EXECUTION COPY
BNSF STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of December 18, 1999 (this
"Agreement"), is between BURLINGTON NORTHERN SANTA FE CORPORATION, a Delaware
corporation ("Issuer"), and CANADIAN NATIONAL RAILWAY COMPANY, a Canadian
corporation ("Grantee").
RECITALS
A. The Combination Agreement. Prior to the entry into this Agreement and
prior to the grant of the Option (as defined in Section 1(a)), Issuer, Grantee,
NORTH AMERICAN RAILWAYS, INC., a Delaware corporation owned 50% by Issuer and
50% by Grantee ("Newco"), and Western Merger Sub, Inc., a Delaware corporation
and a wholly owned subsidiary of Newco ("Merger Sub"), have entered into a
Combination Agreement, dated as of the date of this Agreement (the "Combination
Agreement"), pursuant to which Grantee and Issuer have agreed to effect certain
transactions upon the terms and subject to the conditions set forth in the
Combination Agreement.
B. The Stock Option Agreement. As an inducement and condition to
Grantee's willingness to enter into the Combination Agreement, and in
consideration thereof, the board of directors of Issuer has approved the grant
to Grantee of the Option pursuant to this Agreement and the acquisition of
Common Stock (as defined below) by Grantee pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth in this Agreement and in the Combination Agreement, the
parties agree as follows:
1. The Option. (a) Issuer hereby grants to Grantee an irrevocable
option (the "Option") to purchase, subject to the terms and conditions of this
Agreement, up to 64,992,261 fully paid and nonassessable shares of common stock,
par value $0.01 per share ("Common Stock"), of Issuer at a price per share in
cash equal to the average of the closing price of Issuer's Common Stock on the
New York Stock Exchange (as reported in The Wall Street Journal, New York City
edition) on the five trading days ending on the last trading day preceding the
Notice Date (as defined below) (the "Option Price"); provided, however, that in
no event shall the number of shares for which the Option is exercisable exceed
12.5% of the shares of Common Stock issued and outstanding at the time of
exercise (giving effect to the shares of Common Stock issued or issuable under
the Option) (the "Maximum Applicable Percentage"). The number of shares of
Common Stock purchasable upon exercise of the Option are subject to adjustment
as set forth in this Agreement.
(b) In the event that any additional shares of Common Stock are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement), the aggregate number of shares of Common Stock
purchasable upon exercise of the Option (inclusive of shares, if any, previously
purchased upon exercise of the Option) shall automatically be increased (without
any further action on the part of Issuer or Grantee being necessary) so that,
after such issuance, it equals the Maximum Applicable Percentage. No such
increase shall affect the Option Price.
2. Exercise; Closing. (a) Manner of Exercise; Termination. Grantee or
any other person that shall become a holder of all or part of the Option in
accordance with the terms of this Agreement (each such person being sometimes
referred to in this Agreement as the "Holder") may exercise the Option, in whole
or in part, by delivering a written notice thereof as provided in Section 2(d)
within 18 months following the occurrence of a Triggering Event (as defined in
Section 2(b)) unless prior to such Triggering Event either the Merger Effective
Time or the Arrangement Effective Time (as such terms are defined in the
Combination Agreement) shall have occurred or the Option shall have terminated
in accordance with the following sentence. The Option shall terminate upon any
of (i) the occurrence of either the Merger Effective Time or the Arrangement
Effective Time, (ii) if no notice pursuant to the preceding sentence has been
delivered prior thereto, the close of business on the day 18 months after the
date that Grantee becomes entitled to receive the BNSF Termination Fee (as
defined in the Combination Agreement) under Section 10.4(b) of the Combination
Agreement, (iii) the performance of the CN Stock Option Agreement (as defined in
the Combination Agreement) by Grantee or the right of Issuer to purchase shares
of Grantee's common stock upon exercise of the option granted thereunder shall
have been finally enjoined or held invalid by a court of competent jurisdiction
or (iv) the execution of or the written agreement to enter into an agreement or
series of agreements relating to a Business Combination Transaction (as defined
below) with such Holder; provided, however, that in the event that any portion
of the Option is held by any other person other than the Grantee in accordance
with the terms of this Agreement, any termination pursuant to clause (iv) above
shall only apply to such portion of the Option held by such Holder and shall not
effect that portion of the Option held by the Grantee or such other persons, as
the case may be. A "Business Combination Transaction" shall mean (i) a
consolidation, exchange of shares or merger of a Holder with any Person and, in
the case of a merger, in which the Holder shall not be the continuing or
surviving corporation, (ii) any transaction (including, without limitation, a
consolidation, exchange of shares or merger) in which the Holder shall be the
continuing or surviving corporation but the then outstanding shares of capital
stock of the Holder shall be changed into or exchanged for stock or other
securities of the Holder or any other Person or cash or any other property or
the capital stock of such Holder outstanding immediately before such transaction
shall after such transaction represent less than 50% of the common shares and
common share equivalents of such Holder outstanding immediately after the
transaction or (iii) a sale, lease or other transfer of all or substantially all
the assets of the Holder to any Person.
(b) Triggering Event. A "Triggering Event" shall have occurred if the
Combination Agreement is terminated and Grantee shall have become entitled to
receive the BNSF Termination Fee pursuant to Section 10.4(b) of the Combination
Agreement.
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(c) Notice of Triggering Event by Issuer. Issuer shall notify Grantee
promptly in writing of the occurrence of any Triggering Event, it being
understood that the giving of such notice by Issuer shall not be a condition to
the right of the Holder to exercise the Option.
(d) Notice of Exercise by Grantee. If the Holder shall be entitled to and
wishes to exercise the Option, it shall send to Issuer a written notice (the
date of which is referred to in this Agreement as the "Notice Date") specifying
(i) the total number of shares that the Holder will purchase pursuant to such
exercise and (ii) a place and date (a "Closing Date") not earlier than three
business days nor later than 30 business days from the Notice Date for the
closing of such purchase (a "Closing"); provided, that if the Closing cannot be
effected by reason of the application of any law or regulation, (x) the Holder
or Issuer, as required, promptly after the giving of such notice shall file the
required notice, report, filing or application for approval and shall
expeditiously process the same and (y) the Closing Date shall be extended to not
later than the tenth business day following the expiration or termination of the
restriction imposed by such law. Each of the Holder and the Issuer agrees to
use its reasonable best efforts to cooperate with and provide information to
Issuer or Holder, as the case may be, for the purpose of any required notice,
report, filing or application for approval.
(e) Payment of Purchase Price. At each Closing, the Holder shall pay to
Issuer the aggregate purchase price for the shares of Common Stock purchased
pursuant to the exercise of the Option in immediately available funds by a wire
transfer to a bank account designated by Issuer; provided, that failure or
refusal of Issuer to designate such a bank account shall not preclude the Holder
from exercising the Option, in whole or in part.
(f) Delivery of Common Stock. At such Closing, simultaneously with the
payment of the purchase price by the Holder, Issuer shall deliver to the Holder
a certificate or certificates representing the number of shares of Common Stock
purchased by the Holder and, if the Option shall be exercised in part only, a
new Option evidencing the rights of the Holder to purchase the balance (as
adjusted pursuant to Section 1(b)) of the shares of Common Stock then
purchasable under this Agreement.
(g) Restrictive Legend. Certificates for Common Stock delivered at a
Closing shall be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is subject
to resale restrictions arising under the Securities Act of 1933, as
amended."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if the Holder shall have
delivered to Issuer a copy of a letter from the staff of the Securities and
Exchange Commission, or a written opinion of counsel, in form and substance
reasonably satisfactory to Issuer, to the effect that such legend is not
required for purposes of the Securities Act of 1933, as amended (the "Securities
Act"). In addition, such certificates shall bear any other legend as may be
required by applicable law.
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(h) Ownership of Record; Tender of Purchase Price; Expenses. Upon the
giving by the Holder to Issuer of a written notice of exercise referred to in
Section 2(d) and the tender of the applicable purchase price in immediately
available funds, the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of Issuer shall then be closed or that certificates
representing such shares of Common Stock shall not have been delivered to the
Holder. Issuer shall pay all expenses, and any and all United States and
Canadian federal, provincial, territorial, state and local taxes and other
charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of the Holder or
its assignee, transferee or designee.
(i) Effect of Statutory or Regulatory Restraints on Exercise. To the
extent that, upon or following the giving by the Holder to Issuer of a written
notice of exercise referred to in Section 2(d), Issuer is prohibited under
applicable law or regulation from delivering to the Holder a certificate or
certificates representing the number of shares of Common Stock purchased by the
Holder, Issuer shall immediately so notify the Holder in writing and thereafter
deliver or cause to be delivered, from time to time, to the Holder the portion
of the Option Shares that Issuer is no longer prohibited from delivering, within
two business days after the date on which it is no longer so prohibited;
provided, however, that upon notification by Issuer in writing of such
prohibition, the Holder may, at any time after receipt of such notification from
Issuer, revoke in writing its exercise notice, whether in whole or to the extent
of the prohibition, whereupon, in the latter case, Issuer shall promptly (i)
deliver to the Holder that portion of the Option Shares that Issuer is not
prohibited from delivering pursuant to the time periods set forth in Section
2(d); and (ii) deliver to the Holder, as appropriate, with respect to the
Option, a new Stock Option Agreement evidencing the right of the Holder to
purchase that number of shares of Common Stock for which the surrendered Stock
Option Agreement was exercisable at the time of giving the written notice of
exercise referred to in Section 2(d). Notwithstanding anything to the contrary
in this Agreement, the period for exercise of rights related to the Option set
forth in Section 2(a) shall be extended, at the request of Holder, for a period
not to exceed 180 days from the date that the Option would have terminated
pursuant to Section 2(a) hereof or such shorter period necessary to permit the
delivery of all the Option Shares subject to the exercise notice.
(j) Conditions to Exercise. The obligation of the Issuer to effect the
Closing shall be subject to the condition that the issuance of the Option Shares
at the Closing shall not be prohibited by any law, regulation, injunction or
order of any Governmental Entity (as defined in the Combination Agreement).
(k) Waiver of Voting Rights. The Grantee agrees that it shall have no
voting rights, and shall not exercise or permit to be exercised any voting
rights in any circumstance, in respect of the Option or the Common Stock
purchasable under the Option unless, until, and only to the extent that the
Option has been exercised and Common Stock has been actually purchased
thereunder.
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3. Covenants of Issuer. In addition to its other agreements and
covenants in this Agreement, Issuer agrees:
(a) Shares Reserved for Issuance. It will maintain, free from
preemptive rights, sufficient authorized but unissued shares of Common
Stock to issue the appropriate number of shares of Common Stock pursuant to
the terms of this Agreement so that the Option may be fully exercised
without additional authorization of Common Stock after giving effect to all
other options, warrants, convertible securities and other rights of third
parties to purchase shares of Common Stock from Issuer.
(b) No Avoidance. It will not avoid or seek to avoid (whether by
amendment of its constitutive documents or through reorganization,
consolidation, merger, issuance of rights, dissolution or sale of assets,
or by any other voluntary act) the observance or performance of any of the
covenants, agreements or conditions to be observed or performed under this
Agreement by Issuer.
(c) Further Assurances. After the date of this Agreement, it will
promptly take all actions as may from time to time be required (including
(i) seeking any necessary governmental approval, exemption or other
authorization, (ii) complying with all applicable premerger notification,
reporting and waiting period requirements under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended and (iii) in the event that
prior notice, report, filing or approval with respect to any Governmental
Entity is necessary under any applicable foreign, United States or Canadian
federal, provincial, territorial, state or local law before the Option may
be exercised, cooperating fully with the Holder in preparing and processing
the required applications or notices) in order to permit each Holder to
exercise the Option and purchase shares of Common Stock pursuant to such
exercise and to take all action necessary to protect the rights of the
Holder against dilution.
(d) Stock Exchange Listing. It will use its reasonable best efforts
to cause the shares of Common Stock to be issued pursuant to the Option to
be approved for listing (to the extent they are not already listed) on all
securities exchanges on which shares of Common Stock of the Issuer are then
listed, subject to official notice of issuance.
4. Representations and Warranties of Issuer. Issuer represents and
warrants to Grantee as follows:
(a) Shares Reserved for Issuance; Capital Stock. Issuer has taken all
necessary corporate action to authorize and reserve, free from preemptive
rights, and permit it to issue, sufficient authorized but unissued shares
of Common Stock so that the Option may be fully exercised without
additional authorization of Common Stock after giving effect to all other
options, warrants, convertible securities and other rights of third parties
to purchase shares of Common Stock from Issuer, and all such shares, upon
issuance pursuant to the Option, will be duly authorized, validly issued,
fully paid and
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nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances, and security interests (other than those created by this
Agreement) and not subject to any preemptive rights.
5. Adjustments. In addition to the adjustment to the total number of
shares of Common Stock purchasable upon exercise of the Option pursuant to
Section 1(b), the total number of shares of Common Stock purchasable upon the
exercise of the Option shall be subject to adjustment from time to time as
follows:
(a) In the event of any change in the outstanding shares of Common
Stock by reason of stock dividends, split-ups, mergers, recapitalizations,
combinations, subdivisions, conversions, exchanges of shares or the like,
the type and number of shares of Common Stock purchasable upon exercise of
the Option, shall be appropriately adjusted, and proper provision shall be
made in the agreements governing any such transaction, so that (i) any
Holder shall receive upon exercise of the Option the number and class of
shares, other securities, property or cash that such Holder would have
received in respect of the shares of Common Stock purchasable upon exercise
of the Option if the Option had been exercised and such shares of Common
Stock had been issued to such Holder immediately prior to such event or the
record date therefor, as applicable and (ii) in the event any additional
shares of Common Stock are to be issued or otherwise become outstanding as
a result of any such change (other than pursuant to an exercise of the
Option), the number of shares of Common Stock purchasable upon exercise of
the Option shall be increased so that, after such issuance and together
with shares of Common Stock previously issued pursuant to the exercise of
the Option (as adjusted on account of any of the foregoing changes in the
Common Stock), the number of shares so purchasable equals the Maximum
Applicable Percentage of the number of shares of Common Stock issued and
outstanding immediately after the consummation of such change. If any such
change in the outstanding shares of Common Stock occurs at any time on or
after the first trading day included in the calculation of the Option Price
and prior to the Closing, equitable adjustment shall be made to the Option
Price to reflect the effect of such changes.
(b) Without limiting the parties' relative rights and obligations
under the Combination Agreement, in the event that Issuer enters into an
agreement or arrangement (i) to consolidate with or merge into any person,
other than Grantee or one of its subsidiaries, and Issuer will not be the
continuing or surviving corporation in such consolidation or merger, (ii)
to permit any person, other than Grantee or one of its subsidiaries, to
merge into Issuer and Issuer will be the continuing or surviving
corporation, but in connection with such merger, the shares of Common Stock
outstanding immediately prior to the consummation of such merger will be
changed into or exchanged for stock or other securities of Issuer or any
other person or cash or any other property, or the shares of Common Stock
outstanding immediately prior to the consummation of such merger will,
after such merger, represent less than 50% of the outstanding voting
securities of the merged company, or (iii) to sell or otherwise transfer
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all or substantially all of its assets to any person, other than Grantee or
one of its subsidiaries, then, and in each such case, the agreement
governing such transaction will make proper provision so that the Option
will, upon the consummation of any such transaction and upon the terms and
conditions set forth herein, be converted into, or exchanged for, an option
with identical terms appropriately adjusted to acquire the number and class
of shares or other securities or property that Grantee would have received
in respect of the Common Stock if the Option had been exercised immediately
prior to such consolidation, merger, sale or transfer or the record date
therefor, as applicable and make any other necessary adjustments.
6. Registration. (a) Upon the occurrence of a Triggering Event, Issuer
shall, at the request of a Holder, as promptly as practicable prepare, file and
keep current a shelf registration statement under the Securities Act covering
any or all shares issued and issuable pursuant to the Option and shall use its
best efforts to cause such registration statement to become and remain effective
for such period as may be reasonably necessary to permit the sale or other
disposition of any shares of Common Stock issued upon total or partial exercise
of the Option ("Option Shares") in accordance with any plan of disposition
requested by such Holder; provided, however, that Issuer may suspend filing of
or maintaining the effectiveness of a registration statement relating to a
registration request by a Holder under this Section 6 for a period of time (not
in excess of 60 days in the aggregate) if in its judgment such filing of such
registration statement or the maintenance of its effectiveness would require the
disclosure of nonpublic information that Issuer has a good faith business
purpose for preserving as confidential. Subject to the foregoing, Issuer will
use its reasonable best efforts to cause such registration statement to become
effective as soon as practicable. In connection with any such registration,
Issuer and the Holder requesting such registration shall provide each other with
representations, warranties, indemnities and other agreements customarily given
in connection with such registrations. If requested by such Holder in
connection with such registration, Issuer shall become a party to any
underwriting agreement relating to the sale of such shares, but only to the
extent of obligating Issuer in respect of representations, warranties,
indemnities, contribution and other agreements customarily made by issuers in
such underwriting agreements.
(b) In the event that such Holder so requests, the closing of the sale or
other disposition of the Common Stock or other securities pursuant to a
registration statement filed pursuant to Section 6(a) shall occur substantially
simultaneously with the exercise of the Option.
(c) Any registration statement prepared and filed under this Section 6 and
any sale covered thereby, will be at Issuer's expense except for underwriting
discounts or commissions, brokers' fees and the fees and disbursements of the
Holder's counsel related thereto. In connection with any registration pursuant
to this Section 6, Issuer and such Holder will provide each other and any
underwriter of the offering with customary representations, warranties,
covenants, indemnification, and contribution in connection with such
registration.
7. Extension of Exercise Periods. The periods for exercise of certain
rights under Section 2 shall be extended in each such case at the request of the
Holder to the extent necessary
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to avoid liability by the Holder under Section 16(b) of the Securities Exchange
Act of 1934, as amended ("Section 16(b)"), by reason of such exercise.
8. Assignment. Neither party may assign any of its rights or obligations
under this Agreement or the Option to any other person without the express
written consent of the other party. Any attempted assignment in contravention
of the preceding sentence shall be null and void.
9. Filings; Other Actions. The parties hereto will use their reasonable
best efforts to make all filings with, and to obtain consents of, all third
parties and governmental authorities necessary for the consummation of the
transactions contemplated by this Agreement.
10. Specific Performance. The parties acknowledge that damages would be
an inadequate remedy for a breach of this Agreement by either party and that the
obligations of the parties shall be specifically enforceable through injunctive
or other equitable relief.
11. Severability. The provisions of this Agreement, the Combination
Agreement and any other agreement contemplated by the Combination Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision of this Agreement, the Combination Agreement or any other agreement
contemplated by the Combination Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement or any provisions of
such other agreement. Without limiting the generality of the foregoing, the
invalidity or unenforceability of any provision of any such other agreement
shall not affect the validity or enforceability of any provision of this
Agreement. If any provision of this Agreement or any such other agreement or
the application thereof to any Person or any circumstance, is invalid or
unenforceable, (i) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (ii) the
remainder of this Agreement or any such other agreement and the application of
such provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction. If for any reason a Governmental Entity
determines that the Holder is not permitted to acquire the full number of shares
of Common Stock provided in Section 1(a) of this Agreement (as adjusted pursuant
to Sections 1(b) and 5 of this Agreement), it is the express intention of Issuer
to allow the Holder to acquire or to require Issuer to repurchase such lesser
number of shares as may be permissible, without any amendment or modification of
this Agreement or any other agreement executed or to be executed in connection
herewith.
12. Notices. Notices, requests, instructions or other documents to be
given under this Agreement shall be in writing and shall be deemed given, (i)
when sent, if sent by facsimile, provided that a copy of the facsimile is
promptly sent by U.S. mail and confirmation of receipt has been delivered (ii)
when delivered, if delivered personally to the intended recipient, and (iii) one
business day later, if sent by overnight delivery via an international courier
service and, in each case at the respective addresses of the parties set forth
in the Combination Agreement.
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13. Expenses. Except as otherwise expressly provided in this Agreement or
in the Combination Agreement, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated by this Agreement shall be paid
by the party incurring such expense, including fees and expenses of its own
financial consultants, investment bankers, accountants, and counsel.
14. Entire Agreement. This Agreement, the Confidentiality Agreement (as
defined in the Combination Agreement) and the Combination Agreement (including
any other exhibits thereto and the ancillary agreements contemplated thereby)
constitute the entire agreement, and supersede all other prior agreements,
understandings, representations and warranties, both written and oral, between
the parties, with respect to the subject matter of this Agreement. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties and their respective successors and permitted assigns. Nothing
in this Agreement is intended to confer upon any person or entity, other than
the parties to this Agreement, and their respective successors and permitted
assigns, any rights or remedies under this Agreement.
15. Governing Law and Venue; Waiver of Jury Trial.
(a) This Agreement shall be deemed to be made in and in all respects shall
be interpreted, construed and governed by and in accordance with the laws of the
State of New York without regard to the conflict of law principles thereof. The
parties hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of both the courts of the State of Delaware and of the
United States of America located in Wilmington, Delaware (the "Delaware Courts")
and the Quebec Superior Court located in Montreal, Quebec (the "Quebec Court")
for any litigation arising out of or relating to this Agreement and the
transactions contemplated by this Agreement, waive any objection to the laying
of venue of any such litigation in the Delaware Courts or the Quebec Court and
agree not to plead or claim in any Delaware Court or the Quebec Court that such
litigation brought therein has been brought in an inconvenient forum; provided,
however, that the parties agree that any proceedings in the Quebec Court arising
out of or relating to this Agreement and the transactions contemplated by this
Agreement shall be conducted in English and all written documents relating to
any such proceedings shall be written in English.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
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UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 15.
16. U.S. Dollars. All amounts paid or payable hereunder, and all prices
referenced hereunder, shall be in United States Dollars.
17. Effectiveness. This Agreement shall not be effective until, but shall
become effective automatically immediately, without any action on the part of
Issuer, Grantee or any Holder, when, the Reciprocating Event (as defined below)
occurs. The "Reciprocating Event" shall mean the approval by The Toronto Stock
Exchange of both (i) the grant of the option granted to Issuer by Grantee under
the CN Stock Option Agreement and (ii) the issuance of the shares of Grantee's
common stock issuable thereunder.
18. Captions. The Section and paragraph captions in this Agreement are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions of this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
duly authorized officers of the parties as of the day and year first written
above.
CANADIAN NATIONAL RAILWAY COMPANY
By:/s/ Paul M. Tellier
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Name: Paul M. Tellier
Title: President and Chief Executive Officer
BURLINGTON NORTHERN SANTA FE
CORPORATION
By:/s/ Robert D. Krebs
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Name: Robert D. Krebs
Title: Chairman and Chief Executive Officer