Exhibit 10.2

ENBRIDGE INC.

INCENTIVE STOCK OPTION PLAN (2002)

 

1. PURPOSE

The purpose of this Incentive Stock Option Plan (the “Plan”) is to provide
employees of the Corporation and its Subsidiaries the opportunity to acquire or
enjoy the benefit of an increased proprietary interest in the Corporation in a
manner which is consistent with and will advance the interests of the
Corporation and its Subsidiaries by (a) motivating and rewarding employees in
relation to the long-term performance and growth of the Corporation and the
total return to shareholders, and thereby (b) attracting and retaining the best
employees.

 

2. DEFINED TERMS

As used herein, the following terms shall have the following meanings,
respectively:

“Board” means the Board of Directors of the Corporation (or, if established and
duly authorized to act, the Executive Committee of the Board of Directors of the
Corporation);

“Code” means the United States Internal Revenue Code of 1986, as amended;

“Corporation” means Enbridge Inc., and includes any successor corporation
thereto;

“Committee” means the Human Resources & Compensation Committee of the Board,
established and duly authorized to act in accordance with the by-laws of the
Corporation;

“Directors’ Plan” means the Enbridge Inc. Directors’ Compensation Plan (2002),
as the same may be amended or varied from time to time;

“Fair Market Value” means, with respect to any date, the last board lot sale
price of common shares of the Corporation on The Toronto Stock Exchange on the
last Trading Day immediately prior to such date;

“Insider” means:

 

  (a) an insider as defined in the Securities Act (Alberta), other than a person
who falls within that definition solely by virtue of being a director or senior
officer of a Subsidiary; and

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  (b) an associate, as defined in the Securities Act (Alberta), of any person
who is an insider by virtue of (a) above;

“Participant” means any employee, including an officer, of the Corporation or
its Subsidiaries who has been designated by the Committee to receive and be
granted options or stock option appreciation rights in accordance with
paragraph 5;

“Plan” means the Enbridge Inc. Incentive Stock Option Plan (2002), as embodied
herein and as the same may be amended or varied from time to time;

“Stock Option Plans” means the Plan and the Directors’ Plan;

“Subsidiary” means:

 

  (a) any corporation that is a subsidiary of the Corporation (as such term is
defined in subsection 2(5) of the Canada Business Corporations Act, as such
provision is from time to time amended, varied or re-enacted);

 

  (b) any partnership or limited partnership that is controlled by the
Corporation (the Corporation will be deemed to control a partnership or limited
partnership if the Corporation possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of such partnership
or limited partnership whether through the ownership of voting securities, by
contract or otherwise); and

 

  (c) subject to regulatory approval, any corporation, partnership, limited
partnership, trust, limited liability company or other form of business entity
that the Committee determines ought to be treated as a Subsidiary for purposes
of the Plan, provided that the Committee shall have the sole discretion to
determine that any such entity has ceased to be a Subsidiary for purposes of the
Plan; and

“Trading Day” means any day, other than a Saturday or Sunday, on which The
Toronto Stock Exchange is open for trading.

 

3. ADMINISTRATION

The Committee will administer the Plan in its discretion, subject only to the
specific approval right reserved to the Board in paragraphs 5, 8, 9 and 11
herein. The Committee shall be composed of three or more members of the Board
not eligible to participate in the Plan. The Committee shall have the power to
interpret the provisions of the Plan and to make regulations and formulate
administrative provisions for its implementation, and to make such changes in
the regulations and administrative provisions as, from time to time, the
Committee deems proper and in the best interests of the Corporation. Such
regulations and provisions may include such terms and conditions relating to the
grant or

 

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exercise of options or stock appreciation rights or to resale of shares
purchased upon exercise of options as the Committee may deem necessary or
desirable in connection with compliance with exemption or other provisions of
securities laws of any jurisdiction.

 

4. SHARES

The shares subject to the options and other provisions of the Plan shall be
authorized and unissued common shares of the Corporation. The total number of
shares reserved to be issued under the Plan shall not exceed in the aggregate
15,000,000, subject to the adjustment provisions of paragraph 9. Shares subject
to options which are terminated, cancelled, or expire prior to exercise shall be
available for the grant of further options hereunder. Shares represented by an
unexercised option surrendered upon the exercise of stock appreciation rights,
but not shares issued in payment of any such rights, shall be deducted from the
aggregate reserve and shall not be available for the grant of further options
hereunder.

 

5. ELIGIBLE EMPLOYEES

The Committee, subject to approval by the Board, shall from time to time
designate those full-time key employees, including officers, of the Corporation
or its Subsidiaries to whom options and stock appreciation rights shall be
granted, and shall determine the extent and terms of their participation,
subject to the following:

 

  (a) the total number of shares reserved for issuance to any one Participant
pursuant to options granted pursuant to the Plan (together with options granted
pursuant to any other share compensation arrangements) shall not exceed in the
aggregate 5% of the number of common shares of the Corporation outstanding at
the time of reservation;

 

  (b) the total number of shares reserved for issuance to Insiders pursuant to
the Stock Option Plans (and any other share compensation arrangements) shall not
exceed 10% of the number of common shares of the Corporation outstanding at the
time of reservation;

 

  (c) the total number of shares issued to Insiders pursuant to the Stock Option
Plans (and any other share compensation arrangements) within any one-year period
shall not exceed 10% of the number of common shares of the Corporation
outstanding at the time of issuance (excluding any other shares issued under the
Stock Option Plans (or any other share compensation arrangements) during such
one-year period); and

 

  (d)

the total number of shares issued to any one Insider and such Insider’s
associates (as defined in the Securities Act (Alberta)) pursuant to the Stock
Option Plans (and any other share compensation arrangements)

 

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within any one-year period shall not exceed 5% of the number of common shares
outstanding at the time of issuance (excluding any other shares issued under the
Stock Option Plans (or any other share compensation arrangements) during such
one-year period).

For the purposes of (b), (c) and (d) above, any entitlement to acquire shares
granted pursuant to the Plan prior to the Participant becoming an Insider are to
be excluded from the calculation.

Directors who are not full-time employees of the Corporation, or its
Subsidiaries, shall not be eligible to become Participants.

A designated employee shall have the right not to participate in the Plan, and
any decision not to participate shall not affect his or her employment with the
Corporation. Participation in the Plan does not confer upon the Participant any
right to continued employment with the Corporation, or its Subsidiaries.

 

6. TERMS AND CONDITIONS OF OPTIONS

 

  (a) Term

The term during which an option will be exercisable shall be fixed at the time
of grant, but in no case shall a term exceed ten years, and each option shall be
subject to earlier termination, as provided in paragraphs 6(f), 6(g) and 6(h).

 

  (b) Exercise

Unless the Committee otherwise decides, an option shall become exercisable only
after one year of continued employment immediately following the day the option
is granted and only then in such instalments as the Committee may determine. A
Participant may exercise the exercisable instalments of his or her option in
whole or in part at any time and from time to time during the option term.

 

  (c) Price

The price at which shares will be issued to a Participant pursuant to an option
(the “Option Price”) shall be determined at the time of option grant, but shall
in no instance be less than 100% of the Fair Market Value on the day of grant.
Notwithstanding the foregoing, in the event that an option is awarded at a time
when a corporate trading blackout memo has been issued and is in effect (a
“Trading Blackout”), the effective date of the option shall be no earlier than
the fourth Trading Day following the date of the termination of the Trading
Blackout and the Option Price shall in no instance be less than the weighted
average trading price of the common shares of the Corporation on The Toronto
Stock Exchange for the three Trading Days immediately prior to the effective
date of the option.

 

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  (d) Payment

Participants shall be required to make payment in full for any shares purchased
upon the exercise, in whole or in part, of any option granted under the Plan and
no shares shall be issued until full payment has been made.

 

  (e) Transferability

Options are not transferable or assignable other than by will or according to
the laws of descent and distribution.

 

  (f) Termination of Employment (Retirement or Disability)

Unless the Committee otherwise decides, in the event that a Participant, before
completely exercising his or her option, terminates his or her employment with
the Corporation (or a Subsidiary) due to normal or early retirement under the
Retirement Plan of the Corporation (or a Subsidiary), disability or under
conditions acceptable to the Committee, unexercised instalments of the option
that are exercisable on the date of termination of employment remain
exercisable, unvested instalments of the option continue to vest and the option
remains exercisable until the third anniversary of the date of termination of
employment or the remainder of the option term, whichever is the shorter period,
and the option (in its entirety) shall terminate and be of no further force or
effect whatsoever at the end of such period.

 

  (g) Termination of Employment (Death)

Unless the Committee otherwise decides, in the event that a Participant, before
completely exercising his or her option, terminates his or her employment with
the Corporation (or a Subsidiary) due to death, unvested instalments of that
option fully vest on the date of death and all unexercised options remain
exercisable until the first anniversary of the date of death or the remainder of
the option term, whichever is the shorter period, and the option (in its
entirety) shall terminate and be of no further force or effect whatsoever at the
end of such period.

 

  (h) Termination of Employment (Other)

Unless the Committee otherwise decides, in the event that a Participant, before
completely exercising his or her option, terminates his or her employment with
the Corporation (or a Subsidiary) for any reason (other

 

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than under the circumstances set out in paragraphs 6(f) and 6(g) above), only
unexercised instalments of that option, exercisable on the date employment
terminated, remain exercisable until the thirtieth (30th) day following the date
of the Participant’s termination of employment under this paragraph or the
remainder of the option term, whichever is the shorter period, and the option
(in its entirety) shall terminate and be of no further force or effect
whatsoever at the end of such period. Notwithstanding the foregoing, the
Committee shall have the discretion to extend the 30 day period to a period not
exceeding the third anniversary of the date of termination of employment under
this paragraph, provided that in no circumstances will any such extension result
in the exercise period being extended beyond the end of the option term.

For greater certainty, employment shall be deemed not to have terminated when a
Participant terminates employment with the Corporation in order to accept
employment with a Subsidiary or terminates employment with a Subsidiary in order
to accept employment with the Corporation. Employment shall be deemed to have
terminated if a Subsidiary which employs the Participant ceases to be such.

 

7. TERMS AND CONDITIONS OF UNITED STATES INCENTIVE STOCK OPTIONS

Designated employees of the Corporation’s United States Subsidiary(ies) may be
granted “incentive stock options” within the meaning of Section 422 of the Code
(“United States Incentive Stock Options”).

No United States Incentive Stock Options shall be granted to any participant, if
as a result of such grant, the aggregate fair market value (as of the time the
option is granted) of the shares covered by all United States Incentive Stock
Options granted under this Plan and any other plan of the Corporation or any
Subsidiary to the Participant, which are or which will become exercisable for
the first time by the participant in a single calendar year, exceeds US$100,000
or such amount as shall be specified in Section 422 of the Code.

The exercise price of a United States Incentive Stock Option shall be not less
than 100% of Fair Market Value on the day of grant.

The Committee may determine terms and conditions, in accordance with Section 422
of the Code, under which United States Incentive Stock Options or related stock
appreciation rights may be exercised upon the termination of employment of a
Participant. In all other respects, United States Incentive Stock Options and
related stock appreciation rights shall be subject to the terms and conditions
of options as set forth in paragraph 6.

 

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8. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

Stock appreciation rights may be granted in connection with all options granted
under the Plan, either when the underlying option is granted or at any other
time prior to the expiry or exercise of such option. Exercise of a stock
appreciation right shall result in cancellation of a corresponding number of
shares of the underlying option. Exercise of an option (or part thereof) or
settlement of an option in accordance with Section 10 shall result in
cancellation of a corresponding number of stock appreciation rights. All stock
appreciation rights shall be subject to the following terms and conditions, and
such additional terms, conditions and limits as the Committee with Board
approval may from time to time determine.

 

  (a) Extent of Grant

The number of shares covered by a grant of stock appreciation rights shall not
exceed the number of shares which the Participant may purchase upon the exercise
of an unexercised option or parts thereof held by the Participant.

 

  (b) Limitations on Exercise

Stock appreciation rights shall be exercisable at such times and in such amounts
as the options with which such right are connected are exercisable, provided
that exercise of a stock appreciation right shall be made only during periods
set by the Committee with Board approval.

 

  (c) Entitlement

Stock appreciation rights shall entitle only the holder to surrender to the
Corporation all or part of the unexercised, but exercisable, option in
connection with which such rights were granted and to receive from the
Corporation in exchange, the payment of an amount equal to the amount, if any,
by which the aggregate fair market value of the shares covered by the
surrendered option or portion thereof at the exercise date (calculated as the
weighted average trading price of common shares of the Corporation on The
Toronto Stock Exchange for the five Trading Days prior to the date on which such
payment is made) exceeds the aggregate option exercise price of those shares.
Such payment may not exceed 100% of the exercise price of the related option or
portion thereof which is being surrendered. Payment of such amount may be made
and satisfied by the Corporation in such of the following forms as the Committee
may determine:

 

  (i) in common shares of the Corporation (valued at the weighted average
trading price of common shares of the Corporation on The Toronto Stock Exchange
for the five Trading Days prior to the date on which such payment is made); or

 

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  (ii) in cash; or

 

  (iii) partly in shares so valued and partly in cash.

 

  (d) Transferability

Stock appreciation rights are not transferable or assignable other than by will
or according to the laws of descent and distribution.

 

9. ADJUSTMENTS

In the event that the outstanding common shares of the Corporation shall be
increased or decreased, or changed into, or exchanged for a different number or
kind of shares or other securities of the Corporation or another corporation,
whether through a stock dividend, stock split, consolidation, recapitalization,
amalgamation, reorganization, arrangement or other transaction effected without
receipt of consideration, the Committee or the Board may make appropriate
adjustment in the number or kind of shares or securities available for options
or stock appreciation rights pursuant to the Plan, and as regards options or
stock appreciation rights previously granted or to be granted pursuant to the
Plan, in the number or kind of shares or securities and the purchase price
therefor and the manner in which instalments of the options or stock
appreciation rights become exercisable.

The appropriate adjustments in the number of shares optioned, the option price
per share and the period during which each option may be exercised may be made
by the Board in its discretion and in order to give effect to the adjustments in
the number of shares of the Corporation resulting from the implementation and
operation of the Shareholder Rights Plan Agreement dated as of November 9, 1995
between the Corporation and The R-M Trust Company, as amended, restated or
revised from time to time.

 

10. EFFECT OF REORGANIZATION

In the event of any take-over bid or any proposal, offer or agreement for a
merger, consolidation, amalgamation, arrangement, recapitalization, liquidation,
dissolution, reorganization into a royalty trust or income fund or similar
transaction or other business combination in which the Corporation is not the
surviving or continuing corporation (a “Reorganization”), all options and stock
appreciation rights granted hereunder and outstanding on the date of such
Reorganization, shall be assumed by the surviving or continuing corporation,
provided that the Committee or the Board may make appropriate adjustment in the
manner in which instalments of the options or stock appreciation rights

 

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become exercisable prior to such assumption. If, in the event of any such
Reorganization, provision for such assumption satisfactory to a Participant is
not made by the surviving or continuing corporation, each Participant shall have
distributed to him or her within thirty days after the Reorganization in full
satisfaction in the case of an unexpired option, or part thereof, whether or not
exercisable, cash representing the excess, if any, of the Fair Market Value on
the third Trading Day immediately preceding the closing date of such
Reorganization over the exercise price of such option (less applicable tax
withholdings).

 

11. AMENDMENT, ETC.

The Board may revise, suspend or discontinue the Plan in whole or in part. No
such revision, suspension, or discontinuance shall alter or impair the rights of
a Participant in respect of options or stock appreciation rights previously
granted under the Plan, without the consent of a Participant. Any amendment to
the Plan or to the terms of any options or stock appreciation rights granted
under the Plan are subject to regulatory approval.

Subject to the provisions of paragraph 9, the Board shall not change the minimum
exercise price at which options or stock appreciation rights will be granted, or
extend the maximum term during which an option or stock appreciation right may
be exercised.

 

12. EFFECTIVE DATE

The Plan shall take effect on May 3, 2002, being the date of the 2002 Annual
Meeting of shareholders of the Corporation, if approved by the shareholders at
such meeting. On the Plan taking effect, the Incentive Stock Option Plan
(1999) (the “Prior Plan”) shall be discontinued and all unexercised options
issued under the Prior Plan shall then be considered to be issued and
outstanding under the Plan and all shares reserved for issuance under the Prior
Plan that have not been issued shall be considered to be reserved for issuance
under the Plan.

 

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