Form of US Stock Option Agreement

This Stock Option Agreement (“Option Agreement”) is entered into between Canadian Pacific Kansas City Limited (formerly known as Canadian Pacific Railway Limited) (the “Corporation”) and the Participant[1] named below (the “Optionholder”) pursuant to the Canadian Pacific Railway Limited Management Stock Option Incentive Plan as amended from time to time (the “Plan”)[, a sub-plan under the Canadian Pacific Railway Limited Section 162(m) Incentive Plan (the “162(m) Plan”),] and confirms that:

1.on [ ] (the “Grant Date”);

2.the Optionholder, in such individual's capacity as an officer or employee of the Corporation or any Subsidiary;

3.was granted an option (the “Option”) to purchase [ ] Common Shares (the “Optioned Shares”) of the Corporation set out above, exercisable from time to time as to:

(a)[ ]% on and after the [ ] anniversary of the [Grant Date]; and

(b)[ ]% on and after the [ ] anniversary of the [Grant Date]; and

(c)[ ]% on and after the [ ] anniversary of the [Grant Date]; and

(d)the remaining [ ]% on and after the [ ] anniversary of the [Grant Date];

4.at a price (the “Exercise Price”) of [ ] (USD) per Common Share, being the market price of the Common Shares on the Grant Date on the New York Stock Exchange; and

5.for a term expiring at 5:00 p.m., Calgary time, on [ ] (the “Expiry Date”);

in accordance with the terms and subject to the conditions set out in the Plan [and the 162(m) Plan] (including, without limitation, the “Early Expiry” provisions in Section 4.7 of the Plan) and in this Option Agreement.

Notwithstanding any other provisions in this Option Agreement, the Option shall be subject to the terms and conditions in the Non-Competition and Non-Solicitation Agreement in Schedule A (without any further notice, compensation in lieu of notice or damages of any kind) if the Optionholder fails to comply with the terms and conditions set out in Schedule A. In addition, the Optionholder agrees to reconfirm the obligations outlined in Schedule A upon request by the Corporation at any time throughout the term of the Optionholder’s engagement with the Corporation or upon termination thereof, and failure to provide such confirmation as requested by the Company shall result in the immediate cancellation of the Option granted herein (without any further notice, compensation in lieu of notice or damages of any kind).

By electronically “accepting” this agreement, the Optionholder confirms and acknowledges that he or she has received, read and understood the terms of the Plan [and the 162(m) Plan] and this Option Agreement, and accepts the Option in accordance with the terms of the Plan [and the 162(m) Plan] and this Option Agreement. The Optionholder also confirms and acknowledges that he or she has not been induced to enter into this Option Agreement by expectation of employment or

continued employment with the Corporation or any Subsidiary. The Optionholder also authorizes the Corporation to provide home address information to the Plan Administrator.

IN WITNESS WHEREOF the Corporation and the Optionholder have entered into this Option Agreement as of [ ].

AND WHEREAS, during the course of the Employee’s employment with the member of the CPKC Group (as defined below) that employs Employee, the Employee has access to proprietary and confidential information of the Company and the CPKC Group, thereby making the Company and the CPKC Group uniquely vulnerable to misuse of such information to the detriment of the Company’s and the CPKC Group’s business and interests;

AND WHEREAS, any LTIP granting agreement made on or after the effective date of this Agreement and any grant thereunder is subject to the terms of this Agreement, and such terms are required to protect the proprietary interests and value of the Company and the CPKC Group;

AND WHEREAS, the Employee wishes to participate in one or more of the LTIPs and be eligible to receive grants under these LTIPs by accepting this Agreement either by signature below or by electronic acceptance through Solium Capital ULC (“Shareworks”).

THEREFORE, the parties agree as follows:

1.Consideration. In exchange for accepting this Agreement, the Employee shall be eligible to participate in one or more of the LTIPs, subject to the governing terms of those plans, and acknowledges that this eligibility and any grants thereunder shall constitute good and sufficient consideration for the Employee’s acceptance of the covenants set out in this Agreement.

2.Protected Rights. The parties acknowledge and agree that nothing contained in this Agreement limits: (i) the Employee’s ability to report or file a charge or complaint with any federal, state, provincial or local governmental agency or commission, including the United States Securities and Exchange Commission or any Canadian securities regulator (“Government Agencies”) relating to potential violations of law or regulations; or (ii) the Employee’s ability to communicate with Government Agencies or otherwise participate in any investigation or proceeding that may

be conducted by Government Agencies, including providing documents or other information, without notice to the Company.

3.Non-Competition/Non-Solicitation.

(a)In this Agreement:

(i)“Covenant Period” means the period of the Employee's employment with the member of the CPKC Group that employs Employee and additionally the period of twenty-four (24) months following the cessation of the Employee's employment for any reason; and

(ii)“CPKC Group” means and includes all parent companies, subsidiary companies, and affiliated or related companies or entities of the Company, successors and assigns of the Company which the Employee provides services to, has responsibilities for and/or obtains confidential information from or about.

(b)Non-Competition. During the Covenant Period, the Employee shall not, directly or indirectly, anywhere in Canada or the United States, (i) maintain any interest (proprietary, financial or otherwise) in the business of a Class 1 Railroad or (ii) in any manner, accept employment with, become engaged in the business of, or provide services to, a Class 1 Railroad in any position, role, or area of responsibility similar to or greater than those the Employee held with the member of the CPKC Group that employs Employee in his or her last five (5) years of employment with such member of the CPKC Group. This restriction shall still permit the Employee to acquire, directly or indirectly, less than 2% of the outstanding capital stock of any publicly traded company in the business of a Class 1 Railroad.

(c)Non-Solicitation of Customers, Suppliers and Licensors. During the Covenant Period, the Employee shall not, directly or indirectly, solicit any person that:

(i)is a customer, supplier or licensor of the Company or the CPKC Group at the cessation of the Employee’s employment that the Employee dealt with, or had confidential information of, by virtue of the Employee’s employment any time within twelve (12) months before the cessation of the Employee’s employment;

(ii)was a customer, supplier or licensor of the Company or the CPKC Group that the Employee dealt with, or had confidential information of, by virtue of the Employee’s employment at any time within twelve (12) months before the cessation of the Employee’s employment; or

(iii)to the knowledge of the Employee by virtue of the Employee’s employment, has been pursued as a prospective customer, supplier or licensor by or on behalf of the Company or the CPKC Group through the submission of a proposal in writing to perform services for that prospective customer, supplier or licensor at any time within twelve (12) months before the cessation of the Employee’s employment and regarding whom the Company and the CPKC Group has not determined to cease pursuing,

for the purposes of: (A) terminating or modifying any actual or prospective relationship the customer or prospective customer has with the Company or the CPKC Group or for the purposes of selling any services to, or soliciting services from, that customer or prospective customer where those services are substantially similar to or competitive with the services sold by the Company or the CPKC Group at the cessation of the Employees’ employment, or (B) terminating or modifying any actual or prospective relationship the supplier or licensor or prospective supplier or licensor has with the Company or the CPKC Group.

(d)Non-Solicitation of Employees and Consultants. During the Covenant Period, the Employee shall not directly or indirectly solicit any employee or consultant of the Company or the CPKC Group to leave their employment or engagement. For this Paragraph 3(d), general newspaper and other media advertisements shall not be a solicitation of employees or consultants or former employees or former consultants of the Company or the CPKC Group.

(e)Notwithstanding Paragraphs 3(a)(i) and 5, the Company agrees that Paragraph 3(b) of this Agreement does not apply to the cessation of the Employee’s employment if the member of the CPKC Group that employs Employee terminates the Employee’s employment as a result of a layoff due to lack of work or elimination of position unrelated to the Employee’s performance or conduct.

4.Acknowledgements.

(a)Reasonableness of Covenants, Right to Counsel, and Time for Review. The Employee agrees that it is fair, reasonable and necessary to protect the proprietary interests and value of the Company and the CPKC Group that the Employee agrees to the obligations and restrictions in this Agreement. Accordingly, the Employee confirms all obligations and restrictions in this Agreement are reasonable and valid and the Employee waives all defenses to the strict enforcement of those obligations and restrictions. Employee acknowledges that they are advised to consult with counsel prior to signing this Agreement, and further acknowledges and understands that they have fourteen (14) days to review this Agreement prior to signing.

(b)Annual Confirmation Process. The Employee agrees to confirm the Employee’s obligations in this Agreement on an annual basis through the Employee’s Shareworks account or any other process that the Company may establish. However, such confirmation is not necessary to enforce Employee’s obligations under this Agreement, which continue in full force and effect regardless of any subsequent failure to confirm.

(c)Blue Pencil Doctrine. In the event any of the terms of this Agreement are determined by a court of competent jurisdiction to be unreasonable or overbroad under circumstances then existing, the parties hereto authorize and request the court to apply the “blue pencil doctrine” to modify the unreasonable or overly broad term to make it enforceable against Employee. This Agreement shall not be construed against any party regardless of who was more responsible for its preparation.

(d)Continuing Confidentiality Obligations. The Employee acknowledges and agrees to be bound by the confidentiality obligations outlined in the Company’s Code of Business Ethics, as may be amended, and any further confidentiality agreements entered into during the Employee's employment with the member of the CPKC Group that employs Employee and following the cessation of the Employee's employment for any reason. Both Employee and Company understand and acknowledge that Employee will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is: (1) made in confidence to a federal, state, or local government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of the law; or (2) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

5.Survival. All obligations and restrictions imposed on the Employee under this Agreement shall survive and continue in full force and effect (i) regardless of any changes to the Employee’s terms of employment with the member of the CPKC Group that employs Employee, including changes to the Employee’s duties and location of employment; and (ii) following the cessation of the Employee's employment with the member of the CPKC Group that employs Employee for any reason.

6.Relief/Remedies. In the event of a breach of this Agreement, the Company may seek and shall be entitled to the following remedies, which are non-exhaustive and non-exclusive and are in addition to any further remedies available to the Company in contract, law or equity:

(a)Injunction. The Employee agrees that any breach of this Agreement would cause irreparable harm to the Company and the CPKC Group and this harm may not be compensable entirely with monetary damages. If the Employee breaches this Agreement, the Company and the CPKC Group shall be entitled to injunctive relief. Any injunctive relief sought by the Company and the CPKC Group shall be in addition to and not in limitation of any monetary relief or other remedies or rights to which the Company and the CPKC Group are or may be entitled at law, in equity, or under this Agreement.

(b)Repayment or Return of Benefit. If the Employee breaches the Agreement within twenty-four (24) months after receiving any payment or benefit under any LTIP grant made on or after the effective date of this Agreement (the “Repayment Period”), the Company shall be entitled to repayment or return of such payment or benefit. For clarity:

(i)with respect to the Restricted Share Unit Plan for Eligible Employees of Canadian Pacific Railway Limited and the Performance Share Unit Plan for Eligible Employees of Canadian Pacific Railway Limited, as may be amended, the Company may require, at its sole discretion, that the Employee immediately repay any cash settlement or payment received during the Repayment Period pursuant to any LTIP grant subject to this Agreement; and

(ii)with respect to the Canadian Pacific Railway Limited Amended and Restated Management Stock Option Incentive Plan, as may be amended, the Company may require, at its sole discretion, that the Employee immediately pay the Company an amount equal to the difference between the exercise price of any options and the market value of any corresponding shares which have been purchased during the Repayment Period through the exercise of any vested option granted subject to this Agreement. For the purposes of this paragraph, the term market value shall mean the closing price of the shares on the date that the Employee exercises the vested option.

For further clarity, the obligation set out above in this Paragraph 6(b) regarding the Repayment Period shall not be interpreted to extend the Employee’s Covenant Period.

(c)Forfeiture. The Employee agrees that any LTIP grants made which are subject to the terms of this Agreement (whether vested or unvested) shall be forfeited in their entirety and the Employee shall have no further right, entitlement or interest in such grants.

(d)Accounting. The Company shall be entitled to an accounting, and to the repayment of all profits, compensation, commissions, fees, or other remuneration which the Employee or any other person or entity has either directly or indirectly realized on its behalf or on behalf of another and/or may realize, because of, growing out of, or in connection with litigation relating to any breach of this Agreement.

(e)Legal Costs. The Company shall be awarded its reasonable expenses, including attorneys’ fees and costs, incurred in enforcing this Agreement.

7.Severability. Each provision in this Agreement is separate and distinct, and if any provision, whether in whole or in part, is unenforceable, it shall be severed from this Agreement and all other provisions of this Agreement shall continue to apply in full force and effect.

8.Non-Waiver. The Company's decision to not enforce a breach of any part of this Agreement (or the Company's settlement of any claims for breach) will not prevent the Company from enforcing

the Agreement regarding any other breach of this Agreement that the Company discovers, and shall not operate as a waiver against any future enforcement of any part of this Agreement, any other agreement with the Employee or any other agreement with any other employee of the Company.

9.No Breach of Obligations to Others. The Employee represents that the Employee is not bound by or a party to any agreement or obligation with any other party that restrains or conflicts with the Employee’s obligations under this Agreement or the Employee’s employment with the member of the CPKC Group that employs Employee. The Employee agrees to indemnify the Company and the CPKC Group in respect of any violation of this representation.

10.Disclosure. The Employee agrees to disclose his or her commitments under this Agreement to any future employer or potential employer of the Employee, and authorizes the Company, at its election, to make this disclosure.

11.Governing Law and Forum. This Agreement shall be construed and determined according to the laws of the State of Minnesota, and any disputes arising out of this Agreement shall be determined in a court of appropriate jurisdiction in the state of Minnesota, and the Employee expressly consents to the exclusive jurisdiction of the state and federal courts in Minnesota for any dispute arising under this Agreement. The employee waives the right to claim any other jurisdiction is more convenient or to challenge the jurisdiction of the courts of Minnesota over the Employee.

12.Successor and Assigns. This Agreement binds and inures to the benefit of the Company’s successors and assigns.

13.Amendments. No amendment or modification to this Agreement will be valid or binding unless set out in writing and signed by both the Employee and the Company.

14.Independent Advice. The Employee confirms that the Employee has had a reasonable and adequate opportunity to obtain independent advice about this Agreement, the sufficiency of the consideration for this Agreement and the reasonableness of the obligations and restrictions in this Agreement, and that the Employee is accepting this Agreement freely and voluntarily with full understanding of its contents.

15.At-Will Employment. Nothing in this Agreement is intended to provide nor shall this Agreement provide the Employee with any contractual rights to employment for any period of time. The Employee acknowledges that his/her employment relationship with the member of the CPKC Group that employs Employee is one of at-will employment. This means that either (i) the Employee or (ii) the member of the CPKC Group that employs Employee may terminate the employment relationship at any time and for any reason, with or without cause or notice. The Employee understands he/she is an at-will employee of the member of the CPKC Group that employs Employee and that this Agreement does not modify the Employee's at-will status in any manner.

16.[Practice of Law. As it relates to the practice of law after the Employee’s employment with the Company has ceased (for any reason), the restrictions described in this Agreement shall be interpreted consistent with the applicable rules of professional responsibility, including but not limited to rules on confidentiality of information, duties to former clients and restrictions on the right to practice.]

17.Entire Agreement. This Agreement does not supersede and does not replace or extinguish any other written agreements between Employee and the Company or any member of CPKC Group regarding its subject matter including but not limited to non-competition, non-solicitation, or confidentiality obligations. Other than stated in this Agreement, the Employee has been offered

no oral or written promises, inducements, or representations, and the Employee accepts this Agreement without reliance on any oral or written promises, inducements, or representations other than those set out in this Agreement.

18.Recitals. The recitals set forth above form part of this Agreement.