Washington, D.C. 20549
*The remainder of this
cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required
on the remainder of this cover page shall not be deemed to be “filed” for the purpose of section 18 of the Securities
Exchange Act of 1934 (the “Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
1
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NAME OF REPORTING PERSONS
Canada Pension Plan Investment Board
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2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
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(a)
¨
(b) x
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS (See Instructions)
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH
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7
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SOLE VOTING POWER
0
|
8
|
SHARED VOTING POWER
21,661,095
|
9
|
SOLE DISPOSITIVE POWER
0
|
10
|
SHARED DISPOSITIVE POWER
21,661,095
|
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,661,095
|
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
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¨
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13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.8%(1)
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14
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TYPE OF REPORTING PERSON (See Instructions)
CO
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(1) This calculation is based on 245,024,157
shares of common stock, par value $0.50 per share (the “Common Stock”) of Essential Utilities, Inc. (formerly
known as Aqua America, Inc.), a Pennsylvania corporation (the “Issuer”), outstanding as of March 16, 2020, according
to information provided by the Issuer to the Reporting Persons
1
|
NAME OF REPORTING PERSONS
CPP Investment Board PMI-2 Inc.
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
|
(a) ¨
(b) x
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS (See Instructions)
AF
|
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
8
|
SHARED VOTING POWER
21,661,095
|
9
|
SOLE DISPOSITIVE POWER
0
|
10
|
SHARED DISPOSITIVE POWER
21,661,095
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,661,095
|
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
|
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.8%(1)
|
14
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TYPE OF REPORTING PERSON (See Instructions)
CO
|
(1) This calculation is based on 245,024,157 shares of Common
Stock of the Issuer outstanding as of March 16, 2020, according to information provided by the Issuer to the Reporting Persons.
Item 1.
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Security and Issuer.
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This statement on Schedule
13D (“Schedule 13D”) relates to the common stock, par value $0.50 per share (the “Common Stock”),
of Essential Utilities, Inc. (formerly known as Aqua America, Inc.), a Pennsylvania corporation (the “Issuer”),
having its principal executive offices at 726 W Lancaster Avenue, Bryn Mawr, Pennsylvania, 19010.
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Item 2.
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Identity and Background.
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This Schedule 13D is
filed jointly by Canada Pension Plan Investment Board, a Canadian Crown corporation (“CPP Investments”), and
CPP Investment Board PMI-2 Inc., a Canadian corporation (“PMI-2” and, together with CPP Investments, the “Reporting
Persons”). PMI-2 is a wholly-owned subsidiary of CPP Investments. In accordance with Rule 13d-1(k)(1)(iii) promulgated
pursuant to the Securities Exchange Act of 1934, as amended, the Reporting Persons have entered into and executed a written joint
filing agreement with respect to the filing of this Schedule 13D, dated March 23, 2020 (the “Joint Filing Agreement”).
Descriptions of the Joint Filing Agreement, as set forth in this Item 2 and elsewhere in this Schedule 13D, are qualified in their
entirety by the terms of the Joint Filing Agreement, a copy of which is attached hereto as Exhibit 99.1.
All disclosures herein
with respect to any Reporting Person are made only by such Reporting Person. Any disclosures herein with respect to persons other
than the Reporting Persons are made on information and belief after making inquiry to the appropriate party.
The principal business
address of the Reporting Persons is One Queen Street East, Suite 2500, Toronto, ON M5C 2W5 Canada. The principal business of CPP
Investments is investing the assets of the Canada Pension Plan. The principal business of PMI-2 is holding securities.
In accordance with the
provisions of General Instructions C to Schedule 13D, as of March 23, 2020, information concerning the name, business address,
principal occupation and citizenship of each executive officer, director and controlling person, as applicable, of the Reporting
Persons (collectively, the “Covered Persons”), as required by Item 2 of Schedule 13D, is provided on Schedule
1 hereto and is incorporated by reference herein.
Neither of the Reporting
Persons nor, to the Reporting Persons’ knowledge, any Covered Person has during the last five years (i) been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
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Item 3.
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Source and Amount of Funds or Other Consideration.
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PMI-2 purchased
21,661,095 shares of Common Stock of the Issuer for an aggregate purchase price of U.S. $749,907,108.90 pursuant to the Stock
Purchase Agreement, dated as of March 29, 2019 (the “Stock Purchase Agreement”), by and between the Issuer
and CPP Investments, and assigned by CPP Investments to PMI-2. The purchase price was funded using the working capital of CPP
Investments, which was contributed to PMI-2.
References to, and descriptions
of, the Stock Purchase Agreement as set forth in this Item 3 are qualified in their entirety by the terms of the Stock Purchase
Agreement, a copy of which is attached hereto as Exhibit 99.2 and is incorporated in its entirety in this Item 3.
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Item 4.
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Purpose of Transaction.
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The Reporting Persons
acquired shares of the Issuer’s Common Stock for investment purposes as part of their ordinary business and investing activities.
PMI-2 has the right to
designate a representative of PMI-2 (the “Board Representative”) for appointment, or nomination and recommendation
for election, to the Issuer’s Board of Directors (the “Board”) pursuant to the Shareholders Agreement,
dated as of March 16, 2020, by and between the Issuer and PMI-2 (the “Shareholders Agreement”) and through its
voting rights with respect to its Common Stock. On December 23, 2019 and on March 16, 2020, the Issuer announced that its Board
had appointed Wendy A. Franks, Ph.D. to the Board as the Board Representative, effective and contingent upon the consummation of
PMI-2’s acquisition of the Issuer’s Common Stock pursuant to the Stock Purchase Agreement. After such initial appointment
or election of the Board Representative, for so long as PMI-2 owns at least 5% of the then outstanding shares of Common Stock (the
“5% Beneficial Ownership Requirement”), PMI-2 will have the right to designate a nominee to be the Board Representative.
If PMI-2 ceases to satisfy the 5% Beneficial Ownership Requirement and continues not to satisfy such requirement for the later
of (i) 180 days thereafter and (ii) the date of the next proxy statement relating to the annual meeting of shareholders of the
Issuer, at the request of the Issuer, PMI-2 will cause the Board Representative to resign from the Board, and PMI-2 shall have
no further right to designate a Board Representative to the Board.
In the event that the
Board Representative nominated and recommended for election is not elected at the meeting of the shareholders of the Issuer, the
Issuer will take necessary corporate action so that the Board will adopt resolutions increasing the authorized number of directors
constituting the Board by one and appoint an alternative representative of PMI-2 to the Board at a subsequent meeting of the Board
as long as PMI-2’s alternative representative continues to meet the requirements set forth in Section 2(d) of the Shareholders
Agreement.
References to, and descriptions
of, the Shareholders Agreement as set forth in this Item 4 are qualified in their entirety by the terms of the Shareholders Agreement,
a copy of which is attached here to as Exhibit 99.3 and is incorporated in its entirety in this Item 4.
Accordingly, the Reporting
Persons may participate in and influence the affairs of the Issuer through PMI-2’s rights under the Shareholders Agreement.
In addition, the
Reporting Persons intend to monitor and evaluate their investment on an ongoing basis and expect regularly to review and
consider alternative ways of maximizing their return on such investment. Subject to the Shareholders Agreement, market
conditions, valuations, regulatory approvals and any other approvals, the Reporting Persons may acquire additional shares of
Common Stock or dispose of shares of Common Stock in open market transactions, privately negotiated transactions or
otherwise.
In exploring ways to
maximize the return on their investment, and as part of their ongoing investment activities, the Reporting Persons may engage in
discussions with representatives of the Issuer and/or with other holders of the Issuer’s securities and, from time to time,
suggest or take a position regarding, or participate in, a variety of matters relating to the Issuer, which may include, among
other things, the Issuer’s operations, management, corporate governance, capital structure or its control, strategic alternatives
and direction. To facilitate their consideration of such matters, the Reporting Persons may retain consultants and advisors and
may enter into discussions with potential sources of capital and other third parties. The Reporting Persons may exchange information
with any such persons pursuant to appropriate confidentiality or similar agreements. The Reporting Persons will likely take some
or all of the foregoing steps at preliminary stages in its consideration of various possible courses of action, before forming
any intention to pursue any particular plan or direction.
The Reporting Persons
may, at any time, and from time to time, (i) review or reconsider its position and/or change its purpose and/or formulate plans
or proposals with respect thereto and (ii) consider or propose one or more of the actions described in subparagraphs (a) –
(j) of Item 4 of the instructions to Schedule 13D.
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Item 5.
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Interest in Securities of the Issuer.
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(a) – (b) See
Items 7 to 11 and Item 13 on page 2 of this Schedule 13D.
The Reporting Persons
beneficially own, and have shared voting power and shared dispositive power with respect to, 21,661,095 shares of the Common Stock,
representing approximately 8.8% of the outstanding Common Stock. Such percentage is calculated based on 245,024,157 shares of Common
Stock outstanding as of March 16, 2020, according to information provided by the Issuer to the Reporting Persons.
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(c)
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Except as described in Item 3 above or elsewhere in this Schedule 13D, neither of the Reporting
Persons nor, to the Reporting Persons’ knowledge, any Covered Person has effected any transactions in the Common Stock during
the past sixty days.
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(d)
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No person (other than the Reporting Persons) is known to the Reporting Persons or, to the Reporting
Persons’ knowledge, the Covered Persons, to have the right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, any Common Stock covered by this Schedule 13D.
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Item 6.
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Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
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PMI-2 is party to the
Stock Purchase Agreement and the Shareholders Agreement. The information provided or incorporated by reference in Item 3 and Item
4 is hereby incorporated into this Item 6 by reference.
In addition to the right
of PMI-2 to nominate the Board Representative, the Shareholders Agreement provides for, among other things, certain registration
rights of PMI-2 to require the Issuer to use its commercially reasonable efforts to register certain shares of Common Stock under
the Securities Act of 1933, as amended, in accordance with the terms and conditions of the Shareholders Agreement. The Shareholders
Agreement also provides pre-emptive rights to PMI-2. Subject to certain exceptions, for as long as PMI-2 satisfies the 5% Beneficial
Ownership Requirement, PMI-2 has the option to participate in certain proposed issuances of equity securities, including securities
convertible into or exchangeable for any equity security, by the Issuer, other than Excluded Issuances (as defined in the Shareholders
Agreement), for a pro rata amount equal to PMI-2’s ownership percentage of the then outstanding Common Stock and on
the same pricing terms.
The Shareholders Agreement
also provides that, subject to certain exceptions, including transfers to affiliates with the Issuer’s prior written consent,
PMI-2 may not transfer its shares of Common Stock (or any shares of Common Stock it acquires pursuant to an exercise of its pre-emptive
rights under the Shareholders Agreement) until the earlier of (i) June 16, 2021 and (ii) a Change of Control (as defined in the
Shareholders Agreement). Subject to certain exceptions and timing limitations, the Shareholders Agreement also includes a standstill
restricting PMI-2 from, among other things, directly or indirectly soliciting proxies or consents to vote with respect to any voting
securities of the Issuer, acquiring any securities, or rights to acquire any securities, of the Issuer and forming, joining or
in any way participating in a “group” (as defined under the Act) with respect to the Issuer.
References to, and descriptions
of, the Shareholders Agreement as set forth in this Item 6 are qualified in their entirety by the terms of the Shareholders Agreement,
a copy of which is attached hereto as Exhibit 99.3 and is incorporated in its entirety in this Item 6.
As described in Item 2, the Reporting Persons
have entered into the Joint Filing Agreement. References to, and descriptions of, the Joint Filing Agreement are qualified in their
entirety by the terms of the Joint Filing Agreement, a copy of which is attached hereto as Exhibit 99.1 and is incorporated
in its entirety in this Item 6.
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Item 7.
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Material to Be Filed as Exhibits.
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Exhibit No.
|
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Description
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99.1
|
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Joint Filing Agreement, dated as of March 23, 2020, between the Reporting Persons.
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99.2
|
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Stock Purchase Agreement (Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2019 (Commission File Number 001-06659)).*
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99.3
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Shareholders Agreement, dated as of March 16, 2020, between the Issuer and PMI-2.
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99.4
|
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Assignment and Assumption Agreement, dated as of March 13, 2020, between the Reporting Persons.
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* Incorporated herein by reference.
SIGNATURE
After reasonable
inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete
and correct.
Date:
March 23, 2020
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CANADA PENSION PLAN INVESTMENT BOARD
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By
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/s/ Patrice Walch-Watson
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|
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Name: Patrice Walch-Watson
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|
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Title: Senior Managing Director, General Counsel & Corporate Secretary
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|
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CPP Investment Board PMI-2 Inc.
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By
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/s/ Ryan Barry
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|
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Name: Ryan Barry
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Title: Director and Secretary
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Schedule
1
Directors
of CPP Investments
Heather Munroe-Blum
c/o Canada Pension Plan
Investment Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada
Sylvia Chrominska
c/o Canada Pension Plan
Investment Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada
William “Mark” Evans
c/o Canada Pension Plan
Investment Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada
Ashleigh Everett
c/o Canada Pension Plan
Investment Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Executive, Royal
Canadian Securities Limited
Citizenship: Canada
Tahira Hassan
c/o Canada Pension Plan
Investment Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada, Pakistan
John Montalbano
c/o Canada Pension Plan
Investment Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada
Chuck Magro
c/o Canada Pension Plan
Investment Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Executive, Nutrien
Ltd
Citizenship: Canada
Mary Phibbs
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Great Britain, Australia
Karen Sheriff
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada, United States
Kathleen Taylor
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada
Jo Mark Zurel
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Corporate Director
Citizenship: Canada
Executive
Officers of CPP Investments
Mark Machin
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: President &
Chief Executive Officer
Citizenship: Great Britain
Neil Beaumont
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Chief Financial and Risk Officer
Citizenship: Canada
Alain Carrier
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Head of International, Head of Europe
Citizenship: Canada and Great Britain
Edwin D. Cass
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Global Head of Real Assets
Citizenship: Canada
Shane Feeney
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Global Head of Private Equity
Citizenship: Canada
John Graham
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Global Head of Credit Investments
Citizenship: Canada and Great Britain
Suyi Kim
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Head of Asia Pacific, CPP Investments
Citizenship: South Korea
Michel Leduc
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Global Head of Public Affairs and Communications
Citizenship: Canada
Deborah Orida
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Global Head of Active Equities
Citizenship: Canada
Geoffrey Rubin
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Chief Investment Strategist
Citizenship: United States
Kelly Shen
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Chief Technology and Data Officer
Citizenship: United States
Mary Sullivan
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Chief Talent Officer
Citizenship: Canada
Patrice Walch-Watson
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director, General Counsel & Corporate Secretary
Citizenship: Canada
Poul Winslow
c/o Canada Pension Plan Investment
Board, One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Senior Managing
Director & Global Head of Capital Markets and Factor Investing
Citizenship: Denmark
Directors
of PMI-2
Mark Machin
c/o CPP Investment Board PMI-2 Inc.,
One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: President
Citizenship: Great Britain
Kristina Fanjoy
c/o CPP Investment Board PMI-2 Inc.,
One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Director and
Vice President
Citizenship: Canada
Ryan Barry
c/o CPP Investment Board PMI-2 Inc.,
One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Director and
Secretary
Citizenship: Canada
Executive
Officers of PMI-2
Mark Machin
c/o CPP Investment Board PMI-2 Inc.,
One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: President
Citizenship: Great Britain
Kristina Fanjoy
c/o CPP Investment Board PMI-2 Inc.,
One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Director and
Vice President
Citizenship: Canada
Ryan Barry
c/o CPP Investment Board PMI-2 Inc.,
One Queen Street East, Suite 2500, Toronto, ON M5C 2W5
Principal Occupation: Director and
Secretary
Citizenship: Canada