Unassociated Document
 


FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Report of Foreign Issuer
 
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
 
For the month of March, 2009
 
Commission File Number: 001-02413
 
Canadian National Railway Company
(Translation of registrant’s name into English)
 
935 de la Gauchetiere Street West
Montreal, Quebec
Canada H3B 2M9

(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F           Form 40-F    X  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes           No    X  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes           No    X  

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes           No    X  

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A


 
 
Canadian National Railway Company

Table of Contents
 
Items
 
Item 1
Notice of Annual Meeting of Shareholders
 
Item 2
Management Proxy Circular
 
Item 3
Proxy Form
 
Item 4
Annual Report
 

 
SIGNATURES
 
          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
    Canadian National Railway Company  
           
Date: March 23, 2009  By: /s/ Sean Finn  
      Name:
Sean Finn
 
      Title:
Executive Vice-President
Corporate Services and Chief Legal Officer 
 
 

 
 
Item 1

 
 
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 
 
Our annual meeting of holders of common shares will be held at
 
THE FAIRMONT PALLISER
133 9TH AVENUE SW
CALGARY, ALBERTA (CANADA)
 
on Tuesday, April 21, 2009, at 9:00 a.m. (Mountain time) for:

1.
receiving the consolidated financial statements for the year ended December 31, 2008 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 fixed March 9, 2009, 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
 

 
(Signed) Sean Finn
EXECUTIVE VICE-PRESIDENT,
CORPORATE SERVICES AND CHIEF LEGAL OFFICER

March 3, 2009
Montréal, Québec
 
 

 
 
Item 2
 






 
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
 

April 21, 2009
 

AND
 
MANAGEMENT INFORMATION CIRCULAR







 
 
March 3, 2009


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 The Fairmont Palliser, Crystal Ballroom, Lobby Level, 133 9th Avenue SW, Calgary, Alberta (Canada), on Tuesday, April 21, 2009, at 9:00 a.m. (Mountain 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 2008 performance and our plans for the future. You will have the opportunity to meet your directors and the senior officers 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 find 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 pages 5 and 6 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,
 
   
(Signed) E. Hunter Harrison
(Signed) 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
 
THE FAIRMONT PALLISER
133 9TH AVENUE SW
CALGARY, ALBERTA (CANADA)
 
on Tuesday, April 21, 2009, at 9:00 a.m. (Mountain time) for:

1.
receiving the consolidated financial statements for the year ended December 31, 2008 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 fixed March 9, 2009, 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
 

(Signed) Sean Finn
EXECUTIVE VICE-PRESIDENT,
CORPORATE SERVICES AND CHIEF LEGAL OFFICER

March 3, 2009
Montréal, Québec

CN MANAGEMENT INFORMATION CIRCULAR
 2

 
INFORMATION CIRCULAR
 
This management information circular (the “Information Circular”) is provided in connection with the solicitation of proxies by management of Canadian National Railway Company for use at the annual meeting of its shareholders or at any adjournment or postponement thereof (the “Meeting). In this document you and your refer to the shareholders of, and CN, the Company or we, “us , our refer to, Canadian National Railway Company.The Meeting will be held at The Fairmont Palliser, Crystal Ballroom, Lobby Level, 133 9th Avenue SW, Calgary, Alberta (Canada), on Tuesday, April 21, 2009, at 9:00 a.m. (Mountain time) for the purposes set forth in the foregoing Notice of Meeting. The information contained herein is given as at March 3, 2009, except as indicated otherwise.

IMPORTANT  If you are not able to attend the Meeting, please exercise your right to vote by signing the enclosed form of proxy or voting instruction form and, in the case of registered shareholders and holders of Employee Shares (as such term is defined in this Information Circular) by returning it to Computershare Trust Company of Canada in the enclosed envelope, or by voting over the Internet no later than 5:00 p.m. (Eastern time) on April 20, 2009, or, if the Meeting is adjourned or postponed, by no later than 5:00 p.m. (Eastern time) on the business day prior to the day fixed for the adjourned or postponed meeting. If you are a non-registered shareholder, reference is made to the section entitled How do I vote if I am a non-registered shareholder? on page 5 of this Information Circular.
 
What’s Inside
 
4
Questions and Answers  Voting and Proxies
   
7
Business of the Meeting
7
Financial Statements
7
Election of Directors
7
Appointment of Auditors
   
8
Nominees for Election to the Board
8
Description of Nominees
12
Board of Directors Compensation
16
Board and Committee Attendance
17
Additional Disclosure Relating to Directors
   
18
Statement of Corporate Governance Practices
18
General
18
Code of Business Conduct
19
Independence of Directors
19
Independent Chairman of the Board
19
Position Descriptions
20
Election of Directors
20
Committees of the Board
21
Board and Committee Meetings
22
Board Performance Assessment
22
Director Selection
24
Director Orientation and Continuing Education
24
Audit Committee Disclosure
   
29
Statement of Executive Compensation
29
Human Resources and Compensation Committee
31
Compensation Discussion and Analysis
40
Summary Compensation Table
41
Incentive Plan Awards
45
Employment Contracts/ Arrangements
46
Pension Plan Benefits
50
Termination and Change of Control Benefits
52
Currency Exchange Information
   
53
Other Information
53
Securities Authorized for Issuance Under Equity Compensation Plans
53
Indebtedness of Directors and Executive Officers
53
Interest of Informed Persons and Others in Material Transactions
53
Directors’ and Officers’ Insurance
53
Shareholder Proposals
53
Availability of Documents
53
Approval
   
54
SCHEDULE "A"  Mandate of the Board

CN MANAGEMENT INFORMATION CIRCULAR
 3

 
QUESTIONS AND ANSWERS

Voting and Proxies

The following questions and answers provide guidance on how to vote your shares.
 
Who can vote?
 
Shareholders who are registered as at the close of business on March 9, 2009 (the record date), will be entitled to vote at the Meeting or at any adjournment or postponement thereof, either in person or by proxy.
 
As of the close of business on February 27, 2009, the Company had outstanding 468,280,344 common shares without par value. Subject to the voting restrictions described below, each common share carries the right to one vote.
 
What will I be voting on?
 
Shareholders will be voting (i) to elect directors of the Company, and (ii) to appoint KPMG LLP as auditors of the Company. Our board of directors and our management are recommending that shareholders vote FOR items (i) and (ii).
 
How will these matters be decided at the Meeting?
 
A simple majority of the votes cast, in person or by proxy, will constitute approval of these matters.
 
Who is soliciting my proxy?
 
Management of the Company is soliciting your proxy. The solicitation is being made primarily by mail, but our directors, officers or employees may also solicit proxies at a nominal cost to the Company. The Company has retained the services of Kingsdale Shareholder Services Inc. for the solicitation of proxies in Canada and the United States, at an aggregate cost estimated to be CAD$30,000 plus additional costs relating to out-of-pocket expenses.
 
Who can I call with questions?
 
If you have questions about the information contained in this Information Circular or require assistance in completing your form of proxy, please call Kingsdale Shareholder Services Inc., the Company’s proxy solicitation agent, toll-free at 1-866-851-3217.
 
How can I contact the transfer agent?
 
You can contact the transfer agent either by mail at Computershare Trust Company of Canada, 100 University Ave, 9th Floor, North Tower, Toronto, Ontario M5J 2Y1, by telephone at 1-800-564-6253, by fax at 1-888-453-0330 or by email at service@computershare.com.
 
How do I vote?
 
If you are eligible to vote and your common shares are registered in your name, you can vote your common shares in person at the Meeting or by proxy, as explained below. If your common shares are held in the name of a nominee, please see the instructions below under How do I vote if I am a non-registered shareholder?.
 
What are the voting restrictions?
 
Our articles of incorporation, as amended, provide that no person, together with his or her associates, shall hold, beneficially own or control, directly or indirectly, voting shares to which are attached more than 15% in the aggregate of the votes attached to all our voting shares that may ordinarily be cast to elect directors of the Company. In addition, where the total number of voting shares held, beneficially owned or controlled, directly or indirectly, by any one person together with his or her associates exceeds such 15% maximum, no person shall, in person or by proxy, exercise the voting rights attached to the voting shares held, beneficially owned or controlled, directly or indirectly, by such person or his or her associates.
 
How do I vote if I am a registered shareholder?
 
1.
VOTING BY PROXY
  You are a registered shareholder if your name appears on your share certificate. If this is the case, you may appoint someone else to vote for you as your proxy holder by using the enclosed form of proxy. The persons currently named as proxies in such form of proxy are the Board chair and the President and Chief Executive Officer of the Company.
  However, you have the right to appoint any other person or company (who need not be a shareholder) to attend and act on your behalf at the Meeting. That right may be exercised by writing the name of such person or company in the blank space provided in the form of proxy or by completing another proper form of proxy. Make sure that the person you appoint is aware that he or she is appointed and attends the Meeting.
     
 
How can I send my form of proxy?
   
You can either return a duly completed and executed form of proxy to the transfer agent and registrar for the Company’s common shares, Computershare Trust Company of Canada, in the envelope provided, or you can vote over the Internet by following the instructions on the form of proxy.

CN MANAGEMENT INFORMATION CIRCULAR
 4

 
 
What is the deadline for receiving the form of proxy?
 
 
The deadline for receiving duly completed forms of proxy or a vote over the Internet is 5:00 p.m. (Eastern time) on April 20, 2009, or if the Meeting is adjourned or postponed, by no later than 5:00 p.m. (Eastern time) on the business day prior to the day fixed for the adjourned or postponed meeting.
     
 
How will my common shares be voted if I give my proxy?
   
Your common shares will be voted or withheld from voting in accordance with your instructions indicated on the proxy. If no instructions are indicated, your common shares represented by proxies in favour of the Board chair or the President and Chief Executive Officer will be voted FOR the election of management’s nominees as directors and FOR the appointment of KPMG LLP as auditors and at the discretion of the proxy holder in respect of amendments to any of the foregoing matters or on such other business as may properly be brought before the Meeting. Should any nominee named herein for election as a director become unable to accept nomination for election, it is intended that the person acting under proxy in favour of management will vote for the election in his or her stead for such other person as management of the Company may recommend. Management has no reason to believe that any of the nominees for election as directors will be unable to serve if elected to office and management is not aware of any amendment or other business likely to be brought before the Meeting.
     
 
If I change my mind, how can I revoke my proxy?
   
You may revoke your proxy at any time by an instrument in writing (which includes another form of proxy with a later date) executed by you, or by your attorney (duly authorized in writing), and (i) deposited with the Corporate Secretary of the Company at the registered office of the Company (935 de La Gauchetière Street West, Montréal, Québec, Canada, H3B 2M9) at any time up to and including 5:00 p.m. (Eastern time) on the last business day preceding the day of the Meeting or any adjournment or postponement thereof, or (ii) filed with the chair of the Meeting on the day of the Meeting or any adjournment or postponement thereof, or in any other manner permitted by law or in the case of a vote over the Internet, by way of a subsequent Internet vote.
     
2. VOTING IN PERSON
  If you wish to vote in person, you may present yourself to a representative of Computershare Trust Company of Canada at the registration table. Your vote will be taken and counted at the Meeting. If you wish to vote in person at the Meeting, do not complete or return the form of proxy. 
 
How do I vote if I am a non-registered shareholder?

If your common shares are not registered in your name and are held in the name of a nominee such as a trustee, financial institution or securities broker, you are a non-registered shareholder. If your common shares are listed in an account statement provided to you by your broker, those common shares will, in all likelihood, not be registered in your name. Such common shares will more likely be registered under the name of your broker or an agent of that broker. Without specific instructions, Canadian brokers and their agents or nominees are prohibited from voting shares for the broker’s client. If you are a non-registered shareholder, there are two ways, listed below, that you can vote your common shares:

1.
GIVING YOUR VOTING INSTRUCTIONS
 
Applicable securities laws require your nominee to seek voting instructions from you in advance of the Meeting. Accordingly, you will receive or have already received from your nominee a request for voting instructions for the number of common shares you hold. Every nominee has its own mailing procedures and provides its own signature and return instructions, which should be carefully followed by non-registered shareholders to ensure that their common shares are voted at the Meeting.
   
2.
VOTING IN PERSON
 
However, if you wish to vote in person at the Meeting, insert your own name in the space provided on the request for voting instructions provided by your nominee to appoint yourself as proxy holder and follow the signature and return instructions of your nominee. Non-registered shareholders who appoint themselves as proxy holders should present themselves at the Meeting to a representative of Computershare Trust Company of Canada. Do not otherwise complete the request for voting instructions sent to you as you will be voting at the Meeting.

CN MANAGEMENT INFORMATION CIRCULAR
 5

 
How do I vote if I am an employee shareholder?

Common shares purchased by employees of the Company under its Canadian and U.S. Employee Share Investment Plans and its Union and Management Savings Plans for U.S. Operations (the Plans), are known as Employee Shares. Employee Shares remain registered in the name of the Plans’ custodian (the custodian), unless the employees have withdrawn their common shares from the Plans in accordance with their provisions.

Voting rights attached to the Employee Shares that are registered in the name of the custodian can be exercised by employees, or their attorneys authorized in writing, by indicating on the enclosed voting instruction form the necessary directions to the custodian or any other person or company (who need not be a shareholder) as to how they wish their Employee Shares to be voted at the Meeting. Beneficial owners of Employee Shares may also give such voting instructions by telephone or over the Internet. The Employee Shares will be voted pursuant to the directions of the beneficial owner. If no choice is specified for an item, the Employee Shares will be voted in accordance with management’s recommendations mentioned above and at the discretion of the custodian or such other person indicated, in respect of amendments to the items mentioned on the enclosed voting instruction form or on such other business as may properly be brought before the Meeting. Only Employee Shares in respect of which a voting instruction form has been signed and returned (or in respect of which the employee has given voting instructions by telephone or over the Internet) will be voted.

A holder of Employee Shares may revoke his or her directions, as indicated on a voting instruction form, at any time by an instrument in writing executed by the holder of Employee Shares, or by the holder’s attorney duly authorized in writing, provided such written instrument indicating the holder’s intention to revoke is (i) deposited with the Corporate Secretary of CN at the registered office of CN at any time up to and including 5:00 p.m. (Eastern time) on the last business day preceding the day of the Meeting or any adjournment or postponement thereof, or (ii) filed with the chair of the Meeting on the day of the Meeting or any adjournment or postponement thereof, or in any other manner permitted by law, or in the case of directions given by telephone or over the Internet, by way of subsequent telephone or Internet directions.

The voting instruction form must be used only with respect to Employee Shares. In the event that an employee holds common shares outside the Plans, he or she must also complete the enclosed form of proxy with respect to such additional common shares. No form of proxy is to be completed with respect to Employee Shares.

CN MANAGEMENT INFORMATION CIRCULAR
 6

 
BUSINESS OF THE MEETING

Financial Statements
Our consolidated financial statements for the year ended December 31, 2008, together with the auditors’ reports thereon, are included in the 2008 Annual Report of the Company, available on our website at www.cn.ca, on SEDAR at www.sedar.com, on EDGAR at www.sec.gov and in print, free of charge, to any shareholder who requests copies by contacting our Corporate Secretary.

Election of Directors
Our articles of incorporation, as amended, provide that our board of directors shall consist of a minimum of seven and a maximum of 21 directors (hereinafter the Board or Board of Directors). Pursuant to a resolution of the Board of Directors, 11 persons are to be elected as directors for the current year, each to hold office until the next annual meeting of shareholders or until such person’s successor is elected or appointed.

The term of office of each of the present directors expires at the close of the Meeting. The persons named in the section entitled Nominees for Election to the Board  Description of Nominees will be presented for election at the Meeting as management’s nominees. Unless authority is withheld, the persons designated in the accompanying form of proxy or voting instruction form intend to vote FOR the election of these nominees. The persons nominated are, in the opinion of the Board of Directors and management, well qualified to act as directors of the Company for the ensuing year. The Board of Directors and management do not contemplate that any of these nominees will be unable to serve as a director, but should that occur for any reason before the Meeting, the persons designated in the accompanying form of proxy or voting instruction form reserve the right to vote for another nominee at their discretion unless the shareholder who has given such proxy or voting instruction form has directed that the common shares be withheld from voting on the election of any of the directors.

Appointment of Auditors
The Board of Directors and the Audit Committee recommend that KPMG LLP be appointed to serve as our auditors until the next annual meeting of shareholders. Unless authority is withheld, the persons designated in the accompanying form of proxy or voting instruction form intend to vote FOR the appointment of KPMG LLP as auditors of the Company to hold office until the next annual meeting of shareholders.

 
CN MANAGEMENT INFORMATION CIRCULAR
 7

 
NOMINEES FOR
ELECTION TO THE BOARD

 
Description of Nominees
 
The following tables set out information as of February 27, 2009, unless otherwise indicated, regarding the nominees for election as directors. Among the directors elected last year, Mr. J.V. Raymond Cyr retired from the Board on January 4, 2009 and Messrs. James K. Gray and Robert H. Lee will retire from the Board on the date of the Meeting and will not be nominated for reelection, as they will have reached the retirement age adopted by the Company. Please see the section entitled “Statement of Corporate Governance Practices Director Selection Retirement from the Board for a description of such policy. All nominees are current directors of the Company.
 
 
MICHAEL R. ARMELLINO, CFA
Age: 69(1) 
Fort Lee, New Jersey, U.S.A.
Director Since: May 7, 1996
Independent
 
Mr. Armellino, a chartered financial analyst, is a Retired Partner, The Goldman Sachs Group, LP. From 1991 to 1994, Mr. Armellino was chair and Chief Executive Officer of Goldman Sachs Asset Management. Prior to 1991, he had held various positions at Goldman, Sachs & Co., including senior transportation analyst and Partner in Charge of Research.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
  80%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Strategic Planning Committee (Chair)
100%
OR CONTROLLED(3)
   
   
Audit Committee
100%
 
 
   
Finance Committee
100%
February 2009
106,650
February 2009
Nil
Investment Committee of CNs Pension Trust Funds(2)
100%
February 2008
102,150
February 2008
Nil
 
 
 
A. CHARLES BAILLIE, O.C., LL.D.
Age: 69(1)
Toronto, Ontario, Canada
Director Since: April 15, 2003
Independent
 
Mr. Baillie retired as chair of The Toronto-Dominion Bank in April 2003, and as Chief Executive Officer of the bank in December 2002.
Mr. Baillie is chair of the board of directors of Alberta Investment Management Corporation (AIMCo) and is also a director of George Weston Limited and Telus Corporation.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Finance Committee (Chair)
100%
OR CONTROLLED(3)
     
Audit Committee
  83%
       
Human Resources and Compensation Committee
100%
February 2009
133,776(5)
February 2009
N/A
Strategic Planning Committee
100%
February 2008
127,344(6)
February 2008
N/A
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 8

 
 
HUGH J. BOLTON, FCA
Age: 70(1)
Edmonton, Alberta, Canada
Director Since: April 15, 2003
Independent
 
Mr. Bolton is the chair of the board of directors of EPCOR Utilities Inc. (energy and energy-related services provider), and the chairman of the board of directors of Matrikon Inc. (supplier of industrial IT solutions). Mr. Bolton is also a director of Teck Cominco Limited, The Toronto-Dominion Bank and WestJet Airlines Ltd. From 1992 to 1998, Mr. Bolton was chair and Chief Executive Partner of Coopers & Lybrand Canada (now PricewaterhouseCoopers).
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Audit Committee
100%
OR CONTROLLED(3)
     
Corporate Governance and Nominating Committee
100%
       
Human Resources and Compensation Committee
100%
February 2009
37,346(5)
February 2009
N/A
Strategic Planning Committee
100%
February 2008
32,270(6)
February 2008
N/A
 
 
 
AMBASSADOR GORDON D. GIFFIN
Age: 59(1)
Atlanta, Georgia, U.S.A.
Director Since: May 1, 2001
Independent
 
Mr. Giffin is Senior Partner, McKenna Long & Aldridge (law firm) and he was United States Ambassador to Canada from August 1997 to April 2001. Mr. Giffin is also a director of Canadian Imperial Bank of Commerce, Canadian Natural Resources Limited, TransAlta Corporation and Ontario Energy Savings Corp.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Environment, Safety and Security Committee
100%
OR CONTROLLED(3)
     
Finance Committee
100%
       
Human Resources and Compensation Committee
100%
February 2009
37,412(5)
February 2009
27,000
Strategic Planning Committee
100%
February 2008
32,656(6)
February 2008
27,000
 
 
 
E. HUNTER HARRISON
Age: 64(1)
Wellington, Florida, U.S.A.
Director Since: December 7, 1999
Not Independent
 
Mr. Harrison has been President and Chief Executive Officer of the Company since January 1, 2003. He has served as Executive Vice-President and Chief Operating Officer of the Company from March 1998 to December 2002. Prior to joining CN, Mr. Harrison had been a director and President and Chief Executive Officer of the Illinois Central Corporation and the Illinois Central Railroad Company from 1993 to 1998.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Strategic Planning Committee
100%
OR CONTROLLED(3)
     
 
 
       
 
 
February 2009
313,329
February 2009
3,595,000
  
February 2008
308,993
February 2008
3,505,000
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 9

 
 
EDITH E. HOLIDAY
Age: 57(1)
Washington, District of Columbia,
U.S.A.
Director Since: June 1, 2001
Independent
 
Mrs. Holiday is a Corporate Director and Trustee and a former General Counsel, United States Treasury Department and Secretary of the Cabinet, The White House. Mrs. Holiday is a director of H.J. Heinz Company, Hess Corporation, RTI International Metals, Inc. and White Mountains Insurance Group, Ltd. She is also a director or trustee in various investment companies of the Franklin Templeton Group of Mutual Funds.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Corporate Governance and Nominating Committee
100%
OR CONTROLLED(3)
     
Environment, Safety and Security Committee
100%
       
Human Resources and Compensation Committee
100%
February 2009
35,717(5)
February 2009
27,000
Investment Committee of CNs Pension Trust Funds(2)
100%
February 2008
31,200(6)
February 2008
27,000
Strategic Planning Committee
100%
  
 
 
  
 
 
 
V. MAUREEN KEMPSTON DARKES,
O.C., D. COMM., LL.D.
Age: 60(1)
Miramar, Florida, U.S.A.
Director Since: March 29, 1995
Not Independent
 
Mrs. Kempston Darkes is Group Vice-President and President Latin America, Africa and Middle East, General Motors Corporation. From 1994 to 2001, she was President and General Manager of General Motors of Canada Limited and Vice-President of General Motors Corporation. Mrs. Kempston Darkes is also a director of Brookfield Asset Management Inc.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Environment, Safety and Security Committee (Chair)
100%
OR CONTROLLED(3)
     
Finance Committee
100%
       
Investment Committee of CNs Pension Trust Funds(2)
100%
February 2009
64,577(5)
February 2009
40,000
Strategic Planning Committee
100%
February 2008
59,631(6)
February 2008
40,000
 
 
 
THE HON. DENIS LOSIER, P.C., LL.D.
Age: 56(1)
Moncton, New Brunswick, Canada
Director Since: October 25, 1994
Independent
 
Mr. Losier is President and Chief Executive Officer, Assumption Life (life insurance company). Between 1989 and 1994, Mr. Losier held various cabinet level positions with the government of the Province of New Brunswick. He is also a director of NAV CANADA and Plazacorp Retail Properties Ltd. and has recently been named as a member of the Security Intelligence Review Committee (Canadian Government) and as such, became a member of the Privy Council.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Audit Committee (Chair)
100%
OR CONTROLLED(3)
     
Corporate Governance and Nominating Committee
100%
       
Investment Committee of CNs Pension Trust Funds(2)
100%
February 2009
87,441(5)
February 2009
39,000
Strategic Planning Committee
100%
February 2008
81,378(6)
February 2008
51,000
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 10

 
 
THE HON. EDWARD C. LUMLEY,
P.C., LL.D.
Age: 69(1)
South Lancaster, Ontario, Canada
Director Since: July 4, 1996
Independent
 
Mr. Lumley is Vice-Chairman, BMO Capital Markets (investment bank). From 1986 to 1991, he served as chair of Noranda Manufacturing Group Inc. Mr. Lumley was a Member of Parliament from 1974 to 1984, during which time he held various cabinet portfolios in the Government of Canada. Mr. Lumley is also a director of BCE, Bell Canada and Dollar-Thrifty Automotive Group, Inc.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Investment Committee of CNs Pension Trust Funds (Chair)(2)
100%
OR CONTROLLED(3)
     
Environment, Safety and Security Committee
100%
       
Finance Committee
100%
February 2009
87,431(5)
February 2009
      Nil
Human Resources and Compensation Committee
100%
February 2008
80,985(6)
February 2008
51,000
Strategic Planning Committee
100%
    
      
   
 
 
 
DAVID G.A. McLEAN, O.B.C., LL.D.
Age: 70(1)
Vancouver, British Columbia, Canada
Director Since: August 31, 1994
Independent
 
Mr. McLean is board chair of the Company and chair and Chief Executive Officer, The McLean Group (real estate investment, film and television facilities, communications and aircraft charters).
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board (Chair)
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Corporate Governance and Nominating Committee (Chair)
100%
OR CONTROLLED(3)
     
Environment, Safety and Security Committee
100%
       
Human Resources and Compensation Committee
100%
February 2009
177,989(5)
February 2009
Nil
Investment Committee of CNs Pension Trust Funds(2)
100%
February 2008
164,885(6)
February 2008
Nil
Strategic Planning Committee
100%
  
 
   
  
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 11

 
 
 
ROBERT PACE
Age: 54(1)
Halifax, Nova Scotia, Canada
Director Since: October 25, 1994
Independent
 
Mr. Pace is President and Chief Executive Officer, The Pace Group (private holding company). Mr. Pace is also a director of High Liner Foods Incorporated and Hydro One and board chair of Overland Realty Limited.
MEMBER OF
ATTENDANCE
SECURITIES AND OPTIONS HELD
Board (Chair)
100%
COMMON SHARES OWNED
OPTIONS HELD(4)
 
Human Resources and Compensation Committee (Chair)
100%
OR CONTROLLED(3)
     
Audit Committee
100%
       
Corporate Governance and Nominating Committee
100%
February 2009
94,975(5)
February 2009
51,000
Investment Committee of CNs Pension Trust Funds(2)
100%
February 2008
88,500(6)
February 2008
51,000
Strategic Planning Committee
100%
  
 
 
 
 
(1)  
The age of the directors is provided as at the date of the Meeting (i.e., on April 21, 2009).
(2)  
The Investment Committee of CN’s Pension Trust Funds is a mixed committee composed of both members of the Board of Directors as well as officers of the Company.
(3)  
The information regarding common shares beneficially owned, controlled or directed has been furnished by the respective nominees individually and includes Directors Restricted Share Units granted as compensation to directors, but does not include common shares under options.
(4)  
The information regarding options comprises the options granted under the Management Long-Term Incentive Plan. Mr. Baillie and Mr. Bolton were not members of the Board when options were granted. No options were granted to non-executive directors since 2002. On March 8, 2005, the Management Long-Term Incentive Plan was amended to provide that option grants under such plan could no longer be made to non-executive directors.
(5)  
Includes Directors Restricted Share Units in the following amounts: A. Charles Baillie: 39,176; Hugh J. Bolton: 34,846; Ambassador Gordon D. Giffin: 14,637; Edith E. Holiday: 4,517; V. Maureen Kempston Darkes: 23,577; The Hon. Denis Losier: 33,569; The Hon. Edward C. Lumley: 34,631; David G.A. McLean: 70,079; and Robert Pace: 36,101. Pursuant to the terms of the Directors Restricted Share Units, directors or their estates can only access their Directors Restricted Share Units upon retirement, resignation or death.
(6)  
Includes Directors Restricted Share Units in the following amounts: A. Charles Baillie: 32,744; Hugh J. Bolton: 29,770; Ambassador Gordon D. Giffin: 13,481; Edith E. Holiday: 2,250; Maureen Kempston Darkes: 23,131; The Hon. Denis Losier: 28,518; The Hon. Edward C. Lumley: 28,185; David G.A. McLean: 56,975; and Robert Pace: 29,626. Pursuant to the terms of the Directors Restricted Share Units, directors or their estates can only access their Directors Restricted Share Units upon retirement, resignation or death.
 
 
Board of Directors Compensation
 
The directors of the Company play a central role in enhancing shareholder value. As indicated under “Nominees for Election to the Board Board of Directors Compensation Share Ownership” on page 14, the directors have a substantial investment in the Company. In addition, approximately 75% of the total annual remuneration of the non-executive directors for 2008 was in the form of common shares or Directors Restricted Share Units (DRSUs). Subject to the Minimum Shareholding Requirement as defined on page 14 of the Information Circular, directors may elect to receive all or part of their director, committee member, Board chair and committee chair cash retainers either in cash, common shares of the Company purchased on the open market or DRSUs. They may also elect to receive their common share retainers in DRSUs. Each DRSU entitles the beneficiary thereof to receive upon resignation, retirement or death, one common share of the Company purchased on the open market, plus additional DRSUs reflecting dividend equivalents.

The directors compensation program is designed to attract and retain the most qualified people to serve on CNs Board and committees and takes into account the risks and responsibilities of being an effective director. To reflect the Company’s extensive operations in the United States, four of the non-executive director nominees are from the United States and the compensation of the non-executive directors of the Company tends to be comparable to that of large U.S.-based companies.

In consideration for serving on the Board of Directors in 2008, it was determined that each director be compensated as indicated in the table below:
 
TYPE OF FEE
AMOUNT AND NUMBER    
OF SHARES    
Board Chair Retainer(1)
US$120,000(2) and 12,000 Shares(2)
Director Retainer(3)
US$15,000(2) and 4,500 Shares(2)
Committee Chair Retainer(4)
US$15,000(2)
Committee Member Retainer
US$3,500(2)
Board Meeting Attendance Fee
US$1,500   
Committee Meeting Attendance Fee
US$1,500   
Travel Attendance Fee
US$1,500   
 
(1)  
The Board chair receives no additional Director Retainer nor Committee Chair or Committee Member Retainer.
(2)  
The directors may choose to receive all or part of their cash retainer in common shares or DRSUs and their common share retainer can also be received in DRSUs. The common shares are purchased on the open market.
(3)  
Mr. Harrison does not receive any compensation to serve as director because he is an officer of the Company.
(4)
The committee chairs (other than the Board chair) also receive, as members of a committee, a retainer of US$3,500.
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 12

 
 
The table below reflects in detail the compensation earned by non-employee directors in the 12-month period ended December 31, 2008.
 
   
FEES EARNED (IN CASH)(1)
       
NAME OF
DIRECTOR
DIRECTOR AND
BOARD CHAIR
CASH RETAINER
(CAD$)
COMMITTEE
CHAIR CASH
RETAINER
(CAD$)
COMMITTEE
MEMBER CASH
RETAINER
(CAD$)
BOARD AND
COMMITTEE
ATTENDANCE
AND TRAVEL
FEES(2)
(CAD$)
SHARE-BASED
AWARDS (1,3,4)
(CAD$)
ALL OTHER     
COMPENSATION     
(CAD$)     
TOTAL
(CAD$)
PERCENTAGE OF
TOTAL FEES
RECEIVED
IN COMMON
SHARES AND/OR
DRSUs(7)
Michael R.Armellino
15,990
15,990
14,924
51,168
217,890
3,198(5)   
319,160
68%
A. Charles Baillie
-
-
14,924
54,366
248,073
-      
317,363
78%
Hugh J. Bolton
15,990
-
14,924
57,564
217,890
1,599(5)   
307,967
71%
J.V. Raymond Cyr
15,990
15,990
14,924
46,371
217,890
4,797(5)   
315,962
69%
Ambassador Gordon D. Giffin
15,990
-
14,924
54,366
217,890
4,797(5)   
307,967
71%
James K. Gray
-
-
-
60,762
250,588
3,198(5)   
314,548
80%
Edith E. Holiday
15,990
-
18,655
62,361
217,890
3,198(5)   
318,094
68%
V. Maureen Kempston Darkes
15,990
-
14,924
49,569
217,890
4,797(5)   
303,170
72%
Robert H. Lee
15,990
-
14,924
54,366
217,890
1,599(5)   
304,769
71%
The Hon. Denis Losier
15,990
15,990
14,924
57,564
217,890
1,599(5)   
323,957
67%
The Hon. Edward C. Lumley
-
-
-
62,361
265,680
3,198(5)   
331,239
80%
David G.A. McLean
63,960
-
-
63,960
641,406
12,731(5,6)
782,057
82%
Robert Pace
-
-
-
67,158
265,680
-
332,838
80%
TOTAL
191,880
47,970
138,047
741,936
3,414,547
44,711
4,579,091
75%
 
(1)  
All directors earned compensation in U.S. currency. Compensation received in cash was converted to Canadian dollars using the average rate of exchange of the Bank of Canada for 2008 (1.066), and compensation received in common shares or DRSUs was converted to Canadian dollars using the closing rate of exchange of the Bank of Canada (1.0061) on the first day opened for trading following the date on which the Board of Directors approved Directors Compensation (January 24, 2008).
(2)  
Includes travel fees which amounted to a total of CAD$140,712, in aggregate, for all directors.
(3)  
Includes 4,500 common shares or DRSUs received by each non-executive director as part of the Director Retainer (and 12,000 common shares or DRSUs received by the Board Chair as part of the Board Chair Retainer). The value of such grant was calculated as at January 24, 2008 using the average closing price on such date on the New York and Toronto stock exchanges (CAD$48.42).
(4)  
In addition to the common shares or DRSUs received by the directors and the Board chair as described in note (3) above, the directors and the Board chair may choose to receive all or part of their cash retainers in common shares or DRSUs. The following directors made such election: A. Charles Baillie, James K. Gray, The Hon. Edward C. Lumley, David G.A. McLean and Robert Pace. The value of such election is reflected in this column and was calculated as at January 24, 2008 using the average closing price on such date on the New York and Toronto stock exchanges (CAD$48.42).
(5)  
Such values represent committee attendance fees received in cash for attendance to meetings of board committees of which they were not members. In addition, Mr. McLean received US$6,000 for his participation in meetings of the Companys Donations Committee. Such values were converted to Canadian dollars using the average rate of exchange of the Bank of Canada for 2008 (1.066).
(6)  
Includes the value for 2008 of insurance premiums for life, accidental death and dismemberment insurance as well as 2008 medical and dental coverage for Mr. McLean in Canada and the U.S. The total cost to the Company for such benefits is equal to CAD$3,136.
(7)  
This percentage is calculated by dividing the value provided under the share-based awards column by the value provided under the total column.
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 13

 
Outstanding Option-based Awards and Share-based Awards
 
The table below reflects all awards outstanding as at December 31, 2008 with respect to non-executive directors.

   
  OPTION-BASED AWARDS(1)
SHARE-BASED AWARDS(3)
NAME OF DIRECTOR
  DATE OF GRANT AND NUMBER
OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS
(#)
OPTION
EXERCISE PRICE
(CAD$)
OPTION
EXPIRATION
DATE
VALUE OF
UNEXERCISED
IN-THE-MONEY
OPTIONS(2)
(CAD$)
NUMBER OF SHARES
OR UNITS OF
SHARES THAT HAVE
NOT VESTED
(#)
MARKET OR PAYOUT
VALUE OF
SHARE-BASED
AWARDS THAT
HAVE NOT VESTED(4)
(CAD$)
Michael R. Armellino
-
-
-
-
-
-
-
A. Charles Baillie
-
-
-
-
-
33,196
1,486,517
Hugh J. Bolton
-
-
-
-
-
30,181
1,351,505
J.V. Raymond Cyr
04/26/1999
12,000
14.76
04/26/2009
360,300
27,595
1,235,704
 
01/25/2000
12,000
11.67
01/25/2010
397,320
   
 
01/26/2001
15,000
16.67
01/26/2011
421,600
   
 
01/25/2002
12,000
25.59
01/25/2012
230,280
   
Ambassador
05/01/2001
15,000
19.83
05/01/2011
374,200
13,663
611,829
Gordon D. Giffin
01/25/2002
12,000
25.59
01/25/2012
230,280
   
James K. Gray
-
-
-
-
-
5,850
261,963
Edith E. Holiday
06/01/2001
15,000
20.73
06/01/2011
360,700
2,267
101,516
 
01/25/2002
12,000
25.59
01/25/2012
230,280
   
V. Maureen
04/26/1999
1,000
14.76
04/26/2009
30,025
23,449
1,050,046
Kempston Darkes
01/25/2000
12,000
11.67
01/25/2010
397,320
   
 
01/26/2001
15,000
16.67
01/26/2011
421,600
   
 
01/25/2002
12,000
25.59
01/25/2012
230,280
   
Robert H. Lee
-
-
-
-
-
-
-
The Hon.
01/25/2000
12,000
11.67
01/25/2010
397,320
28,911
1,294,635
Denis Losier
01/26/2001
15,000
16.67
01/26/2011
421,600
   
 
01/25/2002
12,000
25.59
01/25/2012
230,280
   
The Hon.
             
Edward C. Lumley
-
-
-
-
-
28,573
1,279,499
David G.A. McLean
-
-
-
-
-
57,761
2,586,538
Robert Pace
04/26/1999
12,000
14.76
04/26/2009
360,300
30,034
1,344,923
 
01/25/2000
12,000
11.67
01/25/2010
397,320
   
 
01/26/2001
15,000
16.67
01/26/2011
421,600
   
 
01/25/2002
12,000
25.59
01/25/2012
230,280
   

(1)  
Shows information regarding options held by non-executive directors under the Management Long-Term Incentive Plan as of December 31, 2008. As of the date hereof, all these options are exercisable. On March 8, 2005, the Management Long-Term Incentive Plan was amended to provide that option grants under the Plan could no longer be made to non-executive directors. While they remain participants in the Plan for previous grants, the last time non-executive directors received options was in 2002. Mr. Baillie, Mr. Bolton and Mr. Lee were not members of the Board when options were granted under the Management Long-Term Incentive Plan.
(2)  
The value of unexercised in-the-money options at financial year-end is the difference between the average closing price of the common shares on December 31, 2008 on the New York and Toronto stock exchanges (CAD$44.78) and the exercise price, using the December 31, 2008 closing exchange rate (1.2180).
(3)  
Shows information regarding Directors Restricted Share Units held by non-executive directors as of December 31, 2008. The directors may choose to receive all or part of their cash retainer in common shares or DRSUs and their common share retainer can also be received in DRSUs. Pursuant to the terms of the Directors Restricted Share Units, directors or their estates can only access their DRSUs upon retirement, resignation or death.
(4)  
The value of outstanding DRSUs is based on the average closing price of the common shares on December 31, 2008 on the New York and Toronto stock exchanges (CAD$44.78), using the December 31, 2008 closing exchange rate (1.2180).

Share Ownership

The Board has adopted a guideline stating that each non-executive director should own, within three (3) years of joining the Board, common shares, DRSUs or similar share equivalents of CN, if any, with a value of at least the higher of: (i) CAD$250,000, or (ii) three (3) times the aggregate of the annual Director retainer in cash and the annual common share or DRSU grant (and for the Board chair, the aggregate of the Board Chair annual retainer in cash and the annual common share or DRSU grant) (the “Minimum Shareholding Requirement). Each director shall continue to hold such value throughout his or her tenure as a director and the common shares, DRSUs or similar share equivalent of CN held to comply with the Minimum Shareholding Requirement shall not be the object of specific monetization procedures or other hedging procedures to reduce the exposure related to his or her holding.
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 14


Each director is required to receive at least fifty percent (50%) of his or her annual Director, committee, Board chair and committee chair cash retainers in common shares or DRSUs of CN and may elect to receive up to one hundred percent (100%) of such retainers in common shares or DRSUs of CN until his or her Minimum Shareholding Requirement is met. Once the Minimum Shareholding Requirement is met, directors may elect to receive up to one hundred percent (100%) of such retainers in common shares or DRSUs of CN. As of the date hereof, the average value of common shares (including DRSUs) of the Company owned by non-executive directors is approximately CAD$3,284,836 (based on the February 27, 2009, average closing price of the common shares of the Company on the Toronto and New York stock exchanges of CAD$41.00).

The following table provides information on the value of common shares and DRSUs owned by the Companys current directors, the value at risk as a multiple of each directors annual retainer and the amount needed to meet the Minimum Shareholding Requirement.
 
DIRECTOR
YEAR(1)
NUMBER OF
COMMON SHARES
OWNED,
CONTROLLED
OR DIRECTED
NUMBER OF
DRSUs HELD
TOTAL NUMBER
OF COMMON
SHARES OWNED,
CONTROLLED OR
DIRECTED
AND DRSUs
GUIDELINE MET () OR INVESTMENT REQUIRED TO MEET GUIDELINE
(CAD$)
TOTAL VALUE
OF COMMON
SHARES AND DRSUs
(VALUE AT RISK)(2)
(CAD$)
VALUE AT RISK
AS MULTIPLE OF
ANNUAL RETAINER
Michael R. Armellino
2009
106,650
-
106,650
     
 
2008
102,150
-
102,150
4,372,980
21
 
Net change
4,500
-
4,500
     
A. Charles Baillie
2009
94,600
39,176
133,776
     
 
2008
94,600
32,744
127,344
5,485,230
27
 
Net change
-
6,432
6,432
     
Hugh J. Bolton
2009
2,500
34,846
37,346
     
 
2008
2,500
29,770
32,270
1,531,301
8
 
Net change
-
5,076
5,076
     
Ambassador
2009
22,775
14,637
37,412
     
Gordon D. Giffin
2008
19,175
13,481
32,656
1,534,008
8
 
Net change
3,600
1,156
4,756
     
James K. Gray
2009
61,798
5,881
67,679
     
 
2008
57,298
5,774
63,072
2,775,048
14
 
Net change
4,500
107
4,607
     
E. Hunter Harrison
2009
313,329
-
313,329
     
 
2008
308,993
-
308,993
12,847,449
N/A
 
Net change
4,336
-
4,336
     
Edith E. Holiday
2009
31,200
4,517
35,717
     
 
2008
28,950
2,250
31,200
1,464,507
7
 
Net change
2,250
2,267
4,517
     
V. Maureen
2009
41,000
23,577
64,577
     
Kempston Darkes
2008
36,500
23,131
59,631
2,647,857
13
 
Net change
4,500
446
4,946
     
Robert H. Lee
2009
33,500
-
33,500
     
 
2008
29,000
-
29,000
1,373,604
7
 
Net change
4,500
-
4,500
     
The Hon. Denis Losier
2009
53,872
33,569
87,441
     
 
2008
52,860
28,518
81,378
3,585,351
18
 
Net change
1,012
5,051
6,063
     
The Hon.
2009
52,800
34,631
87,431
     
Edward C. Lumley
2008
52,800
28,185
80,985
3,584,941
18
 
Net change
-
6,446
6,446
     
David G.A. McLean
2009
107,910
70,079
177,989
     
 
2008
107,910
56,975
164,885
7,298,099
11
 
Net change
-
13,104
13,104
     
Robert Pace
2009
58,874
36,101
94,975
   
   
 
2008
58,874
29,626
88,500
3,894,269
19
 
Net change
-
6,475
6,475
     
 
(1) 
The number of common shares and DRSUs held by each director for 2009 is as at February 27, 2009 and for 2008 is as at February 29, 2008.
(2) 
The total value is based on the February 27, 2009 average closing price of the common shares on the Toronto and New York stock exchanges (CAD$41.00).
 
 
CN MANAGEMENT INFORMATION CIRCULAR
 15

 
Board and Committee Attendance

The tables below show the record of attendance by directors at meetings of the Board and its committees, as well as the number of Board and Board committee meetings held during the 12-month period ended December 31, 2008.
 
   
NUMBER AND % OF MEETINGS ATTENDED
DIRECTOR(1)
BOARD
AUDIT
COMMITTEE
CORPORATE
GOVERNANCE
AND
NOMINATING
COMMITTEE
ENVI-
RONMENT,
SAFETY AND
SECURITY
COMMITTEE
FINANCE
COMMITTEE
HUMAN
RESOURCES
AND COM-
PENSATION
COMMITTEE
INVESTMENT
COMMITTEE
OF CNS
PENSION
TRUST FUNDS
STRATEGIC
PLANNING
COMMITTEE
COMMITTEES
(TOTAL)
OVERALL
ATTENDANCE
Michael R. Armellino
8/10 
6/6
-
-
4/4
-
5/5
3/3
18/18 
26/28 
 
(80%)
           
(Chair)
(100%)
(93%)
A. Charles Baillie
10/10 
5/6
-
-
4/4
5/5
-
3/3
17/18 
27/28 
 
(100%)
     
(Chair)
     
(94%)
(96%)
Hugh J. Bolton
10/10 
6/6
5/5
-
-
5/5
-
3/3
19/19 
29/29 
 
(100%)
             
(100%)
(100%)
J.V. Raymond Cyr(2)
10/10 
-
5/5
4/4
-
-
5/5
3/3
17/17 
27/27 
 
(100%)
   
(Chair)
       
(100%)
(100%)
Ambassador
10/10 
-
-
4/4
4/4
5/5
-
3/3
16/16 
26/26 
Gordon D. Giffin
(100%)
             
(100%)
(100%)
James K. Gray(3)
10/10 
-
4/5
3/4
-
5/5
5/5
3/3
20/22 
30/32 
 
(100%)
             
(91%)
(94%)
E. Hunter Harrison
10/10 
-
-
-
-
-
-
3/3
3/3 
13/13 
 
(100%)
             
(100%)
(100%)
Edith E. Holiday
10/10 
-
5/5
4/4
-
5/5
5/5
3/3
22/22 
32/32 
 
(100%)
             
(100%)
(100%)
V. Maureen
10/10 
-
-
4/4
4/4
-
5/5
3/3
16/16 
26/26 
Kempston Darkes
(100%)
             
(100%)
(100%)
Robert H. Lee(3)
10/10 
5/6
-
-
4/4
-
5/5
3/3
17/18 
27/28 
 
(100%)
             
(94%)
(96%)
The Hon. Denis Losier
10/10 
6/6
5/5
-
-
-
5/5
3/3
19/19 
29/29 
 
(100%)
(Chair)
           
(100%)
(100%)
The Hon.
10/10 
-
-
4/4
4/4
5/5
5/5
3/3
21/21 
31/31 
Edward C. Lumley
(100%)
         
(Chair)
 
(100%)
(100%)
David G.A. McLean
10/10 
-
5/5
4/4
-
5/5
5/5
3/3
22/22 
32/32 
 
(100%)
 
(Chair)
         
(100%)
(100%)
 
(Chair)
                 
Robert Pace
10/10 
6/6
5/5
-
-
5/5
5/5
3/3
24/24 
34/34 
 
(100%)
       
(Chair)
   
(100%)
(100%)

(1)
All Board members, other than the members of such following committees, attended on a non-voting basis the Human Resources and Compensation Committee meeting held in January 2008 and the Audit Committee meetings held in April 2008 and July 2008. In addition, Hugh J. Bolton and Ambassador Gordon D. Giffin attended on a non-voting basis the Investment Committee meeting held in September 2008 and Michael R. Armellino attended on a non-voting basis the Human Resources and Compensation Committee meeting held in December 2008.
(2)
J.V. Raymond Cyr retired from the Board on January 4, 2009. Upon his retirement, V. Maureen Kempston Darkes was appointed Chair of the Environment, Safety and Security Committee.
(3)
James K. Gray and Robert H. Lee will retire from the Board on the date of the Meeting.

BOARD AND BOARD COMMITTEE MEETINGS
NUMBER OF MEETINGS HELD
Board
10
Audit Committee
6
Corporate Governance and Nominating Committee
5
Environment, Safety and Security Committee
4
Finance Committee
4
Human Resources and Compensation Committee
5
Investment Committee of CNs Pension Trust Funds
5
Strategic Planning Committee
3


CN MANAGEMENT INFORMATION CIRCULAR
 16

 
Additional Disclosure Relating to Directors
 
As of the date hereof, to the knowledge of the Company and based upon information provided to it by the nominees for election to the Board of Directors, no such nominee is or has been, in the last 10 years, a director or executive officer of any company that, while such person was acting in that capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, except for the following:
 
(i)
Mr. Baillie, a director of the Company, was a director of Dana Corporation which filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on March 3, 2006. Dana’s European, South American, Asian-Pacific, Canadian and Mexican subsidiaries are not included in the Chapter 11 filing. Dana Corporation successfully emerged from Chapter 11 reorganization in February 2008. Mr. Baillie is no longer a director of Dana Corporation; and  
 
(ii)
Mr. Lumley, a director of the Company, was a director of Air Canada when it voluntarily filed for protection under the Companies’ Creditors Arrangement Act (“CCAA”) in April 2003. Air Canada successfully emerged from the CCAA proceedings and was restructured pursuant to a plan of arrangement in September 2004. Mr. Lumley is no longer a director of Air Canada.


CN MANAGEMENT INFORMATION CIRCULAR
 17

 
STATEMENT OF CORPORATE GOVERNANCE PRACTICES

General
We are committed to adhering to the highest standards of corporate governance and our corporate governance practices were designed in a manner consistent with this objective. The role, specific mandate and functioning rules of the Board of Directors and of each of its committees are set forth in our Corporate Governance Manual which was formally approved by the Board of Directors on January 21, 2003, and last updated on March 3, 2009. Our Corporate Governance Manual is available on our website at www.cn.ca/governance. It is revised regularly with a view to continually improving our practices by assessing their effectiveness and comparing them with evolving practices, the changing circumstances and our needs. Our Corporate Governance Manual forms part of the documentation given to all persons elected or appointed to the Board of Directors.
 
As a Canadian reporting issuer with securities listed on the Toronto Stock Exchange (“TSX) and the New York Stock Exchange (“NYSE), our corporate governance practices comply with applicable rules adopted by the Canadian Securities Administrators (the “CSA) and applicable provisions of the U.S. Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act) and related rules of the U.S. Securities and Exchange Commission (“SEC). We are exempted from complying with many of the NYSE corporate governance rules, provided that we comply with Canadian governance requirements. Except as summarized on our website at www.cn.ca/governance, our governance practices, however, comply with the NYSE corporate governance rules in all significant respects.
 
The CSA adopted, in June 2005, National Instrument 58-101 - Disclosure of Corporate Governance Practices (the “Disclosure Instrument) and National Policy 58-201  Corporate Governance Guidelines (the “Governance Policy). The Governance Policy provides guidance on governance practices to Canadian issuers, while the Disclosure Instrument requires issuers to make the prescribed disclosure regarding their own governance practices. The Company believes that its corporate governance practices meet and exceed the requirements of the Disclosure Instrument and the Governance Policy. The text and footnotes set forth hereunder refer to the items of the Disclosure Instrument as well as to the guidelines of the Governance Policy, where applicable. The Company also refers, where appropriate, to the NYSE Corporate Governance Standards (the “NYSE Standards).
 
The Board of Directors is of the opinion that the Companys corporate governance practices are well designed to assist the Company in achieving its principal corporate objective, which is the enhancement of shareholder value. The mandate of the Board is set out in Schedule “A” to this Information Circular.(1) The Board of Directors has approved the disclosure of the Companys governance practices described below, on the recommendation of the Corporate Governance and Nominating Committee.

Code of Business Conduct(2)
This year, the Board of Directors has reviewed and updated its Code of Business Conduct to ensure that it is consistent with current industry trends and standards; clearly communicates CNs organizational mission, values, and principles; and most importantly, serves as a ready reference guide for any employees to support everyday decision making. The Code is applicable to directors, officers and employees of CN. It addresses several matters, including conflict of interests, protection and proper use of corporate assets and opportunities, confidentiality of corporate information, fair dealing, compliance with laws and reporting of any illegal or unethical behaviour. No waiver has ever been granted to a director or executive officer in connection therewith. The Code is available on our website at www.cn.ca/governance and in print to any shareholder who requests copies by contacting our Corporate Secretary. The Code has also been filed with the Canadian and U.S. securities regulatory authorities.
 
THE CODE OF BUSINESS CONDUCT WAS REVIEWED AND UPDATED IN 2008.
 
The Board, through its Corporate Governance and Nominating Committee, reviews, monitors and oversees the disclosure relating to the Companys Code of Business Conduct. Each year, management reports to such committee on the implementation of the Code within the organization and on any material contravention by employees of the Company to the provisions of the Code. No material change report has ever been filed or required to be filed pertaining to any conduct of a director or executive officer constituting a departure from the Code.
 
The Board requests every director to disclose any direct or indirect interest he or she has in any organization, business or association, which could place the director in a conflict of interest. Every year, a questionnaire is sent to each director to make sure that the director is in no such conflict that has not been disclosed. Should there be a discussion or decision relating to an organization, business or association in which a director has an interest, the Board would request such director not to participate or vote in any such discussion or decision.
 
 

(1)
Form 58-101F1 of the Disclosure Instrument (“Form 58-101F1”), section 2; Governance Policy, section 3.4.