1. | PURPOSE |
(a) | create employee engagement in the understanding and achievement of annual business plans; |
(b) | focus employee performance on the achievement of objectives at the corporate, business unit and individual levels; |
(c) | assist in attracting, retaining and engaging employees who develop and execute the business plans of the Corporation and its subsidiaries; and |
(d) | tie competitive total cash compensation levels to the achievement of objectives at all levels. |
2. | DEFINED TERMS |
(a) | “affiliate” has the meaning ascribed to that term in the Securities Act (Alberta); |
(b) | “Base Salary” means the base salary of a Participant; |
(c) | “Board” means the Board of Directors of the Corporation; |
(d) | “CEO” means the Chief Executive Officer of the Corporation; |
(e) | “Change of Control” means: |
(i) | the sale to a person or acquisition by a person not affiliated with the Corporation or its Subsidiaries of assets of the Corporation or its Subsidiaries having a value greater than 50% of the fair market value of the assets of the Corporation and its Subsidiaries determined on a consolidated basis prior to such sale whether such sale or acquisition occurs by way of reconstruction, reorganization, recapitalization, consolidation, amalgamation, arrangement, merger, transfer, sale or otherwise; |
(ii) | any change in the holding, direct or indirect, of shares of the Corporation by a person not affiliated with the Corporation as a result of which such person, or a group of persons, or persons acting in concert, or persons associated or affiliated with any such person or group within the meaning of the Securities Act (Alberta), are in a position to exercise effective control of the Corporation whether such change in the holding of such shares occurs by way of takeover bid, reconstruction, reorganization, recapitalization, consolidation, amalgamation, arrangement, merger, transfer, sale or otherwise; and for the purposes of this Plan, a person or group of persons holding shares or other securities in excess of the number which, directly or following conversion thereof, would entitle the holders thereof to cast 20% or more of the votes attaching to all shares of the Corporation which, directly or following conversion of the convertible securities forming part of the holdings of the person or group of persons noted above, may be cast to elect directors of the Corporation shall be deemed, other than a person holding such shares or other securities in the ordinary course of business as an investment manager who is not using such holding to exercise effective control, to be in a position to exercise effective control of the Corporation; |
(iii) | any reconstruction, reorganization, recapitalization, consolidation, amalgamation, arrangement, merger, transfer, sale or other transaction involving the Corporation where shareholders of the Corporation immediately prior to such reconstruction, reorganization, recapitalization, consolidation, amalgamation, arrangement, merger, transfer, sale or other transaction hold less than 50% of the shares of the Corporation or of the continuing corporation following completion of such reconstruction, reorganization, recapitalization, consolidation, amalgamation, arrangement, transfer, sale or other transaction; |
(iv) | the Corporation ceases to be a distributing corporation as that term is defined in the Canada Business Corporations Act; |
(v) | any event or transaction which the Board, in its discretion, deems to be a Change of Control; or |
(vi) | Incumbent Directors ceasing to be a majority of the Board; |
(vii) | any transaction whereby shares held by shareholders of the Corporation are transferred or exchanged for units or securities of a trust, partnership or other entity which trust, partnership or other entity continues to own directly or indirectly all of the shares of the Corporation previously owned by the shareholders of the Corporation and the former shareholders of the Corporation continue to be beneficial holders of such units or securities in |
(viii) | any change of control initiated or commenced by the Board (and whether or not such transaction was initiated or commenced by the Board shall be conclusively determined by the Board) will not constitute a change of control for purposes of this Plan; |
(f) | “Code” means the United States Internal Revenue Code of 1986, as amended; |
(g) | “constructive dismissal” means, unless consented to by the Participant, any action that constitutes constructive dismissal of the Participant at common law, including without limiting the generality of the foregoing: |
(i) | where the Participant ceases to be an officer of the Corporation, unless the Participant is appointed as an officer of a successor to a material portion of the assets of the Corporation; |
(ii) | a material decrease in the title, position, responsibilities, powers or reporting relationships of the Participant; |
(iii) | a reduction in the Base Salary (excluding any annual incentive bonus) of the Participant; or |
(iv) | any material reduction in the value of the Participant’s employee benefits, plans and programs (other than any annual incentive bonus); |
(h) | “Corporation” means Enbridge Inc., and includes any successor entity thereto; |
(i) | “Direct Reports” means executives of the Corporation or its Subsidiaries that report directly to the CEO; |
(j) | “Director” means a director of the Corporation; |
(k) | “Double Trigger Date” has the meaning given to it in subsection 8(i); |
(l) | “For Cause” includes “just cause” as defined in the common law and also includes any circumstance in which the Participant shall have been convicted of a criminal act of dishonesty resulting or intending to result directly or indirectly in gain or personal enrichment of the Participant; |
(m) | “HRC Committee” means the Human Resources and Compensation Committee of the Board, established and duly authorized to act by the Board; |
(n) | “Incumbent Director” means any member of the Board who was a member of the Board immediately prior to the occurrence of the transaction, elections or appointments giving rise to a Change of Control and any successor to an Incumbent Director who was recommended for election at a meeting of shareholders of the Corporation, or elected or appointed to succeed any Incumbent Director, by the affirmative vote of the directors, which affirmative vote includes a majority of the Incumbent Directors then on the Board; |
(o) | “Maximum Award” means, subject to Section 6(c), the maximum amount of compensation payable to a Participant under the Plan, being twice the Target Award; |
(p) | “Notice Period” means the notice period for termination of employment agreed to between the Corporation (or its Subsidiary) and the Participant, or, in the absence of any such agreement, the minimum statutory notice period that may be required under applicable employment standards legislation; |
(q) | “Participant” means an individual who becomes a participant of the Plan in accordance with Section 4; |
(r) | “Plan” means the Enbridge Inc. Short Term Incentive Plan, as amended and restated effective January 1, 2019 of the Corporation described in this document, and as the same may be duly amended or varied from time to time in accordance with the provisions of this Plan; |
(s) | “Retirement Plan” means a pension plan of the Corporation established or in effect from time to time which applies when an employee retires from the employment of the Corporation or its Subsidiaries; |
(t) | “STIP Payment” means the amount payable under the Plan to Participants upon the achievement of certain performance measures, calculated in accordance with Section 6; |
(u) | “Subsidiary” means |
(i) | any corporation that is a subsidiary (as such term is defined in the Canada Business Corporations Act) of the Corporation, as such provision is from time to time amended, varied or re-enacted; |
(ii) | any partnership or limited partnership that is controlled by the Corporation (the Corporation will be deemed to control a partnership or limited partnership if the Corporation possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such partnership or limited partnership, whether through the ownership of voting securities, by contract or otherwise); and |
(iii) | subject to regulatory approval, any corporation, partnership, limited partnership, trust, limited liability company or other form of business entity that the HRC Committee determines ought to be treated as a subsidiary for purposes of the Plan, provided that the HRC Committee shall have the sole discretion to determine that any such entity has ceased to be a subsidiary for purposes of the Plan; |
(v) | “Target Award” means the target amount of compensation payable to a Participant under the Plan, calculated as a percentage of the Participant’s annual Base Salary; |
(w) | “Term” means a period of one fiscal year of the Corporation or as otherwise determined by the HRC Committee; and |
(x) | “U.S. Taxpayer” means an individual whose income is subject to U.S. federal income taxation. |
3. | GOVERNANCE |
(a) | Subject to any determinations or approvals required to be made by the Board, the HRC Committee will administer the Plan in its sole discretion. The HRC Committee shall have the full power and sole responsibility to interpret the provisions of the Plan and to make regulations and formulate administrative provisions for its implementation, and to make such changes in the regulations and administrative procedures as, from time to time, the HRC Committee deems proper and in the best interests of the Corporation. Such regulations and provisions may include the delegation to any Director or Directors or any officer or officers of the Corporation or its Subsidiaries of such administrative duties and powers of the HRC Committee as it may, in its sole discretion, deem fit. The HRC Committee may amend the Plan to correct, remedy or reconcile any errors, inconsistencies or ambiguities in this Plan. The determinations of the HRC Committee in the administration of the Plan shall be final and conclusive. |
(b) | The HRC Committee shall have the authority to exercise discretion in the approval of STIP Payments, including without limitation the authority at any time to waive, amend or otherwise vary eligibility criteria, performance measures and the levels of Target and Maximum Awards under the Plan where in the opinion of the HRC Committee it is reasonable to do so and it does not materially prejudice |
(c) | Subject to any determinations or approvals required to be made by the HRC Committee under the Plan, the CEO shall have authority to administer the Plan. |
4. | PARTICIPATION AND TARGET AWARDS |
(a) | The CEO shall determine employees, other than his Direct Reports, eligible to participate in the Plan. The CEO shall recommend to the HRC Committee for its approval the participation in the Plan of his Direct Reports. The CEO shall also recommend to the HRC Committee for its approval the Target and Maximum Award for each Participant, other than the CEO. |
(b) | The CEO shall recommend to the HRC Committee for its approval the weighting for Corporation, business unit and individual performance measures of his Direct Reports. |
(c) | The HRC Committee will determine and recommend to the Board for its approval the Target and Maximum Award for the CEO. |
(d) | Directors who are not full-time employees of the Corporation or a Subsidiary shall not be eligible to become Participants. |
(e) | A designated employee shall have the right not to participate in the Plan, and any decision not to participate shall not affect his or her employment with the Corporation or a Subsidiary. Participation in the Plan does not confer upon the Participant any right to continued employment with the Corporation or a Subsidiary. |
5. | PERFORMANCE MEASURES |
(a) | At the start of each fiscal year the HRC Committee shall approve the Corporation performance measures, the target for the fiscal year and the levels of performance required to be achieved to receive a STIP Payment, and shall also approve any amendments to these measures and levels. |
(b) | The CEO shall establish: |
(i) | the weighting for Corporation, business unit and individual performance measures for all Participants, other than Direct Reports; |
(ii) | the financial targets and range of performance measures for each business unit; |
(iii) | any other scorecard performance measures, targets and range of performance measures for each business unit. |
(c) | The HRC Committee shall review and recommend to the Board for its approval the performance measures for the CEO. |
(d) | A copy of all performance measures that have been adopted under the Plan shall be appended to the minutes of the meeting at which such performances measures have been reviewed or approved, as applicable. |
6. | STIP PAYMENTS |
(a) | Except as otherwise provided herein, the amount of the STIP Payment for each Participant for a particular Term shall be based upon the achievement of the Corporation, business unit and individual performance measures established for the Participant under Section 5, the Base Salary of the Participant during the applicable Term, and if applicable, proration based on active service as defined in Section 8. |
(b) | Following receipt of the Corporation and business unit financial performance for the fiscal year and the receipt from the CEO of his recommendations on other performance measures, the HRC Committee will review and determine the extent to which the performance relative to targets has been achieved and shall approve the STIP Payments for all Participants except the CEO. The HRC Committee shall review and recommend to the Board for approval the CEO’s STIP Payment. |
(c) | Notwithstanding the foregoing, no STIP Payment payable to a Participant shall exceed an amount equal to two times the Target Award for the Participant for the Term unless approved by the CEO or, in the case of Direct Reports, unless approved by the HRC Committee. The CEO shall report to the HRC Committee by way of information, the Participants who are to receive a STIP Payment in excess of two times the Target Award. |
(d) | Notwithstanding the foregoing, no STIP Payment payable to a Participant designated as a “front office” employee within the energy marketing group shall exceed an amount equal to three times the Target Award for the Participant for the Term unless approved by the CEO. The CEO shall report to the HRC Committee by way of information, the “front office” Participants, other than energy marketing group employees, who are to receive a STIP Payment in excess of three times the Target Award. This Section 6(d) will become effective on January 1, 2014. |
7. | PAYMENTS |
(a) | Timing of Payment |
(b) | Form of Payment |
8. | TERMINATION |
(a) | Voluntary Termination |
(b) | Involuntary Termination Not For Cause |
(c) | Involuntary Termination For Cause |
(d) | Death |
(e) | Retirement |
(f) | Disability |
(g) | Leaves of Absence |
(h) | Secondments |
(i) | Double Trigger Change of Control |
(i) | Corporation, business unit and individual performance shall each be at target (1x multiplier); and |
(ii) | recommendations on other performance measures shall be provided by the CEO. |
(j) | No Future Awards |
9. | NEW HIRES |
10. | FUNDING |
11. | TAXES AND REPORTING |
12. | AMENDMENTS, ETC. |
13. | NO GUARANTEE OF EMPLOYMENT |
14. | CURRENCY |
15. | EFFECT OF REORGANIZATION |
16. | CONFLICT WITH WRITTEN EMPLOYMENT AGREEMENT |
17. | CODE SECTION 409A COMPLIANCE |
18. | INCENTIVE COMPENSATION CLAWBACK POLICY |
19. | EFFECTIVE DATE |