6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

Dated March 31, 2016

Commission file number 001-15254

 

 

ENBRIDGE INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Canada   None

(State or other jurisdiction

of incorporation or organization)

  (I.R.S. Employer Identification No.)

200, 425 – 1st Street S.W.

Calgary, Alberta, Canada T2P 3L8

(Address of principal executive offices and postal code)

(403) 231-3900

(Registrants telephone number, including area code)

 

 

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ¨            Form 40-F  x

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ¨            No   x

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by regulation S-T Rule 101(b)(7):

Yes  ¨            No   x

Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨            No   x

If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b):

N/A

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM S-8 (FILE NO. 333-145236, 333-127265, 333-13456, 333-97305 AND 333-6436), FORM F-3 (FILE NO. 333-185591 AND 33-77022) AND FORM F-10 (FILE NO. 333-198566) OF ENBRIDGE INC. AND TO BE PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

The following documents are being submitted herewith:

 

    1.  Notice of Meeting and Management Information Circular; and
    2.  Form of Proxy.

 

 

 


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

     

ENBRIDGE INC.

     

(Registrant)

Date:

 

March 31, 2016

  By:  

/s/ “Tyler W. Robinson”

     

Tyler W. Robinson

Vice President & Corporate Secretary

 

2


Table of Contents

 

Enbridge Inc.  

 

March 8, 2016

Notice of 2016 Annual Meeting and

Management Information Circular

Annual Meeting of Shareholders of Enbridge Inc.

to be held on Thursday, May 12, 2016

in Calgary, Alberta, Canada

 

LOGO


Table of Contents

Contents

Letter to Shareholders      1   
Notice of our 2016 annual meeting of shareholders      2   
Management information circular      3   

1.  About the meeting

     4   

What the meeting will cover

     4   

Who can attend the meeting and vote

     4   

How to vote

     5   

Electing our directors

     7   

Appointing our auditors

     20   

Having a “say on pay”

     21   

Shareholder proposals

     22   

Voting results

     22   

2. Governance

     23   

Our governance practices

     23   

A culture of ethical conduct

     23   

The role of the Board

     25   

Our expectations of our directors

     27   

Board evaluation

     29   

Diversity

     30   

Key governance documents

     31   

Board committees

     31   

Shareholder outreach

     39   

3. Compensation

     40   

Contents

     40   

Director compensation discussion and analysis

     41   

Executive compensation discussion and analysis

     46   

4. Loans to directors and senior officers

     84   

5. Directors’ and officers’ liability insurance

     84   
Appendix A - Shareholder Proposal      85   
Appendix B - Terms of Reference for the Board of Directors      87   


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LOGO

 

Letter to

Shareholders

 

Dear Shareholder,

 

It is our pleasure to invite you to

attend the Enbridge Inc. annual meeting

of shareholders on May 12, 2016

at the BMO Centre, Stampede Park,

Palomino Room, in Calgary.

  LOGO

This meeting is your opportunity to vote on the items of business, hear about our performance over the past year and learn more about our plans for making sure Enbridge Inc. remains one of your most valued investments.

You will also be able to meet the Board of Directors and senior management and talk to other Enbridge Inc. shareholders.

This document includes a formal notice of the meeting and the management information circular, which explains what the meeting will cover, the voting process, governance and other important information, such as how we make our compensation decisions and why. The package you received also includes our full 2015 annual report, if you asked us to send it to you.

It’s important to vote. Please take some time to review this document and then vote your common shares, either by proxy or by attending the meeting in person.

Sincerely,

 

 

LOGO

Al Monaco

President & Chief Executive Officer

 

LOGO

David A. Arledge

Chair, Board of Directors

 

 

Calgary, Alberta

March 8, 2016

 

 

Enbridge Inc. 2016 Management information circular        1


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LOGO

Notice of our 2016 annual

meeting of shareholders

 

You are invited to the Enbridge Inc. 2016 annual

meeting of shareholders.

 

When

May 12, 2016

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

 

Where

BMO Centre, Stampede Park

Palomino Room

20 Roundup Way SE

Calgary, Alberta, Canada

 

Your vote is important

If you are a shareholder of record of Enbridge Inc. common shares at the close of business on March 17, 2016, you are entitled to receive notice of, attend and vote your common shares at this meeting or any adjournment of it. Please remember to vote your common shares.

 

The Board of Directors has approved the contents of this circular and has authorized us to send it to you.

 

By order of the Board of Directors,

    

 

Items of business

 

1. receiving the audited consolidated financial statements and the report of the auditors for the year ended December 31, 2015;

 

2. electing the directors for the ensuing year;

 

3. appointing the auditors and authorizing the directors to set their remuneration;

 

4. participating in the advisory vote on our approach to executive compensation (“say on pay”);

 

5. voting on a shareholder proposal set forth in Appendix A to Enbridge’s management information circular; and

 

6. considering such other matters as may properly be brought before the meeting or any adjournment of the meeting.

 

 

LOGO

 

Tyler W. Robinson

Vice President & Corporate Secretary

 

Calgary, Alberta

March 8, 2016

    

 

 

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LOGO

Management information circular

 

You have received this management information circular (circular) because you owned Enbridge common shares (Enbridge shares or common shares) at the close of business on March 17, 2016 (record date).

 

As a holder of Enbridge shares, you have the right to attend our annual meeting (meeting) of shareholders on May 12, 2016 and to vote your Enbridge shares. You can vote in person or by proxy, using the enclosed proxy form.

 

About this document

   

 

In this document, you and your mean holders of Enbridge shares. We, us, our, company and Enbridge mean Enbridge Inc. All dollar amounts are in Canadian dollars ($ or CA$) unless stated otherwise. US$ means United States of America (US) dollars.

 

This circular is furnished in connection with the solicitation of proxies by and on behalf of the management of Enbridge for use at the meeting and any adjournment of the meeting.    

This circular explains what the meeting will cover, the voting process and other important information you need to know, such as:

 

  the directors who have been nominated to our Board of Directors (Board or Board of Directors);
  the auditors;
  our governance practices; and
  2015 compensation for our directors and named executive officers.

This circular and proxy form will be mailed to shareholders on or close to March 31, 2016. Unless we state otherwise, information in this circular is as of March 8, 2016.

Voting

It’s important to vote your Enbridge shares. 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.

Accessing documents

You will find important disclosure and governance documents on our website (www.enbridge.com), including our 2015 annual report, annual information form for the year ended December 31, 2015 and this circular. Financial information is provided in our annual financial statements and management’s discussion and analysis (MD&A) for the year ended December 31, 2015, also available on our website. Copies of these documents are also available free of charge by contacting Investor Relations through our website or by phone, email or mail at:

Within North America             1.800.481.2804

Outside North America          1.403.231.5957

email: investor.relations@enbridge.com

Enbridge Inc. Investor Relations

200, 425 – 1st Street S.W.

Calgary, Alberta, Canada T2P 3L8

You can also find these and other documents on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

Communicating with the Board

You can write to our Board or to individual directors by contacting our Corporate Secretary:

Tyler W. Robinson, Vice President & Corporate Secretary

Enbridge Inc.

200, 425 – 1st Street S.W.

Calgary, Alberta, Canada T2P 3L8

email: corporatesecretary@enbridge.com

 

 

Enbridge Inc. 2016 Management information circular        3


Table of Contents

1. About the meeting

What the meeting will cover

There will be five items of business:

Financial statements

Our audited consolidated financial statements for the year ended December 31, 2015 and the report of the auditors thereon will be placed before the meeting. You can download a copy of our 2015 annual report from our website (www.enbridge.com) if you did not receive a copy with this package, or you can request a copy from our Corporate Secretary.

Directors

You will elect directors to our Board of Directors for a term of one year. See page 7. You can read about the nominated directors, including their backgrounds, experience and the committees of the Board (Board committees or any one, a committee) they sit on, beginning on page 9.

Auditors

You will vote on reappointing our auditors. See page 20. Representatives of PricewaterhouseCoopers LLP (PwC) will be at the meeting to answer any questions regarding their audit report. You can read about the services they provided in 2015 and the fees we paid them on page 21.

Having a “say on pay” (advisory vote)

You may also vote on our approach to executive compensation. This is a non-binding advisory vote. See page 21.

Shareholder proposal

You will vote on a shareholder proposal received from Qube Investment Management Inc. which is explained in further detail beginning on page 22 and in Appendix A to this circular.

Other business

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

We need a quorum

We need a quorum to hold the meeting and transact business. This means the people attending the meeting must hold or represent by proxy at least 25% of the total number of issued and outstanding Enbridge shares.

Sending of materials

We are not using what is referred to as “notice-and-access” to send this circular and related materials to our shareholders for this meeting.

We are sending these materials directly to our registered shareholders and indirectly to all non-registered shareholders, including non-objecting beneficial owners, through their intermediaries. We will pay for an intermediary to deliver these materials and a voting instruction form to objecting beneficial owners.

Live audio webcast

We are broadcasting a live audio webcast of our 2016 meeting if you’re unable to attend in person. 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.

Who can attend the meeting and vote

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.

If you held common shares at the close of business on March 17, 2016, you are entitled and encouraged to attend the meeting or any adjournment, and vote your common shares. Each common share you hold represents one vote.

You must be registered to be admitted to the meeting.

Registration will take place outside of the Palomino Room at the BMO Centre, Stampede Park, Calgary, Alberta, Canada, beginning at 12:30 p.m. MDT, one hour before the meeting begins. Registered shareholders who hold their shares in their own name in the form of a share certificate will be required to register with our registrar and transfer agent, CST Trust Company. Beneficial shareholders who hold

 

 

Enbridge Inc. 2016 Management information circular        4


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their shares through a broker, bank, trustee or nominee will be required to register with Broadridge Investor Communications Solutions. 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.

Principal owners of common shares

As of March 8, 2016, there are 928,601,582 common shares issued and outstanding.

There are also 18 series of preference shares issued and outstanding. Preference shares do not have voting rights and none will be voting at the meeting.

The Board and management are not aware of any shareholder who directly or indirectly owns or exercises or directs control over more than 10% of our common shares.

How to vote

You can attend the meeting and vote your common shares in person or you can vote by proxy.

Hold common shares as both a registered and non-registered shareholder?

If some of your common shares are registered in your name and some are held by your nominee, you will need to follow two sets of voting instructions. Please follow the instructions carefully. The voting process is different for registered and non-registered shareholders.

Registered shareholders

You are a registered shareholder if you hold your common shares in your name (in such case, you have a physical share certificate). Registered shareholders have two ways to vote:

 

  by proxy; or
  by attending the meeting and voting in person.

Voting by proxy

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 (President & Chief Executive Officer) and David A. Arledge (Chair of the Board or Chair) 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.

If you appoint the Enbridge proxyholders but do not indicate on the enclosed proxy form how you want to vote your common shares, they will vote as the Board of Directors recommends:

 

  FOR electing the nominated directors;
  FOR reappointing the auditors;
  FOR the advisory vote on our approach to executive compensation; and
  AGAINST the shareholder proposal from Qube Investment Management Inc.

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, check the second box and print the name of the person you want to act on your behalf. Make sure the person you’re appointing knows that you have appointed them as your proxyholder and that he or she needs to attend the meeting. Your proxyholder will need to register with our transfer agent when they arrive at the meeting. The registrar and transfer agent for our common shares is CST Trust Company.

 

 

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Registered shareholders who choose to vote by proxy can vote online, by phone, mail or fax. Choose the method you prefer and then carefully follow the voting instructions on the enclosed proxy form.

 

    Internet:

   You can also appoint a proxyholder on the internet at www.cstvotemyproxy.com.

    Telephone:

   You can also appoint a proxyholder by telephone by calling 1.888.489.7352.

    Mail or fax:

   You can appoint a proxyholder by mail or fax by completing the enclosed proxy form, signing and dating it, and then sending it to:
      CST Trust Company
      Attn: Proxy department
      P.O. Box 721
      Agincourt, Ontario, Canada M1S 0A1
      Fax: 1.866.781.3111 (toll-free in North America; outside of North America: 1.416.368.2502)

CST Trust Company must receive your instructions by 6 p.m. MDT on May 10, 2016 regardless of the voting method you choose. If the meeting is postponed or adjourned, your instructions must be received by 6 p.m. MDT two business days before the meeting is reconvened.

Voting in person

Voting in person gives you the opportunity to meet face to face with management and interact with our Board.

If you are a registered shareholder and want to attend the meeting and vote in person, do not complete or return the enclosed proxy form. When you arrive at the meeting, please let our representatives know you are a registered shareholder and they will direct you to the CST Trust Company table to register.

Changing your vote

If you are a registered shareholder and you voted by proxy, you can change or revoke your voting instructions as set out below.

Changing your vote

You can change a vote you made by proxy by:

 

  voting again on the internet or by telephone, or completing a new proxy form that is dated later than the proxy form previously submitted and mailing it or faxing it to CST Trust Company. Your new instructions will revoke your earlier instructions. CST Trust Company must receive your new instructions by 6 p.m. MDT on May 10, 2016 regardless of the voting method you choose. If the meeting is postponed or adjourned, CST Trust Company must receive your new instructions by 6 p.m. MDT two business days before the meeting is reconvened.

Revoking your vote

You can revoke a vote you made by proxy by:

 

  sending us notice in writing (from you or a person authorized to sign on your behalf). We must receive it by 6 p.m. MDT on May 10, 2016, or by 6 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
  in any other manner permitted by law.

If your common shares are owned by a corporation, your notice must be under a corporate seal or issued by an authorized officer of the corporation or its attorney.

Registered shareholder voting question?

If you are a registered shareholder, contact our transfer agent, CST Trust Company, at 1.800.387.0825 or www.canstockta.com, for any voting questions.

Non-registered shareholders

You are a non-registered (or beneficial) shareholder if your bank, trust company, securities broker, trustee or other financial institution (your nominee) holds your common shares for you in a nominee account. This means you do not have a physical share certificate but your common shares are recorded on the nominee’s electronic system.

Beneficial shareholders have two ways to vote:

 

  by voting instructions; or
  by attending the meeting and voting in person.

 

 

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Voting by voting instructions

Only proxies deposited by registered shareholders can be recognized and acted upon at the meeting.

If you are a beneficial shareholder, your nominee is considered to be the registered shareholder and you will need to follow the voting instructions provided by your nominee to ensure your Enbridge shares are voted in the manner you wish.

Each nominee has its own instructions, but you can generally vote online, by phone, mail or fax. Carefully follow the instructions on the voting information form in the package sent to you by your nominee. Your nominee needs enough time to receive your instructions and then send them to our transfer agent, and so it is important to complete the form promptly.

Voting in person

Voting in person gives you the opportunity to meet face to face with management and interact with our Board.

If you are a beneficial shareholder and you want to attend the meeting and vote in person, your nominee needs to appoint you as proxyholder. We do not have a record of the number of common shares you own or how many votes they represent because your common shares are held in a nominee account and are not registered in your name. Print your name on the voting instruction form you received from your nominee and carefully follow the instructions provided. Do not indicate your voting instructions. When you arrive at the meeting, please let our representatives know you are a beneficial shareholder and they will direct you to the Broadridge Investor Communications Solutions table to register.

Changing your vote

If you vote by proxy, you can change or revoke your voting instructions, but the process and timing is different depending on whether you are a registered or beneficial shareholder.

If you are a beneficial shareholder, contact your nominee to find out how to change or revoke your vote and the timing requirements, or for other voting questions.

Beneficial shareholder voting question?

If you are a beneficial shareholder, contact your nominee for any voting questions.

Voting results

We need a simple majority (at least 50% plus one vote) of all votes cast to elect the nominated directors, appoint the auditors and approve our approach to executive compensation. The shareholder proposal also requires a simple majority of votes cast. Management and the Board recommend that shareholders vote against the shareholder proposal.

Electing our directors

You will elect 11 directors to the Board at the meeting. All 11 directors who were elected at last year’s annual and special meeting of shareholders are standing for re-election to the Board.

All of the directors are independent, except for Al Monaco, our President & Chief Executive Officer. There is no family relationship between any of the nominated directors. Shareholders elect directors to the Board for a term of one year, until the end of the next annual meeting.

You can vote for all 11 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.

The Board unanimously recommends that shareholders vote FOR the election of each of the nominees 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

Under Enbridge’s General Guidelines for the Board, 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 resign 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, 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.

 

 

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Board size

Our articles allow us to have up to 15 directors. The Board believes that 11 directors provide the skills and experience we need to make decisions effectively and meet the needs of the standing Board committees. The Board has the ability to appoint additional directors between shareholder meetings and may do so for a number of reasons, including for Board succession planning purposes. In such cases, shareholders will have the right to vote for or withhold their votes from such interim directors at the next annual meeting of shareholders.

 

 

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Director profiles

The profiles that follow provide information about the nominated directors, including their backgrounds, experience, current directorships, securities held and the Board committees they sit on. Additional information regarding skills and experience of our directors can be found beginning on page 19.

 

David A. Arledge

 

 

 

 

LOGO

Age 71

Naples, Florida, USA

 

Independent

 

Director since

January 1, 2002

 

Chair of the Board since

May 2005

 

Latest date of retirement

May 2020

  From 1983 until 2001, Mr. Arledge was principally employed by Coastal Corporation (energy company) which merged in early 2001 with El Paso Corporation (integrated energy company). He held various executive positions in finance from 1983 to 1993, including Senior Vice President, Finance & Chief Financial Officer, and from 1993 to 2001 held many senior executive and operating positions, retiring in 2001 as Chair, President & Chief Executive Officer. Mr. Arledge holds a BBA (Bachelor of Business Administration) and an LLB (Bachelor of Laws), both from the University of Texas at Austin.        
  Enbridge Board/Board committee memberships        2015 meeting attendance1   
  Board of Directors        9 out of 9        100%   
  Audit, Finance & Risk2        4 out of 4        100%   
  Corporate Social Responsibility2        4 out of 4        100%   
  Governance2        4 out of 4        100%   
  Human Resources & Compensation2        6 out of 6        100%   
  Safety & Reliability2        4 out of 4        100%   
  Total        31 out of 31        100%   
  Director Voting Results in Preceding Three Years           
  2015 votes in favour: 99.41%       
  2014 votes in favour: 99.76%       
  2013 votes in favour: 98.51%       
  Enbridge securities held3                   
  Year      Enbridge shares         DSUs 4     
 
Total market value of
Enbridge shares and DSUs
  
5 
   

 

Minimum

required

  

6 

  2016      32,600         56,891        $4,462,916        $705,000   
  2015      32,600         51,700        $4,882,656        $705,000   
  Other board/board committee memberships7   
  None   

 

James J. Blanchard

 

LOGO

 

Age 73

Beverly Hills, Michigan,
USA

 

Independent

 

Director since

January 25, 1999

 

Latest date of retirement

May 20188

  Governor Blanchard has practised law with DLA Piper LLP (US) (law firm) in Michigan and Washington, D.C.
since 1996 and is the Chair Emeritus and Partner, Government Affairs of that firm. From 1993 to 1996,
Governor Blanchard served as the United States Ambassador to Canada. He was Governor of Michigan for
eight years and served eight years in the United States Congress. Governor Blanchard holds a BA (Bachelor
of Arts) and MBA (Master of Business Administration) from Michigan State University and a JD (Juris Doctor)
from the University of Minnesota.
 
  Enbridge Board/Board committee memberships        2015 meeting attendance1   
  Board of Directors        9 out of 9        100%   
  Corporate Social Responsibility (chair)        4 out of 4        100%   
  Governance        4 out of 4        100%   
  Total        17 out of 17        100%   
  Director Voting Results in Preceding Three Years                   
  2015 votes in favour: 99.32%       
  2014 votes in favour: 99.74%       
  2013 votes in favour: 98.49.%       
  Enbridge securities held3                   
  Year      Enbridge shares         DSUs 4     
 
Total market value of
Enbridge shares and DSUs
  
5 
   
 
Minimum
required
 
6 
  2016      15,881         108,638        $6,209,763        $705,000   
  2015      14,027         103,006        $6,778,551        $705,000   
  Other board/board committee memberships7,9,10   
 

Not-for-profit7

  

 

National Archives Foundation (US)

(not-for-profit)

  

  

   
 
Member, board of directors
Vice Chair
 
  
 

National Democratic Institute

(not-for-profit)

  

  

    Co-Chair, Ambassador’s Circle   
  The Canada-United States Law Institute
(not-for-profit)
        US Co-Chair   

 

 

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Marcel R. Coutu

 

LOGO

 

Age 62

Calgary, Alberta, Canada

 

Independent

 

Director since

July 28, 2014

 

Latest date of retirement

May 2029

  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) and an MBA (Master of Business Administration) from the University of Western Ontario.         
  Enbridge Board/Board committee memberships        2015 meeting attendance1   
  Board of Directors        9 out of 9        100%   
  Audit, Finance & Risk        4 out of 4        100%   
  Human Resources & Compensation11        3 out of 3        100%   
  Safety & Reliability11        2 out of 2        100%   
  Total        18 out of 18        100%   
  Director Voting Results in Preceding Three Years                   
  2015 votes in favour: 99.48% (first year elected)       
  Enbridge securities held3                   
  Year      Enbridge shares         DSUs 4     
 
Total market value of
Enbridge shares and DSUs
  
5 
   
 
Minimum
required
  
6 
  2016      29,400         1,607        $1,546,319        $705,000   
  2015      20,000         451        $1,184,522        $705,000   
  Other board/board committee memberships7   
  Public7   
 

Brookfield Asset Management Inc.

(public global asset management company)

  

  

   

 
 

Director

Member, audit committee and 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, compensation committee, executive
committee, investment committee, governance

and nominating 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 compensation committee

  

  
  

  Private7   
 

Enbridge Gas Distribution Inc.

(utilities company with no publicly listed equity that is an indirect, wholly-owned subsidiary of Enbridge; a reporting issuer because of publicly issued debt)

  

     

   

 

Director

Member, audit committee

  

  

  Not-for-profit7   
    Calgary Exhibition and Stampede Board        Director   

 

 

Enbridge Inc. 2016 Management information circular        10


Table of Contents

J. Herb England

 

 

 

LOGO

Age 69

Naples, Florida, USA

 

Independent

 

Director since

January 1, 2007

 

Latest date of retirement

May 2022

  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        2015 meeting attendance1   
  Board of Directors        9 out of 9        100%   
  Audit, Finance & Risk (chair)        4 out of 4        100%   
  Human Resources & Compensation12        3 out of 3        100%   
  Total        16 out of 16        100%   
  Director Voting Results in Preceding Three Years           
  2015 votes in favour: 97.23%       
  2014 votes in favour: 97.63%       
  2013 votes in favour: 95.56%       
  Enbridge securities held3                   
  Year      Enbridge shares 13      DSUs 4     
 
Total market value of
Enbridge shares and DSUs
  
5 
   
 
Minimum
required
  
6 
  2016      7,031        54,849        $3,085,956        $705,000   
  2015      2,120        51,172        $3,086,673        $705,000   
  Other board/board committee memberships7                   
  Public7                   
 

Enbridge Energy Management, L.L.C.

(public management company that manages the business of Enbridge Energy Partners, L.P. (EEP), a public master limited partnership in which Enbridge holds an interest; Enbridge indirectly holds 100% of the unlisted voting shares)

  

      

   

 

Director

Chair, audit, finance & risk committee

  

  

 

FuelCell Energy, Inc.

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

  

   

   

 
 

Director

Member, audit & finance committee
Chair, compensation committee

  

  
  

  Private7   
 

Enbridge Commercial Trust

(private subsidiary of Enbridge Income Fund)

  

  

   

 

 

Trustee

Member, audit, finance & risk committee

and safety & reliability committee

  

  

  

 

Enbridge Energy Company, Inc.

(private company that is an indirect, wholly-owned subsidiary of Enbridge and general partner of EEP)

  

    

   

 

Director

Chair, audit, finance & risk committee

  

  

 

Enbridge Gas Distribution Inc.

(utilities company with no publicly listed equity that is an indirect, wholly-owned subsidiary of Enbridge; a reporting issuer because of publicly issued debt)

  

     

   

 

Director

Chair, audit finance & risk committee

  

  

 

Enbridge Income Partners GP Inc.

(private company that is a subsidiary of Enbridge and general partner of Enbridge Income Partners LP, a limited partnership in which Enbridge and Enbridge Income Fund hold an interest)

  

     

    Director   
 

Enbridge Pipelines Inc.

(pipeline company with no publicly listed equity that is a subsidiary of Enbridge; a reporting issuer because of publicly issued debt)

  

    

   

 

 

Director

Member, audit, finance & risk committee

and safety & reliability committee

  

  

  

 

Midcoast Holdings, L.L.C.

(private company that is a wholly-owned subsidiary of Enbridge Energy Partners, L.P., and the general partner of Midcoast Energy Partners, L.P., a public master limited partnership in which Enbridge holds an interest)

  

      

   

 

Director

Chair, audit finance & risk committee

  

  

 

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   

 

 

Enbridge Inc. 2016 Management information circular        11


Table of Contents

Charles W. Fischer

 

LOGO

 

Age 65

Calgary, Alberta, Canada

 

Independent

 

Director since

July 28, 2009

 

Latest date of retirement

May 2025

  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        2015 meeting attendance1   
  Board of Directors        9 out of 9        100%   
  Audit, Finance & Risk        4 out of 4        100%   
  Human Resources & Compensation        6 out of 6        100%   
  Safety & Reliability (chair)        4 out of 4        100%   
  Total        23 out of 23        100%   
  Director Voting Results in Preceding Three Years           
  2015 votes in favour: 98.29%       
  2014 votes in favour: 98.17%       
  2013 votes in favour: 95.73%       
  Enbridge securities held3                   
  Year      Enbridge shares 14      DSUs 4     
 
Total market value of
Enbridge shares and DSUs
  
5 
   
 
Minimum
required
  
6 
  2016      11,250        21,941        $1,655,235        $705,000   
  2015      11,250        18,777        $1,739,164        $705,000   
  Other board/board committee memberships7           
  Public7                                 
 

Enbridge Income Fund Holdings Inc.

(public holding company in which Enbridge holds an interest)

  

   

    Director   
 

Pure Technologies Ltd.

(public technology company)

  

  

   

 

Director

Member, audit and compensation committees

  

  

  Private7                                 
 

Enbridge Commercial Trust

(private subsidiary of Enbridge Income Fund)

  

  

   

 

 

Trustee

Chair, safety & reliability committee

Member, audit, finance & risk committee

  

  

  

 

Enbridge Income Partners GP Inc.

(private company that is a subsidiary of Enbridge and general partner of Enbridge Income Partners LP, a limited partnership in which Enbridge and Enbridge Income Fund hold an interest)

  

     

    Director   
 

Enbridge Pipelines Inc.

(pipeline company with no publicly listed equity that is an indirect subsidiary of Enbridge; a reporting issuer because of publicly issued debt)

  

    

   

 

 

Director

Member, audit, finance & risk committee

Chair, safety & reliability committee

  

  

  

  Public agency7                           
   

Alberta Innovates – Energy and Environmental Solutions

(public agency – energy and environmental technology innovation)

   

   

   

 
 

Director

Member, governance & human resources
committee

  

  
  

 

 

Enbridge Inc. 2016 Management information circular        12


Table of Contents

V. Maureen Kempston Darkes

 

LOGO

 

Age 67

Toronto, Ontario, Canada

Lauderdale-by-the-Sea, Florida, USA

 

Independent

 

Director since

November 2, 2010

 

Latest date of retirement

May 2024

  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        2015 meeting attendance1   
  Board of Directors        9 out of 9        100%   
  Corporate Social Responsibility        4 out of 4        100%   
  Human Resources & Compensation        6 out of 6        100%   
  Safety & Reliability        4 out of 4        100%   
  Total        23 out of 23        100%   
  Director Voting Results in Preceding Three Years   
  2015 votes in favour: 97.85%       
  2014 votes in favour: 98.12%       
  2013 votes in favour: 95.63%       
  Enbridge securities held3           
  Year      Enbridge shares         DSUs 4     

 

Total market value of

Enbridge shares and DSUs

  

5 

   
 
Minimum
required
  
6 
  2016      20,346         14,346        $1,730,090        $705,000   
  2015      17,765         12,705        $1,764,822        $705,000   
  Other board/board committee memberships7,15   
  Public7   
 

Brookfield Asset Management Inc.

(public global asset management company)

  

  

   

 
 
 

Director

Chair, risk management committee
Member, management resources and
compensation committee

  

  
  
  

 

Balfour Beatty plc

(public infrastructure services company listed in the UK)

  

   

   

 
 

Director

Chair, safety & sustainability committee
Member, remuneration committee

  

  
  

 

Canadian National Railway Company

(public railway company)

  

  

   

 
 
 

Director

Chair, environment, safety & security committee
Member, audit, corporate governance, finance
and strategic planning committees

  

  
  
  

 

Schlumberger Limited

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

  

    

   

 

Director

Chair, audit committee

  

  

 

 

Enbridge Inc. 2016 Management information circular        13


Table of Contents

Al Monaco

 

LOGO

 

Age 56

Calgary, Alberta, Canada

 

Not independent

 

Director since

February 27, 2012

 

Latest date of retirement

May 2035

  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 has served as President of Enbridge since February 27, 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 memberships16         2015 meeting attendance1   
  Board of Directors         9 out of 9        100%   
  Director Voting Results in Preceding Three Years            
  2015 votes in favour: 99.53%        
  2014 votes in favour: 99.81%        
  2013 votes in favour: 98.63%        
  Enbridge securities held3            
  Year      Enbridge shares 17     

 

Stock

options

  

  

    
 

 

Total market value of
Enbridge shares

(excluding stock options

  
 

)5 

   
 
Minimum
required
  
18 
  2016      374,780        2,593,700         $18,690,279          
  2015      192,201        2,761,300         $11,132,282          
  Other board/board committee memberships7            
  Private7   
 

Enbridge Commercial Trust

(private subsidiary of Enbridge Income Fund)

  

  

     Trustee   
 

Enbridge Gas Distribution Inc.

(utilities company with no publicly listed equity that is an indirect, wholly-owned subsidiary of Enbridge; a reporting issuer because of publicly issued debt)

  

    

     Director   
 

Enbridge Income Partners GP Inc.

(private company that is a subsidiary of Enbridge and general partner of Enbridge Income Partners LP, a limited partnership in which Enbridge and Enbridge Income Fund hold an interest)

  

     

     Director   
 

Enbridge Pipelines Inc.

(pipeline company with no publicly listed equity that is an indirect subsidiary of Enbridge; a reporting issuer because of publicly issued debt)

  

    

     Director   
  Not-for-profit7   
 

American Petroleum Institute

(not-for-profit trade association)

  

  

     Director   
 

C.D. Howe Institute

(not-for-profit public policy institute)

  

  

     Director   
 

Business Council of Canada

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

  

   

     Member   

 

George K. Petty

 

LOGO

 

Age 74

San Luis Obispo,

California, USA

 

Independent

 

Director since

January 2, 2001

 

Latest date of retirement

May 201720

  Mr. Petty was President & Chief Executive Officer of Telus Corporation (telecommunications company) from 1994 to 1999. Prior thereto he was Vice President of Global Business Service for AT&T (telecommunications company) and Chair of the Board of Directors of World Partners, the Global Telecom Alliance. Mr. Petty holds a BSc (Bachelor of Science in Electrical Engineering) from New Mexico State University.      
  Enbridge Board/Board committee memberships      2015 meeting attendance1   
  Board of Directors      9 out of 9         100%   
  Audit, Finance & Risk      4 out of 4         100%   
  Corporate Social Responsibility      4 out of 4         100%   
  Total      17 out of 17         100%   
  Director Voting Results in Preceding Three Years         
  2015 votes in favour: 99.06%   
  2014 votes in favour: 99.56%   
  2013 votes in favour: 98.53%   
  Enbridge securities held3         
  Year      Enbridge shares 19      DSUs 4    Total market value of Enbridge shares & DSUs5           
 
Minimum
required
  
6 
  2016      1,894        72,192      $3,694,669         $705,000   
  2015      1,894        63,699      $3,799,147         $705,000   
  Other board/board committee memberships7         
 

None

 

  

 

 

Enbridge Inc. 2016 Management information circular        14


Table of Contents

Rebecca B. Roberts

 

LOGO

 

Age 63

The Woodlands, Texas, USA

 

Independent

 

Director since

March 15, 2015

 

Latest date of retirement

May 2028

  Ms. Roberts was President of Chevron Pipe Line Company (pipeline company) from 2006 to 2011 where she was responsible for Chevron’s US network of pipelines transporting crude oil, natural gas and petroleum products and for supporting pipeline development projects worldwide. From 2003 to 2006, she was President of Chevron Global Power Generation which owned and operated assets in the US and Asia and provided technical support globally. She held various other management and technical positions with Chevron, its predecessors and its subsidiaries from 1974 to 2003. Ms. Roberts holds a BSc (Bachelor of Science) in Chemistry from McNeese State University.         
  Enbridge Board/Board committee memberships        2015 meeting attendance1   
  Board of Directors21        8 out of 8        100%   
  Safety & Reliability Committees21        3 out of 3        100%   
  Governance Committee21        3 out of 3        100%   
  Total        14 out of 14        100%   
  Director Voting Results in Preceding Three Years   
  2015 votes in favour: 99.67% (first year elected)   
  Enbridge securities held3                   
  Year      Enbridge shares         DSUs 4     
 
Total market value of
Enbridge shares & DSUs
  
5 
   

 

Minimum

required

  

6 

  2016      2,700         2,422        $255,434        $705,000   
  2015      —           —          —          $705,000   
  Other public and private company board/board committee memberships7   
  Public7                                  
 

MSA Safety Incorporated

(public development, manufacture and supplier of safety products)

  

   

   

 

Director

Member, compensation committee

  

  

 

Black Hills Corporation

(public diversified energy company whose regulated and non-regulated businesses generate wholesale electricity and produce natural gas, oil and coal)

  

     

   

 
 

Director

Chair, governance committee
Member, compensation committee

  

  
  

 

Dan C. Tutcher

 

LOGO

 

Age 67

Houston, Texas, USA

 

Independent

 

Director since

May 3, 2006

 

Latest date of retirement

May 2024

  Mr. Tutcher has been President, Chief Executive Officer & Chair of the Board of Trustees of Center Coast MLP & Infrastructure Fund since 2013. Since its inception in 2007, Mr. Tutcher has also been a Principal in Center Coast Capital Advisors L.P. (investment adviser). He was the Group Vice President, Transportation South of Enbridge, as well as President of Enbridge Energy Company, Inc. (general partner of Enbridge Energy Partners, L.P. and an indirect, wholly-owned subsidiary of Enbridge) and Enbridge Energy Management, L.L.C. (public management company in which Enbridge holds 100% of the unlisted voting shares) 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      2015 meeting attendance1   
  Board of Directors      9 out of 9         100%   
  Corporate Social Responsibility      4 out of 4         100%   
  Governance (chair)      4 out of 4         100%   
  Total      17 out of 17         100%   
  Director Voting Results in Preceding Three Years                  
  2015 votes in favour: 99.51%      
  2014 votes in favour: 99.72%      
  2013 votes in favour: 98.54%      
  Enbridge securities held3   
  Year      Enbridge shares 22      DSUs 4    Total market value of Enbridge shares & DSUs5           
 
Minimum
required
  
6 
  2016      635,167        72,425      $35,287,613         $705,000   
  2015      659,173        63,679      $41,867,588         $705,000   
  Other board/board committee memberships7   
  Public7   
   

Center Coast MLP & Infrastructure Fund

(public investment company)

  

  

  President and Chairman of the Board of Trustees      

 

 

Enbridge Inc. 2016 Management information circular        15


Table of Contents

Catherine L. Williams

 

 

LOGO

Age 65

Calgary, Alberta, Canada

 

Independent

 

Director since

November 1, 2007

 

Latest date of retirement

May 2026

  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        2015 meeting attendance1   
  Board of Directors        9 out of 9        100%   
  Audit, Finance & Risk        4 out of 4        100%   
  Human Resources & Compensation (chair)        6 out of 6        100%   
  Safety & Reliability        4 out of 4        100%   
  Total        23 out of 23        100%   
  Director Voting Results in Preceding Three Years   
  2015 votes in favour: 98.33%   
  2014 votes in favour: 98.20%   
  2013 votes in favour: 95.70%   
  Enbridge securities held3   
  Year      Enbridge shares         DSUs 4     
 
Total market value of
Enbridge shares & DSUs
  
5 
   
 
Minimum
required
  
6 
  2016      39,029         32,261        $3,555,232        $705,000   
  2015      35,428         28,658        $3,711,861        $705,000   
  Other board/board committee memberships7   
  Public7   
 

Vermilion Energy Inc.

(public oil and gas company)

  

  

   

 
 

Director

Member, audit and governance and human
resources committees

  

  
  

  Private7   
 

Enbridge Commercial Trust

(private subsidiary of Enbridge Income Fund)

  

  

   

 
 

Trustee

Member, audit, finance & risk committee and
safety & reliability committee

  

  
  

 

Enbridge Income Partners GP Inc.

(private company that is a subsidiary of Enbridge and general partner of Enbridge Income Partners LP, a limited partnership in which Enbridge and Enbridge Income Fund hold an interest)

  

     

    Director   
   

Enbridge Pipelines Inc.

(pipeline company with no publicly listed equity that is an indirect subsidiary of Enbridge; a reporting issuer because of publicly issued debt)

  

    

   

 
 

Director

Member, audit, finance & risk committee and
safety & reliability committee

  

  
  

 

1. Percentages are rounded to the nearest whole number.
2. Mr. Arledge is not a member of any Board committee, but as Chair of the Board, he attends and participates in most of their meetings.
3. Information about beneficial ownership and about securities controlled or directed by our proposed directors is provided by the nominees and is as at March 3, 2015 and March 8, 2016, respectively.
4. DSUs refer to deferred share units and are defined on page 41 of this circular.
5. Total market value = number of common shares or deferred share units × closing price of Enbridge shares on the Toronto Stock Exchange (TSX) of $57.92 on March 3, 2015 and $49.87 on March 8, 2016. Amounts are rounded to the nearest dollar.
6. The annual Board retainer of $235,000 was not increased in 2015. Directors must hold at least three times their annual Board retainer, or $705,000, in DSUs or Enbridge shares and meet that requirement within five years of becoming a director on our Board. All directors meet or exceed this requirement, other than Ms. Roberts, who has until March 15, 2020 to meet this requirement.
7. 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 (i) that is not a reporting issuer or registrant or (ii) that is a reporting issuer or registrant with publicly issued debt securities but it does not have any publicly listed equity securities.
     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. Public agency means an organization funded by government for a specific purpose.
8. In November 2015, Governor Blanchard received unanimous Board approval to extend his term after age 73 by up to an additional two years. See Director term limits on page 30.
9. The Ontario Securities Commission, the British Columbia Securities Commission and the Autorité des marchés financiers issued a management cease trade order against insiders of Bennett Environmental Inc. (Bennett) on April 10, 2006, and another cease trade order on April 24, 2006 after Bennett failed to file its annual financial statements and related MD&A for the year ended December 31, 2005. The orders prevented certain Bennett directors, officers and insiders, including Governor Blanchard, from trading Bennett securities until the commissions received the documents. Bennett filed the required documents on May 30, 2006 and the management cease trade order was revoked on June 19, 2006. Governor Blanchard was a director of Bennett until August 7, 2006.
10. On May 31, 2004 and again on April 10, 2006, certain directors, senior officers and certain current and former employees of Nortel Networks Corporation and Nortel Networks Limited were prohibited from trading in the securities of Nortel Networks Corporation and Nortel Networks Limited pursuant to management cease trade orders issued by the Ontario Securities Commission and certain other provincial securities regulators in connection with delays in the filing of certain financial statements. Following the filing of the required financial statements, the Ontario Securities Commission and subsequently the other provincial securities regulators lifted such cease trade orders effective June 21, 2005 and June 8, 2006, respectively. Governor Blanchard was a director of Nortel Networks Corporation until June 29, 2005. At no time did the above noted cease trade orders apply to Governor Blanchard.
11. Mr. Coutu was appointed to the Human Resources & Compensation Committee and ceased to be a member of the Safety & Reliability Committee effective May 6, 2015.
12. Mr. England ceased to be a member of the Human Resources & Compensation Committee effective May 6, 2015.
13. Mr. England also owns 8,626 units of Enbridge Energy Partners, L.P. and 5,000 units of Midcoast Energy Partners, L.P.
14. Mr. Fischer also owns 27,100 shares of Enbridge Income Fund Holdings Inc.
15. 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.

 

 

Enbridge Inc. 2016 Management information circular        16


Table of Contents
16. Mr. Monaco is not a member of any Board committee. He attends Board committee meetings at the request of the Board.
17. Mr. Monaco also owns 8,150 shares of Enbridge Income Fund Holdings Inc.
18. As President & Chief Executive Officer, Mr. Monaco is required to hold Enbridge shares equal to five times his base salary (see page 81). Mr. Monaco is not required to hold Enbridge shares as a director.
19. Mr. Petty also owns 12,622 shares of Enbridge Energy Management, L.L.C., 5,234 units of Enbridge Energy Partners, L.P. and 400 units of Midcoast Energy Partners, L.P.
20. In February 2015, Mr. Petty received unanimous Board approval to extend his term after age 73 by up to an additional two years. See Director term limits on page 30.
21. Ms. Roberts was appointed to the Board, the Safety & Reliability Committee and the Governance Committee effective March 15, 2015.
22. Mr. Tutcher also owns 70,871 shares of Enbridge Energy Management, L.L.C. and 40,000 units of Enbridge Energy Partners, L.P.

2015 director voting results

The 2015 director voting results are available on our website at (www.enbridge.com) and are also available on SEDAR (www.sedar.com). The percentage of votes that were in favour of individual directors at the annual meeting of shareholders for the preceding three years is shown in their profiles on the preceding pages of this circular.

Director independence

 

Director nominees    Independent    Non-Independent    Reason for non-independence

David A. Arledge

            

James J. Blanchard

            

Marcel R. Coutu

            

J. Herb England

            

Charles W. Fischer

            

V. Maureen Kempston Darkes

            

Al Monaco

           President & Chief Executive Officer of the company

George K. Petty

            

Rebecca B. Roberts

            

Dan C. Tutcher

            

Catherine L. Williams

            

Board committee participation

 

Director    Audit, Finance &
Risk Committee
   Corporate Social
Responsibility
Committee
   Governance
Committee
   Human
Resources &
Compensation
Committee
   Safety &
Reliability
Committee

Management directors – not independent

                        

Al Monaco

                        

Outside directors – independent

                        

David A. Arledge1

                        

James J. Blanchard

        committee chair             

Marcel R. Coutu2, 3

                    

J. Herb England2, 4

   committee chair                    

Charles W. Fischer

                   committee chair

V. Maureen Kempston Darkes

                  

George K. Petty

                    

Rebecca B. Roberts5

                    

Dan C. Tutcher

           committee chair          

Catherine L. Williams2

                committee chair   

 

1. Mr. Arledge is not a member of any of the committees of the Board. He attends most of the committee meetings in his capacity as Chair of the Board.
2. Mr. Coutu, Mr. England and Ms. Williams each qualify as an audit committee financial expert, as defined under the US Securities Exchange Act of 1934. 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 (NI 52-110) and the rules of the New York Stock Exchange (NYSE).
3. Mr. Coutu was appointed to the Human Resources & Compensation Committee and ceased to be a member of the Safety & Reliability Committee effective May 6, 2015.
4. Mr. England ceased to be a member of the Human Resources & Compensation Committee effective May 6, 2015.
5. Ms. Roberts was appointed to the Safety & Reliability Committee and the Governance Committee effective March 15, 2015.

 

 

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Board and Board committee meetings

 

Board/committee    Total number of meetings      In camera sessions      Overall attendance  
Board        9           9         100
Audit, Finance & Risk Committee      4         4         100
Corporate Social Responsibility Committee      4         4         100
Governance Committee      4         4         100
Human Resources & Compensation Committee      6         6         100
Safety & Reliability Committee      4         4         100
Total      31         31         100

Director attendance

 

     Board of
Directors
meetings
(9 meetings)
    Board committee meetings  
      Audit, Finance
& Risk
(4 meetings)
    Corporate
Social
Responsibility
(4 meetings)
    Governance
(4 meetings)
    Human
Resources &
Compensation
(6 meetings)
    Safety &
Reliability
(4 meetings)
 
     Number     %     Number     %     Number     %     Number     %     Number     %     Number     %  

David A. Arledge1

    9        100        4        100        4        100        4        100        6        100        4        100   

James J. Blanchard

    9        100                      4        100        4        100                               

Marcel R. Coutu2

    9        100        4        100                                    3        100        2        100   

J. Herb England3

    9        100        4        100                                    3        100                 

Charles W. Fischer

    9        100        4        100                                    6        100        4        100   

V. Maureen Kempston Darkes

    9        100                      4        100                      6        100        4        100   

Al Monaco4

    9        100                                                                         

George K. Petty

    9        100        4        100        4        100                                             

Rebecca B. Roberts5

    8        100                                    3        100                      3        100   

Dan C. Tutcher

    9        100                      4        100        4        100                               

Catherine L. Williams

    9        100        4        100                                    6        100        4        100   

 

1. Mr. Arledge is not a member of any Board committee, but as Chair of the Board, he attends and participates in most of their meetings.
2. Mr. Coutu was appointed to the Human Resources & Compensation Committee and ceased to be a member of the Safety & Reliability Committee effective May 6, 2015.
3. Mr. England ceased to be a member of the Human Resources & Compensation Committee effective May 6, 2015.
4. Mr. Monaco is not a member of any Board committee. He attends Board committee meetings at the request of the Board.
5. Ms. Roberts was appointed to the Board, as well as the Governance Committee and the Safety & Reliability Committee, effective March 15, 2015.

 

 

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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 company like ours. We use this skills matrix to annually assess our board composition and in the recruitment of new directors.

 

Expertise  

Arledge

 

Blanchard

 

Coutu

 

England

 

Fischer

 

Kempston
Darkes

 

Monaco

 

Petty

 

Roberts

 

Tutcher

 

Williams

Managing and leading growth

                     

International

                       

Chief Executive Officer/Senior Officer

                     

Governance/Board

                     

Operations

                             

Sustainable Development

                     

Marketing

                                 

Human Resources/Compensation

                           

Investment Banking/Mergers & Acquisitions

                           

Finance

                     

Information Technology

                                     
Health, Safety, Environmental and Social Responsibility                          

Government Relations

                         

Emerging Sectors

                         

Director tenure

The graph and table below shows the director tenure of the proposed nominee directors. The average tenure is 8.4 years. For further information on our guidelines for director retirement and the latest date of retirement of each director, please refer to Identifying new candidates on page 30 and the Director profiles beginning on page 9 of this circular.

 

 

LOGO

Interlocking relationships

Consistent with the Director profiles, for purposes of the tables below:

 

  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; and
  private means a corporation or trust (i) that is not a reporting issuer or registrant or (ii) that is a reporting issuer or registrant with publicly issued debt securities but it does not have any publicly listed equity securities.

 

 

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The Board has determined that these board interlocks 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.    audit committee and management, resources and compensation committee

V. Maureen Kempston Darkes

        management, resources and compensation committee and chair, risk management committee

 

Directors    Served together on these boards of
private entities
   Served on these committees

J. Herb England

   Enbridge Commercial Trust1    audit, finance & risk committee and safety & reliability committee

Charles W. Fischer

      audit, finance & risk committee and chair, safety & reliability committee

Al Monaco

     

Catherine L. Williams

        audit, finance & risk committee and safety & reliability committee

Marcel R. Coutu

   Enbridge Gas Distribution Inc.2    audit committee

J. Herb England

      chair, audit, finance & risk committee

Al Monaco

       

J. Herb England

   Enbridge Income Partners GP Inc. 3   

Charles W. Fischer

     

Al Monaco

     

Catherine L. Williams

       

J. Herb England

   Enbridge Pipelines Inc.4    audit, finance & risk committee and safety & reliability committee

Charles W. Fischer

      audit, finance & risk committee and chair, safety & reliability committee

Al Monaco

     

Catherine L. Williams

        audit, finance & risk committee and safety & reliability committee

 

1. Enbridge Commercial Trust is a private subsidiary of Enbridge Income Fund (the Fund, a reporting issuer with publicly issued debt but no publicly listed securities). Its board of trustees manages the business of the Fund.
2. Enbridge Gas Distribution Inc. is a utilities company with no publicly listed equity that is an indirect, wholly-owned subsidiary of Enbridge; it is a reporting issuer with publicly issued debt.
3. Enbridge Income Partners GP Inc. is a private subsidiary of Enbridge and general partner of Enbridge Income Partners LP, a limited partnership in which Enbridge and Enbridge Income Fund hold an interest.
4. Enbridge Pipelines Inc. is a pipeline company with no publicly listed equity that is an indirect subsidiary of Enbridge; it is a reporting issuer with publicly issued debt.

Appointing our auditors

You will vote on appointing Enbridge’s auditors. You may vote for the reappointment of our auditors or withhold your vote. The Board, on the recommendation of the Audit, Finance & Risk Committee, proposes that PwC be reappointed as auditors and that you vote for the reappointment of our auditors.

If PwC is reappointed, they will serve as our auditors until the end of the next annual meeting of shareholders. PwC (formerly Price Waterhouse) has been our auditors since 1992 and auditors for Enbridge Pipelines Inc., our subsidiary, since 1949.

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 (NI 52-110 and National Policy 58-201Corporate Governance Guidelines (NP 58-201)), the US Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the accounting and corporate governance rules adopted by the U.S. Securities and Exchange Commission under Sarbanes-Oxley, which specify certain services that external auditors cannot provide.

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.

 

 

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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.

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 billed by the auditors for each category of service for the financial years ended December 31, 2015 and 2014.

 

      2015      2014      Description of fee category

Audit fees

   $ 15,445,798       $ 13,489,584       Represents the aggregate fees for audit services.

Audit-related fees

   $ 1,133,899       $ 823,989       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 2015 and 2014, the services provided in this category included due diligence related to prospectus offerings and other items.

Tax fees

   $ 1,680,529       $ 1,757,558       Represents the aggregate fees for professional services rendered by the company’s auditors for tax compliance, tax advice and tax planning.

All other fees

   $ 740,886       $ 887,326       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”. These fees include those related to Canadian Public Accountability Board fees, French translation work and process reviews.

Total fees

   $ 19,001,112       $ 16,958,457        

You can find information about the roles and responsibilities of the Audit, Finance & Risk Committee beginning on page 31 of this circular and details about the committee’s pre-approval policies and procedures beginning on page 36 of our annual information form for the year ended December 31, 2015 (available online at www.enbridge.com and www.sedar.com).

The Board unanimously recommends that shareholders vote FOR the reappointment of PricewaterhouseCoopers LLP as auditors of the corporation, to hold office until the close of the next annual meeting of shareholders at such remuneration as shall be fixed by the Board of Directors.

Having a “say on pay”

We have held advisory votes on executive compensation (“say on pay”) at the past five annual meetings. Voting results in the most recent three years are set out in the table below.

 

Say on pay vote    2013      2014      2015  

Votes in favour

     93.56      96.02      95.87

The Board has decided to again hold an advisory vote on executive compensation at this year’s meeting. While this vote is non-binding, it gives shareholders an opportunity to provide important input to our Board.

As a shareholder, you will be asked to vote for or against, or you may abstain from voting on, our approach to executive compensation through the following resolution.

The Board unanimously recommends that you vote FOR the advisory vote on our approach to executive compensation:

Resolve, on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in Enbridge’s management information circular dated March 8, 2016, delivered in advance of the 2016 annual meeting of shareholders on May 12, 2016.

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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Shareholder proposals

Proposals received for the 2016 meeting

We received two shareholder proposals for consideration at the meeting. One shareholder proposal was submitted by Pension Plan of the United Church of Canada (PPUCC, and the PPUCC Proposal), represented by Shareholder Association for Research and Education (SHARE). The PPUCC Proposal has been withdrawn. Further details are included in the table below.

 

Summary of PPUCC Proposal   Summary of Our Response
PPUCC requested that the Board prepare a report, updated annually, disclosing, among other things, our policy and procedures governing lobbying, payments made for lobbying, and membership in tax-exempt organizations that write model legislation or advocate for policy change.  

Enbridge management engaged with SHARE to discuss the PPUCC Proposal. We are pleased to be including a new section in Enbridge’s 2015 Corporate Social Responsibility (CSR) Report pertaining to governmental relations and lobbying. This new section will include information regarding Enbridge’s political engagement philosophy, board oversight of government relations and lobbying, policy regarding political contributions, corporate political contributions in 2015, lobbying activities and industry or trade association memberships (including a list of those associations to which Enbridge has contributed $50,000 or more in membership dues in 2015). Enbridge’s contributions to industry and trade associations and other organizations relating to policy development will also be reviewed annually, and, if applicable, significant contributions by Enbridge specifically for advocacy or lobbying activities will be included in the new section. In addition, beginning with the 2016 CSR Report, this new section will disclose Enbridge’s membership in and/or contributions to tax-exempt organizations in Canada or the US that advocate for policy changes.

 

Status: Proposal Withdrawn

The second shareholder proposal was submitted by Qube Investment Management Inc. (Qube) on behalf of its clients (the Qube Proposal). The Qube Proposal and management’s response are detailed in Appendix A to this circular. As a shareholder, you may vote for, against, or abstain from voting on the Qube Proposal. The Board recommends that shareholders vote AGAINST the resolution.

The Board wishes to acknowledge and thank each of these shareholders and organizations for their constructive dialogue on the subject matter of the shareholder proposals.

Proposals for the 2017 meeting

Under the Canada Business Corporations Act, which governs Enbridge, we must receive shareholder proposals by December 8, 2016 to consider them for inclusion in the management information circular and proxy for the 2017 annual meeting of shareholders, which is expected to be held on May 11, 2017 in Calgary, Alberta.

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 SEDAR (www.sedar.com) following the meeting.

 

 

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2. Governance

Our governance practices

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

We have a comprehensive system of stewardship and accountability that follows best practices and meets the requirements of all rules, regulations, standards and internal and external policies that apply.

This section discusses our governance philosophy, policies and practices. It also describes the role and functioning of our Board and the five Board committees.

You can find more information about governance in our annual information form for the year ended December 31, 2015. Our articles and by-laws also set out certain matters that govern our business activities. These are all available on our website (www.enbridge.com) and on SEDAR (www.sedar.com).

Regulations, rules and standards

Enbridge is listed on the TSX and the NYSE and we are subject to a range of governance rules, regulations, standards and policies including:

Canada

 

  National Instrument 58-101Disclosure of Corporate Governance Practices;
  NP 58-201;
  NI 52-110; and
  Canada Business Corporations Act.

US

As a “foreign private issuer” under US securities laws, we are generally permitted to comply with Canadian corporate governance requirements, rather than those that apply to US listed corporations.

The NYSE rules, however, require us to disclose how we comply with US corporate governance standards and where our practices are different. You can find this document on our website (http://www.enbridge.com/investment-center/corporate-governance/compliance). We must also comply with the audit committee requirements under Rule 10A-3 of the US Securities Exchange Act of 1934. See Audit, Finance & Risk Committee in our annual information form for the year ended December 31, 2015 for a summary of these requirements.

As of the date of this circular, the Board believes we are in full compliance with all Canadian and US corporate governance rules, regulations, standards and policies that apply to us.

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 and employees, as well as consultants and contractors retained by Enbridge.

It discusses what we expect in areas like:

 

  complying with the law and applicable rules and policies;
  interacting with landowners, customers, shareholders, employees and others;
  protecting health, safety and the environment;
  acquiring, using and maintaining assets;
  using computers and communication devices;
  conflicts of interest; and
  proprietary, confidential and insider information.
 

 

 

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The Board reviews the Statement on Business Conduct policy at least once per year and updates it as necessary. The Board approved a revised Statement on Business Conduct in 2015, for implementation later in 2016.

 

All new employees at Enbridge and at each of our subsidiaries must, as a condition of employment, sign a certificate of compliance indicating that they have read the Statement on Business Conduct, understand it and agree to comply with it. Every year, all employees have to confirm that they have complied with it.

 

Directors must also certify that they agree with the Statement on Business Conduct and will comply with it, both when they join our Board and every year they serve as a director.

 

All employees were asked, through an electronic training and certification process, to certify their compliance with the Statement on Business Conduct for the year ended December 31, 2015. As of the date of this circular, 99.9% of Enbridge employees had certified compliance. The President & Chief Executive Officer and all members of the Board have certified their compliance with the Statement on Business Conduct for the year ended December 31, 2015.

   

 

Building awareness

 

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

 

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

 

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

 

Handling conflicts of interest

 

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;

   not participate in any discussions on the matter; 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.

   

 

Interest of informed persons in material transactions

 

No informed person of Enbridge or nominated director (or any associate or affiliate) has or had a direct or indirect material interest in any Enbridge transaction in 2015 or in any proposed transaction that had or will have a material effect on Enbridge or any of our subsidiaries in the foreseeable future.

 

Insider trading

Our insider trading and reporting guidelines, which were most recently revised in February 2016, 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 fifth 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);
  encouraging all insiders to pre-clear proposed purchases or sales of Enbridge securities with the Corporate Secretary’s office; and
  prohibiting all directors, officers, employees and contractors of Enbridge and its subsidiaries from engaging in hedging transactions.

Whistleblower procedures

Our whistleblower procedures help uphold our strong values and preserve our culture of ethical business conduct.

We introduced whistleblower 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.

Employees can report concerns about financial or accounting irregularities or unethical conduct confidentially to the chair of the Audit, Finance & Risk Committee. All submissions may be made anonymously and any complaints submitted in a sealed envelope marked “private and strictly confidential” will be delivered to the committee chair unopened. Complaints about financial or accounting irregularities, unethical conduct or any other compliance issues (including alleged violations of the Statement on Business Conduct) can also be made anonymously using the Enbridge Ethics and Conduct Hotline (the 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.

 

 

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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 Compliance Department through quarterly compliance surveys conducted in each Enbridge business unit. The Audit, Finance & Risk Committee then determines how to handle any issues or complaints brought to its attention. The committee can hire independent advisors (outside legal counsel, independent auditors and others) to help investigate a matter. We pay for these costs.

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.

The Board:

 

  reviews and approves the strategic plan, provides guidance and monitors our progress;
  monitors our risk management programs and helps us identify principal risks;
  makes sure we have appropriate internal control and management systems in place to manage money, compliance and risk and that these systems are functioning appropriately;
  reviews and approves major projects, plans and initiatives that could materially affect the company; and
  reviews and approves compensation for the President & Chief Executive Officer and executive management team.

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.

Duties

The Board is responsible for the oversight of key areas like governance, financial and strategic planning, risk oversight and management, succession planning, corporate disclosure, shareholder relations and corporate communications. These duties are described in our terms of reference for the Board and the Board committees. 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 available on our website (www.enbridge.com), and the terms of reference for the Board of Directors is also attached at Appendix B.

The Board develops position descriptions for the Chair of the Board and 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).

Strategic planning

The Board is responsible for reviewing our strategic planning process and for reviewing and approving our strategic plan. The Board devotes two meetings per year to the strategic plan, including one meeting that is held over two days. 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 the company’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. Each year, management prepares a corporate risk assessment report for the Board and regularly updates the Board and committees on our top risks. The Board is responsible for overseeing the following with respect to the company’s risks:

 

 

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  identifying principal risks when necessary, and at least annually;
  establishing a risk tolerance level for those risks that are identified;
  ensuring the implementation by management of appropriate and effective systems to manage risks;
  considering reports on operational risk management;
  reviewing management’s implementation of risk policies and procedures and assessing the appropriateness and comprehensiveness of those policies and procedures;
  reviewing the quality and adequacy of the risk-related information provided to the Board by management;
  overseeing the Board’s risk management governance model and reflecting the principal risks of the company’s business in the terms of reference for the Board and its committees; and
  seeking assurance that our internal control systems and management information systems are in place and operating effectively.

Our MD&A for the year ended December 31, 2015 contains more information about the risks applicable to Enbridge, and is available on our website (www.enbridge.com) and on SEDAR (www.sedar.com).

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 Safety & Reliability Committee, the Audit, Finance & Risk Committee, the 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.

The Safety & Reliability Committee is responsible for 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, emergency response preparedness, other operational risks and safety culture. The Safety & Reliability Committee oversees the enterprise-wide safety culture, reviews risk management guidelines applicable to safety and reliability matters and other operational risks, and receives results of operational compliance audits including operational risk management. The committee reviews policies directed to prevent injury and to minimize adverse environment impacts and health or safety impacts, and receives reports on insurable risks related to safety and reliability matters.

The Audit, Finance & Risk Committee reviews annually the strategies, policies and practices applicable to the assessment, management, prevention and mitigation of risks relating to foreign currency and interest rates, counterparty credit exposure, cash management, credit and financing and the use of derivative instruments and insurance. The committee also reviews major financial risk exposures and steps management has taken to monitor and manage these exposures, as well as insurance.

The Corporate Social Responsibility Committee is responsible for overseeing risks relating to corporate social responsibility matters.

The HRC Committee is responsible for overseeing the identification of people- and compensation-related risk.

For further information on each Board committee’s role in risk management, please refer to Board committees, beginning on page 31.

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, which recommends them 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 and quarterly reports to shareholders;
  MD&A;
  annual information form; and
  management information circular.
 

 

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

 

 

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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;
  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 U.S. Securities and Exchange Commission.

We define a director as independent if he or she does not have a direct or indirect material relationship with Enbridge. The Board believes that a relationship is material if it could reasonably interfere with a director’s ability to make independent decisions, regardless of any other association he or she may have. The Board uses a detailed annual questionnaire to assist in determining if a director is independent.

Ten of our 11 nominated directors, including the Chair of the Board, are independent. Mr. Monaco is not independent because he is our President & Chief Executive Officer and a member of management.

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.

Independence of the board chair

We have an independent, non-executive Chair of the Board who is responsible for leading the Board. Our General Guidelines for the Board, available on our website (www.enbridge.com), provide that the Chair of the Board shall be an independent director.

Meeting in camera

Our General Guidelines for the Board, available on our website (www.enbridge.com), provide that after every meeting of the Board, an “in camera” meeting is held without officers or management present. The Chair of the Board provides the President & Chief Executive Officer with a summary of the matters discussed at these in camera meetings, including any issues that the Board expects management to pursue. In 2015, an in camera meeting was held following each Board meeting and each committee meeting.

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 Interlocking relationships beginning on page 19 for information about some of our directors who serve together on other boards.

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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Mr. England currently serves on the audit committees of FuelCell Energy, Inc. and the following companies in the Enbridge group of companies: Enbridge, Enbridge Commercial Trust, Enbridge Energy Company, Inc., Enbridge Energy Management, L.L.C., Enbridge Gas Distribution Inc., Enbridge Pipelines Inc. and Midcoast Holdings, L.L.C. See Mr. England’s Director profile on page 11 and Interlocking relationships beginning on page 19 for further details. The Board has determined that such simultaneous service does not impair Mr. England’s ability to effectively serve on Enbridge’s Audit, Finance & Risk Committee.

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 terms of reference also allow individual directors, the Board and Board committees to 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. In 2015, the overall attendance at Board and committee meetings was 100%. Please see information on attendance in the Director profiles beginning on page 9 and under Director attendance 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 Mr. England, Ms. Williams and Mr. Coutu each qualify as “audit committee financial experts” as defined by the US Securities Exchange Act of 1934. 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.

Orientation

Every new director meets with the Chair of the Board, the President & Chief Executive Officer 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:

 

  Board guidelines;
  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 participate in tours of our operations. Quarterly

 

 

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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 2015 and director participation.

 

Date   Topic   Presented/hosted by   Who attended

February 18, 2015

  Cyber Security   Enbridge Inc.   All members of the Board

February 18, 2015

  Tour of Enbridge Information Security Centre   Enbridge Inc.   All members of the Board

March 15, 2015

  World Oil Markets   RBC Capital Markets, LLC   All members of the Board

March 16, 2015

  Crude Oil Fundamentals   PIRA Energy Group   All members of the Board

March 16, 2015

  North American Gas Market Outlook   IHS Energy   All members of the Board

July 28, 2015

  Pipeline Integrity Reliability   Enbridge Inc.   All members of the Board
other than Ms. Roberts

September 15-16, 2015

  Vector and Aux Sable Operations and Site Tour   Enbridge Inc.   All members of the Board

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

Ms. Williams (chair of the HRC Committee and member of the Audit, Finance & Risk Committee and the Safety & Reliability Committee), Ms. Kempston Darkes (member of the HRC Committee, the Corporate Social Responsibility Committee and the Safety & Reliability Committee) and Mr. Coutu (a member of the Audit, Finance & Risk and Safety & Reliability Committees) 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 and Chair of the Board;
  duties and responsibilities;
  Board orientation and development; and
  the evaluation process for senior management.
 

 

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 as appropriate.

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 and Board committee meetings;
  committee members, including the chair; and
  the orientation and development processes for the Board committee.
 

 

 

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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.

Director term limits

Under our Board guidelines, 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. Mr. Petty’s tenure was extended in February 2015 and Governor Blanchard’s tenure was extended in November 2015, in each case, for up to an additional two years.

Identifying new candidates

The Governance Committee serves as the Board’s nominating committee and is responsible for identifying new candidates for nomination to the Board. The Governance Committee also invites and welcomes suggestions from other directors on our Board and from management. The committee reviews a Board composition plan annually. The plan consists of a skills matrix that includes the name of each director, his or her occupation, residence, gender, age, years on the Board, retirement date, business experience, other board commitments, equity ownership, independence and other relevant information. The committee summarizes the plan to identify the ideal attributes, skills and experience of a new candidate. These include executive management, board and industry experience, areas of expertise, global representation, gender and age, among others. The committee ranks each of these skills and areas of experience as a high, medium or low priority.

The Governance Committee, in collaboration with management and, in some cases, external consultants, then develops a list of potential candidates with the desired skills and experience and reviews and updates the list at least once per year. When a position becomes available, the committee reviews the list of potential candidates, revises it to reflect the skills and experience most needed at the time, adds other recently identified candidates and prepares a short list. The committee also considers the candidate’s background and diversity of experience in making its choices and may engage independent consultants to assist in the review and recruitment process.

The chair of the Governance Committee, the Chair of the Board, the President & Chief Executive Officer and sometimes other directors, meet with potential candidates to determine their interest, availability, experience and suitability. The Governance Committee then makes a recommendation to the Board for consideration and approval.

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, gender, age, ethnicity and geographic background. The diversity policy sets out key criteria for the composition of the Board, including an aspirational target in which each gender comprises at least one-third of the independent directors. Three of Enbridge’s 11 directors, or approximately 27% of the Board (and 30% of the 10 independent directors), are women. All 11 directors are standing for re-election.

 

The policy further sets out criteria for management to aspire to have at least one-third of senior management roles at Enbridge occupied by women. Of the 74 senior management positions at Enbridge and its major subsidiaries, 18 of those senior management positions are currently held by women, for a total of 24%.

  

Board composition

 

LOGO

It is the responsibility of the Governance Committee to identify and recommend to the Board potential nominees to the Board with the appropriate competencies, skills and characteristics required of Board members to promote the continued growth and success of Enbridge. In this process, the Governance Committee will take into account professional experience, educational background, skills and knowledge, as well as diversity considerations such as gender, age and ethnicity.

Similarly, 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, will be taken into account.

The Governance Committee will review the diversity policy and its targeted objectives annually to assess its effectiveness and will report to the Board and recommend any revisions that may be necessary.

 

 

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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:

 

  General Guidelines for the Board;
  Terms of Reference for the Board of Directors;
  Terms of Reference for each Board Committee;
  Terms of Reference for the President & Chief Executive Officer;
  Statement on Business Conduct;
  Whistle Blower Policy; and
  Incentive Compensation Clawback Policy.

Board committees

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

 

  Audit, Finance & Risk
  Governance
  Safety & Reliability
  Corporate Social Responsibility
  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 all committee meetings as observers. 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.

Audit, Finance & Risk Committee

Chair:    J. Herb England
Members:    Marcel R. Coutu, Charles W. Fischer, George K. Petty and Catherine L. Williams

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 quarterly and annual financial statements and notes and MD&A and recommending them to the Board for approval;
  reviewing earnings releases and recommending them to the Board for approval;
  discussing with management and the external auditors any significant issues regarding our financial statements and accounting policies;
  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 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 funding exposure under the company’s pension plans and reviewing and approving the financial statements applicable to each of Enbridge’s pension plans.

 

 

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Internal controls

 

  overseeing management’s system of disclosure controls and procedures;
  overseeing the internal controls over financial reporting; and
  overseeing the internal audit function.

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 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
  overseeing credit facilities and inter-company financing transactions and recommending them to the Board for approval.

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 program as it pertains 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, risk management programs and disaster response and recovery programs.

2015 overview

The Audit, Finance & Risk Committee carried out the following activities during 2015:

Audits and financial reporting

 

  reviewed the interim and annual MD&A and financial statements and notes and recommended them to the Board for approval;
  reviewed public disclosure documents containing audited or unaudited financial information, including annual and interim earnings press releases, prospectuses and the annual information form, and recommended them to the Board for approval for public release;
  reviewed and approved the pension plan annual financial statements; 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;
  approved a revised internal audit charter; and
  received quarterly updates on the ethics and conduct hotline activity from the Chief Compliance Officer.

External auditors

 

  recommended appointment of PwC by shareholders and reviewed and approved the 2015 engagement letter (including the terms of engagement and proposed fees); and
  pre-approved all non-audit services to be provided by PwC that are allowed under the committee’s policy.

 

 

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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 the financing plans including additional financing transactions not included in the 2015 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;
  reviewed the annual report on insurance coverages and reviewed and approved the insurance renewal strategy; and
  reviewed the information security report.

Awards and recognition

For the fifth year in a row, the Chartered Professional Accountants of Canada awarded Enbridge the Award of Excellence in Corporate Reporting in the “Utilities and Pipelines” industry sector.

Governance

In November 2015, the Audit, Finance & Risk Committee reviewed its terms of reference. No changes were adopted. 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. The committee also reviewed its performance in 2015 and determined that it had fulfilled all of its responsibilities under its terms of reference.

The Audit, Finance & Risk Committee met four times in 2015. 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. From time to time the committee also met in camera with the Chief Financial Officer. 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.

You can find more information about the committee as required under NI 52-110 under Audit, Finance & Risk Committee, including the Terms of Reference of the committee, the composition and independence of the committee, relevant education and experience of each member of the committee, in our annual information form for the year ended December 31, 2015. Copies are available on our website (www.enbridge.com) and on SEDAR (www.sedar.com). You can also request a copy from the Corporate Secretary.

Corporate Social Responsibility Committee

Chair:    James J. Blanchard
Members:    V. Maureen Kempston Darkes, George K. Petty and Dan C. Tutcher

Responsibilities

The Corporate Social Responsibility Committee is generally responsible for assessing our guidelines, policies, procedures and performance related to corporate social responsibility (CSR) and reviewing our reporting in this area. The Corporate Social Responsibility Committee provides oversight on performance in respect of CSR matters on an enterprise-wide level.

The Corporate Social Responsibility Committee is responsible for reviewing, approving or recommending to the Board policies, practices and priorities to guide Enbridge’s performance on CSR matters which include:

 

  human rights;
  public awareness and consultation;
  environmental stewardship and responsibility;
  external communications;
  government relations;
  stakeholder and indigenous peoples relations; and
  community investment.

The Corporate Social Responsibility Committee is also responsible for providing oversight on performance measures and outcomes on key social, environmental and governance issues, as well as our methods of communicating CSR and related policies. It monitors our reporting and disclosure on CSR matters and receives regular reports from management on how the company is complying with public and corporate requirements on sustainable development issues. It monitors developments on issues that are material to the company’s

 

 

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credibility and reputation and provides oversight on how we are responding to new and emerging social and environmental challenges. The CSR Committee assesses the company’s progress on integrating social and environmental factors into business decision-making and may, depending on the nature of the matter, consider results from reviews on significant issues or incidents that fall within its mandate.

The Corporate Social Responsibility Committee has approved the use of the Global Reporting Initiative (GRI) reporting guidelines for monitoring and reporting our sustainability performance and ensuring our approach to stakeholder engagement is rigorous, transparent and inclusive. Enbridge’s Chief Sustainability Officer (CSO) has a reporting relationship with this committee. Part of the CSO’s role is to enhance the Board’s knowledge.

2015 overview

The Corporate Social Responsibility Committee carried out the following activities as part of its 2015 work plan.

Assessing CSR guidelines, policies and procedures

 

  received updates on CSR issues, impacts, risks and trends;
  reviewed and approved CSR commitments, objectives and strategies;
  evaluated management systems for accountability on CSR performance;
  received management’s reports on:
    regulatory issues and compliance as well as government relations activities; and
    reduction of greenhouse gas (GHG) emissions on an output basis; and
  discussed and approved the corporate risk assessment report as it pertains to the committee’s mandate; and
  reviewed and approved the committee’s terms of reference.

Reviewing our work with government, stakeholders and regulators

 

  reviewed management’s consultation and engagement with indigenous peoples groups;
  received management’s updates on activities involving government relations;
  reviewed and discussed new strategies and procedures being introduced by management to ensure that corporate and regulatory requirements for stakeholder engagement are met across all projects and operations, that feedback from stakeholders is being understood and responded to on a consistent basis;
  received management updates on local social and economic inclusion;
  received updates related to key projects including community consultation, indigenous peoples, and progress on meeting social, economic and environmental conditions for the project issued by the regulator;
  received reports on community investments, including donations to charitable organizations and operating communities; and
  reviewed company initiatives on community safety, public awareness, emergency preparedness and emergency responder training.

Monitoring and reporting CSR performance

 

  discussed reports on how the company’s Gas Pipelines, Liquids Pipelines, Gas Distribution and Major Projects business units are managing sustainability and CSR issues and risks;
  reviewed disclosure on enterprise-wide social, environmental and governance performance in the 2014 annual CSR Report issued in March 2015, and the development of new data and content for the 2015 annual CSR Report to be issued in 2016;
  reviewed results from 2015 disclosures to the Dow Jones Sustainability Index and to the CDP on carbon and water and reviewed results from CSR Materiality Assessment conducted in 2014 with key internal and external stakeholders; and
  monitored developments related to climate change and how the company is responding to changing new regulatory and market dynamics on climate and energy issues, including the implications of new provincial, state and management policies in the US and Canada on GHG emissions reduction and the management of climate risk as well as results from the 2015 UN Summit on Climate Change.

Awards and recognition

The Corporate Social Responsibility Committee supports our continuing commitment to CSR initiatives, which has resulted in Enbridge receiving significant positive external recognition in recent years, including the following awards in 2015:

Corporate Sustainability

  Global 100 List of the Most Sustainable Companies in the World: This award, from Corporate Knights, recognizes Enbridge as being one of the most sustainable companies in the world. Enbridge, which came in 64th place, was one of 12 Canadian companies on the list.
  Best 50 Corporate Citizens in Canada: This award, from Corporate Knights, recognizes Enbridge as being one of the best 50 corporate citizens in Canada. Enbridge came in sixth place.

 

 

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  Dow Jones Sustainability World and North America Indices: The Dow Jones Sustainability Index placed Enbridge on both its North America Index—which is based on the top 20 percent of corporate sustainability performers—and its World Index—which is based on the top 10 percent, from an original grouping of nearly 3,400 companies.

Community Investment

  United Way Spirit of Community Award: United Way Toronto presented Enbridge Gas Distribution with its inaugural Spirit of Community Award, which recognizes creativity, innovation and overall commitment to building a better city for everyone.

Financial and Sustainability Reporting

  Corporate Reporting Award, Chartered Professional Accountants of Canada (CPA Canada): The Corporate Reporting Awards, presented annually by CPA Canada, recognize the best reporting practices in the country. Enbridge received the 2014 Award of Excellence for Corporate Reporting in the ‘Utilities and Pipelines/Real Estate’ industry sector.

Aboriginal Relations

  Silver Level, Progressive Aboriginal Relations (PAR) Certification (2012 – 2014), Canadian Council for Aboriginal Business (CCAB): The CCAB is a national business organization whose members include Aboriginal businesses and Aboriginal community-owned economic development corporations operating in Canada. In 2015, the CCAB recertified Enbridge’s silver-level certification under the PAR program, which recognizes and supports continuous improvement in Aboriginal relations.

Governance

In November 2015, the Corporate Social Responsibility Committee reviewed its terms of reference and determined its mandate was appropriate and that it had fulfilled all of its responsibilities under its terms of reference.

The Corporate Social Responsibility Committee met four times in 2015 and 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.

Governance Committee

Chair:    Dan C. Tutcher
Members:    James J. Blanchard and Rebecca B. Roberts

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.

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

 

 

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new talent with criteria for relevant expertise, senior management experience or other qualifications. See Identifying new candidates and Diversity beginning on page 30 for more information.

The Governance Committee manages the annual performance review of the Board. See Board evaluation beginning on page 29 for more information.

Compensation

The Governance Committee is responsible for reviewing and setting directors’ compensation. There was no increase in directors’ compensation in 2015. See Director compensation discussion and analysis beginning on page 41 for more information.

2015 overview

The Governance Committee carried out the following activities as part of its 2015 work plan:

 

  reviewed proxy voting recommendations and annual meeting voting results for the 2015 meeting;
  approved our statement on corporate governance practices for this circular;
  received reports on employee and Director compliance with the statement on business conduct;
  reviewed the qualifications and independence of all members of the Board;
  reviewed management’s reports on our director and officer liability protection program and management information systems;
  reviewed the Board composition plan and skills matrix for the current Board and analyzed the implications our strategic plan has on Board composition;
  actively participated in a process to identify candidates for Board succession purposes;
  reviewed the composition of the Board committees; and
  conducted the Board evaluation process for 2015 and reviewed and reported to the Board on the results of the various assessments.

Governance

In November 2015, the Governance Committee reviewed its mandate, as set out in the terms of reference, and assessed its performance. The committee approved minor amendments to its terms of reference, the majority of which were made in connection with the completion of the drop down of Enbridge’s Canadian Liquids Pipeline assets and certain Canadian renewable power generation assets to Enbridge Income Partners LP, in which Enbridge Income Fund has an indirect interest (the Canadian Restructuring Plan). The members of the committee are satisfied that the mandate is appropriate and that it met all of its responsibilities in 2015.

The Governance Committee met four times in 2015 and held in camera meetings without 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.

Human Resources & Compensation Committee

Chair:    Catherine L. Williams
Members:    Marcel R. Coutu, Charles W. Fischer and V. Maureen Kempston Darkes

The HRC Committee assists the Board by providing oversight and direction on human resources strategy, policies and programs for the named executives (as defined on page 46 of this circular), senior management and our broader employee base. This includes compensation, pension and benefits as well as talent management, succession planning, workforce recruitment and retention.

Compensation governance and risk assessment

The HRC Committee oversees the identification of people-related risk and the associated response planning as part of the Corporate Risk Assessment process and recommends acceptance of the results to the Board. Since 2002, Mercer (Canada) Limited (Mercer), an independent Advisor, has provided guidance to the HRC Committee on compensation matters to ensure Enbridge’s programs are appropriate, market competitive and continue to meet intended goals. In addition, the HRC Committee is responsible for overseeing the company’s compensation programs from a risk perspective. They accomplish this through the use of a comprehensive risk framework designed to ensure that our programs do not encourage individuals to take inappropriate or excessive risks, that risk mitigating plan features are embedded in the design and that all compensation programs are managed within strong governance and controls processes that are regularly evaluated and reviewed.

Succession planning and executive development

The HRC Committee reviews the succession plan for the position of Chief Executive Officer and other key senior officers, and long-range planning for executive development, succession and retention of critical talent to ensure leadership sustainability and continuity throughout the organization.

 

 

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Every year the HRC Committee conducts a thorough review of the current succession plan and the status of development and retention plans for individual candidates who have been identified for all senior executive positions, including the position of Chief Executive Officer.

The HRC Committee met with the President & Chief Executive Officer to discuss his views on the executive leadership team and potential succession scenarios that included both planned transitions as well as emergency situations related to illness, disability or other unplanned absences. The HRC Committee also met in camera, without Mr. Monaco, to discuss the candidates he had identified as his possible successors.

Succession plans were reviewed in detail for the entire Executive Leadership Team and in-depth discussions were held regarding the range of possible external candidates and development of internal candidates, including the enactment of planned moves at the executive level to new or modified roles for developmental purposes.

The HRC Committee also reviewed the bench strength and succession depth several layers below the Executive Leadership Team to ensure there are no significant gaps and that succession plans remain robust.

The HRC Committee continued to monitor the progression of a comprehensive multi-year, enterprise-wide, leadership development program that was introduced in 2014 and continued to identify and track high potential employees with a view to succession planning and to encourage and support an increased number of opportunities for interaction of high potential candidates with Board members.

The HRC Committee believes executive development and succession is an area of high importance and will continue to receive formal updates of development plan progress at each committee meeting. This was done throughout 2015 and will continue for the foreseeable future.

2015 overview

The HRC Committee:

 

  reviewed the company’s leadership development and talent management 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 the TSX60 and TSX Composite Index over several time periods, and used these assessments to determine 2015 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 2015 to the Board, including his base salary and short-term, medium-term and long-term incentive awards;
  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 2015;
  reviewed and approved changes to the list of North American peer companies utilized for executive compensation benchmarking purposes for 2016 application;
  reviewed competitive market analysis data, including emerging market practices and programs, provided by independent compensation advisors (Mercer), to inform both the President & Chief Executive Officer and other executive officer compensation recommendations;
  approved the annual general salary increase recommendations;
  reviewed and approved the annual Benefit and Regulatory Compliance Report as part of the pension governance process, including the funding status;
  reviewed and approved amendments to the Statement of Investment Policies and Procedures for the Enbridge and Enbridge Gas Distribution registered pension plans;
  to align with the successful execution of the Canadian Restructuring Plan and for application in 2016:
    reviewed and approved changes to the performance peer group, utilized to assess relative financial performance within the compensation plans;
    approved a change to the financial metric for the company portion of the short-term incentive plan from adjusted earnings per share to available cash flow from operations per share;
    approved a change to the metrics for the performance share unit plan from adjusted earnings per share to available cash flow from operations per share (over a three-year period) and from price/earnings ratio to risk-adjusted total shareholder return;
    reviewed and approved a change to the payout curve design for the company portion of the short-term incentive program to be implemented in 2016 to strengthen the alignment between payout and performance;
  reviewed and approved the corporate risk assessment report as it pertains to the committee’s mandate;
  recommended officer appointments to the Board for ratification; and

 

 

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  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.

The HRC Committee also reviewed the strategies and programs designed to attract, develop and retain employees, recognizing our plans for growth and increasing levels of retirement eligibility.

Awards and recognition

Enbridge was recognized in 2015 as one of Canada’s Top 100 Employers (MediaCorp Canada), one of Alberta’s Top Employers (MediaCorp Canada) and as one of the Financial Post’s 10 Best Companies to Work For. Enbridge was also named one of Canada’s Best Diversity Employers (MediaCorp).

Governance

In November 2015, the HRC Committee reviewed its mandate, as set out in the terms of reference, and assessed its performance. The members of the committee are satisfied that the mandate is appropriate and that it met all of its responsibilities in 2015.

The HRC Committee met six times in 2015. It held in camera meetings without management present at each meeting with Mercer and then met on its own in camera without management or Mercer present. Before each meeting, the chair of the committee met with executive management to discuss the agenda items for the meeting and any significant issues.

Safety & Reliability Committee

Chair:    Charles W. Fischer
Members:    V. Maureen Kempston Darkes, Rebecca B. Roberts and Catherine L. Williams

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;
  reviewing the policies followed by management in the conduct of operations directed at preventing injury and adverse environment 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 operational risk management and 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 operational risk management;
  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.

 

 

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2015 overview

The Safety & Reliability Committee carried out the following activities during 2015:

 

  reviewed and approved the corporate risk assessment report as it pertains to the committee’s mandate;
  provided oversight of, and received updates on, the company’s operational risk management progress;
  received updates on the implementation of an enterprise-wide safety and risk management framework that has been developed by management to ensure that the company identifies, prioritizes and effectively prevents and mitigates risks across the enterprise;
  received the operational risk and annual safety & environment reports from the Gas Distribution, Gas Pipelines & Processing, Liquids Pipelines, Major Projects and Green Power and Transmission business units;
  received operational risk management plan and safety perception survey updates from management, including approval of planned external assessments;
  received reports from management regarding safety culture development;
  received reports and updates from management regarding incidents that occurred in 2015 during the committee’s quarterly meetings along with progress reports on related action plans and corrective action measures undertaken;
  received updates on enterprise security, including cyber security, as well as in respect of regulatory and compliance matters;
  received reports from the Chief Compliance Officer about all significant complaints received on matters within the committee’s mandate; and
  received quarterly updates on the enterprise initiatives and management system improvements focused on improvement in the areas of safety and reliability, which led to record performance in the areas of employee and contractor injury frequency and release volumes across the organization in 2015.

Governance

The committee reviewed its terms of reference. The members of the committee are satisfied that its mandate is appropriate and that it met all of its responsibilities in 2015.

The Safety & Reliability Committee met four times in 2015 and 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.

Shareholder outreach

Enbridge engages our shareholders on an ongoing basis and in a variety of ways, tailored to the specific needs of each shareholder group. Our main shareholder events are our annual investor days in Toronto and New York, which provide an opportunity for shareholders to obtain an update on the company outside of our quarterly earnings presentations. These events, along with our annual meeting of shareholders, quarterly earnings presentations and guidance call presentation, are webcast so that they are accessible to a broad audience of investors and are available on our website for a period of 12 months. Our executive team also meets with shareholders throughout the year by way of investor roadshows in a variety of cities. To further our investor outreach, we also participate in several investor conferences.

A list of upcoming and past events and presentations, including presentation slides and webcasts, where available, 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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3. Compensation

This next section discusses director and executive compensation at Enbridge, including our decision-making process, pay for performance, share ownership requirements and 2015 pay decisions.

 

DIRECTOR COMPENSATION DISCUSSION AND ANALYSIS      41   

Philosophy and approach

     41   

Share ownership

     41   

Compensation components

     41   

2015 director compensation results

     43   

Summary compensation table

     43   

Incentive plan awards

     43   

Share-based compensation

     44   

Change in equity ownership

     45   
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS      46   

Named executive officers

     46   

Executive summary

     46   

Compensation philosophy

     47   

Annual decision-making process

     50   

Executive compensation design and 2015 decisions

     54   

Base salary

     54   

Short-term incentive

     54   

Medium- and long-term incentives

     58   

Retirement benefits

     64   

Other benefits

     66   

Compensation changes in 2016

     66   

Total direct compensation for named executives

     67   

Summary compensation table

     73   

Executive compensation and shareholder return

     75   

Incentive plan awards

     76   

Additional stock option information

     77   

Compensation governance

     79   

Termination of employment and change of control arrangements

     82   

Exchange rates

     84   

 

 

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DIRECTOR COMPENSATION DISCUSSION AND ANALYSIS

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 making decisions and carrying out their duties while serving on our Board.

The Governance Committee uses a peer group of companies to set the annual retainers for our Board and targets director compensation at about the 50th percentile. The HRC Committee uses the same peer group to determine executive compensation. See page 51 for more information about our peer group and how we benchmark executive compensation.

The Governance Committee reviews the directors’ compensation plan every year, with assistance from management. Every second year a formal review by an external consultant is undertaken. The next formal review by an external consultant is scheduled for 2017. Each year, as part of this review, the committee considers the time commitment and experience required of members of our Board and the director compensation paid by a group of comparable public companies when it sets the compensation. The committee also reviews the compensation plan to make sure the overall program is still appropriate and reports its findings to the Board.

 

Share ownership

We expect directors to own Enbridge shares so they have an ongoing stake in the company and are aligned with the interests of shareholders. The share ownership guideline is three times the annual Board retainer. The annual Board retainer is $235,000. Directors must now hold at least three times their annual Board retainer, or $705,000, in DSUs or Enbridge shares and meet that requirement within five years of becoming a director on our Board. DSUs are paid out when a director retires from the Board. They are redeemed for cash, based on the weighted average of the closing price of common shares on the TSX for the last five trading days before the redemption date, multiplied by the number of DSUs the director holds. Directors may not engage in equity monetization transactions or hedges involving securities of Enbridge (see Hedging policy on page 82 of this circular).

   

 

About DSUs

 

A deferred share unit (DSU) is a notional share that has the same value as one Enbridge common share. Its value fluctuates with variations in the market price of Enbridge shares.

 

DSUs do not have voting rights but they accrue dividends as additional DSUs, at the same rate as dividends paid on our common shares.

 

 

If a decrease in the market value of our common shares results in a director no longer meeting the share ownership requirements, we expect him or her to buy additional common shares in order to satisfy the minimum threshold.

   

Compensation components

Our Directors’ compensation plan has four components:

 

  an annual retainer;
  an annual fee if he or she serves as the Chair of the Board or chair of a Board committee;
  a travel fee for attending Board and Board committee meetings; and
  reimbursement for reasonable travel and other out-of-pocket expenses relating to his or her duties as a director.

We do not have meeting attendance fees.

Our Directors’ compensation plan has been in effect since 2004 and was revised in 2010 and 2013. The table below shows the fee schedule for directors in 2015. Directors are paid quarterly. If their principal residence is in the US, they receive the same face amounts in US dollars. Mr. Monaco does not receive any director compensation because he is our President & Chief Executive Officer and is compensated in that role.

 

 

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Directors who also serve as a director or trustee of one of our subsidiaries or affiliates may also receive an annual retainer and meeting and travel fees for attending those meetings.

Directors can receive their retainer in a combination of cash, Enbridge shares and DSUs, but they must receive a minimum amount in DSUs, as shown in the table below. Travel fees are always paid in cash.

 

     Annual amount($)        Cash   Enbridge
shares
  DSUs        Cash   Enbridge
shares
  DSUs
     Compensation component        before minimum share ownership        after minimum share ownership

Board Retainer

  235,000   LOGO           LOGO        

Additional retainers

                 

Chair of the Board retainer

  260,000                

Board committee chair retainer

      Up to 50%   Up to 50%   50% to 100%     Up to 75%   Up to 75%   25% to 100%

– Audit, Finance & Risk

  25,000                  

– Human Resources & Compensation

  20,000                  

– Safety & Reliability

  15,000                  

– Corporate Social Responsibility

  10,000                  

– Governance

  10,000                              

Travel fee

  1,500           100%           100%    

Once they reach the minimum share ownership level, directors can choose to receive between one quarter and their entire retainer in DSUs, with the balance in cash, Enbridge shares or a combination of both, according to a percentage mix they choose. They must take at least 25% of the retainer in DSUs. Directors are allocated the Enbridge shares based on the weighted average of the closing price of the Enbridge shares on the TSX for the five trading days immediately preceding the date that is two weeks prior to the date of payment.

The table below shows the breakdown of each director’s annual retainer for the year ended December 31, 2015.

 

Director    Cash
(%)
     Enbridge
shares
(%)
     DSUs
(%)
 

David A. Arledge

     75                 25   

James J. Blanchard

     50         25         25   

J. Lorne Braithwaite1

     75                 25   

Marcel R. Coutu

     75                 25   

J. Herb England

             75         25   

Charles W. Fischer

     50                 50   

V. Maureen Kempston Darkes

     25         50         25   

Al Monaco2

                       

George K. Petty

                     100   

Rebecca B. Roberts3

     50                 50   

Charles E. Shultz1

     75                 25   

Dan C. Tutcher

                     100   

Catherine L. Williams

             50         50   

 

1. Messrs. Braithwaite and Shultz did not stand for re-election in 2015 and retired from the Board on May 6, 2015.
2. Mr. Monaco does not receive any compensation as a director of Enbridge because he is our President & Chief Executive Officer.
3. Ms. Roberts was appointed to the Board effective March 15, 2015.

 

 

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2015 director compensation results

Summary compensation table

The table below shows the total compensation paid to or accrued by our directors for the year ended December 31, 2015. All Enbridge shares and DSUs vested at the time of the grant.

 

              Share-based2 awards      All other compensation      Total  
    

Fees
earned1
(cash)

($)

     Enbridge shares3      DSUs4      Subsidiary
fees5
     Travel
fees
     Dividends on DSUs6         
Director       (#)      ($)      (#)      ($)      ($)      ($)      (#)      ($)      ($)  

David A. Arledge7

     371,250                         3,069         123,750                 10,500         38         1,463         506,963   

James J. Blanchard7

     120,000         1,579         63,657         1,519         61,250                 10,500         18         724         256,131   

J. Lorne Braithwaite8

     67,304                         251         14,688         8,375         4,500         75         3,903         98,770   

Marcel R. Coutu

     176,250                         1,110         58,750         14,625         4,500         9         474         254,599   

J. Herb England7

             4,835         194,929         1,612         65,000         375,802         10,500         20         769         647,000   

Charles W. Fischer

     125,000                         2,362         125,000         88,500         4,500         30         1,506         344,506   

V. Maureen Kempston Darkes

     58,750         2,219         117,422         1,110         58,750                 10,500         14         708         246,130   

Al Monaco9

                                                                               

George K. Petty7

                             5,828         235,000                 10,500         73         2,778         248,278   

Rebecca B. Roberts7, 10

     93,021                         2,372         93,396         39,250         7,500         20         768         233,935   

Charles E. Shultz8

     67,304                         251         14,688         2,448         4,500                         88,940   

Dan C. Tutcher7

                             6,076         245,000                 9,000         75         2,897         256,897   

Catherine L. Williams

             2,408         127,430         2,409         127,500         33,250         4,500         30         1,537         294,217   

 

1. The cash portion of the retainers paid to the directors.
2. The portion of the retainer received as DSUs and Enbridge shares.
3. Directors may also receive additional Enbridge shares as part of our Dividend Reinvestment and Share Purchase Plan, which is available to all shareholders.
4. We pay directors quarterly. The value of the Enbridge shares and DSUs is based on the weighted average of the closing price of Enbridge shares on the TSX for the five trading days immediately preceding the grant date each quarter. The weighted average Enbridge share prices were $58.48, $60.24, $53.78 and $42.93 for the first, second, third and fourth quarters of 2015.
5. Includes the annual retainers paid to each of Ms. Roberts and Ms. Williams and Messrs. Braithwaite, Coutu, England, Fischer and Shultz as a director or trustee of an Enbridge subsidiary or affiliate, and travel fees for attending those meetings. Ms. Roberts received US$39,250 for serving as a director and member of the audit committees of Enbridge Energy Company, Inc., and Enbridge Energy Management, L.L.C. until her resignation from those boards on March 19, 2015. This face amount is shown in the summary compensation table above.
6. Includes dividend equivalents granted in 2015 on DSUs granted in 2015 based on the 2015 quarterly dividend rate of $0.465. Dividend equivalents vest at the time of grant.
7. These directors are paid the same face amounts in US$ because their principal residence is in the US.
8. Messrs. Braithwaite and Shultz did not stand for re-election in 2015 and retired from the Board on May 6, 2015.
9. Mr. Monaco does not receive any compensation as a director of Enbridge because he is our President & Chief Executive Officer.
10. Ms. Roberts was appointed to the Board effective March 15, 2015.

Incentive plans awards

We have not granted stock options (stock options or options) to directors since 2002. None of our non-employee directors hold any share-based awards that have not vested.

 

 

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Share-based compensation

The table below shows the breakdown in share-based compensation each director received each quarter in 2015.

 

Director   Enbridge
Shares1
    DSUs1     Q1
Dividends
on 2015
DSUs1
    Enbridge
Shares1
    DSUs1     Q2
Dividends
on 2015
DSUs1
    Enbridge
Shares1
    DSUs1     Q3
Dividends
on 2015
DSUs1
    Enbridge
Shares1
    DSUs1     Q4
Dividends
on 2015
DSUs1
 
    

$

(# shares)

   

$

(# units)

    $
(# units)
    $
(# shares)
    $
(# units)
    $
(# units)
    $
(# shares)
   

$

(# units)

   

$

(# units)

   

$

(# shares)

   

$

(# units)

   

$

(# units)

 

David A. Arledge2

         $

 

39,609

(677

  

                $

 

38,637

(641

  

  $

 

315

(5

  

         $

 

41,072

(764

  

  $

 

616

(12

  

         $

 

42,372

(987

  

  $

 

976

(21

  

James J. Blanchard2

  $

 

20,351

(348

  

  $

 

19,604

(335

  

         $

 

19,879

(330

  

  $

 

19,123

(317

  

  $

 

156

(2

  

  $

 

21,135

(393

  

  $

 

20,328

(378

  

  $

 

305

(6

  

  $

 

21,808

(508

  

  $

 

20,972

(489

  

  $

 

483

(10

  

J. Lorne Braithwaite3

         $

 

14,688

(251

  

                       $

 

1,290

(22

  

          

  
  $

 

1,300

(25

  

          

  
  $

 

1,312

(28

  

Marcel R. Coutu

         $

 

14,687

(251

  

                $

 

14,687

(244

  

  $

 

117

(2

  

         $

 

14,687

(273

  

  $

 

230

(4

  

         $

 

14,687

(342

  

  $

 

127

(3

  

J. Herb England2

  $

 

62,398

(1,067

  

  $

 

20,804

(356

  

         $

 

60,842

(1,010

  

  $

 

20,294

(337

  

  $

 

165

(3

  

  $

 

64,697

(1,203

  

  $

 

21,573

(401

  

  $

 

323

(6

  

  $

 

66,756

(1,555

  

  $

 

22,256

(518

  

  $

 

513

(11

  

Charles W. Fischer

         $

 

31,250

(534

  

                $

 

31,250

(519

  

  $

 

248

(4

  

         $

 

31,250

(581

  

  $

 

492

(10

  

         $

 

31,250

(728

  

  $

 

766

(16

  

V. Maureen Kempston Darkes

  $

 

29,356

(502

  

  $

 

14,687

(251

  

         $

 

29,336

(487

  

  $

 

14,687

(244

  

  $

 

117

(2

  

  $

 

29,363

(546

  

  $

 

14,687

(273

  

  $

 

231

(4

  

  $

 

29,364

(684

  

  $

 

14,687

(342

  

  $

 

360

(8

  

Al Monaco4

                                                                                   

George K. Petty2

         $

 

75,217

(1,286

  

                $

 

73,372

(1,218

  

  $

 

598

(10

  

         $

 

77,996

(1,450

  

  $

 

1,169

(23

  

         $

 

80,464

(1,874

  

  $

 

1,854

(40

  

Rebecca B. Roberts5

                              $

 

42,800

(710

  

                $

 

38,998

(725

  

  $

 

330

(6

  

         $

 

40,232

(937

  

  $

 

671

(14

  

Charles E. Shultz3

         $

 

14,687

(251

  

                                                                     

Dan C. Tutcher2

         $

 

78,418

(1,341

  

                $

 

76,495

(1,269

  

  $

 

623

(10

  

         $

 

81,315

(1,512

  

  $

 

1,219

(24

  

         $

 

83,888

(1,954

  

  $

 

1,933

(41

  

Catherine L. Williams

  $

 

31,871

(545

  

  $

 

31,875

(545

  

         $

 

31,866

(529

  

  $

 

31,875

(529

  

  $

 

253

(4

  

  $

 

31,837

(592

  

  $

 

31,875

(593

  

  $

 

501

(10

  

  $

 

31,854

(742

  

  $

 

31,875

(742

  

  $

 

782

(16

  

 

1. Directors are paid in Enbridge shares and DSUs quarterly. Their value is based on the weighted average of the closing price of the Enbridge shares on the TSX for the five trading days immediately preceding the grant date each quarter. DSUs dividends paid in 2015 on DSUs granted in 2015 are valued as of March 2, June 1, September 1 and December 1, 2015. The table below shows the grant dates, dividend dates and the weighted average Enbridge share price for each quarter in 2015. DSUs have been rounded to a whole number.

 

Quarter    DSU grant date      Dividend date      Weighted average Enbridge share
price for dividend grant
     Weighted average Enbridge share
price for DSU grant
 

Q1

     March 13, 2015         March 2, 2015         $57.90         $58.48   

Q2

     June 5, 2015         June 1, 2015         $58.93         $60.24   

Q3

     September 11, 2015         September 1, 2015         $51.26         $53.78   

Q4

     December 11, 2015         December 1, 2015         $46.84         $42.93   

 

2. These directors are paid in US$. The amounts they received have been converted to CA$ based on the Bank of Canada noon rate:

March 13, 2015: US$1 = CA$1.2803

June 5, 2015: US$1 = CA$1.2489

September 11, 2015: US$1 = CA$1.3276

December 11, 2015: US$1 = CA$1.3696

3. Messrs. Braithwaite and Shultz did not stand for re-election in 2015 and retired from the Board on May 6, 2015.
4. Mr. Monaco does not receive any compensation as a director of Enbridge because he is our President & Chief Executive Officer.
5. Ms. Roberts was appointed to the Board effective March 15, 2015.

 

 

Enbridge Inc. 2016 Management information circular        44


Table of Contents

Change in equity ownership

The table below shows the change in each director’s equity ownership from March 3, 2015 to March 8, 2016 and his or her status in meeting the share ownership requirements.

 

Director    Enbridge
shares(#)
    Enbridge
stock
options (#)
    DSUs(#)      Total
Enbridge
shares
and
DSUs (#)
    Market (at-risk)
value of equity
holdings ($)1
    Minimum share
ownership
required (3x
Board  retainer)2,3
($)
     Current
holdings
as a
multiple of
the Board
retainer
 

David A. Arledge

                

2016

     32,600               56,891         89,491        4,462,916        705,000         18.99   

2015

     32,600               51,700         84,300        4,882,656        705,000         20.78   

Change

                   5,191         5,191        (419,740                 

James J. Blanchard

                

2016

     15,881               108,638         124,519        6,209,763        705,000         26.42   

2015

     14,027               103,006         117,033        6,778,551        705,000         28.84   

Change

     1,854               5,632         7,486        (568,789                 

Marcel R. Coutu

                

2016

     29,400               1,607         31,007        1,546,319        705,000         6.58   

2015

     20,000               451         20,451        1,184,522        705,000         5.04   

Change

     9,400               1,156         10,556        361,797                    

J. Herb England

                

2016

     7,031               54,849         61,880        3,085,956        705,000         13.13   

2015

     2,120               51,172         53,292        3,086,673        705,000         13.13   

Change

     4,911               3,677         8,588        (717                 

Charles W. Fischer

                

2016

     11,250               21,941         33,191        1,655,235        705,000         7.04   

2015

     11,250               18,777         30,027        1,739,164        705,000         7.40   

Change

                   3,164         3,164        (83,929                 

V. Maureen Kempston Darkes

                

2016

     20,346               14,346         34,692        1,730,090        705,000         7.36   

2015

     17,765               12,705         30,470        1,764,822        705,000         7.51   

Change

     2,581               1,641         4,222        (34,732                 

Al Monaco3

                

2016

     374,780        2,593,700                374,780        18,690,279                  

2015

     192,201        2,761,300                192,201        11,132,282                  

Change

     182,579        (167,600             182,579        7,557,997                    

George K. Petty

                

2016

     1,894               72,192         74,086        3,694,669        705,000         15.72   

2015

     1,894               63,699         65,593        3,799,147        705,000         16.17   

Change

                   8,493         8,493        (104,478                 

Rebecca B. Roberts4

                

2016

     2,700               2,422         5,122        255,434        705,000         1.09   

2015

                                                   

Change

     2,700               2,422         5,122        255,434                    

Dan C. Tutcher

                

2016

     635,167               72,425         707,592        35,287,613        705,000         150.16   

2015

     659,173               63,679         722,852        41,867,588        705,000         178.16   

Change

     (24,006            8,746         (15,260     (6,579,975                 

Catherine L. Williams

                

2016

     39,029               32,261         71,290        3,555,232        705,000         15.13   

2015

     35,428               28,658         64,086        3,711,861        705,000         15.80   

Change

     3,601               3,603         7,204        (156,629                 

Total

                

2016

     1,170,078        2,593,700        437,572         1,607,650        80,173,506        

2015

     986,458        2,761,300        393,847         1,380,305        79,947,266        

Change

     183,620        (167,600     43,725         227,345        226,240                    

 

1. Based on the total market value of Enbridge shares and/or DSUs owned by the director, based on the closing price of $57.92 on the TSX on March 3, 2015 and $49.87 on March 8, 2016. These amounts have been rounded to the nearest dollar. Excludes stock options.
2. Each Director listed in the above table met the share ownership guideline by or before the applicable deadline. Directors must meet the share ownership guideline within five years of becoming a director on our Board. Ms. Roberts must meet the requirement by March 15, 2020.
3. Mr. Monaco does not receive any compensation as a director of Enbridge. He is only compensated for his role as President & Chief Executive Officer. He is required to hold at least five times his base salary in Enbridge shares as a member of management. Please see page 81 of this circular for information on his Enbridge share ownership as a multiple of his base salary.
4. Ms. Roberts was appointed to the Board effective March 15, 2015.
5. Messrs. Braithwaite and Shultz are not shown in the above table because they did not stand for re-election in 2015 and retired from the Board on May 6, 2015.

 

 

Enbridge Inc. 2016 Management information circular        45


Table of Contents

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

Named executive officers

For 2015, the Enbridge named executives are the following individuals:

 

  Al Monaco, President & Chief Executive Officer;
  John K. Whelen, Executive Vice President & Chief Financial Officer;
  D. Guy Jarvis, President, Liquids Pipelines;
  David T. Robottom, Executive Vice President & Chief Legal Officer; and
  C. Gregory Harper, President, Gas Pipelines & Processing.

 

Executive summary

Strategic focus

In 2015, Enbridge continued to focus on the four key priorities in its strategic plan:

   1.     drive safety and operational reliability;

   2.     execute on its growing slate of commercially secured projects;

   3.     secure the longer-term future; and

   4.     maintain the foundation.

Compensation philosophy

Performance is foundational to the executive compensation program and payouts are strongly aligned to the achievement of Enbridge’s strategic priorities. Compensation is typically targeted at median within the markets where Enbridge competes, with performance driving “at risk” incentive payouts up or down accordingly. The vast majority of executive compensation is considered “at risk” because its value is based on specific performance criteria and payout is not guaranteed.

Operational and financial performance metrics are used for the short-term incentive plan while key financial performance metrics are used for the medium- and long-term incentive plans. These programs are designed to motivate management to safely and efficiently operate the business with a focus on the longer term, while providing the superior returns that shareholders expect.

Performance highlights for 2015

Enbridge common shares closed at $46.00 on the TSX on December 31, 2015, resulting in a total shareholder return of negative 20% in 2015, or 12% below the S&P/TSX Composite Index . However, over the past 10 years Enbridge’s total shareholder return has exceeded the S&P/TSX Composite Index by an average of 9% per year.

The North American oil and gas industry, including the midstream sector, was a challenging environment in 2015, experiencing significant declines in commodity prices that resulted in industry-wide share price erosion. Despite this difficult operating environment, Enbridge was able to increase adjusted earnings per share (EPS) by 16% and available cash flow from operations (ACFFO) by 23%, while maintaining excellent safety and operational performance.

 

 

Enbridge Inc. 2016 Management information circular        46


Table of Contents

Key compensation decisions in 2015

In 2015, taking into account company performance during the year, the following key compensation decisions were made for the named executives:

 

Program Component   CEO   Other Named Executives    Rationale

Base pay adjustments1

  12% increase   2.5% to 3.9% increases   

   CEO: to better align positioning relative to competitive market

   Other Named Executives: to maintain competitive positioning

Short-term incentive payments2

 

137% of base pay

(target of 100%)

 

82% to 94% of base pay

(targets of 60% to 65%)

  

   Reflects a company multiplier of 1.20, business unit multipliers ranging from 1.34 to 1.63 and individual multipliers ranging from 1.60 to 1.90

Medium-term incentive awards3

 

249% of base pay

(target of 115%)

 

70% to 154% of base pay

(targets of 70% to 110%)

  

   CEO award recognizes successful strategic leadership of Enbridge’s financial restructuring, and to better align competitive positioning relative to competitive market

   Mr. Whelen received a larger grant to compensate for his ineligibility for the 2012 performance stock option grant

   Mr. Jarvis received an adjustment to his award to compensate for the target change that occurred since the 2012 performance stock option grant

Long-term incentive awards4

 

114% of base pay

(target of 115%)

 

31% to 146% of base pay

(targets of 30% to 79%)

  

   Mr. Whelen and Mr. Jarvis received an adjustment to their awards to compensate for eligibility and long-term incentive target changes that occurred since the time of the 2012 performance stock option grant

 

  1. See page 54 for details.
  2. See page 54 for details.
  3. See page 59 for details.
  4. See page 62 for details.

Pay for performance

Over a five-year period ending December 31, 2015, growth in average annualized total compensation for named executives remained largely flat. At the same time, an initial investment in Enbridge common shares at the beginning of the five-year period would have returned 90% (relative to a five-year return of 12% for a comparable investment in the S&P/TSX Composite index).

Compensation philosophy

Approach to executive compensation

Enbridge’s approach to executive compensation is set by the HRC Committee and approved by the Board. These programs are designed to accomplish three objectives:

 

  attract and retain a highly effective executive team;
  align executives’ actions with Enbridge’s business strategy and the interests of Enbridge shareholders and other stakeholders; and
  reward executives for short-, medium- and long-term performance.

Alignment with company strategy

Enbridge’s vision is to be the leading energy delivery company in North America.

 

Central to achieving that vision is a relentless focus on safety, operational reliability and protection of the environment to ensure that the needs of all stakeholders are met, and that Enbridge continues to be a good citizen within the communities where we live and operate.

   

 

Driving safety and operational reliability is Enbridge’s number one priority.

 

 

 

Enbridge Inc. 2016 Management information circular        47


Table of Contents

The following are Enbridge’s top four priorities:

 

  uncompromising drive for safety and operational reliability; failing to adhere to this priority means the outcomes set out in the remainder of the strategic plan are at risk;
  execute on a large slate of commercially secured projects through a focus on project management and preserving financial strength and flexibility;
  secure the longer-term future by strengthening core businesses and developing new platforms for growth and diversification; and
  uphold the values of Integrity, Safety and Respect; shaping, promoting and protecting Enbridge’s reputation; and attracting, retaining and developing our people.

Enbridge’s executive compensation programs are aligned with the achievement of these strategic priorities and are designed to link payouts to those outcomes. They motivate management to deliver exceptional value to Enbridge shareholders through strong corporate performance and investing capital in ways that minimize risk and maximize return, while always supporting the core business goal of delivering energy safely and reliably.

Management is committed to delivering steady, visible and predictable results, and operating assets in an ethical and responsible manner.

Guiding policies

 

   
ü    Enbridge does:   ×    Enbridge does not:
Use a pay-for-performance philosophy whereby the majority of compensation provided to executives is “at risk” and dependent on pre-defined performance variables that reflect operational and financial priorities defined in the Strategic Plan   Pay out incentive programs when unwarranted by performance
Have a compensation structure that reflects a blend of short-, medium- and long-term incentive awards, and that is linked to business plans for the respective time frame to directly tie results to rewards   Count performance stock units or unexercised stock options toward stock ownership requirements
Incorporate risk management principles into all decision-making processes and ensure compensation programs do not encourage inappropriate or excessive risk taking by executives   Allow stock option grants below 100% fair market value or re-price underwater options
Regularly review its executive compensation programs through third-party consultants to ensure the programs continue to support shareholder interests and regulatory compliance, and are aligned with sound principles of risk management and governance   Include non-performance-based restricted stock units in the executive compensation pay mix
Use both proactive/preventative and incident-based safety and operational metrics that are directly linked to the short-term incentive of every employee to reinforce the critical importance of safety, system reliability, and environmental performance   Implement employment agreements with single-trigger voluntary termination rights in favour of executives
Have meaningful stock ownership requirements that align the interests of executive officers with those of Enbridge shareholders   Permit hedging of Enbridge securities
Benchmark executive compensation programs against a group of similar companies in Canada and the US to ensure that executives are rewarded at a competitive level   Grant, renew or extend any loans to directors or senior executives
Have an incentive compensation clawback policy   Provide stock options to directors who are not full-time employees

 

 

Enbridge Inc. 2016 Management information circular        48


Table of Contents

Pay for performance

Performance is the cornerstone of Enbridge’s executive compensation programs. The Board reviews Enbridge’s business plans over the short, medium and long term and the HRC Committee ensures the compensation programs are linked to these time frames. This focuses management on delivering value to Enbridge shareholders not only in the short term, but also continued performance in the long term.

 

Relevant corporate and business unit performance measures are established for the short-term incentive plan that focus on the critical safety, system reliability, environmental and financial aspects of the business. In 2015, the corporate performance measure was based on adjusted earnings per share (EPS) relative to an externally communicated guidance range, while safety and operational reliability were key measures across all business units.      

Performance is foundational to Enbridge’s executive compensation programs; incentive compensation plans incorporate operational and financial performance conditions.

 

The performance measures for the medium- and long-term incentive plans focus on overall corporate performance aligned with Enbridge shareholder expectations for earnings growth and total shareholder return.

When assessing performance, the HRC Committee considers both objective pre-defined performance metrics as well as qualitative factors not captured in the formal metrics. For example, a decision to complete a certain acquisition may have longer-term strategic benefits that may not be reflected in the short-term performance metrics. Also playing a role are a number of market-based and earnings-based key performance indicators that compare Enbridge’s results to a peer group and to the broader market over a one- to 10-year time horizon. Therefore, the assessment of overall performance is based on a combination of the pre-defined performance metrics, the key performance indicators, as well as the qualitative aspects of management’s responsibilities.

At risk compensation

 

The chart below shows the target compensation mix for the President & Chief Executive Officer and the average for the other named executives. The short-, medium- and long-term incentives are considered to be “at risk” because their value is based on specific performance criteria and payout is not guaranteed.    

The vast majority of compensation for Enbridge’s President & Chief Executive Officer and other named executives is considered “at risk”.

 

In 2015, 81% of the target total direct compensation for the President & CEO, and an average of 74% for the remaining named executive officers, was at risk, directly aligning corporate, business unit and individual performance with the interests of Enbridge shareholders. For details on targets for the incentive programs, see pages 55 and 59.

 

 

LOGO

Importance of operational performance

Operational performance is central to assessing the overall performance of an organization. At Enbridge, delivering on a commitment to drive safety and operational reliability means:

 

  striving for and maintaining industry leadership in safety (public, personal and process);
  ensuring the reliability and integrity of Enbridge pipelines and facilities; and
  protecting the environment.

 

 

Enbridge Inc. 2016 Management information circular        49


Table of Contents

Our short-term incentive program is intended to reinforce Enbridge’s number one priority of driving safety and operational reliability and the associated design provides alignment in two ways:

 

    all business units (including the corporate office) incorporate safety, system reliability/integrity, and environmental performance metrics into short-term incentive scorecards. See page 56 for examples of these metrics; and

    all employees (including the named executives) are required to have safety objectives incorporated into their individual performance goals, with a minimum weighting of 10%.

       

Every Enbridge employee is required to have safety objectives incorporated into the individual performance goals tied to their short-term incentive.

 

Executives are expected to support the safety culture by conducting site visits at both field and office locations to discuss the importance of safety, make safety observations and solicit any safety concerns from employees and contractors. The Board of Directors firmly supports this activity and participates in site visits where directors have an opportunity to speak to employees directly to discuss safety processes and procedures and get their perspective on safety at Enbridge. There were 155 executive/director site visits conducted across the enterprise in 2015.

Annual decision-making process

The HRC Committee reviews and approves the compensation plans and pay levels for all the named executives except the President & Chief Executive Officer. The HRC Committee reviews and recommends the compensation plans and pay level for the President & Chief Executive Officer to the Board.

The table below shows the process by which compensation decisions are made.

 

 

   

Planning and research

 

  è  

Performance assessment and
recommendations

 

  è  

Decision-making and approvals

 

   
                                 
   

Independent
compensation
consultant

 

  è   Management       Management   è   HRC Committee       HRC Committee   è   HRC Committee
Chair and Chair
of the Board
  è   Board of
Directors
   
 

  market analysis and benchmarking

   

  set compensation targets

  set objectives:

- corporate

- business unit

- individual

  define key metrics and other strategic priorities

   

  performance assessments:

- CEO self- assessment

- assessment of each named executive

   

  review corporate, business unit and individual performance

  assess business environment and market performance

  review historical compensation

  consider use of discretion

   

  approve compensation decisions for the named executives (except the CEO)

  approve compensation targets and objectives set by Management

  recommend CEO compensation to the Board

   

  review corporate and CEO performance

  solicit feedback from all Board members

   

  final approval of CEO compensation

 

Benchmarking to peers

Total direct compensation for the named executives is managed within a framework that involves input and consideration by the CEO and the HRC Committee, with Mercer (Canada) Limited (Mercer) providing independent advisory support. The competitiveness of this framework is based on peer group market data extracted from third-party compensation surveys and publicly disclosed executive compensation information for comparable benchmark roles at peer companies. The market data is considered from several perspectives including organization size and industry sector (pipeline, energy and utility criteria).

As the responsibilities of Enbridge’s named executives are primarily North American in scope, equally-weighted Canadian and US peer groups are determined and used for executive compensation benchmarking.

Peer group determination

Enbridge’s compensation benchmarking peer group is reviewed annually. The peer group for 2015 remains unchanged from 2014, with the exception of the removal of Talisman Energy Inc. which was acquired by another company in 2015. Enbridge’s peer group was developed based on an initial selection of companies of similar size (between 50% and 200% of enterprise value) and type of business, with additions or deletions to best reflect the organizations with which Enbridge competes for customers, capital (including risk profile) and executive talent.

The Canadian peer companies identified include a broader range of industries than the US peers, including large pipeline, energy, utility and railway companies that are similar to Enbridge in size (based on enterprise value and revenues), and in risk profile. Together, they reflect the Canadian business environment in which Enbridge operates.

 

 

Enbridge Inc. 2016 Management information circular        50


Table of Contents

Since the US energy sector is much larger and has more depth than Canada’s, the US peer companies identified are from a narrower range of industries, more similar to Enbridge, and include mainly oil and gas pipelines and utilities.

2015 peer group

While enterprise value is used as a primary peer group selection criteria with respect to company size (as a proxy for business complexity), other size metrics are also important. The 2015 compensation benchmarking peer group, and how Enbridge compares in terms of size as of December 31, 2015 (unless otherwise noted), is as follows:

Canadian Peer Group

 

     

Enterprise value

(CA$ millions)

   

Revenue

(CA$ millions)

   

Assets

(CA$ millions)

    Employees     

Market
capitalization

(CA$ millions)

 

How Enbridge compares

    

 

Above 75th

percentile

  

  

   

 

Above 75th

percentile

  

  

   

 

Above 75th

percentile

  

  

   

 

Between 50th and

75th percentile

 

  

    

 

Above 75th

percentile

  

  

Enbridge Inc.

     90,534        33,794        84,664        8,739         39,928   

Canadian National Railway Company

     70,641        12,611        37,024        23,172         60,890   

TransCanada Corporation

     69,314        11,299        64,483        5,512         31,751   

Suncor Energy Inc.

     62,906        29,208        77,527        13,190         51,652   

Canadian Natural Resources Ltd.

     48,527        12,363        59,275        7,657         33,081   

Imperial Oil Ltd.

     46,523        25,188        43,170        5,700         38,210   

Canadian Pacific Railway Ltd.

     35,347        6,712        19,847        12,739         27,040   

Husky Energy Inc.

     22,260        16,354        34,220        5,552         14,086   

Cenovus Energy Inc.

     16,702        13,064        26,126        3,005         14,583   

Encana Corporation

     14,823        4,882        21,731