 9 Strategic PlanningCommittee 4 Investment CommitteeofCN’sPension Trust Funds Human ResourcesandCompensationCommittee 5 Finance Committee Environment, SafetyandSecurityCommittee Corporate GovernanceandNominatingCommittee Audit Committee Board MEETINGS BOARD ANDCOMMITTEE oetPc 11/11 Robert Pace oia 11/11 Edith E.Holiday E. HunterHarrison Gordon D.Giffi Ambassador uhJ otn9/11 Hugh J.Bolton ali 11/11 CharlesBaillie A. Michael R. DIRECTOR cen11/11 Claude Mongeau McLean David G.A. Edward C.Lumley The Hon. Denis Losier The Hon. Kempston Darkes V. Maureen The Hon.DenisLosierfi who donotsitontheHumanResourcesandCompensationCommitteeattendedfollowingnumberofmeetingsanon-votingbasi V. MaureenKempston McLeanattendedtheAprilandJuly2009AuditCommitteeme Darkes,TheHon.EdwardC.LumleyandDavidG.A. Environment, SafetyandSecurityCommitteetojointheAuditinJune2009butattendedAprilCommi Mr. BailliealsoattendedtheApril2009InvestmentCommittee ofCN’sPension Trust Funds onanon-votingbasis,whichhealso CharlesBaillielefttheAuditCommitteeinMay2009tojoinEnvironment,SafetyandSecuritybutattended A. in camera in (1) reln 11/11 Armellino meetingfornon-executivedirectorsandassuchwasnotincludedinMr. Harrison’sattendance. n (3) (2) ve,MichaelR.ArmellinoandV. MaureenKempston Darkes foureachandClaudeMongeauone. (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) 11/11 11/11 11/11 11/11 (Chair) BOARD (90%) (82%) 9/10 3/3 COMMITTEE AUDIT (Chair) / / 9/9 5/5 5/5 – / / / / 3/319/19 – 9/9 4/4 1/1 – 2/2 5/5 4/5 – 9/9 – 3/3 21/22 / / 4/4 3/3 – 3/3 / / / 3/3 5/5 – 4/4 – – 5/5 5/5 – ––––– – 2/3 2/3 – 5/5 –4/49/95/5 – – 4/4 / / –9/95/53/3 – 5/54/4 26/26 COMMITTEE NOMINATING AND GOVERNANCE CORPORATE cer and as a member of the Board of the Company on December 31, 2009. The last 2009 Board meeting was exclusively an cerandasamemberoftheBoardCompanyonDecember31,2009.Thelast2009meetingwasexclusivelyan NUMBER OF MEETINGS NUMBER OFMEETINGS (Chair) HELD IN2009 5/5 – 5/5 3/3 18/18 COMMITTEE SECURITY SAFETY AND ENVI- RONMENT, (Chair) / –9/95/53/3 4/4 26/26 NUMBER AND%OFMEETINGSATTENDED COMMITTEE FINANCE (Chair) / –5/53/3 4/4 16/16 COMMITTEE PENSATION AND RESOURCES COM- HUMAN (Chair) 9/9 3/3 25/25 TRUST FUNDS PENSION OF COMMITTEE CN’S INVESTMENT joined inMay2009.AmbassadorGordonD.Giffi July 2009 Audit Committee meeting on a non-voting basis. July2009AuditCommitteemeetingonanon-votingbasis. ance and Nominating Committee on a non-voting basis. ance andNominatingCommitteeonanon-votingbasis. (Chair) ttee meetingonanon-votingbasis.EdithE.Holiday, 5/5 3/3 27/27 s: E. Hunter Harrison attended six, s: E.HunterHarrisonattendedsix, etings on a non-voting basis. The following directors etings onanon-votingbasis.Thefollowingdirectors COMMITTEE PLANNING STRATEGIC (Chair) 1/1 3/3 25/25 (TOTAL) COMMITTEES (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) 17/17 (67%) (95%) ATTENDANCE OVERALL n left the nleftthe (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%) 38/38 11/13 30/30 30/33 36/36 28/28 37/37 36/36 29/29 27/27 37/37 (85%) (91%) 4/4 i) Mr. Lumley, adirectoroftheCompany, wasadirectorof (ii) Mr. Baillie,adirectoroftheCompany, wasadirector (i) appointed toholditsassets,exceptforthefollowing: with creditorsorhadareceiver, receivermanagerortrustee to orinstitutedanyproceedings,arrangementcompromise legislation relatingtobankruptcyorinsolvencywassubject that capacity, becamebankrupt,madeaproposalunderany capacity orwithinayearofthatpersonceasingtoactin of anycompanythat,whilesuchpersonwasactinginthat has been,inthelast10years,adirectororexecutiveoffi for electiontotheBoardofDirectors,nosuchnomineeisor and baseduponinformationprovidedtoitbythenominees As ofthedatehereof, totheknowledgeofCompany to Directors Additional DisclosureRelating (iii) Mr.(iii) Mongeau,adirectorandthePresidentChief a directorof360networkswitheffectasJune28,2001; to BellCanadainNovember2004.Mr. Mongeauresignedas underwent restructuringin2002andsolditsCanadianassets for creditorprotectiononJune28,2001.360networks the Companies’CreditorsArrangementAct Air Canadawhenitvoluntarilyfi Dana Corporation; in February 2008.Mr. Baillieisnolongeradirectorof successfully emergedfromChapter11reorganization not includedintheChapter11fi Asian-Pacifi Code onMarch3,2006.Dana’sEuropean,SouthAmerican, reorganization underChapter11oftheU.S.Bankruptcy of DanaCorporationwhichfi Corporation (“ Mr. Mongeauwasalsoactingasadirectorof360networks August 10,2009; resigned asadirectorofNNCandNNLeffective Middle East.Theseproceedingsareongoing.Mr. Mongeau subsidiaries madeconsequentialfi Code, andcertainEurope,MiddleEastAfrica(EMEA) United StatesunderChapter11oftheU.S.Bankruptcy Certain U.S.subsidiariesfi creditor protectionproceedingsundertheCCAAinCanada. NNC, NNLandcertainotherCanadiansubsidiariesinitiated Limited (“ Nortel NetworksCorporation(“ Executive Offi a directorofAirCanada; arrangement inSeptember2004.Mr. Lumleyisnolonger proceedings andwasrestructuredpursuanttoaplanof April 2003.AirCanadasuccessfullyemergedfromtheCCAA ”) on June 29, 2006. On January 14, 2009, NNL”) onJune29,2006.OnJanuary14,2009, c, Canadian and Mexican subsidiaries are c,CanadianandMexicansubsidiariesare ceroftheCompany, becameadirectorof 360networks led voluntary petitions in the ledvoluntarypetitionsinthe ”) priortothelatterfi led voluntary petitions for ledvoluntarypetitionsfor NNC led for protection under ledforprotectionunder ling. Dana Corporation ling.DanaCorporation lings in Europe and the lingsinEuropeandthe ”) and Nortel Networks ”) andNortelNetworks ”) in (“CCAA”)in ling ling cer cer (v) Mr. Giffi Mrs. Kempston Darkes,adirectoroftheCompany,(iv) was the CCAAinCanadaonApril17,2009. Canadian subsidiariesfi April 16,2009.AbitibiBowaterInc.andcertainofits under Chapter11oftheU.S.BankruptcyCodeon subsidiaries fi AbitibiBowater Inc.andcertainofitsU.S.Canadian of AbitibiBowaterInc.untilJanuary22,2009. retired asaGMoffi acquired GM’smostvaluableassets.Mrs.Kempston Darkes on July10,2009inareorganizationwhichnewentity bankruptcy fi America, AfricaandtheMiddleEastwereincludedin operations forwhichshewasdirectlyresponsibleinLatin the U.S.BankruptcyCodeonJune1,2009.Noneof GM fi an offi led for bankruptcy protection under Chapter 11 of ledforbankruptcyprotectionunderChapter11of cerofGeneralMotorsCorporation(“ n,adirectoroftheCompany, wasadirector ling. GM emerged from bankruptcy protection ling.GMemergedfrombankruptcyprotection led voluntary petitions in the United States ledvoluntarypetitionsintheUnitedStates cer on December 1, 2009; and ceronDecember1,2009;and led for creditor protection under ledforcreditorprotectionunder ”) when GM”) when

19 CN MANAGEMENT INFORMATION CIRCULAR 20 CN MANAGEMENT INFORMATION CIRCULAR Standards (the“NYSE refers, whereappropriate,totheNYSECorporateGovernance the GovernancePolicy, whereapplicable.TheCompanyalso of theDisclosureInstrumentaswelltoguidelines text andfootnotessetforthhereunderrefertotheitems the DisclosureInstrumentandGovernancePolicy. The governance practicesmeetandexceedtherequirementsof governance practices.TheCompanybelievesthatitscorporate issuers tomaketheprescribeddisclosureregardingtheirown to Canadianissuers,whiletheDisclosureInstrumentrequires Governance Policy providesguidanceongovernancepractices Governance Guidelines(the“ Instrument Disclosure ofCorporateGovernancePractices(the“ adopted,inJune2005,NationalInstrument58-101– The CSA governance rulesinallsignifi governance practices,however, complywiththeNYSEcorporate as summarizedonourwebsiteatwww.cn.ca/governance, our we complywithCanadiangovernancerequirements.Except many oftheNYSEcorporategovernancerules,providedthat Commission (“SEC Act”) andrelatedrulesoftheU.S.SecuritiesExchange the U.S.Sarbanes-OxleyAct Administrators (the“CSA with applicablerulesadoptedbytheCanadianSecurities Exchange (“ 2 Form 58-101F1,section5;GovernancePolicy, sections3.8and3.9. (2) Form 58-101F1oftheDisclosureInstrument(“Form 58-101F1”),section2;GovernancePolicy, section3.4. (1) Toronto StockExchange(“ As aCanadianreportingissuerwithsecuritieslistedonthe the BoardofDirectors. documentation giventoallpersonselectedorappointed needs. OurCorporateGovernanceManualformspartofthe with evolvingpractices,thechangingcircumstancesandour practices byassessingtheireffectivenessandcomparingthem It isrevisedregularlywithaviewtocontinuallyimprovingour Manual isavailableonourwebsiteatwww.cn.ca/governance. updated onMarch2,2010.OurCorporateGovernance by theBoardofDirectorsonJanuary21,2003,andlast Corporate GovernanceManualwhichwasformallyapproved Directors andofeachitscommitteesaresetforthinour role, specifi were designedinamannerconsistentwiththisobjective.The corporate governanceandourpractices We arecommittedtoadheringthehigheststandardsof General PRACTICES CORPORATE GOVERNANCE STATEMENT OF c mandate and functioning rules of the Board of cmandateandfunctioningrulesoftheBoard ”) andNationalPolicy 58-201–Corporate NYSE ”), our corporate governance practices comply ”), ourcorporategovernancepracticescomply ”). We areexemptedfromcomplyingwith ”) and applicable provisions of ”) andapplicableprovisionsof TSX”) andtheNewYork Stock Sarbanes-Oxley of2002(the“Sarbanes-Oxley cantrespects. Governance Policy ”). ”). The ”). The Disclosure Disclosure Circular of theBoardissetoutinSchedule“A” tothisInformation which istheenhancementofshareholdervalue.Themandate the Companyinachievingitsprincipalcorporateobjective, corporate governancepracticesarewelldesignedtoassist The BoardofDirectorsistheopinionthatCompany’s Nominating Committee. on therecommendationofCorporateGovernanceand of theCompany’sgovernancepracticesdescribedbelow, participate orvoteinanysuchdiscussiondecision. has aninterest,theBoardwouldrequestsuchdirectornotto to anorganization,businessorassociationinwhichadirector been disclosed.Shouldtherebeadiscussionordecisionrelating make surethatthedirectorisinnosuchconfl interest. Everyyear, aquestionnaireissenttoeachdirector or association,whichcouldplacethedirectorinaconfl indirect interestheorshehasinanyorganization,business The Boardrequestseverydirectortodiscloseanydirector executive offi required tobefi of theCode.Nomaterialchangereporthaseverbeenfi contravention byemployeesoftheCompanytoprovisions of theCodewithinorganizationandonanymaterial management reportstosuchcommitteeontheimplementation relating totheCompany’sCodeofBusinessConduct.Eachyear, Committee, reviews,monitorsandoverseesthedisclosure The Board,throughitsCorporateGovernanceandNominating regulatory authorities. has alsobeenfi copies bycontactingourCorporateSecretary. TheCode in printtoanyshareholderwhorequests website atwww.cn.ca/governance and therewith. TheCodeisavailableonour director orexecutiveoffi No waiverhaseverbeengrantedtoa of anyillegalorunethicalbehaviour. compliance withlawsandreporting of corporateinformation,fairdealing, assets andopportunities,confi protection andproperuseofcorporate matters, includingconfl employees ofCN.Itaddressesseveral is applicabletodirectors,offi everyday decisionmaking.TheCode guide foranyemployeestosupport importantly, servesasareadyreference CN’s organizationalmission,values,andprinciples;most current industrytrendsandstandards;clearlycommunicates Code ofBusinessConducttoensurethatitisconsistentwith In 2008,theBoardofDirectorsreviewedandupdatedits Code ofBusinessConduct (1) . The Board of Directors has approved the disclosure . TheBoardofDirectorshasapprovedthedisclosure cerconstitutingadeparturefromtheCode. led with the Canadian and U.S. securities ledwiththeCanadianandU.S.securities led pertaining to any conduct of a director or ledpertainingtoanyconductofadirectoror ict of interests, ictofinterests, cer in connection cer inconnection cers and cersand dentiality dentiality OUR WEBSITE. IS AVAILABLE ON MANUAL, WHICH GOVERNANCE CORPORATE FORTH INOUR ARE SET COMMITTEES AND OFITS OF DIRECTORS THE BOARD AND RULESOF MANDATE THE ROLE, ict that has not ictthathasnot (2) ict of ictof led or ledor 2 Form 58-101F1,section1(f);GovernancePolicy, section3.2. (2) Form 58-101F1,sections1(a),(b)and(c);GovernancePolicy, section3.1. (1) at www.cn.ca/governance. Governance Manualwhichisavailableonourwebsite by theBoard.ThesestandardsaresetoutinCN’sCorporate authorities andtheNYSEadditionalstandardsadopted standards developedbytheCanadiansecuritiesregulatory is anindependentdirector, theBoardofDirectorsapplies Offi Board ofDirectors,exceptourPresidentandChiefExecutive of ourshareholders,allthenomineesforelectionto To betteraligntheinterestsofBoardDirectorswiththose Independence ofDirectors confi or auditingmattersmaybesubmitted real wrongdoingintermsofaccounting of employeesregardinganypotentialor Business Conductprovidesthatconcerns at www.cn.ca/governance. TheCodeof procedures aredescribedonourwebsite management directorsessions.These Chairman, whopresidesoverallnon- (ii) tocommunicatedirectlywiththe complaints orconcernstousand to submitaccountingandauditing procedures allowinginterestedparties(i) The BoardofDirectorsalsoadopted concerns arisingwithintheCompany. avenue whichfacilitatesfairandequitableresolutionsto of theOmbudsmanoffersaconfi Corporate GovernanceandNominatingCommittee.Theoffi Conduct isCN’sOmbudsman,whopresentsreportstothe in theimplementationofCompany’sCodeBusiness dealings withcustomers,suppliersandpartners.Akeyperson responsibilities totheCompanyandbefairimpartialinall impair orappeartotheeffectiveperformanceoftheir employees arealsorequiredtoavoidoutsideintereststhatmay As partoftheCompany’sCodeBusinessConduct, in thecompetentandethicaloperationofCompany. the Boardhasresponsibilityforoverseeingmanagement attached asSchedule“A” tothisInformationCircularstatesthat important partofitssuccess.Hence,themandateBoard The Companybelievesthatethicalbusinessconductisan cer, areindependent.Indeterminingwhetheradirector dentiallythroughCN’sHotLine. dential, neutral and informal dential,neutralandinformal THE CHAIRMAN. DIRECTLY WITH COMMUNICATE PARTIES TO INTERESTED ALLOWING PROCEDURES HAS ADOPTED OF DIRECTORS THE BOARD (1) ce ce election totheBoardofDirectorsareindependent: As showninthefollowingtable,10of11nomineesfor the responsibilitiesofBoardandthosemanagement. (iii) clearlyunderstandsandrespectstheboundariesbetween management, (ii)carriesoutitsresponsibilitieseffectivelyand enable ittofunctionindependentlyof structures andproceduresinplaceto to ensurethattheBoard(i)has chair istotakeallreasonablemeasures Chairman. ThekeyroleoftheBoard describes theresponsibilitiesof The CorporateGovernanceManual 1994, istheindependentBoardchair. McLean,whohasbeenadirectoroftheCompanysince G.A. independent directorwhoisdesignatedbytheBoard.Mr. David Governance ManualprovidesthattheBoardchairmustbean function independentlyofmanagement.Hence,ourCorporate Offi separation ofthepositionsPresidentandChiefExecutive since itsprivatisationin1995andwebelievethatthe The Company’sBoardisledbyanon-executiveChairman of theBoard Independent Chairman Robert Pace Claude Mongeau McLean David G.A. Edward C.Lumley The Hon. The Hon.DenisLosier Kempston Darkes V. Maureen NOTINDEPENDENT Edith E.Holiday INDEPENDENT Gordon D.Giffi Ambassador Hugh J.Bolton CharlesBaillie A. Michael R.Armellino NAME cer and Chairman contributes to allowing the Board to cerandChairmancontributestoallowingtheBoard n (2) INDEPENDENCE STATUS ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ INDEPENDENT. DIRECTORS ARE THE BOARDOF ELECTION TO NOMINEES FOR 10 OFTHE11 STATUS INDEPENDENCE FOR NON- REASON Company Offi Chief Executive President and cer of the cerofthe

21 CN MANAGEMENT INFORMATION CIRCULAR 22 CN MANAGEMENT INFORMATION CIRCULAR 3 GovernancePolicy, section3.13. (3) Form 58-101F1,section8. (2) Form 58-101F1,sections3(a)and(b);GovernancePolicy, section3.5. (1) and SponsorshipsCommittee,whicharemixedcommittees Committee ofCN’sPension Trust Funds andtheDonations The BoardofDirectorsalsoestablishedtheInvestment are availableaspartofCN’sCorporateGovernanceManual. and theStrategicPlanningCommitteetheircharters Committee, theEnvironment,SafetyandSecurityCommittee Committee, theHumanResourcesandCompensation Committee, theCorporateGovernanceandNominating These committeesaretheAuditCommittee,Finance committees thathavecertainresponsibilitiesforsuchareas. its supervisionmandateintosixareasandhasestablished to whichwearesubject,theBoardofDirectorshassubdivided activities andthegreatnumberoflawsregulations Given oursize,thenatureandgeographicalscopeof Committees oftheBoard candidates supportedbytheBoardofDirectors. in supportofoneormorenomineeswhoarenotpartthe be electedtotheBoardandthatnoproxymaterialiscirculated of directornomineesisthesameasnumberdirectorsto An “uncontestedelectionofdirectors”meansthatthenumber circumstances involvinganuncontestedelectionofdirectors. pertaining totheresignationoffer. Thispolicyonlyappliesin not bepartofanycommitteeorBoardDirectorsdeliberations to tenderhisorherresignationshould shareholders. Thedirectorwhooffered 90 daysfollowingthemeetingof and announceitinapressreleasewithin Board ofDirectorswillmakeitsdecision Directors whethertoacceptitornot.The a recommendationtotheBoardof Nominating Committeewillconsidersuchofferandmake which thedirectoriselected.TheCorporateGovernanceand Chairman promptlyfollowingthemeetingofshareholdersat be expectedtooffertenderhisorherresignationthe with respecttotheelectionofdirectorsbyshareholders,will receives agreaternumberofvotes“withheld”than“for”, a nomineeforelectionasdirectoroftheCompanywho of ourCorporateGovernanceManual,totheeffectthat The BoardofDirectorshasadoptedapolicy, whichispart Election ofDirectors Offi as apositiondescriptionforthePresidentandChiefExecutive for theBoardchairandcommitteechairs,aswell Our CorporateGovernanceManualincludespositiondescriptions Position Descriptions ceroftheCompany. (1) (2) VOTING POLICY. A MAJORITY HAS ADOPTED OF DIRECTORS THE BOARD identifi Board ofDirectorsand,inconsultationwiththechair, required ordesiredcompetenciesandskillstoimprovethe reviews andmonitorscriteriaforselectingdirectors,including Corporate GovernanceandNominatingCommitteedevelops, governance matters.Aspartofitsresponsibilities,the of Directorsanditscommitteesoverseeingcorporate the responsibilityofmonitoringcompositionBoard The CorporateGovernanceandNominatingCommitteehas Corporate GovernanceandNominatingCommittee Governance Manual. of suchcommitteewhichisincludedinourCorporate the FinanceCommitteearefurtherdescribedincharter Committees. Theresponsibilities,powersandoperationof former Audit,FinanceandRiskCommitteeintotwoseparate was createdinApril2005asaresultofthedivision recommendations totheBoardthereon.ThisCommittee or theengaginginotherformsoffi the borrowingofmoney, theissuingofdebtsecurities authority levelsestablishedbytheBoard,mayauthorize reviews fi opportunities andparametersfordebtorequityfi structure, cashfl Committee providesoversightwithrespecttoourcapital activities. Aspartoftheseresponsibilities,theFinance authorizing, approvingandrecommendingcertainfi the Company’sfi The FinanceCommitteehastheresponsibilityofoverseeing Finance Committee in ourCorporateGovernanceManual. Circular andinthecharterofsuchcommitteewhichisincluded Audit CommitteeDisclosure”atpage28ofthisInformation section entitled“StatementofCorporateGovernancePractices– mandate oftheAuditCommitteeisfurtherdescribedin internal controlsandexternalauditors.The Company’s fi The AuditCommitteehastheresponsibilityofoverseeing Audit Committee Board ofDirectors. the mandateofeachcommittee The followingisabriefsummaryof to committees. of Directors’decision-makingauthority no standingdelegationsoftheBoard to certainlimitedexceptions,thereare the BoardofDirectorsand,subject Company. Allcommitteesreportto of Directorsaswelloffi composed ofmemberstheBoard escandidatesqualifi nancing documents and, within the scope of its nancingdocumentsand,withinthescopeofits nancial reporting, monitoring risk management, nancialreporting,monitoringriskmanagement, owsandkeyfi nancialpolicies,reviewingfi cers of the cersofthe edtobecomeBoardmembers. nancial ratios, reviews the nancialratios,reviewsthe nancing, or makes nancing,ormakes nancings and nancingsand COMMITTEE. OF EACHBOARD THE ACTIVITIES REPORTS ON PROVIDES CIRCULAR INFORMATION TO THIS SCHEDULE “B” nancing, nancing, nancial nancial (3)

Committee areindependent. all membersoftheCorporateGovernanceandNominating solely ofindependentdirectors.AsatFebruary 26,2010, Committee providesthatsuchcommitteemustbecomposed The charteroftheCorporateGovernanceandNominating 2 Form 58-101F1,section6(b);GovernancePolicy, section3.10.TheNYSEStandardsstatethataboardshouldappointnomina (2) Form 58-101F1,section6(c);GovernancePolicy, section3.11. (1) agreed thattheCompanywouldcloselymonitorevolution At ameetingoftheBoardDirectorsinearly2010,itwas compensation consultants. of thisInformationCircularfordisclosureinrespectexecutive Committee –ExecutiveCompensationConsultants”atpage32 Executive Compensation–HumanResourcesand Reference isalsomadetothesubsectionentitled“Statementof from theCommitteememberselectionprocess. and thePresidentCEOofCompanyshallbeexcluded one membershallbeexperiencedinexecutivecompensation, Committee shallbeasittingCEOofanothercompany, atleast three membersoftheHumanResourcesandCompensation Corporate GovernanceManual,thatnomorethanonein The Boardhasadoptedaspolicy, whichisincludedinour in ourCorporateGovernanceManual. described inthecharterofsuchcommitteewhichisincluded Corporate GovernanceandNominatingCommitteearefurther practices. Theresponsibilities,powersandoperationofthe should bemadetheretoandmonitorsthedisclosureofits applicable totheCompany, recommendsanychangethat This Committeereviewsthecorporategovernanceguidelines Compensation Committeeareindependent. February 26,2010,allmembersoftheHumanResourcesand must becomposedsolelyofindependentdirectors.Asat Manual. TheHumanResourcesandCompensationCommittee committee whichisincludedinourCorporateGovernance of thisInformationCircularandinthechartersuch Human ResourcesandCompensationCommittee”atpage32 the sectionentitled“StatementofExecutiveCompensation– Resources andCompensationCommitteeisfurtherdescribedin to meetitsbusinessobjectives.ThemandateoftheHuman attract, motivateandretainthequalityofpersonnelrequired human resourcessystemsareinplacesothattheCompanycan practices byensuring,amongstotherthings,thatappropriate Committee alsohasthemandatetoreviewhumanresources performance assessmentandsuccessionplanning.This the responsibilityofmonitoringexecutivemanagement’s The HumanResourcesandCompensationCommitteehas Human ResourcesandCompensationCommittee 4 Form 58-101F1,section7(d). (4) 3 Form 58-101F1,sections7(a),(b)and(c)GovernancePolicy, sections3.15,3.16and3.17(regardingofﬁ (3) must becomposedsolelyofindependentdirectors. that suchcommitteeshouldhaveawrittencharter. TheBoardhasadoptedawrittenmandatefortheHumanResourcesandCompensa determined bytheCompany’sindependentdirectorsonly. TheNYSEStandardsstatethataboardshouldappointcompensationcom determined bythecorporation’scompensationcommitteeorallindependentdirectorsofcorporation.OurCorporateGovern must becomposedsolelyofindependentdirectors. that suchcommitteeshouldhaveawrittencharter. TheBoardhasadoptedawrittenmandatefortheCorporateGovernanceandNom (4) (2)

(1)

(3) is includedinourCorporateGovernanceManual. are furtherdescribedinthecharterofsuchcommitteewhich and operationoftheDonationsSponsorshipsCommittee donation andsponsorshiprequests.Theresponsibilities,powers and sponsorshipsstrategyforreviewingapproving responsibility, amongstotherthings,ofdevelopingadonations committee composedofdirectorsandoffi The DonationsandSponsorshipsCommittee,whichisamixed Donations andSponsorshipsCommittee our CorporateGovernanceManual. described inthecharterofsuchcommitteewhichisincluded Investment CommitteeofCN’sPension Trust Funds arefurther Trust Funds. Theresponsibilities,powersandoperationofthe and approvingcertainoftheinvestmentsmadebyCN’sPension Division oninvestmentofassetsCN’sPension Trust Funds activities oftheInvestmentDivision,advising has theresponsibility, amongstotherthings,ofreviewingthe is amixedcommitteecomposedofdirectorsandoffi The InvestmentCommitteeofCN’sPension Trust Funds, which Investment CommitteeofCN’sPension Trust Funds Governance Manual. charter ofsuchcommitteewhichisincludedinourCorporate the StrategicPlanningCommitteearefurtherdescribedin of Directors.Theresponsibilities,powersandoperation and capitalbudgetpriortotheirformalapprovalbytheBoard appropriate executiveoffi with thePresidentandChiefExecutiveOffi underlying theCompany’sbusinessplan.Italsoreviews, strategic issues,includingthereviewofkeyassumptions The StrategicPlanningCommitteefocusesonfi Strategic PlanningCommittee is includedinourCorporateGovernanceManual. are furtherdescribedinthecharterofsuchcommitteewhich operation oftheEnvironment,SafetyandSecurityCommittee taken intoconsideration.Theresponsibilities,powersand whether environmental,safetyandsecurityissuesareadequately practices, andreviewingtheCompany’sbusinessplantoascertain security policies,assessingenvironmental,safetyand development andimplementationofenvironmental,safety responsibility, amongstotherthings,ofoverseeingthe The Environment,SafetyandSecurityCommitteehasthe Environment, SafetyandSecurityCommittee Company’s 2011InformationCircular. to includeanon-bindingadvisory“SayonPay” voteinthe of “SayonPay” resolutionsin 2010withtheintention cers). The NYSE Standards state that the CEO’s compensation should be cers).TheNYSEStandardsstatethattheCEO’scompensationshouldbe ting committee composed entirely of independent directors and ting committeecomposedentirelyofindependentdirectorsand ance Manual provides that the CEO’s compensation is ance ManualprovidesthattheCEO’scompensationis cers, the Company’s business plan cers,theCompany’sbusinessplan inating Committee pursuant to which such committee inating Committeepursuanttowhichsuchcommittee mittee composed entirely of independent directors and mittee composedentirelyofindependentdirectorsand tion Committee pursuant to which such committee tion Committeepursuanttowhichsuchcommittee cers, has the cers,hasthe cer and other cerandother nancial and nancialand cers, cers,

23 CN MANAGEMENT INFORMATION CIRCULAR 24 CN MANAGEMENT INFORMATION CIRCULAR 3 Form 58-101F1,section6(a);GovernancePolicy, sections3.12,3.13and3.14. (3) Form 58-101F1,section1(e);GovernancePolicy, section3.3. (2) Form 58-101F1,section1(g). (1) camera in Camera In supervisory responsibilities. of theBoardDirectorsorcommitteeshavingspecial progress oftheCompanyaretransmittedtothosemembers that allmeaningfulinformationconcerningtheaffairsand of suchcommittees.Thisopencommunicationensures under thesupervisionofparticularcommitteesandchairs executive offi through theOffi chair andthePresidentChiefExecutiveOffi Communication regularlytakesplacebetweentheBoard of thisInformationCircular. for ElectiontotheBoard–andCommitteeAttendance” course of2009aresetoutinthesectionentitled“Nominees director forallboardandcommitteemeetingsheldduringthe total numberofmeetingsandtheattendancerecordforeach action orconsideration,additionalmeetingsarecalled.The the yeareventsorcircumstancesrequireBoardcommittee to planahead.Ifduringthecourseof discussions whileallowingmanagement meaningful informationsessionsand of in-depthpresentationsconduciveto this mannerhelpsinthepreparation year. We believethatproceedingin and committeeworkingplansforthe executive offi with theBoardandcommitteechairsappropriate During suchprocess,theCorporateSecretary, incollaboration meetings oftheBoardDirectorsanditscommittees. has theresponsibilityofestablishingaschedulefor The Boardchair, incollaborationwiththeCorporateSecretary, Process Board andCommitteeMeetings December 31, 2009, there were eight December 31,2009,therewereeight During thefi the chairmanshipofBoardchair. presence ofmanagementandunder in meeting oftheBoardDirectors meet beforeoraftereveryin-person The independentBoardmembers only bynon-executivedirectors. in camera in sessions that were attended sessionsthatwereattended Meetings nancial year ended nancialyearended sessions, without the sessions,withoutthe cers having responsibilities for matters placed cershavingresponsibilitiesformattersplaced cers,establishesBoard ceoftheCorporateSecretary, between (1) (2) DIRECTORS. THE BOARDOF MEETING OF IN-PERSON AT EVERY MEMBERS BOARD INDEPENDENT ARE HELDBY SESSIONS IN CAMERA IN FOR THEYEAR. ESTABLISHED PLANS ARE WORKING COMMITTEE BOARD AND cer and, cerand,

Board members, and is updated as may be required. Board members,andisupdatedasmayberequired. competency matrixisreviewedregularlybytheBoardchairwith and geographicallocation,ofeachcandidatetotheBoard.This consideration therepresentativity, bothintermsofexperience meets theneedsofBoard.TheBoardalsotakesinto directors, throughtheirbusinessexpertiseandexperience, process. TheBoardensuresthattheskillsetdevelopedby identifi areas, typesofexpertiseandgeographicalrepresentation Committee, developsacompetencymatrixbasedonknowledge in consultationwiththeCorporateGovernanceandNominating www.cn.ca/governance. Aspartoftheprocess,Boardchair, Governance Manual,whichispostedonourwebsiteat of DirectorsisguidedbytheprocessdescribedinourCorporate In proposingthelistofBoardnominees, Competency Matrix mandatory retirementdatesofcurrentdirectors. for nominationtotheBoardofDirectorsandismindful constantly onthelookoutandmonitoringfornewcandidates The CorporateGovernanceandNominatingCommitteeis absences, willnotberenominated. years, withoutavalidreasonforthe they sit,formorethantwoconsecutive or meetingsofcommitteesonwhich less than75%ofmeetingstheboard Manual, anydirectorwhohasattended As statedinourCorporateGovernance are expectedtoattendallmeetings. Board andboardcommitteemembers at Boardandcommitteemeetings. of Directors,includingtheirattendance performance asmembersoftheBoard an evaluationoftheireffectivenessand are alreadydirectorsoftheCompany, credentials underlyingeachnomination,and,fornomineeswho of Directors.Itconsiderstheirqualifi nominees forelectionorre-electionasmembersoftheBoard and NominatingCommitteeannuallyreviewsthecredentialsof In consultationwiththeBoardchair, theCorporateGovernance Review ofCredentials Director Selection es any gaps to be addressed in the director nomination esanygapstobeaddressedinthedirectornomination (3) cations, the validity of the cations,thevalidityof RENOMINATED. WILL NOTBE A VALID REASON YEARS WITHOUT MORE THANTWO MEETINGS FOR COMMITTEE BOARD OR THAN 75%OF ATTENDED LESS WHO HAS ANY DIRECTOR 1 Form 58-101F1,section1(d). (1) • considering candidatestobecomedirectorsofCN: of CN,theBoardwillapplyfollowingguidelineswhen to makethecommitmentoftimenecessarybeadirector taking reasonablestepstoensuretheabilityofeachcandidate aviewto an individualcanserveisnecessarilylimited.With dedication oftime.Asaresult,thenumberboardsonwhich CN recognizesthatBoardmembershiprequiresasignifi Number ofDirectorships served togetherontheboardsofotherpubliccompanies. As ofFebruary 26,2010,nomembersofourBoardDirectors serve onthesameoutsideboardorcommittee. no morethantwooftheCompany’sdirectorsshouldgenerally Governance Manual,totheeffectthat policy, whichisincludedinourCorporate In addition,theBoardhasadopteda Governance andNominatingCommittee. obtaining theapprovalofCorporate of CNalreadysitswithoutpreviously an outsideboardonwhichadirector shall notaccepttheinvitationtojoin the Boardhasadoptedapolicypursuanttowhichdirector aviewtofurtherstrengthendirectors’independence, With Common Directorships each skill: the BoardchairandCorporateGovernanceNominatingCommittee,alongwithidentifi The followingtableidentifi Robert Pace Claude Mongeau McLean David G.A. Edward C.Lumley The Hon. The Hon.DenisLosier Kempston Darkes V. Maureen Edith E.Holiday Gordon D.Giffi Ambassador Hugh J.Bolton CharlesBaillie A. Michael R.Armellino an individualisemployed; to membershipontheboardofcorporationatwhich corporation directorships(excludingCN’sBoard)inaddition prefer individualswhoholdnomorethantwo(2)public senior executivesofpubliccorporations,theBoardwill for candidatesthatarechiefexecutiveoffi n AKTN IAC CONIGLGLSTRATEGY LEGAL ACCOUNTING FINANCE MARKETING SALES/ es some of the current skills and other factors considered as part of the competency matrix developed by essomeofthecurrentskillsandotherfactorsconsideredaspartcompetencymatrixdevelopedby ✓✓✓✓✓ ✓✓ ✓✓ ✓✓✓✓✓ ✓✓ ✓✓ ✓✓✓ ✓✓✓✓✓✓ ✓✓✓ ✓✓ ✓✓ ✓✓ ✓✓✓✓✓ ✓✓ ✓✓ ✓✓✓ ✓✓✓ ✓✓✓✓✓✓ ✓✓ ✓✓ ✓ ✓✓✓ ✓✓✓✓ ✓✓ ✓✓ ✓ ✓✓ ✓✓ cers or other cersorother COMPANY. ANOTHER PUBLIC THE BOARDOF TOGETHER ON MEMBERS SIT NO BOARD cant cant nominee isadirector. Circular identifytheotherreportingissuersofwhicheach The biographiesonpages8to13ofthisInformation for anotherterm. responsibilities, priortorecommendingdirectorsforre-election Board andavailabilitytodevotesuffi selection criteria,includingdirectors’pastcontributionstothe Committee andtheBoardchairwillapplynominee Committee. TheCorporateGovernanceandNominating continue toserveasamemberoftheBoardor to determinewhetheritisappropriateforsuchdirector that theyhavebeenaskedtojoinsoasallowtheBoard information astoallboardsofdirectorsthattheysitonor Directors areexpectedtoprovidetheBoardchairwith • • (excluding CN’sBoard). hold nomorethanfi for othercandidates,theBoardwillpreferindividualswho at whichanindividualisemployed;and in additiontomembershipontheboardofcorporation (4) publiccorporationdirectorships(excludingCN’sBoard) Board willpreferindividualswhoholdnomorethanfour offi employees ofpubliccorporations(otherthanchiefexecutive non-public corporationsorotherentitiesandforfull-time for candidatesthathaveafull-timeemploymentwith cers or senior executives of such public corporations), the cersorseniorexecutivesofsuchpubliccorporations),the RESOURCES HUMAN (1) ve (5) public corporation directorships ve(5)publiccorporationdirectorships

cation of each director possessing cationofeachdirectorpossessing ENVIRONMENT ENGINEERING/ cienttimetofulﬁ INDUSTRY OF TRANSPORT KNOWLEDGE ll their lltheir POLICY PUBLIC

25 CN MANAGEMENT INFORMATION CIRCULAR 26 CN MANAGEMENT INFORMATION CIRCULAR 1 Form 58-101F1,section9;GovernancePolicy, section3.18. (1) connection withattendanceatsuchevents. reasonable travelandotherout-of-pocket expensesin and CompanyorBoardfunctionsarereimbursedfor are alsoinvitedtoattendtheAnnualMeetingofShareholders receive compensationforsuchparticipation.DirectorsEmeritus or acommitteeoftheBoardispresentnorshalltheyvote the purposeofdeterminingwhetheraquorumBoard at suchmeetings.DirectorsEmeritusshallnotbecountedfor and, ifpresent,mayparticipateinthediscussionsoccurring to attendmeetingsoftheBoardoranycommittee From timetotime,DirectorsEmeritusmaybeinvited,asguests, Crawford, RaymondCyr, JamesK.GrayandCedricRitchie. lifetime emeritusstatushasbeenbestoweduponPurdy and distinguishedserviceaccomplishments.Currently, have madesignifi status ofDirectorEmeritustoretiringorformerdirectorswho The BoardofDirectorsconfers,fromtimetotime,thehonorary Director Emeritus may serveontheBoard. appropriate ornecessarytolimitthenumberoftermsadirector a Boardcommittee.TheofDirectorshasnotdeemedit of suchdirector’scontinuanceasamembertheBoardor Board willhavetheopportunitytodecideappropriateness any majorchangeintheirprincipaloccupationsothatthe addition, directorsareexpectedtoinformtheBoardchairof shareholders followinghisorherseventy-fi be nominatedforre-electionattheannualmeetingof unless otherwisedeterminedbytheBoard,initsdiscretion, retirement agefordirectorswherebyadirectorwouldnot, The Boardhasalsoadoptedapolicyonthemandatory Retirement fromtheBoard updates fromtimetotime. Board chair, alistofpotentialBoardcandidates,whichit Nominating Committeehasconstituted,togetherwiththe to becomedirectorsofCN,theCorporateGovernanceand Committee andtheBoardchairinrecommendingcandidates In ordertoassisttheCorporateGovernanceandNominating Evergreen List cant contributions to the Board through long cantcontributionstotheBoardthroughlong fthbirthday. In • of thefollowingsteps: Nominating CommitteeandtheBoardchairiscomprised is underthesupervisionofCorporateGovernanceand chair, thecommitteechairsandindividualdirectors.Thisprocess effectiveness, theeffectivenessofitscommittees,Board time totime,acomprehensiveprocessannuallyassessits The BoardofDirectorshasimplemented,andreviews,from Process Board Performance Assessment • • – years andinputfromtheBoardofDirectors: taking intoaccountcurrentissues,thefi Governance andNominatingCommitteetheBoardchair, of theCorporateSecretaryandapprovedby The followingquestionnairesarepreparedbytheOffi – evaluation questionnaires. Corporate GovernanceandNominatingCommitteechair or herresponsesandcommentsontheBoardchair individually witheachdirectorhis Committee chairsalsodiscusses Human ResourcesandCompensation One oftheAuditCommitteeor the self-evaluation ofeachdirector. the directormayhaveandtoreview comments tothequestionnaireswhich received fromandinrespectofsuchdirectorany confi Board chaircontactseverydirectorandconductsopen Following receiptofthecompletedquestionnaires, Compensation Committee. Audit CommitteeandtheHumanResources are forwardeddirectlytoeachofthechairs Governance andNominatingCommitteechair, which questionnaires relatingtotheBoardchairandCorporate Board chair, exceptfortheresponsestoevaluation a completesetoftheresponsesisforwardedto Each questionnaireisthensenttoeverydirectorand –

individual directors; questionnaires, includingaself-assessment by Board andcommitteeperformanceevaluation a Boardchairevaluationquestionnaire;and committee chairevaluationquestionnaires. dential one-on-one meetings to discuss the answers dentialone-on-onemeetingstodiscusstheanswers ndings of previous ndingsofprevious PROCESS. ASSESSMENT COMPREHENSIVE IMPLEMENTED A THE BOARDHAS ce ce (1) 2 Form 58-101F1,sections4(a)and(b);GovernancePolicy, sections3.6and3.7. (2) Form 58-101F1,section7(a)andGovernancePolicy, section3.17(b)(regardingdirectors). (1) website atwww.cn.ca/governance. in CN’sCorporateGovernanceManualwhichisavailableonour The Boardperformanceassessmentprocessisfurtherdescribed through one-on-onemeetingswitheachindividualdirector. The Boardchairleadsonanannualbasisapeerreviewprocess report wasmadebytheBoardchairtoofDirectors. directly toeachdirector, aswelltotheBoardchair, anda in anindividualdirectorreportanddistributedbytheadvisor confi were completedbyeachdirectorandforwardeddirectly the processinvolvedpeerassessmentquestionnaireswhich had beennochangeinthecompositionofBoard.In2007, given thefactthatonewascarriedoutin2007andthere in 2004.In2009,nosuchassessmentwasdeemednecessary with theassistanceofanindependentadvisor, aswasdone and theBoardcarriedoutanindividualdirectorpeerassessment of 2007,theCorporateGovernanceandNominatingCommittee a peerassessmentthroughanindependentadvisor. Attheend considers onanannualbasistheappropriatenessofconducting The CorporateGovernanceandNominatingCommitteealso Peer Assessment Board andcommitteechairsindividualdirectors. performance oftheBoardDirectors,committees, assist theBoardofDirectorsinindependentlyassessing from timetotime,hireanindependentadvisorassessor In additiontotheabove-mentionedprocess,Boardmay, Independent Advisor • • functioning andactivitiesoftheBoardcommittees. Board performanceassessmentinordertoimprovethe the overallresultsandsuggestionsderivedfromannual The Boardchairandcommitteechairstakeintoconsideration individual directorsinrespectoftheirpersonalperformance. committees, Boardandcommitteechairsseparatelyto to improvetheeffectivenessofBoardDirectors, Committee chairstotheBoardofDirectors,withsuggestions Committee andHumanResourcesCompensation Reports arethenmadebytheBoardchairandAudit dentiallytotheadvisor. Responseswerethenconsolidated of meetings. also includedinthematerialsprovidedtoBoardadvance reading materialsoncorporategovernanceandothertopicsare back totheBoardonqualityofsuchprograms.Educational educational programsandtoreport directors toattendseminarsandother leading institutions.We encourage educational programsprovidedby makes available,atitscost,ahostof the Boardchair. TheCompanyalso material asdeemedappropriateby Company’s businessstrategyandother trends thatmayberelevanttothe boards, briefi practices associatedwithsuccessful to Boardeffectivenessandthebest to educationandinformationonanongoingbasispertaining The Boardchairarrangesformemberstohaveaccess Continuing Education as required. and accesstoappropriateinformationoroutsideresources on thecontributionindividualdirectorsareexpectedtomake and therolesofBoarditscommittees,adiscussion a reviewwiththeBoardchairofmethodsoperation structure andthenatureoperationofitsbusiness, by theCompany’soffi operations. Ourorientationprogramincludespresentations familiarize themselveswiththeCompany, itsorganizationand containing corporateandotherinformationrequiredto New directorsareprovidedwithaDirectors’handbook Orientation Continuing Education Director Orientationand directors in2009. for additionalinformationoncompensationreceivedby Board ofDirectorsCompensation”thisInformationCircular See thesectionentitled“NomineesforElectiontoBoard– involved, withoutcompromisingadirector’sindependence. compensation realisticallyrefl non-executive directors,takingreasonablestepstoensuresuch to theBoardonadequacyandformofcompensationfor reviews withtheBoardchairandmakesrecommendations The CorporateGovernanceandNominatingCommitteeannually Board Compensation ngs on factors or emerging ngsonfactorsoremerging (1) cers on the Company’s organizational cersontheCompany’sorganizational ects the responsibilities and risk ectstheresponsibilitiesandrisk (2) TOPICS. MATTERS AND A VARIETY OF MEMBERS ON TO BOARD WERE PROVIDED PRESENTATIONS MATERIALS AND READING EDUCATIONAL

27 CN MANAGEMENT INFORMATION CIRCULAR 28 CN MANAGEMENT INFORMATION CIRCULAR • • 2 NI52-110,section3.1,subsections1,2and3.TheNYSEStandardstheapplicablerulesofSECrequirethatinorde (2) NI52-110,section2.3,subsection1. (1) subsidiary oftheCompany. Company, norisanaffi or indirectly, anyfeefromtheCompanyorsubsidiaryof capacity asadirectorormemberofBoardcommittee,directly of theAuditCommitteereceives,otherthaninhisorher provided forintheCorporateGovernanceManual.Nomember Mr. Pace, isnecessarilyamemberoftheAuditCommittee,as of theHumanResourcesandCompensationCommittee, Gordon D.Giffi the Committee,MichaelR.Armellino,Ambassador directors, namely, TheHon.DenisLosier, Chairof The AuditCommitteeiscomposedoffi Composition oftheAuditCommittee with regardstothecharterofourAuditCommittee. www.sedar.com andonourwebsiteatwww.cn.ca/governance of ourAnnualInformationForm availableonSEDARat as summarizedhereinafter, andwereferyoutoSchedule“A” the requirementsregardingcompositionandresponsibilities, auditors intheirannualinformationform.We complywith of theirauditcommittees,aswellallfeespaidtoexternal the composition,educationandexperienceofmembers audit committeeanddiscloseinformationwithrespectto requiresissuerstoincludethecharteroftheir of theCSA National Instrument52-110–AuditCommittees(“ Audit CommitteeDisclosure • • • • topics, including: reading materialsandpresentationsonavarietyofmatters In 2009,Boardmemberswereprovidedwitheducational 3 NI52-110,section2.3,subsections5and6. (3) community dinnersthroughouttheyear. more aboutCN’soveralloperations.Directorsalsoattend gain afullappreciationofsuchstrategicprojectsandtolearn the BoardhadopportunitytointeractwithCNoffi Information Technology commandcenter. Duringsuchevents, They havealsovisitedcertainofCN’smainyards,aswellour terminals inPrinceGeorgeandatthePort ofPrinceRupert. CN ismakingsignifi with fi Moreover, thedirectorshavefromtimetobeenprovided current Sarbanes-OxleyAct key accountingconsiderations;and fi executive successionplanning; executive compensation; corporate governance; nancialstrategy, riskassessmentanddisclosure; independent pursuanttosuchdefi compensatory feefromtheCompanyoranysubsidiaryofnorbeanaffi should not,otherthaninhisorhercapacityasadirectormemberofboardcommitteeandlimitedcircumstances, rst-hand opportunities to visit certain sites in which rst-handopportunitiestovisitcertainsitesinwhich n,HughJ.BoltonandRobertPace. Thechair cant investments, such as the intermodal cantinvestments,suchastheintermodal liatedpersonoftheCompany, orany nition. (2) requirements. ve independent veindependent NI 52-110 (1) cers to cersto liatedpersonoftheCompanyoranysubsidiaryCompany. AllmembersoftheAuditCommitteeare ”) ”) regulatory requirements. with theoversightofCN’scomplianceapplicablelegaland The AuditCommitteeisalsoresponsibleforassistingtheBoard and riskmanagementpolicies. provides thatthecommitteemustreviewCN’sriskassessment internal control.ThemandateoftheAuditCommitteealso of CN’sdisclosurecontrolsandproceduressystems management’s reportassessingtheadequacyandeffectiveness The AuditCommitteeisresponsibleforreceivingperiodically MONITORING RISKMANAGEMENTANDINTERNALCONTROLS relating thereto. by theexternalauditorsandanysignifi response and/oractionplanrelatedtoanyissueidentifi encountered inperformingtheaudit,andmanagement’s the resultsofexternalaudit,anysignifi Furthermore, theAuditCommitteeisinchargeofreviewing requiring Boardapproval. form andotherreportsordocuments,fi fi The AuditCommitteeisalsoresponsibleforreviewingthe the adequacyofthoseprocedures. the Company’sfi disclosure offi the proceduresinplaceforreviewofCompany’s The mandatealsoprovidesthatthecommitteeshouldreview press releases,priortotheirrelease,fi including theCompany’sMD&Adisclosureandearnings statements oftheCompanyandaccompanyinginformation, and theexternalauditors,annualquarterlyfi committee isresponsibleforreviewing,withmanagement The mandateoftheAuditCommitteeprovidesthat OVERSEEING FINANCIALREPORTING They includethefollowing: • • • • four categories: The committee’sresponsibilitiescanbedividedinto Mandate oftheAuditCommittee nancial information contained in the annual information nancialinformationcontainedintheannual monitoring externalauditors. monitoring internalauditors;and monitoring riskmanagementandinternalcontrols; overseeing fi nancialreporting; nancial information extracted or derived from nancialinformationextractedorderivedfrom nancial statements and periodically assess nancialstatementsandperiodicallyassess r to be considered independent, a member of the Audit Committee r tobeconsideredindependent,amemberoftheAuditCommittee accept directly or indirectly any consulting, advisory or other accept directlyorindirectlyanyconsulting,advisoryother (3) ling and distribution. linganddistribution. cant recommendations cantrecommendations nancial or otherwise, nancialorotherwise, cant problems cantproblems nancial nancial ed ed 5 NI52-110,section4.1. (5) NI52-110,section2.3,subsection8. (4) NI52-110,section2.3,subsection3. (3) NI52-110,section2.3,subsection2. (2) NI52-110,section2.3,subsection7. (1) external auditors. employees orformeroftheCompany’sfi committee isresponsibleforreviewinghiringpolicies The mandateoftheAuditCommitteealsoprovidesthat their independence. relationships theexternalauditorshavewithCNandconfi formal writtenstatementfromtheexternalauditorsstatingall The AuditCommitteealsoreviewsatleastannually, the management andtheresolutionthereof). and theexternalauditors(includingadisagreement,ifany, with any materialwrittencommunicationsbetweentheCompany acceptability oftheCompany’saccountingprinciples,including auditors anddiscussingwiththemthequalitynotjust The AuditCommitteeisresponsibleforoverseeingtheexternal non-audit servicesbytheexternalauditors. and pre-approvingoverseeingthedisclosureofpermitted services theexternalauditorsareprohibitedfromproviding, provided bytheexternalauditors,determiningwhichnon-audit overseeing thedisclosureofallaudit,reviewandattestservices The AuditCommitteeisalsoinchargeofapprovingand performance andindependence. and remuneratingthem,monitoringtheirqualifi if appropriate,theremovalofexternalauditors,evaluating committee isresponsibleforrecommendingtheretentionand, The mandateoftheAuditCommitteestatesthat MONITORING EXTERNALAUDITORS Audit Committee. and ensuresthattheinternalauditorsareaccountableto its members.Itfurtherannuallyreviewstheinternalauditplan its responsibilities,staffi regularly monitoringtheinternalauditfunction’sperformance, Internal AuditorreportsdirectlytotheAuditCommittee,andfor The AuditCommitteeisresponsibleforensuringthattheChief MONITORING INTERNALAUDITORS for moredetailsontheseprocedures. Governance sectionofourwebsiteatwww.cn.ca/governance adopted suchprocedures.PleaserefertotheCorporate matters, whileinsuringconfi matters oremployeeconcernsregardingaccountingauditing regarding accounting,internalaccountingcontrolsorauditing retention andtreatmentofcomplaintsreceivedbytheCompany that thecommitteemustestablishproceduresforreceipt, Additionally, themandateofAuditCommitteeprovides (4) ng, budget and the compensation of ng,budgetandthecompensationof dentialityandanonymity. CNhas (2) (1) (3) rm of rmof cations, cations, rming rming fi the assessmentofeffectivenessourinternalcontrolover to theconductofauditourfi for theFinancialReportingProcess)includingmattersrelating ThoseHavingOversightResponsibility (Communications With Institute ofCharteredAccountantsHandbookSection5751 AuditCommittees)andCanadian (Communication With Public AccountantsStatementonAuditingStandardsNo.61 required tobediscussedbytheAmericanInstituteofCertifi The AuditCommitteehasdiscussedwithKPMGLLPthematters with U.S.generallyacceptedaccountingprinciples. position, resultsofoperations,andcashfl in camera in The AuditCommitteemetfi twice ayear, andmorefrequentlyasrequired. separately withtheAuditCommittee,withoutmanagement, as appropriate.Theinternalandexternalauditorsmustmeet and externalauditorstodiscussreviewspecifi also hasdirectcommunicationchannelswiththeinternal retained byit.Pursuanttoitscharter, theAuditCommittee funding forpaymentoftheexternalauditorsandanyadvisors The committeemakesarrangementsfortheappropriate fees andretentionterms,subjecttoadvisingtheBoardchair. it carryoutitsresponsibilities,includingfi the AuditCommitteemayretainindependentadvisorstohelp Furthermore, themandateofAuditCommitteestatesthat consolidated fi opinionsaddressingwhetherthe as abasisforKPMGLLP’s accordance withthestandardsofPCAOB.Theseauditsserve effectiveness ofinternalcontroloverfi (“PCAOB standards ofthePublicCompanyAccountingOversightBoard Canadian generallyacceptedauditingstandardsandthe of ourconsolidatedfi KPMG LLP, areresponsibleforperforminganindependentaudit respect ofthe2009fi controls andproceduressystemsofinternalcontrolin assessing theadequacyandeffectivenessofourdisclosure The AuditCommitteereceivedperiodicallymanagement’sreport Control OverFinancialReporting Audit CommitteeReportRegardingInternal compliance withitsmandate. subject areasreviewedbythecommitteeduringyear, in in Schedule“B”tothisInformationCircular, outlinesthemajor nancialreportingundersection404ofthe ”) in the U.S., and an independent audit of the ”) intheU.S.,andanindependentauditof sessions. The report of the Audit Committee, set forth sessions.ThereportoftheAuditCommittee,setforth nancialstatementsfairlypresentourfi nancial statements in accordance with nancialstatementsinaccordancewith scalyear. TheCompany’sexternalauditors, ve times in 2009 and held vetimesin2009andheld nancial statements and nancialstatementsand nancial reporting, in nancialreporting,in xing such advisors’ xingsuchadvisors’ ows in conformity owsinconformity Sarbanes-Oxley Act (5) c issues cissues nancial nancial ed ed .

29 CN MANAGEMENT INFORMATION CIRCULAR 30 CN MANAGEMENT INFORMATION CIRCULAR of auditcommitteefunctions. procedures forfi in suchactivities;(d)anunderstandingofinternalcontrolsand or experienceactivelysupervisingonemorepersonsengaged expected toberaisedbytheCompany’sfi to thebreadthandcomplexityofissuesthatcanreasonablybe complexity ofaccountingissuesthataregenerallycomparable fi (c) experiencepreparing,auditing,analyzingorevaluating with theaccountingforestimates,accrualsandreserves; general applicationofsuchaccountingprinciplesinconnection principles andfi has: (a)anunderstandingofgenerallyacceptedaccounting expert”, theBoardconsidersifdirectorisapersonwho In determiningifadirectorisan“auditcommitteefi and experienceofeachcommitteemember. Board hasmadesuchdeterminationbasedontheeducation committee fi of thecommitteemeetallcriteriatobedesignatedas“audit (1) NI 52-110, section 3.1, subsection 4. NI52-110,section3.1,subsection4. (1) regulations as suchtermsaredefi all membersoftheAuditCommitteearefi experience. AsrequiredinthecharterofAuditCommittee, Audit Committeerefl The BoardofDirectorsbelievesthatthecomposition Audit CommitteeMembers Education andRelevantExperienceofthe December 31,2009fi Company’s AnnualReportonForm 40-Ffortheyearended Canadian securitiesregulatorsandincludedinthe audited consolidatedfi Committee recommendedtotheBoardthatCompany’s Based onthisreviewandthesediscussions,theAudit remitted totheAuditCommittee. Sarbanes-Oxley Act the independencerulesadoptedbySECpursuantto laws andtherulesregulationsthereunder, including to theCompanywithinmeaningofU.S.federalsecurities Québec” andareindependentpublicaccountantswithrespect of theCodeEthics“Ordredescomptablesagréésdu that KPMGLLPareindependentwithinthemeaningofrules KPMG LLPandtheCompanyincludingawrittenconfi A formalwrittenstatementdescribingallrelationshipsbetween with KPMGLLPthefi two relatedinterpretations.TheAuditCommitteehasdiscussed (Independence DiscussionswithAuditCommittees)andthe supersedes IndependenceStandardsBoardStandardNo.1 and theletterrequiredbyRule3526ofPCAOB,which KPMG LLPprovidedtheCommitteewithwrittendisclosures nancial statements that present a breadth and level of nancialstatementsthatpresentabreadthandlevelof (1) nancial expert” under the rules of the SEC. The nancialexpert”undertherulesofSEC.The and the NYSE Standards, and several members andtheNYSEStandards,severalmembers nancial statements; (b) the ability to assess the nancialstatements;(b)theabilitytoassess nancial reporting; and (e) an understanding nancialreporting;and(e)anunderstanding , and Rule 3526 of the PCAOB was also , andRule3526ofthePCAOBwasalso rm’sindependencefromtheCompany. ectsahighleveloffi ned under Canadian securities laws and nedunderCanadiansecuritieslawsand ledwiththeSEC. nancialstatementsbefi nancial literacy and nancialliteracyand nancial statements, nancialstatements, nancially literate, nanciallyliterate, led with ledwith nancial nancial rmation rmation 20 yearsofbusinessexperience. Dalhousie UniversityinHalifax,NovaScotia,andhasmorethan Limited. Mr. Pace holdsanMBAandLL.BLawDegreefrom Incorporated, HydroOneandisboardchairofOverlandRealty of MaritimeBroadcastingSystemsLimited,HighLinerFoods Group. Mr. Pace isalsoamemberoftheboarddirectors Mr. Pace isthePresidentandChiefExecutiveOffi degree ofeconomicsfromtheUniversityAlberta. Institute ofCharteredAccountants.Heholdsanundergraduate for 40years.HeisafellowoftheAlberta accountant andauditorwiththatfi & Lybrand for34yearsandapublic Mr. BoltonwasapartnerofCoopers Canada (nowPricewaterhouseCoopers). Executive Partner ofCoopers & Lybrand 1997, Mr. BoltonwaschairandChief and WestJet AirlinesLtd.From 1992to committees ofTeck ResourcesLimited is adirectorandchairoftheaudit Inc. andMatrikonMr. Bolton board ofdirectorsEPCORUtilities Mr. BoltonistheChairmanof 25 yearsofexperienceasasecuritiesanalyst. of Business(NewYork University),NewYork andhasmorethan Mr. ArmellinoholdsanMBAinfi in ChargeofResearch.HeisaCharteredFinancialAnalyst. Co., includingthoseofseniortransportationanalystandPartner to 1991,hehadheldvariouspositionsatGoldman,Sachs& Executive Offi LP. From 1991to1994,Mr. ArmellinowaschairandChief Mr. ArmellinoisaRetiredPartner, TheGoldmanSachsGroup, the UniversityofWestern Ontario. NAV Mr. CANADA. LosierholdsaMastersofEconomicsfrom of EnbridgeGasNewBrunswickLimitedPartnership and of PlazacorpRetailPropertiesLtd.,andheisalsoadirector 1994. Heisadirectorandmemberoftheauditcommittee government oftheProvinceNewBrunswick,from1989to Life. Mr. Losierheldvariouscabinetlevelpositionswiththe Mr. LosierisPresidentandChiefExecutiveOffi of hisresponsibilitiesasamemberthecommittee: of thisInformationCircularthatisrelevanttotheperformance of eachmembertheAuditCommitteeasdate The followingisadescriptionoftheeducationandexperience cer of Goldman Sachs Asset Management. Prior cerofGoldmanSachsAssetManagement.Prior nance from the Stern School nancefromtheSternSchool rm rm EXPERTS. FINANCIAL COMMITTEE ARE AUDIT MEMBERS AND SEVERAL LITERATE FINANCIALLY ARE COMMITTEE OF THEAUDIT ALL MEMBERS cer, Assumption cer, ThePace 1 NI52-110,section2.3,subsection4. (1) fi the auditrelatingtoCompany’sinternalcontrolover annual fi auditors inrelationtotheauditofCompany’sconsolidated Consist offeesincurredforprofessionalservicesrenderedbythe Audit Fees The natureoftheservicesundereachcategoryisdescribedbelow. pre-approved. ended December31,2009and2008thatwererequiredtobe audit-related andnon-auditrelatedservicesfortheyears all theservicesperformedbyourindependentauditorsfor the independentauditor. TheAuditCommitteepre-approved fees andtermsallnon-auditengagementsprovidedby approves allauditandaudit-relatedservices,engagement Pursuant tothetermsofitscharter, theAuditCommittee Fees roundedtothenearestthousand. (1) Company byKPMGLLPwerethefollowing: for audit,audit-related,taxandotherservicesprovidedtothe For theyearsendedDecember31,2009and2008,fees KPMG LLPhasservedastheCompany’sauditorssince1992. Auditors Fees a memberoftheAuditCommitteeAbitibiBowaterInc. Canadian NaturalResourcesLimitedandpreviouslyservedas Income Fund. HeisamemberoftheAuditCommittee Resources Limited,TransAlta CorporationandJustEnergy of CanadianImperialBankCommerce,Natural from August1997toApril2001.Mr. Giffi years. Mr. Giffi the practiceoflaworgovernmentserviceformorethanthirty and tradematterspublicpolicy. Hehasbeenengagedin and Atlanta.Hispracticefocusesoninternationaltransactions & Aldridge,wherehemaintainsoffi Mr. Giffi nancialreporting. te – 797,000 TOTAL FEES – Other Tax 811,000 Audit-Related Audit FEES nisSeniorPartner ofthelaw fi nancial statements and those of its subsidiaries, and nancialstatementsandthoseofitssubsidiaries, n was United States Ambassador to Canada nwasUnitedStatesAmbassadortoCanada cesinWashington, D.C. ,5,0 4,761,000 4,757,000 ,3,0 1,170,000 2,794,000 1,134,000 2,812,000 rmofMcKenna Long n is also a director nisalsoadirector (CAD$) 2009 1 (1) (1) (CAD$) 2008 specifi the prohibitedserviceslistedabove,butonlyifhave provide non-auditservices,includingtaxotherthan the CompanymayengageKPMGLLPto the audit.Pursuanttosuchresolutions, services andexpertunrelatedto investment bankingservicesandlegal broker ordealer, investmentadviser, or functions orhumanresourcesfunctions, outsourcing services,management reports, actuarialservices,internalaudit opinions, orcontributionin-kind and implementation,appraisalorvaluationservices,fairness or fi bookkeeping orotherservicesrelatedtotheaccountingrecords audit servicestotheCompanyanditssubsidiaries,including the CompanyfromengagingKPMGLLPtoprovidecertainnon- and theBoardofDirectorshaveadoptedresolutionsprohibiting auditors areprohibitedfromproviding.CN’sAuditCommittee Committee determineswhichnon-auditservicestheexternal The mandateoftheAuditCommitteeprovidesthat Nil Other Fees implications foremployeesandtaxcompliance. Consist offeesincurredforconsultationsoncross-bordertax Tax Fees comfort letters,inconnectionwiththeissuanceofsecurities. regulation andduediligenceotherservices,including services inconnectionwithreportsrequiredbystatuteor statements fortheCompany’spensionplans,andattestation rendered bytheauditorsinrelationtoauditoffi Audit-related feeswereincurredforprofessionalservices Audit-Related Fees nancialstatements,fi callybeenpre-approvedbytheAuditCommittee. nancial information systems design nancialinformationsystemsdesign AUDIT SERVICES. CERTAIN NON- PROVIDING FROM PROHIBITED AUDITORS ARE THE EXTERNAL (1) nancial nancial

31 CN MANAGEMENT INFORMATION CIRCULAR 32 CN MANAGEMENT INFORMATION CIRCULAR The Committeemetninetimesin2009andheld Responsibly/Governance. Corporate GovernanceManualatwww.cn.ca, underDelivering The Committee’sfullcharterisavailableaspartofCN’s • • • • The Committee’sresponsibilitiesinclude: Compensation Committee Mandate oftheHumanResourcesand answer compensation-relatedquestionsattheMeeting. chairman oftheCommittee,Mr. Pace, willbeavailableto Of thesemembers,fourhavecompensationexperience.The Edith E.Holiday, McLean. EdwardC.LumleyandDavidG.A. CharlesBaillie,HughJ.Bolton,GordonD.Gifﬁ Committee, A. Committee membersin2009wereRobertPace, Chairofthe (“Committee The HumanResourcesandCompensationCommittee Compensation Committee Composition oftheHumanResourcesand Compensation Committee Human Resourcesand COMPENSATION EXECUTIVE STATEMENT OF subject areasreviewedbytheCommitteeduringyear. Schedule “B”tothisInformationCircular, outlinesthemajor Resources andCompensationCommittee,setforthin sessions duringeachmeeting.ThereportoftheHuman business objectives. and retainthequalityofpersonnelrequiredtomeetits are inplacetoallowtheCompanyattract,motivate other things,thatappropriatehumanresourcessystems reviewing humanresourcespracticesbyensuring,among management’s compensation; recommending totheBoardofDirectorsexecutive and successionplanning; reviewing executivemanagement’sperformanceassessment Executive Ofﬁ succession planningforthepositionofPresidentandChief ensuring thatappropriatemechanismsareinplaceregarding ”) is comprised of seven independent directors. ”) iscomprisedofsevenindependentdirectors. cer(“ CEO ”); in camera in

n, n, paid to Hugessen in 2009 totalled approximately CAD$152,000. paid toHugessenin2009totalledapproximatelyCAD$152,000. a particularfocusontransitionmatters.Inaggregate,thefees compensation recommendationsandrelatedquestions,with and provideadvicedirectlytotheCommitteeonexecutive for thatpurpose.TheCommitteemandatedHugessentoreview retained theservicesofHugessenConsultingInc.(“ presented forCommitteeapproval.In2009,the provide adviceoncompensationrecommendationsthatare to time,theservicesofexecutivecompensationconsultants services. TheCommitteealsoindependentlyretains,fromtime approximately CAD$121,000toTowers Watson forthese executive compensationmatters.In2009,Managementpaid surveys andtrends,aswellexternalopinionsonvarious the servicesofTowers Watson toprovidemarket information, compensation foritsoffi Management retainsconsultingfi Executive CompensationConsultants the “CompensationDiscussionandAnalysis”section. practices andmodifi succession andtransitionprocess,theCompanyreviewedits executive compensation.In2009,inthecontextofCEO committed tostayingalignedwithbestpracticespertaining is benchmarkedusingacomparatorgroup.TheCompany the Company’sneedsandcharacteristics,compensation The executivecompensationphilosophytakesintoaccount Company isdevelopedusingvarioustoolsandprocesses. section below, theexecutivecompensationpolicyof As discussedinthe“CompensationDiscussionandAnalysis” Compensation DeterminationProcess for criticalpositions. leaders toensurecomprehensivesuccessionplansareinplace process willcontinuetoleveragein-depthassessmentsofselect such needsforkeyrolesandindividuals.Movingforward,the development needs,andfosterdiscussiononplanstoaddress assess managersacrossallfunctions,identifystrengthsand The planbuildsonworkdoneinthesecondhalfof2009to leadership developmentandtalentmanagementwaspresented. At theDecember2009meeting,broadplanfor2010on meetings oftheCommittee. transition matterswerediscussed Vice-President andChiefMarketingOffi Chief OperatingOffi executives, Mr. Keith E.CreelasExecutiveVice-Presidentand appointment, inJanuary2010,oftwootherhighly-regarded Committee andtheBoardareequallysatisfi calibre andwillcontinuetobuildonCN’ssuccess.The satisfi Offi and theExecutiveVice-PresidentChiefFinancial offi and successionplanningfortheCompany’smostsenior In 2009,theCommitteeputanemphasisontransition Succession PlanningandLeadershipDevelopment cers,includingthePresidentandChiefExecutiveOffi cer. TheCommitteeandtheBoardofDirectorsare edthatMr. MongeauandMr. Jobinareofthehighest cerandMr. Jean-JacquesRuestasExecutive edseveralaspectsthereof, asexplainedin cers. In 2009, Management retained cers.In2009,Managementretained rms to assist in determining rmstoassistindetermining in camera cer. Successionand ed with the edwiththe at all regular atallregular Hugessen cer cer ”) ”) risk and succession plans. risk andsuccessionplans. performance, takingintoaccountleadershipabilities,retention makes recommendationsbasedoncorporateandindividual reviews eachcomponentanddesiredmarketpositioning situation oftheCompany’sexecutives.TheCommitteealso economic anddemographicenvironment,aswellthespecifi compensation policy, takingintoaccountthecurrentbusiness, compensation offeredtoNEOsinlinewiththeCompany’s reviews thesuitabilityofeachcomponentandadjusts incentive andlong-termincentive.TheCommitteeannually comprised ofthreemaincomponents:basesalary, annual Compensation forNamedExecutiveOffi corporate andindividualobjectives. performance ofexecutivesandsupporttheachievement and providesadequatecompensationtomotivatesustained interest, iscompetitiveinattractingandretainingtalent, compensation programthatisalignedwithshareholders’ plan provisionsareintegratedintoacomprehensiveexecutive The compensationcomponents,performanceobjectives,and strategy isweightedtowardspay-for-performance components. and encouragesbroadshareownership.Thecompensation short- andlong-termbusinessperformance,iscompetitive The Companyiscommittedtoacompensationpolicythatdrives in anincreasinglycompetitiveenvironment. to attract,retainandmotivateoutstandingexecutivetalent of shareholdervalue.Thisthemealsounderliestheneed fi compensation policyhasbeentotieremunerationthe The pivotalandcontinuingthemeoftheCompany’s The ExecutiveCompensationPolicy oftheCompany and Analysis Compensation Discussion related servicesprovideddirectlytotheCommittee. the onlyservicesperformedbyHugessenwerecompensation- not toperformanyworkforManagement.During2009, between theCommitteeandHugessen,latterhasagreed compensation-related services.Pursuanttoanunderstanding by theconsultantretainedCommitteetoperform all non-compensationservicesprovidedtotheCompany effect thattheChairofCommitteeshallpre-approve In 2007,theBoardofDirectorsadoptedapolicyto Hugessen andthatsuchadviceisobjectiveindependent. The Committeeissatisfi The CommitteeevaluatedHugessen’sperformancefor2009. nancial performance of the Company and the enhancement nancialperformanceoftheCompanyandenhancement aaeetWr 0 0 0 Management Work Committee Work and Compensation Human Resources TYPE OFFEE ed with the advice received from edwiththeadvicereceivedfrom 2001200100 152,000 92,000 IN 2008 BILLED ($) cers(“ IN 2009 BILLED NEOs ($) ”) is ”) is BILLED IN2009 OF TOTAL FEES PERCENTAGE (%) c implemented over a two-year period. implemented overatwo-yearperiod. reference groups.Thischangeiseffectivein2010andwillbe between the50thand60thpercentilewhencomparedtotheir policy forexecutivestopositiontheirtotaldirectcompensation At theendof2009,Companyreviseditscompensation positions withequivalentresponsibilitiesandscope. comparator groups,onthebasisofaggressively-set goals,for executives atthefi to positiontotaldirectcompensationfortheCompany’s For 2009,theCommitteeandBoardofDirectorssought Committee’s independentcompensationconsultant,Hugessen. annual reviewofexecutivecompensation,withadvicefromthe used asasecondaryreferencebytheCommitteepartofits which meettheparameterssetoutabove.Thisinformationis database relatingtoallcompanieswithinsuch information extracteddirectlyfromitsproprietaryconfi U.S. industrialcompanies.Towers Watson providesconsolidated determine whetheritspracticesaregenerallyinlinewith companies withrevenuesrangingfromUS$6to$10billion distribution forasecondaryreferencegroupofU.S.industrial database informationoncompensationtrendsandstatistical data forthisgroupofdirectcomparablesanddrawsupon Committee thengoesbeyondtheanalysesofcompensation account thisprimarygroupforbenchmarkingpurposes.The In settingexecutivecompensation,theCommitteetakesinto and CanadianPacifi Corporation,NorfolkSouthernCorporation Corporation, CSX includes UnionPacifi comparator groupfortheNEOsisClass1Railroadsand the Companycompetesforexecutivetalent.Theprimary companies thatarecomparableinsizeandwithwhom considers thecompensationpracticesofNorthAmerican of thepositions.Indeterminingcompensation,Company the Committeeasbeingappropriateforlevelandnature groups, whichhavebeencarefullyreviewedandendorsedby Executive compensationisbenchmarkedusingcomparator Benchmark UsingComparatorGroups plan, reviewedandapprovedbytheBoardofDirectors. business objectives,asportrayedintheCompany’s are directlyalignedwiththeachievementofCompany’s the Committeeensuresthatperformancegoalsandconditions beginning ofeachyear. Indeterminingcompensationtargets, carefully reviewedandendorsedbytheCommitteeat conditions associatedtoeachcompensationcomponentare compensation targetsannually. Performance goalsand The Companyhasanestablishedprocesstodetermine rst quartile (75th percentile) of the rstquartile(75thpercentile)ofthe cRailway. cRailroad,BurlingtonNorthernSantaFe dential dential

33 CN MANAGEMENT INFORMATION CIRCULAR 34 CN MANAGEMENT INFORMATION CIRCULAR 3 Beginningin2010,awardswillbeestablishedtoprogressivelypositiontotaldirectcompensation(basesalary+annualinc (3) Beginningin2010,suchtargetpayoutswillbeestablishedtopositiontotalcashcompensation(basesalary+annualincent (2) EffectiveJanuary1,2010,thetargetpayoutforCEOis120%ofbasesalary. (1) above-mentioned executivecompensationpolicy: The followingtablesummarizesthekeycomponentsofNEOcompensation,howtheyarebenchmarkedandfi and approvedbytheindependentmembersofBoard compensation oftheCEOisrecommendedbyCommittee by theCEOandreviewedapprovedCommittee.The compensation ofNEOs,otherthantheCEO, isrecommended performance-based restrictedshareunitsandstockoptions.The annual incentiveandlong-termincentives,including The keyelementsofNEOcompensationarebasesalary, Key ElementsofNEOCompensation Long-Term Incentive • Combination of restricted share units Combinationofrestrictedshareunits • Long-Term Incentive OPNN ECITO ECMRIGOBJECTIVE&RATIONALE BENCHMARKING Fixedrateofpay, withannualreview • DESCRIPTION Base Salary COMPONENT Bonus Plan Annual Incentive the 50thand60thpercentileofcomparatorgroup. comparator group. • Granted in the currency of the Grantedinthecurrencyof • Ten-year term;25%peryearvestingover • Options Stock Payout conditionaluponminimumshare • Performance vestingsubjecttoattainment • Performance-based shareunits,payable • Units Share Restricted Maximumpayoutisequaltotwicethe • • Generally paid in U.S. dollars GenerallypaidinU.S.dollars • Target payoutis70%ofbasesalary • Payout linkedtotheachievementof • Annualbonuspayouttoapproximately • recipient’s salary the fi plan period price duringthelastthreemonthsof invested capitaloverthreeyears of targetsrelatedtoaveragereturnon in cashafterthreeyears target payout under thestockoptionplan a differentproportionduetolimitations value, exceptfortheCEOwhoreceives and stockoptionsofapproximatelyequal for theCEO for ExecutiveVice-Presidentsand140% objectives corporate (70%)andpersonal(30%) the year determined fi based onperformanceagainstpre- 4,000 eligiblemanagementemployees rstfouryears (1) nancial and other targets for nancialandothertargetsfor • Awards are established to position Awardsareestablishedtoposition • Target payoutisestablishedtoposition • • Individual salary recommendations Individualsalaryrecommendations • Salariesarebenchmarkedannuallyto • comparator group approximately the75thpercentileof long-term incentiveawardvalue)at + annualincentivetargetpayout total directcompensation(basesalary comparator group the 50thand75thpercentileof annual incentivetargetpayout)between total cashcompensation(basesalary+ considerations individual performanceandretention are basedoncompetitiveassessment, comparator group the median(50thpercentile)of on page38. section “PresidentandChiefExecutiveOffi For adiscussiononthecompensationofCEO, pleasesee NEO compensation. effect thatemploymentagreementsmayhaveonchanging the keycomponentsofNEOcompensation,including Directors. TheCommitteeunderstandstheimplicationsof (3) (2) entive target payout + long-term incentive award value) between entive targetpayout+long-termincentiveawardvalue)between ive target payout) between the 50th and 60th percentile of the ive targetpayout)betweenthe50thand60thpercentileof • Recognize individual contribution Recognizeindividualcontribution • Provideretentionofkeytalent • Rewardtheachievementofsustained • Alignmanagementinterestwith • Drivesuperiorcorporateandindividual • Rewardtheachievementofpersonal • Rewardtheachievementofabalancedset • • Recognize sustained individual Recognizesustainedindividual • Providecompetitiveleveloffi • and potential fi wealth protection shareholder valuegrowthand performance and leadership operating results,safety, customerservice objectives linkedtofi of annualcorporatefi performance compensation nancialperformance cer Compensation” cerCompensation” nancial and nancialand nancialobjectives xed xed t in the tinthe 1. Corporate fi For 2009,theAIBPwascomprisedoffollowingcomponents: 70% forExecutiveVice-Presidentsand140%theCEO. achieved (“ (“AIBP a payoutundertheCompany’sAnnualIncentiveBonusPlan Approximately 4,000managementemployeesareeligiblefor ANNUAL INCENTIVEBONUSPLAN Summary CompensationTable undertheSalarycolumn. The salariespaidtoNEOsduring2009arereportedinthe retention riskandsuccessionplans. consideration individualperformance,leadershipabilities, U.S. currency. Basesalariesarereviewedannually, takinginto of thecomparatorgroupwhicharepredominantlypaidin and objectivecomparisonwithsalariesofequivalentpositions paid inU.S.currencyordertoprovideforameaningful comparator grouppractice.ThebasesalaryofNEOsisgenerally forth hereinandarebenchmarkedannuallyagainstmedian Base salariesareestablishedaccordingtothecriteriaset BASE SALARY Compensation ofNamedExecutiveOffi on the Company’s economic outlook at that time. on theCompany’seconomicoutlookatthattime. approved bytheBoardofDirectorsinJanuary2009based profi a keyroleindrivingtheorganization’sshort-andlong-term selected becausetheyarequantifi measure carryinganequalweight.Thesemeasureswere fl operating income,dilutedearningspershare,freecash performance againstestablishedtargetsforrevenues, In 2009,theBoardofDirectorsassessedCompany’s is measuredagainstobjectivessetbytheBoardofDirectors. factor canrangefrom0%to150%.Corporateperformance For allothermanagementemployees,theperformance 175 otherexecutivesandseniormanagementemployees. range from0%to200%forNEOsandapproximately and profi contribute totheCompany’slong-termfi linked totheachievementofabalancedsetgoalsthat owandreturnoninvestedcapital(“ ”). UndertheAIBP, payoutsforplannedresultstobe tability and return for shareholders. The targets were tabilityandreturnforshareholders.Thetargetswere Target Payouts tability. Thecorporateperformancefactorcan nancial performance: ”) are set as a percentage of salary: ”) aresetasapercentageofsalary: able components that play ablecomponentsthatplay 70% of the bonus was 70%ofthebonuswas ”), with each ROIC”), witheach cers in2009 nancial growth nancialgrowth 4 ROICmeasurestheCompany’seffi (4) as reportedbytheCompany. by theBoardofDirectorsinJanuary2009andresults The followingtableprovidesthe2009objectivesasapproved results asreportedbytheCompany. objectives, refl against thetargets.Thefollowingtableprovides2009 provides abetterrepresentationoftheactualperformance 2009. Theadjustment,whichdoesnotimpactthe2009results, dollar wereadjustedtorefl set atthebeginningofyearassumingalowerCanadian exchange ratewasUS$1=CAD$1.1364.Objectivesthatwere rate ofUS$1=CAD$1.2121.Duringtheyear, theactual In January2009,theobjectivesweresetassuminganexchange Free cashfl (3) ActualexchangeratewasUS$1=CAD$1.1364. (2) ObjectivessetassuminganexchangerateofUS$1=CAD$1.2121. (1) 2009 ANNUAL PLAN INCENTIVEBONUS PERFORMANCE OBJECTIVESANDRESULTS – e hr $3.70 2,945 Free CashFlow 8,700 Per Share Diluted Earnings Income Operating Revenues PER SHAREDATA) IN MILLIONS(EXCEPT ROIC be adjustedforcertainitemsasdeterminedbytheCommittee. net indebtednessandtheaverageshareholders’equity, andmay, incertaininstances, calculated asnetincomebeforeinterestexpense,dividedbythetotalofaverage as akeymeasureoflong-termvaluegenerationtoitsshareholders.ROICisgenerally the paymentofdividends. less cashusedbyinvestingactivities,adjustedfortheimpactofmajoracquisitions,and program andincashequivalentsresultingfromforeignexchangefl from operatingactivities,adjustedforchangesintheaccountsreceivablesecuritization expenditures anddividends.TheCompanydefi demonstrates theCompany’sabilitytogeneratecashafterpaymentofcapital The Companybelievesthatfreecashfl may, therefore,notbecomparabletosimilarmeasurespresentedbyothercompanies. (4) ow does not have any standardized meaning prescribed by GAAP and owdoesnothaveanystandardizedmeaningprescribedbyGAAPand (3) ecting such adjustment, and the actual 2009 ectingsuchadjustment,andtheactual2009 CORPORATE OBJECTIVES 20%1.0 26%Exceeds 12.66% 12.40% 12.00% (CAD$) BASE 0 0 9 Exceeds 790 700 600 ect the actual exchange rate during ecttheactualexchangerateduring ciency in the use of its capital funds and is viewed ciencyintheuseofitscapitalfundsandisviewed ow is a useful measure of performance as it owisausefulmeasureofperformanceasit STRETCH 38 39 Exceeds $3.92 2,406 $3.85 7,367 3,035 8,875 (CAD$) nesfreecashfl (1) ow as cash provided owascashprovided RESULTS (CAD$) 2009 (2)

PERFORMANCE ASSESSMENT uctuations, uctuations, Does not Does not meet meet

35 CN MANAGEMENT INFORMATION CIRCULAR 36 CN MANAGEMENT INFORMATION CIRCULAR 4 ROICmeasurestheCompany’seffi (4) 3 Free cashfl (3) ActualexchangeratewasUS$1=CAD$1.1364. (2) 2. Individual performance: corporate objectives. can beattainedwhenstretchresultsareachievedonallfi corporate performancefactorof150%(or200%forNEOs) performance factor. UnderthetermsofAIBP, amaximum the otherthreemeasures,thustotallinga90%corporate for a0%payoutonboth.Stretchresultswereachieved stretch. OperatingIncomeandRevenuestargetsweremissed equally represents20%oftheplanattargetand30% the sumofresultsforallfi a corporateperformancefactorof90%.The90%is corporate performanceat“partiallyachieved”,allowingfor established objectives,theBoardofDirectorsassessed For 2009,afterconsideringthefi the monetizationofunder-utilized assets. solid freecashfl on operationalexecutionandcontrolofcosts.Italsogenerated North Americanandglobaleconomies,theCompanydelivered almost allmarkets.Despitetheeconomicconditionsin In 2009,revenuesdecreasedduetolowerfreightvolumesin Objectivesadjustedtorefl (1) ANNUAL PLAN–ADJUSTEDTARGETS INCENTIVEBONUS PERFORMANCE OBJECTIVESANDRESULTS –2009 ROIC Flow Free Cash Per Share Diluted Earnings Income Operating Revenues PER SHAREDATA) IN MILLIONS(EXCEPT from 0% to 150%. The individual performance factor for from 0%to150%.Theindividualperformancefactorfor For allotheremployees,theperformancefactorcanrange 175 otherexecutivesandseniormanagementemployees. range from0%to200%forNEOs,andapproximately and leadership.Theindividualperformancefactorcan to fi the achievementofpersonalbusiness-orientedgoalslinked adjusted forcertainitemsasdeterminedbytheCommittee. indebtedness andtheaverageshareholders’equity, andmay, incertaininstances,be calculated asnetincomebeforeinterestexpense,dividedbythetotalofaverage as akeymeasureoflong-termvaluegenerationtoitsshareholders.ROICisgenerally the paymentofdividends. less cashusedbyinvestingactivities,adjustedfortheimpactofmajoracquisitions,and program andincashequivalentsresultingfromforeignexchangefl from operatingactivities,adjustedforchangesintheaccountsreceivablesecuritization expenditures anddividends.TheCompanydefi demonstrates theCompany’sabilitytogeneratecashafterpaymentofcapital The Companybelievesthatfreecashfl may, therefore,notbecomparabletosimilarmeasurespresentedbyothercompanies. CAD$1.2121 assumedwhensetinJanuary2009. (1) (3) (4) nancialandoperatingresults,safety, customerservice (1) (1) (1) ow does not have any standardized meaning prescribed by GAAP and owdoesnothaveanystandardizedmeaningprescribedbyGAAPand ow and increased shareholder value through owandincreasedshareholdervaluethrough (CAD$) BASE 20%1.0 26%Exceeds 12.66% 12.40% 12.00% CORPORATE OBJECTIVES ect the actual exchange rate of US$1 = CAD$1.1364 vs. ecttheactualexchangerateofUS$1=CAD$1.1364vs. 35 36 39 Exceeds $3.92 2,406 $3.67 7,367 2,882 $3.52 8,541 2,792 8,366 5 5 9 Exceeds 790 650 550 ciency in the use of its capital funds and is viewed ciencyintheuseofitscapitalfundsandisviewed 30% of the bonus was based on 30%ofthebonuswasbasedon ow is a useful measure of performance as it owisausefulmeasureofperformanceasit ve measures. Each measure vemeasures.Eachmeasure nancial results against nancialresultsagainst STRETCH (CAD$) nesfreecashfl ow as cash provided owascashprovided RESULTS (CAD$) 2009 (2)

PERFORMANCE ASSESSMENT uctuations, uctuations, Does not Does not ve ve meet meet factors, calculatedasfollows: December 31,andthecorporateindividualperformance The resultingbonuspayoutisbasedontheannualsalary for theNEOs,otherthanCEO, was158%. performance factors.Theaverageindividualfactor their personalobjectivesandapprovedeachofindividual Committee determinedthattheNEOshadpartiallyexceeded 2009, takingintoaccounttherecommendationofCEO, the in reachingtheirobjectiveswasalsoassessed.For theyear contribution ofeachexecutiveandtheleadershipdemonstrated the bonusamounttobepaid.Indoingso,overallpersonal individual performancefactortobeappliedinthecalculationof achievements againstgoalsanddeterminedtheoverall and refl pre-determined personalobjectives.TheCommitteereviewed NEOs, takingintoconsiderationtheirachievementsagainst At year-end, theCEOreviewedperformanceofother assessed performanceforthosegoalswassetatthesamelevel. differ fromthoseincludedinthecorporatetargets,and fi operational considerationsrelatedtotheirfunction.The quantitative fi In 2009,theindividualobjectivesofNEOsincludedboth employees, includingtheNEOs,wasproratedatsamelevel. assessed witha90%factor, theindividualperformanceforall achieved”. For 2009,astheCompany’sperformancewas should theCompany’sperformancebeassessedat“partially individual performancewouldbeproratedatthesamelevel annual incentiveplanalsoprovidesthatboththecorporateand a payoutbeingdeclaredunderthecorporatecomponent.The Any payoutundertheindividualcomponentisconditionalupon Bonus Plan. of theestimatedmaximumcostunderAnnualIncentive year 2009,resultinginanaggregatepayoutequivalentto60% management employeesreceivedabonuspayoutforthe Pursuant tothetermsofAIBP, approximately4,000 incentive plancompensation–Annualplans. in theSummaryCompensationTable, underthe Non-equity was 106%ofTarget Payout. Theactualpayoutsarereported In 2009,theaveragepayoutforNEOs,otherthanCEO, nancial goals set in the NEOs individual objectives did not nancialgoalssetintheNEOsindividualobjectivesdidnot Annual Salary Annual Annual Salary Board ofDirectors. recommended bytheCommitteeandapproved NEOs isbasedonindividualassessmentsreviewedand ected on the totality of the executive’s individual ectedonthetotalityofexecutive’sindividual ؋ nancial measures and qualitative strategic and nancialmeasuresandqualitativestrategic Payout Target ؋ Target Payout ؋ 30% + ؋ ؋ Performance Individual Individual Factor 70% ؋ ؋ Performance Performance below 100% Factor when Corporate Corporate Corporate Corporate Factor individual awards. into accountpreviousexecutivegrantswhensettingthe Using ComparatorGroups”.TheCommitteedoesnottake by theClass1Railroadsdescribedinsection“Benchmarking long-term incentivevaluegrantedoverthelastthreeyears succession plans,aswellthecompensationpracticesand into considerationindividualperformance,retentionriskand In determiningthevalueofaward,Committeetakes compensation andaccountingvaluationsdifferssignifi values. Inparticular, thevolatilityassumptionusedin Accounting Principlesresultingindifferinglong-termincentive the fairvalue,ascalculatedunderU.S.GenerallyAccepted valuation inputsmaydifferfromthoseusedindetermining benchmarking executivecompensation.TheTowers Watson used tovaluesurveydataconsideredbytheCompanyin under amodifi executive compensationconsultant.Thevaluesarecalculated on valuationspreparedbyTowers Watson, theCompany’s by theawardattimeofgrant.Thevaluesarebased incentive awardsonthebasisofexpectedvalueprovided The Committeeestablishesthevalueoflong-term Exchange onthegrantdate. shares ontheToronto StockExchangeortheNewYork Stock the stockoptionsgrantedissetatclosingpriceofcommon release oftheCompany’sfi date isgenerallythesecondtradingdayfollowingpublic the previousyear. Basedonthisapproach,theeffectivegrant following thepublicationofCompany’sfi open fortradingundertheCompany’sInsiderTrading Policy, each yearinJanuary. Theeffectivegrantdateisthefi of theCommitteeandBoardDirectorswhichtakeplace eligible employeesisreviewedandapprovedatthemeetings The annualgrantofRSUsandstockoptionstoNEOsother page 46foradescriptionoftheplan. the ManagementLong-Term IncentivePlan–pleasereferto can beawardedtooneindividualpursuantthetermsof the 20%limitationonnumberofstockoptionsthat a smallerrelativeweightinstockoptionvaluebecauseof award fortheCEOcombinesstockoptionsandRSUswith employees, exceptfortheCEO. Thelong-termincentive equal value,todesignatedexecutiveandseniormanagement options andrestrictedshareunits(“ Board ofDirectorshaselectedtograntacombinationstock the differentlong-termincentivevehicles.Since2005, risk, aswellthetaximplicationanddilutionimpactof position versusstockoptionholdings,executiveretention shareholder wealthprotection,executivestockownership include thebalancebetweenlong-termvaluecreationand the Company’slong-termincentivestrategy. Factors considered The BoardofDirectorsconsidersanumberfactorstoassess LONG-TERM INCENTIVE ed binomial (lattice) valuation methodology edbinomial(lattice)valuationmethodology nancial results. The exercise price of nancialresults.Theexercisepriceof RSUs ”) of approximately ”) ofapproximately nancial results for nancialresultsfor rst day rstday cantly. during theyear. of theaggregatenumberRSUsandstockoptionsgranted 345,000 stockoptions,representing20%and28%,respectively, Executive Offi During 2009,thefi the Option-basedawardscolumn. in 2009isincludedtheSummaryCompensationTable, under The grantdatefairvalueofthestockoptionsawardedtoNEOs RESTRICTED SHAREUNITS–2009AWARD PERFORMANCE OBJECTIVES– The RestrictedShareUnitsPlan(the“ RESTRICTED SHAREUNITS:2009AWARD 1 Interpolationappliesbetweenobjectives. (1) summarized inthefollowingtable: objectives andpayoutconditionofthe2009RSUawardare share priceendingonJanuary31,2012.Theperformance performance vestingfactorandbythe20-dayaverageclosing be equaltothenumberofRSUsawardedmultipliedby currency oftherecipient’ssalary. Thevalueofthepayoutwill the lastthreemonthsof2011.Thepayoutwillbemadein upon meetingaminimumaverageclosingsharepriceduring ending onDecember31,2011.Thepayoutisalsoconditional to theCompany’saverageROICduringthree-yearperiod employees aresubjecttotheattainmentoftargetsrelated The RSUsgrantedin2009toNEOsandotherdesignated for certainitemsasdeterminedbytheCommittee. shareholders’ equity, andmay, incertaininstances,beadjusted the totalofaveragenetindebtednessand calculated asnetincomebeforeinterestexpense,dividedby long-term valuegenerationtoitsshareholders.ROICisgenerally in theuseofitscapitalfundsandisviewedasakeymeasure the Company’sROIC.ROICmeasureseffi three yearsandvestupontheattainmentoftargetsrelatedto The RSUsawardedaregenerallyscheduledforpayoutafter between suchemployeesandtheshareholdersofCompany. talented employeesandtoprovidealignmentofinterests is toenhancetheCompany’sabilityattractandretain by theBoardofDirectorsin2004.TheobjectiveRSUPlan three monthsof2011 share priceforthelast Minimum averageclosing Payout Condition: on December31,2011 three-year periodending Average ROICduringthe Performance Objective: cer, wereawardedatotalof172,500RSUsand ve NEOs, other than the President and Chief veNEOs,otherthanthePresidentandChief 15% andabove Below 12% RSU Plan CAD$42.95 ontheTSX US$34.87 ontheNYSE OBJECTIVE 14% 13% 12% ”) was approved ”) wasapproved or VESTING FACTOR PERFORMANCE ciency ciency 150% 125% 100% 50% 0% (1)

37 CN MANAGEMENT INFORMATION CIRCULAR 38 CN MANAGEMENT INFORMATION CIRCULAR ”). Please refer to page 46 for details of Incentive Plan(the“”).Pleaserefertopage46fordetailsof designated employeespursuanttotheManagementLong-Term Stock optionsweregrantedin2009toNEOsandother STOCK OPTIONS the yearcolumn. the Year, undertheShare-basedawards–Value vestedduring section IncentivePlanAwards–Value Vested orEarnedDuring The valuevestedduringtheyearforeachNEOisincludedin Interpolationappliesbetweenobjectives. (1) RESTRICTED SHAREUNITS–2007AWARD PERFORMANCE OBJECTIVESANDRESULTS – price conditionwasachieved,payoutundertheplanoccurred. of theunitsawarded.Asminimumaverageclosingshare performance resultedinavestingfactorof103.5% exceeded. InaccordancewiththeRSUPlanrules,ROIC period endingonDecember31,2009wasattainedandslightly specifi the RSUPlan.TheRSUsawardedin2007vestedwhen set outinthe2007awardagreementsandaccordancewith designated employeespursuanttothetermsandconditions RSUs grantedin2007werepaidouttoNEOsandother RESTRICTED SHAREUNITS:2007AWARD PAYOUT Table, undertheShare-basedawardscolumn. to NEOsin2009isincludedtheSummaryCompensation The grantdatefairvalueoftherestrictedshareunitsawarded options areexercised. the sharepriceincreasesabovegrantprice,andwhen options providearealizedpayoutvalueonlywhenvested, options willnothavearealizablevalue.Consequently, stock if thesharepricedoesnotappreciateoverthisperiod,stock will havearealizablevalueandbe“in-the-money”.Conversely, between thegrantdateandvestingdate,stockoptions long-term shareholdervalue.Ifthesharepriceincreases NEOs andotherdesignatedemployeesforcreatingsustainable, Stock optionsaregrantedwiththeobjectiveofrewarding in thecurrencyofrecipient’ssalary. date. Stockoptionshaveatermoftenyears.Grantsweremade and vestoverfouryearsatarateof25%eachanniversary the Plan.Thestockoptionsgrantedin2009wereconventional months of2009 for thelastthree closing shareprice Minimum average Payout Condition: on December31,2009 three-year periodending Average ROICforthe Performance Objective: ed target related to the average ROIC for the three-year edtargetrelatedtotheaverageROICforthree-year above 16.5% and Below 13.5% CAD$52.08 ontheTSX US$45.06 ontheNYSE OBJECTIVE 15.5% 14.5% 13.5% or PERFORMANCE VESTING ATRRESULTS FACTOR 150% 125% 100% 50% 0% (1) CAD$55.47 US$52.50 14.64% the Company’s performance. the Company’sperformance. Directors theapprovalofhiscompensationbasedonand performance reviewandrecommendedtotheBoardof of thePresidentandChiefExecutiveOffi of theforegoing,Committeeratedperformance public andgovernmentrelations(10%).Basedonareview operations (10%);humanresourcesmanagement(20%);and transition (25%);marketing(10%);customerserviceand performance (15%);safety(10%);successionandexecutive elements, coveringperformanceinthefollowingareas:fi beginning of2009includedbothfi approved annuallybytheCommittee.Thegoalssetat CEO ismeasuredagainstthegoals,objectivesandstandards individual performance.Theperformanceofthe Company’s fi of theCompany, 70%ofthebonuspayoutwasbasedon policy of2009.Asisthecaseforotherseniorexecutives 280% ofbasesalary, inlinewiththeCompany’scompensation payout setat140%ofbasesalarywithamaximum (CAD$2,014,448) andAnnualIncentiveBonusPlantarget Mr. Harrison’sbasesalarywasestablishedatUS$1,764,000 Board ofDirectors.Pursuanttohisemploymentagreement, Committee andapprovedbytheindependentmembersof The CEO’sannualcompensationisrecommendedbythe President andChiefExecutiveOffi and regulations. costs arefullyreimbursedinaccordancewithapplicablelaws for exceptionalcircumstancesandprovidedallincremental purposes byexecutiveoffi requires thatcorporateaircraftbeusedforbusiness-related policy hasbeendiscontinued.TheCompany’snow of Mr. Harrison’semploymentarrangementswithCN.This personal aswellforbusinessuse.Itwasalsoacondition security reasons,theCEOtouseCompany’saircraftfor policy untilDecember31,2009torequire,foreffi 2010. Inadditiontothesebenefi for thetaxgross-up,whichwaseliminatedasofJanuary appropriate andinlinewithgeneralmarketpractices,except perquisites andotherpersonalbenefi offered toexecutives.TheCommitteebelievesthatexecutive 2009, theCommitteereviewedtypeandlevelofperquisites tax gross-uponthevalueofcertainexecutiveperquisites.In determined bythegradeofposition,andmayincludea offered tosalariedemployees.Thelevelofbenefi health careandlifeinsurancebenefi counselling andtaxservices,clubmembershipcertain typically includetheuseofacompany-leased vehicle,fi benefi NEOs areeligibletoreceiveperquisitesandotherpersonal EXECUTIVE PERQUISITES tsinaccordancewiththeCompany’spolicy. These nancial performance and 30% was based on nancialperformanceand30%wasbasedon cersofCN,includingtheCEO, save ts, it was the Company’s ts,itwastheCompany’s nancialandnon-fi ts exceeding those usually tsexceedingthoseusually ts provided to NEOs are tsprovidedtoNEOsare cer Compensation cer as part of his ceraspartofhis t is generally tisgenerally ciency and ciencyand nancial nancial nancial nancial nancial nancial economic regulationoftheindustry. industry policydiscussionsonlegislativeeffortstoincrease Goverment ofCanada’sServiceReviewProcessandotherrail as theProgressiveRailroadingTransportation Conference,the Mr. Harrisonwasalsoengagedinmanyindustryforumssuch Transportation Board’soversightreportingrequirements. as theCompany’ssuccessfullycomplyingwithSurface Mr. Harrisonwasactivelyengagedintheseactivities,aswell its subsequentintegrationintotheCompany’soperations. Marking 2009wastheclosingofEJ&Etransactionand switching hour, ameasureofyardeffi effi 16%. Grosston-milespertrainmile,anindicatorof measuring theaveragemilesperdayrailcarstravel,improved Car velocity, anindicatorofnetworkfl gains werealsomadeintermsofoperationalproductivity. to theprioryear. UnderMr. Harrison’sleadership,signifi quoted tothecustomer, improvedsevenpointscompared compares actualloadedtransittime,inhours,tothetripplan railroading model.Trip plancompliance,ameasurethat in providingsuperiorcustomerservicethroughitsprecision Mr. HarrisonalsomaintainedtheCompany’scorecommitment the businessthroughatougheconomicyear. CEO easeintohisnewrole,Mr. Harrisoncontinuedtomanage throughout thetransition.Inadditiontohelpingincoming successor forhisnewresponsibilitiesandtominimizedisruption providing guidance,coachingandsupporttohelppreparehis efforts wereexemplary, workingwiththeincomingCEOin selection ofanewCFO. Duringthetransition,Mr. Harrison’s for theselectionofhissuccessorandassisteddirectorswith assisted theBoardwithidentifi succeed himwereidentifi succession planningprocesstoensurethatcandidates Throughout histenure,Mr. Harrisonfosteredaneffective new PresidentandChiefExecutiveOffi a smoothtransitionbetweenhimselfandtheCompany’s Much ofMr. Harrison’senergyin2009wasfocusedonensuring improvement versus2008. comparable to2008andaFRAaccidentratioof2.27–12% Railroad Administration(“ In 2009,theCompany’ssafetyperformanceincludedaFederal the verydiffi Committee considerstheseresultstobeimpressiveinlightof diluted earningspershareof$3.92andaROIC12.66%.The the Companyforlong-termgrowth.Theachieved improvements inoperationaleffi strong leadershipineffectivelycontrollingcosts,drivingfurther revenues andoperatingincome,Mr. Harrisondemonstrated traffi resilience. TheCompanyexperiencedsignifi Mr. Harrison’sleadership,showedtremendousfi crisis sincetheGreatDepression,Company, under In 2009,ayearcharacterizedbymanyastheworsteconomic ciencyandproductivity, improved4%.Carsperyard c volume in all market segments. Despite the decrease in cvolumeinallmarketsegments.Despitethedecrease cult market conditions. cultmarketconditions. ed, trained and mentored. He also ed,trainedandmentored.Healso FRA ”) injury ratio of 1.78 – ”) injuryratioof1.78– ciency and further positioning ciencyandfurtherpositioning cation of core competencies cationofcorecompetencies ciency, improved20%. uidityandeffi cer, ClaudeMongeau. cantly lower cantlylower nancial nancial ciency ciency cant cant Other CompensationPolicies oftheCompany Arrangements” sectiononpage48ofthisInformationCircular. January 1,2010,areprovidedinthe“EmploymentContracts/ the Company’snewPresidentandChiefExecutiveOffi Details ontheemploymentarrangementsofMr. Mongeau, Canadian dollars. paid toMr. Harrisonarereportedintheprescribedtables In accordancewiththeCanadiandisclosurerules,amounts awards andOption-basedcolumns. in theSummaryCompensationTable, undertheShare-based Company’s long-termincentivecompensationpolicy, isincluded value oftheseawards,whichwasestablishedwithinthe conditions asthoseoftheotherNEOsCompany. The Plan, respectively, weregrantedonthesamebasisand Share UnitsPlanandtheManagementLong-Term Incentive Mr. HarrisononJanuary26,2009,pursuanttotheRestricted The 188,000RSUsand210,000stockoptionsgrantedto US$2,551,406 (CAD$2,681,528)toMr. Harrison. members oftheBoardDirectorsapprovedabonuspayout account thecorporateperformancefactor, theindependent In accordancewiththetermsofAIBP, andtakinginto Mr. Harrison’sindividualpersonalperformancefactorat150%. as “exceeds”and,outofascale0%to200%,rated performance, theCommitteeratedMr. Harrison’sperformance For 2009,followingareviewofMr. Harrison’sindividual include CorporateGovernance,People andCommunitysections. Citizenship report–DeliveringResponsiblyandexpandeditto Under hisleadership,theCompanyrevieweditsCorporate Stock ownershiprequirementsareasfollows: the holdingofcommonsharesandvesteddeferredshareunits. the Committee.Stockownershipguidelinescanbemetthrough expected tomaintaincompliance,whichisreportedannually have mettheirinitialshareholdingrequirements,theyare management employees.Onceexecutivesandseniormanagers include atotalofapproximately175executivesandsenior In 2002,theapplicationofguidelineswasbroadenedto as apercentageofsalary, tobeachievedoverafi guidelines thatrequireaminimumlevelofshareownership,set executives. In1999,theCompanyintroducedshareownership The Committeestronglysupportsstockownershipby STOCK OWNERSHIP (1) Effective January 1, 2010, stock ownership guidelines for the CEO were increased EffectiveJanuary1,2010,stockownershipguidelinesfortheCEOwereincreased (1) Senior Management Vice-Presidents Executive andSeniorVice-Presidents President andChiefExecutiveOffi to fi vetimessalary. cer One timessalary 1.5 to2timessalary 3 timessalary 4 timessalary GUIDELINES (1) ve-year period. ve-yearperiod. cer as of cerasof

39 CN MANAGEMENT INFORMATION CIRCULAR 40 CN MANAGEMENT INFORMATION CIRCULAR to takeintoaccountspecialcircumstances. March 4,2008,anddiscretionislefttotheBoardofDirectors 30 days.Thesenewprovisionsonlyaffectgrantsmadeafter such terminationorresignationandunitsshallbepaidwithin exercisable foraperiodof24calendarmonthsfromthedate Substitute optionsthatarevestedandexercisableshallremain or payableinfulluponsuchterminationresignation. which arenotthenexercisableshallvestandbecome a ChangeofControl,alloutstandingsubstituteoptionsorunits a resignationforgoodreasonwithin24calendarmonthsafter and aparticipantisterminatedwithoutcauseorsubmits units isgrantedtotheparticipant.Ifsuchsubstitute would notoccurifapropersubstitutetotheoriginaloptionsor The amendedprovisionsstatethataccelerationofvesting approvalbytheCompany’sshareholdersofaplan c) approvalbytheCompany’sshareholdersofan b) intheeventownershiprestrictions a) of thefollowingevents: or resignsforgoodreason.AChangeofControlmeansany of Control,unlesstheparticipantisterminatedwithoutcause and heldbyaparticipantwouldnotaccelerateuponChange of non-performanceoptionsorunitsawardedafterthatdate trigger provisions”.Pursuanttosuchprovisions,thevesting were amendedeffectiveMarch4,2008toinclude“double The ManagementLong-Term IncentivePlanandtheRSU CHANGE OFCONTROLPROVISION monetization, onCNsecurities. offi Under theCompany’sInsiderTrading Policy, nodirectors, Mr. Mongeauhasalreadyexceededthisrequirement. guidelines fortheCEOwereincreasedtofi requirement. EffectiveJanuary1,2010,stockownership either metorareontracktoachievetheirstockownership of hisposition.Otherexecutivesandseniormanagementhave the Company. Mr. Jobinistrackingwellagainsttherequirement ownership requirementsexceptMr. Jobin,whorecentlyjoined As ofDecember31,2009allNEOshaveexceededtheirshare cers or employees can engage in hedging activities, including cersoremployeescanengageinhedgingactivities,including liquidation ordissolutionoftheCompany. corporation duringaperiodoftwoconsecutiveyears;or 51% oftheboarddirectorssurvivingorresulting that, infact,theseindividualscontinuetoconstituteatleast at thetimeofsuchtransaction,constituteBoardand immediately afterthetransactionareindividualswho, of thedirectorssurvivingorresultingcorporation agreement ofsuchtransactionprovidesthatatleast51% with orintoanothercorporation,unlessthedefi amalgamation, mergerorconsolidationoftheCompany a majorityoftheCompany’soutstandingcommonshares; CN CommercializationAct are repealed, a formal bid for arerepealed,aformalbidfor vetimessalary. nitive nitive e) taking any action as a result of which relations between takinganyactionasaresultofwhichrelationsbetween e) ) takingadvantageorprofi d) soliciting,acceptingthebusinessofacustomer, client, c) engaginginanybusinessthatcompeteswithCN; b) a) the amount of incentive compensation received by the theamountofincentivecompensationreceivedby a) executive offi of fullorpartialcompensationfromanexecutiveformer an executive.TheBoardofDirectorsmayseekreimbursement of annualandlong-termincentivecompensationreceivedby best interesttodoso,requirereimbursementofalloraportion laws andtotheextentitdeterminesthatisinCompany’s in itssolediscretion,tothefullextentpermittedbygoverning Under thispolicy, whichappliestoallexecutives,theBoardmay, under theCompany’sannualandlong-termincentiveplans. compensation clawbackpolicyconcerningfutureawardsmade In March2008,theBoardofDirectorsadoptedanexecutive EXECUTIVE COMPENSATION CLAWBACK theuseofconfi a) certain commitments.Thosecommitmentsprohibit: are subjecttocancellationiftherecipientsfailcomplywith January 22,2009,includingthe2009and2010annualawards, share unitsandstockoptionsgrantedtosuchindividualsafter presidents andseniorvice-presidents.Hence,therestricted to beexecutedinthefuturewithCEO, executivevice- the restrictedshareunitsandstockoptionsawardagreements inclusion ofnon-competeandnon-solicitationprovisionsto On January22,2009,theBoardofDirectorsapproved NON-COMPETE/NON-SOLICITATION PROVISION c) the incentive compensation payment received would have theincentivecompensationpaymentreceivedwouldhave c) theexecutiveoffi b) or reputationofCN. might otherwisebedetrimentaltothebusinessinterests distributors, employeesorothersmaybeimpairedwhich CN anditsconsultants,customers,clients,suppliers, with CN;and of whichtheybecameawareinthecourseemployment employees ofCN; supplier ordistributorofCNhiringengaging other thanperforminghisorherdutieswithCN; fi by arestatementofallorportiontheCompany’s results thatweresubsequentlythesubjectoforaffected upon, orcontingenton,theachievementofcertainfi executive orformeroffi been lowerhadthefi caused theneedforrestatement;and intentional misconductorfraudthatcausedpartially nancialstatements; cerinsituationswhere: dential information of CN for any purpose dentialinformationofCNforanypurpose cer engaged in gross negligence, cerengagedingrossnegligence, nancialresultsbeenproperlyreported. t from any business opportunity tfromanybusinessopportunity cer was calculated based cerwascalculatedbased nancial nancial shareholder return. ninth ofthecompensationearnedinyearhighesttotal lowest totalshareholderreturnrepresentsapproximatelyone fact thatthecompensationearnedbyNEOsinyearof closely tiedtoshareholderreturn,asdemonstratedbythe Accordingly, thecompensationearnedineachyearwas by NEOswasderivedfromequity-based incentiveplans. last fi NEOs andtheinvestmentreturnofshareholders.Over a strongrelationshipbetweenthecompensationearnedby compensation policyiseffectiveandappropriatelysupports The CommitteebelievesthattheCompany’sexecutive unrealized andrealizedgainsfromequity-based incentiveplans. salary andbonusearnedduringtheyear, plusthechangein compensation earnedbyNEOsisdefi market capitalizationincreaseoverthesameperiod.Thetotal about 4.3%oftheapproximateCAD$6.3billionaggregate incentive –thatwereearnedbyNEOstogetherrepresented compensation –basesalary, annualincentive,andlong-term Over thelastfi all dividends. and endingDecember31,2009.Itassumesreinvestmentof S&P 500IndicesfortheperiodbeginningDecember31,2004 with thecumulativetotalreturnofS&P/TSXcompositeand shares tradedontheTSX(CNR)andNYSE(CNI),compared shareholder returnonaCAD$100investmentinCN’scommon The followingPerformance Graph illustratesthecumulativetotal Performance Graph $ 100 $ 150 $ 200 S&P 500 S&P/TSX CNI CNR $ 50 $0 2004 veyears,morethan80%ofthecompensationearned CNR veyears,thethreemaincomponentsof 2005 DEC-04 CNI $100 $100 $100 $100 2006 DEC-05 $105 $124 $131 $127 S&P/TSX DEC-06 $121 $146 $142 $139 nedastheamountofbase 2007 DEC-07 $128 $160 $158 $132 2008 S&P 500 DEC-08 $107 $126 $129 $81

DEC-09

$102 $145 $190 $168

2009

$ 100 close linkbetweenthetwo. period endingonDecember31,2009,anddemonstratesthe compensation earnedbyNEOsineachyearoftheﬁ CN’s commonsharesontheTSXcomparedwithtotal total shareholderreturnonaCAD$100investmentin The followinggraphsillustratetheannualchangeincumulative -$15 $ 25 $ 45 $50 $75 $15 $30 $ 0 $0 2005 2005 Compensation earnedbyNEOsattributedtotheyear(CAD$M) the yearonaCAD$100investmentDecember31,2004 Change inthecumulativetotalshareholderreturnduring 2006 2006 2007 2007 2008 2008 2009 2009 ve-year

41 CN MANAGEMENT INFORMATION CIRCULAR 42 CN MANAGEMENT INFORMATION CIRCULAR 1 Mr. HarrisonretiredonDecember31,2009.Mr. MongeausteppeddownasChiefFinancialOffi (1) SUMMARY COMPENSATION TABLE www.sec.gov. fi December 31,2008.For compensationrelatedtopreviousyears,pleaserefertheCompany’sManagementInformationCirculars The followingtablesetsforththeannualtotalcompensationforNEOs,yearsendedDecember31,2009and Summary CompensationTable methodology. Fluctuationintheexchangeratemayaffectcomparabilityofdatayearoveryear. compensation isexpressedinCanadiandollars.PleaserefertotheCurrencyExchangeInformationonpage55forconversion Most compensationpaid,earnedandawardedtotheNEOswasinU.S.dollars.Infollowingtables,unlessotherwisespecifi 2 RepresentsthegrantdatefairvalueofawardscalculatedinaccordancewithAccountingStandardsCodifi (2) d Basedontheannualizeddividendrate. (d) (e) Basedontheimpliedyieldavailablezero-coupongovernmentissueswithanequivalenttermcommensurateexpect (b) TheJunevaluationrelatestotheawardmadeMr. JobinonJune1,2009. (c) (a) led with the CSA andavailableatwww.sedar.com ledwiththeCSA orfi Sales andMarketing Executive Vice-President, James M.Foote Chief LegalOffi Corporate Servicesand Executive Vice-President, Sean Finn Operations Executive Vice-President, Keith E.Creel Offi and ChiefFinancial Executive Vice-President Luc Jobin YEAR Executive Vice-President Claude Mongeau Chief ExecutiveOffi President and E. HunterHarrison POSITION NAME ANDPRINCIPAL cer Executive Offi lattice-based valuationmodelandtheBlack-Scholesoption-pricingmodel,respectively, andconsidersthefollowingassumptions represent theawardofstockoptionspursuanttoManagementLong-Term IncentivePlan.Thegrantdatefairvalueforrestric Accepted AccountingPrinciples(U.S.GAAP).Share-basedawardsrepresenttheawardofperformance-basedrestrictedshareunits Vice-President andChiefOperatingOffi Resulting fairvalueper Expected term Expected dividendyield term oftheaward Expected stockpricevolatilityover of theaward Risk-free interestrateoverterm Closing sharepriceongrant SHARE-BASED AWARDS (1) and groupsofemployeesthathavesimilarhistoricalexercisebehaviourareconsideredseparately. Represents theperiodoftimethatawardsareexpectedtobeoutstanding.For options,theCompanyuseshistoricaldatatoesti volatility fromtradedoptionsontheCompany’sstock. Based onthehistoricalvolatilityofCompany’sstockoveraperiodcommensuratewithexpectedtermaward,andf cerasofJanuary1,2010.Mr. JobinjoinedCNandassumedthe roleofExecutiveVice-PresidentandChiefFinancialOffi cer cer (b) (e) cer (c) ntCD2.9CD2.0CAD$34.16 CAD$21.30 CAD$27.39 unit (d) 0842175514511542922013827002422,260,830 2,666,840 2,482 2,661 207,000 118,000 2,051,348 2,546,179 462,962 377,414 575,124521,125 875,143 492,137 745,462 2008 548,160 2009 08503081667445592327564(810 4812,692,375 14,861 3,949,071 (28,160) 1,359,830 2,705,674 (125,048) 569,293 2,714,289 3,051,626 2,891,111 344,833 744,465 16,955 131,835 1,000,164 821,606 2,783,703 199,173 194,803 1,768,573 851,957 570,310 2,029 1,000 2,835,498 2,564,473 4,442,901 517,335 2008 400,957 510,707 76,000 2,200 39,051 2009 1,000,164 821,606744,465 2,705,674 1,557,000 1,728,522 851,957 487,695 569,293 2,883,701 234,163 17,343,160 13,350,048 582,420 2008 420,610 744,465 1,722,004 1,113,975 542,822 2009 4,295,513 1,620,129 1,000,164 821,606 2008––– 597,780 11,325,643 10,615,944 851,957 570,310 2,681,528 3,575,195 2009 353,757 610,970 2,625,429 3,450,7451,799,124 2008 4,004,198 1,790,880 2009 2,014,488 2008 2009 ––––– aeCD4.6CD4.1CAD$48.57 CAD$41.91 CAD$48.46 date cereffectiveJanuary1,2010.Mr. Foote retiredonNovember5,2009. A$.2CD10 CAD$1.01 CAD$1.01 CAD$0.92 (JANUARY) SALARY SALARY er er 2.6years 3years 3 years .3 .5 1.60% 1.55% 3.43% 2008 2 7 29% 27% 22% ($) 7 (8) (7) SHARE-BASED (JANUARY) AWARDS 2009 ($) 2 2 3 4 5 (6) (5) (4) (3) (2) (2)

led with the U.S. Securities and Exchange Commission and available at ledwiththeU.S.SecuritiesandExchangeCommissionavailableat AWARDS (JUNE) OPTION- 2009 BASED ($) (a)

cer on June 1, 2009 to dedicate himself to transitioning into the position of President and Chief ceronJune1,2009todedicatehimselftransitioningintothepositionofPresidentandChief NON-EQUITY COMPENSATION – Resulting fairvalueperstock Expected dividendyield Expected term term oftheaward Expected stockpricevolatilityover of theaward Risk-free interestrateoverterm Closing sharepriceongrant OPTION-BASED AWARDS INCENTIVE INCENTIVE ANNUAL cation (ASC) 718 – Compensation – Stock Compensation, under U.S. Generally cation(ASC)718–CompensationStockCompensation,underU.S.Generally PLANS PLAN PLAN ($) (b) (e) C OMPENSATION (c) TOTAL DIRECT (d) : aeCD4.6CD4.1CAD$48.57 CAD$41.91 CAD$48.46 date ted share units and stock options is determined using the ted shareunitsandstockoptionsisdeterminedusingthe option ($) under the Restricted Share Units Plan. Option-based awards under theRestrictedShareUnitsPlan.Option-basedawards cerasofJune1,2009.Mr. CreelwasappointedExecutive

ed termoftheaward. mate option exercise and employee termination, mate optionexerciseandemployeetermination, or option-based awards, also considers the implied or option-basedawards,alsoconsiderstheimplied PENSION A$24 A$25 CAD$15.51 CAD$12.50 CAD$12.41 A$.2CD10 CAD$1.01 CAD$1.01 CAD$0.92 (JANUARY) VALUE . er . er 5.3years 5.3years 5.3 years .8 .5 2.51% 1.95% 3.58% ($) 2008 7 9 39% 39% 27% C OMPENSATION ALL OTHER (JANUARY) 2009 ($) C OMPENSATION (JUNE) ed, ed, TOTAL 2009 ($) (a) DETAILS OF“ALL OTHERCOMPENSATION” AMOUNTSFOR2008AND2009 Includesthevalueofperquisites,otherpersonalbenefi (6) Includesthecompensatoryvalueofpensionbenefi (5) AmountsshownundertheTotal DirectCompensationcolumnrepresentthesumofsalary, share-basedawards,option-basedawar (4) RepresentstheincentiveearnedunderAnnualIncentiveBonusPlanforyear2009.Refertopage35detailso (3) 8 Mr. JobinelectedtodeferhisAnnualIncentiveBonuspayoutundertheVoluntary IncentiveDeferralPlanwherebythepayout (8) Onanannualbasis,Mr. Jobin’ssalarywasUS$525,000for2009. (7) 2 Perquisites andotherpersonalbenefi (2) Thistableoutlinestheperquisitesandothercompensationreceivedin20082009.Theamountsarecalculatedbasedont (1) 7 Thisamountrepresentsotherbenefi (7) Representstheservicecostforpost-retirementlifeandmedicalinsurance,ifapplicable. (6) Thisamountrepresentsotherbenefi (5) Thisamountrefl (4) 3 Mr. Harrison’sbasiclifeinsurancecoveragebeforeretirementwasequalto3timeshissalarywithoutlimitation.Thefi (3) lueMneu20 2009 YEAR Claude Mongeau E. HunterHarrison NAME u oi 09 2009 Luc Jobin et .Cel20 i a rs-p 1,5 16,955 16,955 Taxgross-up: Nil 2009 2009 Sean Finn Keith E.Creel ae .Foe20 2009 James M.Foote on December31,2009andNovember5,respectively. Detailsareprovidedinthetablebelow. Asof2010,taxgross-upsona of theNamedExecutiveOffi after taxesisnotlessthanitwouldhavebeenintheU.S.Perquisites andotherpersonalbenefi at arateof25%peryear. Referto“DeferredCompensationPlans” onpage48fordetails. cash uponretirementortermination.Thedeferralwasconvertedinto4,141deferredshareunitsusingapriceofUS$53.80 executive perquisiteprogramand,effectiveJanuary1,2010,eliminatedtaxgross-upsandreviseditspolicyregardingpersonal page 48fordetails. includes thetransferofownershipacar, thepaymentofvacation,clubmembershipandfi retirement arrangement,andtheestimatedvalueofCAD$165,553(US$157,500)forathree-monthconsultingservicesagreementwit of vacation. for compliancewiththenon-compete/non-solicitationrestrictionscontainedinMr. Harrison’scontract.Italsoincludesthetr since ithasbeenfullyexpensedbytheCompany. addition tothepost-retirementbenefi or 10%ofthetotalsalaryforanyNEOsarereportedas“Nil”inthiscolumn. coverage offeredtosalariedemployees.Seesection“ExecutivePerquisites” onpage38fordetails.Perquisites andotherperso for business-relatedpurposesbyexecutiveoffi aircraft forpersonalaswellbusinessuse.ItwasalsoaconditionofMr. Harrison’semploymentarrangementswithCN.TheC fuel costs,trip-relatedmaintenance,landingfeesandothermiscellaneousvariablecosts.ItwastheCompany’spolicy, foreffi (3) ectsthevalueofMr. Harrison’spersonaltraveloncompany-owned orleasedaircraft.Thisvalueisbasedonaggregateincreme cersarenotreportedinthiscolumn.For Mr. HarrisonandMr. Foote, theamountsreportedalsoincludevalueofbenefi 09 Personal useof 2009 08 Personal useof 2008 082008 Nil Post-retirement benefi 082008 – 2008 Nil – Tax – gross-up: 37,691 082008 2008 Nil Tax Nil 14,861 Post-retirement gross-up: benefi 14,861 tsprovideduponMr. Foote’s earlyretirement.ItincludesanretirementpaymentofCAD$998,450(US$950,000)madepursua tsprovideduponMr. Harrison’sretirement.ItincludesthepaymentofCAD$735,700whichrepresentsanamountUS$350,000fo tsincludetheuseofacompany-leased vehicle,clubmembership, fi tsofferedtoallsalariedemployees,Mr. Harrisonhasapost-retirementlifeinsurancebenefi Other Company perquisites: aircraft: 19,393 497,000 Other Company perquisites: aircraft: 19,219 937,000 cersofCN,includingtheCEO. tsasreportedinthe“Defi tsandothercompensation(asapplicable),forexamplepost-retirementbenefi PERQUISITES ANDOTHER PERSONAL BENEFITS nedBenefi i Post-retirement benefi Nil i Post-retirement Nil benefi i Post-retirement Nil benefi i Tax Nil gross-up: 18,388 ($) tPlans”and“Defi (4) (4) (2) Txg osu:1 7761,113,975 Tax upon Other Tax gross-up: compensation retirement: gross-up: 1,104,524 157,756 101,087 Tax protection: 94,144 Othercompensationupon early retirement: 1,341,442 ts that in aggregate amount to less than CAD$50,000 or 10% of the total salary for any tsthatinaggregateamounttolessthanCAD$50,000or10%ofthetotalsalaryforany (1) nancial and tax counselling services. See section “Employment Contracts/Arrangements” on on nancialandtaxcounsellingservices.Seesection“EmploymentContracts/Arrangements”

nancialcounselling,andcertainhealthcarelifeinsurancebenefi nedContributionPlans”tablesinthe“Pension PlanBenefi rst US$1 million was covered under the regular management plan. In rstUS$1millionwascoveredundertheregularmanagementplan.In COMPENSATION t: ,2 2,029 2,200 2,029 2,200 ts: ts: t: ,0 1,000 1,000 ts: t: ,8 2,482 2,661 2,482 2,661 ts: ts: f theAIBP. ciency and security reasons, to require that the CEO use Company ciencyandsecurityreasons,torequirethattheCEOuseCompany ansfer oftheownershipacar, clubmembershipandpayment is received in the form of deferred share units payable in isreceivedintheformofdeferredshareunitspayable nal benefi useofcorporateaircraft. he incrementalcosttotheCompany. TheCompanyreviewedits ompany’s policy now requires that corporate aircraft be used ompany’s policynowrequiresthatcorporateaircraftbeused t of US$1 million, for which there are no current service costs tofUS$1million,forwhichtherearenocurrentservicecosts . Thecompany-match of1,035unitswillvestoverfouryears, OTHER ll perquisiteshavebeeneliminated. ds, andannualincentiveplans. ts, tax gross-up or tax protection such that net income ts,taxgross-uporprotectionsuchthatnetincome h theCompanyonbasisofUS$2,500perday. Italso ts that in aggregate amount to less than CAD$50,000 tsthatinaggregateamounttolessthanCAD$50,000 ($) (7) (6) (6) (6) (6) (6) (5) (TOTAL OFTHETWO PREVIOUS COMPENSATION COLUMNS) ntal operatingcoststotheCompany, suchas ts granted following their retirement tsgrantedfollowingtheirretirement ts”section. nt to an early nt toanearly r two years r twoyears ts exceeding tsexceeding 1,722,004 1,359,830 ALL OTHER 131,835 ($)

43 CN MANAGEMENT INFORMATION CIRCULAR 44 CN MANAGEMENT INFORMATION CIRCULAR Following hisretirement,theexpirydateofstockoptionsforMr. Harrisonhasbeensettoﬁ (4) Theoptionsgrantedin2009weremadeundertheManagementLong-Term IncentivePlanandvestoveraperiodoffouryears,w (3) Therestrictedshareunitsgrantedin2009weremadeundertheRestrictedShareUnitsPlan.Underthisplan,payoutwil (2) Thegrantdatefairvaluesreportedarecalculatedusingthesameassumptionsasdescribedinfootnote2ofSummaryCom (1) Plan andgrantsofstockoptionsmadeundertheManagementLong-Term IncentivePlanin2009. The followingtableshowsinformationregardinggrantsofrestrictedshareunitsmadetoNEOsundertheRestrictedShareUnits Share-based andOption-basedAwardsin2009 Incentive PlanAwards James M.Foote enFn aur 6 09RSUs January26,2009 Sean Finn et .CelJnay2,20 RSUs 2009 26, January Keith E.Creel u oi ue1 09RSUs June1,2009 Luc Jobin Claude Mongeau AEGATDT AWARD TYPE DATE GRANT E. HunterHarrison NAME award. UnexercisedoptionsshallexpireonthetenthanniversarydateofSeesection“ManagementLong-Term Incentive condition, asdescribedunder“RestrictedShareUnits:2009Award”onpage37. granted ifreturnoninvestedcapitalreaches,respectively, threshold,targetandmaximumperformanceovertheplanperiod options, 20,000optionswillnotvestandwereforfeited. stock optionshasbeensettothreeyearsafterretirementasperthetermsandconditionsinManagementLong-termInce aur 6 09RSUs January 26,2009 aur 6 09RSUs January 26,2009 aur 6 09RSUs January 26,2009 Options Options Options Options Options Options (3) (2) (3) (2) (3) (2) (3) (2) (3) (2) (3) (2) SECURITIES, UNITS OR OTHERRIGHTS 210,000 188,000 veyearsafterretirementasperhisemploymentcontract.For Mr. Foote, theexpirydateof 80,000 40,000 70,000 35,000 80,000 40,000 35,000 17,500 80,000 40,000 (#) December 31,2011 December 31,2011 December 31,2011 December 31,2011 December 31,2011 December 31,2011 November 6,2012 END OF PLAN PERIOD END OFPLAN January 26,2019 January 26,2019 January 26,2019 January 1,2015 l be 50%, 100% or 150% of the number of restricted share units l be50%,100%or150%ofthenumberrestrictedshareunits OR EXPIRYDATE June 1,2019 pensation Table. is also conditional upon meeting a minimum share price isalsoconditionaluponmeetingaminimumshareprice ntive Plan.Consequently, outofhisgrant80,000stock ith 25% of the options vesting at each anniversary date of the ith 25%oftheoptionsvestingateachanniversarydate Plan”onpage46foradescriptionoftheplan. (4) (4) SHARE PRICE OF GRANT OF GRANT ON DATE 41.91 41.91 41.91 41.91 41.91 41.91 48.57 48.57 41.91 41.91 41.91 41.91 ($) GRANT DATEGRANT 1,000,164 1,000,164 1,000,164 2,625,429 4,004,198 FAIR VALUE 851,957 875,143 745,462 851,957 542,822 597,780 851,957 AWARD’S ($) (1) 4 ThevalueofoutstandingshareunitsawardedundertheRestrictedShareUnitsPlanisbasedonclosingpricecom (4) IncludesallrestrictedshareunitsoutstandingonDecember31,2009thathavenotvestedsuchdateundertheRestricted (3) Thevalueofunexercisedin-the-moneyoptionsatﬁ (2) IncludesallstockoptionsgrantedundertheManagementLong-Term IncentivePlanoutstandingonDecember31,2009. (1) The followingtableshowsallawardsmadetoNEOsandoutstandingonDecember31,2009. Outstanding Share-basedAwardsandOption-based ae .Foe6,0 34.17 60,000 James M.Foote et .Cel8,0 34.17 US 44.37 80,000 35,000 Keith E.Creel Luc Jobin Sean Finn 70,000 34.17 US 34.17 70,000 Sean Finn Claude Mongeau 80,000 34.17 US 34.17 80,000 Claude Mongeau E. HunterHarrison NAME of theshareunitsawarded. assuming thattargetedperformancecriteriaandtheminimumsharepriceconditionwillbemet.Inaccordancewithplan, meeting performance criteria and a minimum share price condition that may or may not be achieved. meeting performancecriteriaandaminimumsharepriceconditionthatmayornotbeachieved. of thecommonsharesondateexercise. the December31,2009(1.0510)exchangerateforU.S.dollardenominatedoptions.Thisvaluehasnotbeen,andmayneverbe,re Exchange (US$54.36)forU.S.dollardenominatedoptions,ontheTSX(CAD$57.34)Canadianandth nancialyear-end isthedifferencebetweenclosingpriceofcommonsharesonDecember31,2009,NewYork Stock UNEXERCISED UNDERLYING ,8,0 04 A 2013/01/24 20.42CAD 1,080,000 NUMBER OF SECURITIES 7,0 55 A 2012/01/25 25.59CAD 170,000 2,0 04 A 2013/01/24 20.42CAD 324,000 1,0 41 S21/10 66995 1,0 18,004,760 2012/01/25 314,000 2015/01/01 25.59CAD 2015/01/01 76,689,975 2015/01/01 29.19US 675,000 2015/01/01 44.93US 2015/01/01 44.67US 250,000 48.08US 190,000 34.17US 145,000 145,000 210,000 OPTIONS 4004.3U 2016/01/27 2017/01/25 2018/01/24 44.93US 44.67US 48.08US 24,000 16,800 42,000 0002.9U 2012/11/06 2012/11/06 2012/11/06 29.19US 44.93US 2012/11/06 44.67US 80,000 48.08US 60,000 46,000 60,000 5002.9CD2012/01/25 2015/01/28 25.59CAD 2016/01/27 29.19US 2017/01/25 85,000 2018/01/24 44.93US 44.67US 80,000 48.08US 60,000 46,000 60,000 6002.9U 2015/01/28 2016/01/27 2017/01/25 29.19US 2017/06/11 44.93US 2018/01/24 44.67US 36,000 53.01US 40,000 48.08US 28,000 10,000 60,000 ,0 24 A 2013/06/16 22.41CAD 5,500 (#) OPTION-BASED AWARDS EXERCISE OPTION PRICE S21/10 026867,0 4,013,800 70,000 10,246,856 2012/11/06 US S21/12 ,3,4 0004,013,800 70,000 3,934,240 2019/01/26 US ($) 090/137421,0 1,003,450 17,500 367,482 2019/06/01 090/6211635,0 3,211,040 56,000 2,171,673 2019/01/26 090/61,3,1 0004,013,800 70,000 19,933,511 2019/01/26 EXPIRATION (1) OPTION DATE mon shares on December 31, 2009 on the TSX (CAD$57.34) mon sharesonDecember31,2009theTSX(CAD$57.34) ShareUnitsPlan.Payouts fortheseunitsareconditionalupon IN-THE-MONEY UNEXERCISED actual payout may represent between 0% and 150% actualpayoutmayrepresentbetween0%and150% VALUE OF OPTIONS alized. Theactualgains,ifany, willdependonthevalue e exercise price. The value has been converted using e exerciseprice.Thevaluehasbeenconvertedusing ($) 2 3 (4) (3) (2) SHARES THAT NUMBER OF SHARES OR HAVE NOT UNITS OF SHARE-BASED AWARDS VESTED (#) OF SHARE-BASED PAYOUT VALUE AWARDS THAT MARKET OR HAVE NOT VESTED ($)

45 CN MANAGEMENT INFORMATION CIRCULAR 46 CN MANAGEMENT INFORMATION CIRCULAR 4 Alsoincludesthe“company-matched” deferredshareunitsallocatedtoanexecutivefollowingthedeferralofcompensationi (4) RepresentstheamountofbonusearnedunderAnnualIncentiveBonusPlanforfi (3) 2 Includesrestrictedshareunitsgrantedin2007thathavevestedonDecember31,2009undertheRestrictedShareUnitsPlan (2) FOR GRANTONFEBRUARY 26,2010 OPTIONS OUTSTANDING ANDAVAILABLE The ManagementLong-Term IncentivePlan(the“ Management Long-Term IncentivePlan ThevalueofthepotentialgainsfromoptionsgrantedunderManagementLong-Term IncentivePlanin2005,2006,2007and (1) annual incentivebonuspayoutduringthefi The followingtableshowsthevaluefromincentiveplansvestedorearnedbyNEOsunderCompany’sand Incentive PlanAwards–Value Vested orEarnedDuringtheYear February 26,2010. number ofsharesissuedandissuableunderthePlan,asat provides informationonthestatusofreserveand be issuedunderthePlanis60,000,000.Thefollowingtable 2002. Themaximumnumberofcommonsharesthatmay time non-executiveBoarddirectorsreceivedoptionswasin remain asparticipantsinthePlanforpreviousgrants,last to non-executiveBoarddirectorsunderthePlan.Whilethey of DirectorsonMarch8,2005,grantscannolongerbemade Directors. PursuanttoanamendmentapprovedbytheBoard Company oritsaffi Eligible participantsunderthePlanareemployeesof on March4,2008. amended onApril28,1998,21,2005,24,2007and approved bytheCompanyShareholdersonMay7,1996and of options Shares issuedfollowingtheexercise Options issuableunderthe and outstanding Options alreadygranted 377,414 400,957 498,514 1,324,777 72,475 81,534 James M.Foote Sean Finn Keith E.Creel Luc Jobin Claude Mongeau E. HunterHarrison NAME closing price of the common shares on each day of the respective vesting dates in 2009. closing priceofthecommonsharesoneachdayrespectivevestingdatesin2009. section “DeferredCompensationPlans”foradescriptionoftheVoluntary IncentiveDeferralPlan).Thevalueiscalculatedbase 2010, basedonthe20-dayaverageclosingsharepriceendingJanuary30,2010(CAD$56.08/US$53.80). the closingpriceofcommonsharesonDecember31,2009TSX(CAD$57.34).Asprovidedunderplan,actualpayo Payout” foradescriptionoftheplan).Thevalueshownintablehasbeencalculatedbymultiplyingnumbershareuni shares onthedateofexercise. on suchvestingdate(see“CurrencyExchangeInformation”page55).Thisvaluehasnotbeen,andmayneverbe,realized.The the differencebetweenclosingpriceofcommonsharesoneachoptiongrantvestingdatesin2009andexercis all vestoverfouryears,with25%peryearoneachanniversarydate(seesection“ManagementLong-Term IncentivePlan”forad liates as determined by the Board of liatesasdeterminedbytheBoardof ln1,2,9 2.47 11,623,997 Plan 717127.89 2.39 37,127,192 11,248,811 # COMMON SHARES nancial year ended December 31, 2009. nancialyearendedDecember31,2009. % OFOUTSTANDING ”) was Plan”) was COMMON SHARES AWARDS –VALUE VESTED DURING OPTION-BASED nancialyearendingonDecember31,2009andpaidFebruary 18,2010. 8,8 ,2,1 344,833 420,610 2,681,528 1,426,218 1,678,778 8,249,219 181,186 181,186 566,207 THE YEAR Plan asoftheendrespectiveyears. options grantedundertheManagementLong-Term Incentive The followingtablepresentsinformationconcerningstock death oftheholdersuchoptions. non-transferable except,incertaincircumstances,uponthe options grantediswellbelowthe1%limitation.Optionsare year. Asdemonstratedinthetableabove,numberofstock of theoutstandingcommonsharesatbeginningthat awards maybemadeduringacalendaryearislimitedto1% the maximumnumberofcommonshareswithregardtowhich outstanding. AlsopursuanttotheMarch8,2005amendment, have, shallnotexceed5%ofthecommonsharesissuedand under anyotherplanwhichtheCompanyhasormayeventually awards maybemadetoanyparticipantunderthePlanand aggregate numberofcommonshares,withregardtowhich particular yearis20%oftheawardsinthatyear. Themaximum and/or bethesubjectofagranttoanyoneparticipantin The maximumnumberofcommonsharesthatmaybeissued ($) rne tc pin 9 189 192 Number ofstockoptions as a%ofoutstandingshares Number ofstockoptionsgranted of stockoptions Average weightedexerciseprice outstanding asofyear Number ofstockoptions granted stockoptions Number ofemployeeswhowere Number ofstockoptions 234,163 0 0 1 2 (3) (2) (1) outstanding ed1,9,1 13,052,905 11,497,210 -end (see page 38, section “Restricted Share Units: 2007 Award (seepage38,section“RestrictedShareUnits:2007Award n previous years that have vested during the year (see page 48, n previousyearsthathavevestedduringtheyear(seepage48, d on the number of deferred share units vested multiplied by the d onthenumberofdeferredshareunitsvestedmultipliedby AWARDS –VALUE ts granted by the performance vesting factor of 103.5% and by ts grantedbytheperformancevestingfactorof103.5%and exercised granted VESTED DURING escription of the plan). The potential gains are calculated as escription oftheplan).Thepotentialgainsarecalculatedas e price, converted when applicable using the exchange rate e price,convertedwhenapplicableusingtheexchangerate 2008thathavevestedduringthefi actualgains,ifany, willdependonthevalueofcommon SHARE-BASED ut totheeligibleexecutiveshasbeenmadeinFebruary THE YEAR ($) (4) (4) (4) A$10 CAD$29.16 CAD$31.05 ,6,6 2,299,323 2,760,968 902,700 1,230,150 .6 0.19% 0.26% 092008 2009 COMPENSATION – VALUE nancialyear. Thesegrants EARNED DURING INCENTIVE PLAN INCENTIVE PLAN NON-EQUITY THE YEAR ($) ii iii. ii. i. the Companyshallobtainshareholderapprovalfor: options underthePlan(“ Plan oramendthetermsofanythenoutstandingaward of theprovisionsPlanorsuspendterminate with applicablelegislationandregulations,mayamendany Plan orpursuanttoaspecifi the BoardofDirectorsorCommittee,asprovidedin provisions tothePlan.Suchamendmentstatethat ordinary resolutionconfi At the2007annualmeeting,shareholdersapprovedan STOCK OPTIONSFEATURES conditions Termination Optionsmaybecomeexercisableuponanniversary • Vesting criteria Option period Exercise price by willorpursuanttosuccessionlaws(estatesettlements); under thePlantobetransferableorassignableotherthan any amendmentwhichwouldpermitOptiongranted directors tobeeligiblefornewawardsunderthePlan; any amendmentwhichwouldallownon-employee the Company(a“ShareAdjustment action ofasimilarnatureaffectingsuchsharesistakenby converted orreclassifi the eventthatsuchsharesaresubdivided,consolidated, shares issuableunderthePlan,exceptforadjustmentsin any amendmenttothemaximumnumberofcommon • In the event of a participant’s death, all available Intheeventofaparticipant’sdeath,allavailable • Inthecaseofretirement,optionsarecancelledthree • Intheeventthataparticipant’semploymentis • Stockoptionsshallbecancelleduponthe • Since2005,grantshavebeenofconventional • the Committee. These conditionsaresubjecttothediscretionof Ten years granted inthesamecurrencyasrecipient’ssalary. shares ontheTSXorNYSEgrantdate, At leastequaltotheclosingsharepriceofcommon of twelve months. of twelvemonths. options maybeexercisedbytheestateforaperiod years aftertheretirementdate. participant’s employment. cancelled threemonthsafterterminationofthe all stockoptionsheldbysuchparticipantshallbe terminated bytheCompanyotherthanforcause, employment. cause oriftheparticipantvoluntarilyterminates termination ofaparticipant’semploymentfor anniversary. options, whichvestoverfouryears,25%oneach established foreachgrant. performance targets(“performanceoptions”)as date (“conventionaloptions”)and/oruponmeeting rming the addition of new amendment rmingtheadditionofnewamendment Options ed by the Company or that any other edbytheCompanyorthatanyother c delegation and in accordance cdelegationandinaccordance ”) provided,however, that ”); on suchamendment. “Change ofControlProvision”onpage40formoredetails without causeorresignsforgoodreason.Pleasereferto upon aChangeofControl,unlesstheparticipantisterminated based optionsheldbyaparticipantwouldnotaccelerate a propersubstituteisgranted,thevestingofnon-performance- trigger provision”.Pursuanttosuchprovisions,providedthat On March4,2008,thePlanwasamendedtoincludea“double the Plan. participants shallthenhaveterminatedinaccordancewith previously grantedunderthePlan,unlessrightsof concerned, affectthetermsandconditionsofOptions the writtenconsentordeemedofparticipants No amendment,suspensionorterminationshall,exceptwith ix. b. a. viii. vii. vi. v. iv. which ismorefavourabletoparticipants. and anyamendmenttoafi the additioninPlanofanyformfi shares thatmaybeissued: any increasetothemaximumnumberofcommon an extensionduetoablackoutperiod; beyond theoriginalexpirydate,exceptincaseof any extensiontothetermofanoutstandingOption a ShareAdjustment; granted tothesameparticipant,exceptincaseof Option byanewwithreducedexerciseprice cancellation ofanOptionandthesubstitutionthat the Optionhasbeengrantedtoaparticipantorany any reductionintheexercisepriceofanOptionafter consideration isreceivedbytheCompany; participants receivingcommonshareswhilenocash unit provisionsoranyotherwhichresultin the additioninPlanofdeferredorrestrictedshare Plan reserve; deduction ofthenumberunderlyingsharesfrom cash orcommonshares,whichdoesnotprovideforafull the additionofacashlessexercisefeature,payablein participant; and under thePlanandanyotherplantoone calendar year;or under thePlantoanyoneparticipantduring nancial assistance provision nancialassistanceprovision nancial assistance nancialassistance

47 CN MANAGEMENT INFORMATION CIRCULAR 48 CN MANAGEMENT INFORMATION CIRCULAR amendment oftheplans. plans canbemade,unlesstheBoardofDirectorsapprovesan No modiﬁ this plan. Bonus SharePlan.Noadditionalawardsmaybemadeunder accordance withpastawardsmadeundertheSeniorExecutive retirement orterminationdate,whichvestedinJanuary2001 Certain executivesholddeferredshareunits,payableupontheir to thesharepriceperformance. increase theirstakeintheCompany, linkingtheirfuturereturns match, thisplanprovidesanopportunityforexecutivesto Because ofitstaxeffectivenessandtheadditionalCompany in accordancewiththeexecutive’sirrevocableelection. a lumpsumorinmonthlyinstalmentsnotexceedingtenyears, December 31,2004ismadeafterasix-monthwaitingperiodin regulations, paymentofamountsdeferredorvestedafter For eligibleU.S.taxpayers,incompliancewith executives ismadeinalumpsumfollowingthetermination. over thedeferralperiod.Payment foreligibleCanadian deferred shareunitsaswellaccruednotionaldividends termination dateandincludesthevestedcompany-matched on the20-dayaverageclosingsharepriceatretirementor The payoutofthedeferredshareunitsisestablishedbased year) fromthedeferraldate. deferred shareunitsvestoveraperiodoffouryears(25%per the numberofdeferredshareunits.Thesecompany-matched The Companyalsocreditsacompanymatchequalto25%of Company’s stockownershipguidelines. vested deferredshareunitaccountissufﬁ available toaparticipantwhenthevalueofparticipant’s eligible incentivepaymentsindeferredshareunitsisnot a descriptionoftheStockOwnership).Theelectiontoreceive Compensation Policies ofthe Company”onpage39for under theStockOwnershipguidelines(seesection“Other can deferinDSUsisequivalenttotheirownershiprequirement of theincentiveplan.Themaximumtotalamountparticipants least sixmonthspriortotheendofperformanceperiod the 20-dayaverageclosingshareprice.Electionsaremadeat is convertedintoanumberofunitsatthedeferraldate,using paid ontheCompany’scommonshares.Theamountdeferred into additionaldeferredshareunits,whencashdividendsare Company andearnsnotionaldividends,whicharere-invested A deferredshareunitisequivalenttoacommonofthe payable incashuponretirementorterminationofemployment. by theBoardofDirectors)intodeferredshareunits(“ amounts paidunderaneligibleincentiveplan(asapproved their annualbonus,restrictedshareunitpayoutsandother management employeestoelectdeferup100%of Deferral Plan.ThisplanallowsNEOsandothersenior The Companyintroduced,in2002,itsVoluntary Incentive Deferred CompensationPlans cation to the nature of the deferrals under both cationtothenatureofdeferralsunderboth

cient to meet the cienttomeetthe DSUs ”) ”) pension arrangements. See section“Pension PlanBenefi name andaclubmembershipwillbepaidforuptofi used whileemployedbytheCompanywastransferredtohis non-solicitation restrictions.Theownershipofthecarhe for twoyears,providingcompliancewithnon-competeand eligible foranannualpaymentofUS$350,000(CAD$367,850) life insuranceofUS$1,000,000(CAD$1,142,000).Heisalso per theRSUPlanrules.Hewillbeentitledtopost-retirement his rightstopayoutsfromtheRSUsfollowingretirementas continue duringthosefi retirement toexercisestockoptionsandvestingofwill benefi US$1,500,000 (CAD$1,576,500),with70%ofannualpension the Company, heisentitledtoanannualpensionbenefi the Company. Pursuanttohisemploymentagreementwith As ofDecember31,2009,Mr. E.HunterHarrisonretiredfrom • • • • • executives exceptforthefollowing: compensation andbenefi and markettrends.ThenewCEOremainseligibleforthesame reviewed, aspartoftheannualprocess,basedonperformance Mr. Mongeau’ssalarywassetatUS$950,000,normally of theBoard. employment asCEOisnotforafi employment, tobeeffectiveonJanuary1,2010.Mr. Mongeau’s meeting, thetermsandconditionsofMr. Mongeau’s and CompensationCommittee,approved,atitsApril20,2009 Directors, upontherecommendationofHumanResources after servingintherolesinceJanuary1,2003.TheBoardof January 1,2010,succeedingE.HunterHarrison,whoretired Claude MongeauwasappointedCEOoftheCompanyeffective Arrangements Employment Contracts/ public companyboard. Mr. Mongeauislimitedtoparticipatinginonlyoneoutside in accordancewithapplicablelawsandregulations. and providedallincrementalcostsarefullyreimbursed related purposesonly, saveforexceptionalcircumstances which statesthatcorporateaircraftbeusedforbusiness- The CEOisrequiredtoadheretheCompany’spolicy, after retirement. ownership levelandotherholdingrequirementsforoneyear within fi stock ownershipoffi Mr. Mongeauisrequiredtomaintainaminimumlevelof Information Circular. the “Pension PlanBenefi upon retirementiscappedatUS$1,000,000.Seealso the annualtotalpensionbenefi The supplementalpensionplanremainsineffect,but of basesalarywithapayoutrangingfrom0%to240%. Under theAnnualIncentivePlan,hisTarget Payout is120% tasspousalsurvivorbenefi ve years. He is also expected to maintain this stock veyears.Heisalsoexpectedtomaintainthisstock vetimeshisannualsalary, tobeachieved veyears.Mr. Harrisonalsomaintains t plans and policies as the other tplansandpoliciesastheother ts” section of this Management ts”sectionofthisManagement ts”fordetailsonMr. Harrison’s ts.Hewillhavefi t payable under this plan tpayableunderthisplan xed term. He serves at the will xedterm.Heservesatthewill ve years after veyearsafter ve years. veyears. t of tof Information Circular. general detailsofemploymentwhicharealldescribedinthis only providedemploymentconfi agreements withtheotherNamedExecutiveOffi The Companyhasnotenteredintoformalemployment pension arrangements. See section“Pension PlanBenefi such term.Thisagreementmaybeextendedbymutualconsent. US$2,500 inconsiderationforhisbeingavailabletoCNduring which arefederally-registered defi Messrs. MongeauandFinnparticipateintheCNPPSMPP, SENIOR MANAGEMENTPENSIONPLAN(“SMPP”) COMPANY’S PRINCIPAL AND PENSIONPLAN(“CNPP”) Canadian Pension Plans closing rateof1.0510. converted toCanadiancurrencyusingtheDecember31,2009 Amounts payableinU.S.currencyshownthissectionwere Pension PlanBenefi the Companyandallowshimtobenefi his entitlementsunderexistingbenefi account hisretirementdate.Theagreementalsoconfi He alsoreceivedabonusfor2009,proratedtotakeinto (CAD$998,450) wasmadetohimonDecember18,2009. with Mr. Foote, anearlyretirementpaymentofUS$950,000 Company. Pursuanttoaterminationagreemententeredinto On November5,2009,Mr. JamesM.Foote retiredfromthe - plus - 2009 andiscalculatedasfollows: benefi under bothplansissubjecttoamaximumannualretirement levels) intheSMPP. Theaggregateretirementbenefi the bonusespaidbyCompanyunderAIBP(uptotarget consist ofbasesalaryandovertimeintheCNPPalsoinclude calendar years,whicheverisgreater. Pensionable earnings 60 monthsofcompensatedserviceorthebestfi are theaverageannualpensionableearningsduringlast service andhighestaverageearnings.Highestearnings providing retirementbenefi which theCompanyagreedtopayhima Company startingonoraboutJanuary1,2010,pursuantto into athree-monthconsultingserviceagreementwiththe confi Company. Mr. Foote isboundbyseveralnon-competitionand the ownershipofcarhewasusingwhenemployedby December 31,2011,respectively. ItalsotransferstoMr. Foote counselling andclubmembershipuntilNovember30,2011 (maximum 35years). multiplied bythenumberofyearspensionableservice 2.0% ofhighestaverageearningsinexcesstheYMPE, of pensionableservice(maximum35years) the CanadaPension Plan,multipliedbythenumberofyears maximum pensionableearnings(“ 1.7% ofhighestaverageearningsuptotheyear’s dentiality provisions. On November 6, 2009, he entered dentialityprovisions.OnNovember6,2009,heentered t of CAD$2,444.44 per year of pensionable service for tofCAD$2,444.44peryearpensionableservicefor ts based on pensionable years of tsbasedonpensionableyearsof ts”fordetailsonMr. Foote’s rmation letters setting forth rmationletterssettingforth ts nedbenefi YMPE”) asdefi t and pension plans of tandpensionplansof tfromfi per diem diem per t pension plans tpensionplans nancial and tax nancialandtax ve consecutive veconsecutive cers. It has cers.Ithas ned under nedunder amount of amount of t payable tpayable rmed rmed (CAD$22,000 in2009). maximum contributionimposedbythe Company contributesthesamepercentage,subjectto their pensionableearningsintoaccountandthe DCPP participantscontributeaspecifi unionized automaticallyjointheDCPP. above. EmployeeshiredonorafterJanuary1,2006asnon- for executivesandseniormanagementemployees)mentioned new DCPPormaintainparticipationintheCNPP(andSMPP January 1,2006hadaone-timeopportunitytoeitherjointhe January 1,2006.Non-unionizedemployeeshiredpriorto plan thatwasintroducedfornon-unionizedemployeeson The DCPPisafederally-registered defi DEFINED CONTRIBUTIONPENSIONPLAN(“DCPP”) conditions ofemployment. US$1,000,000 (CAD$1,051,000),asperhistermsand Mr. Mongeau’sannualbenefi Messrs. MongeauandFinnparticipateintheSRS. operating fundsandguaranteedthroughaletterofcredit. until theageof55.SRSretirementbenefi become vestedonlyiftheemployeeremainsinactiveservice the SRSonorafterJuly1,2002,retirementbenefi SRS benefi Employees whojoinedtheSRSpriortoJuly1,2002havetheir immediate, unreducedSRSpensionpriortoage65. the timeofretirement,participantiseligibletoreceivean service isatleast85andtheparticipantage55orover If thesumofparticipant’sageandyearspensionable Company undertheAIBP(uptotargetlevels). Earnings consistofbasesalaryandbonusespaidbythe number ofyearspensionableservice(maximum35years). SMPP, approximatelyCAD$128,765in2009,multipliedbythe the maximumaverageearningsrecognizedunderCNPPand 2% oftheparticipant’shighestaverageearningsinexcess The annualpensionamountpayableundertheSRSisequalto Stipend (“SRS retirement program.ThisplaniscalledtheSpecialRetirement to participateinanon-registered,supplementalexecutive an agreement,includinganon-competitionclause,areeligible Executives andseniormanagementemployeeswhoexecute SPECIAL RETIREMENTSTIPEND(“SRS”) benefi pension priortoage65,subjectCompanyconsent.Pension the participantiseligibletoreceiveanimmediate,unreduced service isatleast85andtheparticipantage55orover, If thesumofparticipant’sageandyearspensionable tsvestaftertwoyearsofemployment. tsvestaftertwoyears.For employeeswhojoin ”). t under the SRS shall not exceed tundertheSRSshallnotexceed c percentage of cpercentageof ned contribution pension nedcontributionpension Income Tax Act ts are paid out of tsarepaidoutof

ts ts

49 CN MANAGEMENT INFORMATION CIRCULAR 50 CN MANAGEMENT INFORMATION CIRCULAR defi Messrs. Creel,HarrisonandFoote participateinthisqualifi DEFINED BENEFITPENSIONPLAN U.S. Pension Plans participates intheDCSERP. options asselectedbytheparticipantinDCPP. Mr. Jobin Notional contributionsareinvestedusingthesameinvestment after twoyearsofemployment. do notcontributetotheDCSERP. Employercontributionsvest account graduallyuntilyearendundertheDCSERP. Employees exceeded thelimitarecreditedbyCompanytoanotional both employerandemployeecontributionsthatwouldhave by theIncomeTax Act(CAD$22,000in2009)theDCPP, Essentially, oncecontributionshavereachedthelimitprescribed Income Tax Act retirement benefi The DCSERPisanunregisteredpensionplan,whichprovides RETIREMENT PLAN(“DCSERP”) DEFINED CONTRIBUTIONSUPPLEMENTAL EXECUTIVE elected toremainintheCNPPandSMPP. Mr. JobinparticipatesintheDCPP. Messrs.MongeauandFinn Employer contributionsvestaftertwoyearsofemployment. in variousinvestmentfundsasselectedbytheparticipant. under theAIBP(uptotargetlevel).Contributionsareinvested Pensionable earningsinclude basesalaryandbonusespayable service asfollows: The contributionpercentageforexecutivesdependsonageand fi of RailroadRetirementBoardservice.Pension benefi 60 iftheemployeehas30yearsofcreditedserviceor retirement benefi limit (CAD$237,526in2009),overthelastfi are cappedattheaverageofU.S. Pensionable earningsconsistofbasesalaryandovertime months inthelast120fullconsecutiveofemployment. pensionable earningsduringthebest60fullconsecutive Highest averageearningsaredefi 35 years). multiplied byyearsandmonthsofcreditedservice(maximum Board averagecoveredcompensation(CAD$76,618in2009) of highestaverageearningsinexcessRailroadRetirement benefi veyearsofemployment. 60 andabove 50–59 40–49 Up to39 POINTS (SUMOFAGEANDSERVICE) nedbenefi ts equal to 0.4% of highest average earnings plus 0.3% tsequalto0.4%ofhighestaverageearningsplus0.3% t pension plan, which provides retirement tpensionplan,whichprovidesretirement with respect to the DCPP described above. with respecttotheDCPPdescribedabove. t is payable without reduction at age 65 or age tispayablewithoutreductionatage65or ts in excess of the limits prescribed by the tsinexcessofthelimitsprescribedby 9% 8% 7% 6% ofpensionableearnings ned as the average annual nedastheaverageannual Internal RevenueCode ve years. The veyears.The ts vest after tsvestafter ed ed

operating funds. arrangement arefullyvestedandpayablefromtheCompany’s CNPP andSMPP. Thepensionbenefi years and4.35months),lessthepensionpayableunder from August23,1995toDecember31,2000(i.e.,twicefi CNPP, SMPPandSRSfortwicethenumberofyearsservice equal tothepensionbenefi pension benefi he transferredfromCanadatotheUnitedStates.Mr. Foote’s Mr. Foote participatedintheCNPPuntilMarch31, 2000,when late-career hire. hire tocompensateforthepensionlossassociatedwithhis the Companydecidedtograntadditionalyearsofserviceupon his fi credited withtwoyearsofserviceforeachyearduring is coveredbyaspecialpensionarrangement,underwhichhe Mr. Foote joinedtheCompanyonAugust23,1995. Mr. Foote delay. Retirementbenefi vested priortoJanuary1,2005arenotsubjectthesix-month or terminationofemployment.Retirementbenefi retirement dates,butnoearlierthansixmonthsafter their lifetimepensionbenefi Participants haduntilDecember 31,2008toelectreceive service or30yearsofRailroadRetirementBoardservice. at age65or60iftheparticipanthas30yearsofcredited The newSERPpensionbenefi (iii) theU.S.RailroadRetirementBoardTier2pension;and (ii) thepensionpayableunderDefi (i) pension isoffsetby: Company undertheAIBP(uptotargetlevels).ThenewSERP 12 andearningsconsistofbasesalarybonusespaidbythe compensated serviceoutofthelast120monthsmultipliedby pensionable earningsduringthebest60consecutivemonthsof below. Highestaverageearningsaredefi credited service(maximum35years)minustheoffsetsdescribed highest averageearnings,multipliedbythenumberofyears The annualpensionunderthenewSERPisequalto2%of SUPPLEMENTAL EXECUTIVERETIREMENTPLAN(“NEWSERP”) limitations imposedbytheU.S. voluntary “pre-tax”contributionstotheSavingsPlansubject Plan whichisaqualifi Messrs. Creel,HarrisonandFoote participateintheSavings QUALIFIED SAVINGS PLAN(“SAVINGS PLAN”) investment fundsasselectedbytheparticipant. and fullyvesteduponcontributionareinvestedinvarious the employee’spre-taxsalary. Allcontributionsareimmediately The matchingcontributionislimitedto50%ofthefi voluntary contributionsarepartiallymatchedbytheCompany. Savings Plan. Savings Plan. with the3%employercontributionsavailableunder the amountofsinglelifeannuitythatcanbepurchased rsttenyearsofservicewiththeCompany. Exceptionally, ts, under his special pension arrangement, are ts,underhisspecialpensionarrangement,are ed401(k)plan.Participants may make tscannotbepaidearlierthanage55. ts he would have accrued under the tshewouldhaveaccruedunderthe t on another date than the above tonanotherdatethantheabove t is payable without reduction tispayablewithoutreduction . Those Internal RevenueCode.Those ts under the special pension tsunderthespecialpension nedBenefi ned as the average nedastheaverage ts accrued and tsaccruedand tPension Plan; rst 6% of rst6%of ve ve he hasbeenparticipatingintheDefi Mr. CreeljoinedICRonApril1,1996.SinceDecember31,2000, retirement orterminationofemployment. Company andcannotbepaidearlierthansixmonthsafter Contributions arevestedaftertwoyearsofservicewiththe service asfollows: The Companycontributesapercentagebasedonageand (up totargetlevel). compensation consistsofbasesalaryandbonusundertheAIBP limitations imposedbytheU.S. contribution oneligiblecompensationwithoutregardtothe DC SERPisastand-aloneplan,whichprovidesCompany which complementstheDCOptiondescribedabove.TheU.S. The U.S.DCSERPisanon-qualifi RETIREMENT PLAN(“U.S.DCSERP”) U.S. DEFINEDCONTRIBUTIONSUPPLEMENTAL EXECUTIVE funds asselectedbytheparticipant. the Company. Contributionsareinvestedinvariousinvestment on orafter2007arevestedthreeyearsofservicewith of servicewiththeCompanyandemployercontributionsmade Employer contributionsmadein2006arevestedafterfi to limitationsimposedbytheU.S. contribution of3.5%basesalarytotheSavingsPlan,subject above. ThenewDCOptionprovidesforanadditionalemployer participation intheDefi opportunity toeitherjointhenewDCOptionormaintain employees hiredpriortoJanuary1,2006hadaone-time non-unionized employeesonJanuary1,2006.Non-unionized A newemployercontributionoptionwasintroducedfor CN RETIREMENTCONTRIBUTIONOPTION(“DCOPTION”) in theU.S.SavingsPlanandDefi Since December31,2000,Mr. Foote hasbeenparticipating participation intheDCOptionandU.S.SERP. As atDecember31,2009,Mr. Creelhadfouryearsof described above.Mr. Creel’spensionbenefi and newSERPjoinedtheDCOptionU.S. ceased toaccrueserviceintheDefi Savings PlanandthenewSERP. OnJanuary1,2006,Mr. Creel each yearofservice,asmentionedabove. SERP underwhichhewascreditedwithtwoyearsofservicefor mentioned above.Hehasalsobeenparticipatinginthenew 60 andabove 50–59 40–49 Up to39 POINTS (SUMOFAGEANDSERVICE) nedBenefi . Eligible Internal RevenueCode.Eligible nedBenefi ed, unfunded pension plan ed,unfundedpensionplan 8% 7% 6% 5% ofeligiblecompensation tPension Planmentioned nedBenefi Internal RevenueCode nedBenefi tPension Plan ts are fully vested. tsarefullyvested. tPension Plan tPension Plan, ve years veyears . 90 daysfollowingretirement. January 1,2005willbepaidintheformofalumpsumwithin the formofalumpsum.Amountsaccruedandvestedbefore paid earlierthansixmonthsafterretirementandwillbein Plan andSupplementalDefi 2004 intheExecutiveAccountBalancePlan,ExcessBenefi Amounts accruedandvestedbyMr. HarrisonafterDecember31, using theactualSavingsPlaninvestmentrateofreturn. (capped attheannual401(a)(17)limit).Interestiscredited annual accrualequivalentto2%ofMr. Harrison’sbasesalary The SupplementalDefi excess oftheannual401(a)(17)limit. of theU.S. Savings PlanwhichisrestrictedbythelimitsofSection402(g) to theexcessofemployer’smatchingcontributionunder The ExcessBenefi of 2009. determined semi-annually. Therateofreturnwas3.25%forall are giveneachmonthusingtheWall StreetJournalprimerate upon retirementorterminationofemployment.Interestcredits (CAD$187,078 for2009)tobeaccruedannually, andispayable bonus payableundertheAIBPinexcessofawageoffsetfactor equivalent to10%ofMr. Harrison’scombinedbasesalaryand The ExecutiveAccountBalancePlanprovidesforasum by newplanswiththesameprovisionsasofJanuary1,2001. frozen asofDecember31,2000and,forMr. Harrison,replaced former ICRnon-registeredunfundedcashplans,whichwere SERP, Mr. Harrisonalsoparticipatesintheaforementioned In additiontotheDefi CONTRIBUTION PLAN PLAN ANDNON-QUALIFIED SUPPLEMENTAL DEFINED EXECUTIVE ACCOUNTBALANCEPLAN,EXCESS BENEFIT Benefi service costofCAD$2,795,000,thatappearsintheDefi until December31,2009.Thishavingbeenthecase, (CAD$1,576,500) ifheremainedemployedbytheCompany for anannualoldSERPbenefi As previouslydisclosed,Mr. Harrison’scontractprovided ICR establishedtheoldSERPeffectiveasofJanuary1,1994. SUPPLEMENTAL EXECUTIVERETIREMENTPLAN(“OLDSERP”) termination ofemployment. cannot bepaidearlierthansixmonthsafterretirementor of US$200,000(CAD$210,200)attributedto2009.Benefi tPlansTable, recognizestheincrementalannualbenefi plus a 2% of base salary in Internal RevenueCodeplusa2%ofbasesalaryin t Plan provides for the accrual of a sum equal tPlanprovidesfortheaccrualofasumequal nedBenefi ned Contribution Plan provides for an nedContributionPlanprovidesforan ned Contribution Plan cannot be nedContributionPlancannotbe t payment of US$1,500,000 tpaymentofUS$1,500,000 t Plan, Savings Plan and old tPlan,SavingsPlanandold ned ned t ts ts t

51 CN MANAGEMENT INFORMATION CIRCULAR 52 CN MANAGEMENT INFORMATION CIRCULAR 8 Mr. CreelnolongeraccruesserviceintheDefi (8) For Mr. Mongeau,theImpactofSalary/Bonusonaccruedpensionobligationrepresentsone-timeimpacthigher (7) 9 Mr. Foote hasaspecialpensionarrangementasdescribedonpage50inthe“U.S.Pension Plans”section. (9) 6 DoesnotincludeformerICRnon-registeredcashplansdescribedintheDefi (6) Thechangeinbenefi (5) Theaccruedobligationisthevalueofbenefi (4) Theprojectedpensionisbasedoncurrentcompensationlevelsandassumestheexecutivewillreceive80%oftargetbonu (3) 2 For Mr. Harrison,theannualbenefi (2) Defi No withdrawalsordistributionsarepermittedbeforethefollowingexecutivesterminatefromCompany. Amounts showninthistableincludeamountsfromtheCompany’sregisteredandnon-registereddefi Defi for 2009. at www.sedar.com, andincludethebenefi and page78ofthe20092008Annualreport,respectively, availableontheCompany’swebsiteatwww.cn.ca andonSEDAR SERP). TheseamountsweredeterminedusingthesameactuarialassumptionsasthoseusedinNote12–Pensions, onpage65 The followingtableprovidesthetotalaccruedobligationforCN’snon-registereddefi Thechangeinbenefi (1) Mr. Harrisonparticipates intheSavingsPlan,ExecutiveAccountBalanceExcessBenefi (3) Representsemployeecontributions,ifany, andinterestgainslosses. (2) Representsemployercontributions. (1) 6 Mr. Foote participatesintheSavingsPlan. (6) Mr. Creelparticipatesin theSavingsPlan,DCOptionandU.S.SERP. (5) Mr. Jobinparticipates intheDefi (4) benefi on assumptions,whichmayornotmaterialize.Amountsshowninthistableincludepensionbenefi website atwww.cn.ca andonSEDARatwww.sedar.com. Theamountscalculatedinthistableareestimatesonlyandbased Note 12–Pensions, onpage 65andpage78ofthe20092008Annualreport,respectively, availableontheCompany’s The followingamountsofaccruedobligationhavebeencalculatedusingthesameactuarialassumptionsasthoseusedin NAME E. HunterHarrison SRS, OLDSERPand PLANS 213,000 16 James M.Foote Sean Finn Keith E.Creel Claude Mongeau James M.Foote Keith E.Creel Luc Jobin E. HunterHarrison NAME old SERP. ThisadditionalpensionwasconditionaluponMr. HarrisonbeingactiveonDecember31,2009pursuanttohisemploymen Mr. Harrisonhasnineyearsofcreditedserviceintheregistered defi and thedecreaseindiscountratewhichincreasedaccruedobligation. The impactontheaccruedobligationatendof2009relatingtochangeinassumptionswasmainlyduefl from thefi assumed. Theservicecostistheestimatedvalueofbenefi ned Benefi ned ContributionPlansTable tregisteredpensionplansandnon-registeredsupplementalarrangementsfor2009areinCanadiancurrency. (4) rstunreducedearlyretirementdateofeachrespectiveplan. (8) (5) (9) (6) (6) (3) t PlansTables E EP134000196,800,000 173,400,000 NEW SERP tobligationthatisnotcompensatoryincludesemployeecontributions,interestcost,changeinassumptionsandgainsloss tobligationthatisattributabletocompensationincludestheservicecostnetofemployeecontributionsandincreasein nedContributionPension PlanandDCSERP. CREDITED OF YEARS tpayableatyear-end andatage65representstheactualpensionpayabletohimhisretirement.For Mr. Foote, itrepresen NUMBER SERVICE 35 9,0 9,0 ,3,0 7,0 3100 1400 6200 3,785,000 (612,000) (134,000) (311,000) 177,000 4,531,000 393,000 393,000 13.56 56 6,0 ,1,0 ,5,0 1,0 ,3,0 ,5,0 1,0 4,228,000 613,000 1,557,000 1,338,000 219,000 2,058,000 1,013,000 263,000 15.67 .5130015001410003,0 4005,0 1,485,000 50,000 34,000 34,000 0 1,401,000 145,000 103,000 9.75 / ,9,0 ,9,0 8220027500027500(,1,0)19,715,000 (1,312,000) 2,795,000 0 2,795,000 18,232,000 1,590,000 1,590,000 N/A (#) nedBenefi OBLIGATION AT START OFYEAR tsaccruedforallservicetothespecifi AT YEAREND ANNUAL BENEFITSPAYABLE ACCRUED ACCUMULATED VALUE tPlanornewSERPsincehestartedparticipatingintheCNRetirementContributionOptionandU.S.DConJanuary1,2006 t obligation of active, deferred and retired senior management and executive members tobligationofactive,deferredandretiredseniormanagementexecutivemembers ($) AT START OFYEAR ($) tsaccruedduringthecalendaryear. 2 (2)(3) (2) ,4,8 ,0,1 6696 9,069,833 (676,966) 1,500,513 8,246,286 nedbenefi 3,2 ,5 460326,916 576,979 84,640 64,722 8,952 165,173 233,324 347,084 OBLIGATION AT 7,0 ,6,0 2,0 600 1,0 7,0 2,363,000 377,000 118,000 (6,000) 124,000 1,868,000 471,000 AT AGE65 YEAR END ACCRUED ($) 9011,2 51,472 12,421 39,051 0 nedContributionPlanstable.TheoldSERPbenefi $ SERVICECOST ($) tplan.Mr. Harrison’sservicecostfor2009refl ($) eddate. OBLIGATION ACCRUED AT START OF YEAR tPlanandSupplementalDefi ($) COMPENSATORY (4) AMOUNT ($) 1 (2) (1) COMPENSATORY CHANGE nedContributionPlan. SALARY/BONUS SALARY/BONUS uctuation in the exchange rate which decreased the accrued obligation uctuationintheexchangeratewhichdecreasedaccruedobligation nedbenefi ON ACCRUED BIAINTOTAL OBLIGATION ects an increase in the annual pension of US$200,000 under the ectsanincreaseintheannualpensionofUS$200,000under IMPACT OF tpayabletoMr. Harrisonisnotbasedoncreditedservice. s fortheyearsafter2009. ($) compensation levelfollowinghisappointmentasCEO. NON-COMPENSATORY t agreement. (7) t plans (SRS, old SERP and new tplans(SRS,oldSERPandnew (1) AMOUNT earnings in excess or below what was earnings inexcessorbelowwhatwas ned contribution plans. nedcontributionplans. tsfromtheCompany’sdefi es other than for difference in earnings. es otherthanfordifferenceinearnings. ($) COMPENSATORY ts the annual pension payable ts theannualpensionpayable CHANGE NON- ACCUMULATED VALUE ($)

5 (4) (5) AT YEAREND AT YEAREND OBLIGATION ACCRUED . ned ned ($) ($) Severance entitlementpayabletotheNEOswouldgenerallybedeterminedinaccordancewithapplicablelegalrequirements. compensation plans,andsummarizedasfollows: retirement, changeofcontrolorainresponsibilitiesNamedExecutiveOffi The Companydoesnothavecontractualarrangementsorotheragreementsinconnectionwithtermination,resignation, Termination andChangeofControlBenefi SRS/SERP Pension Plan Units Deferred Share Shares Units Restricted Stock Options Bonus Plan Incentive Annual benefi Payment ofvested benefi Payment ofvested matched” DSUs vested “Company- units, includingthe Payment ofallvested Partial payoutifmeet All RSUsarecancelled are cancelled All stockoptions the plan Forfeits eligibilityto RESIGNATION ts ts ts matched” DSUs vested “Company- units, includingthe Payment ofallvested plan period on serviceduringthe and proratedbased performance criteria forfeit months orotherwise options withinthree Exercise ofvested three months Continued vestingfor service inplanyear prorated onactive performance and and individual based oncorporate Entitled toabonus EMNTO RTRMN HNEO OTO TERMINATION FORCAUSE CHANGEOFCONTROL RETIREMENT TERMINATION INVOLUNTARY benefi Payment ofvested benefi Payment ofvested ts ts ts matched” DSUs vested “Company- units, includingthe Payment ofallvested (continued vesting) performance criteria Full payoutifmeet forfeit years orotherwise options withinthree Exercise ofvested three years Continued vestingfor service inplanyear prorated onactive performance and and individual based oncorporate Entitled toabonus benefi Payment ofvested benefi Payment ofvested ts ts ts ts “Company-matched” DSUs Accelerated vestingofunvested March 4,2008 Grants madepriorto to March4,2008 Grants madeprior No specifi • Immediate • Immediate • Immediate vesting Payment ofvestedbenefi Payment ofvestedbenefi the planperiod prorated basedon vesting ofallRSUs options of conventional cpoiinForfeits eligibilityto cprovision cer, otherthantheconditionsprovidedin t Payment ofvested Payment ofvested ts ts • If proper substitute Ifpropersubstitute • March 4,2008 Grants madesince Ifpropersubstitute • March 4,2008 Grants madesince within 2years for goodreason cause orresigns terminated without if participantis would occuronly accelerated vesting is granted, within 2years for goodreason cause orresigns terminated without if participantis would occuronly accelerated vesting is granted, the plan matched” DSUs vested “Company- units, includingthe Payment ofallvested All RSUsarecancelled are cancelled All stockoptions SRS benefi benefi benefi tsfortheSERP; ts tsforfeited

53 CN MANAGEMENT INFORMATION CIRCULAR 54 CN MANAGEMENT INFORMATION CIRCULAR 5 Thisamountrepresentsotherbenefi (5) Thisamountrepresentsotherbenefi (4) Value ofUS$350,000peryearpayablefortwoyearsconvertedusinganexchangerate1.0510. (3) NEOswouldbeeligibletocontinuedvestingfollowingretirementfortherestrictedshareunitsgrantedin2008and2009.A (1) RETIREMENT Anyseveranceamountwouldbedeterminedinaccordancewithapplicablelegalrequirements. (3) NEOswouldbeeligibletocontinuedvestingforathree-monthperiodfollowingterminationoptionsgrantedin2006,200 (2) NEOswouldbeeligibletotheportionofrestrictedshareunitsgrantedin2008and2009thathavevesteduponaterm (1) INVOLUNTARY TERMINATION and November5,2009,respectively. shows theincrementalbenefi employment beenterminatedonDecember31,2009underinvoluntarytermination,retirementandchangeofcontrol.Italso The followingtablesshowtheincrementalbenefi 2 NEOswouldbeeligibletocontinuedvestingoverthreeyearsfollowingretirementforoptionsgrantedin2006,2007,2008a (2) et .Cel4038018909––5,832,829 – – Nil 1,819,029 2,605,182 – 4,013,800 – Nil James M.F 693,849 Sean Finn Keith E.Creel Luc Jobin Claude Mongeau Nil E. HunterHarrison 1,911,333 NAME Sean Finn Keith E.Creel Luc Jobin Claude Mongeau NAME includes thepaymentofvacation,transferownershipacar, clubmembershipandfi retirement arrangement,andtheestimatedvalueofCAD$165,553(US$157,500)forathree-monthconsultingservicesagreementwit December 31,2009(1.0510)exchangerateforU.S.dollardenominatedoptions.Underhiscontract,Mr. Harrisoniseligibletoc that wouldvestduringtheperiodmultipliedbydifferencebetweenclosingpriceofcommonsharesonDecember31,2 calculated bymultiplyingthenumberofshareunitsthatwouldhavevestedclosingpricecommonsharesonDecembe performance vestingconditions.Thevalueshownassumesthattargetswouldbemetforeachoftheawardsand converted usingtheDecember31,2009(1.0510)exchangerateforU.S.dollardenominatedoptions. of optionsthatwouldvestduringtheperiodmultipliedbydifferencebetweenclosingpricecommonsharesonDec in ayearforvestingtooccur. on December31,2009theTSX(CAD$57.34).On2009,norestrictedshareunitswouldvestforMr. Jobinasthepl and wouldtrigger100%vestingoftheunits.Thevaluehasbeencalculatedbymultiplyingnumbershareunitsthat upon meetingtheplan’sperformancevestingconditionsandaminimumsharepricecondition.Thevalueshownassumesthatperfor oe4038019313– ,4,4 7,308,415 1,341,442 – 1,953,173 4,013,800 oote tsprovidedtoMr. Foote uponearlyretirement.ItincludesanretirementpaymentofCAD$998,450(US$950,000)madepursu tsprovidedtoMr. Harrison,includingthetransferofownershipacar, clubmembershipandpaymentofvacation. tsthatMr. HarrisonandMr. Foote wereentitledto,followingtheirretirementonDecember31,2009 RESTRICTED SHARE 80470633287570 6,2 25,492,572 368,824 735,700 6,383,288 18,004,760 ,1,4 ,6,8 4,678,027 1,279,062 5,966,973 – – – – – – 1,466,987 275,612 1,953,173 3,211,040 1,003,450 4,013,800 UNITS PLAN RESTRICTED SHARE tsthatNEOs,otherthanMr. HarrisonandMr. Foote, wereentitledto,hadtheir ,7,2 4,1 2,014,645 2,700,592 – – 542,918 789,259 1,471,727 1,911,333 UNITS PLAN ($) 1 (2) (1) ($) 1 2 (3) (2) (1) OPTIONS nancial and tax counselling services. nancialandtaxcounsellingservices. STOCK ($) OPTIONS STOCK NON-SOLICITATION ($) NON-COMPETE/ ny payout would be conditional upon meeting the plan’s ny payoutwouldbeconditionaluponmeetingtheplan’s nd 2009. The value shown is equal to the number of options nd 2009.Thevalueshownisequaltothenumberofoptions 7, 2008 and 2009. The value shown is equal to the number 7, 2008and2009.Thevalueshownisequaltothenumber ination on December 31, 2009. Any payout would be conditional ination onDecember31,2009.Anypayoutwouldbeconditional ontinued vestingoverfi have vested by the closing price of the common shares have vestedbytheclosingpriceofcommonshares ember 31,2009andtheexerciseprice,ifin-the-money, ($) 009 and the exercise price, converted using the 009 andtheexerciseprice,convertedusing r 31, 2009 on the TSX (CAD$57.34). r 31,2009ontheTSX(CAD$57.34). 3 (4) (3) an requires a minimum of nine months of employment an requiresaminimumofninemonthsemployment mance targets would be met for each of the awards mance targetswouldbemetforeachoftheawards trigger 100% vesting of the units. The value has been trigger 100%vestingoftheunits.Thevaluehasbeen h theCompanyonbasisofUS$2,500perday. Italso SEVERANCE SEVERANCE BENEFITS veyears. BENEFITS ($) OTHER ($) (5) ant to an early ant toanearly TOTAL TOTAL ($) ($) the followingcurrencyexchangerates. Compensation disclosedinthesection“StatementofExecutiveCompensation”thatispaidU.S.dollarshasbeenconvertedusi Currency ExchangeInformation NEOswouldbeeligibletoimmediatevestingfollowingachangeofcontrolforoptionsgrantedin2006,2007and2008, (2) NEOswouldbeeligibletoimmediatevestingfollowingachangeofcontrolforrestrictedshareunitsgrantedpriorMarch (1) CHANGE OFCONTROL u oi – 1,692,647 – 545,847 Option-basedawards–Value vestedduringtheyear • Termination scenarios–incrementalcosts • Non-equityincentiveplancompensation–Value earnedduringtheyear • Marketvalueofshare-basedawardsthathavenotvested • Value ofunexercisedin-the-moneyoptions • • Pension value – Annualincentiveplan • Allothercompensation • 1,146,800 • Salary Sean Finn Keith E.Creel Luc Jobin Claude Mongeau NAME executive isterminatedwithoutcauseorresignsforgoodreasonwithintwoyearsofthechangecontrol. (1.0510) exchangerateforU.S.dollardenominatedoptions.For stockoptionsgrantedsinceMarch4,2008, acceleratedvesting options thatwouldvestmultipliedbythedifferencebetweenclosingpriceofcommonsharesonDecember31,2009andth cause orresignsforgoodreasonwithintwoyearsofthechangecontrol. on theTSX(CAD$57.34).For restrictedshareunitsgrantedsinceMarch4,2008,acceleratedvestingwould occurifnopropersu 100% vestingoftheunits.Thevaluehasbeencalculatedbymultiplyingnumbershareunitsthatwouldhavevested plan’s performancevestingconditionsandaminimumsharepricecondition.Thevalueshownassumesthattargetswou RESTRICTED SHARE ,4,0 7,9 1,826,792 679,992 1,146,800 UNITS PLAN 0,6 5,5 1,155,713 352,953 802,760 eebr3 eebr3,20: 1.0510 January28,2005 December31,2009: • January27,2006 • June11,2007 • January25,2007 • 1.1420 January24,2008 • Actual vestingdateofthegrantsmadeon: Actualrate1USD=XCAD 2009: 1.0510 December 31 December31,2009: When bonusisearnedi.e.,December31 Average rateduringtheyear Exchange rateused ($) 1 (2) (1) 4, 2008. Any payout would be conditional upon meeting the 4,2008.Anypayoutwouldbeconditionaluponmeetingthe fore March 4, 2008. The value shown is equal to the number of fore March4,2008.Thevalueshownisequaltothenumberof bstitute is granted, or if the executive is terminated without bstitute isgranted,oriftheexecutiveterminatedwithout would occur if no proper substitute is granted, or if the would occurifnopropersubstituteisgranted,orthe closing price of the common shares on December 31, 2009 closingpriceofthecommonsharesonDecember31,2009 e exercise price, converted using the December 31, 2009 e exerciseprice,convertedusingtheDecember31,2009 OPTIONS ld be met for each of the awards and would trigger ld bemetforeachoftheawardsandwouldtrigger STOCK ($) Jnay2,20: 1.2152 1.2263 1.1032 January28,2009: • January27,2009: • 1.2312 June11,2009: • 1.2312 January25,2009: • January24,2009: • 1.2180 1.0660 December 31,2008: 1.2180 December 31,2008: 2008: TOTAL ng ng ($)

55 CN MANAGEMENT INFORMATION CIRCULAR 56 CN MANAGEMENT INFORMATION CIRCULAR insurance isnotsubjecttoanydeductible. September 30,2010.Thedirectorsandoffi was approximatelyCAD$258,250forthe12monthsending insurance inthefi excess oftheabove.Thepremiumpaidforsuchliability non-indemnifi also carriesexcessdirectorsandoffi the 12monthsendingSeptember30,2010.TheCompany December 31,2009wasapproximatelyCAD$2,087,443for capacity. Thepremiumpaidinthefi and itssubsidiariesagainstliabilityincurredbytheminsuch the protectionofdirectorsandoffi which variesfromCAD$1,000,000toCAD$2,500,000,for CAD$200,000,000, withadeductibletotheCompany liability insuranceintheannualaggregateamountof The Companyhaspurchased,atitsexpense,group Directors’ andOffi or anyofitsaffi has materiallyaffectedorwouldaffecttheCompany completed fi since thecommencementofCompany’smostrecently any informedpersonorproposeddirectorintransaction Company, anyproposeddirectororassociateaffi interest, directorindirect,ofanyinformedpersonthe The managementoftheCompanyisnotawareanymaterial Others inMaterialTransactions Interest ofInformedPersons and of theCompanyorotherwise. entered intoinconnectionwiththepurchaseofcommonshares employees oftheCompanyanditssubsidiaries,whether indebtedness ofcurrentandformerdirectors,offi As ofFebruary 26,2010,therewasnooutstanding Executive Offi Indebtedness ofDirectorsand Incentive Plan. The tablebelowindicates,asatDecember31,2009,certaininformationwithrespecttotheCompany’sManagementLong-Term Securities AuthorizedforIssuanceUnderEquityCompensationPlans OTHER INFORMATION yscrthlesNlNlNil 12,332,247 31.05 Nil 11,497,210 Nil Total by securityholders Equity compensationplansnotapproved by securityholders Equity compensationplansapproved CATEGORY PLAN nancialyear, orinanyproposedtransaction,that able claims in the amount of CAD$25,000,000 in ableclaimsintheamountofCAD$25,000,000 liatesorsubsidiaries. nancial year ending December 31, 2009 nancialyearendingDecember31,2009 cers cers’Insurance cers of the Company cersoftheCompany cers liability insurance for cersliabilityinsurancefor nancial year ending nancialyearending cers excess liability cersexcessliability cers and cersand NUMBER OFSECURITIESTOBE OF OUTSTANDING OPTIONS, WARRANTS ANDRIGHTS WARRANTS ISSUED UPONEXERCISE liate of liateof 147203.512,332,247 31.05 11,497,210 Sean Finn the shareholders. contents ofthisInformationCircularanditssendingto The BoardofDirectorstheCompanyhasapproved Approval on requestfromtheCorporateSecretaryofCompany. are availableonSEDARatwww.sedar.com ormaybeobtained documents andadditionalinformationrelatingtotheCompany its mostrecentlycompletedfi statements andmanagement’sdiscussionanalysisfor information isprovidedintheCompany’scomparativefi annual informationformandfi States andisrequiredtofi The CompanyisareportingissuerinCanadaandtheUnited Availability ofDocuments included intheInformationCircularforsuchannualmeeting. of theCompanynolaterthanDecember3,2010,tobe meeting ofshareholdersmustbereceivedattheheadoffi Shareholder proposalstobeconsideredatthe2011annual Shareholder Proposals March 2,2010 CORPORATE SERVICES ANDCHIEFLEGALOFFICER EXECUTIVE VICE-PRESIDENT PRICE OFOUTSTANDING OPTIONS, WEIGHTED-AVERAGE EXERCISE WEIGHTED-AVERAGE WARRANTS ANDRIGHTS WARRANTS le various documents, including an levariousdocuments,includingan (CAD$) nancialyear. Copiesofthese nancial statements. Financial nancialstatements.Financial REFLECTED INTHEFIRSTCOLUMN) EQUITY COMPENSATION PLANS REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER (EXCLUDING SECURITIES NUMBER OFSECURITIES nancial nancial ce ce the CanadaBusinessCorporationsAct The Boardapprovesallmattersexpresslyrequiredherein,under the day-to-day operationsinawaythatwillmeetthisobjective. increasing shareholdervalue.Management’sroleistoconduct management ofCN’sbusinessandaffairs,withtheobjective management. TheroleoftheBoardistosupervise The Boardhasclearlydelineateditsroleandtheof MANDATE OFTHEBOARD SCHEDULE “A” – . ApprovingCN’s strategy A. following responsibilities: management onsignifi As partofitsstewardshipresponsibility, theBoardadvises as necessary. Meetings oftheBoardareheldatleastninetimesayearand on DelegationofAuthority, asamendedfromtimetotime. matters tomanagementpursuantitsStandingResolutions approval. TheBoardhasdelegatedtheapprovalofcertain committee recommendationsaregenerallysubjecttoBoard is responsiblefor, orasrequiredbyapplicablelaws.Board assign toBoardcommitteesthepriorreviewofanyissuesit legislation andCN’sArticlesBy-laws. TheBoardmay B. Assessing and overseeing the succession planning Assessingandoverseeingthesuccessionplanning B. • • • • of executivemanagement by management. and monitoringtheimplementationofbusinessplan other things,theopportunitiesandrisksofbusiness, a strategicframeworkwhichtakeintoaccount,among reviewing, onatleastanannualbasis,abusinessplanand adopting astrategicplanningprocess,approvingand of integrityaswellcompetence. retention ofexecutiveswhoexhibitthehigheststandards in placefortherecruitment,training,developmentand taking allreasonablestepstoensurethatprocessesare the short-andlonger-term performanceofCN; and executivemanagementcompensationistiedtoboth ensuring thatanappropriateportionofPresidentandCEO management compensation; approving annuallyPresidentandCEOexecutive President andCEO’scorporategoalsobjectives Board expectationsandfi management performancetakingintoconsideration and monitoringPresidentCEOexecutive “ choosing thePresidentandChiefExecutiveOffi President andCEO cant business issues and has the cantbusinessissuesandhasthe ”), appointing executive management ”), appointingexecutivemanagement xed objectives, approving the xedobjectives,approvingthe and other applicable andotherapplicable cer (the cer(the . MonitoringCorporateGovernanceissues C. D. • • • • • • • • • Monitoring fi • • or withthenon-managementdirectorsasagroup. parties tocommunicatedirectlywiththeBoardChair overseeing thedisclosureofamethodforinterested education programsfordirectors; adopting andreviewingorientationcontinuing shareholders andfi approving thelistofBoardnomineesforelectionby remuneration; chairs andindividualdirectorsdeterminingtheir Board, Boardcommittees,andcommittee ensuring theregularperformanceassessmentof appropriate disclosureofanysuchwaiver; the codefordirectorsandexecutiveoffi such code,approvinganywaiverfromcompliancewith executives andemployees,monitoringcompliancewith its PresidentandCEO, seniorfi the CodeofBusinessConductapplicabletoCN’sdirectors, ethical standards,includingreviewing,onaregularbasis, taking allreasonablestepstoensurethehighestqualityof policies andmeasuresforreceivingshareholderfeedback; appropriate, CN’sCorporateGovernanceManualand to governanceissuesandmonitoringreviewing,as monitoring andreviewing,asappropriate,CN’sapproach creates acultureofintegritythroughoutCN; the integrityofmanagementandthat taking allreasonablemeasurestosatisfyitselfas to favoureffectivedecision-making; monitoring thesizeandcompositionofBoard (i) information systems,includingbyoverseeing: and procedures,internalcontrolsmanagement and fi monitoring thequalityandintegrityofCN’saccounting (iv) (iii) (ii) monitoring CN’sinvestorrelationsprograms. adopting communicationsanddisclosurepolicies of CN’sbusiness; in placetoidentify, assessandmanagetheprincipalrisks ensuring thatanappropriateriskassessmentprocessis the integrityandqualityofCN’sfi appropriateness oftheirdisclosure; statements andotherfi safety andsecurity); requirements (includingthoserelatedtoenvironment, CN’s compliancewithapplicablelegalandregulatory of CN’sexternalauditors;and the performanceofCN’sinternalauditfunctionand auditors’ independenceandqualifi the reviewofAuditCommitteeonexternal nancial reporting systems, disclosure controls nancialreportingsystems,disclosurecontrols nancial mattersandinternalcontrols llingBoardvacancies; nancial information and the nancialinformationandthe nancialoffi nancial nancial cations; cers and ensuring cersandensuring cers, other cers,other

57 CN MANAGEMENT INFORMATION CIRCULAR 58 CN MANAGEMENT INFORMATION CIRCULAR . Monitoring Pension Fund matters E. . Monitoringenvironmental,safetyandsecuritymatters F. The Board annually reviews the adequacy of its mandate. The Boardannuallyreviewstheadequacyofitsmandate. CEO orothercorporateoffi available toprovideadviceandcounselthePresident all meetingmaterialsinadvance.Theyarealsoexpectedtobe and activelyparticipateinsuchmeetings.Theyshouldreview committees onwhichtheysitandtorigorouslypreparefor expected toattendthemeetingsofBoardand professionalism indischargingtheirresponsibilities.Theyare Board membersareexpectedtodemonstrateahighlevelof including onlyIndependentdirectorsisheldregularly. directors whoarenotIndependent,anexecutivesession the chairmanshipofBoardChair. Ifsuchgroupincludes Board meetingwithoutthepresenceofmanagementandunder The non-executiveBoardmembersmeetbeforeorafterevery • • • of CN’sPension Trust Funds. approving theannualbudgetofInvestmentDivision Trust Funds plan offeredoradministeredbyCN(the“ connection withanewpensionplanoranyother Funds oranyotherpensiontrustfundestablishedin policies oftheCanadianNationalRailwayPension Trust fund policiesandpractices,includingtheinvestment monitoring andreviewing,asappropriate,CN’spension environmental, safetyandsecuritypoliciespractices. monitoring andreviewing,asappropriate,CN’s ”); cersofCNuponrequest. CN’s Pension • • • • • • • • • • • Financial Information In 2009,theAuditCommittee,inaccordancewithitsmandate: 2009 HIGHLIGHTS G.D. Giffi Members: D.Losier(Chair),M.R.Armellino,H.J.Bolton, Report oftheAuditCommittee activities ofeachcommitteebutarenotmeanttobeexhaustive. December 31,2009.Thesereportsprovidedetailsonthe The followingarereportsofeachBoardcommitteeas COMMITTEES REPORTS OFTHE SCHEDULE “B”– reviewed fi reviewed preparation the with connection in made judgments reviewed the management, and auditors external the with certifi reviewed, management’s of compliance the by reviewed prepared materials communications and analysis reviewed and Report Committee Audit approved and of reviewed review the for place in procedures assessed and reviewed fi other of reviewed those to results quarterly consolidated the on benchmarked report auditors’ external the reviewed quarterly 2009 and annual 2008 the approved and reviewed independent auditors and responsible offi responsible and auditors independent fi the of Company’s the of disclosure and appropriateness quality, fi setting auditors external or auditors internal the management, Management 2009 the in appearing information other fi of disclosure Company’s the and Circular Proxy Management 2009 Form, Information railroads; major fi and (MD&A) analysis and discussion management’s results, effect of alternative generally accepted accounting principles principles accounting accepted generally alternative of effect underlying policies, and principles accounting critical signifi any forth Circular; Information fi Company’s the from approval; Board requiring reports other Company; the of releases press earnings the methods; and methods; proposed any and practices, reporting and assumptions changes thereto; changes nancial reports with applicable legislation; applicable with reports nancial Company; the of statements nancial nancial statements, if any, including analyses of the the of analyses including any, if statements, nancial n, R.Pace nancial statements for CN’s pension plans with the the with plans pension CN’s for statements nancial Annual 2008 the in contained information nancial cant fi cant nancial reporting issues; reporting nancial nancial statements; nancial nancial information derived derived information nancial cers. cation of of cation • • Internal Control • • Risk Management • • • • • • External Auditors • • Internal Auditors Submitted bythemembersofAuditCommittee. • Other • • Committee Performance reviewed procedures established for the receipt, retention retention receipt, the for established procedures reviewed and adequacy the assessing report management’s received Company’s the of oversight the with Board the assisted risk and assessment risk Company’s the reviewed auditors external the from statement formal the reviewed auditors external the services and non-audit which review audit, all determined of disclosure the oversaw and qualifi the approved monitored and terms remunerated and evaluated, appointment audit; the external Board the the of to results the recommended approved and reviewed performance, function’s and audit plan; audit internal the internal the monitored approved and reviewed made recommendations to the Board with respect to the the to respect with Board the to recommendations made the for agenda forward-looking a approved performance and the reviewed evaluate to place in processes the reviewed and treatment of complaints received by the Company Company the by received complaints of treatment and and controls disclosure Company’s the of effectiveness requirements. regulatory and legal applicable with compliance insurance Company’s the including policies, management confi oversaw and pre-approved and providing, from prohibited auditors; are external the by provided services attest auditors; external Company’s the of engagement of staffi responsibilities, its declaration of dividends. of declaration 2010. for committee and Committee; Audit the of auditors; external the of independence and performance regarding accounting, internal accounting controls or auditing auditing or controls accounting internal accounting, regarding and control; internal of systems and procedures fi of delegation coverage, Company’s the of employees former or employees for external the by services non-audit permitted of disclosure the members. its of matters or employee concerns regarding accounting or or accounting regarding concerns employee or matters and management; risk technology auditors. external laws applicable with accordance in Company, the to auditors auditing matters. auditing and regulations; and rming their independence and reviewed hiring policies policies hiring reviewed and independence their rming ng, budget and the compensation compensation the and budget ng, nancial authority, and information information and authority, nancial cations, cations,

59 CN MANAGEMENT INFORMATION CIRCULAR 60 CN MANAGEMENT INFORMATION CIRCULAR Submitted bythemembersofFinanceCommittee. • • Committee Performance • • • • • Financial Activities • • • Financing • • • Financial Policies its mandate: In 2009,theFinanceCommittee,inaccordancewith 2009 HIGHLIGHTS V.M. Kempston Darkes,E.C.Lumley Baillie(chair),M.R.Armellino,G.D.Giffi Members: A.C. Report oftheFinanceCommittee reviewed and approved a forward-looking agenda for the the for agenda forward-looking a approved performance and the reviewed evaluate to place in processes the reviewed the of sale the Board the to recommended and reviewed signifi of audits post oversaw offer; tender debt a signifi reviewed recommended the of and reviewed indebtedness to related decisions recommended activities. Treasury reviewed the including position, liquidity Company’s the reviewed and memoranda offering prospectuses, reviewed the monitored and ratings credit Company’s the reviewed shareholders, to distributions to respect with policies reviewed the to respect with Board the to recommendations made committee for 2010. for committee and Committee; Finance the of Metrolink. to Subdivision Newmarket Lower audits post and acquisitions, material including Board, the by Yard Harrison to improvements rebuilding of completion the credit; of extension or guarantees loans, as well as Company, and structure capital expenditures, capital Company’s fi other agencies. rating credit to respect with activities Company’s regarding policies and dividends, on policies including fi Company’s carried out by the internal auditors or the external auditors, auditors, external the or auditors internal the by out carried related and assets of leases and sales Yard), Johnston (formerly and facilities; credit fi debt fi debt and reviewed their reports; and reports; their reviewed and returns actual and projected as well as transactions, party from investments; from the Company; the nancial hedging, investment and credit; and credit; and investment hedging, nancial nancings; nancing documents, as well as parameters of of parameters as well as documents, nancing nancial policies and fi and policies nancial cant capital and other expenditures, such as as such expenditures, other and capital cant cant capital projects approved approved projects capital cant nancial matters affecting affecting matters nancial n, n, • Corporate GovernanceInitiatives • Continuing EducationforDirectors • Director Compensation • Performance oftheBoardanditsCommittees • • • Composition oftheBoardanditsCommittees Committee, inaccordancewithitsmandate: In 2009,theCorporateGovernanceandNominating 2009 HIGHLIGHTS E.E. Holiday, D.Losier, R.Pace McLean(chair),H.J.Bolton, Members: D.G.A. and NominatingCommittee Report oftheCorporateGovernance • • • • • reviewed and recommended changes to the Company’s Company’s the to changes recommended and reviewed and orientation Company’s the reviewed and monitored Chair, Board the of remuneration Board the to recommended Committees, Board Board, the of performance the reviewed the assessed and directors selecting for criteria reviewed fi independence, directors’ reviewed including Board, the of composition and size the monitored monitored the Company’s Corporate Disclosure and and Disclosure Corporate and Company’s Ombudsman; the CN of monitored Report changes and Annual and reviewed changes proposed developments, monitored information Board’s the meeting for procedures reviewed Corporate Company’s the of review annual the led corporate governance guidelines and monitored disclosure disclosure monitored and guidelines governance corporate directors. for programs education continuing directors. non-executive and chairs Committee the including members, Board and Chairs Committee and Board relation in members Board the of skills and competencies the assisted and size its in reduction a recommending Communications Policy and the Investor Relations and Public Public and Relations Investor the and Policy Communications requirements; regulatory other and disclosure law, securities to to access informal and formal including needs, Board the to recommending including Manual, Governance and expertise; of of corporate governance guidelines in accordance with with accordance in guidelines governance corporate of evaluation Chair and peer Committee, Board, the reviewing needs. and circumstances Company’s the to composition size, Committee Board determining in Board Affairs Program, including recommending to the Board an an Board the to recommending including Program, Affairs management; executive practices; best recent include to update an applicable rules and regulations; and rules applicable Information Management of development the and process mandate; and update to the Communications Policy. Communications the to update Circular questionnaires. Circular nancial literacy and areas areas and literacy nancial • • President andChiefExecutiveOffi • • • • Succession Planning in accordancewithitsmandate: In 2009,theHumanResourcesandCompensationCommittee, 2009 HIGHLIGHTS G.D. Giffi Members: R.Pace Baillie,H.J.Bolton, (Chair),A.C. Compensation Committee Report oftheHumanResourcesand Nominating Committee. Submitted bythemembersofCorporateGovernanceand • Committee Performance developed 2010 performance objectives in conjunction conjunction in objectives performance 2010 developed the to relevant objectives and goals corporate reviewed for policies and systems planning succession the succession reviewed regarding place in mechanisms the reviewed and succession CFO in participated and monitored closely and transition succession, CEO monitored and oversaw performance the evaluate to place in processes the reviewed with incoming President and CEO. and President incoming with the and President the evaluated CEO, the and President CEO, and President the by place into put and CEO; and management President of position the for planning appointment Jobin’s Mr. to relation in matters compensation Harrison’s Mr. of anticipation in matters, compensation Committee. Nominating and Governance Corporate the of CEO’s performance based on those goals and objectives and and objectives and goals those on based performance CEO’s talent the retain and develop identify, to processes including 2009; 1, June of as CFO and Vice-President Executive as and President of assumption Mongeau’s Mr. and retirement recommended the President and the CEO’s compensation compensation CEO’s the and President the recommended executives. outstanding of offi CEO based on this evaluation, for approval by Independent Independent by approval for evaluation, this on based Board members; and members; Board ce as of January 1, 2010; 1, January of as ce n, E.E.Holiday, E.C.Lumley, McLean D.G.A. cer Compensation • Human ResourcesInitiatives • Pension Plans • • Compensation Philosophy • Executive CompensationDisclosure • • • • • Executive Compensation • Appointment ofExecutiveManagement Compensation Committee. Submitted bythemembersofHumanResourcesand • • Committee Performance monitored pension and strategic labour and social issues. social and labour strategic and pension monitored fi the monitored and reviewed to relating policy Company’s the to revisions recommended that policy and philosophy compensation the maintained report a Board the by approval and review for targets. produced bonus 2010 proposed recommended bonus and of reviewed prevision in outlook bonus monitored executive of closely element each Plan; reviewed Deferral and Incentive examined Voluntary the reviewed management’s executive of evaluation the reviewed and management executive of appointment recommended reviewed and approved a forward-looking agenda for the the for agenda forward-looking a approved performance and the reviewed evaluate to place in processes the reviewed pension plans. pension executives, of compensation direct total of positioning the refl and value shareholder of creation the rewards 2009 the in inclusion for compensation executive on and outlook; vesting RSU as well practices; as payouts compensation on reported and compensation executive Board the to recommended and performance and appointment their of conditions and terms the approved of the Human Resources and Compensation Committee; and 2010. for Committee; committee Compensation and Resources Human the of effective January 1, 2010, with the implementation of such such of implementation the with 2010, 1, January effective longer-term and short- the between balance appropriate Circular. Information Management thorough a including compensation, management’s retirement. or termination revised compensation policy over a two year period. year two a over policy compensation revised and Company; the of performance leading review policy perquisites and compensation executive to a recommendation to the Board of a change in total total in change a of Board the to recommendation a to compensation positioning; compensation nancial position of CN’s CN’s of position nancial ects the the ects

61 CN MANAGEMENT INFORMATION CIRCULAR 62 CN MANAGEMENT INFORMATION CIRCULAR Security Committee. Submitted bythemembersofEnvironment,Safetyand • • Committee Performance • Other • Environmental InvestigationsandJudgments • Accounting Accrual • • • • Environmental, HealthandSafetyAudits in accordancewithitsmandate: In 2009,theEnvironment,SafetyandSecurityCommittee, 2009 HIGHLIGHTS E.E. Holiday, E.C.Lumley, McLean D.G.A. Members: V.M. Kempston Baillie, Darkes(Chair),A.C. and SecurityCommittee Report oftheEnvironment,Safety reviewed and approved a forward-looking agenda for the the for agenda forward-looking a approved performance and the reviewed evaluate to place in processes the reviewed safety and environmental US and Canadian of abreast kept notices, all of respect in basis timely a on reports obtained costs environmental for accrual accounting monitored signifi all reviewed ascertain to plan business Company’s the reviewed and audits safety and health environmental, reviewed of implementation and development the oversaw committee for 2010. and for Committee; committee Security and Safety Environment, the of Company. the to importance of developments regulatory governmental by proceedings and investigations complaints, Committee. Audit the with conjunction in taken are issues security and safety environmental, that steps reasonable all taking compliance, of assessments procedures policies, security and safety environmental, authorities, and all judgments and orders in respect of of respect in orders and judgments all and authorities, and consideration; into diligence; due exercising is Company the that ensure to guidelines; and environmental, safety and security matters. security and safety environmental, cant safety and security matters. security and safety cant Submitted bythemembersofStrategicPlanningCommittee. • Committee Performance • • Strategic Direction its mandate: In 2009,theStrategicPlanningCommittee,inaccordancewith 2009 HIGHLIGHTS E.C. Lumley, McLean,C. Mongeau,R.Pace D.G.A. E.E. Holiday, V.M. Kempston Darkes,D.Losier, H.J. Bolton,G.D.Giffi Baillie, Members: M.R.Armellino(Chair),A.C. Committee Report oftheStrategicPlanning and and reviewed the processes in place to evaluate the performance performance the evaluate to place in processes the reviewed strategic Company’s the approved and reviewed of the Strategic Planning Committee. Planning Strategic the of 2009 and plan business 2009-2011 its including direction, capital budgets. capital o btained regular briefi regular btained n, E.H. Harrison, n, E.H.Harrison, ngs on strategic and fi and strategic on ngs nancial issues; issues; nancial CN’s Pension Trust Funds. Submitted bythemembersofInvestmentCommittee • Committee Performance • • • • • Investment Division Funds, inaccordancewithitsmandate: In 2009,theInvestmentCommitteeofCN’sPension Trust 2009 HIGHLIGHTS D. Losier, McLean, R.Pace D.G.A. Baillie,E.E.Holiday,A.C. V.M. Kempston Darkes, Members: E.C.Lumley(Chair),M.R.Armellino, Trust Funds Committee ofCN’sPension Report oftheInvestment reviewed the processes in place to evaluate the performance performance the evaluate to place in processes the reviewed and Plan Incentive Investment CN the approved and the of reviewed budget annual the approved the of and Strategy reviewed Investment the approved of and Statement reviewed the to changes approved and reviewed and Division Investment CN the of activities the reviewed of the Investment Committee of CN’s Pension Trust Funds. Trust Pension CN’s of Committee Investment the of thereunder. payouts award and Division; Investment CN Division; plans; pension Investment CN’s CN for Procedures and Policies Investment assets of investment on Division Investment the advised of CN’s Pension Trust Funds in accordance with applicable applicable with accordance in Funds Trust Pension CN’s of policies and procedures; and policies

63 CN MANAGEMENT INFORMATION CIRCULAR

10%

Cert no. SGS-COC-005437

The Forest Stewardship Council (FSC) is an international certifi cation and labeling system for products that come from responsibly managed forests, and verifi ed recycled sources. Under FSC certifi cation, forests are certifi ed against a set of strict environmental and social standards, and fi bre from certifi ed forests is tracked all the way to the consumer through the chain of custody certifi cation system.

CN shows its concern for protecting the environment through the use of FSC-certiﬁ ed paper.

Printed in Canada