FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer pursuant to Rule 13-a-16 or 15d-16
of the Securities Exchange Act of 1934
FOR THE MONTH OF APRIL, 2015
COMMISSION FILE NUMBER 1-15150
Enerplus Corporation
The Dome Tower
Suite 3000, 333 7th Avenue S.W.
Calgary, Alberta
Canada T2P 2Z1
(403) 298-2200
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F o 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 o 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 o No x
Indicate by check mark whether, by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the securities Exchange Act of 1934.
Yes o No x
EXHIBIT INDEX
EXHIBIT 99.1 Notice of Meeting
EXHIBIT 99.2 Information Circular and Proxy Statement
EXHIBIT 99.3 Form of Proxy
EXHIBIT 99.4 Notice and Access Notification
SIGNATURE
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.
ENERPLUS CORPORATION
BY: |
/s/ David A. McCoy |
|
|
David A. McCoy |
|
|
Vice President, General Counsel & Corporate Secretary |
|
DATE: April 2, 2015
2
Exhibit 99.1
Notice of Annual Meeting of Shareholders
We invite you to attend our annual meeting (Meeting) of holders of common shares of Enerplus Corporation (Enerplus), which will be held on Friday, May 8, 2015 at 10:00 a.m. (Calgary time) at the Calgary Telus Convention Centre (Glen 205 Room), 120 9th Avenue SW, Calgary, Alberta. The Meeting will have the following purposes:
1. To receive the consolidated financial statements of Enerplus for the year ended December 31, 2014, together with the auditors report on those statements;
2. To appoint the auditors of Enerplus;
3. To elect the directors of Enerplus;
4. To vote, on an advisory, non-binding basis, to accept Enerplus approach to executive compensation; and
5. To conduct any other business that may properly come before the Meeting.
The accompanying Information Circular and Proxy Statement (Information Circular) provides detailed information relating to the matters to be dealt with at the Meeting and the voting process, as well as the text of certain of the resolutions proposed to be passed at the Meeting. The Information Circular contains important information, such as discussion regarding Enerplus executive compensation, corporate governance matters, and board compensation and mandates. This information will help you learn more about us and help you in your voting decisions.
By order of the Board of Directors on April 2, 2015,
David A. McCoy |
|
David A. McCoy |
|
Vice-President, General Counsel & Corporate Secretary |
|
Exhibit 99.2
NOTICE OF ANNUAL MEETING AND
INFORMATION CIRCULAR AND PROXY STATEMENT
With Respect to the
Annual Meeting of Shareholders
to be held on
Friday, May 8, 2015
April 2, 2015
Table of Contents
Notice of Annual Meeting |
1 |
|
|
Shareholder and Voting Information |
|
General Meeting Information |
2 |
Voting Information |
4 |
|
|
Business of the Meeting |
|
Financial Statements |
7 |
Appointment of Auditors |
7 |
Annual Election of Board of Directors |
7 |
Advisory Vote on Executive Compensation |
20 |
|
|
Corporate Governance |
|
Board Composition |
21 |
Orientation and Continuous Development |
21 |
Diversity Policy |
22 |
Gender Diversity |
22 |
Board and Committee Meetings |
22 |
Director Term Limits |
22 |
Board Directorship Policy |
23 |
Director Compensation |
23 |
Director Emeritus |
23 |
Executive Succession Planning |
23 |
Ethical Business Conduct |
24 |
Independent Director Performance Assessments |
24 |
|
|
Board Mandate and Committees |
|
Position Descriptions and Responsibilities |
25 |
Rotation of Committee Assignments and Chairs |
25 |
|
|
Director Compensation |
|
Philosophy |
28 |
Fees and Retainers |
28 |
Share-Based Awards |
28 |
Director Summary Compensation Table |
29 |
Director Share Ownership Requirements |
30 |
|
|
Executive Compensation |
|
Letter to Shareholders |
32 |
Named Executive Officers and Profiles |
35 |
Compensation & Human Resources Committee Governance |
41 |
Aligning Executive Compensation and Shareholder Interests |
43 |
Compensation Discussion & Analysis |
45 |
Executive Compensation Components |
46 |
2014 Compensation Treatment for Named Executive Officers |
49 |
Executive Compensation Tables |
57 |
Termination and Change of Control Benefits |
61 |
Additional Information |
|
Schedule A - Mandate of the Board of Directors |
64 |
Schedule B - Annual Responsibilities of the Compensation & Human Resources Committee |
66 |
Schedule C - Securities Authorized For Issuance under Equity Compensation Plans |
67 |
Schedule D - Summary of Share Award Incentive Plan |
68 |
Schedule E - Summary of Stock Option Plan |
72 |
Schedule F - Summary of Rights Incentive Plan (Closed) |
75 |
Schedule G - Summary of 2011 Executive PSU Plan (Closed) |
77 |
Schedule H - Definitions |
79 |
Notice of Annual Meeting of Shareholders
We invite you to attend our annual meeting (Meeting) of holders of common shares of Enerplus Corporation (Enerplus), which will be held on Friday, May 8, 2015, at 10:00 a.m. (Calgary time) at the Calgary Telus Convention Centre (Glen 205 Room), 120 9th Avenue SW, Calgary, Alberta. The Meeting will have the following purposes:
1. To receive the consolidated financial statements of Enerplus for the year ending December 31, 2014, together with the auditors report on those statements;
2. To appoint the auditors of Enerplus;
3. To elect the directors of Enerplus;
4. To vote, on an advisory, non-binding basis, to accept Enerplus approach to executive compensation; and
5. To conduct any other business that may properly come before the Meeting.
The accompanying Information Circular and Proxy Statement (Information Circular) provides detailed information relating to the matters to be dealt with at the Meeting and the voting process, as well as the text of certain of the resolutions proposed to be passed at the Meeting. The Information Circular contains important information, such as discussion regarding Enerplus executive compensation, corporate governance matters, and board compensation and mandates. This information will help you learn more about us and help you in your voting decisions.
By order of the Board of Directors on April 2, 2015,
David A. McCoy |
|
|
|
David A. McCoy |
|
Vice-President, General Counsel & Corporate Secretary |
|
1
SHAREHOLDER AND VOTING INFORMATION
General Meeting Information
About this Information Circular
This Information Circular is furnished to you in connection with the solicitation of proxies by Enerplus for use at the Meeting. Solicitation of proxies may be made through the mail, by telephone or in person by our management, who will not be paid for such solicitation. The costs incurred in the solicitation of proxies and in the preparation and mailing of this Information Circular will be borne by Enerplus.
This Information Circular is dated April 2, 2015 and all information contained in this Information Circular is given as of such date, unless stated otherwise.
Unless expressly stated otherwise, all dollar amounts and references to $ in this Information Circular are in Canadian dollars.
Common Shares Outstanding
Our Common Shares (which are the only outstanding securities of Enerplus that allow the holders to vote at meetings of Shareholders) are listed on the TSX and on the NYSE under the symbol ERF. As at March 6, 2015, there were 205,920,733 Common Shares issued and outstanding.
To the knowledge of the directors and executive officers of Enerplus, no person beneficially owns, directly or indirectly, or exercises control or direction over, securities carrying more than 10% of the voting rights of the issued and outstanding Common Shares.
Quorum
The quorum for the Meeting will consist of two or more individuals present in person and holding or representing by proxy not less than 10% of the issued and outstanding Common Shares. If a quorum is not present at the opening of the Meeting, the Meeting may be adjourned and rescheduled. If the Meeting is adjourned for less than 30 days, no notice of the adjourned meeting will be provided. If the Meeting is adjourned for 30 days or more, notice of the adjourned meeting will be given.
Advance Notice for Director Nominations
Enerplus by-laws require advance notice for nomination of directors for consideration at a Shareholders meeting. Any notices of director nominations must be submitted to the Corporate Secretary of Enerplus no later than 30 days and not more than 65 days prior to the date of an annual meeting. The notice must include certain information about the proposed director nominee(s) (including name, age, residency, citizenship and principal occupation) and the nominating Shareholder. Only those director nominees that comply with applicable requirements set out in Enerplus by-laws will be eligible for election as directors of Enerplus. A copy of Enerplus by-laws is available under Enerplus profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Financial Statements and Material Company Information
Enerplus regularly files quarterly and annual financial statements, as well as material change reports, managements discussion and analysis, and other important information with the securities commissions or similar authorities in each of the provinces of Canada and with the U.S. Securities and Exchange Commission. Financial information of Enerplus is contained in the audited and consolidated comparative financial statements and managements discussion and analysis for the year ending December 31, 2014, which have been provided to Shareholders who have requested such materials. Copies of such documents are available on the internet under Enerplus SEDAR profile at www.sedar.com or on EDGAR at www.sec.gov, on Enerplus website at www.enerplus.com, or may be obtained without charge upon request to Enerplus, Suite 3000, The Dome Tower, 333 - 7th Avenue S.W., Calgary, Alberta, T2P 2Z1, Attention: Investor Relations, or by telephone (1-800-319-6462) or email (investorrelations@enerplus.com).
2
Other Matters
As of the date of this Information Circular, none of the directors or executive officers of Enerplus are aware of any amendment, variation or other matter to come before the Meeting other than the matters listed in the Notice of Meeting. If any other matter properly comes before the Meeting, however, the accompanying proxies will be voted on such matter in accordance with the best judgment of the person or persons voting the proxies.
Indebtedness of Directors and Officers
Enerplus does not provide financial assistance in the form of loans or guarantees to its directors and executive officers. To the knowledge of the directors and executive officers of Enerplus, none of the directors, proposed directors or executive officers of Enerplus, or any associate or affiliate of the foregoing, has been indebted to Enerplus or any of its subsidiaries at any time since January 1, 2014.
Interests in Material Transactions
To the knowledge of the directors and executive officers of Enerplus, none of the directors, proposed directors or executive officers of Enerplus, or any associate or affiliate of the foregoing, has had any material interest, direct or indirect, in any material transaction with Enerplus since January 1, 2014 or in any proposed transaction that has materially affected or would materially affect Enerplus or any of its subsidiaries, except as otherwise disclosed in this Information Circular.
Interests in the Business of the Meeting
To the knowledge of the directors and executive officers of Enerplus, none of the directors, proposed directors or executive officers of Enerplus or anyone who has held such office since January 1, 2014, or any associate or affiliate of the foregoing, has any material interest, direct or indirect, in any matter to be acted upon at the Meeting, except as otherwise disclosed in this Information Circular.
Non-GAAP Measures
This Information Circular makes references to certain financial measures, including capital efficiency, funds flow, recycle ratio and reserves replacement ratio, which do not have a standardized meaning or definition as prescribed by U.S. GAAP. Reserves Replacement Ratio is used by Enerplus and is a common industry metric that is useful to investors and securities analysts to measure the percentage of change in proved plus probable reserves additions and revisions (excluding acquisitions and dispositions) divided by production within the same year.
Readers are referred to discussion under the heading Non-GAAP Measures in Enerplus managements discussion and analysis for the year ending December 31, 2014 and under the heading Non-GAAP Measures in Enerplus press release dated February 20, 2015 (both available under Enerplus profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov). In addition, readers are also referred to the discussion under the heading Presentation of Oil and Gas Reserves, Resources and Production Information in Enerplus annual information form for the year ending December 31, 2014 (available under Enerplus profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov) regarding the references to reserves, contingent resources and operational information in this Information Circular.
This Information Circular also contains information about Enerplus F&D and FD&A costs. For additional information on Enerplus F&D and FD&A costs, see discussion under the heading F&D and FD&A Costs and Information Regarding Reserves, Resources and Operational Information F&D and FD&A Costs in Enerplus press release dated February 20, 2015 (available under Enerplus profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov).
3
Voting Information
Record Date
Every registered holder of Common Shares at the close of business on March 27, 2015, being the Record Date for the Meeting, is entitled to receive notice of and vote their Common Shares at the Meeting on the basis of one vote for each Common Share held. Only Shareholders whose names have been entered in the register of Common Shares on the Record Date will be entitled to receive notice of and to vote at the Meeting, unless that Shareholder has transferred any Common Shares subsequent to that date and the transferee Shareholder, not later than two days before the Meeting or any shorter period that the Chairman of the Meeting may permit, establishes ownership of the Common Shares and requests that the transferees name be included on the list of Shareholders entitled to vote at the Meeting.
Notice-and-Access
This year Enerplus is using the notice-and-access model to deliver meeting materials to beneficial holders of Common Shares. Notice-and-access is a new set of rules developed by the Canadian Securities Administrators that allows companies to post meeting materials online, reducing paper and mailing costs. You can view Enerplus Meeting materials online under its profile on www.sedar.com or www.enerplus.com.
In connection with the Meeting, Enerplus has mailed the following: (i) to Beneficial Shareholders: a voting instruction form; the Notice of Meeting, how to access the Information Circular and other proxy-related materials, and how to request a paper copy of the Information Circular; and a request card for financial statements; (ii) to Registered Shareholders: a Form of Proxy, the Notice of Meeting and the Information Circular; and (iii) to all Shareholders who requested, a copy of Enerplus consolidated financial statements for the year ending December 31, 2014 and accompanying managements discussion and analysis.
Enerplus is sending the meeting materials described above directly to its Registered Shareholders and indirectly to all Beneficial Shareholders through their intermediaries. Enerplus will pay for an intermediary to deliver the applicable meeting materials to objecting beneficial owners. Enerplus is not sending any meeting materials directly to non-objecting beneficial owners.
Appointment of Proxies
A form of proxy or voting instruction form, each referred to as a Form of Proxy, accompanies this Information Circular. The persons named in the Form of Proxy are officers of Enerplus. A person or corporation submitting the Form of Proxy has the right to appoint a person (who does not have to be a Shareholder) to be their representative at the Meeting, other than the persons designated in the Form of Proxy furnished by Enerplus. Such appointment may be exercised by inserting the name of the appointed representative in the blank space provided for that purpose. If you cannot attend the Meeting in person, you are requested to vote in accordance with the instructions below.
Exercise of Discretion by Proxies
The persons named in the enclosed Form of Proxy will, if the instructions are clear, vote the Common Shares represented by that Form of Proxy, and where a choice with respect to any matter to be acted upon has been specified in the Form of Proxy, the Common Shares will be voted in accordance with those instructions. Except as described below with respect to certain broker non-votes in the case of the Beneficial Shareholders, if no specification has been made in respect of any matter in any Forms of Proxy received by Enerplus, the Common Shares represented by those Forms of Proxy will be voted FOR each matter for which no specification has been made.
The Form of Proxy confers discretionary authority on the persons appointed with respect to amendments or variations of matters identified in the Notice of Meeting or other matters that may properly come before the Meeting. At the time of printing this Information Circular, management of Enerplus is not aware of any such amendments, variations or other matters.
4
Deadline for Returning Form of Proxy
To be valid, a Form of Proxy must be received (either directly, in the case of a Registered Shareholder, or through a broker, in the case of a Beneficial Shareholder) by Computershare, at the address shown on the Form of Proxy, at least 48 hours (excluding Saturdays, Sundays and statutory holidays in Calgary, Alberta) before the Meeting or any adjournment(s) thereof, being the Proxy Deadline. Notwithstanding the foregoing, the Chairman of the Meeting may, in his sole discretion, determine to accept all, but not less than all, proxies which have been deposited after the Proxy Deadline. If you are a Beneficial Shareholder, send your voting instructions as soon as possible to allow sufficient time for your nominee to receive the information and then send it to Computershare.
Beneficial Shareholder Voting Options
Beneficial Shareholders are Shareholders who hold Common Shares through brokerage accounts or other intermediaries (and such Common Shares are registered in the name of such intermediary).
In person
Appoint yourself as proxy on the voting instruction form and cast your vote in person at the Meeting. A Beneficial Shareholder receiving a voting instruction form cannot use that voting instruction form to vote Common Shares directly at the Meeting.
By proxy
Designate a person (who does not have to be a Shareholder) as your proxyholder on the Form of Proxy and return the duly completed voting instructions form in accordance with the instructions provided.
By mail
Complete, sign, date and return the voting instruction form in accordance with the instructions provided.
By internet or telephone
Follow the instructions provided on the voting instruction form.
Broker Non-Votes under NYSE Rules
Under the rules of the NYSE, brokers who hold shares on behalf of their clients have the authority to vote on certain proposals when they have not received instructions from those Beneficial Shareholders. A broker non-vote occurs when a broker holding shares for a Beneficial Shareholder does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that item and has not received voting instructions from the Beneficial Shareholder. If you are a Beneficial Shareholder who does not vote your Common Shares, your broker can vote your Common Shares at its discretion ONLY on the matter of the appointment of the auditors of Enerplus. If you do not give your broker instructions on how to vote your Common Shares on the other matters to be voted upon at the Meeting, your broker is not empowered to vote your Common Shares on any other matter to be voted on at the Meeting and your Common Shares will not be voted on those matters. Any Common Shares not voted on matters other than the appointment of Enerplus auditors (whether by abstention, broker non-vote or otherwise) will have no impact on that particular item.
5
Registered Shareholder Voting Options
Registered Shareholders are Shareholders who hold Common Shares in their own name.
In person
Cast your vote at the Meeting.
By proxy
Designate a person (who does not have to be a Shareholder) as your proxyholder on the Form of Proxy and returning the duly completed Form of Proxy to Computershare by the Proxy Deadline.
By mail
Complete, sign, date and return the Form of Proxy in the envelope provided.
By internet or telephone
Follow the instructions included on the Form of Proxy.
Revoking Your Proxy
Prior to the Meeting, Shareholders may revoke a proxy previously given.
If you are a Registered Shareholder, you may revoke your proxy by providing a revocation notice in writing to Computershare by close of business on the last business day preceding the Meeting, or to the Chairman of the Meeting at any time before the start of the Meeting. If the Registered Shareholder is a corporation, the revocation notice must be executed by a duly authorized officer or attorney of the Registered Shareholder.
If you are a Beneficial Shareholder, contact your broker or intermediary to revoke your voting instructions.
6
BUSINESS OF THE MEETING
1. Financial Statements
The consolidated financial statements for the year ending December 31, 2014, together with the auditors report on those statements, have been mailed to the Shareholders who requested such materials together with this Information Circular, in accordance with applicable securities laws. Copies of these financial statements are also available through the internet under Enerplus SEDAR profile at www.sedar.com or on EDGAR at www.sec.gov and on Enerplus website at www.enerplus.com.
2. Appointment of Auditors
Shareholders will be asked to appoint Deloitte LLP, Independent Registered Public Accounting Firm, as auditors of Enerplus until the next annual meeting of Shareholders. Deloitte LLP are currently the auditors of Enerplus and were first appointed in 2002.
The resolution to appoint Deloitte LLP as the auditors of Enerplus requires the approval of more than 50% of votes cast by or on behalf of the Shareholders present in person or represented by proxy at the Meeting. The Board recommends that you vote FOR the appointment of Deloitte LLP as auditors of Enerplus. Unless instructed otherwise, the persons named in the Form of Proxy will vote FOR the appointment of Deloitte LLP as auditors of Enerplus.
The table reflects the fees paid to Deloitte LLP for professional services rendered for the last two fiscal years:
Fee Type |
|
2014 |
|
2013 |
|
|
|
($000s) |
|
($000s) |
|
Audit fees(1) |
|
783 |
|
966 |
|
Audit-related fees(2) |
|
|
|
|
|
Tax fees(3) |
|
352 |
|
501 |
|
All other fees(4) |
|
|
|
|
|
Total |
|
1,135 |
|
1,467 |
|
Notes:
(1) Audit fees were for professional services rendered by Deloitte LLP for the audit of Enerplus annual financial statements and review of Enerplus quarterly financial statements, as well as services provided in connection with statutory and regulatory filings or engagements.
(2) Audit-related fees are for assurance and related services reasonably related to the performance of the audit or review of Enerplus financial statements and not reported under Audit fees above.
(3) Tax fees were for tax compliance, tax advice and tax planning.
(4) Other fees for products and services provided by Deloitte LLP other than those described as Audit fees, Audit-related fees and Tax fees.
3. Annual Election of Board of Directors
The articles of Enerplus provide that the Board is to consist of between one and 15 members. There are currently 11 independent directors (within the meaning of National Policy 58-201 and the NYSE rules) and one non-independent director, Mr. Ian C. Dundas, who is the President & CEO of Enerplus, on the Board. Mr. Douglas R. Martin, the former Chairman of the Board, retired from the Board on November 30, 2014 and was replaced as Chairman of the Board by Mr. Elliott Pew effective June 1, 2014. In addition, both Edwin V. Dodge and Donald J. Nelson are not seeking re-election at the Meeting.
The term of office for each director is from the date at which he or she is elected until the next annual meeting of Shareholders, until a successor is elected or appointed, or until the director is removed at a meeting of Shareholders. The Corporate Governance & Nominating Committee is responsible for recommending nominees for the Board and reviews each director nominees qualifications to ensure there is an effective mix of skills, knowledge and experience on the Board, which is summarized in the Director Skills Matrix, below.
7
Based on the recommendation of the Committee, the Board has fixed the number of directors to be elected at the Meeting at 10, and the 10 individuals named under the Director Nominee Profiles section are proposed to be elected at the Meeting. The Committee has confirmed that each of the recommended director nominees is eligible and is seeking re-election. Should circumstances arise, for any reason, prior to the Meeting that a director nominee is unable to serve on the Board, the persons named in the enclosed Form of Proxy reserve the right to vote for another nominee at their discretion.
Unless instructed otherwise, the persons named in the Form of Proxy will vote FOR the election of each of the persons specified below.
Director Nominee |
|
Director Since |
|
Age |
|
Committees |
|
Current Number of Public Boards (including Enerplus) |
David H. Barr |
|
2011 |
|
65 |
|
Safety & Social Responsibility Committee |
|
3 |
Michael R. Culbert |
|
2014 |
|
58 |
|
Compensation & Human Resources Committee Corporate Governance & Nominating Committee |
|
1 |
Ian C. Dundas |
|
2013 |
|
47 |
|
President & CEO |
|
1 |
Hilary A. Foulkes |
|
2014 |
|
57 |
|
Audit & Risk Management Committee Safety & Social Responsibility Committee |
|
2 |
James B. Fraser |
|
2012 |
|
61 |
|
Reserves Committee Safety & Social Responsibility Committee |
|
2 |
Robert B. Hodgins |
|
2007 |
|
63 |
|
Audit & Risk Management Committee Corporate Governance & Nominating Committee |
|
5 |
Susan M. MacKenzie |
|
2011 |
|
54 |
|
Compensation & Human Resources Committee Reserves Committee |
|
3 |
Elliott Pew |
|
2010 |
|
60 |
|
Board Chairman |
|
2 |
Glen D. Roane |
|
2004 |
|
58 |
|
Audit & Risk Management Committee Corporate Governance & Nominating Committee |
|
4 |
Sheldon B. Steeves |
|
2012 |
|
61 |
|
Audit & Risk Management Committee Reserves Committee |
|
3 |
8
Director Nominee Profiles
The following director nominee profiles outline important information, such as each directors employment, history, educational qualifications, other current company directorships, and security holdings in Enerplus, for your consideration.
Elliott Pew
A.B. (Geology), M.A. (Geology)
Boerne, Texas, U.S.A.
Age: 60
Director since September 2010
Independent Director
Mr. Pew has over thirty five years of diverse experience in the oil and gas industry, most recently as co-founder and Chief Operating Officer for Common Resources, a private exploration and production company, from 2007 until it was sold in 2010. Mr. Pew served on the Board of Managers for two private exploration and production companies, Common Resources II from 2010 - 2012, and later, Common Resources III from 2012 to present. Mr. Pew held various senior executive positions with Newfield Exploration Company, a NYSE-listed oil and gas company in Houston, where he served from 1998 through 2006. While there, he led the companys worldwide exploration program, including the Gulf Of Mexico (GOM) shelf, GOM deepwater, onshore U.S. and international areas. Further, he also led expansion efforts into the onshore Gulf Coast in the late 1990s. Prior thereto, Mr. Pew was Senior Vice-President, Exploration of American Exploration Company, an AMEX-listed exploration and production company. Mr. Pew currently serves on the Board of Directors for Southwestern Energy Company, a public exploration and production company in Houston. He holds an M.A. in Geology from the University of Texas at Austin, and an A.B. in Geology from Franklin and Marshall College.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
|
Board of Directors (Chairman effective June 1, 2014) |
|
Chairman |
|
9/9 |
|
100% |
|
Reserves Committee (Chair prior to June 1, 2014) |
|
Chair |
|
3/3 |
|
100% |
|
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
21,100 |
|
9,100 |
|
132 |
% |
DSUs |
|
29,151 |
|
15,866 |
|
84 |
% |
Total |
|
50,251 |
|
24,966 |
|
101 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
Southwestern Energy Company (NYSE) |
|
Compensation Committee |
Note:
As Chairman of the Board of Directors, Mr. Pew is not a member of any Board committee. However, he may attend and participate in any Board Committee meeting in an ex officio capacity.
9
David H. Barr
B.Sc. (Mechanical Engineering)
Woodlands, Texas, U.S.A.
Age: 65
Director since November 2011
Independent Director
Mr. Barr is currently a director of Logan International Inc. (Logan), a TSX-listed company focused on downhole tools and completion services. Prior thereto, Mr. Barr was the President & Chief Executive Officer of Logan, and prior thereto, the chairman of the board of directors of Logan. Prior thereto, Mr. Barr spent approximately 36 years with Baker Hughes Incorporated (Baker Hughes), a NYSE-listed company, in various executive roles, including Group President of numerous divisions and President of Baker Atlas, a division of Baker Hughes. He currently serves as a director of ION Geophysical Corporation, a NYSE-listed oil and gas seismic company, and Probe Technology Services, Inc., a private oil and gas services company. Mr. Barr holds a B.Sc. Mechanical Engineering degree from Texas Tech University.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
|
Board of Directors |
|
Member |
|
9/9 |
|
100% |
|
Compensation & Human Resources Committee (prior to May 9, 2014) |
|
Member |
|
2/2 |
|
100% |
|
Safety & Social Responsibility Committee (became Chair on May 9, 2014) |
|
Chair |
|
2/2 |
|
100% |
|
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
10,000 |
|
10,000 |
|
0 |
% |
DSUs |
|
24,501 |
|
15,866 |
|
54 |
% |
Total |
|
34,501 |
|
25,866 |
|
33 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
ION Geophysical Corporation (NYSE) |
|
Compensation Committee and Governance Committee |
Logan International Inc. (TSX) |
|
Compensation Committee |
10
Michael R. Culbert
B.Sc. (Business Administration)
Calgary, Alberta, Canada
Age: 58
Director since March 2014
Independent Director
Mr. Culbert has been President and Chief Executive Officer and a director of Progress Energy Canada Ltd., and predecessor companies since 2004. Prior thereto, Mr. Culbert was Vice-President of Marketing and Business Development of Progress Energy Ltd. from November 2001 to July 2004 and Vice-President of Marketing and Business Development of Encal Energy Ltd., a TSX and NYSE-listed oil and gas company, from 1995 to October 2001. In addition, Mr. Culbert has been a Director of Pacific Northwest LNG, a private joint venture company, since October 2013 and was appointed as President of the organization in October 2014. Mr. Culbert holds a Bachelor of Science degree in Business Administration and is a member of the Canadian Association of Petroleum Producers Board of Governors.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
Board of Directors (since March 20, 2014) |
|
Member |
|
6/6 |
|
100% |
Compensation & Human Resources Committee (since March 20, 2014) |
|
Member |
|
2/2 |
|
100% |
Corporate Governance & Nominating Committee (since March 20, 2014) |
|
Member |
|
1/1 |
|
100% |
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
Common Shares |
|
10,000 |
|
|
|
N/A |
DSUs |
|
8,635 |
|
|
|
N/A |
Total |
|
18,635 |
|
|
|
N/A |
Other Public Board Directorships |
|
Committee Position(s) |
Nil |
|
|
Note:
Mr. Culbert was appointed to the Board of Directors on March 20, 2014 at which time he was also appointed as a member of the Compensation & Human Resources Committee and the Corporate Governance & Nominating Committee. Since then, the Board held six meetings, the Compensation & Human Resources Committee held two meetings and the Corporate Governance & Nominating Committee held one meeting.
11
Ian C. Dundas
B.Comm., LL.B.
Calgary, Alberta, Canada
Age: 47
Director since July 2013
Non-Independent Director
Mr. Dundas has been the President & Chief Executive Officer of Enerplus since July 1, 2013. Mr. Dundas joined Enerplus predecessor in 2002 as Vice-President of Business Development, and in 2010 his role expanded to Executive Vice-President. In 2011, Mr. Dundas was appointed as the Executive Vice-President & Chief Operating Officer. Prior to joining Enerplus, Mr. Dundas held several executive positions in the merchant banking business, where he helped oil and gas companies grow by accessing the funding and expertise they required. Mr. Dundas is a member of the Canadian Council of Chief Executives, a former Governor of the Canadian Association of Petroleum Producers and has been on the boards of numerous private and public companies. Mr. Dundas holds a Bachelor of Commerce (Distinction) from the University of Calgary and a Bachelor of Laws (Distinction) from the University of Alberta. Mr. Dundas was called to the Alberta Bar in 1995.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
Board of Directors |
|
Member |
|
9/9 |
|
100% |
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
65,752 |
|
62,752 |
|
5 |
% |
DSUs |
|
|
|
|
|
|
|
Total |
|
65,752 |
|
62,752 |
|
5 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
Nil |
|
|
12
Hilary A. Foulkes
B.Sc., Honours (Earth Sciences)
Calgary, Alberta, Canada
Age: 57
Director since February 2014
Independent Director
Ms. Foulkes has over 30 years of oil and gas industry experience and is currently the Chair of Tudor Pickering, Holt & Co. Securities Canada, a private energy advisory firm, and is a director of Parallel Energy Trust, a TSX-listed oil and gas energy trust. From 2008 to 2012, Ms. Foulkes held a number of executive roles at Penn West Petroleum Ltd., a TSX and NYSE-listed oil and gas company, including Executive Vice-President and Chief Operating Officer. Prior thereto, Ms. Foulkes was Managing Director at Scotia Waterous, an investment banking firm, from April 2000 to March 2008. Ms. Foulkes holds an Honours Bachelor of Science degree in Earth Sciences from the University of Waterloo, is a professional geologist, and a member of the Association of Professional Engineers and Geoscientists of Alberta and the Canadian Association of Petroleum Geologists.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
Board of Directors (since February 21, 2014) |
|
Member |
|
7/7 |
|
100% |
Audit & Risk Management Committee (since February 21, 2014) |
|
Member |
|
3/3 |
|
100% |
Safety & Social Responsibility Committee (since February 21, 2014) |
|
Member |
|
1/1 |
|
100% |
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
4,600 |
|
2,300 |
|
100 |
% |
DSUs |
|
8,635 |
|
|
|
|
|
Total |
|
13,235 |
|
2,300 |
|
475 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
Parallel Energy Trust (TSX) |
|
Reserves & Environmental Health & Safety Committee (Chair) |
|
Audit Committee |
Note:
Ms. Foulkes was appointed to the Board of Directors on February 21, 2014 at which time she was also appointed as a member of the Audit & Risk Management Committee and the Safety & Social Responsibility Committee. Since then, the Board held seven meetings, the Audit & Risk Management Committee held three meetings and the Safety & Social Responsibility Committee held one meeting.
13
James B. Fraser
B.Sc. (Petroleum Engineering), MBA
Polson, Montana, U.S.A.
Age: 61
Director since June 2012
Independent Director
Mr. Fraser has over 35 years of energy industry experience and is a corporate director. Currently, Mr. Fraser is a Managing Partner of Source Rock Energy Partners LLC, a private equity firm. Mr. Fraser was the Senior Vice-President for the shale division of Talisman Energy Inc.s (a TSX and NYSE-listed oil and gas company) North American operations from September 2008 until April 2012. From 2006 to 2008, Mr. Fraser was Vice-President of Operations for the southern division of Chesapeake Energy Corporation (a NYSE-listed oil and gas company) and, prior thereto, spent over 20 years at Burlington Resources Inc. (a TSX and NYSE-listed oil and gas company prior to its acquisition by ConocoPhillips Corporation in 2006) and its predecessor companies, where he held a number of senior positions, including North American Exploration Manager. Mr. Fraser holds an MBA from Regis College and a Bachelor of Science in Petroleum Engineering from the Montana School of Mines.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
Board of Directors |
|
Member |
|
8/9 |
|
89% |
Reserves Committee |
|
Member |
|
4/4 |
|
100% |
Safety & Social Responsibility Committee |
|
Member |
|
2/2 |
|
100% |
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
14,176 |
|
13,796 |
|
3 |
% |
DSUs |
|
20,174 |
|
11,539 |
|
75 |
% |
Total |
|
34,350 |
|
25,335 |
|
36 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
U.S. Energy Corp. |
|
Compensation Committee |
|
Nominating Committee |
14
Robert B. Hodgins
B.A., Honours (Business), C.A
Calgary, Alberta, Canada
Age: 63
Director since November 2007
Independent Director
Mr. Hodgins has been an independent businessman since November 2004. Prior thereto, Mr. Hodgins served as the Chief Financial Officer of Pengrowth Energy Trust (a TSX and NYSE-listed energy trust) from 2002 to 2004. Prior to that, Mr. Hodgins held the position of Vice-President and Treasurer of Canadian Pacific Limited (a diversified energy, transportation and hotels company) from 1998 to 2002 and was Chief Financial Officer of TransCanada PipeLines Limited (a TSX and NYSE-listed energy transportation company) from 1993 to 1998. Mr. Hodgins received an Honours Bachelor of Arts in Business from the Richard Ivey School of Business at the University of Western Ontario and received a Chartered Accountant designation and was admitted as a member of the Institute of Chartered Accountants of Ontario in 1977 and Alberta in 1991.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
Board of Directors |
|
Member |
|
9/9 |
|
100% |
Audit & Risk Management Committee |
|
Chair |
|
4/4 |
|
100% |
Corporate Governance & Nominating Committee |
|
Member |
|
2/2 |
|
100% |
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
18,923 |
|
10,288 |
|
84 |
% |
DSUs |
|
15,866 |
|
15,866 |
|
0 |
% |
Total |
|
34,789 |
|
26,154 |
|
33 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
AltaGas Ltd. (TSX) |
|
Audit Committee (Chairman) |
Governance Committee |
Kicking Horse Energy Inc. (TSX Venture Exchange) |
|
Audit Committee (Chairman) |
Reserves Committee |
MEG Energy Corp. (TSX) |
|
Audit Committee (Chairman) Compensation Committee |
Stone Point Energy Inc. (TSX Venture Exchange) |
|
Audit Committee (Chairman) |
Reserves Committee |
Note:
Mr. Hodgins was a director of Skope Energy Inc. (Skope), a public oil and gas company, which commenced proceedings in the Court of Queens Bench of Alberta under the Companies Creditors Arrangement Act (Canada) to implement restructuring in November 2012, which was completed on February 19, 2013. Mr. Hodgins resigned as a director of Skope on February 19, 2013.
15
Susan M. MacKenzie
B.Eng. (Mechanical), MBA
Calgary, Alberta, Canada
Age: 54
Director since July 2011
Independent Director
Ms. MacKenzie has been an independent consultant since September 2010. Prior thereto, Ms. MacKenzie served as Chief Operating Officer with Oilsands Quest Inc., a NYSE Amex-listed oil sands company, from April 2010 through August 2010. Prior to that, Ms. MacKenzie was employed for 12 years at Petro-Canada, a TSX and NYSE-listed integrated oil and gas company prior to its merger with Suncor Energy Inc. in 2009, where she held senior roles, including Vice-President of Human Resources and Vice-President of In Situ Development & Operations. Ms. MacKenzie was also with Amoco Canada for 14 years in a variety of engineering and leadership roles in natural gas, conventional oil and heavy oil exploitation. Ms. MacKenzie holds a Bachelor of Engineering (Mechanical) degree from McGill University, an MBA from the University of Calgary and is a member of the Association of Professional Engineers and Geoscientists of Alberta. Ms. MacKenzie also holds the ICD.D designation from the Institute of Corporate Directors.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
Board of Directors |
|
Member |
|
9/9 |
|
100% |
Compensation & Human Resources Committee |
|
Chair |
|
4/4 |
|
100% |
Reserves Committee |
|
Member |
|
4/4 |
|
100% |
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
6,450 |
|
6,450 |
|
0 |
% |
DSUs |
|
24,501 |
|
15,866 |
|
54 |
% |
Total |
|
30,951 |
|
22,316 |
|
39 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
Freehold Royalties Ltd. (TSX) |
|
Compensation Committee Reserves Committee |
TransGlobe Energy Corporation (TSX) |
|
Compensation & Human Resources Committee (Chair) |
|
Reserves Committee |
|
Governance and Nominating Committee |
16
Glen D. Roane
B.A., MBA
Canmore, Alberta, Canada
Age: 58
Director since June 2004
Independent Director
Mr. Roane is a corporate director and, in addition to those public entities listed below, he has served as a board member of many TSX-listed companies, including Connacher Oil and Gas, SilverBirch Energy Corporation, Compton Petroleum Corporation, UTS Energy Corporation, Repap Enterprises Inc., Ranchero Energy Inc., Forte Resources Inc., Valiant Energy Inc., Maxx Petroleum Ltd. and NQL Energy Services Inc., since his retirement from TD Asset Management Inc., a subsidiary of The Toronto-Dominion Bank (a publicly traded Canadian chartered bank) in 1997. Mr. Roane has also served two terms as a Member of the Alberta Securities Commission. Mr. Roane is a director of GBC American Growth Fund Inc., a Canadian mutual fund corporation. Mr. Roane holds a Bachelor of Arts and an MBA from Queens University in Kingston, Ontario and also holds the ICD.D designation from the Institute of Corporate Directors.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
Board of Directors |
|
Member |
|
9/9 |
|
100% |
Audit & Risk Management Committee |
|
Member |
|
4/4 |
|
100% |
Corporate Governance & Nominating Committee |
|
Chair |
|
2/2 |
|
100% |
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
99,679 |
|
39,679 |
|
151 |
% |
DSUs |
|
27,144 |
|
18,509 |
|
47 |
% |
Total |
|
126,823 |
|
58,188 |
|
118 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
Badger Daylighting Ltd. (TSX) |
|
Chairman of the Board |
Logan International Inc. (TSX) |
|
Audit Committee |
|
Compensation and Governance Committee (Chairman) |
SilverWillow Energy Corporation (TSX Venture Exchange) |
|
Reserves Committee (Chairman) |
17
Sheldon B. Steeves |
B. Sc. (Geology) |
Calgary, Alberta, Canada |
Age: 61 |
Director since June 2012 |
Independent Director |
Mr. Steeves has over 37 years of experience in the North American oil and gas industry. From January 2001 until April 2012, Mr. Steeves was Chairman and Chief Executive Officer of Echoex Ltd., a junior private company focused on greenfield organic growth in Western Canada. Mr. Steeves spent over 15 years at Renaissance Energy Ltd. where he was appointed Chief Operating Officer in 1997. He holds a Bachelor of Science in Geology from the University of Calgary.
Board and Committee Participation |
|
Position |
|
Meetings |
|
Attendance |
|
Board of Directors |
|
Member |
|
9/9 |
|
100% |
|
Audit & Risk Management Committee |
|
Member |
|
4/4 |
|
100% |
|
Reserves Committee (Chair as of May 9, 2014) |
|
Chair |
|
4/4 |
|
100% |
|
Equity Holdings |
|
2014 |
|
2013 |
|
Change |
|
Common Shares |
|
1,600 |
|
1,600 |
|
0 |
% |
DSUs |
|
21,322 |
|
12,687 |
|
68 |
% |
Total |
|
22,922 |
|
14,287 |
|
60 |
% |
Other Public Board Directorships |
|
Committee Position(s) |
NuVista Energy Ltd. (TSX) |
|
Compensation and Governance Committee |
|
Reserves Committee |
PrairieSky Royalty Ltd. (TSX) |
|
Reserves Committee (Chair) |
|
Governance & Compensation Committee |
18
Director Skills Matrix
The director skills matrix provides a comprehensive overview of both the skills Enerplus considers when recruiting directors and the representation of those skills by each Board nominee. The Corporate Governance & Nominating Committee annually reviews the matrix to ensure there is an appropriate mix of skills on the current Board and utilizes it as a guide for future Board member appointments. It is also a requirement of the Committee to conduct an annual review to ensure that there are no conflicts of interest or performance concerns with respect to nominees who serve on multiple boards.
Majority Voting for Directors
Pursuant to Enerplus majority voting policy, for each director nominee to be elected, more than 50% of votes cast by or on behalf of Shareholders present in person or represented by proxy at the Meeting must be in favour of such election; otherwise, the nominee is required to submit his or her resignation to the Board within five days of the Meeting, with the resignation to take effect upon acceptance by the Board. The Corporate Governance & Nominating Committee will consider the director nominees offer to resign and will make a recommendation to the Board as to whether or not to accept the resignation. The Committee will be expected to accept the resignation except in special circumstances where it is in the best interest of Enerplus that the applicable director nominee continues to serve on the Board. In determining whether or not to accept the resignation, the Committee will consider all relevant factors including: the stated reasons why Shareholders withheld votes from the election of that nominee, the existing Board composition, the nominees length of service, qualifications and past contributions to Enerplus, and Enerplus corporate governance policies. The Board will consider the Committees recommendation and make a decision as to whether to accept the nominees offer to resign within 90 days of the Meeting. Further, Enerplus will announce the decision by way of a press release, including, if the Board elects, the reasons for rejecting the nominees resignation. No nominee who is required to tender his or her resignation will participate in the deliberations or recommendations of the Committee or the Board.
If a nominees resignation is accepted, subject to applicable legal requirements, the Board may leave the resultant vacancy unfilled until the next Meeting or fill the vacancy through the appointment of a new director. This policy does not apply in circumstances involving contested director elections.
19
4. Advisory Vote on Executive Compensation
At the Meeting, Shareholders will be asked to vote, on a non-binding advisory basis, on the acceptance of Enerplus approach to executive compensation.
The Board believes that Shareholders should have the opportunity to fully understand the objectives, philosophy and principles that guide the executive compensation-related decisions made by the Compensation & Human Resources Committee and the Board. Shareholders are encouraged to review the Executive Compensation Compensation Discussion & Analysis section of this Information Circular, which discusses Enerplus compensation philosophy and approach to executive compensation, what the Named Executive Officers are paid, and how their respective levels of compensation are determined.
As part of Enerplus ongoing commitment to corporate governance, the Board has approved a non-binding advisory vote on executive compensation at the Meeting with the intention that this Shareholder advisory vote will form an integral part of the Boards Shareholder engagement process relating to executive compensation.
As this is an advisory vote, the results will not be binding upon the Board. The Board, and specifically the Compensation & Human Resources Committee, will not be obligated to take any compensation actions, or make any adjustments to executive compensation programs or plans, as a result of the vote. However, in considering its approach to compensation in the future, the Committee and the Board will take into account the results of the vote, together with feedback received from Shareholders. Enerplus will disclose the results of the Shareholder advisory vote as part of its report on voting results at the Meeting.
At the Meeting, Shareholders will be asked to vote on the following resolution:
BE IT RESOLVED, on an advisory basis and not to diminish the role and responsibilities of Enerplus board of directors, that the Shareholders accept Enerplus approach to executive compensation disclosed in the Information Circular and Proxy Statement dated April 2, 2015.
The Board recommends that you vote FOR the advisory resolution approving Enerplus approach to executive compensation disclosed in this Information Circular. Unless otherwise instructed, the persons named in the Form of Proxy will vote FOR Enerplus approach to executive compensation disclosed in this Information Circular.
Board Recommendations for Shareholder Voting
Voting Decisions |
|
Board Recommendation |
|
Appointment of Deloitte LLP as auditors of Enerplus |
|
FOR |
|
Election of directors of Enerplus |
|
FOR |
|
Advisory, non-binding, vote accepting Enerplus approach to executive compensation |
|
FOR |
|
20
CORPORATE GOVERNANCE
Enerplus is subject to the corporate governance disclosure requirements adopted by the Canadian Securities Administrators in National Instrument 58-101 and the corporate governance guidelines in National Policy 58-201. In addition, Enerplus is subject to certain of the corporate governance standards of the NYSE and to certain provisions of the Sarbanes-Oxley Act. As a foreign private issuer whose Common Shares are listed on the NYSE, Enerplus is required to disclose any significant ways in which its governance practices differ from those followed by U.S. domestic companies under the NYSEs corporate governance listing standards. Enerplus has reviewed the NYSE listing standards and confirms that its corporate governance practices do not differ significantly from such standards. As a foreign private issuer whose Common Shares are listed on the NYSE, Enerplus is not obligated to have and does not have an internal audit function; however, Enerplus uses an independent company to review and test internal controls.
On an ongoing basis, and when determined to be appropriate or necessary, the Corporate Governance & Nominating Committee monitors and brings forward proposed changes to Enerplus corporate governance practices for the Boards consideration and adoption.
Set out below is a description of certain corporate governance practices and principles of Enerplus, and the roles and responsibilities of the Board.
Board Composition
National Policy 58-201 recommends that the majority of the Board be comprised of independent directors. Nine of the 10 director nominees proposed to be elected at the Meeting have been determined to be independent based on information provided by the individual directors and reviewed by the Corporate Governance & Nominating Committee. One director, Mr. Dundas, is the President & CEO of Enerplus and, as such, is not independent. It is Enerplus practice that the Chairman of the Board shall be an independent and unrelated director and that only independent directors serve on the committees of the Board.
Messrs. Barr and Roane serve as directors on the board of directors of Logan International Inc. The Committee is aware of the interlocking nature of these positions and has satisfied itself that such directors are independent due to the fact that Logan International Inc. is in a different business from Enerplus and neither individual sits on the same Enerplus Board committee.
Any independent director whose circumstances change such that he or she might be considered to be a non-independent director is required to promptly advise the Chair of the Corporate Governance & Nominating Committee of that directors change in circumstances and, if deemed non-independent, to submit his or her resignation to the Chairman of the Board. The CEO of Enerplus shall be the only member of management and the only non-independent director on the Board.
Orientation and Continuous Development
The Corporate Governance & Nominating Committee is responsible for reviewing and monitoring the orientation programs for new directors. The Committee ensures each new director receives an orientation, supplemented by adequate orientation materials. Enerplus executive management reviews with each new director certain information and materials regarding Enerplus, including the role of the Board and its committees, and the legal obligations of a director.
The Committee, in conjunction with the Chairman of the Board and management, has oversight for continuing education for directors in order to ensure that directors maintain the skill and knowledge necessary to meet their obligations. Directors are encouraged to participate in continuing education programs of their choosing to increase their knowledge and skills. In 2014, management facilitated quarterly technical meetings and education sessions on the topics of Enerplus crude oil waterflood assets, Bakken and Marcellus shale assets, and U.S. and Canadian safety and regulatory requirements. These technical education sessions were attended by all directors.
21
Diversity Policy
The Board and management of Enerplus believe that the Company can only excel with exceptional people. In order to attract and retain the most qualified individuals for any position, Enerplus must ensure it objectively assesses talent and skill without being influenced by gender, age, cultural background or other personal traits. Only by impartially assessing the skills and competence of individuals and removing any barriers that may prevent an objective review is Enerplus able to identify the best candidates for any role, development opportunity or promotion. In an effort to engrain this in Enerplus corporate culture, the Board has adopted a Diversity Policy.
Respect for the qualities and values of others is a key element of Enerplus culture and values. By welcoming people with different experiences and perspectives, we gain new insights into our business and enhance our business decision making and problem solving. Accordingly, Enerplus supports and encourages diversity in the workplace because its smart business.
Gender Diversity
Enerplus is committed to a corporate culture of inclusiveness and tolerance without resorting to the use of arbitrary gender targets or diversity-based quotas. Enerplus has been successful in its efforts to recruit exceptional leaders who are women. As evidenced by the statistics in the chart below, Enerplus is proud of its current gender diversity and expects to continue to sustain its achievement in this regard. Enerplus will continue to monitor its gender diversity and disclose the results to the Shareholders on an annual basis.
Category |
|
Total |
|
Number of Women |
|
% of Women |
|
Board of Directors (standing for re-election) |
|
10 |
|
2 |
|
20 |
|
Executive Officers |
|
12 |
|
3 |
|
25 |
|
Managers |
|
32 |
|
11 |
|
34 |
|
The Corporate Governance & Nominating Committee takes into account the current percentage of women on the Board as one factor in its director recruitment process. Similarly, Enerplus management also considers gender when making employment and promotion decisions. However, while being mindful of female representation, both management and the Committee do not prioritize gender at the expense of recruiting the most qualified individuals available.
Board and Committee Meetings
The Board meets a minimum of six times per year. Each Board meeting includes an in-camera discussion of the independent directors without the presence of management. Directors may assist in preparing the agenda for Board and committee meetings. The directors receive a comprehensive package of information in advance of each meeting. Further, the Board attends an annual strategic planning session to review, amend or adopt long-term strategies and new corporate objectives for the upcoming year. Further details on Board and Committee meeting attendance are outlined in the individual director profiles.
Director Term Limits
In 2014, the Board introduced a policy which provides that each independent director may serve up to a maximum of 10 years on the Board, assuming such director receives satisfactory annual performance assessments, is annually re-elected by Shareholders, and meets all other corporate governance requirements. On the Corporate Governance & Nominating Committees recommendation, the Board may, following a formal review by the Committee of the directors current contributions, extend a directors initial ten year term limit for up to five additional years, for a total term limit of 15 years.
During 2014, the Board exercised its discretion and extended the term of a long-standing director, Mr. Glen Roane, who has served as a director on the Board since 2004. On recommendation of the Committee, with Mr. Roane not participating in its deliberations, the Board unanimously agreed to extend his term with the Board for
22
an additional five years. The Board came to this conclusion because of Mr. Roanes numerous and valuable current contributions to the Board and his unique skill set.
To reduce any unintended disruptions to the Boards continuity, it is the Boards policy that no more than two directors shall retire at any one time. If more than two directors are affected by Enerplus term limit policy, the retirement of the director(s) with the shortest tenure on the Board may be deferred until the next annual meeting of Shareholders.
Board Directorship Policy
Being an active and contributing member of the Board requires skill, experience and a personal commitment of both time and energy. To ensure that all directors have sufficient time to commit to the Board, Enerplus has adopted a policy according to which, should a director wish to serve on the board of directors of another entity, such director must obtain prior approval before committing to do so. The Chair of the Corporate Governance & Nominating Committee and the Chairman of the Board review any requests of Board members who wish to serve on other boards.
After a detailed review, which will take into account the current number of directorships, potential conflicts, and the directors past performance assessments, a decision will be rendered based on the facts of the request. The purpose of this policy is to ensure that the director will have sufficient time to successfully satisfy his or her obligations to Enerplus and ensure that no directors of Enerplus become overloaded. At the present time, Enerplus believes all of the nominees for election to the Board have sufficient time to commit to their duties as Enerplus directors.
In 2014, based on the number of directorships held on public company boards of directors, 15.55% and 9.45% of Shareholders at the last Meeting withheld their votes for the re-election of Messrs. Hodgins and Roane, respectively. As a direct result, with the participation of the Chair of the Board and with Messrs. Hodgins and Roane not participating in the review, the Corporate Governance & Nominating Committee undertook an internal review of those nominees and determined that Messrs. Hodgins and Roane were high performing, engaged contributors to the Board and their other directorships were not interfering with their ability to execute their director duties to Enerplus. In making such determination, the Board took into consideration excellent meeting attendance by Messrs. Hodgins and Roane and the results of their individual peer-to-peer evaluations by all other members of the Board. The Board also noted that some of the boards these directors serve on were TSX-Venture Exchange listed companies, which have different reporting timelines than TSX-listed companies such as Enerplus. This staggered reporting was considered by the Board in its determination.
Director Compensation
In order to attract and retain skilled, high functioning individuals to serve as Board members, Enerplus consciously monitors the director compensation practices of its market peers. The Corporate Governance & Nominating Committee, in consultation with an external compensation advisor, regularly reviews the compensation of the members of the Board. Following the review, the Committee makes recommendations to the Board for its consideration when it believes changes in director compensation are warranted or appropriate.
Director Emeritus
In 2014, Douglas R. Martin was appointed Chairman Emeritus by the Board following his retirement as Chairman, to acknowledge his distinguished service and many contributions to Enerplus. Chairman Emeritus is an honorary title and, as such, Mr. Martin does not attend Board meetings nor does he receive any compensation in relation to this role.
Executive Succession Planning
The Compensation & Human Resources Committee is accountable for reviewing managements ongoing succession, leadership and talent strategy programs and plans. Management, on a regular basis, provides the Committee with a detailed succession plan for each executive position and identifies possible succession gaps in the current staff. Further, the Committee and the CEO conduct a detailed review of current employees who are potential successors for all executive positions, with particular focus on the CEO and Senior Vice-President roles. The review includes an assessment of each individuals strengths and development requirements, an estimate as
23
to when such individuals may be prepared to accept such a role change, and any current plans for such individuals career development. The succession and leadership plans are reviewed regularly at Committee meetings.
Ethical Business Conduct
The Board has adopted a Code of Business Conduct applicable to all directors, officers, employees and consultants of Enerplus. The Code sets out in detail the core values and the principles by which Enerplus is governed. It addresses topics which include: honest and ethical conduct, conflicts of interest, compliance with applicable laws and company policies and procedures, public disclosure, use of corporate assets and opportunities, confidentiality of corporate information, reporting responsibilities and procedures, and non-retaliation. The Code is available on Enerplus website at www.enerplus.com, under Enerplus SEDAR profile at www.sedar.com and on Form 6-K on EDGAR at www.sec.gov.
The Board and the Audit & Risk Management Committee have established a Whistleblower Policy to encourage members of the public, employees, officers and directors to raise concerns regarding matters covered by the Code, including accounting, internal controls and auditing matters. Anyone may contact the Chair of the Audit & Risk Management Committee, CEO, General Counsel or the Vice-President, Human Resources to report a contravention of the Code on a confidential basis free from discrimination, retaliation or harassment. A copy of the Whistleblower Policy is available on Enerplus website at www.enerplus.com.
In addition, in order to ensure independent judgment in considering transactions and agreements in which a director or officer of Enerplus has a material interest, all related party transactions and any payments arising from such transactions are approved by the independent directors. No such material transactions or payments occurred in the past year.
Independent Director Performance Assessments
The Corporate Governance & Nominating Committee is responsible for assessing the effectiveness of the Board and the Board committees. The Chair of the Committee leads an annual Board effectiveness roundtable discussion with all members of the Board during an in-camera session at the annual strategic planning session of the Board.
In addition to and separate from the roundtable discussions noted above, the Board undertakes a regular peer-to-peer evaluation. Individual Board members participate in an anonymous and rigorous peer-to-peer director evaluation process. Pursuant to the evaluation process, each member of the Board reflects on the relative input and contribution of their colleagues and considers ways in which a colleagues performance may be enhanced. Further, each director is required to complete a self-evaluation for review. The Chairman of the Board then confidentially meets with each independent director to review the results of the evaluation and proposed steps to address any perceived shortcomings. The purpose of these assessments is to improve the Boards oversight and effectiveness in fulfilling its obligation to provide advice and strategic direction to management. Also, these assessments serve to assist in enhancing the overall performance of each individual director and address any areas requiring director improvement.
Board Mandate and Committees
The Board is responsible for the overall stewardship of Enerplus and discharges this responsibility directly and through delegation of specific responsibilities to committees of the Board, the Chairman of the Board and the officers of Enerplus. The Board has five committees, listed below, each operating in accordance with a Board-approved written mandate outlining its duties and responsibilities. The following section outlines the assignment and rotation of committee chairs and a general review of each of the Board committees and their respective functions. A copy of the Boards mandate is included in Schedule A to this Information Circular and can be found on Enerplus website at www.enerplus.com.
24
· Audit & Risk Management Committee
· Compensation & Human Resources Committee
· Corporate Governance & Nominating Committee
· Reserves Committee
· Safety & Social Responsibility Committee
Position Descriptions and Responsibilities
The Board has position descriptions for the Chairman of the Board (Chairman) and for the Chair of each committee. The Board and CEO have also developed a written position description for the CEO.
The Chairman is responsible for the management, development and effective leadership of the Board. The Chairmans primary role is to provide leadership to the Board and its committees, including chairing meetings in a manner that facilitates open discussions and expressions of competing views in an effort to achieve consensus among the directors. The Chairman is also responsible for, among other things, fostering ethical and independent decision-making, providing a link between the Board and management, and acting in an advisory capacity to the CEO in all matters concerning the interests and management of Enerplus.
Rotation of Committee Assignments and Chairs
Committee assignments and the designation of committee chairs are based on each directors knowledge, interests and areas of expertise. The Board favours rotation of committee assignments and chairs, where practicable, to broaden the exposure of individual directors and introduce new perspectives to the Board committees. However, the Board believes experience and continuity must be preserved when considering candidates for rotation. Committee members and chairs may be rotated in response to changes in membership of the Board and, in all cases, should be rotated only if doing so is likely to maintain or increase committee performance. All directors are welcome to attend committee meetings and are given access to all committee materials regardless of whether they are a member of the committee.
Audit & Risk Management Committee
Chair: Robert B. Hodgins
Members: Hilary A. Foulkes, Glen D. Roane, Sheldon B. Steeves
Accountability: Responsible for the Boards review and oversight of Enerplus financial reporting. The specific responsibilities of the Audit & Risk Management Committee are set out in the Audit & Risk Management Committee charter, a copy of which is on Enerplus website at www.enerplus.com.
Key Responsibilities:
· Assess financial reporting and continuous disclosure of Enerplus
· Review Enerplus internal controls and policies, the certification process, and compliance with regulatory requirements over financial matters
· Evaluate and monitor the performance and independence of Enerplus external auditors
· Monitor the manner in which the business risks of Enerplus are identified and managed
Certain information regarding the Audit & Risk Management Committee that is required to be disclosed in accordance with National Instrument 52-110 is contained in Enerplus Annual Information Form for the year ending December 31, 2014 dated February 20, 2015, an electronic copy of which is available on the internet under Enerplus SEDAR profile at www.sedar.com, in Enerplus annual report on Form 40-F filed on EDGAR at www.sec.gov and on Enerplus website at www.enerplus.com.
25
Compensation & Human Resources Committee
Chair: Susan M. MacKenzie
Members: Michael R. Culbert, Edwin V. Dodge and Donald J. Nelson
Accountability: Assists the Board in fulfilling its duties regarding human resources policies, succession planning, talent management and compensation matters. The Committee also recommends the form and adequacy of compensation arrangements for Enerplus executive officers and employees, having regard to associated risks and responsibilities. The Committee obtains executive compensation data from external consultants who provide advice regarding the compensation of executive officers to ensure achievement of compensation objectives.
Key Responsibilities:
· Assess the performance of senior management with reference to corporate objectives
· Make base salary recommendations for the CEO and senior management to the Board for its approval, having regard to executive compensation policies, programs and awards
· Make annual incentive recommendations to the Board for its approval, including the corporate performance rating and individual performance ratings of officers of Enerplus
· Review and make recommendations to the Board for approval regarding the granting of awards to officers and employees under Enerplus long-term incentive plans
· Review overall compensation programs to ensure competitiveness, reasonableness and employee retention
· Review long-term succession plans for executive positions
· Oversee assessment of Enerplus risks relating to its compensation philosophy, policies and practices to ensure that executives are not encouraged to take unnecessary or inappropriate risks, and to review disclosure in these respects
· Review managements progress in achieving the objectives of the Diversity Policy and disclose results of such progress to Shareholders on an annual basis
Corporate Governance & Nominating Committee
Chair: Glen D. Roane
Members: Michael R. Culbert, Robert B. Hodgins and Donald J. Nelson
Accountability: Assists the Board in matters of corporate governance and regularly reviews Enerplus internal practices and policies to ensure that such practices and policies reflect corporate governance best practices. Furthermore, the Committee also assists the Board in identifying and evaluating director candidates and recommending nominees for membership on the Board.
Key Responsibilities:
· Assess and make recommendations to the Board on size and the appropriate skills and characteristics required of Board members
· Recommend nominees for election or re-election to the Board
· Annually review each directors continuation on the Board
· Facilitate an annual Board effectiveness session and a director peer-to-peer evaluation process to coordinate the implementation of suggested improvements and strategies
· Review and monitor the orientation of new directors
· Regularly review Enerplus corporate governance practices and recommend to the Board any changes that the Committee deems necessary or advisable
· Review Enerplus annual disclosure of corporate governance practices
26
· Review Enerplus corporate governance practices as an ongoing practice to ensure that procedures, charters, policies and protocols are followed
· Review director compensation and make change recommendations to the Board annually
Reserves Committee
Chair: Sheldon B. Steeves
Members: James B. Fraser and Susan M. MacKenzie
Accountability: Assists the Board in carrying out its responsibilities with respect to public disclosure requirements and annual and interim reviews of Enerplus oil and natural gas reserves and contingent resources.
Key Responsibilities:
· Recommend to the Board the engagement of the independent reserves evaluators
· Review managements assessment of the work of the independent reserves evaluators annually
· Review Enerplus procedures relating to the disclosure of information with respect to its reserves and resources
· Review the scope of the annual review of the reserves and resources by the independent reserves evaluators, including findings and any disagreements with management
· Meet in-camera with the independent reserves evaluators
· Determine whether any restrictions affect the ability of the independent reserves evaluators in reporting on Enerplus reserves and resources data
· Receive, annually, signed independent reserves evaluators reports and a certificate of compliance and due diligence from management
· Make recommendations to the Board regarding the approval of Enerplus year-end reserves evaluations
Safety & Social Responsibility Committee
Chair: David H. Barr
Members: Edwin V. Dodge, Hilary A. Foulkes and James B. Fraser
Accountability: Assists the Board in carrying out its responsibilities with respect to the development and implementation of an effective environmental management system, to ensure that Enerplus activities are planned and executed in a safe and responsible manner and that there are adequate systems in place to support ongoing compliance with Enerplus regulatory obligations.
Key Responsibilities:
· Review Enerplus health, safety, regulatory and environmental (HSRE) programs and policies
· Review Enerplus performance related to HSRE matters on a semi-annual basis
· Review external and internal HSRE reports on material risk assessments, ongoing investigations and audits performed
· Review the status of significant remediation projects, developments and environmental provisions
· Ensure that long range preventive programs are in place to mitigate future risks
· Participate in bi-annual visits to one of Enerplus operating facilities
· Receive an annual compliance certificate from management
· Generally ensure the integrity of Enerplus HSRE programs and policies
27
DIRECTOR COMPENSATION
Philosophy
The Board, through the Corporate Governance & Nominating Committee and in consultation with an external compensation advisor, is responsible for benchmarking and designing the directors compensation program. The Committee annually reviews director compensation relative to a peer group and targets total compensation at the median. The overall objective is to ensure the director compensation program:
· Attracts and retains the services of highly qualified individuals
· Compensates the directors in a manner that is competitive with other comparable peers and commensurate with the risks and responsibilities assumed in Board and committee membership
· Aligns the interests of the directors with Shareholders
Directors compensation includes annual retainers, meeting fees and annual share awards (which can be accepted in the form of Common Shares or Deferred Share Units (DSUs)). Directors are not eligible to receive other forms of equity such as stock options, incentive rights, restricted stock units or performance share units.
The director compensation table set forth below excludes any compensation paid to Mr. Dundas and only refers to the compensation of independent directors. Mr. Dundas does not receive any compensation related to his services as a director of the Board. For information on Mr. Dundas compensation in his capacity as CEO, see the Executive Compensation section.
Fees and Retainers
Directors receive cash fees and retainers paid on a quarterly basis. They are also reimbursed for travel expenses related to their attendance at meetings.
2014 Annual Cash Retainer or Meeting Fees |
|
Cash |
|
Board Chairman Retainer |
|
$ |
120,000 |
|
Director Retainer |
|
$ |
35,000 |
|
Audit & Risk Management Committee Chair |
|
$ |
20,000 |
|
Other Committee Chairs |
|
$ |
10,000 |
|
Annual Meeting Fees |
|
$ |
25,000 |
|
Share-Based Awards
Directors receive an annual non-cash retainer which they may elect, prior to the relevant calendar year, to receive either in Common Shares paid under the Director Share Plan or DSUs under the Deferred Share Unit Plan, or a combination of both.
2014 Annual Equity Retainer |
|
Equity |
|
Board Chairman Retainer |
|
$ |
125,000 |
|
Director Retainer |
|
$ |
97,500 |
|
28
Director Share Plan
Under the Director Share Plan, on an annual basis, Common Shares are purchased by Enerplus on the TSX for payment to eligible directors who have elected to be paid all or a portion of their annual non-cash retainer in Common Shares. The Common Shares are not issued from treasury and such securities are not subject to any transfer or resale restrictions imposed on the directors. In 2014, the number of Common Shares purchased was calculated by dividing the dollar value of the portion of the directors non-cash annual retainer that he or she had elected to be paid in the form of Common Shares by the volume weighted average trading price of the Common Shares on the TSX for the last 10 trading days in 2013. Equity payments received by the directors in the form of Common Shares granted under the Director Share Plan were considered share-based awards, which awards vested and were paid immediately as described in the Director Summary Compensation Table. Therefore, no such awards were outstanding as at December 31, 2014.
Deferred Share Unit Plan
Directors who have elected to be paid all or a portion of their annual non-cash retainer in DSUs receive their awards effective the first day of each calendar year. The number of DSUs credited to any director in a calendar year is calculated by dividing the dollar value of the portion of the directors non-cash annual retainer that he or she has elected to be paid in the form of DSUs by the volume weighted average trading price of the Common Shares on the TSX for the last ten trading days of the preceding calendar year. The DSUs vest immediately but are not paid out until a director ceases to be a director of Enerplus.
When a director ceases to serve on the Board for any reason, the director will receive a cash payment for each DSU credited equal to the volume weighted average trading price of the Common Shares on the TSX for the ten trading days immediately preceding the termination date.
The plan was amended in 2014 to align with the treatment of dividends with other long-term incentive plans of Enerplus. For DSUs granted prior to 2014, upon payout the director receives a cash payment equal to the amount of dividends, if any, that would have been paid on the DSUs if they were outstanding as Common Shares from the date of grant. For DSUs granted in or after 2014, the number of DSUs held by a director is increased each month, on a compounding basis, as if the dividends paid on the Common Shares were also paid on the DSUs and reinvested into additional DSUs using the volume weighted average trading price of the Common Shares on the TSX for the five trading days preceding the dividend payment date.
Director Summary Compensation Table
The following table summarizes the aggregate compensation provided to each of the independent directors in 2014. Mr. Dundas, the President & CEO of Enerplus, did not receive any compensation in his capacity as a director.
In 2014, a total of $2,092,700 was paid to the directors in annual compensation: $540,833 in annual cash retainers, $1,196,751 in share-based retainers, $60,000 paid to those directors who acted as chair of a committee and $295,116 for Board and committee meetings. This includes the retainer and fees paid to Messrs. Martin and OBrien who retired from the Board on November 30, 2014 and May 9, 2014, respectively.
29
Name |
|
Annual Retainer |
|
Chair Committee Retainer |
|
Meeting Fee |
|
Share-Based Awards1 (value awarded, and vested or earned, during the year) |
|
Total Compensation |
|
Share-Based Awards2 (value awarded, and vested or earned, not paid out during the year) |
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
David H. Barr |
|
35,000 |
|
6,456 |
|
25,000 |
|
97,500 |
|
163,956 |
|
97,500 |
|
Michael R. Culbert3 |
|
27,319 |
|
|
|
19,514 |
|
76,104 |
|
122,937 |
|
76,104 |
|
Edwin V. Dodge |
|
35,000 |
|
3,544 |
|
25,000 |
|
97,500 |
|
161,044 |
|
|
|
Hilary A. Foulkes3 |
|
30,042 |
|
|
|
21,458 |
|
83,688 |
|
135,188 |
|
83,688 |
|
James B. Fraser |
|
35,000 |
|
|
|
25,000 |
|
97,500 |
|
157,500 |
|
97,500 |
|
Robert B. Hodgins |
|
35,000 |
|
20,000 |
|
25,000 |
|
97,500 |
|
177,500 |
|
97,500 |
|
Susan M. MacKenzie |
|
35,000 |
|
10,000 |
|
25,000 |
|
97,500 |
|
167,500 |
|
97,500 |
|
Douglas R. Martin4 |
|
110,217 |
|
|
|
22,894 |
|
125,000 |
|
258,111 |
|
|
|
Donald J. Nelson |
|
35,000 |
|
|
|
25,000 |
|
97,500 |
|
157,500 |
|
97,500 |
|
David P. OBrien5 |
|
8,750 |
|
|
|
6,250 |
|
34,459 |
|
49,459 |
|
|
|
Elliott Pew6 |
|
84,505 |
|
3,544 |
|
25,000 |
|
97,500 |
|
210,549 |
|
97,500 |
|
Glen D. Roane |
|
35,000 |
|
10,000 |
|
25,000 |
|
97,500 |
|
167,500 |
|
97,500 |
|
Sheldon B. Steeves |
|
35,000 |
|
6,456 |
|
25,000 |
|
97,500 |
|
163,956 |
|
97,500 |
|
Total |
|
540,833 |
|
60,000 |
|
295,116 |
|
1,196,751 |
|
2,092,700 |
|
939,792 |
|
Notes:
(1) Represents the value of Common Shares purchased by Enerplus for directors under the Director Share Plan and/or the value of DSUs granted to the various directors under the DSU Plan, as elected by each director in 2014.
(2) Represents the value of DSUs credited under the DSU Plan to those directors who elected to receive a portion of their non-cash retainer in DSUs. The value is calculated by dividing the dollar value of the portion of the directors non-cash retainer that is elected to be paid in the form of DSUs by the weighted average trading price of the Common Shares on the TSX for the last ten trading days in 2013, which was $19.38.
(3) Ms. Foulkes and Mr. Culbert joined the Board in February 2014 and March 2014, respectively. Compensation amounts are reflected as of their appointment dates. Each received a pro-rated cash payment in lieu of Common Shares or DSUs at the time of their appointment.
(4) Mr. Martin retired from the Board effective November 30, 2014.
(5) Mr. OBrien did not stand for re-election to the Board at the annual meeting of Shareholders held on May 9, 2014.
(6) Mr. Pew was appointed Chairman of the Board effective June 1, 2014. As such Mr. Pew received a pro-rated cash retainer amount as Chairman of the Board from the date of his appointment to the end of the year.
Director Share Ownership Requirements
In order to further align the directors interests with those of Shareholders, directors are required to hold equity interests in Enerplus (Common Shares and/or DSUs) equal to a minimum of three times their total annual compensation (cash and non-cash) by February 2015 (which is five years from the adoption of the director share ownership requirements by Enerplus) or within five years of their election date to the Board, whichever is later.
Outlined below is the number and value of Common Shares and DSUs owned by each independent director as at March 6, 2015. Share ownership requirements for Mr. Dundas, the President & CEO of Enerplus, are reflected in the Executive Compensation section in this Information Circular. The value of a directors ownership requirement is calculated based on the higher of either the closing price of the Common Shares on the TSX on March 6, 2015 or their original purchase price (and in the case of DSUs, their grant date fair value).
30
Currently, all Board members have met or have additional time to achieve their prescribed share ownership level.
Name |
|
Common Shares |
|
DSUs |
|
Total Value of Share Ownership (1) |
|
Share Ownership Requirement |
|
Share Ownership Achievement |
|
Share Ownership Requirement Date |
|
|
|
(#) |
|
(#) |
|
($) |
|
($) |
|
|
|
|
|
David H. Barr |
|
10,000 |
|
24,501 |
|
523,699 |
|
397,500 |
|
Achieved |
|
July 2016 |
|
Michael R. Culbert |
|
10,000 |
|
8,635 |
|
217,939 |
|
397,500 |
|
In Progress |
|
March 2019 |
|
Edwin V. Dodge(2) |
|
27,969 |
|
3,179 |
|
849,157 |
|
397,500 |
|
Achieved |
|
February 2015 |
|
Hilary A. Foulkes |
|
4,600 |
|
8,635 |
|
196,987 |
|
397,500 |
|
In Progress |
|
February 2019 |
|
James B. Fraser |
|
14,176 |
|
20,174 |
|
466,942 |
|
397,500 |
|
Achieved |
|
June 2017 |
|
Robert B. Hodgins |
|
18,923 |
|
15,866 |
|
672,073 |
|
397,500 |
|
Achieved |
|
February 2015 |
|
Susan M. MacKenzie |
|
6,450 |
|
24,501 |
|
481,202 |
|
397,500 |
|
Achieved |
|
July 2016 |
|
Donald J. Nelson(3) |
|
10,500 |
|
15,716 |
|
385,034 |
|
397,500 |
|
In Progress |
|
June 2017 |
|
Elliott Pew |
|
21,100 |
|
29,151 |
|
844,706 |
|
735,000 |
|
Achieved |
|
September 2015 |
|
Glen D. Roane |
|
99,679 |
|
27,144 |
|
2,640,230 |
|
397,500 |
|
Achieved |
|
February 2015 |
|
Sheldon B. Steeves |
|
1,600 |
|
21,322 |
|
323,194 |
|
397,500 |
|
In Progress |
|
June 2017 |
|
Notes:
(1) Based on the closing price of the Common Shares on the TSX of $12.85 per Common Share on March 6, 2015 or their book value at the time of acquisition, whichever is higher.
(2) Pursuant to the Boards retirement policy, Mr. Dodge is not seeking re-election at the Meeting.
(3) Mr. Nelson is not seeking re-election at the Meeting.
31
EXECUTIVE COMPENSATION
Letter to Shareholders
Dear Fellow Shareholder,
We, the Board of Directors, are accountable to our Shareholders for the overall stewardship of Enerplus.
Our accountability includes a commitment to provide our Shareholders with information on the executive compensation philosophy, programs and decision-making at Enerplus that enable us to attract, motivate and retain the high quality executive talent we need to deliver Shareholder value.
The purpose of this letter is to provide an overview of Enerplus performance in 2014, the compensation decisions we made, as well as changes made that will impact executive compensation going forward.
2014 Business Overview
We started 2014 with two strong quarters, achieving results that exceeded most of our corporate performance targets. We ended the first half of the year at the top of our peer group relative to a six-month total shareholder return (TSR), having increased production guidance, decreased operating cost guidance and materially increased our contingent resource and drilling inventory in Ft. Berthold. The inflationary impact of a weakening Canadian dollar on our U.S. spending did result in increased capital spending guidance.
The second half of the year, specifically the last quarter, proved more challenging as commodity prices for both oil and gas fell sharply. Other performance pressures came from the Marcellus price-driven curtailment of production, new gas capture regulations and midstream infrastructure delays in North Dakota, and third party plant outages in Canada.
Nonetheless, we continued to deliver strong operational results in the third and fourth quarters of 2014. We met or exceeded virtually all of our operational targets, as shown in the CD&A. Our year-end reserves position reflected low F&D costs, excellent reserve replacement, as well as a strong recycle ratio and top quartile capital efficiencies. Solid funds flow growth, disciplined capital management, and a successful divestment program resulted in a strengthened balance sheet over the course of the year. We ended 2014 with a strong balance sheet and significant hedge protection for 2015.
We also met or exceeded the majority of our goals in strategic portfolio positioning, people management, finance and reporting, and information systems.
Despite the dramatic drop of our share price at the end of the year, we delivered a one year total shareholder return that was in line relative to our peers. Nonetheless, we believe it is important to acknowledge the absolute negative total return experienced by our Shareholders in 2014. Although Enerplus was positioned near the midpoint of our peer groups TSR performance, it was difficult to call this an above expectation performance year when our Shareholders had lost 35% in TSR.
These results had a direct impact on the corporate portion of 2014 bonuses and long-term incentives paid to executives.
32
2014 Compensation Changes
The Companys compensation framework and programs are continuously reviewed for effectiveness in achieving our compensation objectives. Further descriptions of executive compensation philosophy, framework and elements as well as compensation paid to Named Executive Officers in 2014 are outlined in the Compensation Discussion & Analysis section. Below is a summary of key changes made in 2014 to further align compensation with Shareholder interests and market best practices.
Equity Plans
· Introduced a Share Award Incentive Plan, with 87% Shareholder approval at the last Shareholder meeting
· Discontinued the current use of Options in favor of RSUs and PSUs to reduce dilution to Shareholders
· Removed the minimum payout for PSUs to strengthen the pay for performance connection
· Introduced the ability to treasury settle grants under the Share Award Incentive Plan to reduce cash costs
Retirement Policy
· Introduced retirement provisions within LTI plans, allowing eligible executives to retire without forfeiting equity awards previously granted, potentially reducing future executive severance obligations and further aligning the retiring executives compensation with continued long-term corporate performance
2014 Compensation Decisions
Annually, the Compensation & Human Resources Committee reviews executive pay, benchmarking analysis and risk considerations, and stress tests compensation payouts under various performance scenarios. The Committee considers corporate and individual performance results to make appropriate executive compensation decisions that are tied to the performance of Enerplus and Shareholder returns.
Base Salaries and Long Term Incentives (LTI)
Decisions on executive base salaries and LTI were made in February 2014 to reward individual performance, acknowledge individual potential, link long-term pay to performance, and ensure continued competitiveness within our peer group.
Short Term Incentive
For 2014, based on the recommendation of the Compensation & Human Resources Committee, the Board approved an annual corporate performance rating of 1.0. This rating reflects Enerplus success at meeting or exceeding the majority of its operational and strategic goals but also acknowledges the decline in absolute return experienced by our Shareholders. This compares to a 1.9 performance rating in 2013. More details on this years rating follow in the CD&A.
CEO Compensation
Mr. Dundas total compensation in 2014 was $3,064,981. Mr. Dundas received a 3.5% base salary increase in 2014, an annual bonus payout reflecting both his individual and corporate performance, as well as an LTI grant reflecting his first full year as the CEO of Enerplus. The Compensation & Human Resources Committee recommended and the Board approved this award based on an assessment of his individual performance against his individual objectives for the year and the strong performance and exceptional leadership demonstrated in delivering corporate results in 2014.
2015 Base Salary
In light of significantly lower commodity prices in the first quarter of 2015, the Compensation & Human Resources Committee, in consultation with management, believed it was appropriate to forgo base salary increases for the majority of Enerplus staff. As such, neither Mr. Dundas nor any of the Senior Vice-Presidents of Enerplus received a base salary increase in 2015.
33
Have Your Say on Pay
As a Shareholder, your opinion matters on how we steward Enerplus and the decisions we make. Annually, Shareholders vote on the approval of the non-binding resolution on Enerplus approach to executive compensation. This resolution was approved by Shareholders at the last Shareholder meeting and we look forward to another favourable vote this year. We welcome your input at any time of the year regarding executive compensation, philosophy and how to strengthen the linkage to performance. Two-way communication increases transparency, and our confidence that we are making the right decisions on your behalf and for Enerplus. To contact us, you can write to Enerplus, Suite 3000, The Dome Tower, 333 - 7th Avenue S.W., Calgary, Alberta, T2P 2Z1, or telephone (1-800-319-6462) or email (investorrelations@enerplus.com).
Sincerely,
Elliott Pew |
|
Susan M. MacKenzie |
|
|
|
Elliott Pew |
|
Susan M. MacKenzie |
Board Chairman |
|
Chair of the Compensation & Human Resources Committee |
34
Named Executive Officers
The Named Executive Officers who are the focus of the Compensation Discussion & Analysis and who appear in the compensation tables are:
Name |
|
Title |
|
Level |
Ian C. Dundas |
|
President & CEO |
|
CEO |
Robert J. Waters |
|
Senior Vice-President & Chief Financial Officer |
|
SVP |
Raymond J. Daniels |
|
Senior Vice-President, Operations |
|
SVP |
Eric G. Le Dain |
|
Senior Vice-President, Corporate Development, Commercial |
|
SVP |
Edward L. McLaughlin |
|
President, U.S. Operations |
|
VP |
Named Executive Officers Profiles
The following profiles provide you with background on each of the Named Executive Officers, including experience, education and achievements for 2014. In addition, their individual 2014 total compensation, comparison to 2013 compensation, and percentage of at risk compensation is reflected below.
35
Ian C. Dundas
Position: President & Chief Executive Officer
Experience: Enerplus - 13 years; Industry - 24 Years
Location: Calgary, Alberta
Accountability
Mr. Dundas became President & Chief Executive Officer of Enerplus on July 1, 2013. He joined the company in 2002 as Vice-President of Business Development, where he was responsible for corporate acquisition and divestment strategies. In 2010, his role expanded to that of Executive Vice-President. In 2011, Mr. Dundas was appointed to Executive Vice-President & Chief Operating Officer, where he oversaw the development and execution of the companys operational strategies, strategic planning, marketing and reserves, as well as acquisitions and divestments. As President & Chief Executive Officer, Mr. Dundas is responsible for overall leadership of the strategic and operational performance of Enerplus.
Biography
Prior to joining Enerplus, Mr. Dundas held several executive positions in the merchant banking business, where he helped oil and gas companies grow by accessing the funding and expertise they required. Mr. Dundas is a member of the Canadian Council of Chief Executives and a former Governor of the Canadian Association of Petroleum Producers. Mr. Dundas has been an active volunteer in numerous charitable endeavors and is currently Co-chair of the YMCA Partner of Potential campaign. Mr. Dundas has sat on the boards of numerous private and public companies. Mr. Dundas holds a Bachelor of Commerce (Distinction) from the University of Calgary and a Bachelor of Laws (Distinction) from the University of Alberta. He was called to the Alberta Bar in 1995.
2014 Key Achievements:
· Exceeded most corporate operational performance targets
· Significant advancement of organizational safety and social responsibility performance
· Strong execution success on non-core asset divestment strategy
· Meaningful improvement in employee engagement, leadership development and succession planning in a challenging economic environment
· Median relative TSR performance
Compensation Component |
|
2014 |
|
2013 |
|
Change % |
|
2014 Mix % |
|
At risk in 2014 |
|
Base Salary Earnings |
|
514,583 |
|
470,000 |
|
9 |
% |
17 |
% |
80% of total compensation was at risk |
|
Equity Awards Value |
|
2,018,261 |
|
1,842,026 |
|
10 |
% |
66 |
% |
|
Annual Incentive Plan |
|
426,420 |
|
690,000 |
|
-38 |
% |
14 |
% |
|
Other Compensation |
|
105,717 |
|
102,647 |
|
3 |
% |
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
3,064,981 |
|
3,104,673 |
|
-1 |
% |
100 |
% |
|
|
36
Robert J. Waters
Position: Senior Vice-President & Chief Financial Officer
Experience: Enerplus - 14 years; Industry - 30+ Years
Location: Calgary, Alberta
Accountability
Mr. Waters is a member of the senior executive team and oversees capital markets, accounting, information systems, human resources, investor relations, tax, and corporate services. Mr. Waters joined Enerplus in 2001 as the companys Senior Vice-President & Chief Financial Officer.
Biography
Prior to joining the company, he served in the roles of Vice-President and Chief Financial Officer at Pengrowth Energy Trust, Treasurer at Norcen Energy Resources, and Manager at Thorne Riddell (now KPMG). In 2014, Mr. Waters was appointed to the Board of Directors of The Ann & Sandy Cross Conservation Area and in 2015 he was appointed to the Board of Governors of the Explorers and Producers Association of Canada (EPAC).
Mr. Waters holds an Honours Bachelor of Business Administration and a Masters of Business Administration from the Schulich School of Business at York University, Toronto. He became a Chartered Accountant in 1986.
2014 Key Achievements:
· Converted three years of financial statements to U.S. GAAP from IFRS
· Completed $200 million senior 12 year term debt deal at 3.79%
· Improved internal controls in U.S. accounting and payroll
· Assumed responsibility for Human Resources: Advanced corporate culture, succession and leadership training
· Delivered all of the 2014 Information Systems projects successfully on time and on budget
· Assumed responsibility for Corporate Properties and Workplace Systems
Compensation Component |
|
2014 |
|
2013 |
|
Change % |
|
2014 Mix % |
|
At risk in 2014 |
|
Base Salary Earnings |
|
387,996 |
|
377,000 |
|
3 |
% |
21 |
% |
75% of total compensation was at risk |
|
Equity Awards Value |
|
1,170,601 |
|
980,200 |
|
19 |
% |
62 |
% |
|
Annual Incentive Plan |
|
252,846 |
|
343,070 |
|
-26 |
% |
13 |
% |
|
Other Compensation |
|
80,298 |
|
85,735 |
|
-6 |
% |
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,891,740 |
|
1,786,005 |
|
6 |
% |
100 |
% |
|
|
37
Raymond J. Daniels
Position: Senior Vice-President, Operations
Experience: Enerplus - 8 years; Industry - 30+ Years
Location: Calgary, Alberta
Accountability
Mr. Daniels oversees the companys operations in both Canada and the U.S. His accountability is to strategically and economically develop the U.S. and Canadian assets in a safe and responsible manner. He oversees all geoscience and engineering functions related to developing the assets, and the required technical support services of surface and mineral land; production and facilities engineering; field operations; safety and social responsibility and other operations-related functions.
Biography
Mr. Daniels joined Enerplus as Vice-President of Oil Sands in 2007 and became Vice-President, Development Services in 2009. In 2011, he was appointed to the position of Senior Vice-President, Canadian Operations and his role was expanded again in 2012 to include U.S. Operations. He started his career in technical roles with Chevron Petroleum and held a number of management positions with Conoco U.K. Limited and Conoco Phillips Canada over a 23-year period. Prior to joining Enerplus, he served as ConocoPhillips Canadas Vice-President on the Surmont oil sands development.
Mr. Daniels is a P.Eng and a Chartered Engineer with a Masters of Business Administration and a Bachelor of Science (Mechanical Engineering) from Aberdeen University.
2014 Key Achievements:
· Achieved profitability targets through significant effort in re-balancing priorities and shifting planned capital spending from Canada to the U.S. despite several obstacles including delayed tie-in in Ft. Berthold, reduction of production volumes in the Marcellus, increased regulatory pressure in the U.S., and the impact of the falling Canadian dollar
· Significantly improved Safety & Social Responsibility results with particular focus on engaging external partners on safety initiatives
· Exceeded portfolio targets with a total of $108M (adjusted sales price) in divestments of non-core, non-operated properties
Compensation Component |
|
2014 |
|
2013 |
|
Change % |
|
2014 Mix % |
|
At risk in 2014 |
|
Base Salary Earnings |
|
364,654 |
|
352,600 |
|
3 |
% |
21 |
% |
75% of total compensation was at risk |
|
Equity Awards Value |
|
1,100,185 |
|
992,096 |
|
11 |
% |
63 |
% |
|
Annual Incentive Plan |
|
220,033 |
|
322,431 |
|
-32 |
% |
12 |
% |
|
Other Compensation |
|
76,043 |
|
81,487 |
|
-7 |
% |
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,760,915 |
|
1,748,614 |
|
1 |
% |
100 |
% |
|
|
38
Eric G. Le Dain
Position: Senior Vice-President, Corporate Development, Commercial
Experience: Enerplus - 9 years; Industry - 30+ years
Location: Calgary, Alberta
Accountability
Mr. Le Dain leads the strategic planning, business development and new plays, reserves, and marketing groups. His responsibilities include coordinating and participating in long range planning and the reserve process, acquisitions and divestments, and commodity price risk management.
Mr. Le Dain joined Enerplus in 2006 as Vice-President of Marketing. In 2008, he added regulatory compliance and environmental responsibilities, and then his accountabilities shifted in 2010 when he was appointed Vice-President, Strategic Planning, Reserves & Marketing. In 2011, he was promoted to Senior Vice-President, and in 2013 business development and new plays were added to his portfolio. At the end of 2014, divestment oversight was added to his portfolio.
Biography
Prior to joining Enerplus, Mr. Le Dain was an Executive Director at UBS Commodities Canada Ltd., and at Enron Canada Corp., in origination and marketing. Prior to that he worked in operations, and marketing, at Shell Canada Limited and major projects at Husky Oil Operations Ltd.
Mr. Le Dain holds a Bachelor of Applied Sciences (Mechanical Engineering) degree from Queens University and a Masters of Business Administration degree from the University of Calgary.
2014 Key Achievements:
· Developed a strong hedging position, which will allow Enerplus to fund 2015 capital and dividend programs primarily with funds from operations despite the decline in oil prices
· Strategic planning and forecasting and portfolio targeting taken to next level through process, analysis, and systems changes, including the seamless implementation of a new capital management system
· Implemented term marketing sales and transportation commitments, in particular in the Marcellus and Ft. Berthold regions that support market point sales while ensuring commitment flexibility
· Advanced delineation of Duvernay play
Compensation Component |
|
2014 |
|
2013 |
|
Change % |
|
2014 Mix % |
|
At risk in 2014 |
|
Base Salary Earnings |
|
336,595 |
|
317,750 |
|
6 |
% |
20 |
% |
75% of total compensation was at risk |
|
Equity Awards Value |
|
1,020,177 |
|
830,180 |
|
23 |
% |
62 |
% |
|
Annual Incentive Plan |
|
212,194 |
|
300,142 |
|
-29 |
% |
13 |
% |
|
Other Compensation |
|
82,175 |
|
75,945 |
|
8 |
% |
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,651,142 |
|
1,524,017 |
|
8 |
% |
100 |
% |
|
|
39
Edward L. McLaughlin
Position: President, U.S. Operations
Experience: Enerplus - 4 years; Industry - 30+ Years
Location: Denver, Colorado
Accountability
Mr. McLaughlin oversees the day-to-day activities of our Bakken oil play in North Dakota and Montana as well as our Marcellus natural gas assets in the northeastern U.S. Mr. McLaughlin is based in our Denver office, where he joined Enerplus in 2011 as Manager of Land before becoming President, U.S. Operations in 2012.
Biography
Mr. McLaughlin has more than 30 years of oil and gas experience in the U.S. and has held numerous senior positions within the industry, including President of the U.S. subsidiary of a major oil and gas company. He has a Masters in Business Administration from the University of Colorado and is a Certified Professional Landman.
2014 Key Achievements:
· Increased resource and reserve additions by completing a comprehensive original oil in place (OOIP) evaluation in Ft. Berthold that resulted in a 250% increase in contingent resource
· Solid operational performance with production levels achieving 98% of budget with new well performance exceeding expectations in Ft. Berthold and capital exit efficiency exceeding target
· Significantly evolved the culture of the U.S. organization and championed leadership development resulting in a 33% reduction in attrition relative to 2013
Compensation Component |
|
2014 |
|
2013 |
|
Change % |
|
2014 Mix % |
|
At risk in 2014 |
|
Base Salary Earnings |
|
307,910 |
|
297,250 |
|
4 |
% |
27 |
% |
68% of total compensation was at risk |
|
Equity Awards Value |
|
580,785 |
|
560,063 |
|
4 |
% |
51 |
% |
|
Annual Incentive Plan |
|
185,851 |
|
218,051 |
|
-15 |
% |
17 |
% |
|
Other Compensation |
|
54,581 |
|
54,577 |
|
0.01 |
% |
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,129,127 |
|
1,129,941 |
|
0 |
% |
100 |
% |
|
|
Note:
Mr. McLaughlin is a U.S. employee paid in U.S. dollars and the compensation components are displayed here in U.S. dollars for the purposes of comparing the change year-over-year. Other compensation tables in the CD&A are reflected in the Canadian dollar equivalent of the U.S. dollar. For 2014, the Canadian dollar equivalent of the U.S. dollar is based on the exchange rate in effect on December 31, 2014 of US$1.00=CDN$1.1601. For 2013, the Canadian dollar equivalent of the U.S. dollar is based on the exchange rate in effect on December 31, 2013 of US$1.00=CDN$1.0636.
40
Compensation & Human Resources Committee Governance
The Compensation & Human Resources Committee is exclusively made up of independent directors. Ms. MacKenzie serves as Chair, while other current members include Messrs. Culbert, Dodge, and Nelson. The Committee members experience in leadership roles throughout their careers, their extensive knowledge of the energy industry and their mix of experience in the areas of operations, corporate strategy and financial matters provides the collective experience, skills and qualities to effectively support the Committee in carrying out its mandate.
The Committee has primary responsibility for executive compensation, including setting compensation levels, ensuring plan designs align with Shareholder interests, assessing performance and compensation risk, and determining appropriate incentive payouts. For an annual work plan of the Committees responsibilities, refer to Schedule A.
Executive Compensation Decision Making Process
41
Use of External Advisors
The Compensation & Human Resources Committee regularly retains the services of external compensation consultants to provide information and recommendations on market conditions and appropriate competitive practices. In 2014, the Committee retained the following advisors:
· Mercer (Canada) Limited - Mercers primary mandate in 2014 was to conduct benchmarking analysis of executive compensation and to provide recommendations related to executive compensation levels, pay mix, programs, and policies. Enerplus has retained Mercer to provide similar services since 2005.
· Hugessen Consulting - Hugessen was retained to review Enerplus 2013 disclosure practices with respect to its executive compensation and governance matters, and to provide suggestions for improving the focus and readability of subsequent disclosure. In addition, at the request of the Corporate Governance & Nominating Committee, Hugessen also provided a benchmark report on director compensation of Enerplus peers. The Committee used this information to conduct a director compensation review, as required in the Committees charter. Prior to 2014, Enerplus had not retained Hugessen.
In order to ensure the independence of the Compensation & Human Resources Committees advisors, management must seek approval from the Committee prior to retaining either advisor for other engagements. The following table reflects fees incurred in 2014 and 2013 for the engagement of external compensation consulting.
Consultant Engagement Fees
Fee Type |
|
Consultant |
|
2014 |
|
2013 |
|
|
|
|
|
($000s) |
|
($000s) |
|
Executive & Director Compensation Related Fees1 |
|
Mercer |
|
178.7 |
|
196.9 |
|
|
Hugessen |
|
33.7 |
|
|
|
All Other Fees2 |
|
Mercer |
|
24.2 |
|
34.1 |
|
|
Hugessen |
|
21.1 |
|
|
|
Total |
|
Mercer |
|
202.9 |
|
231.0 |
|
|
Hugessen |
|
54.8 |
|
|
|
Notes:
(1) Compensation related fees for services related to determining compensation for Enerplus executive officers and board directors. This work was completed at the request of the Corporate Governance & Nominating Committee or the Compensation & Human Resources Committee.
(2) Represents fees paid by Enerplus for general advice on other compensation matters, including fees in connection with annual compensation survey participation and consulting services for employee compensation, compensation disclosure practices and human resources matters. This work was completed at the request of the Compensation & Human Resources Committee or management.
42
Aligning Executive Compensation and Shareholder Interests
Compensation Principles
Our executive compensation programs reflect the following principles, which we believe are in the best interests of Shareholders and align with corporate governance best practices:
What We Do |
|
What We Dont Do |
|
|
|
ü Provide a meaningful part of executive compensation that is at risk and contingent upon corporate and individual performance |
|
û Back-date or re-price stock options |
|
|
|
ü Retain external compensation experts, who report directly to the Compensation & Human Resources Committee |
|
û Pay dividends on PSUs or RSUs prior to vesting |
|
|
|
ü Benchmark pay levels and mix to other organizations of comparable size in the same industry and geographic areas |
|
û Provide tax gross-ups |
|
|
|
ü Disclose the operational and financial performance drivers used to determine incentive payouts |
|
û Provide a pension plan |
|
|
|
ü Measure performance and align compensation outcomes with the achievement of corporate goals over multiple time horizons |
|
|
|
|
|
ü Mitigate risk by having anti-hedging, recoupment/claw back and share ownership practices in place |
|
|
|
|
|
ü Include a double trigger in our executive employment agreements so that severance payments are due upon a Change of Control only if the executives employment is also effectively terminated |
|
|
|
|
|
ü Provide reasonable benefits and perquisites that are market competitive and within industry norms. |
|
|
|
|
|
ü Provide long-term incentive provisions upon retirement to encourage eligible executives voluntary retirement and to align retiring executives financial interests with continued long-term corporate performance |
|
|
Risk Mitigation
Enerplus recognizes that certain compensation designs could promote unintended behaviors that may, in certain circumstances, be misaligned with Enerplus and the Shareholders best interests. Enerplus seeks to ensure, through the structure of its compensation programs, to mitigate risk and align executive actions and decisions with the interests of Enerplus and its Shareholders. There are additional risks that Enerplus is typically subject to; however, this discussion focuses solely on risks linked to the executive compensation programs. Elements of Enerplus mitigation of behavioural risk are embedded in its compensation processes and executive compensation design as follows:
Process Elements
· Members of the Compensation & Human Resources Committee meet regularly to review both employee and executive compensation and human resources issues generally, with one of the meetings focused predominantly on executive compensation
· Engagement by the Committee of a third party consultant to review the executive compensation programs brings additional objectivity
· A regular review of proxy materials and compensation survey data analysis identifies whether Enerplus compensation programs are deviating significantly from market practices
43
Compensation Design Elements
· A significant portion of the executives compensation package is comprised of at risk elements such as long-term incentives and short-term incentive bonus. This at risk compensation aligns executive and Shareholder interests because Shareholder returns directly impact the calculation of the short-term and long-term incentives
· Minimum share ownership requirements for the executive officers ensure that the executives are also Shareholders and, therefore, increase alignment with the Shareholders interests
· An annual incentive plan coupled with three-year vesting of long-term incentive awards ensures a focus on both near-term performance and long-term value creation
Share Ownership Requirements
To align executives with Shareholder interests, all executives have a minimum share ownership threshold that must be achieved within five years from the date of their appointment as an officer of Enerplus. Each executive must acquire and hold Enerplus equity valued at or greater than the following multiples of their base salary.
Position |
|
Multiple of Salary |
|
Chief Executive Officer |
|
3X |
|
Senior Vice-President |
|
2X |
|
Vice-President |
|
1X |
|
For the purposes of determining compliance with the share ownership requirements, Enerplus equity includes Common Shares, RSUs and PSUs but excludes Incentive Rights and Options. For PSUs, the minimum performance multiplier is used to determine the share value. For PSUs granted prior to 2014, the minimum payout value of 0.5X is applied. PSUs granted in 2014 are excluded from the share ownership value as they have a zero minimum value. In addition, at least one-half of the executives ownership requirements must be in Common Shares. In the event of an increased ownership threshold as a result of a promotion to a higher executive level, the executive must achieve the higher ownership threshold within three years of that promotion.
As of December 31, 2014, all Named Executive Officers were in compliance with Enerplus equity ownership guidelines or had additional time remaining to achieve the required ownership threshold.
Name |
|
Common Shares1 |
|
Value of Common Shares2 |
|
RSUs/PSUs |
|
Recognized Value of RSUs/PSUs3 |
|
Total Value Share Ownership |
|
Share Ownership Requirement |
|
Share Ownership Status |
|
|
|
(#) |
|
($000) |
|
(#) |
|
($000) |
|
($000) |
|
($000) |
|
|
|
Ian C. Dundas |
|
65,752 |
|
2,342 |
|
175,976 |
|
976 |
|
3,318 |
|
1,553 |
|
Achieved |
|
Robert J. Waters |
|
38,959 |
|
1,775 |
|
98,717 |
|
545 |
|
2,320 |
|
780 |
|
Achieved |
|
Raymond J. Daniels |
|
17,261 |
|
407 |
|
95,470 |
|
529 |
|
936 |
|
733 |
|
Achieved |
|
Eric G. Le Dain |
|
18,802 |
|
480 |
|
85,117 |
|
468 |
|
948 |
|
680 |
|
Achieved |
|
Edward L. McLaughlin4 |
|
3,525 |
|
83 |
|
54,612 |
|
304 |
|
387 |
|
359 |
|
In Progress |
|
Notes:
(1) Based on the number of Common Shares beneficially owned, directly or indirectly, or over which control or direction was exercised, by each Named Executive Officer.
(2) Based on the higher of the closing price of the Common Shares on the TSX of $11.19 per Common Share on December 31, 2014 or their book value at the time of acquisition.
(3) For the purposes of assessing the value of the Named Executive Officers aggregate equity holdings, Enerplus recognizes one-half of the value of outstanding PSUs as at December 31, 2014 for PSUs granted prior to 2014. For PSUs granted in 2014, zero value is assigned.
(4) Mr. McLaughlin is a U.S. employee paid in U.S. dollars. The amounts represent the Canadian dollar equivalent of the U.S. dollar share ownership value based on the exchange rate in effect on December 31, 2014 of US$1.00=CDN$1.1601. In addition, Mr. McLaughlins share ownership status is in progress as he continues towards achieving the condition of holding at least one-half of his ownership requirements in the form of Common Shares.
44
Anti-Hedging Policy
All officers and directors of Enerplus are prohibited from entering into any hedging or other similar transactions that would potentially have the effect of reducing the risk associated with that individuals required equity ownership holdings or at risk pay.
Claw Back Policy
Enerplus, as a foreign private issuer, is subject to certain U.S. legislation, including provisions of the Sarbanes-Oxley Act. The Sarbanes-Oxley Act provides that, in the event an issuer is required to prepare an accounting restatement as a result of the material non-compliance of the issuer with any financial reporting requirement, the chief executive officer and the chief financial officer of the issuer will be required to reimburse the issuer for certain elements of such executives compensation. Enerplus abides by these laws.
Compensation Discussion & Analysis
Executive Compensation Strategy & Philosophy
Our compensation strategy is to attract, motivate, retain and reward top talent while balancing risk, short-term performance and long-term Shareholder value creation. In determining compensation and ensuring alignment to a pay for performance philosophy, Enerplus references corporate performance, peer group compensation and positions executive compensation below, at or above the median based on the particular executives role, performance, knowledge and experience. Our programs are reviewed regularly against the peer group to ensure market competitiveness and an overall competitive compensation package.
Enerplus undergoes the following process when determining executive compensation and the desired outcomes of our rewards philosophy:
Pay At Risk
Enerplus ensures that a meaningful portion of executive pay is at risk - meaning that it is not a guaranteed payment. To align with our pay for performance philosophy, a significant percentage of the executives total compensation is comprised of short-term and long-term incentives which link directly to corporate performance and to Enerplus relative TSR. For the 2014 performance year, the following table shows the mix of compensation components and demonstrates the proportion of at risk pay for the CEO and other Named Executive Officers relative to total compensation.
In 2014, the proportion of the Named Executive Officers target at risk compensation was well aligned with Enerplus peer group.
45
Executive Compensation Components
Executive Compensation Components Summary
The following table summarizes the compensation components offered to executives and illustrates the at risk and not at risk components. Further description follows this summary.
|
|
Not at Risk Compensation |
|
At Risk Compensation |
|
|
Base Salary |
|
Other Compensation |
|
Bonus Plan |
|
Long Term Incentives (LTI) |
Description |
|
Fixed amount of pay to compensate for daily work |
|
Health and insurance benefits, savings plan, car allowance and parking |
|
Lump sum cash payment provided for previous calendar year performance |
|
LTI awards are split: 75% in PSUs and 25% in RSUs |
Purpose |
|
Compensates for executives role, performance and background |
|
Assists in the overall health and financial wellbeing of executives and family |
|
Recognizes and rewards individual and corporate achievements during previous calendar year |
|
To drive mid and long-term corporate performance |
Determination |
|
Based on peer market data, performance, experience and scope of role relative to peers |
|
Consideration given to market competitiveness in determining plan design features |
|
Individual and corporate payout multiplier is up to 2X target where results are outstanding, and may be as low as 0X target for unacceptable levels of performance |
|
LTI award is up to 2x target based on individual and corporate performance, long-term contribution potential of executive, and peer group market data |
Performance linkage |
|
Salaries commensurate with executive background, role and performance |
|
Majority of coverage is a percentage of salary |
|
Individual portion based on achievement of individual objectives set in accordance with corporate strategy Corporate portion based on achievement of objectives approved by the Board |
|
RSUs - Payout amounts are directly linked to share price and adjusted for dividends paid
PSUs Payout amounts range from 0x-2x the grant amount, are linked to Enerplus relative three-year TSR, and adjusted for dividends paid |
Performance Period |
|
Day to Day |
|
Day to Day |
|
One Year |
|
Three Years |
Time of Payout |
|
Bi-monthly |
|
Bi-monthly |
|
Annually |
|
RSUs - Paid out in thirds on grant anniversaries PSUs - Cliff vest on third year anniversary of grant |
Base Salary
Base salaries form the core foundation of our total compensation package. In determining salaries, Enerplus references the peer group median and salaries are positioned below, at or above such median according to the executives role, performance, knowledge and experience.
Short-Term Incentives - Bonus Plan
Executives participate in an annual bonus plan, which rewards individual and corporate achievement over the previous calendar year and is a lump sum payment. The value of the bonus is calculated as below:
46
Bonus target amounts are expressed as a percentage of salary with individual and corporate weightings applied according to the Named Executive Officers level of seniority within the organization. A more senior contributor has greater potential to impact corporate outcomes, so a higher proportion of their bonus is weighted to the corporate results.
|
|
Bonus Weightings |
|
Position |
|
Individual |
|
Corporate |
|
Chief Executive Officer |
|
30 |
% |
70 |
% |
Senior Vice-President |
|
40 |
% |
60 |
% |
Vice-President |
|
50 |
% |
50 |
% |
Individual performance ratings range from zero to double the target, meaning that there is the potential to receive up to two times the individual portion of their annual bonus for outstanding performance. The corporate performance rating also ranges from zero to two and is assessed by the Board of Directors based on three primary factors: (i) operational performance; (ii) other strategic objectives; and (iii) Enerplus relative TSR within its peer group.
Long Term Incentives (LTI)
All executives are eligible to participate in Enerplus LTI program. Prior to 2014, executives were granted awards under the 2011 Executive PSU Plan, the Stock Option Plan and the Rights Incentive Plan. Following the adoption of the Share Award Incentive Plan in 2014, executives are eligible to receive LTI under the Share Award Incentive Plan consisting of 75% Performance Share Units (PSUs) and 25% Restricted Share Units (RSUs). Typically, all grants, when vested, are settled with Common Shares issued from treasury. These Common Shares are then sold on the TSX on behalf of the recipients. Enerplus LTI program allows executives to participate in the success of the Company and creates a strong alignment to Shareholder interests as its value tracks Enerplus share price performance (in the case of RSUs and PSUs) and Enerplus relative TSR (in the case of PSUs).
The target grant value is expressed as a percentage of salary and the grant award can be up to 2X the target. The actual grant may be adjusted up or down from the target award based on individual and corporate performance, long-term contribution potential of the executive, and competitive market practices.
The value of LTI payouts for awards made under the Share Award Incentive Plan is calculated as follows:
The PSU performance multiplier is calculated based on Enerplus three-year TSR percentile rank relative to the members of the S&P/TSX E&P Index. Under the Share Award Incentive Plan, performance below the 25th percentile results in a 0.0X payout, which is different from the awards granted under its predecessor, the 2011 Executive PSU Plan, which would result in a minimum 0.5X multiplier in this situation. Enerplus modified the calculation of the performance multiplier for the Share Award Incentive Plan in 2014 in order to better align the awards granted under such plan with Shareholder interests and Enerplus pay for performance philosophy.
47
The following graph shows the PSU performance multiplier associated with various percentile rankings.
Information about the Named Executive Officers LTI awards is reflected under Executive Compensation Tables - Summary Compensation Table. Summaries of the current and past Enerplus LTI plans are contained under Additional Information.
Savings Plan
For Canadian executives, Enerplus contributes 4% of base salary, plus matches individual contributions on a one-to-one basis up to a maximum employer contribution of 12% of salary. Contributions are made to a retirement savings or non-registered plan at the executives direction.
For American executives, Enerplus contributes to a 401(k) Plan. The employer contribution is 2% of cash earnings, plus matching of individual contributions on a one-to-one basis up to a maximum employer contribution of the lesser of 8% of earnings or US$23,000.
For both plans, contributions are made on each pay and are immediately vested.
Benefits and Perquisites
Executives receive health and insurance benefits, wellness spending accounts, car allowances, parking payments, club memberships and financial services. Perquisites provided are nominal and average less than 5% of a Named Executive Officers total compensation. Enerplus does not have a pension plan.
48
2014 Compensation Treatment for Named Executive Officers
2014 Compensation Determination
Based on 2014 performance and achievements, the Board approved the following compensation decisions, which are also reflected in the Summary Compensation Table:
· Base salary increases awarded to the Named Executive Officers in February 2014 were as follows: Ian Dundas - 3.5%, Robert Waters - 3.5%, Ray Daniels - 3.5%, Eric Le Dain - 6.5%, Edward L. McLaughlin - 3.7%.
· Bonus awards for 2014 were approved and paid to the Named Executive Officers in February 2015; and
· The grant date fair value of 2014 LTI was determined by the Board in February 2014.
The compensation decisions made were based on each Named Executive Officers individual performance, corporate performance, and reflect market competitive compensation levels for their position and scope of role. The aggregate remuneration paid to, or earned by, all Named Executive Officers in 2014 was $9,641,757.
Long Term Incentive Awards
The Compensation & Human Resources Committee determined the long-term incentives awards for each Named Executive Officer based on individual performance and the market competitiveness of LTI awards for their position and scope of role. Named Executive Officers received Share Awards consisting of 75% PSUs and 25% RSUs. The table below depicts the PSUs and RSUs granted to each Named Executive Officer in February 2014:
Name |
|
PSU Award1 (#) |
|
RSU Award2 (#) |
|
Total LTI Value ($) |
|
Ian C. Dundas |
|
77,387 |
|
23,188 |
|
2,018,250 |
|
Robert J. Waters |
|
44,885 |
|
13,449 |
|
1,170,585 |
|
Raymond J. Daniels |
|
42,185 |
|
12,640 |
|
1,100,164 |
|
Eric G. Le Dain |
|
39,117 |
|
11,721 |
|
1,020,164 |
|
Edward L. McLaughlin3 |
|
24,323 |
|
7,403 |
|
636,847 |
|
Notes:
(1) The actual number of PSUs awarded was determined by dividing the intended dollar award amount by the volume weighted average trading price of the Common Shares on the TSX for the first twenty trading days of the applicable performance period, which was $19.56.
(2) The actual number of RSUs awarded was determined by dividing the intended dollar award amount by the volume weighted average trading price of the Common Shares on the TSX for the five trading days preceding and including the grant date, which was $21.76.
(3) Mr. McLaughlin is a U.S. employee paid in U.S. dollars. The total LTI value is determined in U.S. dollars and is reflected in Canadian dollars based on the exchange rate in effect on the grant date, being approximately US$1.00=CDN$1.0964.
Compensation Peer Group
Every year, the Compensation & Human Resources Committee selects a comparator group of companies (referred to in this Information Circular as the Compensation Peer Group) for the purpose of executive compensation benchmarking. Peers are selected based on comparability of operations, including geography and scope as measured by production volumes, market capitalization and annual revenues.
The 2014 Compensation Peer Group used to benchmark Canadian Named Executive Officer compensation is shown below. Additional compensation data from subsidiaries may be considered in determining executive compensation. Edward McLaughlin is a U.S. employee and the peer group used for Mr. McLaughlins compensation benchmarking consists of all exploration and production companies listed in the U.S. Mercer survey.
49
2014 Compensation Peer Group
Advantage Oil & Gas Ltd. |
|
Lightstream Resources Ltd. |
ARC Resources Ltd. |
|
Pengrowth Energy Corporation |
Baytex Energy Corp. |
|
Penn West Petroleum Ltd. |
Bonavista Energy Corporation |
|
Peyto Exploration & Development Corp. |
Crescent Point Energy Corp. |
|
Vermilion Energy Inc. |
Short Term Incentive: 2014 Corporate Bonus Performance Assessment
Corporate Performance Measurement
The Compensation & Human Resources Committee and the Board participate with management in the annual corporate goal setting process and evaluate performance relative to these goals throughout the year. To assess corporate performance in 2014, the Committee used a scorecard approach based on the following three performance categories:
Operational performance |
Execution of strategic objectives |
Total shareholder return |
The performance assessment results in a corporate performance rating, which is used as a multiplier to calculate a portion of an executives bonus award. The annual corporate performance rating scale ranges between zero to a maximum of 2.0. A rating of 1.0 generally reflects meeting the Boards performance expectations.
Weighting the Corporate Performance Categories
The Board does not apply numerical weightings to each of the three performance categories, nor to the specific objectives within each category. Although many of the objectives are numerical in nature, the evaluation process also involves the use of informed judgement and consideration of circumstances such as macroeconomic environment, internal constraints and external factors in determining the performance rating.
The Board determines the appropriate weighting of the three performance categories on an annual basis and may adjust this weighting as required. At the outset of 2014, the Board indicated that there would be a greater emphasis on operational performance when assessing overall corporate performance in 2014. This was driven by the belief that Shareholder value would be optimized by continuing to build a track record of delivering strong operational results. Throughout the second half of 2014 and after the dramatic decline in oil and gas prices, the Board determined that greater emphasis on the absolute TSR than originally anticipated was appropriate.
50
Corporate Performance Summary
For 2014, based on the recommendation of the Committee, the Board approved an annual corporate performance rating of 1.0. This rating reflects Enerplus success at meeting or exceeding the majority of operational and strategic goals and objectives, but also acknowledges the decline in absolute Shareholder return in 2014.
Performance Category |
|
Key Measurements |
|
Assessment |
Operational performance on key metrics and relative to peers |
|
ü Met or exceeded production, funds flow, reserves, G&A costs and safety and regulatory goals
ü Met on capital, after adjusting for foreign exchange
û Missed on operating expenses and spill count |
|
Exceeded |
Execution of Goals and Strategic Objectives |
|
ü Met or exceeded most goals, notably on contingent resource increase in Ft. Berthold
ü Raised over $100 million in funds through non-core divestments
ü Implemented and improved on many processes with measured impact
ü Redefined and advanced corporate culture, talent management and succession strategies |
|
Exceeded |
Total Shareholder Return relative to peers and absolute return |
|
ü TSR was average relative to our peers
û Negative TSR on absolute basis |
|
Missed |
A description of 2014 performance in each category follows.
1. Operational Performance
Management establishes annual goals for operational performance that are important to Shareholder value creation and in turn form the basis of Enerplus public guidance. The Compensation & Human Resources Committee and the Board consider these operational metrics as part of the overall performance evaluation in determining the annual corporate performance rating. The operational metrics are assessed against pre-determined targets and also relative to the operational metrics of a select group of Canadian conventional oil and gas producers whose business is reasonably aligned with Enerplus.
The Committee and the Board concluded that Enerplus exceeded expectations on the majority of its 2014 operational metrics. Productivity-related metrics were complicated in 2014 as we curtailed an average 5,000 BOE/D of Marcellus production in the second half of the year, due to low realized prices. Nonetheless, we increased production guidance twice, meeting the final target, while keeping G&A costs below target.
Despite continual changes in non-operated programs and the weakening Canadian dollar, Enerplus adapted and successfully met or exceeded most of our targets on our operated assets. Over half of the $50 million of capital expenditures above original guidance ($811 million compared to $760 million) was related to foreign exchange shifting from an estimated US$1.00=$1.05 (guidance) to US$1.00=$1.105. The remaining increase can be attributed largely to a decision to accelerate 2015 spending into the fourth quarter of 2014 following the divestment of our interest in the Elmworth area of Alberta. Our Q4 exit capital efficiencies met or exceeded our target.
Our reserves greatly exceeded expectations with the addition of over 75 MMBOE of reserves, over and above the divestment of 11 MMBOE during the year. F&D costs (proved plus probable reserves) for the year were $9.80/BOE ($18.92/BOE on oil properties and $0.65/Mcf on gas properties). FD&A costs (proved plus probable reserves) were $8.62/BOE given attractive divestments. The Reserves Replacement Ratio before net divestments for the year was 2.0X and the recycle ratio was 2.7X, which represent top quartile performance compared to peers.
51
The following table outlines the primary 2014 operational metrics which the Board used to determine 2014 corporate performance relative to predetermined targets. The Committee and the Board concluded that Enerplus exceeded expectations on the majority of the operational metrics and achieved above average performance relative to peers.
|
|
Public |
|
|
|
Assessment Against Expectation |
|
Operational Execution |
|
Guidance1 |
|
2014 Result |
|
Missed |
|
Met |
|
Exceeded |
|
Annual Average Production (BOE/D) |
|
97,100 |
|
103,130 |
|
|
|
|
|
üü |
|
Liquids (BOE/D) |
|
45,100 |
|
43,773 |
|
|
|
ü2 |
|
|
|
Exploration & Development Capital ($MM) |
|
760 |
|
811 |
|
|
|
ü3 |
|
|
|
Finding & Development Oil ($/BOE) |
|
23 |
|
18.92 |
|
|
|
|
|
üü |
|
Finding & Development Gas ($/Mcf) |
|
1.3 |
|
0.65 |
|
|
|
|
|
üü |
|
Reserve Replacement Ratio |
|
1.5 |
|
2 |
|
|
|
|
|
üü |
|
Recycle Ratio |
|
2 |
|
2.7 |
|
|
|
|
|
üü |
|
Q4 Capital Efficiency: Oil ($000/BOE/D) |
|
<40.0 |
|
37.7 |
|
|
|
|
|
üü |
|
Q4 Capital Efficiency: Gas ($000/BOE/D) |
|
<16.0 |
|
18.2 |
|
|
|
ü4 |
|
|
|
Operating Expenses ($/BOE) |
|
10.31 |
|
10.43 |
|
û |
|
|
|
|
|
Operating Expenses ($MM) |
|
365 |
|
393 |
|
|
|
ü5 |
|
|
|
Cash G&A ($/BOE) |
|
2.45 |
|
2.22 |
|
|
|
|
|
üü |
|
Cash G&A $MM |
|
87 |
|
83.5 |
|
|
|
|
|
üü |
|
Notes:
(1) Targets reflect adjustment for acquisition and divestment activity.
(2) At mid-year, guidance was adjusted down to 44,000 BOE/D as regulatory restrictions and midstream operator constraints reduced Ft. Berthold tie-ins.
(3) Exploration & development capital target is achieved after adjusting for foreign exchange and allocation of proceeds from divestments.
(4) Q4 Capital Efficiency for gas target was rated as met after adjusting for Marcellus curtailments.
(5) Operating expenses ($MM) was rated as met after adjustment for increased production relative to guidance and foreign exchange.
2. Execution of Goals and Strategic Objectives
The key elements of Enerplus business strategy are to:
· Improve the profitability and sustainability of its business through strong operational execution in Enerplus core areas
· Actively manage Enerplus portfolio of assets to increase Enerplus focus on its core properties and provide opportunities for future growth
· Maintain financial strength to facilitate execution of plans both in the near and long-term
52
The objectives below and associated achievements outline how Enerplus succeeded at advancing its business strategy in 2014.
53
3. Total Shareholder Return
Enerplus compared its annual TSR to the companies in the S&P/TSX E&P Index in 2014 and used this measurement when considering the corporate performance rating.
Relative to the S&P/TSX E&P Index, through a one-year return period, Enerplus ranked 20th out of 36 companies (45th percentile) with a total return of -35%. The S&P/TSX E&P Index returns ranged from the highest total return at 22% to the lowest at -71%. Over a three-year period, Enerplus had a -42% total return and ranked 17 out of 31 companies (47th percentile).
Relative to a group of exploration and production companies in the U.S. Bakken, we ranked at the 50th percentile with a slightly better one year total return of -38% on the NYSE versus the peer average of -42%.
The Compensation & Human Resources Committee and the Board concluded that Enerplus met expectations with respect to relative TSR. However, due to the dramatic decrease in industry commodity prices during the fourth quarter of 2014, Enerplus TSR was significantly impacted. On an absolute total return basis, it was negative, although on a relative basis Enerplus ranked close to the median of the S&P/TSX E&P Index. Due to the negative absolute total return Shareholders experienced, the Committee and Board increased the relative weighting of the TSR component as part of the corporate performance rating determination.
54
Corporate Performance Relative to Executive Compensation
The following graph illustrates, using the left axis, Enerplus cumulative total return compared to the S&P/TSX Composite Index and the S&P/TSX E&P Index based on an initial investment of $100 from the period of December 31, 2009 to December 31, 2014, assuming reinvestment of all distributions and dividends. The graph also illustrates, using the right axis, the aggregate total compensation, as set out in the Summary Compensation Table, of the Named Executive Officers who remained employed by Enerplus as of December 31st of each of those years. For 2013, compensation for Gordon J. Kerr, former President & CEO, is excluded from the graph as Mr. Kerr left Enerplus June 30, 2013; however, the graph does include full year compensation for Ian C. Dundas who became the President & CEO of Enerplus effective July 1, 2013.
Enerplus incentive programs consider both absolute and relative TSR. The graph above shows that Enerplus TSR over the period has been generally aligned with the performance of the S&P/TSX E&P Index. As a consequence, NEO long-term incentive grants have reflected competitive industry levels on a grant date fair value basis and are shown in the Summary Compensation Table. The graph above does not reflect a clear correlation between NEO pay and absolute performance. It shows the valuation on the date of grant of the long-term incentives rather than the actual payout value of such long-term incentives. This distinction is important because more than half of NEO total compensation is in the form of long-term incentives, which are directly linked to performance, and therefore the actual payout values can vary significantly from the value reported in the Summary Compensation Table.
The following table illustrates how Enerplus current CEOs pay is linked to the absolute TSR shown above. It compares the grant date fair value of Mr. Dundas long-term incentives, as reported in the Summary Compensation Table, to the payout value of such grants made over the period from 2010 to 2014.
55
Grant Year |
|
Mr. Dundas Position |
|
Plan Type |
|
Grant Date Fair Value1 $ |
|
Estimated Payout Value2 $ |
|
Estimated Payout Value as a % of Grant Date Fair Value |
|
2010 |
|
EVP |
|
Share-based awards |
|
423,500 |
|
482,001 |
|
57 |
% |
|
Option-based awards |
|
423,500 |
|
|
|
2011 |
|
EVP & COO |
|
Share-based awards |
|
960,000 |
|
917,075 |
|
64 |
% |
|
Option-based awards |
|
480,000 |
|
|
|
2012 |
|
EVP & COO |
|
Share-based awards |
|
731,250 |
|
401,402 |
|
27 |
% |
|
Option-based awards |
|
731,250 |
|
|
|
2013 |
|
CEO |
|
Share-based awards |
|
921,013 |
|
943,576 |
|
51 |
% |
|
Option-based awards |
|
921,013 |
|
|
|
2014 |
|
CEO |
|
Share-based awards |
|
2,018,250 |
|
1,185,868 |
|
59 |
% |
|
Option-based awards |
|
|
|
|
|
Notes:
(1) The Grant Date Fair Value of awards aligns with the values disclosed by Enerplus in each given year in the Summary Compensation Table and reflects what the Board intended to award Mr. Dundas under various long-term incentive plans.
(2) Where share-based awards have vested, the Estimated Payout Value reflects the amounts paid to Mr. Dundas for awards granted in that year (e.g., the Estimated Payout Value shown for 2010 share-based awards reflects payments made to Mr. Dundas in 2011, 2012 and 2013). Where those share-based awards were not vested as of December 31, 2014, the Estimated Payout Value reflects the market value, as disclosed in the Outstanding Option-Based and Share-Based Awards table as of December 31, 2014. As Mr. Dundas has not exercised any of the Option-based awards granted since the outset of 2010, the Estimated Payout Value for Option-based awards reflects the in-the-money value of those awards, as disclosed in the Outstanding Option-Based and Share-Based Awards table as of December 31, 2014.
The Estimated Payout Value of Mr. Dundas long-term incentive awards from 2010 to 2014 averaged 52% of the value assessed on the date of grant included in the above graph.
In 2014, Mr. Dundas LTI grant was comprised of PSUs (75%) and RSUs (25%). The Estimated Payout Value of PSUs is valued according to Enerplus TSR relative to the performance of the S&P/TSX E&P Index, while the Estimated Payout Value of RSUs is based solely on Enerplus absolute TSR over the period. Note that because the 2013 and 2014 estimated payouts of share-based awards are projected, actual realized payouts will vary from the estimates shown above, based on both absolute and relative TSR during 2015 to 2017.
56
Executive Compensation Tables
Summary Compensation Table
Outlined below is a description of the compensation paid, payable, awarded or granted to the Named Executive Officers in 2014, 2013 and 2012. Enerplus does not have any pension plans or similar deferred compensation plans.
Name and Position |
|
Year |
|
Salary |
|
Share-based awards1 |
|
Option-based awards2 |
|
Non-equity incentive plan compensation annual incentive plans3 |
|
All other compensation4 |
|
Total compensation |
|
|
|
|
|
($000) |
|
($000) |
|
($000) |
|
($000) |
|
($000) |
|
($000) |
|
Ian C. Dundas President & CEO |
|
2014 |
|
515 |
|
2,018 |
|
|
|
426 |
|
106 |
|
3,065 |
|
|
2013 |
|
470 |
|
921 |
|
921 |
|
690 |
|
103 |
|
3,105 |
|
|
2012 |
|
439 |
|
731 |
|
731 |
|
286 |
|
82 |
|
2,269 |
|
Robert J. Waters Senior Vice-President & Chief Financial Officer |
|
2014 |
|
388 |
|
1,171 |
|
|
|
253 |
|
80 |
|
1,892 |
|
|
2013 |
|
377 |
|
490 |
|
490 |
|
343 |
|
86 |
|
1,786 |
|
|
2012 |
|
375 |
|
523 |
|
523 |
|
204 |
|
74 |
|
1,699 |
|
Raymond J. Daniels Senior Vice-President, Operations |
|
2014 |
|
365 |
|
1,100 |
|
|
|
220 |
|
76 |
|
1,761 |
|
|
2013 |
|
353 |
|
496 |
|
496 |
|
322 |
|
81 |
|
1,748 |
|
|
2012 |
|
332 |
|
407 |
|
407 |
|
193 |
|
68 |
|
1,407 |
|
Eric G. Le Dain Senior Vice-President, Corporate Development, Commercial |
|
2014 |
|
337 |
|
1,020 |
|
|
|
212 |
|
82 |
|
1,651 |
|
|
2013 |
|
318 |
|
415 |
|
415 |
|
300 |
|
76 |
|
1,524 |
|
|
2012 |
|
308 |
|
365 |
|
365 |
|
174 |
|
65 |
|
1,277 |
|
Edward L. McLaughlin5 President, U.S. Operations |
|
2014 |
|
357 |
|
637 |
|
|
|
216 |
|
63 |
|
1,273 |
|
|
2013 |
|
316 |
|
279 |
|
288 |
|
232 |
|
58 |
|
1,173 |
|
|
2012 |
|
265 |
|
200 |
|
198 |
|
138 |
|
33 |
|
834 |
|
Notes:
(1) Represents the Boards determination of the fair value on the date of grant of the PSUs and RSUs awarded to the Named Executive Officers under the 2011 Executive PSU Plan and the Share Award Incentive Plan. The actual value realized upon the vesting and payment for these awards may be greater or less than the grant date fair value indicated. See Additional Information for summaries of these LTI plans.
For PSUs granted in 2014 under the Share Award Incentive Plan, the actual number of PSUs awarded was determined by dividing the intended dollar award amount by the volume weighted average trading price of the Common Shares on the TSX for the first twenty trading days of the applicable performance period. For RSUs granted in 2014, the actual number of RSUs awarded was determined by dividing the
57
intended dollar award amount by the volume weighted average trading price of the Common Shares on the TSX for the five trading days preceding and including the grant date.
For PSUs granted in 2013 and 2012 under the 2011 Executive PSU Plan, the actual number of PSUs awarded was determined by dividing the intended dollar award amount by the volume weighted average trading price of the Common Shares on the TSX for the first ten trading days of the applicable performance period. No RSUs were granted to the Named Executive Officers in 2013 and 2012.
The grant date fair value presented for these awards differs from the fair value determined in accordance with U.S. GAAP, which utilizes the closing Common Share trading price on the TSX on the grant date and assumes a relative performance factor of 1.0, and which provides an accounting fair value of the awards as follows:
|
|
Share Award Incentive Plan |
|
2011 Executive PSU Plan |
|
|
|
PSUs |
|
RSUs |
|
PSUs |
|
NEO |
|
2014 |
|
2014 |
|
2013 |
|
2012 |
|
Dundas |
|
1,513,690 |
|
504,571 |
|
986,653 |
|
655,909 |
|
Waters |
|
877,951 |
|
292,650 |
|
510,195 |
|
468,672 |
|
Daniels |
|
825,139 |
|
275,046 |
|
519,647 |
|
364,960 |
|
Le Dain |
|
765,129 |
|
255,049 |
|
434,131 |
|
327,781 |
|
McLaughlin |
|
475,758 |
|
161,089 |
|
290,278 |
|
140,446 |
|
(2) Represents the Boards determination of the fair value on the date of grant of the Options awarded to the Named Executive Officers under the Stock Option Plan in 2013 and 2012. The number of Options granted was calculated based on a valuation methodology for the Options provided to the Board of Directors by Mercer. The actual value realized upon the future exercise of Options may be greater or less than the grant date fair value indicated. See Additional Information for a summary of the Stock Option Plan. Since the implementation of the Share Award Incentive Plan in February 2014, Enerplus has not issued any Options.
The grant date fair value of Options granted in 2013 and 2012 presented differs from the fair value determined using the Black-Scholes pricing model adopted by Enerplus for accounting purposes in accordance with U.S. GAAP. Under the Black-Scholes model, the fair value of an Option in 2013 and 2012 was determined to be approximately 9% and 11% of the underlying market price of a Common Share on the date of grant, respectively. The key assumptions and estimates used for the calculation of the accounting fair value under the Black-Scholes model for the Named Executive Officers in 2013 and 2012 respectively are as follows: Dividend Yield: 8.00%; 7.70%; Volatility: 27.8%; 30.2%; Risk-free interest rate: 1.50%; 1.47%; and Forfeiture rate: 10.0%; 10.0%. The Black-Scholes Model provides an accounting fair value of the awarded number of Options in 2013 and 2012 as follows: Ian C. Dundas: 2013-$850,518; 2012-$734,681; Robert J. Waters: 2013-$428,048; 2012-$524,951; Raymond J. Daniels: 2013-$450,776; 2012-$408,786; Eric G. Le Dain: 2013-$373,369; 2012-$367,140; and Edward L. McLaughlin: 2013-$296,185; 2012-$196,655.
(3) Represents the cash bonus awards earned by the Named Executive Officers for 2014, 2013 and 2012 performance, which were paid in February of the following year.
(4) Reflects payments made by Enerplus to each of the Named Executive Officers for: health and insurance benefits, wellness spending accounts, car allowances, parking payments, club memberships, financial services and the Savings Plan or 401(k) matching contribution.
(5) Mr. McLaughlin is a U.S. employee paid in U.S. dollars. The amounts presented for Share-based and Option-based awards represent the Canadian-dollar equivalent of the U.S. dollar grant date fair value based on the exchange rate in effect on the grant date, being approximately US$1.00=CDN$1.0964 for 2014 awards, US$1.00=CDN$1.010 for 2013 awards and US$1.00=CDN$1.0207 for 2012 awards. All other amounts represent the Canadian-dollar equivalent of the U.S. dollar based on the exchange rate in effect on December 31 of the applicable year, being US$1.00=CDN$1.1601 for 2014, US$1.00=CDN$1.0636 for 2013 and US$1.00=CDN$0.9949 for 2012.
58
Outstanding Option-Based and Share-Based Awards as of December 31, 2014
The following table includes all awards outstanding as of December 31, 2014 under the Stock Option Plan and the predecessor Rights Incentive Plan, as these awards are considered option-based awards under applicable securities laws. The table also includes outstanding awards as of December 31, 2014 under the Share Award Incentive Plan and the 2011 Executive PSU Plan, as these awards are considered share-based awards under applicable securities laws. There were no share-based awards that vested in 2014 but have not been paid out or distributed effective as of December 31, 2014. Following the adoption of the Share Award Incentive Plan in 2014, Enerplus has not made any grants under the Stock Option Plan and the 2011 Executive PSU Plan.
|
|
Option-Based Awards |
|
Share-Based Awards |
|
Name |
|
Common Shares underlying unexercised Incentive Rights or Options (#) |
|
Exercise prices of Incentive Rights or Options(1) ($) |
|
Incentive Right or Option expiration dates(2) |
|
Value of unexercised in- the-money Incentive Rights or Options(3) ($) |
|
Number of share-based awards that have not vested4 (#) |
|
Market or payout value of share-based awards that have not vested5 ($) |
|
Ian C. Dundas |
|
140,915 |
|
15.77 |
|
March 5, 2020 |
|
|
|
151,707 PSUs |
|
1,857,875 |
|
397,972 |
|
13.96 |
|
March 5, 2020 |
|
|
|
151,859 |
|
13.23 |
|
July 9, 2019 |
|
|
|
289,032 |
|
23.00 |
|
March 8, 2019 |
|
|
|
24,269 RSUs |
|
271,569 |
|
105,264 |
|
30.40 |
|
March 10, 2018 |
|
|
|
59,268 |
|
23.58 |
|
December 31, 2015-2016 |
|
|
|
19,239 |
|
17.11 |
|
December 31, 2015 |
|
|
|
Robert J. Waters |
|
258,805 |
|
13.96 |
|
March 5, 2020 |
|
|
|
84,642 PSUs |
|
1,034,374 |
|
113,336 |
|
13.23 |
|
July 9, 2019 |
|
|
|
206,522 |
|
23.00 |
|
March 8, 2019 |
|
|
|
14,076 RSUs |
|
157,510 |
|
79,386 |
|
30.40 |
|
March 10, 2018 |
|
|
|
23,267 |
|
23.58 |
|
December 31, 2016 |
|
|
|
Raymond J. Daniels |
|
192,814 |
|
13.96 |
|
March 5, 2020 |
|
|
|
82,241 PSUs |
|
1,007,006 |
|
88,642 |
|
13.23 |
|
July 9, 2019 |
|
|
|
160,821 |
|
23.00 |
|
March 8, 2019 |
|
|
|
16,732 |
|
30.64 |
|
March 10, 2018 |
|
|
|
13,229 RSUs |
|
148,035 |
|
47,720 |
|
30.40 |
|
March 10, 2018 |
|
|
|
29,334 |
|
23.58 |
|
December 31, 2015-2016 |
|
|
|
9,842 |
|
17.11 |
|
December 31, 2015 |
|
|
|
Eric G. Le Dain |
|
237,854 |
|
13.96 |
|
March 5, 2020 |
|
|
|
72,850 PSUs |
|
888,106 |
|
52,722 |
|
13.23 |
|
July 9, 2019 |
|
|
|
144,437 |
|
23.00 |
|
March 8, 2019 |
|
|
|
64,693 |
|
30.40 |
|
March 10, 2018 |
|
|
|
12,267 RSUs |
|
137,272 |
|
34,288 |
|
23.58 |
|
December 31, 2015-2016 |
|
|
|
12,465 |
|
17.11 |
|
December 31, 2015 |
|
|
|
Edward L. McLaughlin |
|
151,216 |
|
13.96 |
|
March 5, 2020 |
|
|
|
46,864 PSUs |
|
573,940 |
|
27,582 |
|
14.14 |
|
March 8, 2019 |
|
|
|
36,711 |
|
23.00 |
|
March 8, 2019 |
|
|
|
7,748 RSUs |
|
86,701 |
|
15,920 |
|
25.70 |
|
March 10, 2018 |
|
|
|
59
Notes:
(1) The exercise prices of the outstanding Incentive Rights are presented after giving effect to the reduction in the applicable exercise prices in accordance with the terms of the Rights Incentive Plan.
(2) Any awards with the expiration date of July 9, 2019 and March 5, 2020 represent Options granted in July 2012 and March 2013, respectively, as part of 2013 compensation. Any awards with expiration dates of March 10, 2018 and March 8, 2019 represent Options granted under the Stock Option Plan as part of 2011 and 2012 compensation, respectively. Any awards with expiration dates ranging from 2015 to 2016 represent Incentive Rights granted under the Rights Incentive Plan prior to January 1, 2011.
(3) The value of the unexercised in-the-money Incentive Rights and Options as of December 31, 2014 is determined based on the excess of the closing price of the Common Shares on the TSX on December 31, 2014 of $11.19 per Common Share over the applicable exercise price. All outstanding Incentive Rights were vested as at December 31, 2013. The Stock Option Plan awards generally vest one-third on each of the first, second and third anniversaries of the date of grant and expire on the date which is seven years from the date of grant. Accordingly, all of the Options granted to the Named Executive Officers in 2011, two-thirds of the Options granted in 2012 and one-third of the Options granted in 2013 were vested as at December 31, 2014.
(4) Represents the number of PSUs awarded in 2012 and 2013 pursuant to the 2011 Executive PSU Plan, and PSUs and RSUs awarded in 2014 pursuant to the Share Award Incentive Plan, and which were outstanding as at December 31, 2014.
(5) The estimated future payouts represent Enerplus estimate, as at December 31, 2014, of the future payout amount of such awards based on the closing price of the Common Shares on the TSX on December 31, 2014 of $11.19 per Common Share.
For PSUs, calculation assumes a relative performance factor (Multiplier) of 1.0X, which corresponds to Enerplus achieving the 50th (median) percentile compared to its performance group. For PSUs granted in 2014 under the Share Award Incentive Plan, the Multiplier ranges from a minimum of 0.0X to a maximum of 2.0X. For PSUs granted in 2012 and 2013 under the 2011 Executive PSU Plan, the Multiplier ranges from a minimum of 0.5X to a maximum of 2.0X. The actual amount ultimately paid to the Named Executive Officers in respect of such PSUs upon vesting may be greater or less than the amounts indicated.
PSUs generally vest 100% approximately three years from the date of grant. RSUs generally vest on the first, second and third anniversaries of the date of grant. Accordingly, none of the PSUs or RSUs granted in 2014, or any PSUs granted in 2013, were vested as of December 31, 2014.
Incentive Plan Awards Value Vested or Earned During the Year
The following table sets forth the value of the awards that vested or were earned in 2014 for each Named Executive Officer under the Stock Option Plan and the Rights Incentive Plan (which are option-based awards) and under the Share Award Incentive Plan and 2011 Executive PSU Plan (which are share-based awards), as well as the amount of non-equity incentive plan awards.
|
|
Option-based awards - Value vested during the year1 |
|
Option-based awards - Value realized upon exercise during the year2 |
|
Share-based awards - Value vested during the year3 |
|
Non-equity incentive plan compensation - Value earned during the year4 |
|
Name |
|
($) |
|
($) |
|
($) |
|
($) |
|
Ian C. Dundas |
|
1,896,672 |
|
|
|
401,402 |
|
426,420 |
|
Robert J. Waters |
|
1,117,076 |
|
449,199 |
|
286,817 |
|
252,846 |
|
Raymond J. Daniels |
|
1,100,971 |
|
1,284,105 |
|
223,347 |
|
220,033 |
|
Eric G. Le Dain |
|
927,776 |
|
505,856 |
|
200,595 |
|
212,194 |
|
Edward L. McLaughlin |
|
859,460 |
|
1,029,032 |
|
127,572 |
|
215,606 |
|
Notes:
(1) Represents the aggregate value of the Incentive Rights and Options held by the Named Executive Officer that vested in 2014. The value was calculated as the difference between the exercise price of the Options and the Incentive Rights (reduced in accordance with the Rights Incentive Plan), as applicable, that vested in 2014 and the closing price of the Common Shares on the TSX on the date of vesting.
(2) Calculated using the price received on the disposition of the Common Shares issued upon exercise of the Options or the Incentive Rights, as applicable, less the exercise price of such Options or Incentive Rights.
(3) Represents the aggregate value that all Named Executive Officers received from the PSUs granted in 2012 according to the 2011 Executive PSU Plan that vested on December 31, 2014. The PSU payouts, all of which were also made in cash, were based on the ten-day weighted average trading price of the Common Shares on the TSX ending on December 31, 2014, plus the accumulated dividends on the vested PSUs from the date of grant, and were subject to a relative performance payout factor of 0.94. This performance factor was determined on the basis of Enerplus relative total shareholder return over the vesting period reaching the 47th percentile of returns among the constituents of the S&P/TSX E&P Index.
(4) Represents the cash bonus awards earned by the Named Executive Officers for 2014 performance, which were paid in February 2015. Mr. McLaughlins cash bonus was paid in U.S. dollars, and the Canadian-dollar denominated equivalent represented is based on the exchange rate in effect on December 31, 2014, being US$1.00=CDN$1.1601.
60
Termination and Change of Control Benefits
Employment Agreements
Enerplus has employment agreements in place with each of its executives which outline the terms and conditions of the employment contract and treatment in the event of termination, change in role or Change of Control.
Executives commit to non-solicitation and confidentiality conditions in the event of termination and, in exchange, may be eligible for severance payments and benefits. As a condition of receiving such payments and arrangements, the executive:
· Must execute a release that releases Enerplus from further obligations and liabilities to the executive
· May not, directly or indirectly, without the consent of Enerplus, solicit for hire any employee of Enerplus for employment with another entity during the severance period
· May not, directly or indirectly, acquire more than 5% of the outstanding securities of Enerplus for the duration of the severance period
· May not engage in any non-management proxy solicitation with respect to Enerplus for the duration of the severance period or disclose proprietary information regarding Enerplus operations or business opportunities
Summary of Termination Provisions for Named Executive Officers
Termination Type |
|
Salary |
|
Bonus |
|
LTI |
|
Benefits and Perquisites |
For Just Cause or by Executive without Good Reason (Resignation) |
|
None |
|
None |
|
All unexercised, unvested or unpaid grants or awards are immediately forfeited and cancelled on termination date |
|
Cease on termination date |
Without Just Cause (by Enerplus), or For Good Reason (by Executive) following a Change of Control |
|
Lump sum cash payment equal to the aggregate base salary the executive would receive during the severance period |
|
Lump sum cash payment equal to the monthly average of the last two years bonus multiplied by the severance period and for the period of partial and completed years immediately prior to the termination date for which the executive has not been paid any incentive bonus |
|
All LTI vests upon termination date
Incentive Rights and/or Options expire 90 days following termination date |
|
Lump sum cash payment in lieu of benefits and perquisites for the severance period |
Death or Disability |
|
None |
|
None |
|
Share Awards and PSUs vest upon death or termination due to disability
All unvested Incentive Rights and Options vest upon death or termination due to disability and must be exercised within 90 days |
|
None |
Retirement |
|
None |
|
None |
|
Most recent LTI award is pro-rated
All remaining LTI continues to vest as scheduled |
|
Limited health, dental and life insurance benefits for Canadians meeting eligibility criteria
Savings Plan and perquisites cease on retirement date |
61
Estimated Incremental Payments for Termination as of December 31, 2014
Based on the provisions summarized above, the following tables reflect estimated payments that would have been made to the Named Executive Officers or their estates, had their employment with Enerplus terminated as of December 31, 2014. The information presented in these tables does not necessarily reconcile to the information shown in the Summary Compensation and the Outstanding Option-Based and Share-Based Awards Tables. This is a reflection of different measurement periods for the purposes of salary and LTI calculations.
Termination Without Just Cause or For Good Reason Following a Change of Control
|
|
Severance Period |
|
Salary1 |
|
Annual Incentive Bonus2 |
|
Option- Based Award Payments3 |
|
Share-Based Award Payments4 |
|
Benefits & Perquisites5 |
|
Total |
|
Name |
|
(Months) |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
Ian C. Dundas |
|
30 |
|
1,293,750 |
|
1,220,520 |
|
|
|
2,678,867 |
|
264,291 |
|
5,457,428 |
|
Robert J. Waters |
|
24 |
|
780,390 |
|
546,650 |
|
|
|
1,463,916 |
|
160,595 |
|
2,951,551 |
|
Raymond J. Daniels |
|
24 |
|
733,442 |
|
515,071 |
|
|
|
1,446,797 |
|
152,086 |
|
2,847,396 |
|
Eric G. Le Dain |
|
24 |
|
680,109 |
|
473,742 |
|
|
|
1,264,458 |
|
164,351 |
|
2,582,660 |
|
Edward L. McLaughlin |
|
12 |
|
359,343 |
|
207,223 |
|
|
|
947,329 |
|
63,319 |
|
1,577,214 |
|
Notes:
(1) Represents the Named Executive Officers 2014 annual salary multiplied by the severance period.
(2) Based on the average of annual incentive bonuses received by the Named Executive Officer in 2012 and 2013, had such amount been received for the duration of the severance period and with no amount payable in respect of any partial year as termination was deemed to occur on December 31, 2014. For Mr. McLaughlin, U.S. dollar amounts were converted to Canadian dollars using the exchange rate of US$1.00 = CDN$1.1601 in effect December 31, 2014.
(3) All unvested Incentive Rights and Stock Options held by the Named Executive Officer as at December 31, 2014 would vest and be immediately exercisable on December 31, 2014, as provided under the Executive Employment Agreements. The amounts presented are calculated based on the in-the-money value of the Incentive Rights and Options in respect of which vesting has been accelerated, based on the difference between the closing price of Common Shares on the TSX on December 31, 2014 and the exercise price of such Options or Incentive Rights, as applicable.
(4) All unvested PSUs and RSUs as at December 31, 2014 would immediately vest and be paid to the Named Executive Officer. The amounts represent the estimated market value of the outstanding PSUs and RSUs based on relative performance factors estimated as of December 31, 2014, plus the monthly cash dividends or dividend reinvestment that would have been paid by Enerplus on such shares had they been outstanding as Common Shares from the date of grant. The estimated relative performance factors were 1.32 for PSUs that vest on June 30, 2015, 1.72 for PSUs that vest on December 31, 2015 and 0.96 for PSUs that vest on December 31, 2016.
(5) The amount payable over the severance period in lieu of perquisites including car allowance, parking, health, wellness, dental, life insurance and disability programs, benefits paid under a flexible spending account, club membership dues and the Savings Plan matching contribution made by Enerplus to each of the Named Executive Officers.
Termination Due to Death, Disability or Retirement
The payments shown below relate exclusively to option-based and share-based award payments. No other payments would be made if termination were due to death, disability, or retirement.
|
|
Death or Disability1 |
|
Retirement2 |
|
Name |
|
$ |
|
$ |
|
Ian C. Dundas |
|
2,678,867 |
|
N/A |
|
Robert J. Waters |
|
1,463,916 |
|
1,010,767 |
|
Raymond J. Daniels |
|
1,446,797 |
|
N/A |
|
Eric G. Le Dain |
|
1,264,458 |
|
N/A |
|
Edward L. McLaughlin |
|
947,329 |
|
N/A |
|
Notes:
(1) Represents the estimated incremental payment for share-based awards that would have been made to a Named Executive Officer by reason of death or disability on December 31, 2014.
(2) Represents the aggregate value of the share-based awards that Mr. Waters would have received upon an effective retirement date of December 31, 2014. No other Named Executive Officers were eligible to retire as at December 31, 2014 based upon the retirement criteria of a minimum of age 55 plus a minimum of five years of service with Enerplus for a combined total minimum of 65 years. Upon retirement, share awards previously granted will continue to vest in accordance with their original terms except shares awarded in the most recent grant are pro-rated.
62
ADDITIONAL INFORMATION
Schedule A - Mandate of the Board of Directors
Schedule B - Annual Responsibilities of the Compensation & Human Resources Committee
Schedule C - Securities Authorized For Issuance Under Equity Compensation Plans
Schedule D - Summary of Share Award Incentive Plan
Schedule E - Summary of Stock Option Plan
Schedule F - Summary of Rights Incentive Plan (Closed)
Schedule G - Summary of 2011 Executive PSU Plan (Closed)
Schedule H - Definitions
63
Schedule A - Mandate of the Board of Directors
The primary responsibility of the Board of Directors is to supervise the management of Enerplus to ensure its long-term success and to maximize Shareholder value. Any responsibility which has not been delegated to management remains with the Board of Directors of Enerplus (Board).
Composition
The Board shall be composed of a minimum of one director and a maximum of fifteen directors. Except as set out in the By-Laws of Enerplus, Board members will be elected at the annual meeting of the Shareholders and will serve until their successors are duly appointed. A majority of the directors will be independent. All members of the Board shall have the skills and abilities required to carry out their duties and responsibilities in the most effective manner. The Board shall endeavor to always have the right mix of experience and competencies to discharge its responsibilities.
Meetings
The Board shall meet at least six times yearly, and as deemed necessary in order to carry out its duties effectively. The Board shall also retain independent advice, if necessary.
Duties and Responsibilities
The Board is charged with the overall stewardship of Enerplus and manages or supervises the business of Enerplus and its management. The Boards responsibilities include:
1. Management Selection, Retention and Succession
· Select, appoint and, if necessary, terminate the CEO
· Approve the appointment of the Chairman of the Board as recommended by the Corporate Governance & Nominating Committee
· Approve the list of directors standing for election, as recommended by the Corporate Governance & Nominating Committee
· Review its charter annually and recommend changes to the Board when necessary
· Annually appoint directors to the following committees and delegate to such committees specific responsibilities, pursuant to their respective mandates, as approved by the Board
· The Audit & Risk Management Committee
· The Compensation & Human Resources Committee
· The Corporate Governance & Nominating Committee
· The Reserves Committee
· The Safety & Social Responsibility Committee
· At the Boards discretion, appoint any other Board committees that the Board decides are needed and delegate to such committees specific responsibilities, pursuant to their respective mandates, as approved by the Board
· Approve compensation programs for senior management, as recommended by the Compensation & Human Resources Committee
· Assess the CEO against corporate objectives approved by the Board
· Assess, annually, the effectiveness and the performance of the Board, its committees and directors in fulfilling their responsibilities
· Approve directors compensation, as recommended by the Corporate Governance & Nominating Committee
64
2. Strategy
· Review and approve the corporate objectives developed by the CEO
· Review, adopt and monitor Enerplus strategic planning process
· Monitor Enerplus performance in light of the approved strategic planning process
· Adopt, annually, a strategic planning process to maximize Shareholder value
3. Corporate Ethics and Integrity
· Review and monitor Enerplus Code of Business Conduct and disclose any waivers of the Code for officers and directors
· Review and respond to potential conflict of interest situations
· Ensure policies and processes are in place for the identification of principal business risks and review and approve risk management strategies
· Approve corporate policies and other corporate protocols and controls
· Approve Enerplus policy on public disclosure
· Review, annually, its mandate and amend as deemed necessary
4. Financial Responsibilities
· Approve the annual audited financial statements of Enerplus as recommended by the Audit & Risk Management Committee
· Approve the quarterly interim financial statements of Enerplus as recommended by the Audit & Risk Management Committee
· Recommend to the Shareholders the appointment of Enerplus external auditors, as recommended by the Audit & Risk Management Committee
· Review and approve Enerplus operating budget
· Review, as deemed necessary, approval authorities of the CEO and senior management
· Approve financial commitments in excess of delegated approval authorities
· Review and approve any material acquisitions, divestments and corporate reorganizations
· Assess and approve any material securities offerings, financing or banking arrangements
65
Schedule B - Annual Responsibilities of the Compensation & Human Resources Committee
On an annual basis, the Compensation & Human Resources Committee is responsible for the following activities related to executive and employee compensation, and succession planning and talent management.
January |
|
ü Recommend to the Board of Directors the corporate performance rating for the funding of the annual bonus pool, any salary increase for the CEO, the CEOs annual bonus, and the CEOs annual PSU and RSU awards
ü Review the CEOs proposals for VP and SVP salary increases, annual bonuses, and annual PSU and RSU awards
ü Review payouts made under the various PSU plans. Approval is not required unless the Compensation & Human Resources Committee wishes to apply discretion to modify the payout calculation relative to the prescribed methodology
ü Review any updates to executive succession planning and leadership development
ü Approve non-executive compensation changes |
|
|
|
February |
|
ü Review and recommend to the Board executive salary increases, annual bonuses, and annual PSU and RSU awards
ü Review draft Information Circular disclosure and provide feedback to management
ü Review draft corporate and CEO goals for the current year, and provide recommendations on those goals to the Board
ü Review any updates to executive succession planning and leadership development
ü Review executive goals for the current year
ü Review diversity objectives and make recommendations to the Board as required |
|
|
|
March |
|
ü Finalize any Compensation & Human Resources Committee contributions to the Information Circular and approve the filing
ü Define and approve external consultant mandates |
|
|
|
June |
|
ü Approve PSU and RSU awards to any new hires and/or recently promoted employees |
|
|
|
August |
|
ü Review comprehensive benchmarking of senior executive compensation
ü Review voting results from the Annual Meeting and reports from institutional advisory firms, and determine follow-up action
ü Review any updates to executive succession planning and leadership development
ü Conduct Diversity Policy progress review |
|
|
|
September |
|
ü Approve PSU and RSU awards to any new hires and/or recently promoted employees |
|
|
|
November |
|
ü Review comprehensive compensation benchmarking of all executive positions
ü Approve any changes to compensation philosophy, incentive targets, plan designs, and/or policies for the upcoming year
ü Review any updates to executive succession planning and leadership development
ü Begin the CEO performance assessment process |
|
|
|
December |
|
ü Complete the CEO evaluation in respect of prior year performance
ü Approve PSU and RSU awards to any new hires and/or recently promoted employees |
66
Schedule C - Securities Authorized For Issuance Under Equity Compensation Plans
The following table sets forth, as of December 31, 2014, the number of Common Shares which were authorized for issuance with respect to the Stock Option Plan, the Rights Incentive Plan and the Share Award Incentive Plan, being the only compensation plans of Enerplus then in effect in which securities may be issued from treasury. Descriptions of these plans are set out under Additional Information.
Plan Category |
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights1 (a) |
|
Weighted-average exercise price of outstanding options, warrants and rights2 (b) |
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
|
Equity compensation plans approved by security holders |
|
11,653,080 |
|
$ |
18.65 |
|
8,920,121 |
|
Equity compensation plans not approved by security holders |
|
N/A |
|
N/A |
|
N/A |
|
Total |
|
11,653,080 |
|
$ |
18.65 |
|
8,920,121 |
|
Notes:
(1) Includes Options, Incentive Rights, PSUs and RSUs outstanding under the Stock Option Plan, the Rights Incentive Plan, and the Share Award Incentive Plan.
(2) Without giving effect to the permitted reduction in the exercise prices under the Rights Incentive Plan. If the downward adjustment in the exercise price is included, the weighted-average exercise price is $18.65. The weighted-average exercise price with or without the downward adjustment is the same price, as the conditions for a permitted reduction in exercise price have not been fulfilled.
67
Schedule D - Summary of Share Award Incentive Plan
Background
The Share Award Incentive Plan (Plan) was approved by Shareholders and implemented in February 2014 to replace Enerplus previous LTI plans, including the 2011 Executive PSU Plan, the Stock Option Plan and the Rights Incentive Plan. Since the adoption of the Plan, Enerplus has not made and does not intend to make any further grants of awards under the previous LTI plans.
The Plan governs the annual granting of Share Awards in the form of either or both RSUs and PSUs to executives and employees for greater alignment of interests between Enerplus and Shareholders.
Vesting and Expiry
RSU
Each RSU awarded entitles the holder to one Common Share at the time of vesting. RSUs vest in three tranches: one third on each of the first, second and third anniversary dates of the date of grant.
PSU
Each PSU awarded entitles the holder to one Common Share at the time of vesting. PSU awards cliff vest in their entirety at the end of a three year performance period.
Dividends
Share Awards accrue dividends starting from the date of grant that are notionally reinvested on a compounding basis using the five-day volume weighted average price preceding the dividend payment date.
Payout
Common Shares payable to a holder upon vesting of a Share Award may be issued from Enerplus treasury. On or prior to the payout date, these Common Shares will automatically be sold on the TSX by a broker, dealer or plan administrator on behalf of the holder without any discretion exercised or instructions provided by the holder. Each holder will then be paid a cash amount, based on the average sale price received from all Common Shares sold on behalf of the Plan participants in respect of that payout date. However, Enerplus may elect to instead pay to the holder an amount in cash equal to the aggregate fair market value of the Common Shares to which the holder is entitled under his or her Share Awards in lieu of issuing treasury Common Shares. In this case, the fair market value payable to the holder is based on the five day volume weighted average trading price of the Common Shares on the TSX for the period ending one business day prior to the vesting date.
RSU
The value of payment is calculated based on the number of vesting RSUs including those obtained through the notional reinvestment of dividends, multiplied by the sum of the share price.
PSU
The value of payment is calculated based on the number of vesting PSUs including those obtained through the notional reinvestment of dividends, multiplied by the share price multiplied by the payout multiplier (Multiplier).
The Multiplier ranges from 0.0x to 2.0x and is determined based on Enerplus relative TSR over the performance period as compared to a group of industry peers (Performance Group). If the percentile rank is less than 25, the Multiplier is zero, and if the percentile rank is equal to or greater than 75, the Multiplier is two. Where the percentile rank is between those numbers, the Multiplier will be determined by linear interpolation between the two nearest values.
The Performance Group is specified by the Board at the beginning of each performance period, and generally will consist of the entities that comprise the S&P/TSX E&P Index (or any replacement or successor index) at the beginning of the performance period. The composition of the Performance Group may subsequently be amended by the Board if any member of the group ceases to exist during the applicable performance period.
68
For Share Awards granted in 2014, the TSR for a given performance period was calculated using cumulative dividends on a reinvested basis and the change in the trading price of the Common Shares on the TSX over such period. The share price used at the beginning of the performance period to determine the TSR of Enerplus and the Performance Group was based on the volume weighted average trading prices for the first 20 trading days and last 20 trading days of such performance period.
In February 2015, Enerplus amended the Plan to ensure consistent year-over-year pricing of PSUs to be granted under the Plan and better align the terms of the Plan with industry practice. The amendment provides that the share price used at the beginning of the performance period to determine the TSR of Enerplus and the Performance Group would be based on the final 20 trading days prior to the commencement of the performance period rather than the first 20 trading days of the performance period itself. As such, the starting share price for a new PSU award will align with the ending share price of the vesting PSU. The administrative nature of this amendment did not require Shareholder approval under the terms of the Plan or applicable regulatory requirements.
Pool (Shareholder Approved Treasury Reserve)
The Plan provides that the number of Common Shares reserved for issuance from Enerplus treasury pursuant to the Plan shall not exceed 5% of the aggregate number of issued and outstanding Common Shares (on a non-diluted basis) at such time. Additionally, the Plan provides that the number of Common Shares reserved for issuance from treasury under the Plan plus the number of Common Shares reserved for issuance pursuant to grants under any other Security-Based Compensation Arrangement shall not exceed 10% of the aggregate number of issued and outstanding Common Shares (on a non-diluted basis) at such time. A Security-Based Compensation Arrangement generally means any other plan under which Common Shares can be issued from Enerplus treasury.
Following the expiration, cancellation or other termination of any Share Awards under the Share Award Incentive Plan (including upon the vesting and payout of Share Awards), a number of Common Shares reserved for issuance under the Share Awards which have expired, been cancelled or terminated will automatically become available for issuance in respect of new Share Awards that may subsequently be granted under the Plan. As there is a rolling 10% aggregate maximum number of issued and outstanding Common Shares reserved among all of Enerplus Security-Based Compensation Arrangements, as Options and Incentive Rights granted in previous years are exercised or expire, the Common Shares reserved for issuance under those grants will be reallocated for future issuance under the Plan. As the Plan does not have a fixed maximum number of Common Shares reserved for issuance under the Plan, the TSX requires that the approval of all unallocated Share Awards under the Plan be sought by Enerplus every three years from a majority of the Shareholders.
As of March 6, 2015 an aggregate of 3,529,814 Share Awards (1,401,515 PSUs and 2,128,299 RSUs) were issued and outstanding, representing 1.7% of the issued and outstanding Common Shares, which entitle the holders to receive an aggregate number of Common Shares (assuming a Multiplier of 1.0X applicable to outstanding PSUs) representing approximately 0.68% of Enerplus issued and outstanding Common Shares as at March 6, 2015.
As at March 6, 2015, there were Options and Incentive Rights outstanding to acquire a total of 9,947,024 Common Shares, representing 4.8% of the issued and outstanding Common Shares at such date. As Options and Incentive Rights are exercised, terminated, cancelled or expire, the Common Shares underlying such Options and Incentive Rights will become available for issuance under the Share Award Incentive Plan, subject to the limit of 5% of the issued and outstanding Common Shares reserved for issuance under such plan.
69
Termination Provisions
Termination Type |
|
|
For Just Cause or by Executive without Good Reason (Resignation) |
|
Share Awards are forfeited and cancelled on the termination date. |
Without Just Cause (by Enerplus) or For Good Reason (by Executive), including following a Change of Control |
|
All outstanding Share Awards are forfeited and terminated on the effective date of the termination, unless otherwise stated in the termination provisions contained in an executive employment agreement.
If an executive officers employment with Enerplus is terminated in certain circumstances following a Change of Control, the vesting and payment of Share Awards may be accelerated pursuant to the terms of his or her executive employment agreement. |
Death or disability |
|
All Share Awards fully accelerate and vest, with the amount of the cash payment calculated on the basis of Enerplus share performance up to the date of the holders death and based on the fair market value of the Common Shares at such time. |
Retirement |
|
All Share Awards previously granted to the holder will continue to vest and be paid out in accordance with their original terms, except that in the case of retirement, the number of unvested and unpaid Share Awards that comprise the most recent grant of such awards will be reduced on a pro rata basis for the proportion of the entire three year vesting period completed prior to the date of retirement. |
Other Terms
· The Plan provides that the Board may, in its sole discretion, amend or modify the terms and conditions regarding any grant of Share Awards, including without limitation, to accelerate any vesting or payment date of a Share Award or to adjust the Multiplier or the number of Common Shares deliverable pursuant to PSU awards under the Plan; provided that no such amendment or modification may, without the consent of the affected holder, reduce or adversely affect the amount of a Share Award otherwise payable pursuant to the terms of the Plan
· The Board may, at any time, with the approval of Shareholders, suspend, discontinue or amend the Plan or a Share Award. However, the Board of Directors may not amend the Plan or a Share Award without the approval of the holders of a majority of Common Shares who vote at a Shareholder meeting to:
(a) increase the number of Common Shares, or the percentage of the issued and outstanding Common Shares, reserved for issuance pursuant to the Plan
(b) expand the categories of individuals who are eligible to participate in the Plan
(c) extend the term of any Share Award beyond the term of such awards provided for under the terms and conditions of the Plan
(d) remove or increase the limits on the number of Common Shares issuable to any individual holder or to insiders as described under Pool (Shareholder Approved Treasury Reserve) above
(e) permit the transfer or assignment of Share Awards, except to permit a transfer to a family member, an entity controlled by the holder of the Share Awards or a family member, a charity or for estate planning or estate settlement purposes
(f) amend the amendment provisions of the Plan, unless the change to the Plan or a Share Award results from the application of the customary anti-dilution provisions of the Plan. Additionally, no suspension, discontinuance or amendment may be made by the Board in respect of previously issued Share Awards that would adversely alter or impair those awards without the consent of the affected holder. Any amendments to the Plan are also subject to the requirements of the TSX or other applicable regulatory bodies
· The Plan contains standard adjustment and anti-dilution provisions for changes in the capital structure of Enerplus
70
· A Share Award is personal to the holder and is non-transferable and non-assignable, other than as required for estate settlement purposes in the event of the holders death
· The Plan does not provide for or contemplate the provision of financial assistance to holders, as no financial payment is required to be made by the holder under the operation of the Plan
· Enerplus is not required to issue or deliver any Common Shares to any holder or make any payment in violation of any applicable law, regulation or rule of any governmental authority, securities regulatory authority or stock exchange
· The aggregate number of Share Awards granted to any individual under the Plan shall not exceed 5% of the issued and outstanding Common Shares (on a non-diluted basis), and the number of Common Shares issuable to insiders of Enerplus as a whole under the Plan, either within any one-year period or at any time, shall not exceed 5% of the issued and outstanding Common Shares (on a non-diluted basis), in each case less the number of Common Shares reserved for issuance to such persons under any other Security-Based Compensation Arrangements of Enerplus
71
Schedule E - Summary of Stock Option Plan
Background
In connection with the Conversion, the Stock Option Plan was approved by the Unitholders of the Fund on December 9, 2010, to allow all employees to be eligible to receive Options.
Directors of Enerplus were not eligible to participate in the Stock Option Plan. Since the implementation of the Share Award Incentive Plan in February 2014, Enerplus has not issued any Options.
Vesting and Expiry
Options vest in 3 tranches: one third on each of the first, second and third anniversary dates of the date of grant.
Unexercised Options expire seven years from the date of grant. If the expiry date of an Option occurs during or within 10 business days of a blackout period (as such term is defined in the Stock Option Plan), then the expiry date is extended to the tenth business day after the expiry date of the blackout period.
Dividends
Options are not eligible to accrue dividends.
Payout
When an Option has vested, the Option holder can exercise the Option by purchasing Common Shares at the exercise price. The Option holder can either hold the Common Shares or can surrender the Common Shares in exchange for a cash payment equal to the difference between the current market price and the exercise price under the Option multiplied by the Common Shares underlying the Option exercised.
The exercise price of an Option must be no less than the closing price of the Common Shares on the TSX on the last business day prior to the date on which the Option is granted.
Pool
The Stock Option Plan provides that, at all times, 10% of the issued and outstanding Common Shares (on a non-diluted basis), less the number of Common Shares that are reserved for issuance pursuant to other Security-Based Compensation Arrangements where Common Shares may be issued from treasury, will be reserved and available for issuance upon the exercise of Options. This 10% maximum is an evergreen provision whereby a number of Common Shares equivalent to the number of Options that have been exercised, terminated, cancelled or expired are re-reserved for issuance under the Stock Option Plan and available for future issuances. As Options are exercised, terminated, cancelled or expire, the Common Shares underlying such Options will instead become available for issuance under the Share Award Incentive Plan, subject to the limit of 5% of the issued and outstanding Common Shares reserved for issuance under that plan.
The last Option grant was in 2013. As of March 6, 2015, there were 9,276,053 Options outstanding, representing 4.5% of the issued and outstanding Common Shares on such date. As of December 31, 2014, there were a total of 9,678,104 Options outstanding representing approximately 4.7% of the issued and outstanding Common Shares, with exercise prices ranging from $12.88 to $30.64 with a weighted average exercise price of $18.42 and expiration dates ranging from March 10, 2018 to March 5, 2020. As of December 31, 2014, a total of 5,058,627 of these outstanding Options were vested, with a weighted average exercise price of $20.85.
72
Termination Provisions
Termination Type |
|
|
For Just Cause or by Executive without Good Reason (Resignation) |
|
Options expire and are cancelled on the termination date. |
Without Just Cause (by Enerplus) or For Good Reason (by Executive), including following a Change of Control |
|
Unless otherwise specified in an executive employment agreement, unvested Options expire and are cancelled on the termination date. Vested Options expire 90 days from termination date. |
Death or Disability |
|
All unvested options become vested on the death or disability date and must be exercised within 90 days. |
Retirement |
|
Options continue to vest and expire in accordance with their original terms. |
Other Terms
· The Stock Option Plan states that the Board may, at any time without the approval of the Shareholders and the holders of any other voting securities of Enerplus, suspend, discontinue or amend the Stock Option Plan or any Option
· The Board may not, without the approval of a majority of the Shareholders and the holders of other voting securities of Enerplus, amend the Stock Option Plan or an Option to:
(a) increase the number of Common Shares, or the percentage of the issued and outstanding Common Shares, issuable pursuant to the Stock Option Plan
(b) make any amendment that would reduce the exercise price of an outstanding Option (including a cancellation and re-issue of an Option that constitutes a reduction of the exercise price)
(c) extend the expiry date of any Option granted under the Stock Option Plan beyond the expiry date of the Option determined at the date of grant, except as provided for with respect to an expiry date that occurs during a blackout period, as described above
(d) expand the categories of individuals who are eligible to participate in the Stock Option Plan
(e) amend the Stock Option Plan to permit the transfer or assignment of Options, except to permit a transfer to a family member, an entity controlled by the holder of the Options or a family member, a charity, or for estate planning or estate settlement purposes
(f) amend the amendment provisions of the Stock Option Plan, unless the change to the Stock Option Plan or an Option results from the application of provisions in the Stock Option Plan relating to mergers, business combinations, take-over bids or similar transactions or to the anti-dilution provisions
· An Option is personal to the holder thereof and is non-transferable and non-assignable
· The Stock Option Plan does not provide for or contemplate the provision of financial assistance to facilitate the exercise of Options and the issuance of Common Shares
· The Stock Option Plan (and any proposed future amendments to the Stock Option Plan) is subject to such future approvals of the Shareholders and applicable stock exchanges as may be required by the terms of the Stock Option Plan or applicable stock exchanges from time to time. As a result of implementing an automatic re-loading 10% maximum number of Common Shares reserved for issuance under the Stock Option Plan, the TSX requires approval from Shareholders every three years. Shareholder approval of unallocated Options was last obtained at the annual meeting held in May 2013. Any amendment to the Stock Option Plan is subject to the prior approval, where required, of applicable stock exchanges, and no amendment to, or suspension or discontinuance of, the Stock Option Plan may be made to the Stock Option Plan or an Option granted under the Option Plan that would adversely alter or impair any previously granted Options, without the prior consent of the holder
73
· The maximum number of Common Shares that any one individual may receive upon the exercise of Options under the Stock Option Plan is 5% of the issued and outstanding Common Shares (on a non-diluted basis) at the date of the grant of the Options, less the aggregate number of Common Shares reserved for issuance to such individual under any other securities-based compensation arrangement (Individual Limit)
· The maximum number of Common Shares that insiders of Enerplus may receive upon the exercise of Options under the Stock Option Plan is 10% of the issued and outstanding Common Shares (on a non-diluted basis) at the date of the grant of the Options, less the aggregate number of Common Shares reserved for issuance to insiders of Enerplus under any other Security-Based Compensation Arrangement (Aggregate Insider Limit)
· In addition, the maximum number of Common Shares that may be issued to any one insider of Enerplus under the Stock Option Plan within a one-year period is the Individual Limit excluding Common Shares issued to the insider under the Stock Option Plan or any other Security-Based Compensation Arrangement during the preceding one-year period, and the maximum number of Common Shares that may be issued to insiders of Enerplus under the Stock Option Plan within a one-year period is the Aggregate Insider Limit excluding Common Shares issued to insiders of Enerplus under the Stock Option Plan or any other Security-Based Compensation Arrangement during the preceding one-year period
74
Schedule F - Summary of Rights Incentive Plan (Closed)
Background
Effective January 1, 2011, Enerplus converted from an income trust (the Fund) to a corporation and the Trust Unit Rights Incentive Plan (TURIP) effective 2001, was amended and restated to the Rights Incentive Plan in January 2011 to reflect the Conversion. Each Incentive Right granted under the Rights Incentive Plan outstanding as at December 31, 2010 entitled the holder to purchase one Common Share in lieu of a trust unit of the Fund on the same terms and at the same price as such Incentive Right was exercisable prior to the Conversion. All Incentive Rights outstanding as at December 31, 2010 continue to be subject to the provisions of the Rights Incentive Plan. The last grant of Incentive Rights under the Rights Incentive Plan was made in 2010 and, as a result of the adoption by Enerplus of the Stock Option Plan effective January 1, 2011, Enerplus has not made and does not intend to make any further grants of awards under the Rights Incentive Plan.
Vesting and Expiry
Incentive Rights vest in 3 tranches: one third on each of the first, second and third anniversary dates of the date of grant.
Once vested, an Incentive Right is exercisable and expires at the end of the third calendar year following the year in which the Incentive Right vested.
If the expiry date of an Incentive Right occurs during or within 10 business days of a blackout period, then the expiry date is extended to the tenth business day after the expiry date of the blackout period.
Dividends
Incentive Rights are not eligible to accrue dividends.
Exercise Price
The original exercise price of an Incentive Right at the time of grant could not be less than the closing price of the trust units (now Common Shares) of the Fund on the TSX on the last business day prior to the approval of the grant of the Incentive Rights by the Board. However, the original exercise price of the Incentive Rights may be adjusted downward at the election of the holder, except U.S. holders who are subject to certain U.S. tax rules, in which case the original exercise price may not be adjusted downward. The downward adjustment may occur once Enerplus distributions or dividends to Shareholders exceed 10% of the net property, plant and equipment account on Enerplus balance sheet, on a per share basis, in a calendar year (adjusted as to 2.5% of the net property, plant and equipment, on a per share basis, at the end of each calendar quarter), following which the exercise price of the Incentive Rights may be reduced by a corresponding per share amount.
Pool
The Rights Incentive Plan provides that the aggregate number of Common Shares reserved for issuance thereunder, subject to any adjustments or increases of such number relating to mergers, business combinations, take-over bids and anti-dilution provisions, shall not exceed 5,473,866, which was the number of Incentive Rights outstanding on January 1, 2011, the date of the Conversion.
All Incentive Rights that are exercised, terminated or cancelled or that have expired are immediately re-reserved for issuance, and will become available for issuance under the Share Award Incentive Plan subject to the limit of 5% of the issued and outstanding Common Shares reserved for issuance under that plan.
As of March 6, 2015, a total of 670,971 Incentive Rights remained outstanding, representing 0.33% of the issued and outstanding Common Shares. As of December 31, 2014, there were a total of 689,652 Incentive Rights outstanding representing 0.34% of the issued and outstanding Common Shares, with exercise prices ranging from $17.11 to $47.19 with a weighted average exercise price of $22.01 and expiration dates ranging from December 31, 2015 to December 31, 2016. As of December 31, 2014, all outstanding Incentive Rights were exercisable.
75
Termination Provisions
Termination Type |
|
|
For Just Cause or by Executive without Good Reason (Resignation) |
|
Incentive Rights expire and are cancelled on termination date. |
Without Just Cause (by Enerplus) or For Good Reason (by Executive), including following a Change of Control |
|
Unless otherwise specified in an executive employment agreement, unvested Incentive Rights expire and are cancelled on the termination date. Vested Incentive Rights expire 90 days from termination date. |
Death or Disability |
|
All unvested Incentive Rights become vested on the death or disability date and must be exercised within 90 days. |
Retirement |
|
Incentive Rights continue to vest and expire in accordance with their original terms. |
Other Terms
· The Rights Incentive Plan contains standard adjustment and anti-dilution provisions for changes in the capital structure of Enerplus. The Rights Incentive Plan states that the Board may, at any time without the approval of the Shareholders, suspend, discontinue or amend the Rights Incentive Plan
· The Board may not, without the approval of a majority of the Shareholders, amend the Rights Incentive Plan to:
(a) increase the number of Common Shares, or the percentage of the issued and outstanding Common Shares, issuable pursuant to the Rights Incentive Plan
(b) other than as provided for in the exercise price adjustment mechanisms for distributions, make any amendment that would reduce the exercise price of an outstanding Incentive Right (including a cancellation and reissue of an Incentive Right that constitutes a reduction of the exercise price), or to make any amendment to such exercise price adjustment mechanisms
(c) extend the expiry date of any Incentive Right granted under the Rights Incentive Plan beyond the expiry date of the Incentive Right determined at the date of grant, except as provided for with respect to an expiry date that occurs during a blackout period
(d) expand the categories of individuals who are eligible to participate in the Rights Incentive Plan
(e) amend the Rights Incentive Plan to permit the transfer or assignment of Incentive Rights, except to permit a transfer to a family member, an entity controlled by the holder of the Incentive Rights or a family member, a charity, or for estate planning or estate settlement purposes
· The Rights Incentive Plan (and any proposed future amendments to the Rights Incentive Plan) is subject to such future approvals of the Shareholders and applicable stock exchanges as may be required by the terms of the Rights Incentive Plan or applicable stock exchanges from time to time. Any amendment to the Rights Incentive Plan is subject to the prior approval of the TSX or other applicable regulatory bodies, and no amendment to, or suspension or discontinuance of, the Rights Incentive Plan or an Incentive Right granted under the Rights Incentive Plan may be made that would alter or impair any previously granted Incentive Rights, without the prior consent of the holder
· An Incentive Right is personal to the holder and is non-transferable and non-assignable
· The Rights Incentive Plan does not provide for or contemplate the provision of financial assistance to facilitate the exercise of Incentive Rights and the issuance of Common Shares
· The total number of Common Shares to be granted to any Incentive Rights holder under the Rights Incentive Plan and any other Security-Based Compensation Arrangement shall not exceed 5% of the issued and outstanding Common Shares (on a non-diluted basis) at the date of the grant of the Incentive Right
76
Schedule G - Summary of 2011 Executive PSU Plan (Closed)
Background
The 2011 Executive PSU Plan was implemented in 2011 to grant PSUs to executive officers. Since the implementation of the Share Award Incentive Plan in February 2014, Enerplus does not intend to make any further grants under the 2011 Executive PSU Plan.
Vesting and Expiry
Shares cliff vest and expire three years from year of grant (performance period).
Dividends
The cash value of dividends over the performance period is summed and added to the payout price of the PSUs upon vesting.
Payout
Once the applicable performance period has been completed, a grant of PSUs vests and a cash payment is made to the executive within 31 days.
The value of payment is calculated based on the number of vesting PSUs multiplied by the sum of the share price and accumulated dividends over the performance period. The value is then multiplied by a performance multiplier.
The share price is calculated using the volume weighted average trading price of the Common Shares on the TSX for the last 10 trading days of the applicable performance period.
The performance multiplier ranges from 0.5x to 2.0x and is determined based on Enerplus relative total shareholder return (TSR) performance over the performance period measured to a group of industry peers (Performance Group).
The Performance Group is specified by the Board at the beginning of each performance period, which generally will consist of the entities that comprise the S&P/TSX E&P Index (or any replacement or successor index) at the beginning of the performance period, as may be modified by Enerplus. The composition of the Performance Group may subsequently be amended by the Board if any member of the group ceases to exist during the applicable performance period.
The TSR over the performance period is calculated by dividing (a) the total of the cash dividends or similar payments received during the performance period plus the total Common Share price appreciation (or depreciation) during the period by (b) the Common Share price at the beginning of the relevant performance period, using the ten day volume weighted average trading price.
The TSR, as compared to the Performance Group, results in a multiplier referred to as a relative performance factor then being applied to the number of PSUs granted in respect of the performance period. The relative performance factor is determined by the Board, after consultation with, and receiving the recommendation of, Enerplus management. The methodology used to determine the relative performance factor may differ for separate grants of PSUs and may be revised by the Board based on such factors as the Board considers appropriate. For example, the relative performance factor may range from a multiplier of 0.5 for a relative performance ranking at or below the 25th percentile as compared to the Performance Group, to a multiplier of 1.0 for achieving the 50th percentile, up to a multiplier of 2.0 where Enerplus performance ranks at or above the 75th percentile as compared to the Performance Group, with linear interpolation.
77
Pool
There are no treasury shares reserved for issuance under this Plan.
Termination Provisions
Termination Type |
|
|
For Just Cause or by Executive without Good Reason (Resignation) |
|
All PSUs expire upon termination unvested or unpaid. |
Without Just Cause (by Enerplus) or For Good Reason (by Executive), including following a Change of Control, Death or Disability |
|
All PSUs vest upon termination date. |
Death or Disability |
|
All PSUs vest upon death or disability date. |
Retirement |
|
Most recent award is pro-rated. |
|
|
All remaining PSUs continue to vest as scheduled. |
Other Terms
The Board may amend or otherwise modify the terms and conditions regarding any grant of PSUs, including without limitation, accelerate any payment date or modify the methodology of calculating and paying any PSUs granted under the plan, provided that no such amendment or modification may, without the consent of the affected executive, reduce or adversely affect the amount of an award otherwise payable pursuant to the terms of the 2011 Executive PSU Plan.
78
Schedule H - Definitions
2011 Executive PSU Plan means Enerplus 2011 Executive Performance Share Unit Plan dated effective January 1, 2011, as amended May 1, 2013
Beneficial Shareholders means Shareholders who do not hold their Common Shares in their own name but through brokers or other intermediaries
Board means the board of directors of Enerplus
BOE means barrels of oil equivalent, with six thousand cubic feet (6 Mcf) of natural gas converted to one barrel of oil equivalent and one barrel of natural gas liquids equivalent to one barrel of oil equivalent
BOE/D means barrels of oil equivalent per day
CD&A means the Compensation Discussion & Analysis section of this Information Circular
CEO means Chief Executive Officer
Chairman means the Chairman of the Board
Change of Control occurs upon:
(a) the acquisition by a person of beneficial ownership of such number of voting securities of Enerplus which would entitle such person to cast 35% or more of the votes attaching to all voting securities of Enerplus which may be cast to elect directors of Enerplus;
(b) the amalgamation, arrangement, merger, reorganization, other business combination or any other transaction involving Enerplus, unless persons who were Shareholders of Enerplus immediately prior to the implementation of such transaction own at least 65% of the shares of, or other securities that may be voted for the election of directors of, Enerplus or any resulting entity outstanding immediately after such transaction;
(c) the sale, lease, transfer or disposition, in a single transaction or series of related transactions, of all or substantially all of the assets of Enerplus and its subsidiaries, taken as a whole;
(d) the liquidation of Enerplus or substantially all of its assets or the winding-up or dissolution of Enerplus;
(e) a change in the composition of the Board as a result of a contested election of directors, a meeting of the Shareholders of Enerplus with an item of business relating to the election of directors or other transaction, with the result that the persons who were directors of Enerplus prior to such contested election, meeting or transaction do not constitute a majority of the directors elected in such election, at such meeting or pursuant to such transaction; or
(f) a determination by a majority of the Board, acting reasonably and in good faith, that a Change of Control has occurred or is about to occur
Code means the Code of Business Conduct of Enerplus
Common Shares means common shares in the capital of Enerplus
Computershare means Computershare Trust Company of Canada, the registrar and transfer agent of Common Shares
79
Conversion means a plan of arrangement completed effective January 1, 2011 by Enerplus Resources Fund (the Fund) and Enerplus, pursuant to which the business carried on by the Fund was reorganized from an income trust structure under the Fund to a corporate structure under Enerplus
Enerplus or the Company means Enerplus Corporation and, where the context permits, includes its subsidiaries
F&D costs means finding and development costs
FD&A costs means finding, development and acquisition costs
Form of Proxy means a form of proxy or voting instruction form, as applicable, accompanying this Information Circular
G&A costs means general and administrative costs
HSRE means health, safety, regulatory and environmental
Hugessen means Hugessen Consulting
IFRS means International Financial Reporting Standards
Incentive Rights means rights to acquire Common Shares granted under the Rights Incentive Plan
Mercer means Mercer (Canada) Limited
Mcf means one thousand cubic feet
MMBOE means millions of barrels of oil equivalent. A BOE conversion ratio of 6 Mcf: 1 BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value
Notice of Meeting means the Notice of Annual Meeting of Shareholders accompanying this Information Circular
NYSE means the New York Stock Exchange
OOIP is the crude oil portion of discovered petroleum initially-in-place (PIIP). PIIP is the quantity of petroleum that is estimated to be contained in known accumulations prior to production. The recoverable portion of discovered PIIP includes production, reserves and contingent resources; the remainder is unrecoverable. Discovered Original Oil in Place (OOIP) is not defined in NI 51-101 and does not have a standardized meaning under NI 51-101.
Options means stock options to acquire Common Shares under the Stock Option Plan
PSUs means notional performance share units granted pursuant to the 2011 Executive PSU Plan and the Share Award Incentive Plan
Proxy Deadline means at least 48 hours (excluding Saturdays, Sundays and statutory holidays in Calgary, Alberta) before the Meeting or any adjournment(s) thereof
Record Date means March 27, 2015
Registered Shareholders means Shareholders who hold Common Shares in their own name
80
Reserves Replacement Ratio is equal to the sum of proved plus probable reserves additions and revisions, excluding acquisitions and dispositions, divided by annual production
Rights Incentive Plan means Enerplus Rights Incentive Plan (prior to January 1, 2011, the Trust Unit Rights Incentive Plan) dated effective June 21, 2001, as amended and restated effective January 1, 2011
RSUs means notional restricted share units granted pursuant to the Share Award Incentive Plan
SarbanesOxley Act means the U.S. SarbanesOxley Act of 2002
Savings Plan means Enerplus employee savings plan
Security-Based Compensation Arrangement generally means any other plan under which Common Shares can be issued from Enerplus treasury
Share Award Incentive Plan means Enerplus Share Award Incentive Plan dated effective February 20, 2014 as amended and restated effective February 2015
Share Awards means the RSU awards and the PSU awards
Shareholders means holders of Common Shares
Stock Option Plan means Enerplus Stock Option Plan dated effective January 1, 2011
Termination For Good Reason generally means the occurrence of any one or more of the following events, whether or not any one of such events would, in and of itself, constitute constructive dismissal at common law:
(a) the aggregate remuneration of the executive is materially reduced or not paid when due
(b) Enerplus requires the executive, without the executives agreement, to be based anywhere other than Enerplus principal offices on a non-temporary basis
(c) the executive is subject to a material reduction in the executives overall responsibility
(d) Enerplus fails to continue in effect any aspect of the executives remuneration without providing the executive with a substantially similar level of compensation and benefits (or, where applicable, a reasonable and realistic opportunity to achieve a substantially similar level of performance-based compensation or benefits)
(e) any failure by any successor of Enerplus to assume and agree to be bound by the provisions of the executive employment agreements
TSX means the Toronto Stock Exchange
S&P/TSX E&P Index means the S&P/TSX Oil and Gas Exploration and Production Index
TSR means total shareholder return as described under the various plans
U.S. GAAP means U.S. generally accepted accounting principles
81
Enerplus Corporation
The Dome Tower
3000, 333 - 7th Avenue S.W.
Calgary, Alberta, Canada
T2P 2Z1
Telephone: (403) 298-2200
Toll Free Telephone: 1-800-319-6462
Fax: (403) 298-2211
www.enerplus.com
Exhibit 99.3
|
014J4B Security
Class Holder Account Number 8th Floor, 100 University Avenue Toronto, Ontario
M5J 2Y1 www.computershare.com Fold Fold Form of Proxy - Annual General
Meeting to be held on May 8, 2015 This Form of Proxy is solicited by and on behalf
of Management. . VOTE BY MAIL BY RETURNING THE PROXY IN THE INCLUDED ENVELOPE
OR BY USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK! Go to
the following web site: www.investorvote.com To Vote Using the Internet .
Call the number listed BELOW from a touch tone telephone. To Vote Using the
Telephone . If you vote by telephone or the Internet, DO NOT mail back this
proxy. Voting by mail may be the only method for securities held in the name
of a corporation or securities being voted on behalf of another individual.
Voting by mail or by Internet are the only methods by which a holder may
appoint a person as proxyholder other than the Management nominees named on
the reverse of this proxy. Instead of mailing this proxy, you may choose one of
the two voting methods outlined above to vote this proxy. To vote by
telephone or the Internet, you will need to provide your CONTROL NUMBER
listed below. You can enroll to receive future securityholder
communications electronically by visiting www.computershare.com/eDelivery and
clicking on eDelivery Signup. To Receive Documents Electronically .
Smartphone? Scan the QR code to vote now. 1-866-732-VOTE (8683) Toll Free
CONTROL NUMBER 1. Every holder has the right to appoint some other person or
company of their choice, who need not be a holder, to attend and act on their
behalf at the meeting or any adjournment or postponement thereof. If you wish
to appoint a person or company other than the persons whose names are printed
herein, please insert the name of your chosen proxyholder in the space
provided (see reverse). 2. If the securities are registered in the name of
more than one owner (for example, joint ownership, trustees, executors,
etc.), then all those registered should sign this proxy. If you are voting on
behalf of a corporation or another individual, you must sign this proxy with
signing capacity stated, and you may be required to provide documentation
evidencing your power to sign this proxy. 3. This proxy should be signed in
the exact manner as the name(s) appear(s) on the proxy. 4. If this proxy is
not dated, it will be deemed to bear the date on which it is mailed by
Management to the holder. 5. The securities represented by this proxy will be
voted as directed by the holder, however, if such a direction is not made in
respect of any matter, this proxy will be voted as recommended by Management.
6. The securities represented by this proxy will be voted in favour or
withheld from voting or voted against each of the matters described herein,
as applicable, in accordance with the instructions of the holder, on any
ballot that may be called for and, if the holder has specifi ed a choice with
respect to any matter to be acted on, the securities will be voted
accordingly. 7. This proxy confers discretionary authority in respect of
amendments or variations to matters identifi ed in the Notice of Meeting or
other matters that may properly come before the meeting or any adjournment or
postponement thereof. 8. This proxy should be read in conjunction with the
accompanying documentation provided by Management. Proxies submitted must be
received by 10:00 am, Mountain Time, on Wednesday, May 6, 2015. Notes to
proxy
|
|
ERJQ 0 5 2 5 7
7 Fold Fold . AR3 014J5J Authorized Signature(s) - This section must be
completed for your instructions to be executed. I/We authorize you to act in
accordance with my/our instructions set out above. I/We hereby revoke any
proxy previously given with respect to the Meeting. If no voting instructions
are indicated above, this Proxy will be voted as recommended by Management.
DD / MM / YY . Signature(s) Date Appointment of Proxyholder Print the name of
the person you are appointing if this person is someone other than the
Management Nominees listed herein I/We, being holder(s) of Enerplus
Corporation (the Corporation) hereby appoint: Ian C. Dundas, the President
& Chief Executive Offi cer of the Corporation, or failing him, David A.
McCoy, the Vice-President, General Counsel & Corporate Secretary of the
Corporation OR as my/our proxyholder with full power of substitution and to
attend, act and to vote for and on behalf of the shareholder in accordance
with the following direction (or if no directions have been given, as the
proxyholder sees fi t) and all other matters that may properly come before
the Annual General Meeting of shareholders of Enerplus Corporation (the
Meeting ) to be held at the Telus Convention Centre, Glen 205, 120-9th
Avenue S.E. Calgary, Alberta on Friday, May 8, 2015 at 10:00 AM (Mountain
Time) and at any adjournment or postponement thereof. VOTING RECOMMENDATIONS
ARE INDICATED BY HIGHLIGHTED TEXT OVER THE BOXES. 1. Election of Directors
Withhold For 01. DAVID H. BARR 04. HILARY A. FOULKES 07. SUSAN M. MACKENZIE
10. SHELDON B. STEEVES Withhold For 02. MICHAEL R. CULBERT 05. JAMES B.
FRASER 08. ELLIOTT PEW Withhold For 03. IAN C. DUNDAS 06. ROBERT B. HODGINS
09. GLEN D. ROANE For 2. Appointment of Auditors To appoint Deloitte LLP,
Independent Registered Chartered Accountants, as auditors of the Corporation.
Withhold For 3. Advisory Resolution on Executive Compensation To vote, on an
advisory, non-binding basis, on an ordinary resolution to accept the
Corporations approach to executive compensation. Against Vote For all
nominees listed below (or vote for individual nominees below) If you are not
mailing back your proxy, you may register online to receive the above fi
nancial report(s) by mail at www.computershare.com/mailinglist.
Securityholder Communication Materials Mark this box if you consent to the
electronic delivery by the Corporation of all future materials required to be
delivered to securityholders under corporate and securities laws as described
under the Consent for Electronic Delivery of Documents above, which you
acknowledge that you have read and agreed to. Interim Financial Statements
Mark this box if you would like to receive Interim Financial Statements and
accompanying Managements Discussion and Analysis by mail. Annual Financial
Statements Mark this box if you would NOT like to receive the Annual
Financial Statements and accompanying Managements Discussion and Analysis by
mail. CONSENT TO ELECTRONIC DELIVERY OF DOCUMENTS Computershare Trust Company
(Computershare) is seeking consent on behalf of the Corporation. By marking
the box below consenting to electronic delivery: (i) I consent, until my
consent is revoked by me, to receiving all future materials required to be
delivered by the Corporation to its securityholders under applicable
corporate or securities laws, including, without limitation, any notice of
meeting, management proxy circular, form of proxy, notice-and-access
notice, interim fi nancial statements and related managements discussion and
analysis, annual fi nancial statements and any other securityholder communications
(Securityholder Communication Materials) to which I am entitled as a
shareholder electronically rather than by mail; (ii) I understand and agree
that, after my consent has been given and the Corporation has fi led the
documents with applicable securities regulatory bodies, the Corporation or
its agent, including Computershare, may notify me that a document which I am
entitled to receive is available electronically at the Corporations or its
agents (including Computershares) website with a link to that specifi c
page of the website containing the document. I agree that such notifi cation
will be sent to me either at the email address or by mail; (iii) I
acknowledge that access to the Internet, email and the worldwide web are
required for me to access a document electronically and I confi rm that I
have such access; (iv) I understand and agree that any email notice or other
notifi cation will contain the web address (or a hyperlink) identifying where
the documents to be delivered electronically are located. By accessing the
website information which I will be provided under (ii) above, I can access,
view, download and print a paper document from my computer. A document
distributed electronically will be in Portable Document Format (PDF). Adobe
Acrobat Reader® software is required to view a document in PDF format (Adobe
Acrobat Reader® is the registered trademark of Adobe Systems Incorporated.);
(v) I understand that I may request a paper copy of a document for which I
have consented to electronic delivery by contacting the Corporation or its
agent, including Computershare, at the telephone number, fax number, email
address or mailing address set forth elsewhere on this form. I understand and
agree that at any time and without giving me advance notice, the Corporation
may elect not to provide me an electronic version of the document, in which
case a paper copy of the document will be mailed to me. If a document
intended to be provided to me electronically is not available electronically,
a paper copy of the document will be mailed to me; (vi) I understand that the
Corporation, its agent, including Computershare, as applicable, will maintain
on the website provided to me any document provided to me electronically for
not less than one year from the date of its posting; (vii) I understand that
I may revoke or modify my consent any time by notifying the Corporation or
its agent, including Computershare, by fax, email or mail using the contact
information set elsewhere on this form. I understand that if I wish to revoke
or modify my consent, I must notify the Corporation or its agent, including
Computershare. Such change, revocation or modifi cation must actually be
received and acknowledged by the Corporation or its agent in order for it to
be effective; and (viii) I understand that I am not required to consent to
electronic delivery. I am a registered shareholder of the Corporation. I have
read and understand the terms of this Consent to Electronic Delivery of
Documents and, on those terms, I consent to the electronic delivery of the
Securityholder Communication Materials.
|
Exhibit 99.4
Notice and Access Notification to Beneficial Shareholders
Annual General Meeting of Enerplus Corporation
Date
Friday, May 8, 2015
Location
Telus Convention Centre
Room: Glen 205
120 9th Avenue S.E.
Calgary, Alberta
You are receiving this notice as Enerplus Corporation (Enerplus) has elected to use the notice and access model for delivery of meeting materials to its shareholders who do not hold their common shares in their own name (beneficial shareholders). Under notice and access, beneficial shareholders receive a voting instruction form enabling them to vote at Enerplus meeting. However, instead of a paper copy of the Information Circular and Notice of Meeting (the meeting materials), beneficial shareholders receive this notice with information on how they may access the meeting materials electronically. Beneficial shareholders should follow the instructions below to view the meeting materials on the Internet. This communication presents only an overview of the more complete meeting materials that are available to beneficial shareholders on the Internet.
MATTERS TO BE VOTED UPON AT THE MEETING
The matters to be considered at the meeting are listed below, along with the section within the Information Circular for the meeting where disclosure regarding the matter can be found.
1. To receive the consolidated financial statements of Enerplus for the year ended December 31, 2014, together with the auditors report on those statements; see Annual General Meeting Matters Financial Statements in the Information Circular;
2. To appoint the auditors of Enerplus; see Annual General Meeting Matters Appointment of Auditors in the Information Circular;
3. To elect the directors of Enerplus; see Annual General Meeting Matters Annual Election of Board of Directors in the Information Circular;
4. To vote, on an advisory, non-binding basis, to accept Enerplus approach to executive compensation; see Annual General Meeting Matters Advisory Vote on Executive Compensation and Executive Compensation in the Information Circular; and
5. To conduct any other business that may properly come before the Meeting.
HOW TO ACCESS THE MEETING MATERIALS ONLINE
You can access meeting materials (Notice of Meeting & Information Circular) on the Internet at: www.enerplus.com/about/agm.cfm or under Enerplus profile at www.sedar.com.
You are reminded to view the meeting materials before voting.
HOW TO RECEIVE A PAPER COPY
Beneficial shareholders may request a paper copy of materials by postal delivery at no cost to them by visiting www.proxyvote.com, or by calling Toll Free 1-877-907-7643 and entering the control number on the enclosed voting instruction form. Requests may be made up to one year from the date the meeting materials are filed on SEDAR. In order to allow reasonable time to be allotted for a beneficial shareholder to receive and review a paper copy of the meeting materials in advance of the proxy deposit date and time as set out in the accompanying voting instruction form, any beneficial holder wishing to request a paper copy of the meeting materials as described above, should ensure such request is received no later than April 24, 2015. If you do request a paper copy of the meeting materials, please note that another voting instruction form will not be sent; please retain the enclosed voting instruction form for voting purposes. If you do not have a control number on the enclosed voting instruction form, please call Toll Free 1-855-887-2243.
HOW TO VOTE
Vote by Telephone, Facsimile or Mail: To vote your common shares by telephone, facsimile or by mail, please follow the instructions on the enclosed voting instruction form by the deadline noted.
Vote by Internet: To vote your common shares using the Internet, go to www.proxyvote.com and follow the instructions using the control number on your voting instruction form.
Vote in Person: Beneficial shareholders are not entitled, without making additional arrangements, to vote in person at the meeting. If you wish to vote in person at the meeting, please see the instructions on the enclosed voting instruction form or contact your intermediary, or broker, well in advance of the meeting to determine how you can do so.
Beneficial shareholders with general questions about notice and access may contact Computershare Trust Company, in its capacity as registrar and transfer agent for Enerplus, Toll Free at 1-866-921-0978.
Enerplus (NYSE:ERF)
Historical Stock Chart
From Sep 2024 to Oct 2024
Enerplus (NYSE:ERF)
Historical Stock Chart
From Oct 2023 to Oct 2024