DEF 14A
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12

ENBRIDGE INC.    

 

(Name of Registrant as Specified in its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Table of Contents

LOGO

 

  

March 4, 2019

 

Notice of 2019 Annual Meeting of Shareholders and Proxy Statement

Annual Meeting of Shareholders of Enbridge Inc.

to be held on Wednesday, May 8, 2019

in Calgary, Alberta, Canada

 

 

LOGO


Table of Contents

What’s inside

 

Letter to Shareholders   
Notice of 2019 annual meeting of shareholders   
Proxy Statement      1  

Proxy Statement summary

     1  

About this Proxy Statement

     3  
Meeting information      3  
Voting information      4  

Who can attend the Meeting and vote

     4  

Voting recommendations

     4  

How to vote

     5  
Business of the Meeting      8  

Financial Statements

     8  

Item 1: Election of directors

     8  

Item 2: Appointment of our auditor

     20  

Item 3: Approval of our 2019 Long Term Incentive Plan and the ratification of the grants of stock options thereunder

     22  

Item 4: Advisory vote to approve compensation of Named Executive Officers

     30  
Statement of corporate governance      32  

Our governance practices

     32  

Governance highlights

     32  

Key governance documents

     33  

A culture of ethical conduct

     33  

Interest of informed persons in material transactions / transactions with related persons

     34  

The role of the Board

     36  

Our expectations of our directors

     39  

Board evaluation

     41  

Diversity

     42  

Shareholder engagement

     43  

Board committees

     44  
Director compensation      54  

Director compensation table

     56  
Security ownership of certain beneficial owners and management      59  
Compensation Discussion and Analysis      64  

Executive compensation summary

     65  

Compensation policies and practices

     66  

Assessing 2018 performance

     66  

Approach to executive compensation

     67  

Executive compensation design

     68  

2018 compensation decisions

     69  

Total direct compensation for Named Executive Officers

     75  

Compensation governance

     79  

Executive compensation tables and other compensation disclosure

     84  

CEO pay ratio

     99  

Appendix A – Enbridge Inc. 2019 Long Term Incentive Plan

     100  

Appendix B – Terms of Reference for the Board of Directors

     117  
Appendix C – Non-GAAP reconciliation      119  


Table of Contents

LOGO

 

Letter to

Shareholders

 

Dear Shareholder,

  LOGO

We are pleased to invite you to our 2019 Annual Meeting of Shareholders on May 8, 2019 at 1:30 p.m. MDT at the Calgary Marriott Downtown Hotel, 110-9th Avenue S.E., Calgary, Alberta. The meeting will also be available to all stakeholders by audio webcast at Enbridge.com.

We’ve had a busy, productive year executing the priorities we discussed with shareholders last year. We accomplished these priorities while providing safe, reliable energy that our customers want and need, which has always been and will continue to be our first priority.

This meeting is an opportunity to for us to talk with you about the progress on our strategies and our vision to be the leading energy delivery company in North America. We look forward to your questions and the discussion.

We delivered very strong financial and operating results this year and we increased our dividend again by 10%. We delivered on a major priority of selling non-core assets that allows us to focus on a pure pipeline and utility business model, which features three premium, low-risk energy infrastructure businesses. We exited the year with a strong balance sheet, greater financial flexibility and a much simpler corporate structure. We’re pleased with our position and we remain focused on extending our track record of success.

The board is ultimately responsible for governance and stewardship of your company. Inside this document you’ll find information on how the board oversees strategy and the management of financial, commercial, environmental and social risks and opportunities facing our business. We’ve outlined highlights of the duties and responsibilities of each of our five standing board committees and how they were carried out over the year.

You’ll also find information on our director nominees, our auditors, the approval of our long term incentive plan and ratification of grants of stock options thereunder, executive compensation, and how the board of directors receives input from shareholders on these matters, including our “say on pay” advisory vote.

On behalf of the board and management, we would like to welcome two new directors who were appointed in February 2019. Teresa Madden brings more than 30 years of power and utility industry and financial experience to the board. Susan Cunningham brings more than 35 years of oil and gas industry experience to the board. Our formal diversity policy highlights the importance we place on differences in skills, experience and diversity considerations such as gender, age and ethnicity. With the appointment of Mses. Madden and Cunningham, five of our 13 directors (38% and 50% of our 10 independent directors) are women.

On behalf of the board and management, we would like to thank Michael McShane, who retired from the board this past year, and Clarence Cazalot, who is not standing for re-election as a director and will be retiring at this year’s meeting, for their valuable contributions as directors.

We encourage you to take time to review this document and vote your shares, either by proxy or by attending the meeting in person.

On behalf of the board and management, thank you for your continued confidence in Enbridge Inc.

Sincerely,

 

LOGO

 

Al Monaco

  

LOGO

 

Gregory L. Ebel

President & Chief Executive Officer   

Chair, Board of Directors

  

Calgary, Alberta

March 13, 2019

 

 

Enbridge Inc. 2019 Proxy Statement


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LOGO

Notice of 2019 annual

Meeting of shareholders

 

Dear Shareholder,

 

We invite you to attend Enbridge Inc.’s 2019 annual meeting of shareholders (the “Meeting”).

 

When

 

May 8, 2019

1:30 p.m. (mountain daylight time) (“MDT”)

 

Where

 

Kensington Room

Calgary Marriott Downtown Hotel

110-9th Avenue S.E.

Calgary, Alberta, Canada T2G 5A6

 

Materials

 

An Important Notice Regarding Internet Availability of Proxy Materials for the 2019 Annual Meeting of Shareholders (the “Notice”) is being mailed to shareholders on or about March 27, 2019.

 

We are providing access to the proxy statement and annual report via the Internet using the US “notice and access” system. These materials are available on the website referenced in the Notice (www.envisionreports.com/ENB2019).

 

Your vote is important

 

If you are a shareholder of record of Enbridge Inc. common shares at the close of business on March 11, 2019, you are entitled to receive notice of, attend and vote your common shares at the Meeting, or at a reconvened meeting, if the Meeting is postponed or adjourned. Please remember to vote your common shares.

 

The Board of Directors has approved the contents of this proxy statement and has authorized us to send it to you. Please read the enclosed proxy statement to learn more about the Meeting, our director nominees, the Enbridge Inc. 2019 Long Term Incentive Plan and our executive compensation and governance practices.

 

By order of the Board of Directors,

      

Items of business

 

The Meeting will be held for the following purposes:

 

•   to receive the audited consolidated financial statements and the report of the auditors for the year ended December 31, 2018;

 

•   to vote on:

 

ITEM 1:  election of the director nominees identified in the proxy statement to serve as directors until the close of the next annual meeting of shareholders

 

ITEM 2:  appointment of PricewaterhouseCoopers LLP as independent auditors of the company and authorizing the directors to set their remuneration

 

ITEM 3:  approval of the Enbridge Inc. 2019 Long Term Incentive Plan and the ratification of the grants of stock options thereunder

 

ITEM 4:  a non-binding advisory vote to approve the compensation of our Named Executive Officers

 

•   to consider such other matters as may properly be brought before the Meeting or any adjournment or postponement thereof.

 

LOGO

Tyler W. Robinson

Vice President & Corporate Secretary and Chief Compliance Officer

Calgary, Alberta

March 4, 2019

 

 

2019 Proxy Statement Enbridge Inc.


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Proxy Statement

Proxy Statement summary

In this summary, we highlight certain information you will find in this Proxy Statement. This summary does not contain all of the information that you should consider. Please review the entire Proxy Statement carefully before casting your vote.

Enbridge 2019 annual meeting of shareholders

 

  About the Meeting    You are requested to vote on the following
matters at the Meeting
   Board
Recommendation
           For more
information
 

  When

  May 8, 2019, 1:30 p.m. MDT

  

ITEM 1: Election of directors

election of the 12 director nominees identified in the Proxy Statement to serve as directors until the close of the next annual meeting of shareholders

   FOR

each nominee

          page 8    

  Where

  Kensington Room

  Calgary Marriott Downtown Hotel

  110 9th Avenue S.E.

  Calgary, Alberta, Canada T2G 5A6

  

ITEM 2: Appointment of our auditor

appointment of PricewaterhouseCoopers LLP (“PwC”) as independent auditors of the company and authorizing the directors to set their remuneration

   FOR

this resolution

          page 20  

  Record Date

  March 11, 2019

   ITEM 3: Approval of the Enbridge Inc. 2019 Long Term Incentive Plan and the ratification of the grants of stock options thereunder    FOR

this resolution

         
page 22
 
 

  Mailing

An Important Notice Regarding Internet Availability of Proxy Materials for the 2019 Annual Meeting of Shareholders (the “Notice”) is being mailed to shareholders on or about March 27, 2019.

   ITEM 4: Advisory vote to approve the compensation of our Named Executive Officers    FOR

this resolution

         
page 30
 
 

The 12 nominated directors receiving the highest number of “FOR” votes duly cast at the Meeting will be duly elected to the Board. Each of Items 2, 3 and 4 above must receive an affirmative majority of votes duly cast at the Meeting to be approved.

Director nominees

The following table provides summary information about each nominee director. For more detailed information on director nominees, see “Director profiles” beginning on page 9.

 

  Name   Director
since
    Principal occupation   Independent   Committee service   2018 voting
results
 

Gregory L. Ebel

(Chair)

    2017     Corporate Director   No   –       93.47%  

Pamela L. Carter

    2017     Corporate Director   Yes   CSRC / GC* / S&RC     98.85%  

Marcel R. Coutu

    2014     Corporate Director   Yes   AFRC / GC / HRCC     89.74%  

Susan M. Cunningham

    2019     Advisor, Darcy Partners   Yes   HRCC / S&RC     N/A  

J. Herb England

    2007     Chair & CEO of Stahlman-England Irrigation Inc.   Yes   AFRC*     98.19%  

Charles W. Fischer

    2009     Corporate Director   Yes   AFRC / CSRC / S&RC*     99.05%  

V. Maureen Kempston Darkes

    2010     Corporate Director   Yes   CSRC* / HRCC / S&RC     93.03%  

Teresa S. Madden

    2019     Corporate Director   Yes   AFRC / GC     N/A  

Al Monaco

(President & CEO)

    2012     President & CEO of Enbridge   No   –       96.27%  

Michael E.J. Phelps

    2017     Chairman of Dornoch Capital Inc.   Yes   CSRC / GC / HRCC     92.63%  

Dan C. Tutcher

    2006     Managing Director and Portfolio Manager, Brookfield   No   CSRC / S&RC     91.29%  

Catherine L. Williams

    2007     Corporate Director   Yes   AFRC / HRCC*     92.97%  

 

*

Chair

AFRC

Audit, Finance & Risk Committee

GC

Governance Committee

S&RC

Safety & Reliability Committee

CSRC

Corporate Social Responsibility Committee

HRCC

Human Resources & Compensation Committee

 

 

 

Enbridge Inc. 2019 Proxy Statement    1


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Corporate governance highlights

We are committed to strong and sustainable corporate governance, which promotes the long-term interests of our shareholders, strengthens the Board and management accountability and helps build public trust in Enbridge. Highlights of our strong corporate governance include:

 

 

annual election of all directors

 

separate Chair and CEO

 

majority voting policy for directors

 

diversity policy for directors and senior management

 

regular executive sessions of non-management directors

 

risk oversight by Board and Board committees

 

38% women directors

 

majority independent directors

 

statement on business conduct and ethics & compliance program

 

individual director election (no slate voting)

 

annual Board, committee and director evaluation process

 

incentive compensation clawback policy

 

share ownership guidelines for directors and executives

 

independent audit, compensation and nominating committees

 

annual advisory vote on executive compensation

 

Board renewal 54% directors < 5 years tenure

 

Board orientation/education program

 

prohibition on hedging or pledging for directors, executives and all employees

 

 

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About this Proxy Statement

This management information circular and proxy statement (the “Proxy Statement”), including all appendices hereto, is being furnished in connection with the solicitation of proxies by or on behalf of management of Enbridge Inc. (“Enbridge”) for use at the annual meeting (the “Meeting”) of the shareholders of Enbridge to be held at the Kensington Room, Calgary Marriott Downtown Hotel, 110-9th Avenue S.E., Calgary, Alberta, Canada T2G 5A6 on May 8, 2019 at 1:30 p.m. (MDT), or at any adjournment(s) or postponement(s) thereof, for the purposes set out in the Notice of Meeting.

We expect that the solicitation of proxies will be by mail. Proxies may also be solicited personally, by telephone, e-mail, Internet, facsimile or other means of communication by officers, employees and agents of Enbridge. The cost of solicitation will be borne by Enbridge.

As of January 1, 2018, Enbridge is no longer considered a “foreign private issuer” pursuant to applicable US securities laws. Accordingly, this Proxy Statement has been prepared in compliance with the disclosure requirements under the rules of the US Securities and Exchange Commission (the “SEC”) applicable to US domestic issuers, as well as applicable Canadian disclosure requirements.

We are providing access to this Proxy Statement and our annual report on Form 10-K for the fiscal year ended December 31, 2018 (collectively, the “proxy materials”) via the Internet using the US “notice and access” system.

On or about March 27, 2019, we expect to mail a Notice Regarding Internet Availability of Proxy Materials (the “Notice”) to all holders of record of our common shares as of March 11, 2019, and to post the proxy materials on the website referenced in the Notice (www.envisionreports.com/ENB2019). In the case of beneficial owners of these securities, the Notice is being sent indirectly through such shareholders’ or unitholders’ brokers or other intermediaries. We intend to reimburse these brokers or other intermediaries for permitted fees and costs incurred by them in mailing the Notice to beneficial owners of securities.

As more fully described in the Notice, all holders of common shares may choose to access our proxy materials on the website referred to in the Notice or may request to receive a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.

In this Proxy Statement, “you” and “your” mean holders of common shares of Enbridge Inc. (“Enbridge shares” or “common shares”). “We”, “us”, “our”, “company” and “Enbridge” mean Enbridge Inc. “Board of Directors” or “Board” means the Board of Directors of Enbridge. All dollar amounts are in United States of America (“US”) dollars (“US$” or “$”) unless stated otherwise. “C$” means Canadian dollars. Unless stated otherwise, information in this Proxy Statement is given as of March 4, 2019, the date of this Proxy Statement.

Information contained on or otherwise accessible through Enbridge’s website and other websites, though referenced herein, does not form part of and is not incorporated by reference into this Proxy Statement.

Meeting information

Meeting date, time and location

May 8, 2019 at 1:30 p.m. (Mountain Daylight Time)

Kensington Room, Calgary Marriott Downtown Hotel

110-9th Avenue S.E.

Calgary, Alberta, Canada T2G 5A6

Live audio webcast

We will be broadcasting a live audio webcast of our Meeting. Be sure to check our website closer to the Meeting date for details. We will also post a recording of the Meeting on our website after we hold it.

We need a quorum

We need a quorum to hold the Meeting and transact business. This means at least three persons holding, or representing by proxy, at least 25% of the total number of issued and outstanding Enbridge shares. If you submit a properly executed proxy card or vote by telephone or the Internet, you will be considered part of the quorum.

 

 

Enbridge Inc. 2019 Proxy Statement    3


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Voting information

Please carefully read this section, as it contains important information regarding how to vote your Enbridge shares. Enbridge has sent or caused to be sent forms of proxy to our registered shareholders and voting instruction forms to our non-registered shareholders.

Who can attend the Meeting and vote?

The Board has fixed March 11, 2019 as the record date for the purpose of determining shareholders entitled to receive the Notice of Meeting and to vote at the Meeting or any adjournment or postponement thereof, either in person or by proxy. Only holders of common shares at 5:00 p.m. (Eastern Daylight Time) on the record date are entitled to vote at the Meeting. Our authorized share capital consists of an unlimited number of common shares and an unlimited number of preference shares, issuable in series. Preference shares do not have voting rights. Each holder of common shares is entitled to one vote for each common share held.

You must be registered to be admitted to the Meeting

Registration will take place outside of the Kensington Room at the Calgary Marriott Downtown Hotel, Calgary, Alberta, Canada, beginning at 12:30 p.m. MDT, one hour before the Meeting begins. Registered shareholders who hold their common shares in their own name in the form of a share certificate, or through the direct registration system (“DRS”) on the records of the transfer agent in electronic form, will be required to register with our registrar and transfer agent, Computershare Trust Company of Canada (“Transfer Agent”). Beneficial shareholders who hold their common shares through a broker, bank, trustee or nominee will be required to register with Broadridge Investor Communication Solutions, Inc. All shareholders should be prepared to present valid photo identification, such as a driver’s licence, passport or other government-issued identification. Cameras and recording devices will not be permitted in the Meeting. For the safety and security of all those in attendance, all bags are subject to search and you may be required to check your bag prior to being admitted into the Meeting.

Who is soliciting my proxy?

Management of Enbridge is soliciting your proxy in connection with this Proxy Statement and the Meeting. The cost of this solicitation will be borne by the company. Proxies will be solicited by mail, in person, by telephone or by electronic communications. To encourage you to vote, Enbridge employees may contact you in person or by phone. We pay for the cost of soliciting your vote and our employees do not receive a commission or any other form of compensation for it.

Voting recommendations

The Board recommends that you vote:

 

 

FOR the election of each of the 12 nominated directors;

 

FOR the reappointment of the auditors and authorizing the directors to set their remuneration;

 

FOR the approval of the Enbridge Inc. 2019 Long Term Incentive Plan and the ratification of the grants of stock options thereunder; and

 

FOR the non-binding advisory vote to approve the compensation of our Named Executive Officers.

Voting by management proxyholders and exercise of discretion

If you appoint Al Monaco, our President & Chief Executive Officer, and Gregory L. Ebel, our Chair of the Board (the “Enbridge proxyholders”) to act and vote on your behalf at the Meeting, as provided in the proxy card or voting instruction form, but do not indicate how you want to vote your common shares, the Enbridge proxyholders will vote as the Board of Directors recommends and as set out immediately above under “Voting recommendations”.

The proxy card or voting instruction form also confers discretionary authority on the person or persons named to vote on any amendment or variation to the matters identified in the notice of Meeting and on any other matter properly coming before the Meeting. As at the date of this Proxy Statement, management is not aware of any such amendment, variation or other matter. If, however, any such amendment, variation or other matter properly comes before the Meeting, proxies will be voted at the discretion of the person or persons named on the proxy card or voting instruction form. If you appoint a proxyholder other than the Enbridge proxyholders, please make them aware and ensure they will attend the Meeting for the vote to count.

 

 

4    2019 Proxy Statement Enbridge Inc.


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How to vote

What is the difference between a registered shareholder and a beneficial owner?

You are a registered shareholder if your common shares are registered directly in your name with our Transfer Agent. You may hold your common shares in the form of a physical share certificate or through the direct registration system (DRS) on the records of the Transfer Agent in electronic form.

What does it mean if I receive more than one Notice, proxy card or voting instruction form?

If you receive more than one Notice, proxy card or voting instruction form, it means that you have multiple accounts with brokers or other nominees or with the Transfer Agent, as applicable, through which you hold common shares. The voting process is different for registered shareholders and beneficial owners. Please follow the instructions carefully and vote or provide voting instructions for all of the common shares you own.

I am a registered shareholder – How do I vote?

Registered shareholders have two ways to vote: by proxy before the Meeting or by attending the Meeting and voting in person.

Voting by proxy is the easiest way to vote. It means you are giving someone else the authority to attend the Meeting and vote on your behalf (called your “proxyholder”).

Al Monaco, our President & Chief Executive Officer, and Gregory L. Ebel, our Chair of the Board, have agreed to act as the Enbridge proxyholders. Proxyholders must vote your common shares according to your instructions, including on any ballot that may be called. If there are changes to the items of business or new items properly come before the Meeting, a proxyholder can vote as he or she sees fit.

You can appoint someone else to be your proxyholder. This person does not need to be a shareholder. To do so, do not check the names of the Enbridge proxyholders on your proxy form. Instead, print the name of the person you want to act on your behalf. If you appoint someone other than the Enbridge proxyholders, please make them aware and ensure they will attend the Meeting for the vote to count. Your proxyholder will need to register with our Transfer Agent, when they arrive at the Meeting.

There are three ways to vote by proxy before the Meeting:

 

Telephone Voting    You may vote by calling the toll-free telephone number 1-866-732-8683. You will be prompted to provide your control number printed on the Notice or proxy card. You may not appoint a person as proxy holder other than the management nominees named in the Notice or proxy card if you vote by telephone. Please follow the voice prompts that allow you to vote your common shares and confirm that your instructions have been properly recorded.
Internet Voting    You may vote by logging on to www.envisionreports.com/ENB2019 and clicking on Cast your Vote. If you requested proxy materials by mail, you may also vote by utilizing the website noted on the proxy card. Please follow the website prompts that allow you to vote your common shares and confirm that your instructions have been properly recorded.

Return Your Proxy  

Card by Mail

   If you requested proxy materials by mail, you may vote by completing, signing and returning the proxy card in the postage-paid envelope provided with the proxy materials. The proxy holders will vote your common shares according your directions.

Proxies, whether submitted through the Internet or by telephone or mail as described above, must be received by the Transfer Agent by 1:30 p.m. MDT on May 6, 2019. If the Meeting is postponed or adjourned, your instructions must be received not later than 48 hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) before the time the Meeting is reconvened. The time limit for the deposit of proxies may be waived or extended by the chair of the Meeting at his or her discretion without notice.

If you are a registered shareholder, contact Computershare Trust Company of Canada, our Transfer Agent, at 1-866-276-9479 (toll free in North America) or 1-514-982-8696 (outside North America), for any voting questions.

I am a beneficial owner – How do I vote?

Beneficial owners have two ways to vote: by voting instructions before the Meeting or by attending the Meeting and voting in person.

Beneficial owners will receive a Notice indirectly through their broker or other intermediary. The Notice contains instructions on how to access our proxy materials and vote online. You should follow the voting instructions of your

 

 

Enbridge Inc. 2019 Proxy Statement    5


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broker or other intermediary. Brokers or other intermediaries may set deadlines for voting that are further in advance of the Meeting than those set out in this Proxy Statement. You should contact your broker or intermediary for further details.

Without specific instructions, Canadian brokers and their agents or nominees are prohibited from voting common shares for the broker’s client. Without specific instructions, U.S. brokers and their agents or nominees are prohibited from voting common shares for the broker’s client with respect to “non-routine” matters, including the election of directors, the approval of the 2019 Long Term Incentive Plan and the ratification of the grants of stock options thereunder and the non-binding advisory vote to approve compensation of NEOs (as defined below), but may vote such common shares with respect to “routine” matters, including the appointment of an auditor. When a broker is unable to vote on a proposal because it is non-routine and the owner of the common shares does not provide voting instructions, a “broker non-vote” occurs. Broker non-votes have no effect on the vote on such a proposal because they are not considered present and entitled to vote.

If you are a beneficial owner, contact your broker or nominee for any voting questions.

How can I vote in person at the Meeting?

Common shares that are registered directly in your name may be voted in person at the Meeting. When you arrive at the Meeting, please let our representatives know you are a registered shareholder and they will direct you to the Transfer Agent’s table to register. In addition, you have the right to appoint some other person of your choice as a proxyholder, who need not be a shareholder, to attend and act on your behalf at the Meeting. To do so, insert the name of your chosen proxyholder in the space provided on the proxy card.

If you are a beneficial owner and you wish to vote those common shares in person at the Meeting (or have another person attend and vote on your behalf), you should contact the broker or nominee that holds your common shares to obtain the necessary proxy, and bring that proxy to the Meeting with you. You will not be able to vote without the necessary proxy. When you arrive at the Meeting, please let our representatives know you are a beneficial owner and they will direct you to the Broadridge Investor Communication Corporation table to register.

How can I change or revoke my vote?

If you are a registered shareholder, you may change a vote you made by proxy by voting again by any of the means, and by the deadlines, described above under “I am a registered shareholder – How do I vote?” Your new instructions will revoke your earlier instructions.

If you are a registered shareholder and you voted by proxy, you can revoke your voting instructions by:

 

 

sending us a notice in writing (from you or a person authorized to sign on your behalf). We must receive it by 5 p.m. MDT on May 7, 2019, or by 5 p.m. MDT on the business day before the Meeting is reconvened if it was postponed or adjourned. Send your notice to the Corporate Secretary, Enbridge Inc., 200, 425-1st Street S.W., Calgary, Alberta, T2P 3L8 Fax: 1-403-231-5929;

 

giving your notice to the chair of the Meeting before the start of the Meeting. If you give the chair of the Meeting your notice after the Meeting has started, your revocation will apply only to the items of business that haven’t already been voted on; or

 

any other manner permitted by law.

If you are a beneficial owner, contact your broker or nominee to find out how to change or revoke your vote and the timing requirements, or for other voting questions. Intermediaries may set deadlines for the receipt of revocation notices that are farther in advance of the Meeting than those set out above and, accordingly, any such revocation should be completed well in advance of the deadline prescribed in the proxy card or voting instruction form, to ensure it is given effect at the Meeting.

What is the voting deadline?

To be effective, your proxy must be received by 1:30 p.m. MDT on May 6, 2019 regardless of the voting method you choose. If the Meeting is postponed or adjourned, your instructions must be received not later than 48 hours (excluding, Saturdays, Sundays and statutory holidays in the Province of Alberta) before the time the Meeting is reconvened. The time limit for the deposit of proxies may be waived or extended by the chair of the Meeting at his or her discretion without notice.

The company reminds shareholders that only the most recently dated voting instructions will be counted and any prior dated instructions will be disregarded.

 

 

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Employee savings plan voting information

If you participate in the Enbridge Employees’ Savings Plan and have Enbridge shares under this plan, you have the right to provide voting directions to the plan trustee for those Enbridge shares. Enbridge shares held by plan participants will be voted in accordance with the instructions received from the plan participant. If you elect not to provide voting directions to the plan trustee, the Enbridge shares that you beneficially own under the plan will not be voted.

If you participate in the Enbridge Employee Services, Inc. Employees’ Savings Plan or the Employees’ Investment Plan of St. Lawrence Gas, you have the right to provide voting directions to the applicable plan trustee for those Enbridge shares that are allocated to your plan account. If you elect not to provide voting directions to the applicable plan trustee, the Enbridge shares that you beneficially own under the plan will not be voted.

Because the voting instructions from plan participants must be processed so that the trustees can vote before proxy cut-off on May 6, 2019, plan participants will have an earlier voting deadline than May 6, 2019. Please refer to your Notice or voting instruction form for details of the cut-off applicable to each plan.

How will votes be tabulated?

Proxies will be counted and tabulated by the Transfer Agent. Proxies will be submitted to management where they contain comments clearly intended for management or to meet legal requirements.

How do I contact the Transfer Agent?

Registered shareholders may contact Computershare Trust Company of Canada, our Transfer Agent, at 1-866-276-9479 (toll free in North America) or 1-514-982-8696 (outside North America), for any voting questions.

 

 

Enbridge Inc. 2019 Proxy Statement    7


Table of Contents

Business of the Meeting

Financial statements

Our audited consolidated financial statements for the year ended December 31, 2018 and the report of the auditors thereon will be provided before the Meeting. You can view, download or request a copy of our 2018 annual report by following the instructions on the Notice. You can also view or download a copy from our website (www.enbridge.com), or you can request a copy from our Investor Relations department using the contact information on page 61. The annual report is also available at www.sedar.com.

ITEM 1: Election of directors

Shareholders elect directors to the Board for a term of one year, until the end of the next annual meeting. Twelve directors will be elected at the Meeting, and 12 of our 13 incumbent directors are nominated for election or re-election, as applicable. On March 12, 2019, Clarence P. Cazalot, Jr. notified us that he will not stand for re-election and will retire at the end of the Meeting.

All of the directors standing for election or re-election are independent, as applicable, except for Al Monaco, our President & Chief Executive Officer, Gregory L. Ebel, our non-executive Chair of the Board and the former Chairman, President and Chief Executive Officer of Spectra Energy Corp (“Spectra Energy”), and Mr. Tutcher. There is no family relationship between any of the nominated directors or executive officers.

You may vote for all 12 of the nominated directors, vote for some and withhold your vote for others, or withhold your votes for all of them. Unless you instruct otherwise, the Enbridge proxyholders will vote for electing each of the nominated directors.

As at the date of this Proxy Statement, the company has received no notice of any other proposed director nominees. Any such nominations would need to be made in accordance with our By-law No. 2. See “Advance Notice By-law” on page 35 of this Proxy Statement for details.

Vote required for approval:

The 12 nominees receiving the highest number of FOR votes duly cast at the Meeting will be elected to the Board.

 

The Board recommends that shareholders vote “FOR” the election of each nominee

set forth below, to hold office until the close of the next annual meeting

of shareholders or until their respective successors have been elected.

Majority voting policy

Enbridge’s Corporate Governance Principles and Guidelines contain our majority voting policy. Any nominee for director in an uncontested election who receives more withheld votes than for votes (i.e., the nominee is not elected by at least a majority of 50% + 1 vote), will immediately tender their resignation and will not participate in any meeting of the Board or any committee thereof at which the resignation is considered. The Board, on the recommendation of the Governance Committee, will determine whether or not to accept the resignation within 90 days after the date of the meeting, and will accept the resignation absent exceptional circumstances. Enbridge will promptly issue a news release with the Board’s decision, a copy of which will be provided to the Toronto Stock Exchange, and if the Board determines not to accept a resignation, the news release will state the reasons for that decision. The director’s resignation will be effective when accepted by the Board. If the Board accepts the director’s resignation, it can appoint a new director to fill the vacancy. Enbridge’s Corporate Governance Principles and Guidelines are available on our website (www.enbridge.com).

Board composition

A snapshot of our Board’s composition is illustrated below:

LOGO

 

 

8    2019 Proxy Statement Enbridge Inc.


Table of Contents

Nominees for election to the Board

Director profiles

The profiles that follow provide information about the nominated directors, including their backgrounds, experience, current directorships, Enbridge securities held and the Board committees they sit on. Additional information regarding skills and experience of our directors can be found beginning on page 20.

 

 

Pamela L. Carter

 

LOGO

 

Age 69

Franklin, Tennessee, USA

 

Independent

 

Director since

February 27, 2017

 

Latest date of retirement

May 2025

 

2018 annual meeting votes for: 98.85%

     

 

 

 

Ms. Carter was the Vice President of Cummins Inc. and President of Cummins Distribution Business, a division of Cummins Inc., a designer, manufacturer and marketer of diesel engines and related components and power systems, from 2008 until her retirement in 2015. Ms. Carter joined Cummins Inc. in 1997 as Vice President – General Counsel and held various management positions within Cummins. Prior to joining Cummins Inc., Ms. Carter served in the private practice of law and in various capacities with the State of Indiana, including Parliamentarian in the Indiana House of Representatives, Deputy Chief-of-Staff to governor Evan Bayh, Executive Assistant for Health Policy & Human Services and Securities Enforcement Attorney for the Office of the Secretary of State. She served as the Attorney General for the State of Indiana from 1993 to 1997 and was the first African-American woman to be elected state attorney general in the U.S.A. Ms. Carter holds a BA (bachelor of Arts) from the University of Detroit, MSW (Master of Social Work) from the University of Michigan, J.D. (Doctor of Jurisprudence) from McKinney School of Law, Indiana University, Public Administration from Harvard Kennedy School. Ms. Carter received a 2018 Sandra Day O’Connor Board Excellence Award honoring her for her demonstrated commitment to board diversity.

 

 

 

 

Enbridge Board/Board committee memberships

 

      

 

2018 meeting attendance1

 

        
  Board of Directors

 

     10 out of 10      100%    
  Corporate Social Responsibility

 

     4 out of 4      100%    
  Governance (chair)

 

     4 out of 4      100%    
  Safety & Reliability

 

     4 out of 4      100%    
 

Total

 

 

    

22 out of 22

 

    

 

100%

 

 

 

 
 

 

Enbridge securities held2

 

                        
  Year    Enbridge shares      DSUs3       

 

Total market value of
Enbridge shares & DSUs4

   Minimum
required5
       
 

2019

 

    

 

42,559

 

 

 

    

 

5,029

 

 

 

    

US$1,625,470

 

    

 

US$780,000

 

 

 

 
 

 

Other board/board committee memberships6

 

                        
 

 

Public6

 

                        
 

CSX Corporation

(public transportation company)

 

 

    

Director

Chair of the finance committee

Member of the governance committee and public affairs committee

 

 

 

 

       
 

Hewlett Packard Enterprise Company

(public technology company)

 

 

    

Director

Chair of the human resources and compensation committee

 

 

 

       
  Broadridge Financial Solutions, Inc.
(public financial services company)

 

    

Director

Chair of the audit committee

Member of the governance and nominating committee

 

 

 

 

       
     

 

Former US-listed company directorships (last 5 years)

 

              
      

 

Spectra Energy Corp

 

                        

 

 

Enbridge Inc. 2019 Proxy Statement    9


Table of Contents

Marcel R. Coutu

 

LOGO

 

Age 65

Calgary, Alberta, Canada

 

Independent

 

Director since

July 28, 2014

 

Latest date of retirement

May 2029

 

2018 annual meeting

votes for: 89.74%

 

 

Mr. Coutu was the Chairman of Syncrude Canada Ltd. (integrated oil sands project) from 2003 to 2014 and was the President and Chief Executive Officer of Canadian Oil Sands Limited from 2001 until January 2014. From 1999 to 2001, he was Senior Vice President and Chief Financial Officer of Gulf Canada Resources Limited. Prior to 1999, Mr. Coutu held various executive positions with TransCanada PipeLines Limited and various positions in the areas of corporate finance, investment banking and mining and oil and gas exploration and development. Mr. Coutu holds an HBSc (Bachelor of Science, Honours Earth Science) from the University of Waterloo and an MBA (Master of Business Administration) from the University of Western Ontario.

 

 

 

 

Enbridge Board/Board committee memberships

 

 

      

 

2018 meeting attendance1

 

 

 

       
 

 

Board of Directors

 

       10 out of 10     

 

 

 

100%

 

 

 
  Audit, Finance & Risk

 

       4 out of 4        100%    
  Governance

 

       4 out of 4        100%    
  Human Resources & Compensation

 

       6 out of 6        100%    
  Total

 

       24 out of 24        100%    
 

 

Enbridge securities held2

 

 

                  
  Year      Enbridge shares        DSUs3       

 

 

 

Total market value of
Enbridge shares and DSUs4

 

 
 

    
Minimum
required5

 
 

 

 

 

 

2019

 

    

 

29,400

 

 

 

    

 

19,882

 

 

 

      

 

US$1,683,332

 

 

 

    

 

US$780,000

 

 

 

 
 

 

Other board/board committee memberships6

 

 

       
 

 

Public6

 

 

       
 

Brookfield Asset Management Inc.

(public global asset management company)

 

 

      


 

Director

Chair, audit committee

Member, management, resources and
compensation committee

 

 

 

 
 

 

 

Power Corporation of Canada

(public international management and holding

company)

 

 

 

      


 

Director

Member, audit committee and compensation
committee

 

 

 
 

 

 

The Great-West Lifeco Inc.

(public international financial services holding

company that is an indirect subsidiary of Power

Corporation of Canada)

 

 

 

 

      




 

Director

Member, executive committee, governance
and nominating committee, human resources
committee, investment committee and risk
committee

 

 

 
 
 
 

 

 

IGM Financial Inc.

(public personal financial services company that is

an indirect subsidiary of Power Corporation of Canada)

 

 

 

      


 

Director

Member, executive committee, investment
committee and human resources committee

 

 

 
 

 

 

 

Not-for-profit6

 

 

       
 

 

Calgary Exhibition and Stampede Board

 

 

    

 

 

 

 

Director

 

 

 

 

       

 

Susan M. Cunningham

 

LOGO

 

Age 63

Houston, Texas, USA

 

Independent

 

Director since

February 13, 2019

 

Latest date of retirement

May 2031

 

2018 annual meeting

votes for: N/A

     

 

Ms. Cunningham has been an Advisor for Darcy Partners (consulting firm) since 2017. From 2014 to 2017, Ms. Cunningham was Executive Vice President, EHSR (Environment, Health, Safety, Regulatory) and New Frontiers (global exploration, new ventures, geoscience and business innovation) at Noble Energy, Inc. From 2001 to 2013, she held various senior management roles with Noble Energy, Inc. Prior thereto, Ms. Cunningham held positions with Texaco U.S.A., Statoil Energy, Inc. and Amoco Corporation. Ms. Cunningham holds a BA in Geology and Geography from McMaster University and is a graduate of Rice University’s Executive Management Program. She was also Chairman of the OTC (Offshore Technology Conference) from 2010 to 2011.

 

 

 

 

Enbridge Board/Board committee memberships

 

            

2018 meeting attendance1

 

        
  Board of Directors7

 

             
  Human Resources & Compensation7

 

             
  Safety & Reliability7

 

             
 

Total

 

 

             
 

 

Enbridge securities held2

 

                        
  Year    Enbridge shares      DSUs3       

 

Total market value of
Enbridge shares and DSUs4

   Minimum
required5
       
 

2019

 

  

 

 

 

 

 

  

 

 

 

 

 

    

US$–

 

  

 

 

US$780,000

 

 

 

 
 

 

Other board/board committee memberships6

 

                        
 

 

Other foreign

 

                        
 

Oil Search Limited

(public oil and gas exploration and production)

 

 

 

    

Director

Member, people and nominations committee

 

 

 

       
 

 

Former US-listed company directorships (last 5 years)

 

              
 

 

Cliffs Natural Resources Inc.

 

                        

 

 

10    2019 Proxy Statement Enbridge Inc.


Table of Contents

Gregory L. Ebel

 

LOGO

 

Age 54

Houston, Texas, USA

 

Not Independent

 

Director since

February 27, 2017

 

Latest date of retirement

May 2032

 

2018 annual meeting

votes for: 93.47%

 

 

Mr. Ebel served as Chairman, President and CEO of Spectra Energy from January 1, 2009 to February 27, 2017 at which time he became a Director of Enbridge and Chair of the Enbridge Board. Prior to that time, Mr. Ebel served as Spectra Energy’s Group Executive and Chief Financial Officer beginning in January 2007. He served as President of Union Gas Limited from January 2005 until January 2007, and Vice President, Investor & Shareholder Relations of Duke Energy Corporation from November 2002 until January 2005. Mr. Ebel joined Duke Energy in March 2002 as Managing Director of Mergers and Acquisitions in connection with Duke Energy’s acquisition of Westcoast Energy Inc. Mr. Ebel holds a BA (Bachelor of Arts, Honours) from York University.

 

 

 

 

Enbridge Board/Board committee memberships

 

 

  

2018 meeting attendance1

 

 

       
  Board of Directors

 

   10 out of 10      100%    
  Audit, Finance & Risk8

 

   4 out of 4      100%    
  Corporate Social Responsibility8

 

   4 out of 4      100%    
  Governance8

 

   4 out of 4      100%    
  Human Resources & Compensation8

 

   6 out of 6      100%    
  Safety & Reliability8

 

   4 out of 4      100%    
 

Total

 

 

  

32 out of 32

 

  

 

 

100%

 

 

 

 
 

 

Enbridge securities held2

 

 

              
  Year      Enbridge shares        DSUs3         
Stock
Options9
 
 
  

 

Total market value of Enbridge shares and DSUs

(excluding stock options)4

    
Minimum
required5
 
 
 
 

2019

 

    

 

651,845

 

 

 

    

 

14,139

 

 

 

      

 

405,408

 

 

 

  

US$22,748,102

 

    

 

US$780,000

 

 

 

 
 

 

Other board/board committee memberships6

 

 

              
 

 

Public6

 

 

       
 

The Mosaic Company

(public producer and marketer of concentrated phosphate and potash)

 

 

  

Chairman of the board

Member, audit committee

Chair, corporate governance and nominating
committee

 

 

 

 

 
 

 

Former US-listed company directorships (last 5 years)

 

                
   

 

Spectra Energy Corp

 

                

 

 

 

J. Herb England

 

LOGO

 

 

Age 72

Naples, Florida, USA

 

Independent

 

Director since

January 1, 2007

 

Latest date of retirement

May 2022

 

2018 annual meeting

votes for: 98.19%

 

 

Mr. England has been Chair & Chief Executive Officer of Stahlman-England Irrigation Inc. (contracting company) in southwest Florida since 2000. From 1993 to 1997, Mr. England was the Chair, President & Chief Executive Officer of Sweet Ripe Drinks Ltd. (fruit beverage manufacturing company). Prior to 1993, Mr. England held various executive positions with John Labatt Limited (brewing company) and its operating companies, including the position of Chief Executive Officer of Labatt Brewing Company – Prairie Region (brewing company), Catelli Inc. (food manufacturing company) and Johanna Dairies Inc. (dairy company). In 1993, Mr. England retired as Senior Vice President, Finance and Corporate Development & Chief Financial Officer of John Labatt Limited. Mr. England holds a BA (Bachelor of Arts) from the Royal Military College of Canada and an MBA (Master of Business Administration) from York University. He also has a CA (Chartered Accountant) designation.

 

 

 

 

Enbridge Board/Board committee memberships

 

 

      

 

2018 meeting attendance1

 

 

 

       
  Board of Directors

 

       10 out of 10          100%    
  Audit, Finance & Risk (chair)

 

       4 out of 4          100%    
 

Total

 

 

      

 

14 out of 14

 

 

 

      

 

100%

 

 

 

 
 

 

Enbridge securities held2

 

 

       
  Year        Enbridge shares          DSUs3       

 

 

 

Total market value of
Enbridge shares and DSUs4

 

 
 

      
Minimum
required5
 
 
 
 

2019

 

      

 

26,923

 

 

 

      

 

70,227

 

 

 

      

 

US$3,318,365

 

 

 

      

 

US$780,000

 

 

 

 
 

 

Other board/board committee memberships6

 

 

       
 

 

Public6

 

 

       
 

FuelCell Energy, Inc.

(public fuel cell company in which Enbridge holds a small interest)

 

 

      

Chairman of the board

Member, audit and finance committee

 

 

 
 

Private6

 

       
 

Stahlman-England Irrigation Inc.

(private contracting company)

 

 

      

Chair, board of directors

Chief executive officer

 

 

       
 

USA Grading Inc.

(private excavating, grading and underground utilities company)

 

 

    

 

Director

 

 
 

Former US public company directorships (last 5 years)

 

       
   

Enbridge Energy Management, LLC

 

                  

 

 

Enbridge Inc. 2019 Proxy Statement    11


Table of Contents

 

Charles W.

Fischer, CM

 

LOGO

 

Age 68

Calgary, Alberta, Canada

 

Independent

 

Director since

July 28, 2009

 

Latest date of retirement

May 2025

 

2018 annual meeting votes for: 99.05%

 

Mr. Fischer was the President & Chief Executive Officer of Nexen Inc. (oil and gas company) from 2001 to 2008. From 1994 to 2001, Mr. Fischer held various executive positions within Nexen Inc., including the positions of Executive Vice President & Chief Operating Officer in which he was responsible for all Nexen’s conventional oil and gas business in Western Canada, the US Gulf Coast and all international locations, as well as oil sands, marketing and information systems activities worldwide. Prior thereto, Mr. Fischer held positions with Dome Petroleum Ltd. (oil and gas company), Hudson’s Bay Oil & Gas Ltd. (oil and gas company), Bow Valley Industries Ltd. (oil and gas company), Sproule Associates Ltd. (petroleum consulting firm) and Encor Energy Ltd. (oil and gas company). Mr. Fischer holds a BSc (Bachelor of Science in Chemical Engineering) and an MBA (Master of Business Administration), both from the University of Calgary.

 

 

 

Enbridge Board/Board committee memberships

 

 

 

2018 meeting attendance1

 

       
  Board of Directors

 

    10 out of 10        100%    
  Audit, Finance & Risk

 

    4 out of 4        100%    
  Corporate Social Responsibility

 

    4 out of 4        100%    
  Safety & Reliability (chair)

 

    4 out of 4        100%    
  Total

 

    22 out of 22        100%    
 

Enbridge securities held2

 

                        
  Year      Enbridge shares        DSUs 3      
Total market value of
Enbridge shares and DSUs4
 
 
    
Minimum
required5
 
 
 
 

2019

  

 

31,169

 

  

 

35,419

 

 

 

US$2,274,455

 

  

 

US$780,000

 

 
 

Other public board/board committee memberships6

 

                
              
              
                                              
              

V. Maureen Kempston Darkes

 

 

LOGO

 

Age 70

Toronto, Ontario, Canada

Lauderdale-by-the-Sea, Florida, USA

 

Independent

 

Director since

November 2, 2010

 

Latest date of retirement

May 2024

 

2018 annual meeting

votes for: 93.03%

 

Ms. Kempston Darkes is the retired Group Vice President and President Latin America, Africa and Middle East, General Motors Corporation (automotive corporation and vehicle manufacturer). From 1994 to 2001, she was the President and General Manager of General Motors of Canada Limited and Vice President of General Motors Corporation. Ms. Kempston Darkes holds a BA (Bachelor of Arts) and an LLB (Bachelor of Laws), both from the University of Toronto.

 

 

 

Enbridge Board/Board committee memberships

   

2018 meeting attendance1

        
  Board of Directors

 

    10 out of 10        100%    
  Corporate Social Responsibility (chair)

 

    4 out of 4        100%    
  Human Resources & Compensation

 

    6 out of 6        100%    
  Safety & Reliability

 

    4 out of 4        100%    
  Total

 

    24 out of 24        100%    
 

Enbridge securities held2

               
  Year    Enbridge shares      DSUs3    

 

Total market value of
Enbridge shares and DSUs4

    

Minimum

required5

       
 

2019

  

 

21,735

 

  

 

35,414

 

 

 

US$1,952,046

 

  

 

US$780,000

 

 
 

Other board/board committee memberships6,10

               
 

Public6

               
 

Brookfield Asset Management Inc.

(public global asset management company)

 

 

   


Director

Chair, risk management committee

Member, management resources and
compensation committee

 

 

 
 

       
 

Canadian National Railway Company

(public railway company)

 

 

   




Director

Member, audit committee, corporate

governance and nominating committee,
finance committee, strategic planning
committee and pension and investment
committee

 

 

 
 
 
 

       
 

Schlumberger Limited11

(public supplier of technology, integrated project management and information solutions in oil and gas industry)

 

 

   

Director

Chair, audit committee

Member, finance committee

 

 

 

       

 

 

12    2019 Proxy Statement Enbridge Inc.


Table of Contents

 

Teresa S. Madden

 

LOGO

 

Age 63

Boulder, Colorado, USA

 

Independent

 

Director since

February 12, 2019

 

Latest date of retirement

May 2031

 

2018 annual meeting votes for: N/A

 

     

Ms. Madden was the Executive Vice President and Chief Financial Officer of Xcel Energy, Inc., an electric and natural gas utility, from 2011 until her retirement in 2016. She joined Xcel in 2003 as Vice President, Finance, Customer & Field Operations and was named Vice President and Controller in 2004. Prior thereto, Ms. Madden held positions with Rogue Wave Software, Inc. as well as New Century Energies and Public Service Company of Colorado, predecessor companies of Xcel Energy. Ms. Madden holds a bachelor of Science (BS) in Accounting from Colorado State University and an MBA from Regis University.

 

 

 

Enbridge Board/Board committee memberships

            

2018 meeting attendance1

        
  Board of Directors7

 

             
  Audit, Finance & Risk7

 

             
  Governance7

 

             
  Total

 

             
 

Enbridge securities held2

                        
  Year    Enbridge shares      DSUs3       

 

Total market value of
Enbridge shares and DSUs4

   Minimum
required5
       
 

2019

  

 

 

  

 

 

    

US$–

  

 

US$780,000

 

 
 

Other board/board committee memberships6

                        
 

Public6

                        
  Peabody Energy Corp.

 

    

Director

Chair, audit committee

Member, health, safety, security & environmental committee and executive committee

 

 

 

 
                                             
                   

 

Al Monaco

 

 

LOGO

 

Age 59

Calgary, Alberta, Canada

 

Not independent

 

Director since

February 27, 2012

 

Latest date of retirement

May 2027

 

2018 annual meeting votes for: 96.27%

     

 

Mr. Monaco joined Enbridge in 1995 and has held increasingly senior positions. He has been President & Chief Executive Officer of Enbridge since October 1, 2012 and served as Director and President of Enbridge from February 27, 2012 to September 30, 2012. Mr. Monaco holds an MBA (Master of Business Administration) from the University of Calgary and has a Chartered Professional Accountant designation.

 

 

 

 

Enbridge Board/Board committee memberships12

 

      

 

2018 meeting attendance1

 

        
 

 

Board of Directors

 

 

     10 out of 10      100%    
 

 

Enbridge securities held2

 

                  
  Year    Enbridge shares      Stock
options
      

Total market value of
Enbridge shares

(excluding stock options)4

  

Minimum

required13

       
  2019      805,295        3,453,320        US$27,506,566         
 

 

Other board/board committee memberships6

 

                  
 

 

Private6

 

                  
 

 

DCP Midstream, LLC

(a private 50/50 joint venture between Enbridge and Phillips 66 and the general partner of DCP Midstream GP, LLC, the general partner of DCP Midstream GP, LP, the general partner of DCP Midstream Partners, LP, a midstream master limited partnership with public unitholders)

 

 

 

    

Director

Member, human resources and compensation committee

 

 

 
 

 

Not-for-profit6

 

                  
 

 

American Petroleum Institute

(not-for-profit trade association)

 

 

 

    

Director

Member, executive committee and finance committee

 

 

 
 

 

Business Council of Canada

(not-for-profit, non-partisan organization composed of CEOs of Canada’s leading enterprises)

 

 

 

     Member

 

       

 

 

Enbridge Inc. 2019 Proxy Statement    13


Table of Contents

 

Michael E.J. Phelps

 

LOGO

 

Age 71

West Vancouver, BC, Canada

 

Independent

 

Director since

February 27, 2017

 

Latest date of retirement

May 2023

 

2018 annual meeting votes

for: 92.63%

  

 

Mr. Phelps is Chairman and founder of Dornoch Capital Inc., a private investment company. From January 1988 to 2002, he served as President and Chief Executive Officer, and subsequently as Chairman and Chief Executive Officer, of Westcoast Energy Inc., based in Vancouver, B.C. In 2001, Mr. Phelps was appointed as an Officer to the Order of Canada. In 2003, the Canadian government appointed Mr. Phelps as Chairman of the Wise Persons’ Committee, a panel developed to review Canada’s system of securities regulation. Mr. Phelps holds a BA (Bachelor of Arts) and LLB (Bachelor of Laws) from the University of Manitoba and an LLM (Master of Laws) from the London School of Economics.

 

  

 

Enbridge Board/Board committee memberships

 

      

 

2018 meeting attendance1

 

      
   Board of Directors

 

     10 out of 10        100%    
   Corporate Social Responsibility

 

     4 out of 4        100%    
   Governance

 

     4 out of 4        100%    
   Human Resources & Compensation

 

     5 out of 6        83%    
  

 

Total

 

 

    

 

23 out of 24

 

    

 

 

 

 

96%

 

 

 

 

   
  

 

Enbridge securities held2

 

                        
   Year    Enbridge shares        DSUs3        Total market value of
Enbridge shares & DSUs4
     Minimum
required5
     
  

2019

 

    

 

55,645

 

 

 

      

 

3,358

 

 

 

    

US$2,015,373

 

      

 

US$780,000

 

 

 

 
  

Other board/board committee memberships6

 

                        
  

 

Public6

 

                        
  

 

 

 

      
  

 

Private6

 

                        
  

Tiene Energy Ltd.

 

 

    

Chairman of the Board

 

 
  

 

Former US-listed company directorships (last 5 years)

 

              
  

 

Canadian Pacific Railway

 

 

            
  

 

Marathon Oil Corporation

 

 

            
    

 

Spectra Energy Corp

 

 

            
                      

 

Dan C. Tutcher

 

LOGO

 

Age 70

Houston, Texas, USA

 

Not Independent

 

Director since

May 3, 2006

 

Latest date of retirement

May 2024

 

2018 annual meeting votes

in favor: 91.29%

 

  

 

Mr. Tutcher is a Managing Director and Portfolio Manager on the Energy Infrastructure Equities team for Brookfield’s Public Securities Group. Prior to joining Brookfield in 2018, Mr. Tutcher was President & Chair of the Board of Trustees of Center Coast MLP & Infrastructure Fund since 2013 and a Principal in Center Coast Capital Advisors L.P. since its inception in 2007. He was the Group Vice President, Transportation South of Enbridge, as well as President of Enbridge Energy Company, Inc. (general partner of former Enbridge sponsored affiliate Enbridge Energy Partners, L.P.) and Enbridge Energy Management, L.L.C. (another former Enbridge sponsored vehicle) from May 2001 until retirement on May 1, 2006. From 1992 to May 2001, he was the Chair of the Board of Directors, President & Chief Executive Officer of Midcoast Energy Resources, Inc. Mr. Tutcher holds a BBA (Bachelor of Business Administration) from Washburn University.

 

  

 

Enbridge Board/Board committee memberships

 

 

           

 

 

 

 

2018 meeting attendance1

 

 

 

 

   
   Board of Directors

 

     10 out of 10        100%    
   Corporate Social Responsibility

 

     3 out of 4        75%    
   Governance14

 

     2 out of 3        67%    
   Safety & Reliability

 

     3 out of 4        75%    
   Total

 

     18 out of 21        86%    
  

 

Enbridge securities held2

 

        
   Year      Enbridge shares          DSUs3       

 

Total market value of Enbridge shares & DSUs4

      
Minimum
required5
 
 
 
  

2019

 

    

 

697,523

 

 

 

      

 

106,547

 

 

 

    

US$27,464,724

 

       US$780,000    
  

 

Other board/board committee memberships6

 

        
  

 

Public6

 

  

 

 

 

    
  

 

Former US-listed company directorships (last 5 years)

 

        
    

 

Centre Coast MLP & Infrastructure Fund

 

 

      

 

 

14    2019 Proxy Statement Enbridge Inc.


Table of Contents

 

Catherine L. Williams

 

 

LOGO

Age 68

Calgary, Alberta, Canada

 

Independent

 

Director since

November 1, 2007

 

Latest date of retirement

May 2026

 

2018 annual meeting votes in favor: 92.97%

  

 

Ms. Williams was the Chief Financial Officer for Shell Canada Limited (oil and gas company) from 2003 to 2007. Prior thereto, she held various positions with Shell Canada Limited, Shell Europe Oil Products, Shell Canada Oil Products and Shell International (oil and gas companies) from 1984 to 2003. Ms. Williams holds a BA (Bachelor of Arts) from the University of Western Ontario and an MBA (Master of Business Administration, Finance) from Queen’s School of Business (now Smith School of Business at Queen’s University).

 

 

  

 

Enbridge Board/Board committee memberships

 

    

 

2018 meeting attendance1

 

        
  

 

Board of Directors

 

  

 

 

 

10 out of 10

 

 

    

 

 

 

100%

 

 

 
   Audit, Finance & Risk

 

     4 out of 4          100%    
   Human Resources & Compensation (chair)

 

     6 out of 6          100%    
  

Total

 

 

    

 

20 out of 20

 

 

 

      

 

100%

 

 

 

 
  

 

Enbridge securities held2

 

                
   Year    Enbridge shares        DSUs3     

 

Total market value of
Enbridge shares & DSUs4

       Minimum
required5
       
  

2019

 

    

 

52,104

 

 

 

      

 

42,629

 

 

 

    

 

US$3,235,807

 

 

 

      

 

US$780,000

 

 

 

 
  

 

Other board/board committee memberships6

 

                
  

 

Public6

 

                
  

Vermilion Energy Inc.

(public oil and gas company)

 

 

    


 

Director

Chair, audit committee

Member, governance and
human resources committee

 

 

 

 
 

 

       

 

1.

Percentages are rounded to the nearest whole number.

2.

Information about beneficial ownership and about securities controlled or directed by our proposed directors is provided by the nominees and is as at March 4, 2019.

3.

DSUs refer to deferred share units and are defined on page 54 of this Proxy Statement.

4.

Total market value = number of common shares or deferred share units × closing price of Enbridge shares on the Toronto Stock Exchange (“TSX”) of C$46.65 on March 4, 2019. Amounts are converted to US$ using C$1 = US$ 0.7322, the published WM/Reuters 4 pm London exchange rate for December 31, 2018, and then rounded to the nearest dollar.

5.

Directors must hold at least three times their annual Board retainer in DSUs or Enbridge shares within five years of becoming a director on our Board. All director nominees meet or exceed this requirement except Mses. Madden and Cunningham, who have until February 12, 2024 and February 13, 2024, respectively, to meet this requirement.

6.

Public means a corporation or trust that is a reporting issuer in Canada, a registrant in the US, or both, and that has publicly listed equity securities.

Private means a corporation or trust that is not a reporting issuer or registrant.

Not-for-profit means a corporation, society or other entity organized for a charitable, civil or other social purpose which does not generate profits for its members.

7.

Mses. Madden and Cunningham were appointed to the Board on February 12, 2019 and February 13, 2019, respectively.

8.

Mr. Ebel is not a member of any Board committee, but as Chair of the Board, he attends their meetings.

9.

Mr. Ebel’s stock options were Spectra Energy options that converted into options to purchase Enbridge shares upon the closing of the Merger Transaction (as defined on page 34). No new Enbridge stock options were granted to Mr. Ebel in his capacity as a Director of Enbridge or Chair of the Enbridge Board.

10.

Ms. Kempston Darkes was an executive officer of General Motors Corporation (“GM”) from January 1, 2002 to December 1, 2009. GM filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code on June 1, 2009. None of the operations for which she was directly responsible in Latin America, Africa and the Middle East were included in the bankruptcy filing. GM emerged from bankruptcy protection on July 10, 2009 in a reorganization in which a new entity acquired GM’s most valuable assets.

11.

Ms. Kempston Darkes is not standing for re-election to the Schlumberger Limited board and will retire from that board in April 2019.

12.

Mr. Monaco is not a member of any Board committee, but he attends their meetings at the request of such committees.

13.

As President & Chief Executive Officer, Mr. Monaco is required to hold Enbridge shares equal to six times his base salary (see page 83). Mr. Monaco is not required to hold Enbridge shares as a director.

14.

Mr. Tutcher ceased being a member of the Governance Committee on October 23, 2018.

 

 

Enbridge Inc. 2019 Proxy Statement    15


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Retiring director

Clarence P. Cazalot, Jr. is not standing for re-election as a director of Enbridge and will retire at the end of the Meeting. Mr. Cazalot is 68 years old and has served on our Board since February 2017, prior to which he was a director of Spectra Energy. Mr. Cazalot is the retired Executive Chairman, President and Chief Executive Officer of Marathon Oil Corporation (“Marathon”) (public exploration and production company). He was Executive Chairman of Marathon from August 2013 to December 2013; Chairman from 2011 to 2013; and President, Chief Executive Officer and director from 2002 to August 2013. From 2000 to 2001, he served as Vice Chairman of USX Corporation and President of Marathon. Mr. Cazalot held various executive positions with Texaco Inc. from 1972 to 2000. He is a member of the Advisory Board of the James A. Baker III Institute for Public Policy, the Board of Visitors of the University of Texas M.D. Anderson Cancer Center, the Memorial Hermann Health Systems Board and the LSU Foundation. Mr. Cazalot holds a BS (Bachelor of Science in Geology) from Louisiana State University, Baton Rouge, an honorary PhD (Doctor of Philosophy, Humane Letters) from Louisiana State University and an honorary PhD (Doctor of Philosophy, Engineering) from Colorado School of Mines. Mr. Cazalot’s other public company board and committee memberships are as follows:

 

 

Public

 

 

       

Baker Hughes Incorporated

(public supplier of oilfield services and products)

  

Director

Chair of the conflict committee

Member of the governance committee

 

 

 

 

 

 

Former US-listed company directorships (last 5 years)

 

                

 

FMC Technologies

 

                

 

Spectra Energy Corp

 

                

 

 

16    2019 Proxy Statement Enbridge Inc.


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Director independence

 

 

  Director

 

  

 

Independent

 

  

 

Non-Independent

 

  

 

Reason for non-independence

 

 

 

  Pamela L. Carter

  

 

             

  Clarence P. Cazalot, Jr.

  

             

  Marcel R. Coutu

  

             

  Susan M. Cunningham

  

             

  Gregory L. Ebel

     

  

 

Former Chairman, President and Chief Executive
Officer of Spectra Energy and a non-executive Spectra
Energy employee until April 15, 2017

 
 
 

  J. Herb England

  

             

  Charles W. Fischer

  

             

  V. Maureen Kempston Darkes

  

             

  Teresa S. Madden

  

             

  Al Monaco

       

  

 

President & Chief Executive Officer of the company

 

  Michael E.J. Phelps

  

             

  Dan C. Tutcher

       

  

 


Employee of Brookfield, whose subsidiary and
institutional partners made payments to Enbridge for
property or services in an amount which exceeds 2%
of Brookfield’s consolidated gross revenues

 
 
 
 

  Catherine L. Williams

  

             

Current Board committee participation

 

  Director    Audit, Finance
& Risk
Committee
   Corporate
Social
Responsibility
Committee
   Governance
Committee
   Human
Resources &
Compensation
Committee
   Safety &
Reliability
Committee
  Not independent                         
  Gregory L. Ebel1                         
  Al Monaco1                         
  Dan C. Tutcher3                     
  Independent                         
  Pamela L. Carter            committee chair        
  Clarence P. Cazalot, Jr.                     
  Marcel R. Coutu2                   
  Susan M. Cunningham                     
  J. Herb England2    committee chair                    
  Charles W. Fischer                    committee chair
  V. Maureen Kempston Darkes         committee chair           
  Teresa S. Madden2                     
  Michael E.J. Phelps                   
  Catherine L. Williams2                 committee chair     

 

1.

Messrs. Ebel and Monaco are not members of any of the committees of the Board. They attend most of the committee meetings in their capacities as Chair of the Board and President & Chief Executive Officer, respectively.

2.

Mses. Madden and Williams and Messrs. Coutu and England each qualify as an audit committee financial expert, as defined under the US Securities Exchange Act of 1934, as amended. The Board has also determined that all the members of the Audit, Finance & Risk Committee are financially literate, according to the meaning of National Instrument 52-110Audit Committees and the rules of the New York Stock Exchange (“NYSE).

3.

Mr. Tutcher ceased being a member of the Governance Committee on October 23, 2018.

 

 

Enbridge Inc. 2019 Proxy Statement    17


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Board and Board committee meetings in 2018

 

  Board/committee    Total number of
meetings
     In camera sessions      Overall
attendance
 
  Board      10        7        99%  
  Audit, Finance & Risk Committee      4        4        100%  
  Corporate Social Responsibility Committee      4        4        95%  
  Governance Committee      4        4        93%  
  Human Resources & Compensation Committee      6        6        97%  
  Safety & Reliability Committee      4        4        96%  
  Total      32        29        97%  

Director attendance in 2018

 

                             Board committee meetings  
   Board of
Directors
meetings
(10 meetings)
            Audit,
Finance &
Risk
(4 meetings)
     Corporate
Social
Responsibility
(4 meetings)
     Governance
(4 meetings)
    

Human
Resources &
Compensation

(6 meetings)

     Safety &
Reliability
(4 meetings)
 
  Director    Number      %             Number      %      Number      %      Number      %      Number      %      Number      %  
  Pamela L. Carter      10        100                              4        100        4        100                      4        100  
  Clarence P. Cazalot, Jr.      9        90                4        100                                    6        100                
  Marcel R. Coutu      10        100                4        100                      4        100        6        100                
  Susan M. Cunningham1                                                                                            
  Gregory L. Ebel      10        100                                                                                
  J. Herb England      10        100                4        100                                                          
  Charles W. Fischer      10        100                4        100        4        100                                    4        100  
  V. Maureen Kempston Darkes      10        100                              4        100                      6        100        4        100  
  Teresa S. Madden1                                                                                            
  Michael McShane2      9        100                4        100                                                  4        100  
  Al Monaco3      10        100                                                                                
  Michael E.J. Phelps      10        100                              4        100        4        100        5        83                
  Rebecca B. Roberts2      3        100                                            2        100        3        100        2        100  
  Dan C. Tutcher4      10        100                              3        75        2        67                      3        75  
  Catherine L. Williams      10        100                4        100                                    6        100                

 

1.

Mses. Madden and Cunningham were appointed to the Board on February 12, 2019 and February 13, 2019, respectively.

2.

Ms. Roberts and Mr. McShane retired from the Board effective May 9, 2018 and October 31, 2018, respectively.

3.

Mr. Monaco is not a member of any Board committee. As a director and President & Chief Executive Officer, he attends Board committee meetings at the request of such committees.

4.

Mr. Tutcher ceased being a member of the Governance Committee on October 23, 2018.

All then-current directors other than Mr. Tutcher attended the 2018 annual meeting of shareholders.

 

 

18    2019 Proxy Statement Enbridge Inc.


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Board diversity and tenure

Five of Enbridge’s 13 directors, or approximately 38% of the Board (and 50% of the 10 independent directors), are women. All five of these directors are standing for election or re-election, as applicable. The charts below show director gender diversity, tenure and age. The average tenure of our directors is approximately 5.7 years. For further information on our diversity policy, guidelines for director retirement and the latest date of retirement of each director, please refer to “Identifying new candidates” and “Diversity” on page 42 and the “Director profiles” beginning on page 9 of this Proxy Statement.

 

Director

  Age   Tenure on Enbridge Board
(years of service)
  Under 60   60-69   70-75   0-5   5-10   10-15
Pamela L. Carter                    
Clarence P. Cazalot, Jr.                    
Marcel R. Coutu                    
Susan M. Cunningham                    
Gregory L. Ebel                    
J. Herb England                    
Charles W. Fischer                    
V. Maureen Kempston Darkes                    
Teresa S. Madden                    
Al Monaco                    
Michael E.J. Phelps                    
Dan C. Tutcher                    
Catherine L. Williams                    
Total in each Age and Tenure Category   2   7   4   7   3   3

 

LOGO   

LOGO

Tenure Gender diversity Age

   LOGO

 

 

Enbridge Inc. 2019 Proxy Statement    19


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Mix of skills and experience

We maintain a skills and experience matrix for our directors in areas we think are important for a corporation like ours. We use this skills matrix to annually assess our board composition and in the recruitment of new directors. The table below indicates each director’s skills and experience in the areas indicated based on a self-assessment by each director.

 

     Area   Carter   Cazalot, Jr.   Coutu   Cunningham   Ebel   England   Fischer  

Kempston

Darkes

  Madden   Monaco   Phelps   Tutcher   Williams
    Managing and Leading Strategy and Growth                          
    International                          
    CEO / CFO / Executive Officer                          
    Governance / Board                          
    Operations (Oil & Gas / Energy)                          
    Risk Oversight / Management                          
    Corporate Social Responsibility & Sustainability                          
    Energy Marketing                          
    Human Resources / Compensation                          
    Investment Banking / Mergers and Acquisitions                          
  Financial Literacy                          
    Information Technology                          
    Health, Safety & Environment                          
    Public Policy and Government and Stakeholder Relations                          
    Emerging Sectors / Growth Opportunities                          

Compensation committee interlocks and insider participation

The table below sets out the board interlocks in 2018. The Board has determined that the board interlocks set out below do not impair the ability of these directors to exercise independent judgment as members of our Board.

 

  Directors    Serve together on this board of a public
company
   Serve on these committees
  Marcel R. Coutu    Brookfield Asset Management Inc.   

Chair, audit committee

Member, management, resources and compensation committee

  V. Maureen Kempston Darkes        

Chair, risk management committee

Member, management, resources and compensation committee

ITEM 2. Appointment of our auditor

PricewaterhouseCoopers LLP (“PwC”) was last appointed as our auditor at our last annual meeting of shareholders, held on May 9, 2018. If PwC is reappointed, they will serve as our auditor until the end of the next annual meeting of shareholders. PwC (formerly Price Waterhouse) have been our auditors since 1992 and have been the auditors for Enbridge Pipelines Inc., our subsidiary, since 1949. Representatives from PwC are expected to be present at the Meeting, will have an opportunity to make a statement if they desire to do so and will be available to respond to questions.

The Board, on the recommendation of the Audit, Finance & Risk Committee, proposes that PwC be reappointed as auditor and recommends that you vote for the reappointment of PwC as our auditor and authorizing the directors to set their remuneration. You may vote for or against the reappointment of our auditors or withhold your vote.

PwC is a participating audit firm with the Canadian Public Accountability Board, as required under the Canadian Securities Administrators’ National Instrument 52-108Auditor Oversight.

Auditor independence

Auditor independence is essential to the integrity of our financial statements and PwC has confirmed its status as independent within the meaning of the Canadian and US securities rules.

We are subject to Canadian securities regulations (National Instrument 52-110Audit Committees (“NI 52-110”) and National Policy 58-201Corporate Governance Guidelines), the US Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley”) and the accounting and corporate governance rules adopted by the SEC under Sarbanes-Oxley, which specify certain services that external auditors cannot provide.

 

 

20    2019 Proxy Statement Enbridge Inc.


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We comply with these Canadian and US rules. We believe, however, that some non-audit services, like tax compliance, can be delivered more efficiently and economically by our external auditors. To maintain auditor independence, our Audit, Finance & Risk Committee must pre-approve all audit and non-audit services. It is also responsible for overseeing the audit work performed by PwC.

The Audit, Finance & Risk Committee reviews our external auditors’ qualifications and independence once per year. Their review includes formal written statements that describe any relationships between the auditors, their affiliates and Enbridge that could affect the auditors’ independence and objectivity.

Pre-approval policies and procedures

The Audit, Finance & Risk Committee has adopted a policy that requires pre approval by the Audit, Finance & Risk Committee of any services to be provided by the company’s external auditors, PwC, whether audit or non-audit services. The policy prohibits the company from engaging the auditors to provide the following non-audit services:

 

 

bookkeeping or other services related to accounting records and financial statements;

 

financial information systems design and implementation;

 

appraisal or valuation services, fairness opinions or contribution in kind reports;

 

actuarial services;

 

internal audit outsourcing services;

 

management functions or human resources;

 

broker or dealer, investment adviser or investment banking services;

 

legal services; and

 

expert services unrelated to the audit.

The Audit, Finance & Risk Committee believes that the policy will protect the company from the potential loss of independence of the external auditors. The Audit, Finance & Risk Committee has also adopted a policy which prohibits the company from hiring (as a full time employee, contractor or otherwise) into a financial reporting oversight role any current or former employee or partner of its external auditor who provided audit, review or attest service in respect of the company’s financial statements (including such financial statements of its reporting issuer subsidiaries and significant investees) during the 12 month period preceding the date of the initiation of the current annual audit. The policy further prohibits the hiring of a former partner of the company’s external auditor who receives pension benefits from the firm, unless such pension benefits are of a fixed amount, not dependent upon firm earnings and fully funded. In all cases, the hiring of any partner or employee or former partner or employee of the independent auditor is subject to joint approval by the lead engagement partner and the company’s Vice President and Chief Accounting Officer.

External auditor services - fees

The following table sets forth all services rendered by the company’s auditors, PwC, by category, together with the corresponding fees (rounded to the nearest hundred dollars) billed by the auditors for each category of service for the financial years ended December 31, 2018 and 2017.

 

     

2018

(C$)

    

2017

(C$)

     Description of fee category

Audit fees

     17,715,900        16,323,000      Represents the aggregate fees for audit services.

Audit-related

fees

     1,385,000        3,682,700      Represents the aggregate fees for assurance and related services by the company’s auditors that are reasonably related to the performance of the audit or review of the company’s financial statements and are not included under “Audit fees”. During fiscal 2018 and 2017, the services provided in this category included due diligence related to prospectus offerings, purchase price allocations and other items.

Tax fees

     3,749,500        3,075,000      Represents the aggregate fees for professional services rendered by the company’s auditors for tax compliance, tax advice and tax planning.

All other fees

     152,000        174,000      Represents the aggregate fees for products and services provided by the company’s auditors other than those services reported under “Audit fees”, “Audit-related fees” and “Tax fees”. During fiscal 2018 and 2017, these fees include those related to Canadian Public Accountability Board fees, French translation work and process reviews.

Total fees

     23,002,400        23,254,700       

You can find information about the roles and responsibilities of the Audit, Finance & Risk Committee beginning on page 44 of this Proxy Statement.

 

 

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Vote required for approval:

The appointment of PwC as Enbridge’s auditor requires an affirmative vote of the majority of the votes duly cast at the Meeting.

 

The Board recommends that shareholders vote “FOR” the reappointment of

PricewaterhouseCoopers LLP as independent auditors of the company

to hold office until the close of the next annual meeting of shareholders

and authorizing the Board to set their remuneration.

ITEM 3: Approval of Enbridge Inc. 2019 Long Term Incentive Plan and the ratification of the grants of stock options thereunder

On February 13, 2019, our Board, upon the recommendation and approval of our Human Resources and Compensation Committee, unanimously approved the adoption of the 2019 Long Term Incentive Plan (the “2019 Plan”), subject to approval by our shareholders at the 2019 Annual Meeting and the Toronto Stock Exchange.

The 2019 Plan was effective as of the date the Board unanimously approved it on February 13, 2019 (the “Effective Date”). Awards may be granted under the 2019 Plan on or after the Effective Date, but no common shares may be issued upon the exercise, vesting, distribution or payment of any such awards unless the plan is approved by our shareholders. If the 2019 Plan is not approved by our shareholders within twelve months after the Effective Date, all awards previously granted under the 2019 Plan will be canceled and become null and void, and the 2019 Plan will terminate in its entirety. As described further below, on February 21, 2019, our Board approved the grant of awards under the 2019 Plan, including stock options, restricted stock units and performance stock units, which are subject to shareholder approval of the 2019 Plan. The stock option awards are the only outstanding grants under the 2019 Plan that will be settled in our common shares upon their exercise, and therefore we are also seeking shareholder ratification of the grants.

The 2019 Plan will replace several of our prior incentive award plans if approved by our shareholders, specifically: the Enbridge Inc. Performance Stock Option Plan, as amended, the Enbridge Inc. Incentive Stock Option Plan, as revised, the Enbridge Inc. Performance Stock Unit Plan, as revised, the Enbridge Inc. Restricted Stock Unit Plan, as revised, and the Enbridge Inc. Restricted Stock Unit Plan for Energy Marketers, as revised (each a “Prior Plan” and together, the “Prior Plans”). No additional awards were or will be granted under the Prior Plans as of the Effective Date, and all shares still available to be issued and not subject to outstanding awards under the Prior Plans will become available under the 2019 Plan, as described below. Awards granted prior to the Effective Date under a Prior Plan will continue to be governed by the terms and conditions of the applicable Prior Plan.

Highlights of the 2019 Plan

The 2019 Plan provides for the issuance of equity-based awards covering up to 49,700,000 common shares, consisting of 32,000,000 common shares plus 17,700,000, the number of common shares available for issuance and not subject to outstanding awards under the Prior Plans as of the Effective Date. In addition, the 2019 Plan provides for the grant of cash-settled awards. The 2019 Plan also includes a number of provisions designed to protect shareholder interests and appropriately reflects our compensation philosophy and developments in our compensation practices in recent years, including:

 

Minimum vesting requirements.

   The 2019 Plan generally requires a minimum one-year vesting schedule for all awards.

Best practices for options.

   The 2019 Plan prohibits grants of discounted options and the repricing of options without shareholder approval.

No dividend equivalents on unvested or unearned awards.

   The 2019 Plan prohibits the payment of dividend equivalents unless and until the underlying award vests and, for dividend equivalents tied to performance-based awards, until satisfaction of all applicable performance-based goals.

Forfeiture and clawback.

   All awards are subject to the company’s clawback policy.

No transferability.

   Awards generally may not be transferred, except by will or the laws of descent and distribution.

No “evergreen” provision.

   Shares authorized for issuance under the 2019 Plan cannot be automatically replenished.

Importance of equity-based compensation

Our Board believes that the 49,700,000 common shares available for grant under the 2019 Plan would provide sufficient shares to meet the equity-based compensation needs of the company through our 2023 annual shareholder meeting. This estimate is based on our recent share usage, estimated for growth, adjusted upward to allow for the

 

 

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potential that performance-based awards may be earned at maximum and for flexibility around types of vehicles used. Actual issuances could be materially different from this estimate.

As of February 13, 2019, approximately 17,700,000 common shares remain available for issuance and are not subject to outstanding awards under the Prior Plans, which, based on the analysis above and our “burn rate” discussed below, we believe to be sufficient to continue our current grant practices for no more than approximately two years, including grants for 2019. Therefore, if shareholders do not approve the 2019 Plan, our future ability to issue equity-based awards, other than cash-settled awards, will be limited.

We believe that share ownership by employees provides performance incentives and fosters long-term commitment to the benefit of our shareholders. Equity-based compensation, combined with long-term restrictions, clawback provisions and share ownership requirements, aligns employees’ interests with those of our shareholders. In addition, the success of our business depends largely on our ability to attract, retain and reward talented employees. If the 2019 Plan is not approved, we would be limited in our ability to use a valuable retention tool and would be at a significant competitive disadvantage in attracting new talent.

Historic burn rate

Our equity-based compensation model, including the broad-based participation of our employees and the portion of equity compensation paid to our senior executives, results in a “burn rate”. Burn rate provides a measure of our annual share utilization. As shown in the following table, the company’s three-year average burn rate was 0.473%, which is well below the 3.99% burn rate benchmark published by ISS applicable to companies within the Russell 3000 Energy Sector.

 

  Year    Shares Underlying
Options Granted
    

Weighted
Average Shares

Outstanding
(Basic)

     Burn Rate1  
  2018      5,775,340        1,724,000,000        0.335%  
  2017      5,994,834        1,532,431,830        0.391%  
  2016      6,372,980        918,000,000        0.694%  
  Our Three-Year Average                        0.473%  
  ISS’s Industry Burn Rate Average                        3.99%  

 

1.

Calculated by dividing the weighted average shares outstanding (basic) by the total granted.

Overhang

Overhang provides a measure of potential dilution. As of February 13, 2019, the date our Board approved the 2019 Plan, we had 2,022,662,570 common shares outstanding; 36,039,117 common shares were subject to outstanding equity awards under the Prior Plans; and 17,700,000 common shares were available for future award grants under the Prior Plans. Accordingly, our fully diluted overhang as of February 13, 2019 was 2.7%. Had the 32,000,000 common shares being requested under this proposal been available for grant as of February 13, 2019, our fully diluted overhang would have increased to 4.2%.

Equity compensation plan information

We note that the number of common shares remaining available for issuance under our Prior Plans as described above differs from those reported in the table on page 92 under “Shares reserved for equity compensation as of December 31, 2018”, since that table, required by SEC disclosure rules, is dated as of year-end 2018 and therefore does not take into account shares issued upon exercise of outstanding options, or withheld shares in connection with such exercises, in 2019. If the table were restated as of February 13, 2019, it would reflect the following information:

 

Shares to be issued in respect of outstanding RSUs and PSUs as of February 13, 2019

     0  

Shares to be issued upon exercise of outstanding options, warrants and rights approved by security holders as of February 13, 2019

     36,039,117  

Weighted average exercise price (for options)1

     $34.13  

Weighted average remaining term (for options)

     5.70 years  

Shares available for future issuance under the Prior Plans as of February 13, 20192

     17,786,088  

 

1.

Canadian dollars have been converted to US dollars using the published WM/Reuters 4 pm London year-end exchange rate of C$1 = US$0.7322.

2.

Includes 2,278,133 options outstanding under the Enbridge Inc. Performance Stock Option Plan and 33,760,984 options outstanding under the Enbridge Inc. Incentive Stock Option Plan. No additional awards were or will be granted under the Prior Plans as of the Effective Date.

 

 

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In addition, as of February 13, 2019, there were 1,051,265 shares to be issued upon exercise of outstanding options and other awards under the Spectra 2007 LTIP, which were assumed by Enbridge at the closing of the Merger Transaction, as described on page 94. No additional awards will be granted under the Spectra 2007 LTIP and no shares under the Spectra 2007 LTIP will be used for awards under the 2019 Plan.

Enbridge also takes into account the relevant accounting and tax impact of all potential forms of equity awards in designing our grants. We believe that the benefits to our shareholders resulting from equity award grants to our senior employees, including interest alignment and mitigation of incentives to take inappropriate business risks, outweigh the potential dilutive effect of grants under the 2019 Plan. The Human Resources and Compensation Committee believes that paying a portion of compensation in the form of equity awards that vest over multiple years is an effective method of aligning the interests of senior employees with those of our shareholders, encouraging ownership in the company and retaining, attracting and rewarding talented employees.

Summary of the 2019 Plan

The following summary of the material terms of the 2019 Plan is qualified in its entirety by reference to the complete text of the 2019 Plan, which is attached to this Proxy Statement as Appendix A.

Overview

The purpose of the 2019 Plan is to (1) enhance the company’s ability to attract, retain and motivate eligible individuals who make (or are expected to make) important contributions to the company by providing these individuals with equity ownership opportunities, (2) align the interests of such individuals with the company’s shareholders and (3) promote ownership of the company’s equity.

The 2019 Plan includes numerous features designed to protect shareholder interests and reflect our compensation principles. For example, the 2019 Plan prohibits grants of stock options with exercise prices below their grant date fair market value, the repricing of stock options, and the payment of dividends on unvested or unearned awards (including awards subject to performance-based vesting). The 2019 Plan also generally requires a minimum one-year vesting schedule for all awards, provides that all awards will be subject to our clawback policy, and authorizes a definitive number of shares for issuance, which cannot be automatically increased without further shareholder approval.

Administration

The 2019 Plan may be administered by the Board or a committee of the Board (the “Administrator”). The 2019 Plan will be administered by the Human Resources and Compensation Committee, unless otherwise determined by the Board and subject to applicable regulations.

The Administrator will have the authority to grant awards, determine which eligible individuals receive awards and set award terms and conditions, among other things, subject to the conditions and limitations in the 2019 Plan. The Administrator also has the authority to take all actions and make all determinations under the 2019 Plan, including to interpret the 2019 Plan and applicable award agreements, to adopt, amend and repeal administrative rules, guidelines and practices relating to the 2019 Plan, to correct defects and reconcile inconsistencies in the 2019 Plan or any award, to amend the 2019 Plan to reflect changes in applicable law and to amend any award agreement, including, in each instance, without shareholder approval (unless such approval is required by applicable law or stock exchange rules) and all subject to the conditions in the 2019 Plan and applicable law. The Administrator may also delegate its duties to any director or officer (or group thereof) of the company, subject to applicable law. The Administrator’s determinations under the 2019 Plan are in its sole discretion and will be final and binding.

Eligibility

Awards may be granted to any employee or non-employee director who has been designated by the Administrator. As of February 13, 2019, approximately 11,850 officers and employees and 12 non-employee directors would have been eligible to receive awards under the 2019 Plan.

Common shares available for awards under the 2019 Plan

The total number of our common shares which may be delivered pursuant to awards granted under the 2019 Plan on or after the Effective Date is 49,700,000 common shares, consisting of 32,000,000 common shares plus 17,700,000, the number of common shares available for issuance and not subject to outstanding awards under the Prior Plans as of the Effective Date. This total number of common shares, which is subject to adjustment in connection with certain corporate transactions or events as described below, represents approximately 2.5% of the issued and outstanding Enbridge common shares as of the Effective Date.

 

 

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Common shares subject to an award under the 2019 Plan will only be counted against this overall share limit to the extent they are actually issued. For example, if any award is settled in cash, forfeited or otherwise terminates, is canceled without the delivery of common shares, or if the common shares underlying an award are surrendered or withheld from any award to satisfy any obligation of the recipient (including taxes) or are tendered to pay the grant, exercise or purchase price of any award, then the common shares covered by such forfeited, terminated or canceled award, or which are equal to the number of common shares surrendered, withheld or tendered, will become available to be delivered pursuant to awards granted under the 2019 Plan. The payment of any dividend equivalent right in cash in conjunction with any outstanding award will also not count against the overall share limit. In addition, notwithstanding anything contrary in the 2019 Plan, no more than two million common shares may be issued pursuant to the exercise of incentive stock options (as described below). In no event will common shares subject to an award granted under a Prior Plan become available to be delivered under the 2019 Plan (including if such Prior Plan award is settled in cash, forfeited, withheld or otherwise is terminated without the delivery of common shares).

In addition, in connection with another entity’s merger or consolidation with the company or the company’s acquisition of an entity, the Administrator may grant awards in substitution for any options or other share-based awards granted by such other entity before the merger or acquisition. These substitute awards will not count against the overall share limit, and common shares subject to these substitute awards will not be added to the number of common shares available for awards under the 2019 Plan, except that common shares acquired by the exercise of substitute incentive stock options will count against the two million share maximum for common shares that may be issued pursuant to the exercise of incentive stock options.

In connection with certain corporate transactions or events, the Administrator may also adjust the number and types of shares subject to any outstanding award, the terms and conditions of any outstanding award, and the number of common shares issuable under the 2019 Plan in such manner as the Administrator deems appropriate in order to prevent the enlargement or dilution of benefits intended under the 2019 Plan. These corporate events may include, among other things: a dividend or other distribution, reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the company’s assets, or sale or exchange of our common shares, a “change in control” (as described below), issuance of warrants, other unusual or nonrecurring transaction or event affecting the company, or changes in any applicable laws or accounting principles.

Minimum vesting and other limitations of awards

All awards granted under the 2019 Plan are subject to a minimum vesting schedule of at least twelve months following the date of grant, provided that vesting may accelerate in connection with death, retirement, a change in control or other termination. Up to five percent of the common shares available for grant under the 2019 Plan may be granted with a minimum vesting schedule that is shorter than twelve months.

In addition, the total number of common shares that may be issued to “reporting insiders” (as defined under Canadian securities laws), which includes our directors and certain officers, pursuant to all equity-based compensation arrangements within any one-year period cannot exceed 10% of the number of our common shares outstanding at the time of issuance (excluding any other common shares issued under all equity-based compensation arrangements of the company during such period). The total number of common shares reserved for issuance to “reporting insiders” pursuant to all equity-based compensation arrangements of the company also cannot exceed 10% of the number of common shares outstanding.

Except to the extent provided in an award agreement, awards are not transferable except by will or the laws of descent and distribution. All awards are subject to our clawback policy. No awards may be granted under the 2019 Plan after February 11, 2029.

Types of awards

The types of awards that may be granted under the 2019 Plan are:

Stock options. A stock option entitles the recipient to purchase our common shares at a fixed exercise price. The exercise price per share will be determined by the Administrator but will not be less than 100% of the fair market value of our common shares on the date of grant. Fair market value will generally be the closing sales price of our common shares as quoted on the TSX (for Canadian employees) or NYSE (for U.S. employees) on the trading date prior to the grant date. The Administrator may also determine any vesting or other conditions and limitations applicable to each option, including any performance criteria. Options must be exercised within ten years after the date of grant. In the event that on the last business day of the term of an option (other than an incentive stock option) its exercise is

 

 

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prohibited because of a blackout period preventing trading by the recipient in the company’s shares, the term of the option will be extended until the tenth trading day following the expiration of the blackout period (but in no event will the extension last beyond the ten-year maximum term). Awards may also be issued as incentive stock options within the meaning of 422 of the US Internal Revenue Code. In no event may the Administrator reduce the grant price per share of outstanding options or cancel outstanding options for cash, other awards or options with a grant price per share that is less than that of the original options without shareholder approval.

Restricted stock. Restricted stock are common shares that are registered in the recipient’s name, but that are subject to the company’s right to repurchase all or a part of such shares at their issue price, or other stated formula price, or to require forfeiture if conditions are not satisfied before the applicable restriction period ends. The Administrator may grant or offer for sale restricted shares in such amounts, and subject to such terms and conditions, as it may determine, including any vesting and performance criteria. Recipients of restricted stock will not be entitled to voting rights in such shares until the underlying shares vest, and dividends will be retained by the company while the applicable restriction period applies and will be paid only if and when the restricted stock vests.

Restricted stock units. A restricted stock unit is an unfunded, unsecured right to receive a common share, cash or other property at a future date. The Administrator may grant restricted stock units in such amounts, and subject to such terms and conditions, as it may determine, including any vesting and performance criteria. The recipient will have only the rights of a general unsecured creditor of the company and no rights as a shareholder of the company until the common shares underlying the restricted stock units, if any, are delivered.

Performance awards. A performance award may be a grant of shares or share-denominated units with a performance period and goals, as well as any other terms conditions and restrictions, in each case as the Administrator may determine. The value of a performance award will depend on the extent to which applicable performance goals are attained within the applicable performance period, and the value of any earned award may be paid in cash or shares as the Administrator determines.

Dividend equivalent rights. The Administrator may, in its discretion, include in the award agreement of any award other than an option a dividend equivalent right entitling the recipient to receive an amount equal to all or any portion of the regular cash dividends that would be paid on the common shares covered by such award as if such shares had been delivered. The Administrator may determine whether dividend equivalent rights will be paid currently or credited to an account of a recipient, whether they should be settled in cash, shares or another form, and whether they should be subject to the same restrictions on transferability and forfeiture as the awards to which they relate, as well as such other terms and conditions as the Administrator may deem appropriate. In no event will dividend equivalent rights be paid unless and until the award to which they relate vests, including for dividend equivalent rights tied to performance-based awards, until all applicable performance-based goals have been satisfied.

Other share or cash based awards. Other types of share- or cash-based awards may be granted subject to such terms and conditions as the Administrator may determine (and subject to any required prior approval by the Toronto Stock Exchange or under any other applicable laws). Such awards may include annual or other periodic or long-term cash bonus awards (whether based on specified performance criteria or otherwise), and may be paid in shares, cash or other property, as the Administrator determines.

Change in control

In the event of a “change in control”, the Administrator may (1) cancel awards for the in-the-money value of stock options and the value of other awards (as determined in the sole discretion of the Administrator), (2) accelerate vesting of awards, (3) provide that awards will be assumed by the successor entity (or a parent or subsidiary thereof) with adjustments as the number and kind of shares and any applicable terms to provide substantially equivalent value and terms of the affected award, (4) adjust the number and type of shares subject to awards, the number of awards that may be granted under the 2019 Plan and any terms of awards, provided that adjustments result in substantially equivalent value being provided to holders of such awards, (5) replace awards with other rights or property of substantially equivalent value, (6) modify terms of awards to add events, conditions or circumstances upon which the vesting of such awards will accelerate and/or (7) deem any performance conditions satisfied at target, maximum or actual performance through the closing of the transaction or to provide for performance conditions to continue (either as if or as adjusted) after the closing.

As used in the 2019 Plan, a “Change in Control” means (1) the sale (other than to persons affiliated with the company or its subsidiaries) of assets of the company or its subsidiaries having a value greater than 50% of the fair market value of the assets of the company and its subsidiaries (determined on a consolidated basis prior to such sale), other than a sale by the company of assets to an entity where, immediately prior to such sale or disposition, at least 50% of

 

 

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the voting securities of such entity are owned by shareholders of the company in substantially the same proportions as their ownership of the company, (2) any change in the holding of shares of the company by a person not affiliated with the company in which such person or certain group of persons are in a position to exercise effective control of the company; provided that a person or group of persons holding shares entitling them to cast 20% or more of the votes to elect directors will be deemed to be in a position to exercise effective control (other than a person holding such shares in the ordinary course of business as an investment manager who is not using such holding to exercise effective control), (3) any reconstruction, reorganization, recapitalization, consolidation, amalgamation, arrangement, merger, transfer, sale or other transaction involving the company where shareholders of the company immediately prior to such transaction hold less than 50% of the shares of the company or of the continuing corporation following completion of such transaction; (4) shareholders of the company approve a plan to wind-up, dissolve or liquidate the company or significantly rearrange the company’s affairs in one or more transactions, or the commencement of proceedings related to the same (except where such re-arrangement is part of a reorganization of the company where the business of the company is continued and the shareholdings remain substantially the same), or (5) “Incumbent Directors” cease to be a majority of the Board; provided that any transaction whereby shares held by shareholders of the company are transferred or exchanged for units or securities of a trust, partnership or other entity which continues to own all of the shares of the company previously owned by the shareholders of the company and the former shareholders of the company continue to be beneficial holders of such units or securities in the same proportions. “Incumbent Directors” 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 in control, and any successor to an Incumbent Director who was recommended for election at a meeting of shareholders of the company, or elected or appointed to succeed any Incumbent Director, by the affirmative vote of the directors, which affirmative vote include a majority of the Incumbent Directors then on the Board.

Clawback

Awards under the 2019 Plan are subject to our clawback policy as it may be amended from time to time, including any clawback policy adopted to comply with applicable laws.

Transfer restrictions

Unless otherwise provided in an award agreement, no award may be transferred, except by will or the laws of descent and distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order. During the life of the recipient, awards will be exercisable only by the recipient.

Effect of termination of employment and other changes in participant status

Pursuant to the terms of the award agreement, the Administrator may determine how a participant’s termination of employment, disability, death, retirement, leave of absence, secondment or any other change in status affects an award.

Amendment and termination

The Board may amend, suspend or terminate the 2019 Plan at any time without shareholder approval, provided that no amendment may be effective unless approved by our shareholders to the extent approval is necessary under applicable law or the rules of any applicable stock exchange. No amendments to the 2019 Plan, other than an increase to the overall share limit, may materially and adversely affect any outstanding award at the time of such amendment without the affected recipient’s consent.

Shareholder approval will be required for an amendment to the 2019 Plan to the extent necessary to comply with stock exchange rules or other applicable laws, including amendments relating to (1) increasing the overall share limit, (2) reducing the grant, exercise or purchase price for any awards, (3) canceling of any awards and reissuing or replacing such awards with awards having a lower grant, exercise or purchase price, (4) removing or exceeding the limits of the plan on participation by reporting insiders” (as defined under the Canadian securities law), (5) extending the term of any award, (6) allowing other than employees or directors of the company or a subsidiary to become participants in the 2019 Plan and (7) allowing awards to become transferable or assignable other than by will or according to the laws of descent and distribution.

The Administrator may also amend, modify or terminate any outstanding award without shareholder approval (unless such approval is required by the 2019 Plan, applicable laws or stock exchange rules) and without the applicable recipient’s consent (unless such action materially and adversely affects the recipient’s rights under the award).

Unless earlier terminated by the Board, the 2019 Plan will terminate at the close of business on the day before the tenth anniversary of the Effective Date, but any outstanding awards will remain outstanding in accordance with the terms and conditions of the 2019 Plan.

 

 

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U.S. federal income tax consequences of the 2019 Plan

The following is a brief description of the U.S. federal income tax consequences generally arising with respect to grants of awards under the 2019 Plan. This description is not intended to, and does not, provide or supplement tax advice to award recipients. Recipients are advised to consult with their own independent tax advisors with respect to the specific tax consequences that, in light of their particular circumstances, might arise in connection with their receipt of awards under the 2019 Plan, including any state, local or foreign tax consequences and the effect, if any, of gift, estate and inheritance taxes.

Incentive stock options

A recipient will not recognize taxable income upon exercising an incentive stock option (an “ISO”) except that the alternative minimum tax may apply. Upon a disposition of shares acquired upon exercise of an ISO before the end of the applicable ISO holding periods, the recipient generally will recognize ordinary income equal to the lesser of (1) the excess of the fair market value of the shares at the date of exercise of the ISO over the exercise price or (2) the amount realized upon the disposition of the ISO shares over the exercise price. Otherwise, a recipient’s disposition of shares acquired upon the exercise of an ISO for which the statutory holding periods (defined as on or after the later of (a) the second anniversary of the date of grant of the ISO and (b) the first anniversary of the date of exercise of the ISO) are met generally will result in long-term capital gain or loss measured by the difference between the sale price and the recipient’s tax basis in such shares (the tax basis in the acquired shares of shares for which the ISO holding periods are met generally being the exercise price of the ISO).

Nonstatutory stock options

The grant of a nonstatutory stock option (i.e., an option other than an ISO) will create no tax consequences at the grant date for the recipient or the company. Upon exercising such an option, the recipient will recognize ordinary income equal to the excess of the fair market value of the vested shares (and/or cash or other property) acquired on the date of exercise over the exercise price, and will be subject to FICA (Social Security and Medicare) tax in respect of such amounts. A recipient’s disposition of shares acquired upon the exercise of a nonstatutory stock option generally will result in long- or short-term capital gain or loss measured by the difference between the sale price and the recipient’s tax basis in such shares (the tax basis in the acquired shares generally being the exercise price plus any amount recognized as ordinary income in connection with the exercise of the option).

Restricted stock

A recipient of restricted stock generally will not be subject to income taxation at grant. Instead, upon lapse of the restrictions, the recipient will recognize ordinary income equal to the fair market value of the shares on the date of lapse. The recipient’s tax basis in the shares received will be equal to the fair market value of the shares on the date the restrictions lapse, and the recipient’s holding period in such shares begins on the day after the restrictions lapse.

Restricted stock units

A recipient of a restricted stock unit (whether time-vested or subject to achievement of performance goals) will not be subject to income taxation at grant. Instead, the recipient will be subject to income tax at ordinary rates on the fair market value of the shares (or the amount of cash) received on the date of delivery. The recipient will be subject to FICA (Social Security and Medicare) tax at the time any portion of such award is deemed vested for tax purposes. The fair market value of the shares (if any) received on the delivery date will be the recipient’s tax basis for purposes of determining any subsequent gain or loss from the sale of the shares, and the recipient’s holding period with respect to such shares will begin at the delivery date. Gain or loss resulting from any sale of shares delivered to a recipient will be treated as long- or short-term capital gain or loss depending on the holding period. If any dividend equivalent amounts are paid to the recipient, they will be includible in the recipient’s income as additional compensation (and not as dividend income) and will be subject to income and employment tax withholding.

Disposition of shares

Unless stated otherwise above, upon the subsequent disposition of shares acquired under any of the preceding awards, a recipient will recognize capital gain or loss based upon the difference between the amount realized on such disposition and the recipient’s basis in the shares, and such amount will be long-term capital gain or loss if such shares were held for more than 12 months.

Cash awards

A recipient who receives a cash award will not recognize any taxable income for federal income tax purposes at grant. Any cash received pursuant to the award will be treated as compensation income received by the recipient generally

 

 

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in the year in which the recipient receives such cash, and such amount will generally be deductible by the company or one of its subsidiaries.

Deduction

The company generally will be entitled to a tax deduction equal to the amount recognized as ordinary income by the recipient in connection with the delivery of shares pursuant to a restricted stock unit (whether time-vested or subject to achievement of performance goals), the exercise of an option or the lapse of restrictions on shares of restricted stock. The company will not be entitled to any tax deduction with respect to an ISO if the recipient holds the shares for the ISO holding periods prior to disposition of shares, and is generally not entitled to a tax deduction for any award with respect to any amount that represents compensation in excess of $1 million paid to “covered employees” under Section 162(m) of the US Internal Revenue Code.

Section 409A

Some awards under the 2019 Plan may be considered to be deferred compensation subject to special U.S. federal income tax rules (Section 409A of the US Internal Revenue Code). Failure to satisfy the applicable requirements under these provisions for awards considered deferred compensation would result in the acceleration of income and additional income tax liability to the recipient, including certain penalties. The 2019 Plan and awards under the 2019 Plan are intended to be designed and administered so that any awards under the 2019 Plan that are considered to be deferred compensation will not give rise to any negative tax consequences to the recipient under these provisions.

New plan benefits

On February 21, 2019, our Board approved the grant of awards under the 2019 Plan, which is subject to shareholder approval of the 2019 Plan and, also in the case of stock option awards, subject to shareholder ratification of the award grants. The awards granted under the 2019 Plan as of the date of this Proxy Statement are set forth in the tables below. In the event that the 2019 Plan is not approved by our shareholders, the awards granted thereunder will be cancelled. Future awards under the 2019 Plan will be granted subject to the Administrator’s discretion and therefore are not currently determinable.

 

  Name and Position   

Number

of Stock
Options1

     Stock Option
Exercise Price
     Stock Option
Expiration Date
    

Number
of other

Awards2

     Total Dollar
Value of all
Awards ($)3
     Total Number
of Units of  All
Awards4
 

Al Monaco

     825,740        C$48.30        February 21, 2029        125,580        6,499,395        951,320  

John K. Whelen

     216,100        C$48.30        February 21, 2029        32,870        1,701,081        248,970  

D. Guy Jarvis

     219,770        C$48.30        February 21, 2029        33,420        1,729,715        253,190  

Robert R. Rooney

     153,490        C$48.30        February 21, 2029        23,340        1,208,025        176,830  

William T. Yardley

     202,700        $36.71        February 21, 2029        39,290        2,062,624        241,990  

Current executive officers as a group (includes NEOs)

     2,136,920       

C$48.30

$36.71

 

 

     February 21, 2029        333,450        17,286,872        2,470,370  

Current non-employee directors as a group

                                         

Employees other than executive officers as a group

     4,723,990       

C$48.30

$36.71

 

 

     February 21, 2029        1,793,060        71,652,207        6,517,050  

 

1.

The stock options vest on pro-rata on the first, second and third anniversary of the grant date, subject to continued service.

2.

For executive officers, includes performance stock units that vest based on performance through a three-year performance period commencing January 1, 2018 and ending December 31, 2021. For employees (other than executive officers, includes restricted stock units that vest on December 1, 2021, subject to continued service.

3.

Dollar value reflects the grant date fair value of all restricted stock units, performance stock units and stock options granted in February 2019 under the 2019 Plan, subject to shareholder approval. Canadian dollars have been converted to US dollars using the published WM/Reuters 4 pm London year-end exchange rate of C$1 = US$0.7322.

4.

Shows target grant of performance stock unit awards and includes restricted stock units and stock options granted on February 21, 2019 under the 2019 Plan, subject to shareholder approval of the 2019 Plan and, in the case of stock options, shareholder ratification of the award grants.

 

 

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The Board recommends that shareholders vote FOR the resolution set out below:

BE IT RESOLVED as an ordinary resolution of Enbridge Inc. that:

 

1.

the Enbridge Inc. 2019 Long Term Incentive Plan which is described in Enbridge Inc.’s Proxy Statement dated March 4, 2019, be and is hereby approved, ratified and confirmed;

2.

the grants of stock options which are described in the Proxy Statement, be and are hereby approved, ratified and confirmed; and

3.

any officer or director of Enbridge Inc. be and is hereby authorized for and on behalf of Enbridge Inc., under corporate seal or otherwise, to do all such things and to execute all such documents or instruments as may be necessary or desirable to give effect to this resolution and the matters authorized hereby, such determination to be conclusively evidenced by the execution and delivery of any such documents or instruments and the taking of any such actions.

Vote required for approval:

The approval of the 2019 Plan requires an affirmative vote of the majority of the votes duly cast at the Meeting.

 

The Board recommends that shareholders vote “FOR”

the approval of the Enbridge Inc. 2019 Long Term Incentive Plan

and the ratification of the grants of stock options thereunder.

ITEM 4: Advisory vote to approve compensation of Named Executive Officers

In accordance with the Exchange Act of 1934 (the “Exchange Act”) and a related US SEC rule, we are providing shareholders with the opportunity to vote for or against, on a non-binding advisory basis, the compensation of our Named Executive Officers (“NEOs”) as disclosed in this Proxy Statement, commonly known as “say on pay”. As this is an advisory vote, the results will not be binding on the Board. However, when considering the company’s approach to compensation for our NEOs, the Board will take into account the results of this vote, together with other shareholder feedback and best practices in compensation and governance.

We ask that, as you consider your vote, you review the Compensation Discussion and Analysis contained in this Proxy Statement. The Board believes that the executive compensation program that has been implemented achieves the goal of maximizing long-term shareholder value while attracting, motivating and retaining top talent. The company recognizes that the proper structure of executive compensation is critical to both managing risk and appropriately incentivizing the company’s NEOs. The company believes that its approach to executive compensation is fair and balanced, and creates incentives for NEOs that are well-aligned with shareholders’ interests over the long term.

We have held advisory votes on our approach to executive compensation at each annual meeting of shareholders since 2011. Voting results in the most recent three years are set out in the table below.

 

  Say on pay vote      2018        2017        2016  

Votes for

       83.78%          95.94%          95.82%  

You will be asked to vote for or against, or you may abstain from voting on, the compensation of the company’s NEOs as disclosed in the Proxy Statement through the following resolution.

The Board recommends that shareholders vote FOR the resolution set out below:

BE IT RESOLVED, on an advisory basis, that the shareholders approve the compensation of the Named Executive Officers of Enbridge Inc. as disclosed in Enbridge Inc.’s Proxy Statement dated March 4, 2019 (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and the narrative disclosures that accompany the compensation tables) delivered in advance of the 2019 annual meeting of shareholders in accordance with the compensation disclosure rules of the SEC and the Canadian securities regulatory authorities.

The Board will take the results of this vote into account when it considers future compensation policies and issues. We will also examine the level of shareholder interest and the comments we receive and consider the best approach and timing for soliciting feedback from shareholders on our approach to executive compensation in the future.

 

 

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Vote required for approval:

In order to be approved, the advisory resolution on say on pay requires an affirmative vote of the majority of the votes duly cast at the Meeting.

 

The Board recommends that shareholders vote “FOR”

the advisory vote to approve the compensation of the company’s

Named Executive Officers as disclosed in the Proxy Statement.

Shareholder proposals

We did not receive any shareholder proposals to be included in the Proxy Statement.

Proposals for the 2020 meeting

Enbridge is subject to both the rules of the SEC under the Exchange Act and the provisions of the Canada Business Corporations Act with respect to shareholder proposals. As clearly indicated under the Canada Business Corporations Act and the rules of the SEC under the Exchange Act, simply submitting a shareholder proposal does not guarantee its inclusion in the proxy materials.

Shareholder proposals submitted pursuant to the rules of the SEC under the Exchange Act for inclusion in the company’s proxy materials for its annual meeting of shareholders to be held in 2020 (the “2020 meeting”), must be received no later than November 28, 2019. Such proposals must also comply with all applicable provisions of Exchange Act Rule 14a-8.

Shareholder proposals submitted pursuant to applicable provisions of the Canada Business Corporations Act that a shareholder intends to present at the 2020 meeting and wishes to be considered for inclusion in Enbridge’s proxy statement and proxy form for the 2020 meeting must be received no later than December 5, 2019. Such proposals must also comply with all applicable provisions of the Canada Business Corporations Act and the regulations thereunder. The 2020 meeting is expected to be held in May 2020 in Calgary, Alberta.

All shareholder proposals must be mailed to our Corporate Secretary at Enbridge Inc., 200 – 425 1st Street SW, Calgary, Alberta, Canada T2P 3L8 or sent by email to CorporateSecretary@enbridge.com and received by the deadlines indicated above.

As described below in the section “Advance Notice By-law”, pursuant to Enbridge’s Advance Notice By-Law (By-law No. 2), if a shareholder intends to nominate a person for election as a director of Enbridge at an annual meeting of shareholders, other than pursuant to a shareholder proposal, such nomination must comply with the procedures set out in the Advance Notice By-Law, including providing timely notice in proper written form. Please refer to page 35 of this Proxy Statement for details.

Other business

As of the date of this Proxy Statement, the Board and management are not aware of any other items of business to be brought before the Meeting.

Voting results

We will post the results of this year’s votes and the other items of business on our website (www.enbridge.com) and on www.sedar.com and www.sec.gov following the Meeting.

 

 

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Statement of corporate governance

Regulations, rules and standards

Effective January 1, 2018, Enbridge is no longer considered a “foreign private issuer” pursuant to applicable US securities laws. Accordingly, Enbridge is subject to corporate governance requirements applicable to US domestic issuers and applicable Canadian corporate governance requirements, as well as the governance and disclosure requirements of the TSX and the NYSE.

We have a comprehensive system of stewardship and accountability that meets applicable Canadian and US requirements, including: Canadian Securities Administrators (CSA) National Policy 58-201 Corporate Governance Guidelines; National Instrument 58-101 Disclosure of Corporate Governance Practices; National Instrument 52-110 Audit Committees; requirements of the Canada Business Corporations Act; item 407 of Regulation S-K of the SEC and the corporate governance guidelines of the NYSE.

Our governance practices

Sound governance means sound business. At Enbridge, we believe good governance is important for our shareholders, our employees and the company.

This section discusses our governance philosophy, policies and practices. It also describes the role and functioning of our Board and the five Board committees. The framework for our corporate governance can be found in our Corporate Governance Principles and Guidelines, our Code of Business Conduct and in the written terms of reference for our Board, each of the five Board committees, the President & CEO and the Chair of the Board. Our articles and by-laws also set out certain matters that govern our business activities. All of these documents are available on our website (www.enbridge.com).

Governance highlights

We are committed to strong and sustainable corporate governance, which promotes the long-term interests of our shareholders, strengthens our Board and management accountability and helps build public trust in Enbridge. Important elements of our strong corporate governance include:

 

 

annual election of all directors

 

separate Chair and CEO

 

majority voting policy for directors

 

diversity policy for directors and senior management

 

regular executive sessions of non-management directors

 

risk oversight by Board and Board committees

 

no dual class share structure

 

political contributions policy

 

38% women directors

 

majority independent directors

 

statement on business conduct and ethics & compliance program

 

individual director election (no slate voting)

 

annual Board, committee and director evaluation process

 

incentive compensation clawback policy

 

executive compensation pay-for-performance philosophy

 

sustainability reporting

 

share ownership guidelines for directors and executives

 

independent audit, compensation and nominating committees

 

annual advisory vote on executive compensation

 

Board renewal 54% directors < 5 years tenure

 

Board orientation/education program

 

prohibition on hedging or pledging for directors, executives and all employees

 

whistle blower policy

 

shareholder engagement on ESG matters

 

 

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Key governance documents

Various mandates, policies and practices support the corporate governance framework at Enbridge. The following documents, among others, are key components of Enbridge’s corporate governance and can be found on our website at www.enbridge.com:

 

 

Articles of Continuance and Articles of Amendment

 

General By-Law No. 1

 

By-Law No. 2

 

Corporate Governance Principles and Guidelines (“Governance Guidelines”)

 

Incentive Compensation Clawback Policy

 

Terms of Reference for the Board

 

Terms of Reference for each Board Committee

 

Terms of Reference for the Chair of the Board

 

Terms of Reference for the President & Chief Executive Officer

 

Whistle Blower Policy

A culture of ethical conduct

A strong culture of ethical conduct is central to Enbridge.

Our Statement on Business Conduct (available on our website at www.enbridge.com) is our formal statement of expectations for all individuals engaged by Enbridge. It applies to everyone at Enbridge and our subsidiaries, including our directors, officers, employees, contingent workers as well as consultants and contractors retained by Enbridge.

It discusses what we expect in areas like:

 

    complying with the law, applicable rules and all policies;
    how to avoid conflicts of interest, including examples of acceptable forms of gifts and entertainment;
    anti-corruption and money laundering;
    acquiring, using and maintaining assets (including computers and communication devices) appropriately;
    data privacy, records management, proprietary, confidential and insider information;
    protecting health, safety and the environment;
    interacting with landowners, customers, shareholders, employees and others; and
    respectful workplace/no harassment.
 

 

The Board approved a revised Statement on Business Conduct in 2017 and the revised Statement on Business Conduct became effective on September 29, 2017.

On the commencement of employment with Enbridge and annually thereafter, all Enbridge employees and contingent workers active in the Company’s human resources information system are required to complete a Statement on Business Conduct training and certify compliance with the Statement on Business Conduct. Additionally, employees and contingent workers are also required to disclose any actual or potential conflicts of interest.

Directors must also certify their compliance with the Statement on Business Conduct on an annual basis.

During January 2019, all employees and contingent workers active in the Company’s human resources information system were required to complete online Statement on Business Conduct training and applicable compliance certification, and were required to declare any real or potential conflicts of interest. As of the date of this Proxy Statement, approximately 99.1% of these Enbridge employees had certified compliance with the Statement on Business Conduct for the year ended December 31, 2018. All 11 current directors on the Board who were directors in 2018 have also certified their compliance with the Statement on Business Conduct for the year ended December 31, 2018.

Building awareness

We use training to help raise awareness and reinforce our commitment to ethical conduct.

To date, we have developed training programs on fraud awareness, foreign corruption laws and the Statement on Business Conduct.

 

 

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Through the annual online Statement on Business Conduct training program, Enbridge communicates its expectation that everyone working for Enbridge has a duty to report compliance issues (including suspected breaches of the Statement on Business Conduct) on a timely basis.

Our values

Enbridge adheres to a strong set of core values – safety, integrity and respect – in support of our communities, the environment and each other.

Handling conflicts of interest and related person transactions

If a director or officer has a material interest in a transaction or agreement involving Enbridge, or otherwise identifies a potential personal conflict, he or she must:

 

 

declare the conflict or potential conflict; and

 

abstain from voting on the matter at any Board meeting where it is being discussed or considered.

This approach is consistent with the requirements of the Canada Business Corporations Act. In addition, the Board would review related person transactions in conjunction with making director independence determinations. Completion of annual questionnaires by directors and officers of the company assists in identifying possible related person transactions. Further, as set forth above, pursuant to our Statement on Business Conduct, all officers and directors are required to avoid conflicts of interest and to disclose any actual or potential conflicts of interest. They must also annually certify their compliance with the Statement on Business Conduct. Disclosures of an actual or potential conflict of interest are reviewed by the company’s Ethics & Compliance Department to ensure appropriate follow-up and reporting. Any waiver from any part of the Statement on Business Conduct requires the approval of the Chief Executive Officer. For executive officers, senior financial officers and members of the Board, a waiver requires the express approval of Enbridge’s Board. Since the beginning of 2018, neither the Chief Executive Officer nor the Board has waived any aspect of the Statement on Business Conduct.

For purposes of the foregoing, a “related person transaction” is a transaction in which the company was or is to be a participant and the amount involved exceeds US$120,000, and in which any related person had or will have a direct or indirect material interest, and a “related person” means (i) a director, nominee director or executive officer of the company; (ii) an immediate family member of a director, nominee director or executive officer, or (iii) a beneficial holder of greater than five per cent of the company’s shares or an immediate family member of such holder.

Interest of informed persons in material transactions / transactions with related persons

On February 27, 2017, Enbridge and Spectra Energy combined through a stock-for-stock merger transaction (the “Merger Transaction”). Upon the closing of the Merger Transaction, Gregory L. Ebel (Spectra Energy’s former Chairman, President and Chief Executive Officer) became the non-executive Chair of the Enbridge Board of Directors. Enbridge is required, until the first meeting of the Board of Directors following the 2020 annual shareholders meeting of Enbridge, to provide, without charge, to Mr. Ebel as non-executive Chair: (i) use of Enbridge’s aircraft for business flights to board meetings and for other business conducted on behalf of Enbridge, (ii) information technology support and (iii) administrative support.

Enbridge is also required to secure office space in the Houston area on behalf of Mr. Ebel and to reimburse the non-executive Chair for expenses incurred for tax return preparation services (in an aggregate amount not to exceed US$100,000 per year for such office and tax return preparation services). Following the closing of the Merger Transaction, Mr. Ebel remained a non-executive employee of Spectra Energy until April 15, 2017, at which time he experienced a qualifying termination under his change in control agreement with Spectra Energy and became entitled to receive certain payments and benefits which were paid in 2017 as well as the following payments and benefits which, except as indicated below, were paid in 2018:

 

 

continued welfare benefits for a period of two years following Mr. Ebel’s qualifying termination (such benefits are valued at approximately US$45,521, with those provided in 2018 valued at US$22,761).

 

 

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Insider trading prohibited

Our insider trading and reporting guidelines, which were most recently revised in February 2018, place restrictions on those in a special relationship with Enbridge (including insiders) when they purchase or sell Enbridge shares or other securities. The guidelines, which fulfill our obligations to stock exchanges, regulators and investors, include the following measures:

 

 

imposing quarterly and annual trading blackout periods on all directors and officers of Enbridge and its subsidiaries and certain employees, contractors and other persons in a special relationship with Enbridge when financial results are being prepared and have not yet been publicly disclosed (these periods currently begin on the first day following the end of each fiscal quarter or year end and end at the close of trading on the first trading day after we issue a news release disclosing our financial results for that fiscal quarter or year-end) or a Form 10-Q or Form 10-K, as applicable, is filed with the SEC;

 

encouraging and, in the case of directors and executive officers, requiring pre-clearance of all proposed purchases or sales of Enbridge securities with the Corporate Secretary’s office;

 

prohibiting all directors, officers, employees, contractors and other persons in a special relationship with Enbridge and its subsidiaries from purchasing or selling securities of Enbridge or its subsidiaries with knowledge of material non-public information, from disclosing material non-public information to any other persons and from making recommendations or expressing opinions on the basis of material non-public information as to the purchase or sale of securities of Enbridge and its subsidiaries; and

 

prohibiting all directors, officers, employees and contractors of Enbridge and its subsidiaries from engaging in hedging transactions and short sales of Enbridge securities.

Whistle Blower Policy and reporting procedure

Our Whistle Blower Policy and reporting procedures help uphold our strong values and preserve our culture of ethical business conduct.

We introduced the Whistle Blower procedures a number of years ago to protect the integrity of our accounting, auditing and financial processes. We expanded and updated the procedures in 2008 and 2012, and again in 2017.

Complaints about financial or accounting irregularities, unethical conduct or any other compliance issues (including alleged violations of the Statement on Business Conduct) can be made anonymously using the Enbridge Ethics and Conduct Hotline (“Hotline”), which allows for the submission of confidential and anonymous reports through a toll-free telephone number and a web-based reporting system. The Hotline is administered by an independent third-party service provider. Copies of all reports received through the Hotline are provided to the chair of the Audit, Finance & Risk Committee. Individuals can also report concerns about financial or accounting irregularities or unethical conduct confidentially, and directly, to the chair of the Audit, Finance & Risk Committee. All written submissions may be made anonymously and any complaints submitted in a sealed envelope marked “Private and Strictly Confidential” will be delivered to the chair of the Audit, Finance & Risk Committee unopened.

At least once each quarter (sooner if there is an urgent matter), the Chief Compliance Officer reports to the Audit, Finance & Risk Committee about all significant complaints received and to the Safety & Reliability Committee about all significant complaints received on matters within the Safety & Reliability Committee’s mandate. Quarterly reports to the Audit, Finance & Risk Committee also include information about any other significant compliance issues that have been brought to the attention of Enbridge’s Ethics & Compliance Department through quarterly compliance surveys. The Audit, Finance & Risk Committee then determines how to handle any issues or complaints brought to its attention. The committee can hire independent advisors (e.g., outside legal counsel, independent auditors and others) to help investigate and resolve a matter.

Advance Notice By-Law

Enbridge’s By-Law No. 2 sets out advance notice requirements for director nominations (the “Advance Notice By-Law”). It was adopted by the Board on December 2, 2014 and confirmed by shareholders at the annual meeting of shareholders on May 6, 2015. The purpose of the Advance Notice By-Law is to provide shareholders, directors and management of Enbridge with guidance on the nomination of directors. The Advance Notice By-Law is the framework by which the company seeks to fix a deadline by which shareholders of the company must submit director nominations to the company prior to any annual or special meeting of shareholders and sets forth the information that a shareholder must include in the notice to the company for the notice to be in proper written form.

 

 

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Pursuant to the Advance Notice By-Law, if a shareholder intends to nominate a person for election as a director of Enbridge at the Meeting, other than pursuant to a shareholder proposal, such nominations must comply with the procedures set out in the Advance Notice By-Law, including providing timely notice in proper written form.

To be timely, the nominating shareholder’s notice must be given: (a) in the case of an annual meeting of shareholders, not less than 30 days prior to the date of the meeting (no later than April 8, 2019, in the case of the Meeting); provided, that if the meeting is to be held less than 50 days after the date (the “Notice Date”) on which the first public announcement of the date of the meeting was made, notice shall be not later than the close of business on the 10th day following the Notice Date; and (b) in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not also called for other purposes), not later than the close of business on the 15th day following the day on which the first public announcement of the date of the meeting was made. The 2020 annual meeting of shareholders is expected to be held in May 2020 in Calgary, Alberta.

To be in proper written form, a nominating shareholder’s notice must set forth or be accompanied by, as applicable, the information specified in the Advance Notice By-Law regarding both the nominating shareholder and the person whom the nominating shareholder proposes to nominate for election as a director (a “proposed nominee”), as well as the written consent duly signed by the proposed nominee to being named as a nominee for election to the Board and to serve as a director of the company, if elected. Such notice must be promptly updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting.

Delivery of the notice pursuant to the Advance Notice By-Law may only be given by personal delivery or electronic mail, and shall be deemed to have been given and made only at the time it is served by personal delivery or sent by electronic mail to the secretary of the company at: Corporate Secretary, 200-425-1st Street S.W., Calgary, Alberta, Canada, T2P 3L8 or, in the case of electronic mail, to CorporateSecretary@enbridge.com; provided if such delivery or electronic mail is made on a day which is not a business day or later than 5:00 p.m. (Calgary time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day. The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the Advance Notice By-Law and, if any proposed nomination is not in compliance therewith, to declare that such defective nomination shall be disregarded. The Board may, in its sole discretion, waive any requirement in the Advance Notice By-Law. A copy of Enbridge’s Advance Notice By-Law is available on our website (www.enbridge.com).

The role of the Board

The Board is ultimately responsible for governance at Enbridge and for stewardship of the company. It has full power to oversee the management of our business and affairs. It carries out many of its responsibilities through its five standing Board committees:

 

 

Audit, Finance & Risk;

 

Corporate Social Responsibility;

 

Governance;

 

Human Resources & Compensation; and

 

Safety & Reliability.

Principal responsibilities

As part of its stewardship responsibility, the Board has the following responsibilities:

 

 

appoints, evaluates the performance of, and approves the compensation of the President & Chief Executive Officer and approves the appointment of other members of executive management;

 

ensures that processes are in place for succession planning, training and monitoring of senior management;

 

reviews and approves the strategic plan, provides guidance and monitors our progress;

 

helps us identify principal risks, monitors our risk management programs and ensures appropriate systems are implemented to monitor, manage and mitigate those risks;

 

ensures we have processes in place to monitor and maintain the integrity of our internal control and management information systems;

 

ensures the President & Chief Executive Officer and executive management create a culture of integrity, safety and respect throughout the company;

 

develops the company’s approach to corporate governance, including our Corporate Governance Principles and Guidelines; and

 

oversees shareholder communications, public disclosure and corporate communications.

 

 

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The Board is responsible for oversight of key areas referred to above and for overseeing corporate financial operation, including changes to capital structure, annual budgets and financing plans, dividend policy, new financings, financial statements and management’s discussion and analysis and the company’s authorities and spending limits policies. In addition, the Board reviews and approves initiatives, investments and transactions that could materially affect the company. The Board also approves and monitors compliance with significant policies and procedures by which the company is governed and operated.

The Board’s responsibilities are described in the terms of reference for the Board, which are attached at Appendix B to this Proxy Statement. These terms of reference are drafted by management under the guidance of the Governance Committee and approved by the Board, which reviews them once per year and updates them as needed. Copies of the terms of reference for the Board and each of the Board committees are also available on our website (www.enbridge.com).

The Board delegates day-to-day management of Enbridge to the President & Chief Executive Officer and senior management, although major capital expenditures, debt and equity financing arrangements and significant acquisitions and divestitures require Board approval.

The Board develops position descriptions for each committee chair. These descriptions are part of their terms of reference and are reviewed annually. The Governance Committee defines the division of duties between the Board and the President & Chief Executive Officer. The terms of reference for the President & Chief Executive Officer are available on our website (www.enbridge.com).

The role of the non-executive chair of the Board

Pursuant to Section 21 of amended General By-law No. 1 (as amended effective upon the closing of the Merger Transaction, “Amended By-Law No. 1”), Gregory L. Ebel shall serve as non-executive chair of the Board from the effective date of Amended By-law No. 1 until the termination of the annual general meeting of Enbridge shareholders during the 2020 calendar year (the “Specified Chair Period”). During the Specified Chair Period, any removal of Mr. Ebel from such position or any modification of the duties and reporting relationships of such position will require the affirmative vote of at least 75% of the entire Board. In the event that Mr. Ebel is unable or unwilling to continue in such office during the Specified Chair Period, the vacancy created thereby will be filled only by an individual who is also a Continuing Spectra Director (as defined in Amended By-Law No. 1) unless otherwise approved by the affirmative vote of at least 75% of the entire Board. The Board shall nominate Mr. Ebel as a director of Enbridge and the Board and Enbridge shall use their best efforts to obtain the election as a director of Mr. Ebel by the Enbridge shareholders at each meeting of the Enbridge shareholders called to consider the election of directors prior to the 2020 annual general meeting.

Section 45 of Amended By-law No. 1 provides the duties of the non-executive chair of the Board, and these are also contained in the Terms of Reference for the Chair of the Board, available on our website (www.enbridge.com).

Strategic planning

The Board is responsible for reviewing our strategic planning process and for reviewing and approving our strategic plan. The Board devotes at least one meeting per year to the strategic plan. In addition, the Board discusses strategy with management at every regular Board meeting throughout the year, oversees the implementation of the plan, monitors our progress, considers any adjustments to the plan and reviews and approves any transactions it believes will have a significant impact on the plan or our strategic direction.

Safety and operational reliability remains Enbridge’s number one priority and sets the foundation for the strategic plan. You will find more information about our strategic priorities in our annual report which is available on our website (www.enbridge.com).

Risk oversight and management

Risk oversight and management is an important role for the Board and Board committees. The Board is responsible for identifying and having an understanding of the principal risks of the company’s business and ensuring that appropriate systems are implemented to monitor, manage and mitigate those risks. Each year, management prepares a corporate risk assessment report for the Board which assesses enterprise-wide risks and highlights top risks. Management regularly updates the Board and committees on our top risks.

Our annual report on Form 10-K filed with the SEC and on SEDAR on February 15, 2019, including our management’s discussion and analysis for the year ended December 31, 2018, contains more information about the risks applicable to Enbridge, and is available on our website (www.enbridge.com) and on www.sedar.com and www.sec.gov.

 

 

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Board committees’ role in risk management

To better identify, manage and mitigate risk, the corporate risk assessment report is reviewed annually by the four Board committees with enterprise-wide risk management responsibility: the Audit, Finance & Risk Committee, the Safety & Reliability Committee, Corporate Social Responsibility Committee and the Human Resources & Compensation Committee (“HRC Committee”). As a result of such review, each committee makes recommendations to the Board in respect of company practices. In addition, the Board committees can authorize the implementation of systems that address risks within the scope of their responsibility and monitor them to ensure they remain effective.

 

   Board committee

 

Risk oversight responsibilities

 

Audit, Finance & Risk Committee

 

 

Oversight of the company’s strategies, policies and practices relating to assessing, managing, preventing and mitigating risk and the integrity of our financial statements and financial reporting process, including the annual review of the company’s principal and financial risks and insurance program.

 

 

Safety & Reliability Committee

 

 

Oversight of safety and operational risk including pipeline and facility integrity management, security, emergency response, enterprise-wide safety culture and environment, health and safety.

 

 

Corporate Social Responsibility Committee

 

 

Oversight of corporate social responsibility and sustainability matters including climate and energy, Indigenous rights and relationships, stakeholder engagement, government relations and environmental, social and governance matters, as well as our reporting in this area.

 

 

Human Resources & Compensation Committee

 

 

Oversight of people- and compensation-related risk, ensuring our compensation program and practices do not encourage inappropriate or excessive risks that could have a material adverse impact on the company; succession planning; and pension, retirement and savings plans.

 

 

Governance Committee

 

 

Oversight of corporate governance framework, including director appointment, education and evaluation processes, Enbridge’s corporate governance practices and Statement on Business Conduct.

 

Each committee reports to the Board, which coordinates the company’s overall risk management approach.

For further information on each Board committee’s role in risk management, please refer to “Board committees”, beginning on page 44.

Internal controls

The Board seeks assurance at least annually that our internal control systems and management information systems are operating effectively.

The Board has delegated responsibility for reviewing our quarterly and annual financial statements to the Audit, Finance & Risk Committee. The Audit, Finance & Risk Committee reviews and approves our quarterly financial statements and recommends our annual financial statements to the Board for approval. The committee is also responsible for overseeing our internal audit function and senior management reporting on internal controls.

Corporate communications

The Board reviews and approves all major corporate communications policies, including our corporate disclosure guidelines. It also reviews and approves all corporate disclosure documents, including our annual report to shareholders, MD&A and proxy statement.

The Board works to ensure we communicate effectively with shareholders, the public and other stakeholders to avoid selective disclosure.

Succession planning

The Board is responsible for:

 

 

appointing the President & Chief Executive Officer and ratifying the appointment of other members of executive management;

 

monitoring senior management’s performance; and

 

annually reviewing the succession strategy for all senior management positions.

It delegates responsibility for reviewing our policies and procedures relating to employment, succession planning and compensation (including executive compensation) to the HRC Committee.

The HRC Committee is also responsible for:

 

 

making sure we have appropriate programs for dealing with succession planning and employee retention;

 

monitoring the performance of senior management;

 

overseeing human capital risk to make sure our management programs (including those for our officers) effectively address succession planning and employee retention;

 

 

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overseeing the design of our compensation programs; and

 

reporting to the Board on organizational structure and succession planning matters.

Our expectations of our directors

Our directors are expected to act in the best interests of Enbridge. They have a duty of care to exercise in both decision-making and oversight.

Independence

First and foremost, we believe in the importance of an independent board. The Governance Committee is responsible for making sure the Board functions independently of management.

The majority of our directors must be independent, as defined by Canadian securities regulators in NI 52-110, NYSE rules and the rules and regulations of the SEC. The Governance Guidelines provide that the Board shall consist of a substantial majority of independent directors. The Board uses a detailed annual questionnaire to assist in determining if a director is independent.

The Board has determined that 10 of our 13 directors are independent. Mr. Monaco is not independent because he is our President & Chief Executive Officer and a member of management. Mr. Ebel is not independent because until the Merger Transaction, he was the Chairman, President and Chief Executive Officer of Spectra Energy and he remained a non-executive employee of Spectra Energy until April 15, 2017. Mr. Tutcher is not independent because he is an employee of Brookfield, whose subsidiary and institutional partners made payments to Enbridge in 2018 for property or services in an amount which exceeds 2% of Brookfield’s consolidated gross revenues. See “Director independence” on page 17 for more information.

Enbridge’s Amended By-law No. 1 became effective upon the Merger Transaction and specifies requirements relating to the non-executive chair of the Board. See “The role of the non-executive chair of the Board” beginning on page 37.

The Governance Committee has developed guidelines to ensure each director is aware of the expectations placed on him or her as a director. Key expectations include meeting attendance, financial literacy and ethical conduct.

Separate CEO and Board Chair

Mr. Monaco is the President & Chief Executive Officer of Enbridge. Mr. Ebel is the non-executive Chair of the Board. Mr. Ebel is not independent for the reasons referred to under “Independence” above.

Meetings of non-management directors

Our Governance Guidelines, available on our website (www.enbridge.com), provide that the Board meets regularly in camera without officers of the company present. The non-management directors also hold regularly scheduled meetings without management Directors present and may invite management Directors and members of the management to attend as they may determine. The Chair of the Board presides over these meetings and provides the President & Chief Executive Officer with a summary of the matters discussed at these meetings, including any issues that the Board expects management to pursue.

To facilitate leadership and open and candid discussion among independent directors, the independent directors are given the opportunity to hold in camera meetings should the need arise. In 2018, the directors met in camera following seven of the Board meetings and after each committee meeting. In the event that the non-management Directors include Directors who are not independent under applicable stock exchange rules, the company should, at least once per year, schedule an executive session including only independent directors. The directors held one such executive session of only the independent directors in 2018. The chair of the Audit, Finance & Risk Committee, or in his absence, the chair of the Governance Committee, will preside over such meetings of independent directors. The Board does not have an independent lead director.

Other directorships

Our directors may serve on the boards of other public companies and together on the boards and committees of other public entities, as long as their outside positions and common memberships do not affect their ability to exercise independent judgment while serving on our Board. See “Compensation committee interlocks and insider participation” on page 20 for information about two of our directors who serve together on one other board.

Directors who serve on our Audit, Finance & Risk Committee cannot sit on the audit committees of more than two other public entities unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on our Audit, Finance & Risk Committee.

 

 

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External consultants and other third parties

To make sure the Board functions independently of management, Board committees have the flexibility to meet with external consultants and Enbridge employees without management whenever they see fit. The Board and Board committees may also hire independent advisors, as needed, at Enbridge’s cost.

Attendance

We expect directors to attend all Board and Board committee meetings of which they are a member as well as the annual meeting of shareholders. The Governance Committee reviews each director’s attendance record every year. If a director has a poor attendance record, the committee chair and Chair of the Board will discuss and recommend how to handle the matter. A director whose attendance record continues to be poor may be asked to leave the Board. Please see information on attendance in the “Director profiles” beginning on page 9 and under “Director attendance in 2018” on page 18.

Financial literacy

The Board defines an individual as financially literate if he or she can read and understand financial statements that are generally comparable to ours in breadth and complexity of issues. The Board has determined that all of the members of the Audit, Finance & Risk Committee are financially literate according to the meaning of NI 52-110 and the rules of the NYSE. It has also determined that Mses. Madden and Williams and Messrs. Coutu and England each qualify as “audit committee financial experts” as defined by the Exchange Act. The Board bases this determination on each director’s education, skills and experience.

Orientation and continuing education

The Board recognizes that proper orientation and continuing education are important for directors to fulfill their duties effectively. It has delegated these responsibilities to the Governance Committee, which has developed a comprehensive program for new directors and for directors who join a committee for the first time. Following the closing of the Merger Transaction, onboarding sessions were held for all directors to become more familiar with Enbridge’s combined businesses and operations, financial policies and compliance programs.

Orientation

Every new director meets with the Chair of the Board, the President & Chief Executive Officer and executive and senior management to learn about our business and operations and participates in tours of our sites and facilities.

New directors are also given a copy of the Board manual, which contains:

 

 

Corporate Governance Principles and Guidelines and the Terms of Reference for the Board and each of its committees, the Chair and the President & CEO;

 

personal information about each of the directors and senior officers;

 

a list of the members of the Board, the members of the Board committees and all meeting dates;

 

organizational charts (corporate and management);

 

our financial risk management policies and treasury authority limitations;

 

information about statutory liabilities;

 

information about the directors’ and officers’ liability programs;

 

our insider trading and reporting guidelines;

 

indemnification agreements;

 

information about our dividend reinvestment and share purchase plan;

 

our Statement on Business Conduct; and

 

public disclosure documents for Enbridge and certain subsidiaries.

Directors are notified whenever there are updates to these documents. The manual and any updates are also made available electronically.

Continuing education

Our continuing education program for directors focuses on providing information relating to our business, industry, competitive environment and key risks and opportunities. We offer education sessions for directors on key topics and encourage them to participate in associations and organizations that can broaden their awareness and knowledge of developments related to our business.

Directors can also request presentations on a particular topic. Throughout their tenure, directors have discussions with the Chair of the Board, receive quarterly presentations from senior management on strategic issues and

 

 

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participate in tours of our operations. Quarterly briefings include reviews of the competitive environment, our performance relative to our peers and any other developments that could materially affect our business. The table below lists the internal seminars and other presentations we offered in 2018 and director participation.

 

  Date

 

Topic

  

Presented/hosted by

  

Who attended

 

  February 13, 2018

 

 

U.S. Tax Reform

  

 

Enbridge

  

 

All members of the Board

 

  August 1, 2018

 

 

Global Crude Fundamentals

  

 

Global Energy Commodity Analysis, RBC

  

 

All members of the Board
except Ms. Carter

 

  August 1, 2018

 

 

The Future of Electric Utilities

  

 

Boston Consulting Group

  

 

All members of the Board
except Ms. Carter

We also pay for continuing education opportunities through third parties and we encourage directors to pursue director education seminars and courses offered externally.

Mr. Coutu and Mses. Kempston Darkes and Williams are members of the Institute of Corporate Directors (ICD). Ms. Kempston Darkes was recognized by the ICD in 2011 with a Fellowship Award, which the ICD considers to be the highest distinction for directors in Canada.

Board evaluation

The Governance Committee is responsible for assessing the performance of the Board and its Chair, the Board committees and individual directors on an ongoing basis.

Assessing the Board and Chair of the Board

All of the directors complete a confidential questionnaire every year so they can evaluate the effectiveness of the Board and suggest ideas for improving performance. The questionnaire is designed to provide constructive input to improve overall Board performance and includes questions on:

 

 

Board composition;

 

effectiveness of the Board, Board meetings, individual directors and Chair of the Board;

 

duties and responsibilities; and

 

the evaluation process for the CEO and CEO succession planning.

The evaluation process includes additional questions for directors to evaluate their peers. The directors are asked to consider criteria such as skills and experience, preparation, attendance and availability, communication and interaction with Board members and/or management and business, company and industry knowledge. Directors are encouraged to comment broadly, positively and negatively, on any issue concerning the Board, Board committees and director performance.

Directors submit their completed questionnaires to the chair of the Governance Committee, who presents the feedback to the Chair of the Board. The chair of the Governance Committee then presents the summary to the Board. The Board discusses the results and develops recommendations during a roundtable discussion held during an in camera session of the Board conducted by the Chair of the Board.

From time to time, the Chair of the Board meets informally with each director, to discuss performance of the Board, Board committees and other issues.

Board committee assessments

Each director also completes a confidential questionnaire for each Board committee of which they are a member. The questionnaire is designed to facilitate candid conversation among the members of each Board committee about the Board committee’s overall performance, function, areas of accomplishment and areas for improvement. This session takes place in camera at the first Board committee meeting after the directors complete their questionnaires.

The questionnaire helps the Board ensure that each Board committee is functioning effectively and efficiently and fulfilling its duties and responsibilities as described in its terms of reference. It includes questions about:

 

 

the composition of the Board committee;

 

the effectiveness of the Board committee, Board committee meetings and the committee chair; and

 

the development processes for the Board committee.

Completed questionnaires are submitted to the chair of the Governance Committee, who summarizes them and provides a copy to each Board committee chair and the Chair of the Board. Each committee discusses the results and develops recommendations during an in camera session of the committee.

 

 

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Director term limits

Under our Governance Guidelines for the Board, a director will retire at the next annual meeting of shareholders after he or she reaches the age of 73, or after 15 years of service on the Board, whichever comes first. Members of the Board as at January 1, 2011, who reach 15 years of service before age 73, may remain on the Board to age 73. A director may be asked to remain on the Board for an additional two years after age 73 if the Board unanimously approves the extension. If a director receives an extension, he or she is not eligible to serve as Chair of the Board or chair of any of the Board’s five standing Board Committees.

Identifying new candidates

The Governance Committee serves as the Board’s nominating committee and has accountability for the oversight of the Board and committee succession planning process and for making recommendations to the Board for the appointment of new Board and committee members. The Governance Guidelines provide that the Board should possess, as a group, the competencies, skills and characteristics necessary to develop and oversee the implementation of the strategic vision of the company and such other qualities as the Board shall identify from time to time. These characteristics and qualities include knowledge, experience, high ethics and standards, integrity, independent judgment, understanding of the company’s business and willingness to devote adequate time to Board duties. The Board also looks for diversity in a nominee such that the nominee can enhance perspective and experiences through diversity. The Board has adopted a diversity policy applicable to the Board and senior management of the company. The diversity policy sets out key criteria for the composition of the Board, including a target in which each gender comprises at least one-third of the independent directors. For further details, see “Diversity” below. The Governance Committee also considers all candidates recommended by the company’s shareholders.

The Chair of the Board, the President & Chief Executive Officer and the chair of the Governance Committee, with the support of the Corporate Secretary and external advisors, monitor the composition of the Board and committees on an ongoing basis and make recommendations to the Governance Committee in fulfillment of its mandate.

The Corporate Secretary maintains a Board composition plan which includes information pertaining to the current directors and a live inventory of potential Board candidates. The information pertaining to current directors includes business experience, occupation, residence, gender, age, years on the Board, retirement date, other board commitments, equity ownership, independence and other relevant information, as well as skills matrix for all of the directors’ skills, updated annually or more frequently, as required. The President & Chief Executive Officer and the Corporate Secretary meet regularly to consider and plan for upcoming Director retirements, taking into account relevant factors including directors’ skills, age, tenure and diversity. From time to time, executive search consultants are engaged to undertake external searches for potential director candidates, with the particulars of the executive search consultant’s mandate determined through dialogue between the Chair of the Board, the President & Chief Executive Officer and the chair of the Governance Committee. The Chair of the Board and the President & Chief Executive Officer have primary responsibility for the assessment of Director candidates for recommendation to the Governance Committee and the Board.

Enbridge’s Amended By-law No. 1, available on our website, also contains certain requirements for the appointment of new directors until the termination of the annual general meeting of Enbridge shareholders during the 2019 calendar year.

Diversity

Board diversity

We are committed to increasing the diversity of our Board over time by actively seeking qualified candidates who meet diversity criteria. Enbridge is one of over 40 founding members of the Canadian Board Diversity Council.

In February 2015, the Board formally adopted a written diversity policy to highlight our approach to diversity and the importance we place on differences in skills, experience as well as diversity considerations such as gender, age and ethnicity. The diversity policy sets out key criteria for the composition of the Board, including the objective to have a Board composition in which each gender comprises at least one-third of the independent directors. The Governance Committee reviews the diversity policy and its targeted objectives annually to assess its effectiveness and reports to the Board and recommends any revisions that may be necessary.

Mses. Madden and Cunningham were appointed to the Board on February 12, 2019 and February 13, 2019, respectively. With the appointment of Mses. Madden and Cunningham, five of Enbridge’s 13 directors, or

 

 

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approximately 38% of the Board (and 50% of our 10 independent directors) are women. All five women directors are standing for election or re-election, as applicable, at the Meeting.

Senior management diversity

Enbridge’s diversity policy also provides for increasing diversity in senior management and includes the objective to have at least one-third of senior management roles at Enbridge occupied by women.

Our “executive officers” as defined in National Instrument 51-102 Continuous Disclosure Obligations consist of our President & CEO and our seven Executive Vice Presidents. One of these eight “executive officers”, or approximately 12.5%, is a woman. Eight of the 32 officer positions at Enbridge are currently held by women, for a total of 25%. For these purposes, Enbridge did not have any “major subsidiaries” (assets or revenues comprising 30 percent or more of the consolidated assets or revenues of the company as at December 31, 2018) that had operations or employees. However, when we consider all of the officers of Enbridge and these “major subsidiaries”, 16 of the 60 officer positions are currently held by women, for a total of approximately 27%.

In identifying candidates for senior management roles, professional experience, educational background, skills and knowledge, as well as diversity considerations such as gender, age and ethnicity, are taken into account.

Promoting diversity, equality and inclusion in our workforce

Enbridge is building a diverse, inclusive and respectful workplace by implementing meaningful strategies to empower employees and ensure we attract, develop and retain diverse talent. Enbridge strives to ensure it is a workplace where everyone is welcome, valued and connected. We embrace diversity and inclusion because we know that diverse backgrounds, abilities and perspectives lead to better decisions, and help keep us innovative and dynamic, in turn supporting the achievement of our business goals. Our commitment is underpinned by our Corporate Social Responsibility Policy, available on our website.

We have an executive-led Diversity & Inclusion Steering Committee representing a variety of business areas and locations. The steering committee works with four regional Diversity & Inclusion Advisory Groups to drive regional priorities through leadership, advocacy, education and representation. We further foster diversity and inclusion through 10 employee resource groups that employees lead in various locations across the company.

Enbridge has adopted a Diversity & Inclusion strategy which outlines three goals, supported by specific actions, over three years:

 

1.

empower employees to model inclusive behaviors;

2.

build a diverse and inclusive workplace; and

3.

attract and retain diverse talent.

The company has set aspirational targets to increase diversity in the workforce.

Shareholder engagement

We believe active engagement with our shareholders is essential to good corporate governance and we do so on an ongoing basis and in a variety of ways, tailored to the specific needs and interests of a wide array of shareholder groups.

Our main shareholder event is our annual Investment Community Conference, which provides an opportunity for shareholders to obtain an update on the company and ask questions of our executive team outside of our quarterly earnings presentations. This event, along with our annual meeting of shareholders and quarterly earnings presentations, is webcast and accessible to a broad audience of investors. Presentations, audio recordings and transcripts are available on our website for a period of at least 12 months following events.

Members of our executive team, including our CEO and CFO, Presidents of our business units, as well as representatives from investor relations and corporate social responsibility departments also meet with shareholders throughout the year directly, and by way of investor roadshows in a variety of cities. To further our investor outreach, we also participate in several third party hosted investor conferences.

In addition to discussion of business results and initiatives, strategy and capital structure, topics discussed over the past year included environmental, social and governance policies and performance.

A list of upcoming and past events and presentations, as well as investor documents and filings, can be found on our website (www.enbridge.com). Enbridge is also committed to communicating with shareholders through our website, where current and potential investors are invited to contact the Investor Relations team online, by letter, phone or email.

 

 

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You can also write to our Board, the Chair of the Board or to individual directors at the following address or by email to corporatesecretary@enbridge.com:

c/o Corporate Secretary

Enbridge Inc.

200, 425 – 1st Street S.W.

Calgary, Alberta, Canada T2P 3L8

Questions may also be directed to our investor relations personnel at investor.relations@enbridge.com or 1-800-481-2804.

Board committees

Our Board has five standing Board committees to help it carry out its duties and responsibilities:

 

 

Audit, Finance & Risk

 

Corporate Social Responsibility

 

Governance

 

Safety & Reliability

 

Human Resources & Compensation

The Board has delegated certain responsibilities to each Board committee, including overseeing risk management systems that are within the scope of the responsibilities of each Board committee. Each Board committee is made up entirely of independent directors.

Mr. Monaco, our President & Chief Executive Officer, is not a member of any Board committee, nor is the Chair of the Board; however, both attend committee meetings.

The Governance Committee annually reviews Board Committee memberships and recommends Committee membership changes and assignments to the Board.

Board committee meetings generally take place before each regularly scheduled Board meeting. Each Board committee also meets in camera, independent of management, following the regular Board committee meeting. They also meet with external consultants and/or Enbridge staff, without management present, whenever they see fit.

Each Board committee reports regularly to the Board and makes recommendations on certain matters as appropriate. The Governance Committee is responsible for recommending the role of each Board committee to the Board.

Report of the Audit, Finance & Risk Committee

The Audit, Finance & Risk Committee fulfills public company audit committee obligations and assists the Board with oversight of: the integrity of the company’s financial statements; the company’s compliance with legal and regulatory requirements; the independent auditor’s qualifications and independence; and the performance of the company’s internal audit function and external auditors. The committee also assists the Board with the company’s risk identification, assessment and management program.

Responsibilities

The Audit, Finance & Risk Committee assists the Board in overseeing:

 

 

the integrity of our financial statements and financial reporting process;

 

the integrity of our management information systems, disclosure controls, financial controls and internal audit function;

 

our external auditors and ensuring they maintain their independence; and

 

our compliance with financial and accounting regulatory requirements and our risk management program.

The Audit, Finance & Risk Committee is responsible for ensuring the committee, our external auditors, our internal auditors and management of Enbridge maintain open communications.

The Audit, Finance & Risk Committee is responsible for:

Financial reporting

 

 

reviewing our annual financial statements and notes and MD&A and recommending them to the Board for approval;

 

reviewing and approving (or recommending to the Board for approval) our interim financial statements and MD&A;

 

reviewing earnings releases and recommending them to the Board for approval;

 

 

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discussing with management and the external auditors any significant issues regarding our financial statements, accounting policies and internal controls;

 

reviewing any litigation, claim or contingency that could have a material effect on the financial position of the company and, if applicable, the disclosure in the financial statements;

 

reviewing the post-audit or management letter containing the recommendations of the external auditors and management’s response, including an evaluation of the adequacy and effectiveness of the internal financial controls;

 

reviewing with management any anticipated changes in reporting standards and accounting policies;

 

reviewing annually the approach taken by management in the preparation of earnings press releases as well as financial information and earnings guidance provided to analysts and ratings agencies; and

 

reviewing and monitoring the financial positions of and funding exposure under the company’s pension plans.

Internal controls and internal audit

 

 

overseeing management’s system of disclosure controls and procedures;

 

overseeing the internal controls over financial reporting;

 

reviewing with management the company’s administrative, operational and accounting internal controls, including controls and security of the computerized information systems;

 

overseeing the internal audit function;

 

reviewing the reports of the internal auditor;

 

approving the appointment of the Chief Audit Executive; and

 

adopting and reviewing annually the internal audit charter.

The internal auditors report directly to the Audit, Finance & Risk Committee. They meet regularly with the committee, in camera, without any members of management present. The chair of the committee also meets with the internal auditors from time to time, to discuss significant issues.

External auditors

 

 

reviewing the qualifications, performance and independence of our external auditors and recommending their appointment to the Board;

 

reviewing all audit and non-audit services to be provided by the external auditors, including proposed fees, and pre-approving them, consistent with our policy; and

 

setting the compensation of the external auditors, reviewing their performance, overseeing their activities and retaining them in their role as external auditors.

The external auditors report directly to the Audit, Finance & Risk Committee. They meet regularly with the committee, in camera, without any members of management present. The chair of the committee also meets with the external auditors from time to time, to discuss significant issues.

Finance

 

 

reviewing the issuance of securities by Enbridge and authorizing or recommending such matters to the Board for approval;

 

overseeing the filing of prospectuses or related documents with securities regulatory authorities; and

 

reviewing changes to credit facilities and inter-company financing transactions and recommending them to the Board for approval where applicable.

Risk management

 

 

overseeing the annual review of Enbridge’s principal risks, including financial risks, as they pertain to the committee’s mandate;

 

reviewing risks in conjunction with internal and external auditors;

 

monitoring our risk management programs and policies as they pertain to the committee’s mandate; and

 

reviewing our annual report on insurance coverages.

Together with the Board, the committee also reviews with senior management, internal counsel and others as necessary:

 

 

our method of reviewing risk and our strategies and practices related to assessing, managing, preventing and mitigating risk; and

 

loss prevention policies and risk management programs.

 

 

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2018 highlights

Following are highlights of the activities of the Audit, Finance & Risk Committee in 2018:

Audits and financial reporting

 

 

reviewed annual MD&A and financial statements and notes and recommended them to the Board for approval;

 

reviewed and approved the interim MD&A and financial statements;

 

reviewed public disclosure documents containing audited or unaudited financial information, including annual and interim earnings press releases, prospectuses and the annual report, and recommended them to the Board for approval for public release;

 

reviewed and approved the pension plan annual financial statements and received an annual pension report; and

 

the chair of the Audit, Finance & Risk Committee reviewed and approved the prior year’s expenses of the President & Chief Executive Officer.

Internal controls

 

 

reviewed the quarterly internal controls compliance reports;

 

reviewed the internal audit role and audit plan and received quarterly internal audit reports; and

 

reviewed and reapproved the internal audit charter.

Compliance

 

 

received quarterly updates on the ethics and conduct hotline activity from the Chief Compliance Officer.

External auditors

 

 

reviewed the qualifications and independence of PwC;

 

recommended appointment of PwC by shareholders and reviewed and approved the 2018 engagement letter (including the terms of engagement and proposed fees);

 

pre-approved all non-audit services to be provided by PwC that are allowed under the committee’s policy and approved an updated independent auditor services pre-approval policy;

 

reviewed the performance of PwC; and

 

reviewed PwC’s report on compliance with Sarbanes-Oxley.

Finance

 

 

reviewed quarterly treasury management reports;

 

reviewed unbudgeted capital commitments under Management’s authority and recommended spending authorities be refreshed to the Board for approval; and

 

reviewed financing plans including additional financing transactions not originally included in the 2018 annual financing plan, credit facilities and inter-company financing transactions, and recommended them to the Board for approval.

Risk management

 

 

reviewed the quarterly financial risk management reports;

 

reviewed and approved the corporate risk assessment report as it pertains to the committee’s mandate;

 

approved credit exceptions under the risk policy; and

 

reviewed the annual report on insurance coverages and insurance renewal strategy.

The committee also provided oversight over the finance transformation and enterprise resource planning program following the Merger Transaction.

Governance

The Audit, Finance & Risk Committee met four times in 2018 and reviewed its performance in 2018. The committee reviewed the qualifications of its members, and recommended to the Board members who it believes can be properly considered audit committee financial experts. It held in camera meetings without management present at each of its regularly scheduled meetings with the Chief Audit Executive of Internal Audit as well as with the external auditors and then it met on its own in camera. Before each meeting, the chair of the committee met with the Chief Financial Officer to discuss the agenda items for the meeting and any significant issues. The chair also met with the senior partner of the external auditors assigned to Enbridge’s audit before each meeting. In October 2018, the committee reviewed its terms of reference and approved minor amendments.

The Audit, Finance & Risk Committee has:

 

 

reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2018 with the company’s management and the external auditor, PwC;

 

 

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discussed with PwC the matters that are required to be discussed under Public Company Accounting Oversight Board (“PCAOB”) standards governing communications with audit committees; and

 

been provided by PwC the written disclosures and the letter required by applicable requirements of the PCAOB regarding its communications with the Audit, Finance & Risk Committee concerning independence, and discussed with PwC that firm’s independence.

Based on the review and discussions referenced above, the Audit, Finance & Risk Committee recommended to the Board that the financial statements for the fiscal year ended December 31, 2018 be included in the company’s 2018 Annual Report on Form 10-K, for filing with the SEC.

 

Chair:      J. Herb England
Members:      Clarence P. Cazalot, Jr., Marcel R. Coutu, Charles W. Fischer, Teresa S. Madden and Catherine L. Williams

Report of the Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee provides oversight of, and carries out the responsibilities delegated by the Board related to, corporate social responsibility (“CSR”) and sustainability matters.

Responsibilities

The Corporate Social Responsibility Committee is responsible for assessing, and providing oversight of, our policies, strategies and performance related to CSR and sustainability. The Corporate Social Responsibility Committee also reviews our public reporting in this area.

Matters within the committee’s mandate include:

 

 

social, political and environmental trends, risks and opportunities that could affect the company’s business strategy and performance;

 

actions the company can take to be, and be known as, a responsible and good corporate citizen in the communities in which it operates, while furthering its long-term business objectives; and

 

communication, engagement and relationship-building with communities, stakeholders, decision makers and Indigenous Peoples critical to the company’s ability to build and sustain public trust and confidence.

The Corporate Social Responsibility Committee is also responsible for reviewing and recommending to the Board policies and priorities to guide Enbridge’s performance on:

 

 

stakeholder engagement;

 

Indigenous engagement;

 

climate and energy;

 

community investment;

 

community and landowner awareness on pipeline safety;

 

political contributions;

 

government relations;

 

public policy; and

 

internal and external communications.

The Corporate Social Responsibility Committee assesses the company’s progress on integrating social and environmental considerations into our business decision-making and may, depending on the nature of the matter, consider results from reviews on issues that fall within its mandate. The committee provides oversight on performance measures and outcomes on key social and environmental issues, as well as our methods of communicating on CSR related matters and policies. It receives regular reports from management on how the company is complying with relevant public and corporate requirements. It monitors developments on issues that are material to Enbridge’s credibility and reputation and provides oversight on how well we are responding to new environmental, social and governance (ESG) risks and opportunities.

2018 highlights

Following are highlights of the activities of the Corporate Social Responsibility Committee in 2018:

Assessing corporate policies, procedures and practices

 

 

following the Merger Transaction, continued to provide oversight on the integration of policies, procedures and practices on CSR and related issues including reporting and disclosure on ESG matters, climate policy, Indigenous engagement, public awareness programs, community engagement and investment, and engagement with governments;

 

 

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received updates on key social, political and environmental issues, impacts, risks and trends of consequence to our businesses;

 

reviewed management strategies and systems for performance, accountability and risk management on Indigenous issues;

 

reviewed management strategies and systems for performance, accountability and risk management on climate-related issues;

 

received management’s reports on regulatory issues and compliance as well as government relations activities;

 

received management’s reports on investor engagement on ESG matters; and

 

discussed and approved the corporate risk assessment report as it pertains to the committee’s mandate.

Reviewing our work with government, Indigenous peoples, stakeholders and regulators

 

 

assessed results from management’s consultation and engagement with Indigenous groups on specific projects and operations;

 

reviewed and discussed actions being taken by management to ensure that corporate and regulatory requirements for engagement with local communities and Indigenous are met across all projects and operations;

 

received briefings on additional steps being taken by management to respond to Indigenous concerns and enter into agreements and/or collaborations that provide interested Indigenous communities with enhanced opportunities for economic participation in our projects and operations and the development of joint initiatives on pipeline safety and environmental and cultural protection;

 

received reports on community investments, including donations to charitable organizations and operating communities; and

 

received updates on the company’s engagement with key stakeholders impacted by company projects and operations through open houses, meetings, public awareness programs and social media and digital communications.

Monitoring and reporting CSR performance

 

 

received and reviewed a discussion paper focused on “Indigenous Rights and Relationships in North American Energy Infrastructure”, prepared in response to a shareholder resolution tabled at the company’s 2017 annual meeting of shareholders;

 

received reporting on enterprise-wide performance on key ESG topics in our 2017 annual Sustainability Report;

 

monitored developments related to climate change and how we are responding to new regulatory and market dynamics on climate and energy issues, including the implications of new provincial, state and federal policies in the US and Canada on greenhouse gas emissions reduction; and

 

monitored developments relating to potential changes to federal regulatory frameworks for impact assessment and permitting in both Canada and the US.

Awards and recognition

The Corporate Social Responsibility Committee supports our continuing involvement in social, environmental and governance initiatives that have resulted in Enbridge receiving significant positive external recognition in recent years, including the following recognitions in 2018:

 

 

2018 Global 100 List of the Most Sustainable Companies;

 

Best 50 Corporate Citizens in Canada;

 

Dow Jones Sustainability North America Index;

 

Thomson Reuters iX Global Diversity and Inclusion Index;

 

Bloomberg Gender Equity Index (January 2019);

 

2018 Canada’s Top 100 Employers;

 

2018 Canada’s Best Diversity Employers;

 

2018 Canada’s Top Employers for Young People;

 

2018 Top Employers for Canadians Over 40;

 

Globe and Mail Corporate Governance Rankings; and

 

Chartered Professional Accountants of Canada Silver Award for Excellence in Corporate Reporting.

 

 

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Governance

The Corporate Social Responsibility Committee met four times in 2018 and reviewed its performance in 2018. The committee held in camera meetings without management present at the end of each meeting. Before each meeting, the chair of the committee met with executive management to discuss the agenda items for the meeting and any significant issues. In October 2018, the Corporate Social Responsibility Committee reviewed its terms of reference and approved amendments thereto.

 

Chair:      V. Maureen Kempston Darkes
Members:      Pamela L. Carter, Charles W. Fischer, Michael E.J. Phelps and Dan C. Tutcher

Report of the Governance Committee

The Governance Committee fulfills public company nominating/corporate governance committee obligations and carries out the responsibilities delegated by the Board related to the company’s director nominations process, director compensation and developing and maintaining the company’s corporate governance policies.

Responsibilities

The Governance Committee focuses on ensuring we have a comprehensive system of stewardship and accountability for directors, management and employees that is in the best interests of Enbridge.

The Governance Committee is responsible for developing our approach to governance, including the division of duties between the Chair of the Board, directors, the President & Chief Executive Officer and management.

It is responsible for:

 

 

recommending matters about overall governance to the Board;

 

reviewing the terms of reference for the Board and the Board Committees;

 

setting corporate governance guidelines for the Board; and

 

reviewing management’s compliance reports on corporate governance policies, including the Statement on Business Conduct.

The Governance Committee works closely with the Corporate Secretary and other members of management to keep abreast of governance trends and implement board governance best practices.

Board composition, education and evaluation

The Governance Committee is responsible for:

 

 

developing a Board composition plan and recommending the nomination of directors to the Board and Board Committees;

 

establishing formal orientation and education programs for directors;

 

reviewing and reporting to the Board on risk management matters relating to corporate liability protection programs for directors and officers;

 

assessing the performance of the Board, Board Committees, the Chair of the Board and individual directors;

 

monitoring the quality of the relationship among Board members and Board Committees and with management and recommending any changes; and

 

ensuring the Board functions independently of management.

One of the Governance Committee’s objectives is to nominate a balanced mix of members to the Board who have the necessary experience and expertise to make a meaningful contribution in carrying out duties on behalf of the Board. It sets guidelines for recruiting new talent with criteria for relevant expertise, senior management experience or other qualifications. See “Identifying new candidates” and “Diversity” on page 42 for more information.

The Governance Committee manages the annual performance review of the Board. See “Board evaluation” beginning on page 41 for more information.

Compensation

The Governance Committee is responsible for reviewing and setting director compensation. In 2018, all Board retainers were paid in United States dollars and the Board retainer was increased. See “Director compensation” on page 54 for more information.

 

 

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2018 highlights

Following are highlights of the activities of the Governance Committee in 2018:

 

 

reviewed proxy voting recommendations and annual meeting voting results for the 2018 annual meeting;

 

approved revised Insider Trading & Reporting Guidelines and Disclosure Guidelines;

 

approved our statement on corporate governance practices for this Proxy Statement;

 

received reports on employee and director compliance with the Statement on Business Conduct;

 

provided oversight over Board governance and Board committee composition;

 

provided oversight over the integration of governance policies, procedures and practices following the Merger Transaction;

 

received management’s reports on developments in corporate governance and disclosure;

 

monitored implementation of the company’s diversity policy;

 

reviewed the Board composition plan and skills matrix and analyzed the implications our strategic plan has on Board composition;

 

reviewed the qualifications and independence of all members of the Board;

 

reviewed the composition of the Board committees;

 

participated in Board succession planning;

 

reviewed management’s reports on our director and officer liability protection program and management information systems; and

 

conducted the Board evaluation process for 2018 and reviewed and reported to the Board on the results of the various assessments.

Awards

Ms. Carter received a 2018 Sandra Day O’Connor Board Excellence Award honoring her for her demonstrated commitment to board diversity.

Governance

The Governance Committee met four times in 2018 and reviewed its performance in 2018. The committee held in camera meetings without management present at each meeting. Before each meeting, the chair of the committee reviews agenda items for the meeting and discusses any significant issues with management. In October 2018, the Governance Committee reviewed its terms of reference, and no changes were adopted.

 

Chair:      Pamela L. Carter
Members:      Marcel R. Coutu, Teresa S. Madden and Michael E.J. Phelps

Report of the Safety & Reliability Committee

The Safety & Reliability Committee provides oversight of operational matters and carries out the responsibilities delegated by the Board related to safety and reliability.

Responsibilities

The Safety & Reliability Committee is responsible for the oversight of operational matters and reviews and makes recommendations to the Board regarding safety and reliability matters, including:

 

 

environment;

 

health & safety;

 

pipeline and facility integrity management;

 

security (physical, data and cyber);

 

emergency response preparedness; and

 

other operational risks.

The committee is responsible for the oversight of operational matters to ensure that the company meets the safety and reliability objectives established by the Board. The committee’s responsibilities include:

 

 

overseeing the enterprise-wide safety culture and receiving reports from management and third parties regarding safety culture development;

 

overseeing the annual review of Enbridge’s principal risks as they pertain to the committee’s mandate;

 

receiving reports on the risk management guidelines applicable to safety and reliability matters and other operational risks;

 

 

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reviewing the policies followed by management in the conduct of operations directed at preventing injury and adverse environment, health or safety impacts;

 

reviewing the policies followed by management relating to the documentation and reporting of safety and reliability approvals, compliance and incidents;

 

receiving status and assessment reports from management regarding compliance with safety and reliability matters, including corporate risk assessments, and providing recommendations;

 

reviewing and providing oversight of management’s response to significant safety incidents;

 

reviewing and making recommendations regarding management’s methods of communicating policies relating to safety and reliability;

 

considering the results of operational compliance audits including safety and reliability assurance verifications;

 

considering potential impacts of proposed legislation and other emerging issues relating to safety and reliability;

 

at least annually, receiving from management a report on the insurable risks related to the areas within its mandate; and

 

determining, if necessary, further directors’ and officers’ duties and responsibilities relating to safety and reliability.

In addition, the committee may retain independent advisors, request other reports, meet with management or employees and furnish recommendations to the Board.

2018 highlights

The Safety & Reliability Committee carried out the following activities during 2018:

 

 

received quarterly reports on the company’s enterprise safety and operational reliability performance;

 

reviewed and approved the corporate risk assessment report as it pertains to the committee’s mandate;

 

received management’s report on top operational risks;

 

provided oversight of, and received updates on, the enterprise safety and reliability verification and assurance program and the monitoring and reporting of safety and operational reliability performance;

 

received quarterly operational risk reports and annual safety & environment reports from the Liquids Pipelines, Gas Transmission & Midstream and Utilities & Power Operations business units;

 

received reports and updates from management regarding incidents that occurred in 2018 during the committee’s quarterly meetings along with progress reports on related action plans and corrective action measures undertaken;

 

received quarterly reports on enterprise security as well as regulatory and compliance matters;

 

received quarterly reports on information technology and cyber security matters;

 

received quarterly reports from the Chief Compliance Officer about all significant complaints received on matters within the committee’s mandate;

 

received quarterly updates on the enterprise initiatives and management system improvements focused on improvement in the areas of safety and reliability, which led to continued strong performance in the areas of employee and contractor injury frequency and release volumes across the organization in 2018; and

 

provided oversight over, and received reports on, the integration and subsequent centralization of the safety and reliability functions following the Merger Transaction.

Governance

The Safety & Reliability Committee met four times in 2018 and reviewed its performance in 2018. The committee held an in camera meeting without any members of management present, at each meeting. Before each meeting, the chair of the committee met with executive management to discuss the agenda items for the meeting and any significant issues. In October 2018, the Safety & Reliability Committee reviewed its terms of reference, and no changes were adopted.

 

Chair:      Charles W. Fischer
Members:      Pamela L. Carter, Susan M. Cunningham, V. Maureen Kempston Darkes and Dan C. Tutcher

Report of the Human Resources & Compensation Committee

The Human Resources & Compensation Committee assists the Board by providing oversight and direction on human resources strategy, policies and programs for the named executives, senior management and our broader employee base. This includes compensation, pension and benefits as well as talent management, succession planning, workforce recruitment and retention.

 

 

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Responsibilities

The Human Resources & Compensation Committee is responsible for:

 

 

reviewing, approving, amending, or when appropriate, making recommendations to the Board regarding the following:

   

human resources policies, practices and structures;

   

compensation programs, annual salary budgets, employee benefit plans, cash-based and equity-based incentive compensation plans, other management incentive and perquisite plans, and any other non-standard remuneration plans;

   

the comparator group of companies to be used for executive compensation purposes;

   

senior management, executive and officer appointments and their compensation including special pension arrangements;

   

management succession plans, management development plans, and termination policies/arrangements;

   

the Committee’s report and the Statement of Executive Compensation, including the Compensation Discussion and Analysis; and

   

the evaluation of human resources risk as part of the corporate risk assessment process.

 

oversee the company’s compensation programs from a risk perspective to ensure they do not encourage individuals to take inappropriate or excessive risks that are reasonably likely to have a materially adverse impact on the company;

 

oversee regulatory compliance with respect to compensation matters;

 

review and administer incentive compensation plans;

 

in conjunction with the Chair of the Board, lead the annual Chief Executive Officer performance review process;

 

in conjunction with the Chair of the Board, identify a Chief Executive Officer succession plan to be recommended to the Board for their approval; and

 

review, approve or make recommendations to the Board in respect of pension, retirement and savings plan matters, including:

   

the design, benefit provisions, investment options and text of applicable plans;

   

policies and guidelines with respect to the funding of the liabilities and the investment assets of each plan;

   

the financial risk aspects of policies and investment portfolios for the plans; and

   

the terms of reference of the management pension committee and appointment of its members.

In addition, the committee may retain independent advisors, request other reports, meet with management or employees and furnish recommendations to the Board.

2018 highlights

The Human Resources & Compensation Committee carried out the following activities during 2018:

 

 

reviewed the company’s succession planning strategy and received regular updates on progress to ensure robust development of candidate pools at various levels in the organization for leadership capability and continuity;

 

reviewed both company and business unit performance, based on the approved short-term incentive performance metrics and corporate financial performance compared to our peers, and used these assessments to determine 2018 short-term, medium-term and long-term incentive awards for our executives and employees;

 

evaluated the President & Chief Executive Officer’s performance and recommended all aspects of his compensation for 2018 to the Board, including his base salary and short-term, medium-term and long-term incentive awards;

 

reviewed and recommended approval to the Board of the overall number of incentive stock options to be granted;

 

reviewed Mr. Monaco’s performance assessments and compensation recommendations for the other executive officers, including recommendations for their base salaries and short-term, medium-term and long-term incentive awards for 2018;

 

reviewed competitive market analysis data provided by independent compensation advisors to inform both the President & Chief Executive Officer and other executive officer compensation recommendations;

 

reviewed and approved the annual benefit and regulatory compliance report as part of the pension governance process, including the funding status;

 

approved changes to pension plans to create a harmonized pension program following the Merger Transaction;

 

reviewed and approved the corporate risk assessment report as it pertains to the committee’s mandate;

 

reviewed workforce reports and the strategies and programs designed to attract, develop and retain employees and advance diversity and inclusion;

 

approved changes to the Short Term Incentive Plan for 2019;

 

 

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recommended officer appointments to the Board for ratification; and

 

considered compensation risk in the approval of all compensation programs, measures and targets and reviewed and approved the results of the annual compensation risk assessment, designed to support compensation risk oversight.

Governance

The Human Resources & Compensation Committee met six times in 2018 and reviewed its performance in 2018. The committee held an in camera meeting without any members of management present, at each meeting. Before each meeting, the chair of the committee met with executive management to discuss the agenda items for the meeting and any significant issues. In October 2018, the Human Resources & Compensation Committee reviewed its terms of reference, and no changes were adopted.

 

Chair:      Catherine L. Williams
Members:      Clarence P. Cazalot, Jr., Marcel R. Coutu, Susan M. Cunningham, V. Maureen Kempston Darkes and Michael E.J. Phelps

Please see page 98 for the Report of the Human Resources & Compensation Committee as related to its review of and recommendations regarding the Compensation Discussion and Analysis included in this Proxy Statement.

 

 

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Director compensation

Philosophy and approach

The Board is responsible for developing and implementing the directors’ compensation plan and has delegated the day-to-day responsibility for director compensation to the Governance Committee.

Our directors’ compensation plan is designed with four key objectives in mind:

 

 

to attract and retain the most qualified individuals to serve as directors;

 

to compensate our directors to reflect the risks, responsibilities and time commitment they assume when serving on our Board and Board committees;

 

to offer directors compensation that is competitive with other public companies that are comparable to Enbridge and to deliver such compensation in a tax effective manner; and

 

to align the interests of directors with those of our shareholders.

While our executive compensation program is designed around pay for performance, director compensation is based on annual retainers. This is to meet the compensation objectives and to help ensure our directors are unbiased when mak