Form 8-K CANADIAN PACIFIC RAILWAY For: Oct 24
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
October 18, 2016
Date of Report (Date of earliest event reported)
Date of Report (Date of earliest event reported)
Canadian Pacific Railway Limited
(Exact name of registrant as specified in its charter)
Canada | 001-01342 | 98-0355078 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
7550 Ogden Dale Road S.E., Calgary, Alberta,
Canada, T2C 4X9
Canada, T2C 4X9
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (403) 319-7000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Vice-President and Chief Financial Officer
On October 19, 2016, Canadian Pacific Railway Limited (the “Company”) announced the appointment of Nadeem Velani as Vice-President and Chief Financial Officer, effective October 18, 2016.
Mr. Velani, age 44, joined the Company in March 2013 and served as Vice-President Investor Relations until September 9, 2016 when he was appointed Vice-President and Interim Chief Financial Officer. Prior to joining the Company, Mr. Velani spent 15 years at Canadian National Railway Co. where he worked in a variety of positions in Financial Planning, Sales and Marketing and Investor Relations. There is no arrangement or understanding with any person pursuant to which Mr. Velani was appointed as Vice-President and Chief Financial Officer. There are no transactions or relationships between the Company and Mr. Velani that are reportable under Item 404(a) of Regulation S-K.
In connection with his appointment as Vice-President and Chief Financial Officer, Mr. Velani’s base salary will increase to $415,000. Mr. Velani’s target award level under the Company’s short term incentive plan will be 60% of his base salary and his long term incentive opportunity will be 115% of his base salary. The value of Mr. Velani’s total compensation package is expected to be $1,141,250 annually.
A copy of Mr. Velani’s employment offer letter dated March 11, 2013 with respect to his appointment as Assistant Vice-President Investor Relations is attached as Exhibit 10.1 to this current report on Form 8- K.
A copy of Mr. Velani’s employment offer letter dated October 28, 2015 with respect to his appointment as Vice-President Investor Relations is attached as Exhibit 10.2 to this current report on Form 8- K.
A copy of Mr. Velani’s employment offer letter dated October 18, 2016 with respect to his appointment as Vice-President and Chief Financial Officer is attached as Exhibit 10.3 to this current report on Form 8- K.
A copy of the press release announcing the appointment of Mr. Velani as Vice-President and Chief Financial Officer is attached as Exhibit 99.1 to this current report on Form 8- K.
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Exhibit Description |
Exhibit 10.1 | Employment offer letter dated March 11, 2013, between the Company and Nadeem Velani. |
Exhibit 10.2 | Employment offer letter dated October 28, 2015, between the Company and Nadeem Velani. |
Exhibit 10.3 | Employment offer letter dated October 18, 2016, between the Company and Nadeem Velani. |
Exhibit 99.1 | Press Release dated October 19, 2016, announcing the appointment of Nadeem Velani as Vice-President and Chief Financial Officer |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: October 24, 2016 | |||
CANADIAN PACIFIC RAILWAY LIMITED | |||
By: | /s/ Scott Cedergren | ||
Name: | Scott Cedergren | ||
Title: | Assistant Corporate Secretary | ||
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EXHIBIT INDEX
Exhibit No. | Exhibit Description |
Exhibit 10.1 | Employment offer letter dated March 11, 2013, between the Company and Nadeem Velani. |
Exhibit 10.2 | Employment offer letter dated October 28, 2015, between the Company and Nadeem Velani. |
Exhibit 10.3 | Employment offer letter dated October 18, 2016, between the Company and Nadeem Velani. |
Exhibit 99.1 | Press Release dated October 19, 2016, announcing the appointment of Nadeem Velani as Vice-President and Chief Financial Officer |
March 11, 2013
Private and Confidential
Nadeem Velani
7 Caldow Road
Toronto ON
M4N 2P4
Dear Nadeem:
I am very pleased to offer you the position of AVP Investor Relations with Canadian Pacific Railway Company located in Calgary, reporting to myself.
Commencement Date
March 25, 2013.
Total Direct Compensation
In this role the expected value of your total direct compensation package (base salary, STIP and LTIP) will have an expected annual value of $370,500 and is comprised of:
Base Salary
Your annual base salary will be $190,000.
Short Term Incentive Plan (STIP)
You will be eligible to participate in the Short Term Incentive Plan (STIP). Your target award level will be 30% of your base salary (or $57,000.) This annual bonus is comprised of two components, individual and corporate: 40% will be based on your individual performance as measured through the Company's Performance Management Program and the remaining 60% will be based on the Company's performance against its corporate targets. For 2013 you will receive a prorated amount.
Long Term Incentive Plan (LTIP)
You will be eligible to participate in CP’s annual Long Term Incentive Plan. Subject to plan design as it may change over time and ongoing Board discretion, your target award level is 65% of your annual base salary (or $123,500), consisting of a 32.5% allocation of regular stock options and a 32.5% allocation of performance share units (PSU’s).
For 2013, you will receive a discretionary Option grant with an expected value of 32.5% of your annual base salary granted on April 2, 2013, unless the CEO is in possession of undisclosed material information on that date. If such is the case the grant will be made on the 3rd business day following the release of such information.
Special Payment
Upon hire you will receive a cash payment of $25,000. You must remain actively employed with CP and should you resign prior to March 2014, you will be required to reimburse the full amount to CP.
Annual Vacation
You will be entitled to five weeks’ vacation. In this calendar year, your vacation entitlement will be prorated according to your start date. As part of CP’s Flexbenefits plan, you will also have the opportunity to purchase up to an additional 10 Personal Days Off (PDOs) per year, pro-rated according to your start date. For more information on PDOs, see Appendix II.
Automobile Plan
The Automobile Plan allows you to select an automobile up to a value of $44,400 (excluding provincial sales tax, goods and services tax, transportation, and license costs). The plan also allows you to exceed this limit but at your own expense.
The Company will obtain a vehicle and make it available for unrestricted use by yourself and immediate family members who reside with you (as well as occasional use by others). The Company will pay or will reimburse you for all maintenance and operating expenses. The vehicle will be replaced after four (4) years or 100,000 kilometers, whichever comes first. Provision has been made to allow you to purchase the vehicle, if you so wish, when it becomes eligible for replacement or sooner if you leave the employ of the Company, according to the terms of the plan.
As a result of your participation in this plan, you will incur an annual taxable benefit relating to the use of the vehicle in accordance with current tax laws. However, given it is the Company’s objective to promote the use of more fuel efficient, environmentally friendly automobiles, the taxable benefit associated with this perk will be grossed up should you select a vehicle that meets the criteria for
environmentally friendly vehicles as outlined in the Company’s Executive Automobile Policy.
Upon commencement of employment, please contact Doug Rasmussen at Pattison Leasing (403) 301-2407 to arrange for your vehicle. Please note that depending on the vehicle selected, it may take up to 6 months from order placement to receive your vehicle, and as a result, to begin taking advantage of this benefit.
FLEXBenefits
You will be eligible to participate in CP’s FlexBenefits administered through Manulife, our benefits provider. An activation key will be forwarded to you with a link for accessing FlexBenefits on line. You will be given an expiry date by which time you must complete your enrolment. Please see Appendix II for a summary of benefits.
Executive Medical Plan
You are entitled to an annual executive medical examination. The examination includes a number of tests, which will assist in determining your health status as well as recommending preventative and/or curative measures, thus optimizing your health. The medical information obtained during the examination remains strictly confidential.
You are entitled to an annual executive medical examination. The examination includes a number of tests, which will assist in determining your health status as well as recommending preventative and/or curative measures, thus optimizing your health. The medical information obtained during the examination remains strictly confidential.
Canadian Pacific Pension Plan
You will be enrolled in the Canadian Pacific Defined Contribution (DC) Pension Plan. CP’s competitive DC plan features employer and employee contributions which increase over time based on your combined age and years of service. An enrollment kit describing the DC plan will be provided to you in your “Getting Started” package, and detailed information will be accessible on CP’s intranet site, Rail City, after your start date.
In addition, you will be eligible to participate in the Canadian Pacific Railway Company Supplemental Retirement Plan (the Supplemental Plan), which is fully paid by the Company. Supplemental benefits include pension benefits in excess of the Canada Revenue Agency maximums for the DC pension plan. For your level, this plan provides an additional notional contribution of 6% of your base salary annually. The following illustrates contribution levels.
Ownership Guidelines
By five (5) years from your start date, you will be required to achieve an ownership level equivalent to your annual salary. To help you meet your ownership requirements, the company has a voluntary incentive deferral program. Annually, you may elect to defer all or a portion of your PIP payment into DSUs. The company will provide a 25% match, i.e., one DSU will be awarded for every four DSUs acquired with your PIP deferral. The matched units will only be provided if you are below your ownership level.
Employee Share Purchase Plan (ESPP)
You can own part of CP through the Employee Share Purchase Plan (ESPP). CP shares may be purchased through payroll deduction and the Company will match a portion of every dollar you invest (subject to certain vesting and contribution conditions). You can contribute between 1% and 10% of your eligible earnings to the Plan. On the first 6% of your base salary, CP will contribute 33 cents for every dollar you invest. You may contribute an additional 4% of base salary which will not be eligible for CP contributions.
Relocation
As your new position is located in Calgary, the relocation of you, your family and your household effects will be governed by the Company’s Relocation (Canada) Policy #8801 which can be found under Employee Policies on Rail City.
As a relocating employee, please ensure that the request for Relocation Form (Appendix 1) is returned with your signed acceptance as soon as possible in order to initiate your move. Once returned to us, Brookfield Global Relocation Services (BGRS) will then contact you to initiate the process and answer any questions you might have.
Additional Information
Welcome to CP” Presentation
You are also invited to access “RailCity”, CP’s Intranet site, where you can view information about our company, our policies and learn about our benefits. To view the “Welcome to CP” presentation on “RailCity”, click on the “Employee” tab and choose “New Employee”. If you have any difficulties accessing the site please contact our HR Service Centre at 1-866-319-3900 or [email protected]
Accommodation of Special Needs
Should you require accommodation as a result of special needs such as physical, mental or learning disabilities or religious requirements, please contact me or Employee Relations at (403) 319-6447. The nature of such discussions will not be disclosed to others except for legitimate business purposes or to enable the accommodation. For a copy of CP's Workplace Accommodation policy, please contact the HR Service Centre at 1(866)319-3900 or in Calgary at (403)319-3900.
Terms and Conditions of Employment
As a condition of employment, you will be required to read CP’s Code of Business Ethics and electronically sign an acknowledgement that you have read and agree to adhere to the Code of Business Ethics. You will be provided with mandatory on-line training on CP’s Code of Ethics after the commencement of your employment with the Company. In addition, your photograph will be posted in our Talent Management database for the purpose of supporting the employee development and succession planning processes.
You acknowledge that you are legally entitled to accept an offer of employment with CP and that you have disclosed to CP any employment agreements with CN relating to non-disclosure, non-compete and non-solicitation.
It is CP’s policy to honor all legally enforceable employment agreements an employee has with third-parties, and to respect the intellectual property of third parties. You therefore acknowledge that you will honour all non-solicitation and non-disclosure agreements that you may have with CN and as might otherwise be imposed by law.
Future Relocation
CP is a national organization with an extensive network in Canada and the U.S. Based on operational needs; you may be required to relocate to another work location on the system. As well, advancement opportunities may require geographical relocation. Should you be faced with either situation, notice of the need to relocate and assistance to do so will be provided to you in accordance with corporate relocation policies.
Obtaining or Maintaining Qualification
Provided you are medically fit for safety-critical positions, you may be required to obtain a certification or to maintain your current certification / qualification as locomotive engineer or conductor, as you may be called upon to operate trains as and when required. This may involve operating trains away from your normal work location.
Security Clearance
In accordance with Company Policy, all new hires are required to pass a security clearance. This offer of employment is conditional upon the results.
If you have any questions regarding your benefits and other entitlements related to this offer of employment, please call Kathie Brown, Assistant Vice President Total Compensation, at (403) 319-6455.
This offer of employment is submitted to you for acceptance, and is valid through March 15, 2013. Please sign and return the enclosed copy of this letter and the completed CP New Hire Information form on or before that date to:
Kathie Brown
AVP Total Compensation
600 - 401 9th Avenue SW
Calgary AB T2P 4Z4
Nadeem, I look forward to your creative input, fresh perspective and positive contribution.
I am confident that your skills will complement our team and that your career with CP will be challenging and rewarding. We hope that you will join us!
Sincerely,
/s/ Mark Wallace
Mark Wallace
VP Corporate Affairs and Chief of Staff
Accepted: /s/ Nadeem Velani
(Signature)
Date: March 14th / 2013
Contact Telephone #__________________________
Confirmation of Start Date: 2013/03/25
(yy/mm/dd)
October 28, 2015
Private and Confidential
Nadeem Velani
4721 6 Street SW
Calgary AB
T2S 2N2
Dear Nadeem,
I am pleased to offer you the position of VP Investor Relations effective October 28, 2015 reporting to me.
Your work at CP will continue to involve disciplined application of our core Foundations: Provide Service, Control Costs, Optimize Assets, Operate Safely and Develop People. I am confident that your skills will complement the executive team and that your career with CP will continue to be challenging and rewarding.
In this role your base salary will increase to $245,000. The expected value of your total compensation package (base salary, short term and long term incentive plans) will be $575,750 annually representing an increase of 29% over your current package.
Please review the attached details of this offer.
CP’s transformation to date has been impressive. Congratulations Nadeem! I look forward to working with you on the executive team.
Sincerely,
/s/ Mark Wallace
Mark Wallace
VP Corporate Affairs and Chief of Staff
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CP Offer Details
Total Direct Compensation
Base Salary
Your base salary will increase approximately 9.5% to $245,000.
Short Term Incentive Plan (STIP)
You will continue to be eligible to participate in the Short Term Incentive Plan (STIP). Your target award level will increase to 50% of your base salary (or $122,500). This annual bonus is comprised of two components, individual and corporate: 25% will be based on your individual performance as measured through the Company's Performance Management Program and the remaining 75% will be based on the Company's performance against its corporate targets. Both Corporate and individual components have a maximum of 200% of target (i.e., for a total of 100% of base salary).
Long Term Incentive Plan (LTIP)
You will continue to be eligible to participate in CP’s annual Long Term Incentive Plan. Subject to plan design, as it may change over time and ongoing Board discretion, your target award level will increase to 85% of your annual salary (or $208,250), consisting of an allocation of 50% of value in regular stock options and 50% of value in performance share units (PSU’s). Subject to Board approval, annual grants typically occur in January of each year.
Ownership Guidelines
By October 28, 2020, you will be required to achieve an ownership level equivalent to 1.5 times your annual salary. To help you meet your ownership requirements, the Company has a voluntary incentive deferral program. Annually, you may elect to defer all or a portion of your STIP payment into DSUs. The company will provide a 25% match, i.e., one DSU will be awarded for every four DSUs acquired with your STIP deferral. The matched units will only be provided if you are below your ownership level.
Flexible Perquisites Program
You are eligible to participate in the Canadian Pacific Railway Flexible Perquisites Program for senior officers. This program allows you to design the perquisite package best suited to your individual needs (executive automobile, clubs, financial counseling services etc.) within a set annual “flex dollar” amount. Any unused funds at the end of the year are paid out in cash.
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Executive Compensation Clawback Policy
By signing this offer letter you are agreeing to be bound by the Executive Compensation Clawback Policy. The Corporation may seek reimbursement of incentive compensation paid to you, specifically, where (i) you have received or receive incentive compensation that is based on financial results that are subsequently materially restated or corrected, (ii) through misconduct, you are responsible for causing the need for such restatement or correction, and (iii) your incentive compensation would have been lower based on the restated or corrected results.
The Board may from time to time approve amendments to the Executive Compensation Clawback Policy. If such amendments are made, you will be advised immediately. For further information please see Appendix 1.
Future Relocation
CP is an international organization with an extensive network in Canada and the U.S. Based on operational needs; you may be required to relocate to another work location on the system. As well, advancement opportunities may require geographical relocation. Should you be faced with either situation, notice of the need to relocate and assistance to do so will be provided to you in accordance with the corporate relocation policy.
Obtaining or Maintaining Qualification
Provided you are medically fit for safety-critical positions, you may be required to obtain a certification or to maintain your current certification / qualification as locomotive engineer or conductor, as you may be called upon to operate trains as and when required. This may involve operating trains away from your normal work location.
Your participation in the Plans mentioned above is governed by the appropriate Plan document, detailing the Plan terms and conditions. These terms and conditions may be revised at anytime at the discretion of the Company. If you have any questions about these plans or any other compensation matter, contact Kathie Brown at 403 319-6455.
Please sign page below as your acceptance and return the enclosed copy of this letter to Kathie Brown, AVP Total Compensation:
Accepted: /s/ Nadeem Velani
(Signature)
Date: Oct. 29/2105
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Appendix I
Executive Compensation Clawback Policy
The Board of Directors may determine that incentive compensation paid to a senior executive or former senior executive should be reimbursed to the Company in circumstances where:
1. | The incentive compensation paid to the senior executive or former senior executive was predicated upon the achievement of financial results that were subsequently materially restated or corrected, in whole or in part; and |
2. | The senior executive or former senior executive engaged in gross negligence, fraud or intentional misconduct that caused or partially caused the need for such restatement or correction, as admitted by the senior executive, or, in the absence of such admission, as determined by the Board acting reasonably; and |
3. | The incentive compensation paid to the senior executive or former senior executive would have been lower based on the restated or corrected results. |
Intentional misconduct includes (but is not limited to) acts or omissions that are not in good faith or which are a knowing violation of a law, and can also include conscious inaction, where no corrective measures were taken to avoid or rectify a material decision made, which resulted in financial harm to the Company.
In such an instance, reimbursement of all or a portion of the applicable incentive compensation paid to the senior executive or former senior executive under the Company’s incentive plans will be sought, as permitted by applicable laws and to the extent the Board determines, in its sole discretion, that it is in the best interest of the Company to so require reimbursement (including to ensure compliance with applicable laws).
If it is determined recovery should be sought, the Board may pursue all reasonable legal and other remedies to recover the applicable incentive compensation, including, without limitation, by: (i) seeking repayment from the senior executive or former senior executive; (ii) reducing the amount that would otherwise be payable to the senior executive under a Company plan; (iii) reducing or withholding future equity grants, bonus awards, or salary increases; or (iv) taking any combination of these actions. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities.
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October 18, 2016
Nadeem Velani (978330)
4721 6 Street SW
Calgary AB
T2S 2N2
Dear Nadeem,
I am pleased to inform you that the Board of Directors has approved your position as Vice-President and Chief Financial Officer and an increase to your compensation package effective October 18, 2016.
Your annual base salary will increase to $415,000. Your target award level under the Short Term Incentive will remain at 60% of your base salary and your Long Term Incentive opportunity will continue to be 115% of your base salary. As a result, the expected value of your total compensation package (base salary, STIP and LTIP) will increase to $1,141,250 annually.
Ownership Guidelines
By September 2021, you are required to achieve an ownership level equivalent to 2 times your annual salary. To help you meet your ownership requirements, the Company has a voluntary incentive deferral program. Annually, you may elect to defer all or a portion of your STIP payment into DSUs up to your ownership level. The Company will provide a 25% match, i.e., one DSU will be awarded for every four DSUs acquired with your STIP deferral. The matched units will only be provided if you are below your ownership level.
Terms of Employment
All other terms and conditions of your employment remain unchanged. Your participation in the Plans mentioned above is governed by the appropriate Plan document, detailing the Plan terms and conditions. These terms and conditions may be revised at any time at the discretion of the Company.
Congratulations Nadeem! CP’s transformation to date has been impressive and I know that you will continue to be a significant contributor to helping us achieve even more in the future.
Sincerely,
/s/ E. Hunter Harrison
E. Hunter Harrison
Chief Executive Officer
Release: Immediate October 19, 2016
Nadeem Velani named CP’s Chief Financial Officer
Calgary, AB – Canadian Pacific (TSX: CP) (NYSE: CP) today announced that Nadeem Velani has been named Vice-President and Chief Financial Officer. Velani had been serving as Vice-President and interim CFO since September 9, 2016.
“Working closely with the board and after performing all necessary due diligence, we are pleased to name Nadeem our Chief Financial Officer,” said E. Hunter Harrison, CP’s Chief Executive Officer. “In Nadeem we have a trusted and highly capable leader who will bring stability to this role for the long-term.”
Velani joined CP in March 2013 and served as Vice-President Investor Relations before becoming interim CFO. Prior to CP, Velani spent 15 years at Canadian National Railway Co. where he worked in a variety of positions in Strategic and Financial Planning, Investor Relations, Sales and Marketing and the Office of the President and CEO.
“I welcome this tremendous opportunity to work closely with the executive team as we continue to write the CP story,” said Velani. “I am proud to lead the finance team and am excited about what the future will bring under the leadership of Hunter and Keith.”
As CP's Vice-President and CFO, Velani is a key member of the senior management team responsible for helping plan the long-term strategic direction of the company. Other responsibilities include financial planning, investor relations, reporting and accounting systems as well as pension, treasury and tax.
Velani holds an undergraduate degree in Economics from Western University and an MBA in Finance/International Business from McGill.
Velani holds an undergraduate degree in Economics from Western University and an MBA in Finance/International Business from McGill.
About Canadian Pacific
Canadian Pacific (TSX: CP)(NYSE: CP) is a transcontinental railway in Canada and the United States with direct links to eight major ports, including Vancouver and Montreal, providing North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of CP.
Contacts:
Media
Martin Cej
24/7 Media Pager: 855-242-3674
Investment Community
Maeghan Albiston
403-319-3591
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