EXHIBIT 10.1

SPECTRA ENERGY CORP

PHANTOM STOCK AWARD AGREEMENT

This Phantom Stock Award Agreement (the “Agreement”) has been made as of
                ,     (the “Date of Grant”) between Spectra Energy Corp, a
Delaware corporation, with its principal offices in Houston, Texas (the
“Company”), and              (the “Grantee”).

RECITALS

Under the amended and restated Spectra Energy Corp 2007 Long-Term Incentive Plan
as it may, from time to time, be amended (the “Plan”), the Compensation
Committee of the Board of Directors of the Company (the “Committee”), or its
delegatee, has determined the form of this Agreement and selected the Grantee,
as an Employee, to receive the award evidenced by this Agreement (the “Award”)
and the Phantom Stock units and tandem Dividend Equivalents that are subject
hereto. The basis for the Award is to provide an incentive for the Employee to
remain with the Company and to improve Employee retention. Awards are not
intended for Employees who have given notice of resignation or who have been
given notice of termination by the Company, and will not accrue to Employees
once such notices are given. For clarity, Awards do not accrue for Employees who
have received notice, given notice or have been determined to be entitled to a
notice period by a court, and no damages suffered by an Employee due to lack of
sufficient notice will include compensation for loss of vesting rights or
accrual of an Award. The applicable provisions of the Plan are incorporated in
this Agreement by reference, including the definitions of terms contained in the
Plan (unless such terms are otherwise defined herein).

AWARD

In accordance with the Plan, the Company has made this Award, effective as of
the Date of Grant and upon the following terms and conditions:

Section 1. Number and Nature of Phantom Stock Units and Tandem Dividend
Equivalents. The number of Phantom Stock units and the number of tandem Dividend
Equivalents subject to this Award are each              (    ). Each Phantom
Stock unit, upon becoming vested before its expiration, represents a right to
receive payment in the form of one (1) share of Common Stock. Each tandem
Dividend Equivalent represents a right to receive cash payments equivalent to
the amount of cash dividends declared and paid on one (1) share of Common Stock
after the Date of Grant and before the Dividend Equivalent expires. Phantom
Stock units and Dividend Equivalents are used solely as units of measurement,
and are not shares of Common Stock and the Grantee is not, and has no rights as,
a shareholder of the Company by virtue of this Award. The Dividend Equivalents
subject to this Award have been awarded to the Grantee in respect of services to
be performed by the Grantee exclusively in and after the year in which the Award
is made.

Section 2. Vesting of Phantom Stock Units. The specified percentage of the
Phantom Stock units subject to this Award, and not previously forfeited, shall
vest, with such percentage considered satisfied to the extent such Phantom Stock
units have previously vested, as follows:

(a) Generally. 100% upon Grantee continuously remaining an Employee of the
Company, including Subsidiaries, through the third anniversary of the Date of
Grant (the “Vesting Period”).

(b) Retirement. If Grantee’s employment with the Company, including
Subsidiaries, terminates at a time when Grantee is eligible for an immediately
payable early or normal retirement benefit under the Spectra Energy Retirement
Cash Balance Plan or under another retirement plan of the Company or Subsidiary,
which plan the

 

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Committee, or its delegatee, in its sole discretion, determines to be the
functional equivalent of the Spectra Energy Retirement Cash Balance Plan, then
the number of Phantom Stock units and tandem Dividend Equivalents to which the
Grantee shall have a right to payment hereunder shall be prorated to reflect the
number of months of the Vesting Period during which the Grantee’s active
employment with the Company, including Subsidiaries, (“Active Employment”)
continued, and the remaining Phantom Stock units not vested shall be forfeited.
Solely for purposes of calculating the prorated payment in the preceding
sentence, if the Grantee’s Active Employment continued for at least one (1) day
during a calendar month in the Vesting Period, Grantee’s Active Employment shall
be considered to have continued for the entirety of such month, but in no event
for more than thirty-six (36) months. Grantee shall be considered to have
“retired” but Grantee’s employment shall be considered to continue, with
continued vesting under Section 2(a) with respect to the prorated payment
determined in accordance with the above, (i) unless the Committee or its
delegatee, in its sole discretion, determines that (A) Grantee is in violation
of any obligation identified in Section 4 or (B) the termination of Grantee’s
employment is for Cause, in which case all Phantom Stock units not previously
vested shall be forfeited, or (ii) unless the Grantee dies, in which case the
Phantom Stock units subject to the provisions of this Section 2(b) shall vest in
accordance with Section 2(c).

(c) Death or Disability. If Grantee’s employment with the Company, including
Subsidiaries, terminates (i) as the result of Grantee’s death or (ii) as the
result of Grantee’s permanent and total disability within the meaning of Code
Section 22(e)(3) as applicable, the Phantom Stock units subject to this Award
shall vest immediately.

(d) Involuntary Termination Without Cause. If Grantee’s employment is terminated
by the Company, or employing Subsidiary, other than for Cause, regardless of
reason for termination or the party giving notice, (i) the number of Phantom
Stock units and tandem Dividend Equivalents to which the Grantee shall have a
right to payment hereunder shall be prorated to reflect the number of months of
Active Employment during the Vesting Period, and shall vest immediately, and
(ii) the remaining Phantom Stock units shall be forfeited. Solely for purposes
of calculating the prorated payment in clause (i) of the preceding sentence, if
the Grantee’s Active Employment continued for at least one (1) day during a
calendar month in the Vesting Period, Grantee’s Active Employment shall be
considered to have continued for the entire month, but in no event for more than
thirty-six (36) months.

For purposes of this Agreement, the termination of Grantee’s employment shall
not result in the payment of any amount hereunder that is subject to, and not
exempt from, Code Section 409A, unless such termination of employment
constitutes a “separation from service” as defined under Code Section 409A.

(e) Change in Control. All Phantom Stock units and tandem Dividend Equivalents
to which the Grantee has the right to payment hereunder shall become 100% vested
to the extent not yet vested as provided for in Section 2 above, if, following
the occurrence of a Change in Control and before the second anniversary of such
occurrence, (A) the Grantee’s employment is terminated involuntarily, and not
for Cause, by the Company, or employing Subsidiary, or their successor; or
(B) such employment is terminated by the Grantee for Good Reason.

For the purposes of this paragraph, “Good Reason” is defined as the occurrence
(without the Grantee’s express written consent) of any of the following, unless
such act or failure to act is corrected, prior to the effective date of
Grantee’s termination of employment, as specified in Grantee’s notice
termination, as provided in the following paragraph: (A) a substantial adverse
alteration in the nature or status of the Grantee’s responsibilities; (B) a
reduction in the Grantee’s annual base salary, provided that there is not an
across-the-board reduction similarly affecting all or substantially all
similarly-situated employees of the Company and employing Subsidiaries; (C) a
reduction in the Grantee’s target annual bonus, provided that there is not an
across-the-board reduction similarly affecting all similarly-situated employees
of the Company and employing Subsidiaries; (D) the elimination of any material
employee benefit plan in which the Grantee is a participant or the material
reduction of Grantee’s benefits under such plan, unless the Company either
(1) immediately replaces such employee benefit plan or unless the Grantee is
permitted to immediately participate in other employee benefit plan(s) providing
the Grantee with a substantially equivalent value of benefits in the aggregate
to those

 

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eliminated or materially reduced, or (2) immediately provides the Grantee with
other forms of compensation of comparable value to that being eliminated or
reduced; (E) a relocation without the written consent of the Grantee that
requires the Grantee to report to a work location more than thirty-five
(35) miles from the work location to which the Grantee was assigned prior to the
Change in Control.

Grantee is required to provide notice to the Company of the existence of any of
the conditions set forth in this Section 2(e) at least fifteen (15), but not
more than sixty (60), days prior to the date of Grantee’s termination of
employment. Upon receipt of such notice, the Company may, prior to the effective
date of Grantee’s termination of employment, cure or remedy such condition. If
Grantee terminates from employment after providing notice and after the Company
has cured the condition within the time frame set forth in this Section 2(e),
then such termination of employment will be considered to be a voluntary
termination of employment, and not a separation for Good Reason.

The Grantee’s continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting Good Reason
pursuant to the foregoing provisions of this Section 2(e).

Section 3. Definition of “Cause.” For the purposes of this Agreement, “Cause”
for termination by the Company or an employing Subsidiary of the Grantee’s
employment shall mean (i) a material failure by the Grantee to carry out, or
malfeasance or gross insubordination in carrying out, reasonably assigned duties
or instructions consistent with the Grantee’s position, (ii) the final
conviction of the Grantee of a felony or crime involving moral turpitude,
(iii) an egregious act of dishonesty by the Grantee (including, without
limitation, theft or embezzlement) in connection with employment, or a malicious
action by the Grantee toward the customers or employees of the Company or any
affiliate, (iv) a material breach by the Grantee of the Company’s Code of
Business Ethics, or (v) the failure of the Grantee to cooperate fully with
governmental investigations involving the Company or its affiliates; all as
determined by the Company in its sole discretion.

Section 4. Violation of Grantee Obligation. In consideration of the continued
vesting opportunity provided under Section 2 following the termination of
Grantee’s continuous employment by the Company, including Subsidiaries, if
Grantee is considered “retired”, Grantee agrees that during the period beginning
with such termination of employment and ending with the third anniversary of the
Date of Grant (“Restricted Period”), Grantee shall not (i) without the prior
written consent of the Company, or its delegatee, become employed by, serve as a
principal, partner, or member of the board of directors of, or in any similar
capacity with, or otherwise provide service to, a competitor, to the detriment,
of the Company or any Subsidiary, or (ii) violate any of Grantee’s other
noncompetition obligations, or any of Grantee’s nonsolicitation or nondisclosure
obligations, to the Company or any Subsidiary. The noncompetition obligations of
clause (i) of the preceding sentence shall be limited in scope and shall be
effective only to competition with the Company or any Subsidiary in the
businesses of: gathering, processing or transmission of natural gas, resale or
arranging for the purchase or for the resale, brokering, marketing, or trading
of natural gas, electricity or derivatives thereof; energy management and the
provision of energy solutions; gathering, compression, treating, processing,
fractionation, transportation, trading, marketing of natural gas components,
including natural gas liquids; sales and marketing of electric power and natural
gas, domestically and abroad; and any other business in which the Company,
including Subsidiaries, is engaged at the termination of Grantee’s continuous
employment by the Company, including Subsidiaries; and within the following
geographical areas (i) any country in the world where the Company, including
Subsidiaries, has at least US$25 million in capital deployed as of termination
of Grantee’s continuous employment by Company, including Subsidiaries; (ii) the
continent of North America; (iii) the United States of America and Canada;
(iv) the states of (A) Virginia, (B) Georgia, (C) Florida, (D) Texas,
(E) California, (F) Massachusetts, (G) Illinois, (H) Michigan, (I) New York,
(J) Colorado, (K) Oklahoma, (L) Kentucky, (M) Ohio and (N) Louisiana; and
(v) any state or states or province or provinces in which was conducted a
business of the Company, including Subsidiaries, which business constituted a
substantial portion of Grantee’s employment. The Company and Grantee intend the
above restrictions on competition in geographical areas to be entirely severable
and independent, and any invalidity or enforceability of this provision with
respect to any one or more of such restrictions, including geographical areas,
shall not render this provision unenforceable as applied to any one or

 

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more of the other restrictions, including geographical areas. If any part of
this provision is held to be unenforceable because of the duration, scope or
area covered, the Company and Grantee agree to modify such part, or that the
court making such holding shall have the power to modify such part, to reduce
its duration, scope or area, including deletion of specific words and phrases,
i.e., “blue penciling”, and in its modified, reduced or blue pencil form, such
part shall become enforceable and shall be enforced. Nothing in Section 4 shall
be construed to prohibit Grantee being retained during the Restricted Period in
a capacity as an attorney licensed to practice law, or to restrict Grantee
providing advice and counsel in such capacity, in any jurisdiction where such
prohibition or restriction is contrary to law.

Section 5. Forfeiture/Expiration. Any Phantom Stock unit subject to this Award
shall be forfeited upon notice of the termination of Grantee’s continuous
employment with the Company and its Subsidiaries, whether such notice is given
by the Grantee or by the Company, including Subsidiaries, from the Date of
Grant, except to the extent otherwise provided in Section 2, and, if not
previously vested and paid, or deferred, or forfeited, shall expire immediately
before the third anniversary of the Date of Grant. Any Dividend Equivalent
subject to this Award shall expire at the time the unit of Phantom Stock with
respect to which the Dividend Equivalent is in tandem (i) is vested and paid,
or, to the extent permitted by the laws of the applicable jurisdiction,
deferred, (ii) is forfeited, or (iii) expires.

Section 6. Dividend Equivalent Payments. Payment with respect to any Dividend
Equivalent subject to this Award that is in tandem with a Phantom Stock unit
that is vested and paid shall be paid in a single cash lump sum payment as soon
as practicable following the vesting and payment of the Phantom Stock unit, and
in no event later than the end of the third calendar year following the year of
the Date of Grant, except, if the vested Phantom Stock unit is deferred by the
Grantee as provided in Section 7, payment with respect to the tandem Dividend
Equivalent shall likewise be deferred. Payment under this Section 6 shall be
made not later than thirty (30) days after payment hereunder of the related
tandem Phantom Stock units. The Dividend Equivalent payment amount shall equal
the aggregate cash dividends declared and paid with respect to one (1) share of
Common Stock for the period beginning on the Date of Grant and ending on the
date the vested, tandem Phantom Stock unit is paid or deferred and before the
Dividend Equivalent expires. However, should the Grantee receive shares under
this Award without the right to receive a dividend and, because of the timing of
the declaration of such dividend, the Grantee is not otherwise entitled to
payment under the expiring Dividend Equivalent with respect to such dividend,
the Grantee, nevertheless, shall be entitled to such payment. Dividend
Equivalent payments shall be subject to withholding for taxes. Notwithstanding
any other provision hereof, to the extent necessary for this Agreement not to be
construed as a salary deferral arrangement under Canadian law, in no event will
any Dividend Equivalent to which the Grantee may be entitled vest, or will the
right to receive a payment in respect of any Dividend Equivalent arise, after
December 30 of the calendar year which is three years following the end of the
year in which any portion of the services to which the award of such Dividend
Equivalent relates were performed by the Grantee, and in the event this would,
apart from this provision, occur, notwithstanding any other provision hereof,
the applicable Dividend Equivalent will vest and the Grantee will be entitled to
receive payment of such Dividend Equivalent on December 30 (or the first date
prior thereto that is not a Saturday, Sunday or holiday) in the first calendar
year which is three years following the end of the year in which any portion of
the services to which the award of such Dividend Equivalent relates were
performed by the Grantee.

Section 7. Payment of Phantom Stock Units. Payment of Phantom Stock units
subject to this Award shall be made to the Grantee in a single lump sum payment
as soon as practicable following the time such units become vested in accordance
with Section 2 prior to their expiration but in no event later than thirty
(30) days following such vesting and in no event later than the end of the third
calendar year following the year of the Date of Grant, except to the extent
deferred by Grantee in accordance with such procedures as the Committee, or its
delegatee, may prescribe consistent with the requirements of Code Section 409A
or any Canadian law equivalent, as applicable. Any deferral of Phantom Stock
units by the Grantee hereunder shall apply to both the shares of Common Stock
and the related tandem Dividend Equivalents. Payment shall be subject to
withholding for taxes. Payment shall be in the form of one (1) share of Common
Stock for each full vested unit of Phantom Stock and any fractional vested unit
of Phantom Stock shall not be payable unless and until subsequent vesting
results in a

 

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full unit of Phantom Stock becoming vested. Notwithstanding the foregoing, the
number of shares of Common Stock that would otherwise be paid (valued at Fair
Market Value on the date the respective unit of Phantom Stock became vested, or
if later, payable) shall be reduced by the Committee, or its delegatee, in its
sole discretion, to fully satisfy any tax required to be withheld, unless the
Company, or employing Subsidiary, as applicable, and the Grantee agree that such
tax obligations will instead be satisfied by Grantee timely tendering to the
Company, or employing Subsidiary, as applicable, sufficient cash to satisfy such
obligations and the Grantee does timely tender such cash. In the event that
payment, after any such reduction in the number of shares of Common Stock to
satisfy withholding for tax requirements, would be less than ten (10) shares of
Common Stock, then, if so determined by the Committee, or its delegatee, in its
sole discretion, payment, instead of being made in shares of Common Stock, shall
be made in a cash amount equal in value to the shares of Common Stock that would
otherwise be paid, valued at Fair Market Value on the date the respective
Phantom Stock units became vested, or if later, payable.

Notwithstanding any provision of this Agreement to the contrary, if any payment
or other benefit provided herein would be subject to unfavorable tax
consequences under Code Section 409A because the timing of such payment is not
delayed as provided in Code Section 409A for a “specified employee” (within the
meaning of Code Section 409A), then if the Grantee is a “specified employee,”
any such payment that the Grantee would otherwise be entitled to receive during
the first six (6) months following Grantee’s termination of employment from the
Company, including Subsidiaries, shall be accumulated and paid, within thirty
(30) days after the date that is six (6) months following the Grantee’s date of
termination of employment from the Company, including Subsidiaries, or such
earlier date upon which such amount can be paid under Code Section 409A without
being subject to such unfavorable tax consequences such as, for example, upon
the Grantee’s death.

Section 8. No Employment Right. Nothing in this Agreement or in the Plan shall
confer upon the Grantee the right to continued employment by the Company or any
Subsidiary, or affect the right of the Company or any Subsidiary to terminate
the employment or service of the Grantee at any time for any reason.

Section 9. Nonalienation. The Phantom Stock units and Dividend Equivalents
subject to this Award are not assignable or transferable by the Grantee. Upon
any attempt to transfer, assign, pledge, hypothecate, sell or otherwise dispose
of any such Phantom Stock unit or Dividend Equivalent, or of any right or
privilege conferred hereby, or upon the levy of any attachment or similar
process upon such Phantom Stock unit or Dividend Equivalent, or upon such right
or privilege, such Phantom Stock unit or Dividend Equivalent, or right or
privilege, shall immediately become null and void.

Section 10. Determinations. Determinations by the Committee, or its delegatee,
shall be final and conclusive with respect to the interpretation of the Plan and
this Agreement.

Section 11. Governing Law and Severability. The validity and construction of
this Agreement shall be governed by the laws of the state of Delaware applicable
to transactions taking place entirely within that state. The invalidity of any
provision of this Agreement shall not affect any other provision of this
Agreement, which shall remain in full force and effect.

Section 12. Conflicts with Plan, Correction of Errors, and Grantee’s Consent. In
the event that any provision of this Agreement conflicts in any way with a
provision of the Plan, such Plan provision shall be controlling and the
applicable provision of this Agreement shall be without force and effect to the
extent necessary to cause such Plan provision to be controlling. In the event
that, due to administrative error, this Agreement does not accurately reflect a
Phantom Stock Award properly granted to Grantee pursuant to the Plan, the
Company, acting through its Executive Compensation Department, reserves the
right to cancel any erroneous document and, if appropriate, to replace the
cancelled document with a corrected document. It is the intention of the Company
and the Grantee that this Award comply with, or be exempt from, the requirements
of Code Section 409A or any Canadian law equivalent, as applicable. Accordingly,
this Agreement, and any terms contained herein, shall be interpreted as
necessary to comply with, or be exempt from, the requirements of Code

 

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Section 409A, or any Canadian law equivalent, as applicable. Grantee consents to
any amendment of this Agreement as the Company may reasonably make in
furtherance of such intention, and the Company shall promptly provide, or make
available to, Grantee a copy of any such amendment. Further, to the extent that
any term of this Agreement is ambiguous, such term shall be interpreted as
necessary to comply with, or be exempt from, the requirements of Code
Section 409A, or any Canadian law equivalent, as determined by the Company.

Section 13. Grantee Confidentiality Obligations. In accepting this Phantom Stock
Award, Grantee acknowledges that Grantee is obligated under Company policy, and
under federal and state law, to protect and safeguard the confidentiality of
trade secrets and other proprietary and confidential information belonging to
the Company and its affiliates that are acquired by Grantee during Grantee’s
employment with the Company and its affiliates, and that such obligations
continue beyond the termination of such employment. Grantee agrees to notify any
subsequent employer of such obligations and that the Company and its affiliates,
in order to enforce such obligations, may pursue legal recourse not only against
Grantee, but against a subsequent employer of Grantee. Grantee agrees that he
shall not disclose the existence or terms of this Agreement to anyone other than
his spouse, tax advisor(s) and/or attorney(s), provided that he first obtains
the agreement of such persons to be bound by the confidentiality provisions of
this paragraph. Grantee also agrees to immediately give the Company written
notice in accordance with the provisions of this Agreement in the event he is
legally required to disclose any of the confidential information covered by the
provisions of this paragraph.

Section 14. Nonsolicitation. Grantee further agrees that he will not, either
directly or indirectly, solicit, hire or employ, or cause any other person,
company, or entity to solicit, hire or employ, any employee or contractor
retained or employed by the Company or its affiliates during the period of
Grantee’s employment and for a period of seven (7) years following Grantee’s
termination of employment with the Company and its affiliates. The provisions of
this paragraph shall not apply to contact initiated by an employee or contractor
of the Company or its affiliates in response to a general solicitation of
applications for employment. Grantee agrees that this Agreement is subject to
the provisions of this paragraph.

Section 15. Notices. All notices under this Agreement shall be mailed or
delivered by hand to the parties at their respective addresses set forth beneath
their signatures below or at such other address as may be designated in writing
by either party to the other party, or to their permitted transferees if
applicable. Notices shall be effective upon receipt.

Section 16. Payments Subject to Clawback. To the extent that any payment under
this Agreement is subject to clawback under Section 954 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, as it may be amended from time to
time, such amount will be clawed back in appropriate circumstances, as
determined under the terms and conditions prescribed by such Act and the
authority issued thereunder.

Section 17. Arbitration Agreement. The Grantee and Company both agree that any
dispute arising out of or related to this Agreement shall be resolved by binding
arbitration under the employment dispute resolution rules of the American
Arbitration Association and that any proceeding under the provisions of this
Section 17 shall be held in Houston, Texas. The parties both irrevocably WAIVE
ANY AND ALL RIGHTS TO A JURY as to any and all claims and issues in any such
dispute. By this provision, both the Grantee and Company understand and agree
that any and all claims and issues in such dispute shall be decided by such
arbitration proceeding.

Notwithstanding the foregoing, this Award is subject to cancellation by the
Company in its sole discretion unless the Grantee, by not later than
                ,             , has signed a duplicate of this Agreement, in the
space provided below, and returned the signed duplicate to the Executive
Compensation Department—Phantom Stock (WO 1O23), Spectra Energy Corp, P. O. Box
1642, Houston, TX 77251-1642, which, if, and to the extent, permitted by the
Executive Compensation Department, may be accomplished by electronic means.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and
granted in Houston, Texas, to be effective as of the Date of Grant.

 

ATTEST:

   SPECTRA ENERGY CORP

By:                                                                 
                                     

   By:                                                                      
                                     Corporate Secretary            President &
CEO, Spectra Energy Corp

Address for Notices:

5400 Westheimer Court

Mail Drop 1O23

Houston, Texas 77056

Attention: Karen Gowder

Acceptance of Phantom Stock Award

IN WITNESS OF Grantee’s acceptance of this Award and Grantee’s agreement to be
bound by the provisions of this Agreement and the Plan, Grantee has signed this
Agreement this                  day of                 ,     .

 

 

  Grantee’s Signature    

 

  (print name)  

 

  (employee ID)   Address for Notices:  

 

  (address)  

 

  (address)  

 

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