2010 Annual Information Form - FortisBC

Terasen Inc.
Effective March 1, 2011 renamed FortisBC Holdings Inc.
A subsidiary of Fortis Inc.
Form 51-102F6 – Statement of Executive Compensation
For the Year Ended December 31, 2010
dated
March 31, 2011

CORPORATE STRUCTURE
Terasen Inc. is a wholly-owned subsidiary of Fortis Inc. and Terasen Gas Inc. is a subsidiary of
Terasen Inc.
For purposes of this Statement of Executive Compensation:
“Fortis” means Fortis Inc.;
“FortisBC” means FortisBC Inc.;
“Terasen”, the “Company” or the “Corporation” means Terasen Inc. which was renamed
FortisBC Holdings Inc. effective March 1, 2011 and includes its subsidiaries, where
appropriate; and
“Terasen Gas” means Terasen Gas Inc. which was renamed “FortisBC Energy Inc.” effective
March 1, 2011;
Compensation Discussion & Analysis
EXECUTIVE COMPENSATION
The Company’s executive compensation program is designed to provide competitive levels of
compensation, a significant portion of which is dependent upon individual and corporate
performance and contribution to increasing shareholder value. The Committee recognizes the
need to provide a total compensation package that will attract and retain qualified and
experienced executives as well as align the compensation level of each executive to that
executive’s level of responsibility. The objectives of base salary are to recognize market pay, and
acknowledge competencies and skills of individuals. The objectives of the annual incentive plan
are to reward achievement of short-term financial and operating performance and focus on key
activities and achievements critical to the ongoing success of Terasen. Long-term incentive plans
focus executives on sustained shareholder value creation.
The objectives of executive compensation practices at Terasen are specifically designed to:
1. attract and gain sustainable commitment from senior management;
2. motivate performance by tying incentive compensation to the achievement of specific
measures of financial and operating performance;
3. foster identification with shareholder interest through equity-based compensation;
and
4. recognize other multiple stakeholder interests including those of customers and
employees
Competitive Positioning
Terasen does not measure performance against a particular reference group. However, as a
general policy, Terasen establishes base and incentive compensation targets so as to
compensate executives and in particular, each person who served as the Chief Executive Officer
or Chief Financial Officer during the most recently completed financial year and the three most
highly compensated executive officers of the Company during the most recently completed
financial year (the “Named Executive Officers” or “NEOs”), at a level generally equivalent to the
median of practice among a broad reference group of approximately 200 Canadian commercial
industrial companies. This reference group, (The Commercial Industrial Comparator Group) is
compiled by Hay Group Limited. For clarity, this reference group does not include organizations
in the financial service and broader public sectors. It does include organizations from the energy,
mining and manufacturing sectors. This reference group is formally reviewed as part of the
2

triennial review of executive compensation policy.
Base salaries for the NEOs are reviewed by the Governance Committee (the “Committee”) and
established annually in the context of total compensation from this reference group as a
comparative measure.
Actual compensation will vary based on the performance of the executive relative to the
achievement of goals and objectives. The NEOs are rewarded for performance through the
following elements of compensation:
Compensation
Element
(Eligibility) Description Compensation Objectives
Annual Base Salary and Annual Incentive
Annual Base
Salary
(all NEOs)
Annual Incentive
(all NEOs)
Long-term Equity Based Incentive
Stock Options
(all NEOs)
Pension and Savings Plans
Defined Benefit
Pension Plan
(certain NEOs)
RRSP
(certain NEOs)
Defined
Contribution:
Supplemental
Retirement Plan
(SRP)
(all NEOs)
Employee
Savings Plan
(all employees
and NEOs)
Salary is a market-competitive, fixed level of
compensation.
Combined with salary, the target level of annual
incentive provides market-competitive total cash
opportunity. Annual incentive payout depends on
individual and corporate performance.
Equity grants are made in the form of stock options for
Common Shares of Fortis. The amount of annual
grant will be dependent on the level of the executive
and their current share ownership levels. Planned
grant value is converted to the number of shares
granted by dividing the planned value by the predetermined,
formulaic planning price. Options vest
over a 4 year period. Full eligibility for the stock option
award is dependent upon the executive meeting share
ownership levels of 300% of salary for the President
and CEO and 150% of base salary for all other NEOs.
Payout upon retirement based on the number of years
of credited service and actual pensionable earnings.
Contribution to a registered retirement savings plan
equal to 6.5% of a member’s base salary which is
matched by the member up to the maximum
contribution limit allowed by the Canada Revenue
Agency.
Accrual of 13% of base salary and annual incentive in
excess of the Canada Revenue Agency limit.
At time of retirement, paid in one lump sum or in equal
payments over 15 years.
Contributions of 3% of base salary directed to a
registered or non registered savings plan.
Retain and attract highly qualified
leaders; Motivate strong business
performance
Retain and attract highly qualified
leaders by incenting and rewarding
performance
Retain and attract highly qualified
leaders;
Motivate strong business
performance;
Align executive and investor
interests;
Balance compensation for short and
long-term strategic results
Retain highly qualified leaders
Retain highly qualified leaders
Retain highly qualified leaders
Retain highly qualified leaders
3

Annual Base Salary
Base salaries paid to the Company’s NEOs are determined by the Board upon recommendation
by the Committee and are established annually in the context of total compensation and by
reference to the range of salaries paid at approximately the median of the salaries paid to
executives of comparable Canadian commercial industrial companies.
Annual Incentive
NEOs participate in an annual incentive plan which provides for annual cash bonuses which are
determined by way of an annual assessment of corporate and individual performance in relation
to targets approved by the Board of Directors upon recommendation by the Committee. The
Company’s annual earnings must reach a minimum threshold level before any payments are
made. The objectives of the annual incentive plan are to reward achievement of short-term
financial and operating performance and focus on key activities and achievements critical to the
ongoing success of the Company.
Corporate performance is determined with reference to the performance of the Company relative
to weighted targets in respect of financial performance including Terasen Gas and its affiliated
gas utilities net earnings of $122.5 million, customer, key processes, employee, and public safety.
Individual measures’ weightings range from 5 to 25% and results can be objectively and
subjectively measured. The measures are quite similar to recent years with the target/challenge
levels incenting improvement over our own historical performance as well as against our peers
where appropriate.
The Board has determined that the Company has substantially met or exceeded its corporate
performance goals and accordingly has awarded incentive compensation to the NEO’s as set out
in Table B, Summary Compensation Table.
A target incentive award, based on each participant’s level of responsibility is set and
communicated to each participant annually. Scores for company performance measures are
contained in a scorecard and an overall annual result is determined. The executive
compensation program places a significant portion of compensation at risk through the annual
incentive plan.
Individual performance is determined with reference to individual contribution to corporate
objectives, elements of which are subjective. For the President and Chief Executive Officer, 70%
of the annual cash bonus is based on corporate targets and 30% is based upon personal targets.
For each of the other NEOs, 50% of the annual cash bonus is based upon corporate targets and
50% is based upon personal targets. At the discretion of the Board of Directors, executives may
be awarded up to an additional 50% of target incentive pay in recognition of exceptional
performance contributions.
Long term incentives are granted to align executives’ interests with shareholders interests in
increasing shareholder value. The program currently used by Terasen is the Fortis Inc. 2006
Stock Option Plan. Description of this plan is set out below:
2006 Stock Option Plan
The 2006 Stock Option Plan was approved by the shareholders of Fortis Inc. on 2 May 2006 for
purposes of granting options in the common shares of Fortis (the “Common Shares’) to certain
eligible persons, which includes the Company’s NEOs (the “Eligible Persons”) in order to
encourage increased share ownership by key employees as an incentive to maximize
shareholder value. The directors of Terasen are not eligible to participate in the Fortis Inc. 2006
Stock Option Plan (the “2006 Stock Option Plan”). No options are granted under the 2006 Stock
Option Plan if, together with any other security based compensation arrangement established or
4

maintained by Fortis, such granting of options could result, at any time, in (a) the number of
Common Shares issuable to insiders of Fortis, at any time, exceeding 10% of the issued and
outstanding Common Shares and, (b) the number of Common Shares issued to insiders of Fortis,
within any one (1) year period, exceeding 10% of the issued and outstanding Common Shares.
The 2006 Stock Option Plan is administered by Fortis Inc. Pursuant to the 2006 Stock Option
Plan, the determination of the exercise price of options is made by the Human Resources
Committee at a price not less than the volume weighted average trading price of the Common
Shares of Fortis determined by dividing the total value of the Common Shares traded on the TSX
during the last five (5) trading days immediately preceding the date by the total volume of the
Common Shares traded on the TSX during such five (5) trading days. Options may not be
amended to reduce the option price. The Human Resources Committee determines: (i) which
Eligible Persons are granted options; (ii) the number of Common Shares covered by each Option
grant; (iii) the price per share at which Common Shares may be purchased; (iv) the time when the
Options will be granted; (v) the time when the options will vest; and (vi) the time at which the
options will be exercisable (up to seven (7) years from the date of grant).Options granted under
the 2006 Stock Option Plan are personal to the Eligible Person and not assignable, other than by
testate succession or the laws of decent and distribution. In the event that a person ceases to be
an Eligible Person, the 2006 Stock Option Plan will no longer be available to such person. The
grant of options does not confer any right upon an Eligible Person to continue employment or to
continue to provide services to Terasen.
If the term of an option granted pursuant to the 2006 Stock Option Plan, held by an
Eligible Person, expires during a blackout period (being a period during which the Eligible Person
is prohibited from trading in the securities of Fortis pursuant to securities regulatory requirements
or Fortis’s written policies then applicable), then the term of such option or unexercised portion
thereof shall be extended and shall expire ten (10) business days after the end of the blackout
period.
Options granted pursuant to the 2006 Stock Option Plan have a maximum term of seven (7)
years from the date of grant and the options will vest over a period of not less than four (4) years
from the date of grant, provided that no option will vest immediately upon being granted. Options
granted pursuant to the 2006 Stock Option Plan will expire no later than three (3) years after the
termination, death or retirement of an Eligible Person.
Eligible Persons are granted options based on salary levels. In 2010, the President and Chief
Executive Officer of the Company was granted an option entitling him to purchase that number of
Common Shares of Fortis Inc. having a market value at the time of grant equal to 300% of his
base salary. Each of the other NEO’s were granted an option entitling each NEO to purchase
that number common shares having a market value at the time of grant equal to 150% of such
NEO’s annual base salary.
The 2006 Stock Option Plan provides that notwithstanding provisions in the plan to the contrary,
no option maybe amended to reduce the option price below the option price as of the date the
option is granted.
Pension Plans See “Executive Compensation – Pension Plan Benefits”.
Employee Savings Plan
Terasen contributes an amount equal to 3% of monthly base salary. These contributions may be
directed to an RRSP, spousal RRSP, a non-registered savings plan or any combination. This plan
is provided to all eligible employees of Terasen including NEOs with the exception of Mr. Walker.
5

B. SUMMARY COMPENSATION TABLE
The following table sets forth the compensation information for the financial years indicated below
for the NEOs:
Name and principal
position Year
John C. Walker 10
President and CEO
Terasen Inc.
Scott A. Thomson 11
Executive Vice
President, Finance,
Regulatory & Energy
Supply and CFO
Terasen Gas Inc.
Roger A. Dall’Antonia
Vice President, Finance
and Treasury
Terasen Inc.
Douglas L. Stout 11
Vice President, Energy
Solutions & External
Relations
Terasen Gas Inc.
Robert M. Samels 11
Vice President,
Business Planning
Terasen Gas Inc.
R.L. (Randy) Jespersen
Former President, and
CEO
Terasen Inc.
2010
2009
2008
2010
2009
2008
2010
2009
2008
2010
2009
2008
2010
2009
2008
2010
2009
2008
Salary
($)
453,192
-
-
292,327
285,000
275,000
222,327
215,000
199,981
262,000
262,000
254,000
225,000
225,000
218,000
232,750
455,000
440,000
Optionbased
awards
($) 1
186,173
-
-
68,919
78,638
69,458
51,985
59,319
50,513
63,345
72,291
64,165
54,402
62,090
55,064
220,024
251,084
222,273
Annual
incentive
2 3
plans
310,000
-
-
150,000
200,000
175,000
135,000
108,000
107,500
123,000
145,000
145,000
92,000
115,000
115,000
-
300,000
300,000
MTIP
Payouts
($) 4
-
-
-
-
434,455
-
-
-
-
-
136.543
-
-
124,130
-
-
744,781
-
Pension
value
5
($)
80,698
-
-
52,000
49,000
44,000
31,000
31,000
8,000
42,000
42,000
39,000
116,000
43,000
169,000
984,000
345,000
688,000
All other
compensation
6 7 8 9
($)
94,442
-
-
33,433
17,229
15,764
25,237
61,156
46,784
18,231
16,322
16,570
14,549
11,466
21,536
1,703,391
45,173
27,075
Total
compensation
($)
1,124,505
-
-
596,679
1,064,322
579,222
1 Represents the fair value of options granted by Fortis Inc. to acquire common shares of Fortis Inc. The fair values of
$4.41, $4.10 and $4.76 per option were determined at the date of grant using the Black-Scholes Option Pricing Model in
2010, 2009, and 2008, respectively.
2 Represents amounts earned under Terasen Gas’ short-term non-equity incentive program in recognition of performance
for the reported year and paid in the following year.
3 Includes, were applicable, for certain NEO's an additional discretionary incentive paid in recognition of exceptional
performance contributions.
4 A payout that was instituted by former owners as a Medium Term Incentive Plan to retain key personnel upon
acquisition. It was paid out after 3 years from the date of grant if the employee was still in the employ of the Company.
These employees are now under the Fortis compensation structure.
5 Represents all compensation related to defined benefit, defined contribution pension plans and supplemental retirement
plans.
6 Includes, where applicable, the aggregate of amounts paid by Terasen Gas for the employees' savings plan, payment in
lieu of vacation, options and flexible benefit plan taxable cash. Only includes perquisites, including property or other
personal benefits provided to a NEO that are not generally available to all employees, and that are in the aggregate worth
$50,000 or more, or are worth 10% or more of a NEO’s salary.
7 Includes the amount Mr. Walker received in director’s fees as a member of the Board of Directors for Terasen until June
30, 2010.
8 Mr. Dall’Antonia is employed by Terasen Inc. and received a $40,000 signing bonus in 2008, $50,000 signing bonus in
2009, and $12,000 in lieu of stub year 2007 long term incentive options in 2010.
9 Mr. Jespersen’s employment ended June 30 th , 2010 and he was paid a lump sum in accordance with his negotiated
agreement.
10 Amounts reported represent amounts paid by FortisBC Inc. for Mr. Walker’s services to FortisBC Inc., Terasen Inc. and
Terasen Gas. FortisBC Inc. was proportionately reimbursed by Terasen Gas and Terasen Inc. for the services provided.
11 Mr. Thomson, Mr. Stout and Mr. Samels provide services to FortisBC Inc. for which Terasen was proportionately
reimbursed for the services provided.
465,549
424,475
372,778
508,575
674,156
518,735
501,951
580,686
578,600
3,140,165
2,141,038
1,677,348
6

Compensation and Benefits
The following outlines the terms of the compensation and benefits as outlined in the employment
agreements for each of the NEO. The Annual Base Salary paid to the NEO shall, for the purpose
of establishing appropriate increases, be reviewed annually by the Board or a committee thereof
as part of the annual review of executive officers’ remuneration. The decision on whether to grant
an increase to the executive’s base salary and the amount of any such increase shall be in the
sole discretion of the Board or committee thereof.
NEOs are eligible to participate in such short-term incentive plans as may be implemented by the
Company from time to time. The terms and conditions of all such incentive plans are subject to
modification from time to time by the Board or committee thereof, in its sole discretion.
NEOs are eligible to participate in such long-term incentive plans as may be implemented by the
Company from time to time. The terms and conditions of all such incentive plans are subject to
modification from time to time by the Board or committee thereof, in its sole discretion.
NEOs participate in the Company’s group insurance, benefit and retirement plans as may be in
effect from time to time. The terms of all such group insurance benefit and retirement plans are
subject to modification from time to time by the Board or committee thereof, in its sole discretion.
NEOs are entitled to vacation and to additional days off, all to be taken in accordance with the
Company’s policies and procedures, and as amended from time to time by the Company, in its
sole discretion and the NEO agrees that such amendments shall not constitute a breach of the
employment agreement.
During the NEO’s employment, the Company reimburses the NEO for all traveling and other
expenses actually, properly and necessarily incurred by the NEO in connection with the
performance of the NEO’s duties hereunder in accordance with the policies set from time to time
by the Company, in its sole discretion. The NEO is required to furnish such receipts, vouchers or
other evidence as are required by the Company to substantiate such expenses.
7

C. INCENTIVE PLAN AWARDS
The following table sets forth the total number of options granted in Fortis Common Shares to the
NEOs. The aggregate value is based on the difference between the Fortis Common Share price
at December 31, 2010 of $33.98 and the exercise price of the options.
Option-based awards
Number of securities
underlying unexercised Option
Option
options
exercise price expiration
Name
(#)
($)
date 1
Value of unexercised inthe-money
options
($)
John C. Walker 44,992 15.280 10-Mar-14 841,350
39,392 18.405 1-Mar-15 613,530
34,329 22.940 28-Feb-16 378,992
36,184 28.190 7-May-14 209,505
38,204 28.270 26-Feb-15 218,145
51,820 22.290 11-Mar-16 605,776
42,216 27.360 1-Mar-17 279,470
336,901 3,146,768
Scott A. Thomson 15,780 25.76 16-Aug-14 129,712
Roger A.
Dall'Antonia
14,592 28.27 26-Feb-15 83,320
19,180 22.29 11-Mar-16 224,214
15,628 27.36 1-Mar-17 103,457
65,180 540,703
10,612 28.27 26-Feb-15 60,595
14,468 22.29 11-Mar-16 169,131
11,788 27.36 1-Mar-17 78,037
36,868 307,762
Douglas L. Stout 14,556 25.76 16-Aug-14 119,650
13,480 28.27 26-Feb-15 76,971
17,632 22.29 11-Mar-16 206,118
14,364 27.36 1-Mar-17 95,090
60,032 497,829
Robert M. Samels 12,288 25.76 16-Aug-14 101,007
R.L. (Randy)
Jespersen
11,568 28.27 26-Feb-15 66,053
15,144 22.29 11-Mar-16 177,033
12,336 27.36 1-Mar-17 81,664
51,336 425,758
50,304 25.76 30-Jun-13 413,499
46,696 28.27 30-Jun-13 266,634
46,110 22.29 30-Jun-13 539,026
49,892 27.36 30-Jun-13 330,285
193,002 1,549,444
1 Mr. Jespersen’s options expire no later than three (3) years after his date of retirement of June 30, 2010.
8

The following table sets forth the value of option based awards and non-equity incentive
compensation earned by the Named Executive Officers during the most recently completed
financial year. The aggregate value of the option based awards vested during the year is based
on the difference between the Fortis share price on the vesting date of any options that vested
during 2010 and the exercise price of the options.
Name
Option Based Awards Value
Vested during the year
($)
Non-equity incentive plan compensation-
Value earned during 2010 ($)
John C. Walker 115,672 310,000
Scott A. Thomson 25,489 150,000
Roger A. Dall'Antonia 19,266 135,000
Douglas L. Stout 23,415 123,000
Robert M. Samels 20,112 92,000
R.L.(Randy) Jespersen 81,356 -
D. PENSION PLAN BENEFITS
The following table sets forth the details of the defined benefit pension plan for following Named Executive
Officer.
Name
Number
of years
credited
service
(#)
Annual benefits
payable
($)
at year
end
at age
65
Accrued
obligation
at start of
year
($)
Compensatory
change
($)
Noncompensatory
change
($)
Accrued
obligation at
year end
($)
John C.
Walker 27.66 92,183 116,635 635,074 15,503 147,015 797,592
The following table sets forth the details of the defined benefit pension plan for the respective Named
Executive Officers.
Name
Scott A.
Thomson
Douglas L.
Stout
Robert M.
Samels
R.L. (Randy)
Jespersen 1
Number
of years
credited
service
(#)
Annual benefits
payable ($) Accrued
Non-
At year At age obligation at Compensatory Compensatory
end 65
start of year Change
Change
($)
($)
($)
0.42 2,000 2,000 2,000 - 1,000 13,000
Accrued
obligation
At year end
($)
0.42 2,000 2,000 18,000 - 3,000 21,000
15.50 103,000 103,000 1,144,000 83,000 23,000 1,250,000
27.5 394,000 390,000 3,627,000 984,000 1,285,000 5,896,000
1 Mr. Jespersen retired on June 30, 2010. The amounts reflect the actual retirement benefits payable to him, including a
temporary bridge pension of $4,000 per year payable to age 65.
9

The information shown in the defined benefit pension plan table above has been calculated using
the valuation method and actuarial assumptions described in the pension note in the Company’s
annual financial statements for 2010.
The following table sets forth the details of the defined contribution pension plans and
supplemental retirement plans for the respective Named Executive Officers.
Name
John C. Walker
Scott A. Thomson
Roger A. Dall’Antonia
Accumulated
value at start of
year
($)
Compensatory
($)
Non-compensatory
($)
Accumulated value
at year end
($)
717,503 65,195 50,243 807,786
331,000
102,000
52,000
31,000
49,000
13,000
432,000
146,000
Douglas L. Stout 326,000 42,000 45,000 413,000
Robert M. Samels 102,000 33,000 19,000 154,000
Prior to January 1, 2007, the executive officers of the Company, with the exception of John
Walker were members of the Terasen Gas Inc. Retirement Plan for Management and Exempt
Employees (the "M&E Plan"), a non-contributory pension plan. The M&E Plan has both a defined
contribution (DC) provision and a defined benefit (DB) provision. The pension benefit under the
DB provision for executive officers equals 2% of best 3-year average earnings for each year of
credited service under the M&E Plan. Normal retirement is the first day of the month coincident
with or next following attainment of age 65. Executive officers who are members of the M&E Plan
are eligible to retire at age 55 or age 50 if age plus continuous service equals 65 years. If an
executive officer is less than age 55, or age plus service is less than 80 years, the accrued
pension to date of retirement is reduced 3% per year before age 60, otherwise no reduction
applies.
On January 1, 2000, Terasen Gas implemented the defined contribution component of the
M&E Plan and related Supplemental Retirement Plan (“SRP”). All executive officers were given a
one-time option to remain in the defined benefit component or convert to the defined contribution
component of the plans. The defined contribution component of the M&E Plan and SRP was
frozen effective December 31, 2006.
Mr. Jespersen participated in the DB provision of the M&E Plan. The other executive officers
participate in the DC provision of the M&E Plan.
Messrs. Jespersen and Samels participated in the DB provision of the M&E Plan. The other
executive officers participate in the DC provision of the M&E Plan.
The M&E Plan’s corresponding non-registered supplemental plan is the Terasen Gas Inc.
Supplemental Retirement Plan (the “M&E SRP”). The M&E SRP is designed to provide the
executive officers of the Company with the portion of the Company's pension promise that cannot
be paid from the M&E Plan because of limits imposed by the Income Tax Act. As the executive
officers are members of the M&E Plan, they are automatically members of the M&E SRP.
All members of the M&E Plan, including the executive officers, ceased to accrue further service
under the M&E Plan and the M&E SRP effective December 31, 2006.
10

Effective January 1, 2007, all salaried executive officers of the Company and the Corporation,
except for Roger A. Dall’Antonia are members of the Pension Plan for Employees of Terasen Inc.
(the "Terasen Plan"), a contributory defined benefit pension plan. The Terasen Plan provides a
pension benefit equal to 2% of final average earnings (limited to $250,000 per year), integrated
with the Canada Pension Plan (CPP). Members can retire with an unreduced pension at age 60
or when age plus continuous service equal 90 years. Pension benefits are otherwise reduced by
3% per year. Members are required to contribute 50% of the total required contributions to the
Terasen Plan.
The Terasen Plan’s corresponding non-registered supplemental plan is the Supplemental
Pension Plan for Employees of Terasen Inc. (the “Terasen SRP”). The Terasen SRP is designed
to provide the executive officers of the Company with the portion of the Company's pension
promise which cannot be paid from the Terasen Plan because of limits imposed by the
Income Tax Act. As the executive officers are members of the Terasen Plan, they are
automatically members of the Terasen SRP.
Effective May 31, 2007, the then salaried executive officers of the Company, with the exception of
R.L. (Randy) Jespersen, ceased to accrue service under the Terasen Plan and the Terasen SRP.
Effective June 1, 2007, all salaried executive officers of the Company, excluding R.L. (Randy)
Jespersen, are members of the Terasen Inc. Group RRSP (the “Group RRSP”) and it’s
corresponding supplemental plan, the Supplemental Executive Retirement Plan of Terasen Inc.
(the “Executive SRP”) sponsored by the Company. The Group RRSP directs a total contribution
of 13% of earnings to an RRSP (6.5% each from employer and employee). The Executive SRP
directs notional employer contributions equal to 13% of a member’s earnings in excess of the
Income Tax Act RRSP limit to a notional account.
Pensionable earnings under each of the M&E Plan, M&E SRP, Terasen Plan and Terasen SRP
include base pay plus bonus paid under a predetermined incentive plan. Pensionable earnings
under the Terasen Plan and Terasen SRP are limited to $250,000.
Mr. Walker participates in a defined benefit registered pension plan (the “DB RPP”). The DB RPP
provides for an annual accrual of 1.33% up to final average years maximum pensionable
earnings (“YMPE”) as defined under the Canada Pension Plan and 2% in excess of the final
average YMPE up to the NEOs best average earnings. The best average earnings are based on
the 36 consecutive months of service during which earnings were highest. The final average
YMPE is based on the final 36 months of service. The DB RPP provides a payout upon
retirement based on the number of years of credited service and actual pensionable earnings and
has a maximum accrual period of 35 years.
Mr. Walker also participates in a defined benefit pension uniformity plan (the “DB PUP”). The DB
PUP provides the portion of the calculated pension that cannot be provided under the DB RPP
due to limits prescribed by the Income Tax Act. For the purposes of the DB PUP, the recognized
earnings are limited to the base earnings rate that was in effect at December 31, 1999.
In addition, Mr. Walker participates in a defined contribution supplemental employee retirement
plan (the “DC SERP”). The DC SERP provides for the accrual by FortisBC of an amount equal to
13% of the annual base salary of a participant and an annual cash incentive in excess of the
allowed Canada Revenue Agency limit to a notional account which accrues interest equal to the
rate of a 10-year Government of Canada Bond plus a premium of 0% to 3% dependent upon
years of service. At the time of retirement, the notional amounts accumulated under the DC
SERP may be paid to the participant in one lump sum or in equal payments over fifteen years.
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E. TERMINATION AND CHANGE OF CONTROL BENEFITS
The discussion below sets out the terms of the employment contracts that trigger benefits arising
from termination and/or change of control as of December 31, 2010 for all NEO’s with the
exception of Mr. Walker.
There are no contracts, agreements, plans or arrangements that provide for payments to Mr.
Walker at, following or in connection with any termination (whether voluntary, involuntary or
constructive), resignation, retirement, a change in control of the Company or a change in a
NEO’s responsibilities (excluding perquisites and other personal benefits if the aggregate of this
compensation is less than $50,000).
Executive Employment Contracts – NEOs
1. Termination without Cause
In the event the Company terminates the executive without cause the Company will pay all
amounts owed by the Company under the specific employment agreement as of the date of
termination, the following payments in lieu of notice of termination:
(a) an amount in lieu of any entitlement to short term incentive plan payment for the
calendar year in which the executive is terminated equivalent to the average
amount of short term incentive plan payment paid to the executive respecting the
previous two (2) calendar years pro-rated from the beginning of the calendar year
in which the executive is terminated to the date of written notice of termination;
Executive Amount
Scott A. Thomson $187,500
Roger A. Dall’Antonia $107,750
Douglas L. Stout $145,000
Robert M. Samels $115,000
(b) an amount in lieu of any entitlement to Annual Base Salary and short term
incentive plan payments equivalent to two (2) times the executive’s Annual Base
Salary at the date of termination plus two (2) times the average amount of short
term incentive plan payment paid or payable to the executive under the
employment agreement respecting the previous two (2) full calendar years prior
to the calendar year in which the executive is terminated;
Executive Salary Incentive
Scott A. Thomson $600,000 $375,000
Roger A. Dall’Antonia $460,000 $215,500
Douglas L. Stout $524,000 $290,000
Robert M. Samels $450,000 $230,000
(c) an amount in lieu of all registered pension plan, supplemental pension plan
contributions and all other benefit contributions ordinarily paid by the Company
for insured benefits equivalent to a percent of the total amount paid to the
executive by the Company; and
Executive Pension & Benefits Percent (%)
Scott A. Thomson $292,500 30%
Roger A. Dall’Antonia $202,650 30%
Douglas L. Stout $244,200 30%
Robert M. Samels $340,000 30%
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(d) an amount in respect of outplacement counselling up to ten (10) percent of the
executive’s Annual Base Salary to be paid directly to an outplacement
counselling agency as chosen by the Company.
Executive Amount
Scott A. Thomson $30,000
Roger A. Dall’Antonia $23,000
Douglas L. Stout $26,200
Robert M. Samels $22,500
The executive’s entitlement to any long-term incentive compensation at the date of termination
shall be solely determined in accordance with the terms of any long-term incentive plan and any
long-term incentive agreement in force as at the date of termination of the employment
Agreement.
2. Termination by Executive for Good Reason
In the event the executive terminates the employment agreement and resigns as an executive for
“good reason”, the executive shall be entitled to payments equal to the payments for termination
without cause, set out above, provided that the executive must invoke his/her right to resign for
good reason within ninety (90) days of the occurrence of any events which cause there to be
good reason.
Good reason is defined as one or more of the following events, occurring without the executive’s
written consent:
(a) a material diminution or adverse change to the executive’s position, nature of
responsibilities, or authority within the Terasen Inc. companies that is not
contemplated by the employment agreement
(b) a decrease in the executive’s Annual Base Salary as provided in the Agreement
(or as such amounts may be increased from time to time) excluding any amounts
accrued by or paid to the executive relating to incentive compensation amounts
and any decrease that may occur in the value of the executive’s benefits under
the Company’s benefit plans resulting from a restructuring of any or all benefit
plans at the discretion of the Company;
(c) any other failure by the Company to perform any material obligation under, or
breach by the Company of any material provision of the agreement;
(d) a relocation of the executive’s current primary work location to a location greater
than eighty-three (83) kilometers from its current location; or
(e) any failure to secure the agreement of any successor entity to the Company to
fully assume the Company’s obligations under the employment agreement;
but does not include any financial transaction that may occur between Fortis Inc.,
Terasen Inc., Terasen Gas Inc. or, as applicable, any company related to Fortis Inc.,
Terasen Inc. or the Terasen Gas Inc.
F. DIRECTOR COMPENSATION
For the period from January 1 to June 30, 2010, the director remuneration for Terasen Inc. was
combined with the director remuneration for Terasen Gas (the composition of the boards and
committees of Terasen Inc. and Terasen Gas was consistent for such period). Directors of
Terasen Inc. and Terasen Gas, other than directors who are also officers or employees of such
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companies, were paid an annual director retainer of $27,000 and meeting fees of $1,250 for each
combined board meeting and $1,000 for each combined committee meeting attended. In lieu of a
director’s retainer, the Chair of the Boards of Terasen Inc. and Terasen Gas received an
aggregate annual retainer of $67,500. The Chair of the Audit & Risk Committees and the Chair of
the Governance Committees of Terasen Inc. and Terasen Gas received an additional aggregate
annual retainer of $4,000 and $2,000, respectively. Such directors were also reimbursed for
miscellaneous out-of-pocket expenses incurred in carrying out their duties as directors and paid
an additional $1,000 for travel time for each group of combined meetings attended in person
outside the director’s regional area of residence. Terasen Inc. paid the full amount of such
retainers, meeting fees and reimbursements. Terasen Gas reimbursed Terasen Inc. a portion of
such amounts pursuant to a corporate services agreement.
Effective July 1, 2010, director remuneration for Terasen Inc. and Terasen Gas was combined
with director remuneration of FortisBC (the composition of the boards and committees of
FortisBC, Terasen Inc. and Terasen Gas became consistent on July 1, 2010). Effective July 1,
2010, directors of FortisBC, Terasen Inc. and Terasen Gas, other than directors who are also
officers or employees of such companies, were paid an aggregate annual director retainer of
$35,000 and meeting fees of $1,250 for each combined board or combined committee meeting
attended. In lieu of a director’s retainer, the Chair of the Boards of FortisBC, Terasen Inc. and
Terasen Gas received an aggregate annual retainer of $67,500. The Chair of the Audit & Risk
Committees and the Chair of the Governance Committees of FortisBC, Terasen Inc. and Terasen
Gas received an additional aggregate annual retainer of $8,000 and $4,000, respectively. Such
directors were also reimbursed for miscellaneous out-of-pocket expenses incurred in carrying out
their duties as directors and paid an additional $1,000 for travel time for each group of combined
meetings attended in person outside the director’s regional area of residence. A proportionate
amount of such retainers, meeting fees and reimbursements was paid by Terasen Inc. Terasen
Gas reimbursed Terasen Inc. a portion of such amounts pursuant to a corporate services
agreement.
The following table sets forth individual director compensation paid by the Company for 2010.
Name (6)
Harold G. Calla 5
Fees earned
($) All other Compensation ($)
Total
($)
47,080 2,770 49,850
Brenda Eaton 42,000 3,540 45,540
Harry McWatters 42,000 4,540 46,540
Roger M. Mayer 1 19,250 1,540 20,790
Linda S. Petch 41,000 3,540 44,540
Beth D. Campbell 3 20,790 1,540 22,330
Ida J. Goodreau 42,000 4,540 46,540
H. Stanley Marshall 4 72,800 2,770 75,570
Barry V. Perry 42,000 3,540 45,540
David R. Podmore 42,000 2,770 44,770
1
Appointed to the Board of Directors and Audit & Risk Committee, effective July 1, 2010
3
Appointed to the Board of Directors and Chair of the Governance Committee, effective July 1, 2010.
4
Chair of the Board
5
Chair of the Audit & Risk Committee
6 “
See Summary Compensation Table” for amounts paid to Mr. Walker in his capacity as a director of Terasen Inc. and
Terasen Gas prior to Mr. Walker’s July 1, 2010 appointment as President and CEO of Terasen Inc. and Terasen Gas.
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