Potash Corporation of Saskatchewan 10K 2005 Annual report | POT Filing

Exhibit 99

Table of Contents


			Page

Letter to Shareholders				1

Notice of Annual and Special Meeting of Shareholders				2

Management Proxy Circular				3

	Questions and Answers on Voting and Proxies			3

	Business of the Meeting			6

	Nominees for Election to the Board of Directors			7

		Director Independence and Other Relationships		10

		Compensation/Attendance of Directors		12

	Appointment of Auditors			15

	Adoption of 2006 Performance Option Plan			16

	Corporate Governance			19

		Report of the Audit Committee		19

		Report of the Compensation Committee and Compensation Discussion and Analysis		20

		Report on Corporate Governance and Nominating Matters		26

	Ownership of Shares			29

	Executive Compensation			30

	Performance Graphs			35

	Directors’ and Officers’ Liability Insurance			36

	Voting Shares			36

	Normal Course Issuer Bid			36

	2006 Shareholder Proposals			36

	Additional Information			36

	Directors’ Approval			36

	Appendix A – Statement of Corporate Governance Practices			37

	Appendix B – Resolution of Shareholders			47

	Appendix C – 2006 Performance Option Plan			48

	Appendix D – Board of Directors Charter			53

	Appendix E – Audit Committee Charter			56


				Potash Corporation of Saskatchewan Inc.

February 27, 2006

Dear Shareholder:

We are pleased to invite you to join our Board of Directors and senior management team at our 2006 Annual and Special Meeting of Shareholders. The meeting will be held on:


	May 4, 2006
	10:30 a.m. (local time)
	Adam Ballroom
	Delta Bessborough
	601 Spadina Crescent East
	Saskatoon, Saskatchewan, Canada

The items of business to be considered and voted upon at this meeting are set out in the Notice of Annual and Special Meeting and the accompanying Management Proxy Circular. In addition, this meeting provides you, the shareholder, with an opportunity to meet, listen to and ask questions of the people who are responsible for the performance of the Corporation.

Your vote and participation are very important. If you are unable to attend the meeting in person, you can vote by telephone, via the Internet or by completing and returning the enclosed proxy. Please refer to the “Questions and Answers on Voting and Proxies” section of the accompanying Management Proxy Circular for further information.

We will also webcast the meeting at www.potashcorp.com. We encourage you to visit our website at any time before the meeting as it provides useful information about our company.

We look forward to seeing you on May 4, 2006.


Sincerely,

D. J. HOWE		W. J. DOYLE
Board Chair		President and Chief Executive Officer

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

LETTER TO SHAREHOLDERS

Page 1

Notice of Annual and Special Meeting of Shareholders

NOTICE IS HEREBY GIVEN that the Annual and Special Meeting (the “Meeting”) of shareholders of Potash Corporation of Saskatchewan Inc. (the “Corporation”), a corporation organized under the laws of Canada, will be held on:


	May 4, 2006
	10:30 a.m. (local time)
	Adam Ballroom
	Delta Bessborough
	601 Spadina Crescent East
	Saskatoon, Saskatchewan, Canada

for the following purposes:


1.	to receive the consolidated financial statements of the Corporation for the fiscal year ended December 31, 2005 and the report of the auditors thereon;

2.	to elect the Board of Directors for 2006;

3.	to appoint auditors for 2006;

4.	to consider and, if deemed appropriate, adopt, with or without variation, a resolution (the full text of which is reproduced as Appendix B to the accompanying Management Proxy Circular) authorizing the Corporation to implement a new performance option plan, which is attached as Appendix C to the accompanying Management Proxy Circular; and

5.	to transact such other business as may properly come before the Meeting or any adjournments thereof.

DATED at Saskatoon, Saskatchewan this 27^th day of February, 2006.


	BY ORDER OF THE BOARD OF DIRECTORS


	JOSEPH A. PODWIKA
	Secretary

POTASH CORPORATION OF SASKATCHEWAN INC.

SUITE 500, 122 – 1^ST AVENUE SOUTH, SASKATOON, SK CANADA S7K 7G3

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

Page 2

Management Proxy Circular

Questions and Answers on Voting and Proxies


1.	Who can I call if I have questions about the information contained in this Management Proxy Circular or require assistance in completing my proxy form?


	Georgeson Shareholder Communication Canada, Inc., the Corporation’s proxy solicitation agent, at 1-866-699-2833, for service in English and in French.

2. Who is soliciting my proxy?

The management of the Corporation. Solicitation of proxies will be primarily by mail, supplemented by telephone or other contact by employees of the Corporation (who will receive no additional compensation), and all such costs will be borne by the Corporation. We have retained the services of Georgeson for the solicitation of proxies in Canada and in the United States. Georgeson’s services are estimated to cost $24,000.

3. On what am I voting?


	Three items:


	(1)	the election of directors;

	(2)	the appointment of auditors; and

	(3)	a resolution authorizing the Corporation to implement a new performance option plan.


	The Corporation’s Board of Directors and management recommend that you voteFOR items (1), (2) and (3).

4. Who is entitled to vote?


	Common shareholders as at the close of business on March 13, 2006 (the “Record Date”) or their duly appointed representatives will be entitled to cast a vote.

	As at February 27, 2006, 103,651,326 common shares in the capital of the Corporation (the “Shares”) are entitled to be voted at the Meeting.

5. By when must I vote?


	This will depend on the way in which you will be voting:


	(1)	If you are a Registered Shareholder planning to attend the Meeting and wish to vote your Shares in person at the Meeting, your vote will be taken and counted at the Meeting.

	(2)	If you are a Registered Shareholder and voting using the proxy form, your proxy form should be received at the Toronto office of CIBC Mellon Trust Company by mail or facsimile prior to the commencement of the Meeting, or hand-delivered at the registration table on the day of the Meeting prior to the commencement of the Meeting.

	(3)	If you are a Registered Shareholder and voting your proxy by telephone or Internet, your vote should be received by CIBC Mellon Trust Company no later than 11:00 p.m. (Saskatoon time) on Tuesday May 2, 2006.

	(4)	If you are a Non-Registered Shareholder and wish to attend the Meeting or vote by proxy, you should refer to Item 11.

Please note that Items 6 to 10 below are only applicable to Registered Shareholders. Non-Registered Shareholders should refer to Item 11 for further information on voting.

6. How do I vote if I am a Registered Shareholder?


	You are a Registered Shareholder if your name appears on your share certificate. The enclosed proxy form indicates whether you are a Registered Shareholder.

	You can vote your Shares by proxy or in person at the Meeting if you are a Registered Shareholder:


	(1)	By Proxy


	There are four ways that you can vote by proxy:


	(a)	By Telephone


	Call 1-866-271-1207 from your touch-tone phone and follow the instructions (only available to Registered Shareholders resident in Canada or the United States).

	You will need the control number located on the enclosed proxy form. You do not need to return your proxy form.

MANAGEMENT PROXY CIRCULAR │ Questions and Answers on Voting and Proxies

Page 3


	(b)	On the Internet


	Go to www.eproxyvoting.com/potash and follow the instructions on screen.

	You will need the control number located on the enclosed proxy form. You do not need to return your proxy form.


	At any time, CIBC Mellon may cease to provide telephone and Internet voting, in which case shareholders can elect to vote by mail, by fax or by attending the Meeting in person, as described below.


	(c)	By Mail


	By completing, dating and signing the enclosed proxy form and returning same in the envelope provided.


	(d)	By Fax


	By completing, dating and signing the enclosed proxy form and forwarding same by fax to 1-866-781-3111 (toll-free within Canada and the United States) or 1-416-368-2502 (from any country other than Canada and the United States).


	If your Shares are not registered in your name (e.g. if they are held through a bank, trust company, securities broker or other nominee), do not use the above fax number as it is reserved for Registered Shareholders. Instead, use the fax numbers, if any, provided by your nominee. See Item 11(1).


	(2)	By Attending the Meeting in Person


	If you wish to vote in person at the Meeting, do not complete or return the proxy form.


7.	What if I sign the proxy form as described in this Management Proxy Circular?


	Signing the proxy form gives authority to Mr. Dallas J. Howe, Mr. William J. Doyle, Mr. Wayne R. Brownlee or Mr. Joseph A. Podwika, all of whom are either directors or officers of the Corporation, to vote your Shares at the Meeting in accordance with your voting instructions.

	A proxymust be in writing and must be executed by you or by your attorney authorized in writing or, if the shareholder is a corporation or other legal entity, by an officer or attorney thereof duly authorized. A proxy may also be completed over the telephone or over the Internet. See Items 6(1)(a) and (b).


8.	Can I appoint someone other than these people to vote my Shares?


	Yes. You have the right to appoint some other person of your choice, who need not be a shareholder, to attend and act on your behalf at the Meeting. If you wish to do so, please strike out those four printed names appearing on the proxy form, and insert the name of your chosen proxyholder in the space provided thereon.

	You cannot appoint a person to vote your Shares other than our directors or officers whose printed names appear on the proxy form if you decide to vote by telephone or Internet.

	It is important to ensure that any other person you appoint is attending the Meeting and is aware that his or her appointment has been made to vote your Shares.


9.	How will my Shares be voted if I vote by proxy?

The persons named in the proxy form must vote or withhold from voting your Shares in accordance with your instructions on the proxy form. In the absence of such instructions, however, your Shares will be votedFOR the election to the Corporation’s Board of Directors of the nominees as described in this Management Proxy Circular and on the proxy form,FOR the appointment of Deloitte & Touche LLP as auditors until the close of the next annual meeting,FOR the resolution authorizing the Corporation to implement a new performance option plan andFOR management’s proposals generally.


10.	If I change my mind, can I take back my proxy once I have given it?


	Yes. A shareholder who has voted by proxy may revoke it by voting again in any manner (telephone, Internet, mail or fax). In addition, you may revoke a voted proxy by depositing an instrument in writing (which includes another proxy form with a later date) executed by you or by your attorney authorized in writing with our Corporate Secretary at Suite 500, 122 – 1^st Avenue South, Saskatoon, Saskatchewan, Canada, S7K 7G3, at any time up to and including the last business day preceding the date of the Meeting, or any adjournment or postponement thereof or by depositing it with the Meeting chair on the day of the Meeting, or any adjournment or postponement thereof. You may also revoke a proxy in any other manner permitted by law.

	Note that your participation in person in a vote by ballot at the Meeting will automatically revoke any proxy previously given by you in respect of business covered by that vote.


11.	How do I vote if I am a Non-Registered Shareholder?


	You are a Non-Registered (or Beneficial) Shareholder if your Shares are held through a bank, trust company, securities broker or other nominee.

	For most of you, the proxy form or the request for voting instructions sent or to be sent by your nominee indicates whether you are a Non-Registered (or Beneficial) Shareholder.

MANAGEMENT PROXY CIRCULAR │ Questions and Answers on Voting and Proxies

Page 4


	There are two ways that you can vote your Shares if you are a Non-Registered (or Beneficial) Shareholder:

	(1) By Providing Voting Instructions to Your Nominee


	Your nominee is required to seek voting instructions from you in advance of the Meeting. Accordingly, you will receive, or have already received, from your nominee either a request for voting instructions or a proxy form for the number of Shares you hold.

	Every nominee has its own procedures which should be carefully followed by Non-Registered Shareholders to ensure that their Shares are voted at the Meeting. These procedures generally allow voting by telephone, on the Internet, by mail or by fax. Please contact your nominee for instructions in this regard.

	If your Shares are not registered in your name, do not use the fax number in 6(1)(d) as this number is reserved for Registered Shareholders.


	(2) By Attending the Meeting in Person


	If you wish to vote in person at the Meeting, insert your own name in the space provided on the request for voting instructions or proxy form to appoint yourself as proxyholder and follow the instructions of your nominee.

	Non-Registered Shareholders who instruct their nominee to appoint themselves as proxyholders should, at the Meeting, present themselves to a representative of CIBC Mellon at the table identified as “Beneficial Shareholders”. Do not otherwise complete the form sent to you as your vote will be taken and counted at the Meeting.


12.	What if amendments are made to these matters or if other matters are brought before the Meeting?


	The person named in the proxy form has discretionary authority with respect to amendments or variations to matters identified in the Notice of the Meeting and to other matters which may properly come before the Meeting.

	As of the date of this Management Proxy Circular, our management knows of no such amendment, variation or other matter expected to come before the Meeting. If any other matters properly come before the Meeting, the persons named in the proxy form will vote on them in accordance with their best judgment.


13.	How will the votes be counted?


	All matters to be considered at the Meeting will each be determined by a majority of votes cast at the Meeting by proxy or in person. In the event of equal votes, the Meeting chair is entitled to a second or casting vote.

14. How can I contact the transfer agent?


	You can contact the transfer agent as follows:

	By mail:


	CIBC Mellon Trust Company
	600 The Dome Tower
	333 – 7^th Avenue SW
	Calgary, Alberta, Canada T2P 2Z1


	By telephone:


	1-800-387-0825 (toll-free within Canada and the United States)
	or 1-416-643-5500 (from any country other than Canada and the United States)


	By fax:


	1-416-643-5501 (all countries)


	By e-mail:


	inquiries@cibcmellon.com

Except as otherwise stated, the information contained herein is given as of February 27, 2006. Unless otherwise specified, all dollar amounts are expressed in United States dollars.

MANAGEMENT PROXY CIRCULAR │ Questions and Answers on Voting and Proxies

Page 5

Business of the Meeting


1.	Financial Statements


	The Consolidated Financial Statements for the fiscal year ended December 31, 2005 are included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 filed with the U.S. Securities and Exchange Commission (“SEC”) and the Canadian securities regulatory authorities.


2.	Nominees for Election to the Board of Directors


	The 12 nominees proposed for election as directors of the Corporation are listed beginning on page 7. All are currently directors of the Corporation. All nominees have established their eligibility and willingness to serve as directors. Directors will hold office until the next annual meeting of shareholders of the Corporation or until their successors are elected or appointed.

	Unless otherwise instructed, the persons designated in the form of proxy intend to vote for the election of the nominees listed beginning on page 7. If, for any reason, at the time of the Meeting any of the nominees are unable to serve, it is intended that the persons designated in the form of proxy will vote in their discretion for a substitute nominee or nominees.


3.	Appointment of Auditors


	Proxies solicited hereby will be voted to reappoint the firm of Deloitte & Touche LLP, the present auditors of the Corporation, as auditors of the Corporation to hold office until the next annual meeting of shareholders of the Corporation, unless the shareholder signing such proxy specifies otherwise.


4.	Adoption of 2006 Performance Option Plan

At the Meeting, shareholders will be asked to consider and, if deemed appropriate, adopt, with or without variation, a resolution (the full text of which is reproduced as Appendix B to this Management Proxy Circular) authorizing the Corporation to implement a new performance option plan, which is attached as Appendix C to this Management Proxy Circular. Unless a proxy specifies otherwise, the persons designated in the form of proxy intend to vote for the resolution to approve the new performance option plan.

MANAGEMENT PROXY CIRCULAR │ Business of the Meeting

Page 6

Nominees for Election to the Board of Directors

The articles of the Corporation provide that the Board of Directors of the Corporation (the “Board”) shall consist of a minimum of 6 directors and a maximum of 20, with the actual number to be determined from time to time by the Board. The Board has determined that, at the present time, there will be 12 directors.

Proxies solicited hereby will be voted for the following proposed nominees (or for substitute nominees in the event of contingencies not known at present) who will, subject to the bylaws of the Corporation and applicable corporate law, hold office until the next annual meeting of shareholders or until their successors are elected or appointed in accordance with the bylaws or applicable corporate law. In an uncontested election, any nominee for director who fails to receive votes in favor of his or her election representing at least a majority of the votes cast (added together with the votes withheld) shall tender his or her resignation for consideration by the Corporate Governance and Nominating Committee. Except in extenuating circumstances, it is expected that the Committee will recommend to the Board that the resignation be accepted and effective within a period of 90 days and that the action taken be publicly disclosed. To the extent possible, the Committee and Board members who act on the resignation shall be directors who have themselves received a majority of votes cast.

The following table states the names and ages of all the persons to be nominated for election as directors, all other positions and offices with the Corporation now held by them, their present principal occupation or employment, their business experience over the last five years, the period during which present directors of the Corporation have served as directors and their independence status. The table also discloses the number of Shares and Deferred Share Units beneficially owned by each of them as of February 27, 2006, including Shares over which any such individual has or shares voting or investment power, and the value thereof. Finally, the table discloses the number of Shares deemed to be beneficially owned (as defined).



FREDERICK J. BLESI Director since 2001. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 2,000 5,476 $664,018 16,000⁽⁴⁾	Feb 2006 2,000 6,700 $835,635 11,000⁽⁵⁾

Mr. Blesi, 68, of Glenview, Illinois, U.S.A., is a retired Chairman and Chief Executive Officer of the Phosphate Chemicals Export Association, Inc. (“PhosChem”), principal exporter of U.S. phosphate chemicals. Before joining PhosChem, he was Vice President, International with International Minerals and Chemical Corporation. He is a director of the Evans Scholars Foundation and The Western Golf Association.

Mr. Blesi is a member of the Audit Committee and the Corporate Governance and Nominating Committee.



WILLIAM J. DOYLE Director since 1989. Independence Status⁽¹⁾: Non-independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 77,551 0 $6,888,080 893,807⁽⁴⁾	Feb 2006 77,978 0 $7,489,787 790,490⁽⁵⁾

Mr. Doyle, 55, of Winnetka, Illinois, U.S.A., is President and Chief Executive Officer of the Corporation. He became President of PCS Sales in 1987, after a career with International Minerals and Chemical Corporation. He is Chairman of The Fertilizer Institute and Potash & Phosphate Institute and Vice Chairman of Canpotex Limited. Mr. Doyle is on the College Board of Advisors at Georgetown University.

Mr. Doyle is a member of the Executive Committee.

MANAGEMENT PROXY CIRCULAR │ Nominees for Election to the Board of Directors

Page 7



JOHN W. ESTEY Director since 2003. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 2,000 3,953 $528,745 2,000⁽⁴⁾	Feb 2006 2,000 5,577 $727,771 2,000⁽⁵⁾

Mr. Estey, 55, of Glenview, Illinois, U.S.A., is President and Chief Executive Officer of S&C Electric Company. He is a member of the Board of Governors of the National Electrical Manufacturers Association, a director of the Executives’ Club of Chicago and a member of the Dean’s Advisory Board at the Kellogg School of Management at Northwestern University.

Mr. Estey is Chair of the Compensation Committee and a member of the Safety, Health and Environment Committee.



WADE FETZER III Director since 2002. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 3,000 2,428 $482,115 6,000⁽⁴⁾	Feb 2006 4,000 3,121 $683,972 7,000⁽⁵⁾

Mr. Fetzer, 68, of Glencoe, Illinois, U.S.A., is a Retired Partner with the investment banking firm Goldman Sachs. He sits on the boards of Serologicals Corporation, Sphere Communications, Northern Star Broadcasting, University of Wisconsin Foundation and Rush-Presbyterian St. Luke’s Medical Center. He is also on the Kellogg Alumni Advisory Board.

Mr. Fetzer is a member of the Corporate Governance and Nominating Committee and the Compensation Committee.



DALLAS J. HOWE Director since 1991. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 6,000 8,539 $1,291,354 48,400⁽⁴⁾	Feb 2006 8,000 11,043 $1,829,080 46,400⁽⁵⁾

Mr. Howe, 61, of Calgary, Alberta, Canada, is owner and Chief Executive Officer of DSTC Ltd., a technology investment company, and a director of Advanced Data Systems Ltd. and the Saskatchewan Wheat Pool Inc. A director of Potash Corporation of Saskatchewan, the Crown corporation, from 1982 to 1989, he joined the Corporation’s Board in 1991 and was elected Chair in 2003.

Mr. Howe is Board Chair, Chair of the Executive Committee and a member of the Corporate Governance and Nominating Committee.



ALICE D. LABERGE Director since 2003. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 2,000 3,594 $496,859 2,000⁽⁴⁾	Feb 2006 2,000 4,424 $617,025 2,000⁽⁵⁾

Ms. Laberge, 49, of Vancouver, British Columbia, Canada, is a Corporate Director and the former President and Chief Executive Officer of Fincentric Corporation, a global provider of software solutions to financial institutions. She was previously Senior Vice President and Chief Financial Officer of MacMillan Bloedel Limited and is a director of the Royal Bank of Canada, Catalyst Paper, the United Way of the Lower Mainland and St. Paul’s Hospital Foundation.

Ms. Laberge is a member of the Audit Committee and the Safety, Health and Environment Committee.

MANAGEMENT PROXY CIRCULAR │ Nominees for Election to the Board of Directors

Page 8



JEFFREY J. MCCAIG Director since 2001. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 2,000 5,512 $667,216 28,000⁽⁴⁾	Feb 2006 2,000 6,735 $838,997 28,000⁽⁵⁾

Mr. McCaig, 54, of Houston, Texas, U.S.A., is Chairman and Chief Executive Officer of Trimac Holdings, a bulk trucking and third-party logistics company. Prior to that, he practiced law, specializing in corporate financing and securities. He is a director of Orbus Pharma Inc., The Standard Life Assurance Company of Canada and Stoneham Administration Inc.⁽⁶⁾

Mr. McCaig is a member of the Audit Committee and the Compensation Committee.



MARY MOGFORD Director since 2001. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 4,000 6,587 $940,337 10,000⁽⁴⁾	Feb 2006 4,000 7,307 $1,086,037 10,000⁽⁵⁾

Ms. Mogford, 61, of Newcastle, Ontario, Canada, is a Corporate Director and a former Ontario Deputy Minister of Finance and Deputy Minister of Natural Resources. She is a director of Falconbridge Ltd., MDS Inc. and Sears Canada Inc., and a member of the Altamira Advisory Council. She is a Fellow of the Institute of Corporate Directors (ICD) and an accredited director under the ICD/Rotman School of Business Directors’ Education Program.

Ms. Mogford is the Chair of the Corporate Governance and Nominating Committee and a member of the Audit Committee.



PAUL J. SCHOENHALS Director since 1992. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 2,000 4,410 $569,336 2,000⁽⁴⁾	Feb 2006 2,000 5,430 $713,652 2,000⁽⁵⁾

Mr. Schoenhals, 64, of Calgary, Alberta, Canada, is President and Chief Executive Officer of Enform, a petroleum industry safety and training service. He is a former Member of the Legislative Assembly and Cabinet Minister in Saskatchewan and was Chairman of Potash Corporation of Saskatchewan, the Crown corporation, from 1987 to 1989.

Mr. Schoenhals is the Chair of the Safety, Health & Environment Committee and a member of the Compensation Committee.



E. ROBERT STROMBERG, Q.C. Director since 1991. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 13,877 4,262 $1,611,106 46,277⁽⁴⁾	Feb 2006 15,580 5,137 $1,989,868 47,980⁽⁵⁾

Mr. Stromberg, 64, of Saskatoon, Saskatchewan, Canada, was formerly associated with the Saskatchewan law firm Robertson Stromberg Pedersen. He is a director of NorSask Forest Products Inc. and Hitachi Canadian Industries Ltd. and holds the rank of Honorary Lieutenant-Colonel of the North Saskatchewan Regiment.

Mr. Stromberg is a member of the Executive Committee, the Safety, Health & Environment Committee and the Corporate Governance and Nominating Committee.

MANAGEMENT PROXY CIRCULAR │ Nominees for Election to the Board of Directors

Page 9



JACK G. VICQ Director since 1989. Independence Status⁽¹⁾: Independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 3,186 3,094 $557,790 15,186⁽⁴⁾	Feb 2006 3,186 3,791 $670,141 9,186⁽⁵⁾

Mr. Vicq, 66, of Saskatoon, Saskatchewan, Canada, is Professor Emeritus of Accounting, University of Saskatchewan. He is a past Associate Dean of Commerce at the university and was responsible for the Centre for International Business Studies. He formerly held the A.W. Johnson Distinguished Chair in Public Policy in the Saskatchewan Department of Finance.

Mr. Vicq is the Chair of the Audit Committee and a member of the Executive Committee.



ELENA VIYELLA DE PALIZA Director since 2003. Independence Status⁽¹⁾: Non-independent.	Number of Shares Beneficially Owned Number of Deferred Share Units Held⁽²⁾Total Value of Shares Beneficially Owned and Deferred Share Units Held⁽³⁾Number of Shares Deemed to be Beneficially Owned	Feb 2005 2,500 3,243 $510,093 2,500⁽⁴⁾	Feb 2006 2,500 4,466 $669,084 2,500⁽⁵⁾

Ms. Viyella de Paliza, 51, of the Dominican Republic, is President of Inter-Quimica, S.A., a chemicals importer and distributor, Monte Rio Power Corp. and Indescorp, S.A. She is President of the Dominican Business Council, a member of the board of the Inter-American Dialogue and Past President of the Dominican Stock Exchange, Dominican Manufacturers Association and the National Agribusiness Board.

Ms. Viyella de Paliza is a member of the Executive Committee and the Safety, Health and Environment Committee.


(1)	See “Director Independence and Other Relationships”.

(2)	See “Compensation/ Attendance of Directors”. Deferred Share Units do not carry any voting rights. The number of Deferred Share Units held by each director has been rounded down to the nearest whole number.

(3)	Based on the price per Share on the NYSE of $88.82 as at February 28, 2005 and $96.05 as at February 27, 2006. The “Total Value of Shares Beneficially Owned and Deferred Share Units Held” as disclosed excludes the value of the additional deemed Shares included in the “Number of Shares Deemed to be Beneficially Owned”.

(4)	The number of Shares indicated above as deemed to be beneficially owned by the nominated directors includes Shares purchasable by such directors within 60 days of February 28, 2005 through the exercise of options granted by the Corporation, as follows: Frederick J. Blesi 14,000 Shares; William J. Doyle 816,256 Shares; Wade Fetzer III 3,000 Shares; Dallas J. Howe 42,400 Shares; Jeffrey J. McCaig 26,000 Shares; Mary Mogford 6,000 Shares; E. Robert Stromberg 32,400 Shares; and Jack G. Vicq 12,000 Shares. No stock options have been granted to the Corporation’s non-employee directors since November 2002.

(5)	The number of Shares indicated above as deemed to be beneficially owned by the nominated directors includes Shares purchasable by such directors within 60 days of February 27, 2006 through the exercise of options granted by the Corporation, as follows: Frederick J. Blesi 9,000 Shares; William J. Doyle 712,512 Shares; Wade Fetzer III 3,000 Shares; Dallas J. Howe 38,400 Shares; Jeffrey J. McCaig 26,000 Shares; Mary Mogford 6,000 Shares; E. Robert Stromberg 32,400 Shares; and Jack G. Vicq 6,000 Shares. No stock options have been granted to the Corporation’s non-employee directors since November 2002.

(6)	Mr. McCaig was a director of TCT Logistics Inc. (“TCT”) from June 2001 to January 2002. In or about January 2002, a receiver was appointed over the business and assets of TCT by a creditor of TCT.

All of the above directors have had the principal occupation described above for the previous five years other than Ms. Laberge, who was Chief Financial Officer of Fincentric Corporation from October 2000 to November 2003 and Chief Executive Officer from December 2003 to June 2005.

Director Independence and Other Relationships

The Board has determined that all of the directors of the Corporation with the exception of Mr. Doyle and Ms. Paliza are independent within the meaning of the “PotashCorp Governance Principles”, National Instrument 58-101 “Disclosure of Corporate Governance Practices” (“NI 58-101”), applicable rules of the SEC and the New York Stock Exchange (“NYSE”) corporate governance rules.

For a director to be considered independent, the Board must determine that the director does not have any material relationship with the Corporation, either directly or indirectly (e.g. as a partner, shareholder or officer of an organization that has a relationship with the Corporation). Directors of the

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Corporation inform the Board as to their relationships with the Corporation and provide other pertinent information pursuant to questionnaires that they complete, sign and certify on an annual basis. As permitted by the NYSE corporate governance rules, the Board has adopted categorical standards to assist it in making determinations of independence. These standards are set out in the “PotashCorp Governance Principles”, the full text of which is available on the Corporation’s website. The independence standards established by the Board are as follows:


1.	A director will not be considered independent if, currently or within the preceding three years, as applicable:


	(a)	the director is, or was, an employee or executive officer of the Corporation, including any affiliated entity of the Corporation;

	(b)	an immediate family member of the director is, or was, an executive officer of the Corporation, including any affiliated entity of the Corporation;

	(c)	the director is, or was, a partner of, employed by or affiliated with any of the Corporation’s present or former internal or external auditors;

	(d)	an immediate family member of the director is, or was, a partner of, employed by or affiliated with any of the Corporation’s present or former internal or external auditors as a partner, principal, manager or in any other capacity; or

	(e)	an executive officer of the Corporation serves or served on the compensation committee of an entity which, in turn, employs or employed either (i) the particular director as an executive officer or (ii) an immediate family member of such director as an executive officer.


2.	A director will not be considered independent if the director received any direct compensation, or an immediate family member of the director received more than $100,000 in direct compensation, within the past three fiscal years from the Corporation, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided that such compensation is not contingent in any way on continued service).

3.	A director will not be considered independent if the director has any of the following commercial or charitable relationships:


	(a)	the director has served as an executive officer or employee of, or any of his or her immediate family members has served as an executive officer of, another company that makes payments to, or receives payments from, the Corporation for property or services in an amount that, in any one of the three most recent fiscal years, exceeds the greater of (x) $1,000,000 and (y) 2 percent of the annual consolidated gross revenues of the company for which such director, or any of his or her immediate family members, has served as an executive officer (or as an employee in the case of the director); or

	(b)	the director has served as an officer, director or trustee of a charitable organization, and the Corporation’s discretionary charitable contributions to that organization exceeds 1.5 percent of that organization’s total annual consolidated gross revenues within any one of the three most recent fiscal years (provided that the Corporation’s matching of employee charitable contributions will not be included in the amount of the Corporation’s contributions for this purpose).

Where a relationship exists as a result of a director who is a limited partner, a non-managing member or who occupies a similar position in an entity that does business with the Corporation, or who has a shareholding in such entity which is not significant, and who, in each case, has no active role in sales to, purchases from, or in providing services to the Corporation and derives no direct material benefit from same, such relationship shall be considered not to be material.

Mr. Doyle is the Chief Executive Officer of the Corporation and is therefore not independent. Mr. Doyle is also Vice Chairman of Canpotex Limited. The Corporation had sales of approximately $577.1 million to Canpotex Limited in 2005.

Ms. Paliza’s father and brother are executive officers of Fertilizantes Santo Domingo, C. por A (“Fersan”), a fertilizer bulk blender and distributor of agrichemicals based in the Dominican Republic, which is a customer of the Corporation. Although representing less than 1% of the Corporation’s consolidated sales in 2005, sales to Fersan exceeded 2% of Fersan’s 2005 consolidated gross revenues. As such, Ms. Paliza does not meet the Corporation’s categorical independence standards which incorporate in relevant part the NYSE corporate governance rules. Ms. Paliza has no direct or indirect interest in the Corporation’s sales to and purchases by Fersan and all such transactions are completed on normal trade terms. Even though she does not meet the aforementioned independence standards, Ms. Paliza provides a valuable contribution to the Board through her industry knowledge and experience and international business perspective.

In determining the independence of its other directors, the Board evaluated business and other relationships that each director had with the Company. In doing so, it determined as immaterial (i) any relationship falling below the thresholds in 3(a) and not otherwise required to be disclosed pursuant to Items 404(a) or (b) of Regulation S-K under theSecurities

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Exchange Act of 1934 (the“Exchange Act”), (ii) any relationships falling below the threshold in paragraph 3(b) or covered pursuant to paragraph 4 above, and (iii) any relationship between the Corporation and an entity as to which the director in question has no relationship other than a director thereof.

Although disclosure is required pursuant to the regulations of the SEC under theExchange Act, the Board also determined the following relationships relating to Mr. Stromberg to not impair his independence.

Mr. Stromberg was associated with the Saskatchewan law firm Robertson Stromberg Pedersen until June 30, 2005. The Corporation retained Robertson Stromberg Pederson in 2005. Total billings for 2005 did not exceed $150,000 and Mr. Stromberg derived no material benefit therefrom. A son of Mr. Stromberg, David Stromberg, is a director and a major indirect shareholder of Micro Oil Inc. (“Micro Oil”), a privately held process oil blender and supplier based in Saskatoon, Saskatchewan. David Stromberg is also the president of Micro Oil. Another son of Mr. Stromberg, Jeffrey Stromberg, is a shareholder of Micro Oil. In 2005 and 2004, purchases in an aggregate amount of approximately Cdn$1,126,147.78 and Cdn$352,000, respectively, were made by the Corporation from Micro Oil. The 2005 purchases totaled $929,625, based on a 2005 average exchange rate of 1.2114, and the 2004 purchases totaled $270,499 based on 2004 average exchange rate of 1.3013. Micro Oil and the Corporation have also entered into a confidentiality agreement relating to the development of oil processes used by the Corporation.

Purchases from Micro Oil are made in the ordinary course of business. Mr. Stromberg has no current relationship with the Robertson Stromberg Pedersen firm and has no interest in the business of his adult sons. Through his prominence in the Saskatchewan business community and his professional qualifications and experience, Mr. Stromberg has been and continues to be a valued member of the Board. His presence on the Board plays no role in the Corporation’s decisions to transact business with Micro Oil or the Robertson Stromberg Pedersen firm. The Corporation has and will continue to make such decisions on the basis of the best interests of the Corporation.

None of the directors of the Corporation serve together on the boards of directors of other companies.

Compensation/Attendance of Directors

Directors of the Corporation who are not also officers or employees, that is all directors other than Mr. Doyle, (the “outside directors”) are compensated through the cash payment of an annual retainer plus other fees and the grant of Deferred Share Units. In 2003, the Board decided to discontinue granting stock options to directors.

Except as set forth below, each outside director receives from the Corporation a retainer at an annual rate of $50,000, a per diem fee of $1,500 for meetings he or she attends (until July 1, 2005 the annual rate of the retainer was $40,000 and the per diem fee was $1,000) and a travel fee of $500 per day where travel is required on a day or days on which a meeting does not occur. Outside directors receive an additional $10,000 per year if they serve as a chair of a Board Committee ($15,000 in the case of the Audit Committee Chair). As of July 1, 2004, all Audit Committee members receive an additional $5,000 per year, with the exception of the Audit Committee Chair. Each outside director who is a member of a Board Committee receives a per diem fee of $1,500 for meetings he or she attends, provided such meetings are not held the same day as a Board meeting. Outside directors are also reimbursed for expenses incurred in discharging their responsibilities. Effective July 1, 2005, Mr. Howe, as Board Chair, receives an annual retainer of $140,000 (until July 1, 2005, his annual retainer was $110,000), but does not receive per diem or travel fees. Director compensation is established on the advice of independent consultants, with a view to establishing compensation at the median of the applicable Comparator Group (see “Report of the Compensation Committee and Compensation Discussion and Analysis – Compensation Principles”).

Effective November 20, 2001, the Corporation adopted a Deferred Share Unit Plan for Non-Employee Directors (the “Plan”), which entitles non-employee directors to receive discretionary grants of deferred share units (“Deferred Share Units”), each of which has an initial value equal to the market value of a Share at the time of its grant. The Plan also allows the director to defer, in the form of Deferred Share Units, up to 100% of the annual retainer fees and any other fees payable to such director in respect of serving as a director (“Fees”), which would otherwise be payable in cash. The Plan is intended to enhance the Corporation’s ability to attract and retain highly qualified individuals to serve as directors and promote a greater alignment of interests between such directors and the shareholders of the Corporation.

The number of Deferred Share Units credited to the director’s account with respect to Fees that the director elects to allocate to the Plan is determined as of the last trading day of each calendar quarter and is equal to the quotient obtained by dividing (a) the aggregate amount of Fees allocated to the Plan for the relevant calendar quarter by (b) the market value of a Share on such last trading day (determined on the basis of the closing price on the Toronto Stock Exchange (“TSX”) for participants resident in Canada and on the basis of the closing price on the NYSE for all other participants). Deferred Share Units earn dividends in the form of additional Deferred Share Units at the same rate as dividends are paid on Shares.

Each Deferred Share Unit is credited to the account of an individual director and fully vests upon an award, but is distributed only when the director has ceased to be a member

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of the Board or the board of directors of any subsidiary and the director is neither an employee of the Corporation nor of any subsidiary.

At such time, the director will receive a cash payment equal to the market value of a number of Shares purchased on the open market equal to the number of Deferred Share Units recorded in the director’s account (reduced by the amount of applicable withholding taxes). While the Compensation Committee, with Board approval, has the discretion to distribute Shares in lieu of cash, the Committee and Board have determined that all distributions pursuant to the Plan will be made in cash.

On July 1, 2004, the Board determined that the value of annual discretionary Deferred Share Unit grants be established at $55,000 for outside directors, with the exception of the Board Chair, Mr. Howe, whose annual value of Deferred Share Unit grants is set at $140,000. On November 16, 2005, each non-employee director received a discretionary grant of 676 Deferred Share Units, with the exception of the Board Chair, Mr. Howe, who was granted 1,721 Deferred Share Units.

The Board believes that the economic interests of directors should be aligned with those of shareholders. To achieve this, all directors are expected to hold Shares and Deferred Share Units in the Corporation. By the time a director has served on the Board for ten months, he or she must own a minimum of 2,000 Shares. By the time a director has served on the Board for three years, he or she must own Shares and/or Deferred Share Units with a value at least five times the annual retainer paid to directors. The Board may make exceptions to this standard where, as a result of the unique financial circumstances of a director, compliance would result in an unacceptable hardship. As at February 27, 2006, all of the Corporation’s directors were in compliance with the minimum shareholding requirements described above.

Directors also participate in the Corporation’s Group Life insurance coverage (Cdn$50,000), Accidental Death and Dismemberment coverage (Cdn$100,000), Business Travel Accidental coverage (Cdn$250,000) and Supplemental Business Travel Medical coverage ($250,000 per calendar year).

The following table sets forth compensation earned by the individuals who served as directors of the Corporation during fiscal 2005.

Remuneration of Directors

for the 12-month period ended December 31, 2005



	Annual Retainer ($)				Meeting and Other Fees ($)								Percentage
													of Total
			Deferral to				Deferral to		Annual Grant of				Remuneration
			Deferred Share				Deferred Share		Deferred Share		Total		in Deferred Share
Director	Cash		Units		Cash		Units		Units ($)		Remuneration ($)		Units

Frederick J. Blesi	$	–	$	45,000.00	$	38,000.00	$	–	$	55,000.00	$	138,000.00		72.46	%

William J. Doyle	$	–	$	–	$	–	$	–	$	–	$	–		–

John W. Estey	$	–	$	45,000.00	$	–	$	36,500.00	$	55,000.00	$	136,500.00		100.00

Wade Fetzer III	$	45,000.00	$	–	$	25,500.00	$	–	$	55,000.00	$	125,500.00		43.82

Dallas J. Howe	$	62,500.00	$	62,500.00	$	–	$	–	$	140,000.00	$	265,000.00		76.42

Alice D. Laberge	$	33,750.00	$	11,250.00	$	38,500.00	$	–	$	55,000.00	$	138,500.00		47.83

Jeffrey J. McCaig	$	–	$	45,000.00	$	37,000.00	$	–	$	55,000.00	$	137,000.00		72.99

Mary Mogford	$	45,000.00	$	–	$	49,000.00	$	–	$	55,000.00	$	149,000.00		36.91

Paul J. Schoenhals	$	30,015.00	$	14,985.00	$	24,345.50	$	12,154.50	$	55,000.00	$	136,500.00		60.18

E. Robert Stromberg, Q.C.	$	36,000.00	$	9,000.00	$	23,200.00	$	5,800.00	$	55,000.00	$	129,000.00		54.11

Jack G. Vicq	$	45,000.00	$	–	$	45,000.00	$	–	$	55,000.00	$	145,000.00		37.93

Elena Viyella de Paliza	$	27,000.00	$	18,000.00	$	–	$	28,500.00	$	55,000.00	$	128,500.00		78.99

Total	$	324,265.00	$	250,735.00	$	280,545.50	$	82,954.50	$	690,000.00	$	1,628,500.00		62.86	%

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The following tables provide a summary of Board and Committee meetings held during fiscal 2005 and attendance thereat.

Summary of Board and Committee Meetings Held

for the 12-month period ended December 31, 2005



Board of Directors			9
Audit Committee			9
Compensation Committee			6
Corporate Governance and Nominating Committee			6
Executive Committee			0
Safety, Health and Environment Committee			5

Total number of meetings held			35

Pursuant to the “PotashCorp Governance Principles”, the Board meets in executive session, with only independent directors present, before and after each regularly scheduled meeting of the Board. The presiding officer at the executive session is Dallas J. Howe, the Board Chair, or, in his absence, a director selected by majority vote of those present. Sessions are of no fixed duration and participant directors are encouraged to raise and discuss any issues of concern.

Summary of Attendance of Directors

for the 12-month period ended December 31, 2005

Board

Committee

meetings

Director

attended

Frederick J. Blesi

9 of 9

15 o

f 15

William J. Doyle

9 of 9

n/a⁽¹⁾

John W. Estey

9 of 9

11 o

f 11

Wade Fetzer III

9 of 9

12 o

f 12

Dallas J. Howe

9 of 9

6 o

f 6⁽²⁾

Alice D. Laberge

9 of 9

14 o

f 14

Jeffrey J. McCaig

9 of 9

15 o

f 15

Mary Mogford

9 of 9

15 o

f 15

Paul J. Schoenhals

9 of 9

11 o

f 11

E. Robert Stromberg, Q.C.

9 of 9

11 o

f 11

Jack G. Vicq

8 of 9

9 o

f 9

Elena Viyella de Paliza

9 of 9

5 o

f 5


	(1) Mr. Doyle was a member of only the Executive Committee, which did not meet in 2005. However, upon invitation of the applicable Committees, he did attend all or a portion of many of the Committee meetings held.

	(2) In addition to the Committees of which he is a member, Mr. Howe, as Board Chair, regularly attends other Committee meetings as well.

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Appointment of Auditors

Proxies solicited hereby will be voted to reappoint the firm of Deloitte & Touche LLP, the present auditors, as auditors of the Corporation to hold office until the next annual meeting of shareholders, unless the shareholder signing such proxy specifies otherwise. The affirmative vote of a majority of Shares voted on such matter is required to reappoint the firm of Deloitte & Touche LLP as auditors of the Corporation. Since the Corporation’s initial public offering in 1989, Deloitte & Touche LLP (or its predecessors) have been the Corporation’s auditors. A representative of Deloitte & Touche LLP is expected to attend the Meeting. At that time the representative will have the opportunity to make a statement if he or she desires and will be available to respond to appropriate questions.

For the years ended December 31, 2005 and December 31, 2004, Deloitte & Touche LLP received the following fees:


	Year ended December 31,

	2005		2004

Audit Fees		$2,281,000		$2,301,000
Audit Related Fees		201,000		165,000
Tax Fees		32,000		79,000
All Other Fees		3,000		121,000

Audit Fees

Deloitte & Touche LLP billed the Corporation $2,281,000 and $2,301,000 for 2005 and 2004, respectively, for the following audit services (i) audit of the annual consolidated financial statements of the Corporation for the fiscal years ended December 31, 2005 and 2004; (ii) review of the interim financial statements of the Corporation included in quarterly reports on Form 10-Q for the periods ended March 31, June 30 and September 30, 2005 and 2004; (iii) audits of individual statutory financial statements; and (iv) the provision of consent letters. The amounts billed for 2005 and 2004 were significantly impacted by the requirements of Section 404 of theSarbanes-Oxley Act of 2002.

Audit-Related Fees

Deloitte & Touche LLP billed the Corporation $201,000 and $165,000 for 2005 and 2004, respectively, for the following services (i) accounting consultations regarding financial accounting and reporting standards; and (ii) employee benefit plan audits.

Tax Fees

Deloitte & Touche LLP billed the Corporation $32,000 and $79,000 for 2005 and 2004, respectively, for the following services (i) tax compliance; (ii) tax planning; and (iii) tax advice, including minimizing tax exposure or liability.

All Other Fees

Deloitte & Touche LLP billed the Corporation $3,000 and $121,000 for 2005 and 2004, respectively, for provision of risk and knowledge datasets and implementation of a risk control tracking system.

Pre-Approval Policy for External Auditor Services

The Audit Committee monitors and reviews the independence of its auditors on an on-going basis. In addition, the Committee has adopted processes for the pre-approval of engagements for services of its external auditors.

The Audit Committee’s policy requires pre-approval of all audit and non-audit services provided by the external auditor. The policy identifies three categories of external auditor services and the pre-approval procedures applicable to each category, as follows:


(1)	Audit and audit-related services – these are identified in the annual Audit Service Plan presented by the external auditor and require annual approval. The Audit Committee monitors the audit services engagement at least quarterly.

(2)	Pre-approved list of non-audit services – non-audit services which are reasonably likely to occur have been identified and receive general pre-approval of the Audit Committee, and as such do not require specific pre-approvals. The term of any general pre-approval is 12 months from approval unless otherwise specified. The Audit Committee annually reviews and pre-approves the services on this list.

(3)	Other proposed services – all proposed services not categorized above are brought forward on a case-by-case basis and specifically pre-approved by the Chair of the Audit Committee, to whom pre-approval authority has been delegated.

All fees paid to the independent auditors for 2005 were approved in accordance with the pre-approval policy.

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Adoption of 2006 Performance Option Plan

2006 Performance Option Plan

On February 27, 2006, the Board adopted a new performance option plan (the “2006 Performance Option Plan”), subject to the approval of the 2006 Performance Option Plan by the Corporation’s shareholders at the Meeting. If approved, the 2006 Performance Option Plan will be deemed effective as of January 1, 2006 and will permit the grant of options to purchase up to 1,400,000 Shares to individual officers and employees of the Corporation and its subsidiaries. Non-employee directors and other non-employee contractors and third party vendors will not be eligible to participate in the 2006 Performance Option Plan.

Options to purchase Shares may be granted under the terms of the 2006 Performance Option Plan only during 2006 and no options will be granted prior to the Meeting. Unless sooner terminated as provided therein, the 2006 Performance Option Plan will terminate on January 1, 2007, although the terms of the plan will continue to govern options granted thereunder prior to termination.

The 2006 Performance Option Plan will be administered by the Compensation Committee or any other Board Committee designated by the Board. A copy of the 2006 Performance Option Plan is attached hereto as Appendix C. This description of the 2006 Performance Option Plan is qualified, in its entirety, by the terms of the attached plan document.

If approved, the 2006 Performance Option Plan will result in up to 1.35% (as at February 27, 2006) of the outstanding share capital of the Corporation being available for issue pursuant to the exercise of options granted under the 2006 Performance Option Plan. The aggregate number of Shares in respect of which stock options may be granted to any one person pursuant to the 2006 Performance Option Plan and which remain outstanding may not at any time exceed 300,000 Shares, representing 0.29% (as at February 27, 2006) of the outstanding share capital of the Corporation.

Under the terms of the 2006 Performance Option Plan, options will have a term of ten years and will vest at the end of the three-year performance cycle ending December 31, 2008, subject to the Corporation’s achievement of the performance criteria described in the 2006 Performance Option Plan. The performance metrics and vesting scale have been designed in accordance with the Corporation’s compensation philosophy. See “Report of the Compensation Committee and Compensation Discussion and Analysis”. In general, options will vest as determined by a schedule that references the Corporation’s performance during the performance cycle as measured by reference to cash flow return on investment and weighted average cost of capital. Any options that do not become vested will terminate at the end of the performance cycle.

The number of options granted to each individual optionee will be targeted to deliver total compensation in the 75^th percentile of the Comparator Group for corporate performance, based on cash flow return on investment and weighted average cost of capital, above the 75^th percentile of the Dow Jones U.S. Basic Materials Index (“DJUSBMI”). Similarly, for corporate performance in the 50^th percentile of the DJUSBMI, the number of options granted will be targeted to deliver total compensation in the 50^th percentile of the Comparator Group.

It is anticipated that there will be approximately 220 participants in the 2006 Performance Option Plan. Following shareholder approval of the 2006 Performance Option Plan at the Meeting, a determination will be made as to the number of options to be granted to executive officers and other participants, which options will be granted in accordance with the criteria described below.

The option price for any option granted under the 2006 Performance Option Plan to any optionee shall be fixed by the Board when the option is granted and, for optionees resident in the United States and any other optionees designated by the Board, the option price shall not be less than the fair market value of a Share at such time, which shall be deemed to be the closing price per Share on the NYSE on the last trading day immediately preceding the day the stock option is granted. For all other optionees, the option price shall be deemed to be the closing price per Share on the TSX on the last trading day immediately preceding the day the stock option is granted. In either case, if the Shares did not trade on such exchange on such day, the option price shall be the closing price per Share on such exchange on the last day on which the Shares traded on such exchange prior to the day the stock option is granted.

The 2006 Performance Option Plan requires all options to be subject to provisions to the effect that:

(a)

if the employment of an optionee as an officer or employee of the Corporation or a subsidiary terminates by reason of his or her death, or if an optionee who is a retiree pursuant to paragraph (b) below dies during the 36-month period following retirement, the legal personal representatives of the optionee will be entitled to exercise any unexercised vested options, including such stock options that may vest after the date of death, during the period ending at the end of the twelfth calendar month following the calendar month in which the optionee dies, failing which exercise the stock options will terminate;


(b)	subject to the terms of paragraph (a) above, if the employment of an optionee as an officer or employee of the Corporation or a subsidiary terminates by reason of retirement in accordance with the then prevailing

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Page 16


	retirement policy of the Corporation or subsidiary, the optionee will be entitled to exercise any unexercised vested stock options, including such stock options that may vest after the date of retirement, during the period ending at the end of the 36^th month following the calendar month in which the optionee retires, failing which exercise the stock options will terminate;

(c)

if the employment of an optionee as an officer or employee of the Corporation or a subsidiary terminates for any reason other than as provided in paragraphs (a) or (b) above, the optionee will be entitled to exercise any unexercised vested stock options, to the extent vested and exercisable at the date of such event, during the period ending at the end of the calendar month immediately following the calendar month in which the event occurs, failing which exercise the stock options will terminate; and


(d)	each stock option is personal to the optionee and is not assignable, except (i) as provided in paragraph (a) above, and (ii) at the election of the Board, a stock option may be assignable to the spouse, children and grandchildren of the original optionee and to a trust, partnership or limited liability company, the entire beneficial interest of which is held by one or more of the foregoing.

Nothing contained in paragraphs (a), (b) or (c) above shall extend the period during which a stock option may be exercised beyond its ten-year term or any earlier date on which it is otherwise terminated in accordance with the provisions of the 2006 Performance Option Plan.

If a stock option is assigned pursuant to paragraph (d)(ii) above, the references in paragraphs (a), (b) and (c) above to the termination of employment or death of an optionee shall not relate to the assignee of a stock option but shall relate to the original optionee. In the event of such assignment, legal personal representatives of the original optionee shall not be entitled to exercise the assigned stock option, but the assignee of the stock option or the legal personal representatives of the assignee may exercise the stock option during the applicable specified period.

The Board may amend or discontinue the 2006 Performance Option Plan at any time but no such amendment may increase the aggregate maximum number of Shares that may be subject to stock options granted under the 2006 Performance Option Plan, change the manner of determining the minimum option price, extend the option term under any option beyond ten years or, without the consent of the holder of the option, alter or impair any option previously granted to an optionee under the 2006 Performance Option Plan; and, provided further, that, without the prior approval of the Corporation’s shareholders, stock options issued under the 2006 Performance Option Plan shall not be repriced, replaced or regranted through cancellation, or by lowering the option price of a previously granted stock option. In the event of certain transactions affecting the capitalization of the Corporation, including a merger, the Board may make such adjustments in the number or option price of outstanding options or the number of Shares available for grant and other authorized limits under the 2006 Performance Option Plan it deems appropriate to reflect such transaction. In the event of change of control (as defined in the 2006 Performance Option Plan), all unvested options then outstanding will become fully vested.

A participant in the 2006 Performance Option Plan who is employed and resident in Canada will be deemed to receive a benefit from employment in the year he or she exercises options under the 2006 Performance Option Plan. One-half of the difference between the exercise price and the market price of the Shares at the time of exercise, multiplied by the number of Shares over which options are exercised, will be included in the participant’s taxable income in the year of exercise. If the participant so elects, and subject to certain limitations, taxation of the said benefit may be deferred from the year of exercise until the earliest of the year the participant disposes of the Shares, dies or ceases to be resident in Canada for tax purposes. The participant will have a cost base in the optioned Shares equal to their market value on the date of exercise for purposes of computing any capital gain or capital loss on any subsequent disposition of the Shares. The Corporation may not take any tax deduction in respect of the benefits deemed to be received by participants under the 2006 Performance Option Plan in Canada.

All of the options granted under the 2006 Performance Option Plan will be treated as non-qualified stock options for U.S. federal income tax purposes. A participant in the 2006 Performance Option Plan who is employed and resident in the U.S. will not be deemed to receive any income at the time an option is granted, nor will the Corporation’s applicable subsidiary be entitled to a deduction at that time. However, when any part of an option is exercised, the participant will be deemed to have received ordinary income in an amount equal to the difference between the exercise price of the option and the fair market value of the Shares received on the exercise of the option. The Corporation’s applicable subsidiary will be entitled to a tax deduction in an amount equal to the amount of ordinary income realized by such participants. Upon any subsequent sale of the Shares acquired upon the exercise of an option, any gain (the excess of the amount received over the fair market value of the Shares on the date ordinary income was recognized) or loss (the excess of the fair market value of the Shares on the date ordinary income was recognized over the amount received) will be a long-term capital gain or loss if the sale occurs more than one year after such date of recognition and otherwise will be a short-term capital gain or loss.

Grants under the 2006 Performance Option Plan shall be made after shareholder approval is obtained and during the 2006 fiscal year.

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In order for the 2006 Performance Option Plan to become effective, the resolution to approve the 2006 Performance Option Plan must be passed by a majority of the votes cast by the shareholders who vote in respect of the resolution.

UNLESS A PROXY SPECIFIES THAT THE SHARES IT REPRESENTS SHOULD BE VOTED AGAINST THE RESOLUTION TO APPROVE THE 2006 PERFORMANCE OPTION PLAN, THE PROXYHOLDERS NAMED IN THE ACCOMPANYING FORM OF PROXY INTEND TO VOTE FOR THE RESOLUTION.

Securities Authorized for Issuance Under Equity Compensation Plans

The Corporation has three other stock option plans. On May 5, 2005, the Corporation’s shareholders approved the 2005 Performance Option Plan under which the Corporation was permitted, after February 28, 2005 and before January 1, 2006, to grant options for the issuance of up to 1,200,000 Shares pursuant to the exercise of the options. As at January 1, 2006, options to acquire 1,186,000 Shares had been granted and were outstanding under the 2005 Performance Option Plan. Grants under the 2005 Performance Option Plan were made during fiscal year 2005 only. The material terms of the 2005 Performance Option Plan are described in the “Report of the Compensation Committee and Compensation Discussion and Analysis – Long-Term Incentives (Stock Options)”. Additional information regarding the 2005 Performance Option Plan, including the full text of the plan, can be found in the Corporation’s Management Proxy Circular for the fiscal year ended 2004. No amendments with respect to the 2005 Performance Option Plan have been adopted in the last fiscal year.

The Corporation also has an existing Stock Option Plan – Officers and Employees with 148,176 options remaining available for grant as at February 27, 2006 (148,176 at December 31, 2005) and a Stock Option Plan – Directors with 28,600 options remaining available for grant as at February 27, 2006 (28,600 at December 31, 2005). The material terms of the Stock Option Plan – Officers and Employees and the Stock Option Plan – Directors are described in the “Report of the Compensation Committee and Compensation Discussion and Analysis – Long-Term Incentives (Stock Options)”. No amendments with respect to the Stock Option Plan – Officers and Employees and the Stock Option Plan – Directors have been adopted in the last fiscal year.

The following table provides information about securities that may be issued under the Corporation’s existing equity compensation plans, as of December 31, 2005 and February 27, 2006:

Equity Compensation Plan Information

(a) Number of Shares

remaining available for

to be issued

(b) Weighted-average

future issuance under

upon exercise of

exercise price of

equity compensation

outstanding options,

plans (excluding Shares

Plan Category

warrants and rights

reflected in column (a))

December 31, 2005

Equity compensation plans approved by shareholders

5,081,756

⁽¹⁾

50.46

190,776

Equity compensation plans not approved by shareholders

n/a

February 27, 2006

Equity compensation plans approved by shareholders

5,023,569

⁽²⁾

51.02

193,276

Equity compensation plans not approved by shareholders

n/a


(1)	Of this amount, 1,186,000 options were outstanding pursuant to the 2005 Performance Option Plan, 3,711,156 options were outstanding pursuant to the Stock Option Plan – Officers and Employees and 184,600 options were outstanding pursuant to the Stock Option Plan – Directors.

(2)	Of this amount, 1,183,500 options were outstanding pursuant to the 2005 Performance Option Plan, 3,660,469 options were outstanding pursuant to the Stock Option Plan – Officers and Employees and 179,600 options were outstanding pursuant to the Stock Option Plan – Directors.

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Corporate Governance

In accordance with NI 58-101, the Corporation annually discloses information relating to its system of corporate governance. Details of the Corporation’s corporate governance practices are described in Appendix A to this Management Proxy Circular. Furthermore, in accordance with the requirements of NI 58-101, the text of the Corporation’s Board of Directors Charter is attached hereto as Appendix D. In addition, the recent activities of certain of the Committees of the Board are described below in the Committee reports. The “PotashCorp Governance Principles”, described in part below, the Board of Directors Charter and the Board Committee charters are also available on the Corporation’s website, www.potashcorp.com, and in print to any shareholder who requests a copy from the Corporate Secretary of the Corporation.

As a Canadian reporting issuer with securities listed on the TSX and the NYSE, the Corporation has in place corporate governance practices that are not only consistent with the requirements of both of those stock exchanges but in many cases go beyond those requirements. The Corporation is also in compliance with applicable rules adopted by the Canadian Securities Administrators through the Canadian securities regulatory authorities and the SEC.

Report of the Audit Committee

The Corporation has a standing Audit Committee. The Board has determined that each of the following directors, who served as members of the Audit Committee during the year ended December 31, 2005, is independent according to the Board’s independence standards as set out in the “PotashCorp Governance Principles” (which is available on the Corporation’s website), NI 58-101, applicable rules of the SEC and the corporate governance rules of the NYSE. See also “Nominees for Election to the Board of Directors – Director Independence and Other Relationships”.

Jack G. Vicq (Chair)

Frederick J. Blesi

Alice D. Laberge

Jeffrey J. McCaig

Mary Mogford

The Board has determined that Mr. Vicq and Ms. Laberge qualify as “audit committee financial experts” under the rules of the SEC and thereby have the requisite accounting and/or related financial management expertise required under the rules of the NYSE. In addition, the Board, in its business judgment, has determined that each member of the Audit Committee is financially literate.

The purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities for (i) the integrity of the Corporation’s financial statements, (ii) the Corporation’s compliance with legal and regulatory requirements, (iii) the qualification and independence of the Corporation’s independent auditors, and (iv) the performance of the Corporation’s independent auditors. In accordance with the Audit Committee Charter adopted by the Board, the Audit Committee has responsibility for the oversight of the Corporation’s financial reporting and audit processes and related internal controls on behalf of the Board. During the fiscal year ended December 31, 2005, the Committee met 9 times.

In overseeing the audit process, the Audit Committee obtained from the independent auditors their letter dated February 14, 2006, as required by the Independent Standards Board Standard No. 1, describing all relationships between the auditors and the Corporation that might bear on the auditors’ independence and the auditors’ judgment that they are, in fact, independent and discussed with the auditors the disclosures therein. The Audit Committee also reviewed the organizational structure, procedure and practices that support the objectivity of the internal audit department and reviewed and approved the Internal Audit Department Charter. The Audit Committee reviewed with both the independent and the internal auditors their audit plans, audit scope and identification of audit risks. The Audit Committee discussed, with and without management present, the results of the independent auditors’ communications required by generally accepted auditing standards, including those described in Statement on Auditing Standards No. 61, as amended, “Communication with Audit Committees”. The Committee also discussed the results of the internal audit examinations.

In meetings with financial management, internal audit and the independent auditors, the Audit Committee reviewed and discussed quarterly interim financial information prior to the earnings release for the applicable quarter. The Audit Committee also reviewed and approved the quarterly MD&As.

The Audit Committee reviewed and discussed the MD&A and the audited financial statements of the Corporation as of and for the fiscal year ended December 31, 2005, with management and the independent auditors, including the quality, not just the acceptability, of the Corporation’s financial reporting practices and the completeness and clarity of the related financial disclosures. Management is responsible for the preparation of the Corporation’s financial statements and the independent auditors are responsible for auditing those financial statements.

The Audit Committee reviewed the processes involved in evaluating the Corporation’s internal control environment and the Audit Committee also oversaw and monitored the 2005 compliance process related to the certification and attestation requirements of Section 404 of theSarbanes-Oxley Act of 2002.

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Based on the above-mentioned review and discussions with management and the independent auditors, the Audit Committee recommended to the Board that the audited consolidated financial statements and MD&A be included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, for filing with the SEC. The Audit Committee also recommended the reappointment, subject to shareholder approval, of the independent auditors.

The Audit Committee reviews the Corporation’s Disclosure Controls and Procedures on an annual basis. In addition, in November 2005, it reviewed and updated its Committee Charter, a copy of which is attached as Appendix E hereto. The Committee has established procedures for:


•	the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and

•	the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

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

Report of the Compensation Committee and Compensation Discussion and Analysis

Composition of the Compensation Committee

The Corporation has a standing Compensation Committee, referred to as the “Committee” hereinafter in this report. The Board has determined that each of the following directors who served as members of the Committee during the year ended December 31, 2005, is independent according to the Board’s independence standards as set out in the “PotashCorp Governance Principles” (which is available on the Corporation’s website), NI 58-101, applicable rules of the SEC and the corporate governance rules of the NYSE. See also “Nominees for Election to the Board of Directors – Director Independence and Other Relationships”.

John W. Estey (Chair)

Wade Fetzer III

Jeffrey J. McCaig

Paul J. Schoenhals

Compensation Committee Report on Executive Compensation

The Committee is, at present, composed of four independent directors. The Committee held 6 meetings in the last fiscal year.

The Committee is charged with formulating and making recommendations to the Board in respect of compensation issues relating to directors and senior officers of the Corporation. The Committee also makes recommendations regarding the Corporation’s stock option plans and administers the Short- and Medium-Term Incentive plans, each in accordance with its terms which are described later in this report. Prior to January 1, 2006, the Corporation administered a Long-Term Incentive Plan, the terms of which are substantially the same as the current Medium-Term Incentive Plan. The name of the plan was changed principally to distinguish it from our option plans which, given their ten-year life, are more appropriately considered long-term incentives.

The Committee reviews and makes recommendations regarding the general merit increase budget for salaried and non-bargaining hourly employees and has general oversight of employee benefit programs. In addition, the Committee, in consultation with the Chief Executive Officer, considers and reports to the Board regarding employee or executive succession matters.

Compensation Structure and Policies

The Corporation designates executive compensation policies, as described more fully below, to attract and retain qualified executives by providing compensation packages which are competitive within the marketplace and which compensate executives in a manner that encourages individual performance consistent with shareholder expectations.

Compensation Principles


•	Provide emphasis on performance-based compensation by maintaining total cash compensation levels (salary and annual short-term incentives) at the median (50^th percentile) of the relevant comparator group with the opportunity to achieve above median compensation through the medium-term and long-term incentive plans (performance units and stock options) by achieving above median company performance.

•	External competitive compensation comparisons prepared by independent compensation consultants currently consist of (i) a group of 23 publicly traded U.S. companies selected on the basis of a number of factors, including similar industry characteristics and market capitalization (the “Comparator Group”), and (ii) additional executive compensation survey information gathered by three independent compensation consulting services consisting of U.S.-based company data (the “Additional Surveys”).

•	In order to determine the median for the purpose of total cash compensation comparisons, regression based upon sales size is applied to the salaries and annual short-term incentive targets of the Comparator Group and the Additional Surveys for each position studied.

•	The opportunity to earn total compensation above the median is provided through medium-term and long-term incentive plans. These plans are designed with measures (total shareholder return and internal performance measures that have been linked historically with total

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	shareholder return) that will require above median company performance relative to other basic materials companies in order to deliver above median total compensation. The total shareholder return of the DJUSBMI has been established as a benchmark for determining the relative performance of the Corporation.

•	In order to determine the median and upper quartile for purposes of total compensation (salary, annual short-term incentives, medium-term incentives and long-term incentives), the range between competitive levels based upon comparative sales size regression and comparative market capitalization regression is utilized.

•	Establish the value of retirement and welfare benefits at the median of comparable companies.

The Committee engaged Hewitt Associates, executive compensation consultants, during 2005 for research, survey information and design expertise in reviewing certain executive and director compensation programs. This work has included director pay analysis, performance stock option plan design and executive compensation analysis. Also in 2005, the Committee engaged Watson Wyatt executive compensation consultants to provide input and a second opinion on the competitiveness of program design and award values. Hewitt Associates has historically performed other human resources consulting services for the Corporation, including actuarial consulting, employee benefits design, finance consulting and recordkeeping services. The Committee has adopted the corporate governance best practice of retaining independent executive compensation consulting services and conducted a process during the summer of 2005 to select an independent consulting firm to replace Hewitt Associates as executive compensation consultant to the Committee. The Committee evaluated four consulting firms and selected Watson Wyatt as the replacement consultant, based in part on the positive experience in delivering the review services earlier in the year, on their expertise in both Canadian and U.S. compensation regulation and practices and on their depth of available compensation consulting services. Watson Wyatt does not perform any other consulting services for the Corporation. The Committee will continue to use Hewitt Associates’ proprietary Total Compensation Measurement data services to provide specific competitive data for selected executive and director positions for some period of transition, but this information has been and will continue to be supplemented with other compensation survey data available through Watson Wyatt consulting.

Elements of Executive Compensation

Executive compensation consists of four main elements: base salary, short-term incentives, performance units issued under the Medium-Term Incentive Plan which measures a performance period of three years, and stock options issued as long-term incentives. These are described in the table below.

Compensation

Performance

Element

Form

Eligibility

Period

Determination

Base salary

Cash

All salaried employees

Annual

• For the executive group, base salary targets are set at the median of the Comparator Group and Additional Surveys, adjusted to reflect individual performance and internal equity.

Short-term incentives

Cash

All executives and other selected employees (approximately 218 in 2005). This Plan has been extended to most salaried staff employees beginning in 2006.

1 year

• Awards are based on the achievement of predetermined goals for corporate performance or a combination of corporate and operating group performance.

• Targets have been established at the median of the Comparator Group and Additional Surveys.

• Individual awards can be adjusted (± 20%) to recognize individual performance, provided the total of the adjusted awards proximates the total of the awards at mid-point.

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Compensation

Performance

Element

Form

Eligibility

Period

Determination

Medium-Term Incentive Plan

Performance Share Units

All executives and senior management (approximately 65 individuals)

3 years

• Units issued at a price equal to the average market price of the Shares at award date (January 1, 2006).

• Each award vests and is paid out at the end of the three-year performance period (December 31, 2008) in relation to a vesting schedule whereby ¹/2 of the units are vested in accordance with corporate TSR targets and ¹/2 of the units are vested in accordance with corporate TSR relative to a selected competitive group’s TSR.

• The value at payout is based on the number of vested units multiplied by the 30-day average Share price at the end of the performance period.

Long-term incentives

Performance Stock Options

All executives and other selected managers (approximately 215 individuals)

3 years (vesting)

10 years (option term)

• The 2005 and 2006 Performance Option Plans incorporate performance vesting.

• Based on Share price appreciation during the 10-year term.

The Corporation does not have any non-qualified deferred compensation arrangements in place for management.

Salary

The Corporation has established a system of tiered salary levels for senior executives (i.e. vice president and above) of the Corporation. Senior executive positions are assigned to an appropriate salary tier, considering the position’s internal value as well as external comparisons to relevant positions in the Comparator Group and Additional Surveys. The Committee generally establishes salary guidelines at levels that approximate the median (the 50^th percentile), adjusted through a regression analysis utilizing sales size. Individual executive salaries for those executives that report directly to the Chief Executive Officer are subject to approval by the Chief Executive Officer and the Committee. The Chief Executive Officer’s salary is subject to approval by the Committee and the Board.

Short-Term Incentive Compensation

The Corporation’s Short-Term Incentive Plan is intended to aid in developing strong corporate management by providing annual financial incentives to eligible employees to achieve success. The plan presently provides for incentive awards based on an individual’s performance, position with the Corporation and the financial results of the Corporation. In 2005, there were about 218 participants in this plan. Eligible positions are assigned an incentive award range with a target expressed as a percentage of salary. The Corporation’s performance as determined by cash flow return (defined in the plan) in relation to a pre-established target provides a corporate measure of achievement expressed as a percentage and applied to the potential target award. Individual awards are also adjusted in accordance with individual performance and such other factors as the Committee deems appropriate. For certain participants employed at operating facilities, one-half of the award is based upon achievement of the corporate performance target and one-half is based upon achievement of annually determined operating facility targets, including safety, environmental performance and productivity.

Under the terms of the plan, generally no payments are made if the cash flow return is less than 50% of the target set by the Board for that year. For senior executives, which include the Named Executive Officers, incentive awards can range from 15% to 200% of salary, depending upon position level, actual cash flow return as compared to target return above the minimum threshold requirement, and subject to adjustment (± 20%) based on the executive’s performance and such other factors as the Committee deems appropriate, provided the total of the adjusted awards proximates the total of the awards at mid-point.

Effective for the 2006 plan year, the Corporation’s Short-Term Incentive Plan has been extended to most salaried staff employees. The purpose is to tie compensation more directly to corporate performance and support initiatives to have motivated and productive employees that support corporate goals. Furthermore, an extensive study of cash compensation was conducted and indicated that competitive practice also supports extending performance-based pay at these levels of the Corporation.

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Medium-Term Incentive Plan

The Corporation’s Medium-Term Incentive Plan is intended to award senior executives and other key employees for superior performance over a three-year measurement period and for their continued contributions to the success of the Corporation. The performance objectives under the plan are designed to further align the interests of executives and key employees with those of shareholders by linking the vesting of awards to the total return to shareholders over the three-year performance period beginning January 1, 2006 and ending December 31, 2008 (called Total Shareholder Return or “TSR”). TSR measures the capital appreciation in the Shares, including dividends paid over the performance period, and thereby simulates the actual investment performance of the Shares.

A participant is awarded a number of units under the Medium-Term Incentive Plan, generally based on the participant’s salary at the beginning of the performance period (multiplied by three), target award percentage and the Share price at the beginning of the performance period. The target award percentages range from 20% to 70%, depending upon the executive’s position with and potential for contribution to the success of the Corporation.

Under the Medium-Term Incentive Plan, vesting of one-half of the units is based on increases in the TSR over the three-year performance period ending December 31, 2008. Vesting of the remaining one-half of the units is based on the extent to which the TSR matches or exceeds the TSR of the common shares of a group of peer companies over the performance period. The peer group of companies consists of those companies that are included in the DJUSBMI.

Participants generally are required to continue in a qualifying position with the Corporation throughout the performance period as one of the conditions to vesting. However, if a participant’s employment terminates earlier due to the participant’s retirement, disability or death or the Corporation terminates a participant’s employment without just cause, the participant will be entitled to a cash payment in settlement of a pro rata number of units, with vesting determined based on the achievement of performance objectives as of the date of termination. A participant who resigns or whose employment is terminated for just cause forfeits all rights to any units granted under the plan.

Vested units are settled in cash based on the average Share price in the last 30 trading days at the end of the performance period. However, the Share price used to determine the cash payout in settlement of a vested unit may not exceed 300% of the market value of a Share as at the commencement of a performance cycle. Depending on the extent to which the performance objectives are achieved, an amount ranging from 0% to 150% of the units granted under the Medium-Term Incentive Plan may become vested. Achievement of all target performance objectives entitles an eligible executive to a payout of 100% of the units awarded under the plan. The target performance objective for the one-half of the units based on total TSR is a TSR of 30% over the performance period. The target performance objective for the remaining units is to outperform the peer group index by 5% over the performance period. A maximum of 150% of units may become vested if performance exceeds target. For a corporate TSR of 50% or more, one-half of the units will vest at 150%. For TSR performance that exceeds the peer group by 10% or more, one-half of the units will vest at 150%. No units will vest if none of the minimum performance objectives are achieved. The minimum performance requirement for the units based on total TSR is a positive TSR. The minimum performance requirement for the remaining units is for the TSR to have matched the peer group index.

Long-Term Incentives (Stock Options)

Stock Option Plan – Officers and Employees and Stock Option Plan – Directors

The November 20, 2003 grant was the last full grant made under the Stock Option Plan – Officers and Employees (the “Officers and Employees Plan”) described immediately below. See the 2005 and 2006 Performance Option Plans for a description of the Corporation’s newer plans for officers and employees. In addition, options have not been granted under the Stock Option Plan – Directors (the “Directors Plan”) since 2002. Under both the Officers and Employees Plan and the Directors Plan, the aggregate number of Shares subject to options to any single optionee may not at any time exceed 5% of the issued and outstanding Shares (on a non-diluted basis). Beginning in the fourth quarter of 2003, the Corporation began to expense stock options.

As at February 27, 2006, options for a total of 3,660,469 Shares had been granted and were outstanding under the Officers and Employees Plan, representing approximately 3.53% of the total number of Shares outstanding. Options were granted at 100% of market value at the date of the grant, become exercisable over two years (or earlier in the event of a “change of control”, as defined in the Officers and Employees Plan) and expire after ten years. 148,176 options are still available for grant under the Officers and Employees Plan.

If the employment of an optionee terminates by reason of his or her death or if a retired optionee dies, his or her legal personal representatives will be entitled to exercise any unexercised options, including options that may vest after the date of death, at any time until the end of the twelfth calendar month following the calendar month in which the optionee dies, failing which the options terminate. Unless the Board at the time of the grant of an option provides otherwise, if the employment of an optionee terminates by reason of retirement in accordance with the applicable retirement policy, the optionee is entitled to exercise any options, including options that vest after the date of retirement, until the expiry date of such options or the date on which such options are otherwise terminated in accordance with the

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provisions of the Officers and Employees Plan, failing which the options terminate. If the employment of an optionee terminates, for any other reason, the optionee will be entitled to exercise unexercised vested options, to the extent exercisable at the date of such event, at any time until the end of the calendar month immediately following the calendar month in which the event occurs, failing which exercise the options terminate.

Options granted under the Officers and Employees Plan are not assignable, except where the optionee’s employment terminates by reason of his or her death or if a retired optionee dies, provided that an option may be assigned to the spouse, children and grandchildren of the original optionee and to a trust, partnership or limited liability company, the entire beneficial interest of which is held by one or more of the foregoing if the Board so elects. If a “change of control” of the Corporation occurs (as defined in the Officers and Employees Plan), each outstanding option granted under the Officers and Employees Plan may be exercised, even if such option is not otherwise exercisable by its terms.

The Board may amend or discontinue the Officers and Employees Plan at any time but, except in certain limited circumstances, no such amendment may increase the aggregate maximum number of Shares that may be subject to option under the Officers and Employees Plan, change the manner of determining the minimum option price, extend the option period under any option beyond ten years or, without the consent of the holder of the option, alter or impair any option previously granted to an optionee under the Officers and Employees Plan.

As at February 27, 2006, options for a total of 179,600 Shares had been granted and were outstanding under the Directors Plan, representing approximately 0.17% of the total number of Shares outstanding. Options were granted at 100% of the market value at the date of the grant, became exercisable over two years and expire after ten years. 28,600 options are still available for grant under the Directors Plan. The terms of the Directors Plan are substantially as described for the Officers and Employees Plan. As noted above, the Company has not granted options under the Directors Plan since 2002.

2005 and 2006 Performance Option Plans

On May 5, 2005, the Corporation’s shareholders approved the 2005 Performance Option Plan under which the Corporation could offer, after February 28, 2005 and before January 1, 2006, options for the issuance of up to 1,200,000 Shares pursuant to the exercise of options to eligible officers and employees. Under the 2005 Performance Option Plan, the exercise price of an option is the quoted market closing price of the Corporation’s Shares on the last trading day immediately preceding the date of grant and the option’s maximum term is ten years. As of February 27, 2006, options to acquire 1,183,500 Shares had been issued and were outstanding under the 2005 Performance Option Plan.

The substantially identical 2005 and 2006 Performance Option Plans have one key difference from the Officers and Employees Plan, which is the performance-based vesting feature. This feature was developed to support the Committee’s principles, as defined above, that the opportunity to earn pay above the median should be delivered through long-term compensation that requires achieving performance goals aligned with shareholder interests.

Under the 2005 and 2006 Performance Option Plans, option vesting is determined by achieving corporate performance goals that historically have correlated with the Corporation’s TSR and, in turn, relative to the DJUSBMI TSR. Performance will be measured over a three-year vesting period.

The performance-based vesting schedule determines the percentage of options vested at the end of the three-year vesting period and ties the level of Corporation performance to the level of total compensation delivered.

Using 10-year historical data, the Committee worked with Hewitt Associates and Watson Wyatt to analyze the correlation between the Corporation’s cash flow return on investment (“CFROI”) minus its weighted average cost of capital (“WACC”), the Corporation’s TSR and the Corporation’s performance relative to the DJUSBMI performance. Having established the link between the Corporation’s CFROI-WACC and TSR performance levels relative to the DJUSBMI performance, a schedule was developed based upon the Corporation’s CFROI-WACC levels to vest appropriate amounts of Shares at different performance levels.

In order to deliver a level of total compensation that is synchronized with the level of corporate performance achieved, data on compensation provided by the Comparator Group and Additional Surveys was analyzed to determine the 25^th, 50^th, and 75^th percentile compensation levels for the Corporation’s management positions. These compensation study results and the vesting schedule are then linked to determine option grant levels that will deliver the appropriate compensation for the performance delivered.

For 2006, the Corporation is requesting shareholder approval of an amount of 1,400,000 options to be available for grant under the provisions of the 2006 Performance Option Plan. It is expected that this amount will be sufficient for one annual grant to be made after the Meeting and before January 1, 2007.

Executive Share Ownership Guidelines

The Committee strongly supports Share ownership by its executives. In November 2004 the Corporation introduced minimum shareholding guidelines, to be met by November 2009 for the then current executive officer group. Any

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individual who is promoted into a position subject to these Guidelines will have a five-year period within which to meet the Share ownership requirements. The shareholding requirements reflect the value of Shares held and can be met through direct or beneficial ownership of Shares, including Shares held through the Corporation’s qualified defined contribution savings plans. Options and performance units (under the Medium-Term Incentive Plan) are not included in the definition of Share ownership for purposes of the guidelines.

The Guidelines are:


	Share Ownership
Title	Guideline

Chief Executive Officer		5 times base salary
Chief Financial Officer, Chief Operating Officer, Senior Vice Presidents and Division Presidents		3 times base salary
Designated Senior Vice Presidents and Vice Presidents		1 times base salary

Of the Named Executive Officers, Mr. Doyle, Ms. Irwin and Mr. Brownlee held Shares with a value in excess of the ownership guidelines as of February 27, 2006. Details regarding the ownership of Shares by the Named Executive Officers are set forth under “Ownership of Shares”.

Chief Executive Officer Compensation

The Committee reviews annually the Chief Executive Officer’s salary, any awards under the Short- and Medium-Term Incentive Plans and any grant of options under the Corporation’s option plans and makes its recommendations to the Board. The Chief Executive Officer’s annual salary is determined primarily on the basis of his individual performance and the performance of the Corporation. While no mathematical weighting formula exists, the Committee considers all factors which it deems relevant, including the Corporation’s financial results, the Corporation’s TSR and performance relative to its Comparator Group, the duties and responsibilities of the Chief Executive Officer, the Chief Executive Officer’s individual performance relative to written objectives established at the beginning of each year, and current compensation levels. Awards pursuant to the Short- and Medium-Term Incentive Plans and under the option plans are made in accordance with the plans as outlined above.

Reference is also made to the compensation of Chief Executive Officers of the Comparator Group and Additional Surveys. The comparison of the Corporation’s Chief Executive Officer compensation to the Comparator Group incorporates many factors including the relative sales and market capitalization of the companies, their profitability and shareholder return history, the duties of the Chief Executive Officer and any other extenuating or special circumstances. In general, the Chief Executive Officer’s cash compensation is set at the 50^th percentile of the applicable range.

In January 2006, the Committee and the Board reviewed Mr. Doyle’s performance relative to his 2005 performance goals for the purpose of determining his 2006 base pay level and 2005 short-term incentive bonus award. At that time, a salary of $1,000,000 and short-term incentive bonus award of $1,056,000 for 2005 performance were recommended by the Committee and approved by the Board. The goals and related achievements upon which the decision was based were:


1.	Improvement in all safety indices.


	This goal was not met in 2005. Recordable and lost time injury rates both increased from the record-low levels of 2004.


2.	Meet or exceed approved 2005 budget, including earnings per share (EPS) and cash flow per share (CFPS) targets.


	This goal was achieved.


3.	Outperform our peer group of basic materials companies in total shareholder return.


	TSR for the last three years ending December 31, 2005 was 158% for the Corporation versus 57.4% for the DJUSBMI; however TSR for 2005 was -2.7% for the Corporation versus 6.3% for the DJUSBMI.


4.	Continue to implement strategic plan to decommoditize selected product lines with particular focus on improving return on our phosphate business.


	During second quarter of 2006, a new purified phosphate plant will come on stream in Aurora, NC. The new DFP plant at Aurora demonstrated production at capacity, substantially improving feed phosphate results. Phosphate gross margin for 2005 was $98.9 million, more than six times the 2004 total.


5.	Grow revenue base and bottom line for the company through strategic use of capital.

Revenue increased to $3,847.2 million in 2005 versus $3,244.4 million in 2004 and net income in 2005 was $542.9 million versus $298.6 million in 2004. Strategic capital was used to complete the Rocanville expansion, continue the purified phosphoric acid plant expansion, and complete key Trinidad debottlenecks. Investments in other companies included $18.6 million in Arab Potash Company, $74.9 million in Israel Chemicals, Ltd. and $97.4 million in Sinochem Hong Kong Holdings Limited (“Sinofert”).


6.	Oversee the establishment of a global International Plant Nutrition Institute through the International Fertilizer Association to ensure a scientific environmental defense for fertilizer products.


	This effort is ongoing and should be achieved by the end of 2006.

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7.	Show measurable success in leadership development and succession planning for the Corporation’s employees.


	During 2005, 75% of position movements in the executive and senior staff group were filled by promoting and transferring internal candidates.


8.	Lead management’s effort in maintaining best corporate governance practices at all levels.

Mr. Doyle supported management and approved continuing initiatives in the area of corporate compliance. In addition, the tone was set at the top of the organization regarding the importance of conducting business honestly, fairly, with integrity and in compliance with all legal requirements and for all employees to reaffirm their commitment to the company’s “Statement of Core Values and Code of Business Conduct”.


9.	Find new ways to make it easier for our customers to do business with us.


	The following four customer service initiatives were begun in 2005:


	▪	Open/shipped orders confirmation tool – an automatic e-mail to customers on a regular basis with a summary of all open and shipped orders on a month-to-date or year-to-date basis so they can track any changes that need to be made to their open orders.

	▪	Enterprise wide customer complaint system – central data bank to track complaint receipt and resolution.

	▪	Customer contact recording system – enhanced technology to note customer requirements, comments and commitments and to review previous actions in order to improve the quality and depth of our customer response.

	▪	Website hits reporting tool – enhanced technology to track customers’ preferences when it comes to utilizing our website and to focus on expanding and improving areas most often utilized.


10.	Provide leadership for the company with the investment community, within our industry and in the communities in which our people work and reside.


	In 2005, Mr. Doyle supported and was directly involved with numerous analyst and shareholder events, including meetings with major shareholders, analyst meetings, conference calls, and plant site tours. The Corporation received 5 awards from the Canadian Institute of Certified Accountants (CICA) for its annual reporting, sustainability report and corporate governance disclosure. This included the top reporting award in the mining sector, second place for our sustainability report and corporate governance disclosure, and top honors for our annual report and recognition as the overall best corporate reporter in Canada.

	Leadership in our communities was demonstrated by community support projects at all our plants and offices, both cash donations and volunteer hours. The Corporation demonstrated its commitment to stakeholders in the global community by providing major contributions to the South Asia tsunami relief effort and to Hurricane Katrina relief. Corporate donations increased by 58% in 2005.

Mr. Doyle’s compensation for 2005 as set forth in the Summary Compensation Table and salary for 2006 were determined in accordance with the foregoing and approved by the Committee together with all other independent members of the Board.

Submitted on behalf of the Committee: John W. Estey, Wade Fetzer III, Jeffrey J. McCaig and Paul J. Schoenhals.

Report on Corporate Governance and Nominating Matters

Disclosure Regarding Nominating Committee Processes

The Corporation has a standing Corporate Governance and Nominating Committee, referred to as the “CG&N Committee” hereinafter in this report. The CG&N Committee has a charter which is available to shareholders and others at the Corporation’s website, www.potashcorp.com. Each of the following five directors who comprise the CG&N Committee is independent according to the Board’s independence standards as set out in the “PotashCorp Governance Principles” (which is available on the Corporation’s website), NI 58-101, applicable rules of the SEC and the corporate governance rules of the NYSE. See also “Nominees for Election to the Board of Directors – Director Independence and Other Relationships”. During the fiscal year ended December 31, 2005, the CG&N Committee met 6 times.


	Mary Mogford (Chair)
	Frederick J. Blesi
	Wade Fetzer III
	Dallas J. Howe
	E. Robert Stromberg

Shareholders may propose individuals to be nominated for election as directors (a “Proposal”) in accordance with the provisions of Section 137 of theCanada Business Corporations Act (the“Act”). Shareholders wishing to make a Proposal should refer to the relevant sections of theActfor a description of the procedures to be followed. For additional information regarding shareholder proposals, see “2007 Shareholder Proposals”. Shareholders who do not meet the threshold criteria for making, or otherwise choose not to make, a Proposal may at any time suggest nominees for

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election to the Board. Names of and supporting information regarding such nominees should be submitted to: Corporate Secretary, Potash Corporation of Saskatchewan Inc., Suite 500, 122 – 1^st Avenue South, Saskatoon, Saskatchewan, S7K 7G3, Canada.

A CG&N Committee-recommended nominee for a position on the Board must, at a minimum, meet the qualification standards for directors established by Section 105 of theAct. In addition, such nominee must possess and exhibit the highest degree of integrity, professionalism, values and independent judgment. The CG&N Committee also believes that the Board should be comprised of directors who possess experience and expertise in one or more of the following areas:


•	fertilizer industry
•	global and international commerce
•	transportation industry
•	e-commerce and technology
•	finance
•	law
•	accounting
•	mining industry
•	chemical industry
•	general business management
•	public policy

On an ongoing basis the CG&N Committee asks incumbent directors and senior management to suggest individuals who should be considered as proposed nominees to the Board. The CG&N Committee identifies the mix of expertise and qualities required for the Board. The Chair of the CG&N Committee, in consultation with the CG&N Committee, the Board Chair and the Chief Executive Officer maintains a list of potential candidates suggested by incumbent directors, senior management or shareholders and biographical information for each such potential candidate. When it becomes apparent that a vacancy on the Board will arise, either from mandatory or elective retirement or otherwise, the CG&N Committee reviews its list of potential candidates against the skill sets of incumbent Board members and the range of experience and expertise necessary for the Board. Potential candidates who have, in the opinion of the CG&N Committee, the desired expertise are identified. Those who have the requisite qualifications and meet the Corporation’s standards are ranked by the CG&N Committee in order of preference and contacted to determine their interest in serving on the Board. If this process does not result in the identification of suitable nominees, the CG&N Committee may engage the services of a search firm to assist in the identification of director candidates. The CG&N Committee evaluates all potential candidates in the manner described, no matter what the source of the recommendation.

Prior to joining the Board, new directors are informed of the degree of energy and commitment the Corporation expects of its directors.

In an uncontested election, any nominee for director who fails to receive votes in favor of his or her election representing at least a majority of the votes cast (added together with the votes withheld) shall tender his or her resignation for consideration by the CG&N Committee. Except in extenuating circumstances, it is expected that the CG&N Committee will recommend to the Board that the resignation be accepted and effective within a period of 90 days and that the action taken be publicly disclosed. To the extent possible, the CG&N Committee and Board members who act on the resignation shall be directors who have themselves received a majority of votes cast.

Disclosure Regarding Director Orientation and Continuing Education

The Board has adopted a written New Director Orientation Policy designed to:


(a)	provide each new director with a baseline of knowledge about the Corporation which will serve as a basis for informed decision-making;

(b)	tailor the program for each new director to take into account his or her unique mix of skills, experience, education, knowledge and needs; and

(c)	be delivered over a period of time to minimize the likelihood of overload and maximize the lasting educational impact.

The orientation program is tailored to the needs of each new director, and consists of a combination of written materials, one-on-one meetings with senior management, site visits and other briefings and training as appropriate.

The Board also recognizes the importance of ongoing director education and the need for each director to take personal responsibility for this process. To facilitate ongoing education, the Corporation will:


(a)	maintain a directors’ intranet site to facilitate the exchange of views and published information;

(b)	maintain a membership for each director in an organization dedicated to corporate governance and ongoing director education;

(c)	each year encourage and fund the attendance of each director at one seminar or conference of interest and relevance and fund the attendance of each Committee Chair at one additional seminar or conference. In all cases, approval for attendance shall be obtained, in advance, from the Board Chair. In 2005, a number of directors took advantage of our policy by attending seminars or conferences of interest or relevance;

(d)	encourage presentations by outside experts to the Board or Committees on matters of particular import or emerging significance; and

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(e)	at least annually, schedule a site visit in conjunction with a Board meeting.

The Board holds one meeting each year at one of the Corporation’s operating facilities. Site visits by the Board and meetings with senior management of the facility are incorporated into the itinerary.

Disclosure Regarding the Ability of Shareholders to Communicate With the Board of Directors

The Corporation has a process for shareholders or other interested parties who wish to communicate with members of the Board, including the presiding director or the non-management directors as a group. Communications in writing should be sent to:


	PotashCorp Board of Directors
	c/o Corporate Secretary
	Suite 500, 122 – 1^st Avenue South
	Saskatoon, Saskatchewan S7K 7G3
	CANADA

Communications by e-mail should be sent to directors@potashcorp.com.

Matters relating to the Corporation’s accounting, internal accounting controls or auditing matters will be referred to the Audit Committee. Other matters will be referred to the Board Chair.

To further facilitate communications between the Corporation’s shareholders and the Board, the Corporation has adopted a policy that all directors standing for re-election and all new director nominees are expected to attend the Meeting. In 2005, all such directors and nominees attended the annual meeting.

Submitted on behalf of the CG&N Committee: Mary Mogford, Frederick J. Blesi, Wade Fetzer III, Dallas J. Howe and E. Robert Stromberg.

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Ownership of Shares

The following table sets forth information as of February 27, 2006, with respect to the beneficial ownership of Shares held by the executive officers of the Corporation named in the Summary Compensation Table herein and by all directors and executive officers of the Corporation as a group.



			Number of		Percentage
			Shares		of
	Number of		Beneficially		Outstanding
Name	Shares Held		Owned^(1)(2)(3)		Shares

William J. Doyle, Director, President and Chief Executive Officer		77,978		790,490		0.76%

Wayne R. Brownlee, Executive Vice President, Treasurer and Chief Financial Officer		17,398		355,618		0.34%

James F. Dietz, Executive Vice President and Chief Operating Officer		12,600		258,852		0.25%

Barbara J. Irwin, Senior Vice President, Administration		12,065		185,285		0.18%

Garth W. Moore, President, PCS Potash		6,622		124,842		0.12%

All directors and executive officers as a group, including the above-named individuals (26 persons)		220,871		2,488,875		2.40%


	(1) The number of Shares beneficially owned is reported on the basis of regulations of the SEC, and includes Shares that the individual has the right to acquire at any time within 60 days after February 27, 2006 and Shares directly or indirectly held by the individual or by certain family members or others over which the individual has sole or shared voting or investment power.

	(2) Each of the directors and executive officers of the Corporation owned less than 1% of the Shares issued and outstanding as at February 27, 2006. The directors and executive officers of the Corporation as a group beneficially owned approximately 2.401% of the Shares issued and outstanding as at February 27, 2006.

	(3) Includes Shares purchasable within 60 days after February 27, 2006 through the exercise of options granted by the Corporation, as follows: Mr. Doyle 712,512 Shares; Mr. Brownlee 338,220 Shares; Mr. Dietz 246,252 Shares; Ms. Irwin 173,220 Shares; Mr. Moore 118,220 Shares and directors and executive officers as a group, including the foregoing individuals, 2,268,004 Shares.

Listed below are the names and other information concerning persons known to the Corporation (from records and reports filed with the SEC on Schedule 13D or 13G) who owned, as of February 27, 2006 more than 5% of the Corporation’s Shares:



	Amount and Nature of		Percent of
Name and Address of Beneficial Owner	Beneficial Ownership		Class⁽¹⁾

FMR Corp. (Fidelity) 82 Devonshire Street Boston, Massachusetts 02109		16,771,446⁽²⁾⁽³⁾		16.18%

PRIMECAP Management Company 225 S. Lake Ave., #400 Pasadena, California 91101		10,279,315⁽⁴⁾⁽⁵⁾		9.92%

Capital Group International, Inc. 11100 Santa Monica Blvd. Los Angeles, California 90025		8,792,250^(6)(7)(8)		8.48%

Capital Guardian Trust Company 11100 Santa Monica Blvd. Los Angeles, California 90025		6,454,250^(8)(9)(10)		6.23%

Jarislowsky, Fraser Limited 1010 Sherbrooke St. West Suite 2005 Montreal, Quebec H3A 2R7		5,803,930^(11)(12)		5.60%


	(1) Represents percent of Shares outstanding as of February 27, 2006.

	(2) Such person has sole dispositive power as to all 16,771,446 Shares and sole voting power as to 4,330,031 Shares.

	(3) As set forth in a Schedule 13G dated February 14, 2006.

	(4) Such person has sole dispositive power as to all 10,279,315 Shares and sole voting power as to 2,608,915 Shares.

	(5) As set forth in a Schedule 13G dated February 8, 2006.

	(6) Such person has sole dispositive power as to all 8,792,250 Shares and sole voting power as to 7,371,150 Shares.

	(7) As set forth in a Schedule 13G dated February 2, 2006.

	(8) Capital Group International, Inc. may be deemed the beneficial owner of the Shares of its subsidiaries, including the 6,454,250 Shares beneficially owned by Capital Guardian Trust Company.

	(9) Such person has sole dispositive power as to all 6,454,250 Shares and sole voting power as to 5,300,750 Shares.

	(10) As set forth in a Schedule 13G dated February 2, 2006.

	(11) Such person has sole dispositive power as to all 5,803,930 Shares, sole voting power as to 4,854,556 Shares, and shared voting powers as to 949,374 Shares.

	(12) As set forth in a Schedule 13G dated February 10, 2006.

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Page 29

Executive Compensation

Summary Compensation Table

The following table sets forth, for the periods indicated, all compensation earned by the individuals who served as the Chief Executive Officer and the Chief Financial Officer of the Corporation, and by each of the Corporation’s other three most highly compensated executive officers as of the end of calendar year 2005, for services rendered to the Corporation and its subsidiaries (the “Named Executive Officers”).

Summary Compensation Table⁽¹⁾



										Long-Term Compensation

			Annual Compensation							Awards		Payouts
																	Additional 2005 Information

										Securities
										Underlying							Option Grant
							Other Annual			Options		LTIP		All Other			Date Present
			Salary		Bonus⁽²⁾		Compensation			Granted⁽³⁾		Payouts⁽⁴⁾		Compensation			Value⁽¹²⁾		Totals⁽¹³⁾
Name and Principal Position	Year		$		$		$			#		$		$			$		$

William J. Doyle		2005		950,000		1,056,000		66,501	⁽⁵⁾		225,000		6,332,879		70,023	⁽⁶⁾		4,416,750		12,892,153
President and		2004		808,750		1,375,000		139,431	⁽⁵⁾		–		–		25,500	⁽⁶⁾
Chief Executive Officer		2003		783,750		535,000		51,579	⁽⁵⁾		112,512		–		81,822	⁽⁶⁾

Wayne R. Brownlee		2005		420,000		352,000		117	⁽⁷⁾		65,000		1,659,358		34,089	⁽⁸⁾		1,286,043		3,751,607
Executive Vice President,		2004		359,385		350,000		6,630	⁽⁷⁾		–		–		13,727	⁽⁸⁾
Treasurer and Chief		2003		359,385		144,000		2,649	⁽⁷⁾		48,220		–		19,321	⁽⁸⁾
Financial Officer

James F. Dietz		2005		417,783		318,000		1,736	⁽⁷⁾		65,000		2,001,334		17,965	⁽⁹⁾		1,275,950		4,032,768
Executive Vice President		2004		385,288		370,000		4,238	⁽⁷⁾		–		–		4,614	⁽⁹⁾
and Chief Operating Officer		2003		385,288		164,000		–			56,252		–		12,284	⁽⁹⁾

Barbara J. Irwin		2005		347,416		201,000		1,736	⁽⁷⁾		35,000		1,457,259		11,905	⁽¹⁰⁾		687,050		2,706,366
Senior Vice President,		2004		324,741		275,000		4,584	⁽⁷⁾		–		–		2,253	⁽¹⁰⁾
Administration		2003		322,333		126,000		–			48,220		–		11,629	⁽¹⁰⁾

Garth W. Moore		2005		348,938		195,000		5,880	⁽⁷⁾		35,000		1,464,744		30,695	⁽¹¹⁾		692,485		2,737,742
President,		2004		317,216		267,000		3,419	⁽⁷⁾		–		–		13,417	⁽¹¹⁾
PCS Potash		2003		317,216		123,000		2,570	⁽⁷⁾		48,220		–		18,437	⁽¹¹⁾


(1)	Those amounts which were paid in Canadian dollars have been converted to United States dollars using the average exchange rate for the month prior to the date of payment.

(2)	Reports amounts awarded pursuant to the Corporation’s Short-Term Incentive Plan. See “Compensation Committee Report on Executive Compensation – Short-Term Incentive Compensation”.

(3)	Options granted pursuant to the Stock Option Plan – Officers and Employees and the 2005 Performance Option Plan. 2003 amounts adjusted to reflect the stock split which occurred in August 2004.

(4)	Reflects payouts pursuant to the terms of the Long-Term Incentive Plan in effect for the three-year performance period January 1, 2003 to December 31, 2005. The calculation was based on performance over the three-year period, measured by reference to TSR. TSR of the Corporation measured the capital appreciation of the Shares over the performance period and included dividends paid. As such, it simulated the actual investment performance realized by shareholders. The plan considered both the TSR of the Corporation and the TSR performance relative to the DJUSBMI.

The following table sets forth rates of return over the performance period (using the defined average opening/closing prices):



	Potash Corp (NYSE)		DJUSBMI

TSR		148.77%		60.11%


	Market capitalization for the Corporation was $3.31 billion as at January 1, 2003 and $8.31 billion as at December 31, 2005. This represented an increase of $5.0 billion, or 151%.

	For details regarding the Medium-Term Incentive Plan in place for the performance period January 1, 2006 to December 31, 2008, see “Compensation Committee Report on Executive Compensation – Medium-Term Incentive Plan”.

(5)	Of the other annual compensation indicated for 2005, $21,636 is related to spousal travel benefits (while accompanying the executive on Corporation business), $17,347 reflects payments made for personal tax planning, preparation, administration and financial matters, $16,860 reflects a membership allowance, and $10,064 relates to tax reimbursements on taxable benefits. Of the other annual compensation indicated for 2004, $84,820 reflects a membership allowance and $9,755 represents tax reimbursements on taxable benefits. Of the other annual compensation indicated for 2003, $34,854 reflects payments made for personal tax preparation and administration, and $3,048 represents tax reimbursements on taxable benefits.

(6)	The reported amounts for 2005, 2004 and 2003 consist, respectively, of:


(i)	$60,128, $17,259 and $28,740 which represents the Corporation’s contribution to the Corporation’s defined contribution pension and savings plan on behalf of the indicated Named Executive Officer;

(ii)	$9,895, $8,241 and $8,532 which represents the value of the benefit for group term life insurance premiums paid by the Corporation on behalf of the indicated Named Executive Officer; and

(iii)	$44,550 for 2003 which represents moving expenses.


(7)	The reported amounts for 2005, 2004 and 2003 represent tax reimbursements on taxable benefits.

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(8)	The reported amounts for 2005, 2004 and 2003 consist, respectively, of:


(i)	$30,725, $10,995 and $15,944 which represents the Corporation’s contribution to its defined contribution pension and savings plans on behalf of the indicated Named Executive Officer; and

(ii)	$3,364, $2,732 and $3,377 which represents the value of the benefit for group term life insurance premiums paid by the Corporation on behalf of the indicated Named Executive Officer.


(9)	The reported amounts for 2005, 2004 and 2003 consist, respectively of:


(i)	$11,709, $0 and $10,000 which represents contributions by the Corporation’s subsidiary to its defined contribution pension plan on behalf of the indicated Named Executive Officer; and

(ii)	$6,256, $4,614, and $2,284 which represents the value of the benefit for group term life insurance premiums paid by the Corporation’s subsidiary on behalf of the indicated Named Executive Officer.


(10)	The reported amounts for 2005, 2004 and 2003 consist, respectively of:


(i)	$9,892, $681 and $9,707 which represents contributions by the Corporation’s subsidiary to its defined contribution pension plan on behalf of the indicated Named Executive Officer; and

(ii)	$2,013, $1,572, and $1,922 which represents the value of the benefit for group term life insurance premiums paid by the Corporation’s subsidiary on behalf of the indicated Named Executive Officer.


(11)	The reported amounts for 2005, 2004 and 2003 consist, respectively, of:


(i)	$27,323, $10,426 and $14,682 which represents the Corporation’s contribution to its defined contribution pension and savings plans on behalf of the indicated Named Executive Officer; and

(ii)	$3,372, $2,991, $3,755 which represents the value of the benefit for group term life insurance premiums paid by the Corporation on behalf of the indicated Named Executive Officer.


(12)	Taken from “Option Grants During the Most Recently Completed Fiscal Year” table below.

(13)	Total of the dollar values disclosed on the “Summary Compensation Table” and the “Option Grant Date Present Value” for 2005.

Options

The following table provides details on the options granted to the Named Executive Officers during the fiscal year ended December 31, 2005.

Option Grants During the Most Recently Completed Fiscal Year⁽¹⁾



Individual Grants

	Number of		% of Total Options
	Securities		Granted to		Exercise or				Grant Date
	Underlying Options		Employees in		Base Price				Present Value⁽³⁾⁽⁴⁾
Name	Granted⁽¹⁾⁽²⁾		Fiscal Year		($/Share)		Expiration Date		$

William J. Doyle		225,000		18.93%		$88.23		May 5, 2015		$4,416,750
Wayne R. Brownlee		65,000		5.47%		Cdn$109.92		May 5, 2015		1,286,043
James F. Dietz		65,000		5.47%		$88.23		May 5, 2015		1,275,950
Barbara J. Irwin		35,000		2.94%		$88.23		May 5, 2015		687,050
Garth W. Moore		35,000		2.94%		Cdn$109.92		May 5, 2015		692,485


(1)	Options granted pursuant to the Corporation’s 2005 Performance Option Plan.

(2)	Options granted on May 5, 2005. Subject to the terms of the 2005 Performance Option Plan, each option will vest, if at all, based on achievement of certain corporate measures over a three-year period ending December 31, 2007.

(3)	The Black-Scholes-Merton Option Pricing Model was used by the Compensation Committee to determine the grant date present value of the stock options granted in May 2005 by the Corporation to the Named Executive Officer, thereby assisting in the calculation regarding the number of options to grant. Under the Black-Scholes-Merton Option Pricing Model, the “Grant Date Present Value” of the stock options referred to in the table was $19.63 per Share for Mr. Doyle, Mr. Dietz and Ms. Irwin and Cdn$24.63 per Share for Mr. Brownlee and Mr. Moore. The material assumptions and adjustments incorporated in the Black-Scholes-Merton Option Pricing Model in estimating the value of options reflected in the above table include the following:


(i)	an option term of 10 years and an interest rate of 4.14% (US risk free rate corresponding to the term of the options) with respect to options granted to Mr. Doyle, Mr. Dietz and Ms. Irwin; and an option term of 10 years and an interest rate of 4.13% (Cdn. risk free rate corresponding to the term of the options) with respect to the options granted to Mr. Brownlee and Mr. Moore;

(ii)	with respect to options granted to Mr. Doyle, Mr. Dietz and Ms. Irwin, volatility of 27.1% (calculated using daily stock prices on the NYSE for the three-year period prior to 4/1/2005); and with respect to the options granted to Mr. Brownlee and Mr. Moore, volatility of 27.09% (calculated using daily stock prices on the TSX for the three-year period prior to 4/1/2005);

(iii)	with respect to the options granted to Mr. Doyle, Mr. Dietz and Ms. Irwin, dividends at the rate of $0.60 per Share and with respect to the options granted to Mr. Brownlee and Mr. Moore, dividends at the rate of Cdn$0.7424 per Share (representing the annualized dividends paid with respect to a Share at the date of grant); and

(iv)	a discount related to risk of forfeiture of 29.63% for Mr. Doyle, Mr. Dietz and Ms. Irwin and 29.05% for Mr. Brownlee and Mr. Moore was applied. A further 25% discount regarding risk for the performance based features was also then applied.


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


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

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The following table sets forth the options exercised during the year ended December 31, 2005 by the Named Executive Officers, the number of options held by the Named Executive Officers at year end, and the year-end value of unexercised, in-the-money options held by such individuals at December 31, 2005.

Aggregated Option Exercises During the Most Recently Completed

Fiscal Year and Fiscal Year-End Option Values



					Number of Securities				Value of Unexercised in-the-
	Securities				Underlying Options at FY-End				Money Options at FY-End⁽²⁾
	Acquired on		Aggregate
	Exercise		Value Realized⁽¹⁾				# Not				$ Not
Name	#		$		# Exercisable		Exercisable		$ Exercisable		Exercisable

William J. Doyle		160,000	$	9,788,765		712,512		225,000	$	30,263,369	$	0
Wayne R. Brownlee		76,300		4,356,863		338,220		65,000		12,569,636		0
James F. Dietz		30,000		2,034,765		246,252		65,000		10,175,215		0
Barbara J. Irwin		15,000		810,379		173,220		35,000		6,986,915		0
Garth W. Moore		90,000		4,569,609		118,220		35,000		3,362,569		0


(1)	All values are pre-tax.

(2)	Values are calculated by determining the amount by which the market value of the Shares underlying the options on December 31, 2005 exceeded the exercise prices of the options and converting Canadian dollar amounts to United States dollars using the December 31, 2005 exchange rate of $0.8577.

Pension Plans

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

The Corporation maintains a Supplemental Retirement Income Plan (the “Supplemental Plan”), which provides a supplementary pension benefit for certain of the Corporation’s officers and key managers. Under the basic terms of the Supplemental Plan, a pension benefit is provided in an amount equal to 2% of the average of the participant’s three highest years’ earnings multiplied by the participant’s years of pensionable service (to a maximum of 35 years), minus any annual retirement benefit payable under the PCS Plan or certain other tax qualified plans. For the purposes of the Supplemental Plan, earnings are defined as the participant’s annual base pay plus 100% of all bonuses paid or payable for such year pursuant to the Short-Term Incentive Plan. The normal retirement age pursuant to the Supplemental Plan is 65, with a reduction in benefits for early retirement prior to age 62. No benefits pursuant to the Supplemental Plan are payable if termination occurs prior to age 55. Benefits payable to employees who have reached the minimum age (55) for retirement pursuant to the Supplemental Plan are generally secured by letters of credit provided by the Corporation and are generally paid in the form of an annuity for life, or at a participant’s election, in a single lump sum payment equal to the actuarial present value of the annual benefit provided by the Supplemental Plan.

For a designated group of senior officers, including Mr. Doyle, Mr. Brownlee and Mr. Moore, the benefit payable under the Supplemental Plan is an amount equal to (i) 5% of the average of the senior officer’s three highest years’ earnings multiplied by the senior officer’s years of pensionable service (to a maximum of 10 years), plus (ii) 2% of the average of the senior officer’s three highest years of earnings multiplied by the senior officer’s years of pensionable service in excess of 25 years to a maximum of 10 additional years, minus (iii) any annual retirement benefit payable under the PCS Plan and certain other tax qualified plans.

The following table shows the range of estimated annual benefits to Mr. Doyle, Mr. Brownlee and Mr. Moore pursuant to the Supplemental Plan. Estimated benefits payable pursuant to the Supplemental Plan will be reduced by any benefits payable to Mr. Doyle, Mr. Brownlee and Mr. Moore pursuant to the PCS Plan and certain other tax qualified plans.

Supplemental Retirement Income Plan Table



		Years of Service
Remuner-
ation ($)		10		20		30		40

$	250,000	$	125,000	$	125,000	$	150,000	$	175,000
	500,000		250,000		250,000		300,000		350,000
	1,000,000		500,000		500,000		600,000		700,000
	1,500,000		750,000		750,000		900,000		1,050,000
	2,000,000		1,000,000		1,000,000		1,200,000		1,400,000
	3,000,000		1,500,000		1,500,000		1,800,000		2,100,000

As of December 31, 2005, the average of the three highest years’ earnings for purposes of the Supplemental Plan for each Named Executive Officer participating in the Supplemental Plan was as follows: $1,942,500 for Mr. Doyle, $650,923 for Mr. Brownlee and $546,790 for Mr. Moore. The estimated credited years of service at assumed retirement age of 65 for each of the Named Executive Officers participating in the Supplemental Plan are as follows: 28 years for Mr. Doyle, 41 years for Mr. Brownlee and 31 years for Mr. Moore.

The cost of the future pension benefits is calculated each year by the Corporation and is reviewed by independent actuaries. The 2005 annual service cost and total accrued pension obligations for the Supplemental Plan as at December 31,

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2005 respectively, for Mr. Doyle is $363,668 and $8,008,965, for Mr. Brownlee $113,262 and $4,052,773 and for Mr. Moore $82,765 and $2,333,313. The annual service cost represents the value of the projected Supplemental Plan benefit earned during the year. The total accrued pension obligation represents the value of the projected Supplemental Plan benefit earned for all service to date.

The annual service cost and total accrued pension obligations described above are based on estimates solely related to this plan, and represent contractual entitlements which may change over time. The methods used to determine such estimated amounts will not be identical to the methods used by other companies and, as a result, these figures may not be directly comparable across companies. The assumptions for this plan also differ from the assumptions disclosed in Note 14 to the consolidated financial statements relating to the Corporation’s significant pension plans. The key assumptions made in determining these amounts are as follows:



	Assumptions	Assumptions	Assumptions
	Used at the End	Used at the End	Used at the End
	of the Year 2005	of the Year 2004	of the Year 2003
	and for the	and for the	and for the
	2006 Expense	2005 Expense	2004 Expense

Interest Rate	5.00% per annum	6.00% per annum	7.00% per annum

Increase in Pensionable Earnings	4.00% per annum	5.00% per annum	5.00% per annum

Increase in theIncome Tax ActMaximum Contribution Limits	2.00% per annum	2.00% per annum	2.00% per annum

Expected Return on Plan Assets	N/A	N/A	N/A

Retirement Age	Age 62	Age 62	Age 62

Mortality Rates	1994 Unisex Pensioner Mortality Table	1994 Unisex Pensioner Mortality Table	1983 Group Annuity Mortality Table

Prior to January 1, 1999, PCS Phosphate and PCS Nitrogen maintained separate defined benefit pension plans for their respective eligible U.S. employees, including Mr. Dietz in the case of PCS Nitrogen. Effective January 1, 1999, the Corporation consolidated its pension plans for U.S. employees and the Nitrogen Pension Plan was merged with and into the Phosphate Pension Plan to form a new U.S. Pension Plan (the “U.S. Pension Plan”).

Under the U.S. Pension Plan, participants age 62 or older with at least 20 years of service receive a retirement benefit of 1.5% of the participant’s final average compensation (as defined below) multiplied by the participant’s years of service accrued after December 31, 1998 (maximum 35 years) in the form of a life annuity. Participants with service accrued prior to January 1, 1999 under previous plans, including Mr. Dietz, will have a portion of their retirement benefit calculated under the formulas for such plans. Employees not meeting the minimum age or years of service requirement at termination will receive a reduced benefit.

Pursuant to the U.S. Pension Plan, final average compensation is defined as compensation for the highest paid 60 consecutive months of service out of the last 120 months of service. Compensation is defined as a participant’s base pay plus annual bonus. The retirement benefits from the U.S. Pension Plan for Mr. Dietz and Ms. Irwin are subject to certain limitations on the amount of retirement benefits that may be provided under U.S. tax qualified pension plans. The Corporation maintains a supplemental pension plan (the “U.S. Supplemental Plan”) intended to provide participants with the same aggregate benefits that such participant would have received had there been no legal limitations on the benefits provided by the U.S. Pension Plan. No benefits pursuant to the U.S. Supplemental Plan are payable if termination occurs prior to age 55.

For Mr. Dietz and Ms. Irwin, the following table represents the range of estimated annual benefits under the U.S. Pension Plan and the U.S. Supplemental Plan for service on or after January 1, 1999.

Post-1998 Service Table



		Years of Service
Remuner-
ation ($)		10		15		20		25		30

$	300,000	$	45,000	$	67,500	$	90,000	$	112,500	$	135,000
	400,000		60,000		90,000		120,000		150,000		180,000
	500,000		75,000		112,500		150,000		187,500		225,000
	600,000		90,000		135,000		180,000		225,000		270,000
	700,000		105,000		157,500		210,000		262,500		315,000
	800,000		120,000		180,000		240,000		300,000		360,000

As of December 31, 2005, the final average compensation for the purposes of the U.S. Pension Plan and U.S. Supplemental Plan for Mr. Dietz was $615,843 and for Ms. Irwin was $452,674. The estimated credited years of post-1998 service under such plans at normal retirement age of 65 for Mr. Dietz is 13 years and for Ms. Irwin 20 years.

As of December 31, 1998, the Nitrogen Pension Plan provided a normal monthly retirement benefit equal to the sum of (i) 1.1% of the participant’s average monthly pay during the highest paid 60 consecutive calendar months of the last 120 calendar months of employment multiplied by the participant’s credited service, and (ii) 0.4% of (a) the excess of such average monthly pay over the participant’s “covered compensation” multiplied by (b) the participant’s credited service (up to a maximum of 35 years). “Covered compensation” is defined as the 35-year average of the U.S. Social Security wage bases measured from the year in which the participant reaches Social Security retirement age.

The following table represents the range of estimated annual benefits for Mr. Dietz pursuant to the formula in the Nitrogen Pension Plan (including benefits relating to pre-1999 service under the U.S. Supplemental Plan).

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Nitrogen Pre-1999 Service Table



		Years of Service
Remuner-
ation ($)		5		10		15		20		25

$	300,000	$	21,000	$	43,000	$	64,000	$	85,000	$	106,000
	400,000		29,000		58,000		86,000		115,000		144,000
	500,000		36,000		73,000		109,000		145,000		181,000
	600,000		44,000		88,000		131,000		175,000		219,000
	700,000		51,000		103,000		154,000		205,000		256,000
	800,000		59,000		118,000		176,000		235,000		294,000

As of December 31, 2005, the estimated credited years of pre-1999 service at normal retirement age of 65 for Mr. Dietz is 6 years for the purposes of the U.S. Pension Plan, and 2 years for purposes of the U.S. Supplemental Plan. Final average compensation is the same as that calculated for the purpose of the U.S. Pension Plan and post-1998 service.

The 2005 annual service cost and the total accrued pension obligation for the U.S. Supplemental Plan as at December 31, 2005, respectively for Mr. Dietz is $39,571 and $627,433, for Ms. Irwin is $24,242 and $223,759. The annual service cost represents the value of the projected U.S. Supplemental Plan benefit, earned during the year. The total accrued pension obligation represents the value of the projected U.S. Supplemental Plan benefit earned for all service to date. The assumptions used in calculating such obligations are those as used in Note 14 to the consolidated financial statements.

Employment Contracts and Termination of Employment

Change in Control Agreements

Effective December 30, 1994, the Corporation and, where applicable, PCS Sales entered into Change in Control Agreements with certain senior executives, including Mr. Doyle, Mr. Brownlee and Mr. Moore. The initial term of each Change in Control Agreement was through December 31, 1997; however, the term of the Change in Control Agreements has been automatically renewed for successive one-year periods since December 31, 1997 and continues to be subject to automatic renewal for successive one-year terms until the employee reaches age 65 or unless either party gives notice of termination. A change in control of the Corporation will be deemed to have occurred if:


(a)	there is a significant (50% or more) change in the Board within any two-year period, not including replacement directors approved for nomination by the Board;

(b)	there occurs an amalgamation, merger, consolidation or other transaction whereby the control of the existing shareholders of the Corporation is diluted to less than 50% control of the surviving or consolidated entity;

(c)	there occurs a significant (50% or more based on book value) sale or other disposition of the fixed assets of the Corporation within any twelve-month period; or

(d)	any party acquires 20% or more of the voting securities of the Corporation.

Benefits pursuant to the Change in Control Agreements will be payable upon termination of the executive’s employment within two years following a change in control. Termination of the executive’s employment is defined to include the executive ceasing to be employed for any reason, including constructive dismissal, except by reason of death, disability, resignation or voluntary retirement, or dismissal for dishonest or willful misconduct.

The severance benefit entitlements upon termination of employment following a change in control of the Corporation are:


(a)	a lump-sum payment of three times the executive’s current base salary and average bonus for the last three years;

(b)	a lump-sum payment of the pro-rata target bonus for the short year in which the termination occurs;


(c)	immediate vesting and cash out of all outstanding Long-Term Incentive Plan awards;


(d)	a credit of three additional years of service under the Supplemental Plan;


(e)	a three-year continuation of medical, disability and group term life insurance, provided that these benefits terminate upon obtaining similar coverage from a new employer or upon commencement of retiree benefits; and

(f)	financial or outplacement counseling to a maximum of Cdn$10,000.

Payments to be made pursuant to the foregoing and relating to the employee’s bonus may be deferred by the executive for up to three years or for such other period as may be permitted by theIncome Tax Act(Canada). For Mr. Doyle, there is provision for a “gross up” of payments to cover excise taxes if payable in respect of such benefits.

All outstanding non-exercisable options granted to the executive pursuant to the option plan become exercisable upon the occurrence of a change in control. In the event no public market for the Shares exists, the Corporation (or PCS Sales, as the case may be) will compensate the executive for the value of his or her options on the basis of a Share value approved by the shareholders of the Corporation upon a change in control, or, if no such value has been approved, then based upon the market value of the Shares when last publicly traded.

Other

The current severance policy of the Corporation for termination without cause, which is applicable to all salaried employees including the Named Executive Officers, is to provide notice of impending termination, or payment of salary in lieu of notice, equivalent to two weeks for each complete year of service (subject to a minimum of 4 weeks and a maximum of 52 weeks). Such policy is superseded by specific termination provisions contained in any applicable written agreement.

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Performance Graphs

The following graph illustrates the Corporation’s cumulative shareholder return, assuming reinvestment of dividends, by comparing a $100 investment in the Shares at December 31, 2000 to the return on the Standard & Poor’s 500 Index^®, the DJUSBMI and a self-selected peer group.



	Dec-00		Dec-01		Dec-02		Dec-03		Dec-04		Dec-05

Corporation-NYSE Listing	$	100	$	80	$	84	$	116	$	225	$	219
Self-Selected Peer Group		100		105		108		135		215		276
S&P 500^®		100		88		69		88		98		103
DJUSBMI		100		104		88		137		146		167


		Symbol
The self-selected peer group consists of:
Agrium Inc.*		AGU
Mosaic Co (formerly IMC Global Inc.)		MOS
Yara International ASA		YAR NO
Israel Chemicals Limited		CHIM IT
Sociedad Quimica Y Minera de Chile S.A.		SQM/B CI
K&S AG		SDF GR

The following graph illustrates the Corporation’s cumulative shareholder return, assuming reinvestment of dividends, by comparing a Cdn$100 investment in the Shares at December 31, 2000 to the return on the S&P/ TSX Composite Index.



	Dec-00		Dec-01		Dec-02		Dec-03		Dec-04		Dec-05

Corporation-TSX Listing	$	100	$	85	$	89	$	101	$	182	$	171
S&P/ TSX Composite Index		100		87		77		97		111		138

* TSX Listing.

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Page 35

Directors’ and Officers’

Liability Insurance

The Corporation has acquired and maintains liability insurance for its directors and officers as well as those of its subsidiaries as a group. The coverage limit of each insurance is $100 million per claim and $100 million in the annual aggregate. The Corporation has entered into a one-year contract ending June 30, 2006. Premiums of $871,450 were paid by the Corporation for the last fiscal year. Claims for which the Corporation grants indemnification to the insured persons are subject to a $5 million deductible for any one loss.

Voting Shares

There are 103,651,326 Shares of the Corporation outstanding as of February 27, 2006, each Share carrying the right to one vote. Each shareholder of record at the close of business on March 13, 2006 is entitled to vote at the Meeting the Shares registered in his or her name on that date.

The quorum for any meeting of shareholders is one or more persons present and holding or representing by proxy not less than 5% of the total number of outstanding Shares.

Normal Course Issuer Bid

On January 25, 2005, the Corporation announced that its Board of Directors had authorized a Share repurchase program of up to 5.5 million Shares (approximately 5% of the Corporation’s issued and outstanding Shares) through a normal course issuer bid. On September 22, 2005, the Corporation announced that its Board of Directors had authorized an increase in the number of Shares sought under the normal course issuer bid. The amendment allowed the Corporation to repurchase up to 4.0 million additional Shares, for a total of 9.5 million Shares (approximately 10% of the Corporation’s public float). Under the normal course issuer bid, Shares could be repurchased from time to time on the open market through February 14, 2006 at prevailing market prices. The purchases were made through the facilities of the TSX and the NYSE. Shares purchased under the bid were cancelled. The Corporation completed its normal course issuer bid on December 16, 2005. A copy of the notice the Corporation filed with the TSX in respect of the normal course issuer bid, as well as the amendment thereto, may be obtained from the Corporate Secretary of the Corporation at the address indicated under “Additional Information”.

2007 Shareholder Proposals

Proposals of shareholders intended to be presented at the Corporation’s annual meeting of shareholders in 2007 and which such shareholders are entitled to request be included in the Management Proxy Circular for that meeting, must be received at the Corporation’s principal executive offices not later than November 29, 2006.

Additional Information

Financial information relating to the Corporation is contained in its comparative financial statements and MD&A for the fiscal year ended December 31, 2005. Additional information relating to the Corporation that are not contained in this Management Proxy Circular, including the Corporation’s financial information as well as its most recent Form 10-K together with any document incorporated by reference therein, are available on SEDAR at www.sedar.com or EDGAR at www.sec.gov/edgar.shtml. Copies may be also be obtained on request from the Corporate Secretary, Potash Corporation of Saskatchewan Inc., Suite 500, 122 – 1st Avenue South, Saskatoon, Saskatchewan, S7K 7G3, Canada.

Directors’ Approval

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

JOSEPH A. PODWIKA

Secretary

February 27, 2006

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Page 36

Appendix A

Statement of Corporate Governance Practices

The Board, through its Corporate Governance and Nominating Committee, which met 6 times in 2005, is focused on new threshold regulatory standards (both proposed and implemented) as well as best practices that go beyond the requirements mandated by regulation.

To comply with those standards and achieve those best practices, the Board has adopted the “PotashCorp Governance Principles” and “Statement of Core Values and Code of Business Conduct”. The complete text of the “PotashCorp Governance Principles”, the “Statement of Core Values and Code of Business Conduct” and the Board and Committee Charters, as well as other governance related documents, can be found at www.potashcorp.com and are available in print to any shareholder who requests them.

Many regulatory changes have come into effect over the past year. The Corporation has amended its governance practices in response to changes in regulations and best practices and will continue to respond to future corporate governance developments as appropriate. On June 30, 2005, National Policy 58-201 “Corporate Governance Guidelines” (“NP 58-201”) and National Instrument 58-101 “Disclosure of Corporate Governance Practices” (“NI 58-101”) came into force in Canada. The Corporation’s corporate governance practices are substantially in alignment with NP 58-201. In addition, the following table discloses the Corporation’s current corporate governance practices in accordance with the requirements of NI 58-101.



			PotashCorp
Disclosure Requirement under Form 58-101F1			Compliance		Comments & Discussion

1.	(a)	Disclose the identity of directors who are independent.		Yes	The Board has determined that all of the directors of the Corporation with the exception of Mr. Doyle and Ms. Paliza are independent. See disclosure under the “Director Independence and Other Relationships” section of this Management Proxy Circular.

	(b)	Disclose the identity of directors who are not independent, and describe the basis of that determination.		Yes	See disclosure under the “Director Independence and Other Relationships” section of this Management Proxy Circular.

	(c)	Disclose whether or not a majority of directors are independent. If a majority of directors are not independent, describe what the board of directors (the board) does to facilitate its exercise of independent judgment in carrying out its responsibilities.		Yes	Ten of twelve, or 83.3%, of the Corporation’s current directors are independent.

	(d)	If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.		Yes	Such other directorships have been disclosed in the “Nominees for Election to the Board of Directors” section of this Management Proxy Circular.

	(e)	Disclose whether or not the independent directors hold regularly scheduled meetings at which members of management are not in attendance. If the independent directors hold such meetings, disclose the number of meetings held during the preceding 12 months. If the independent directors do not hold such meetings, describe what the board does to facilitate open and candid discussion among its independent directors.		Yes	The Board has adopted a policy for the independent members of the Board to meet without management present before and after each regularly scheduled meeting of the Board. These sessions are of no fixed duration and participating directors are encouraged to raise and discuss any issues of concern. This policy was complied with for all meetings of the Board in 2005 with respect to Mr. Doyle (9 meetings). With respect to Ms. Paliza, who was identified as non-independent in early 2005, this was complied with commencing in July 2005 (3 meetings).