Exhibit 10.10

 

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PERFORMANCE SHARE UNIT PLAN FOR EMPLOYEES

OF ENCANA CORPORATION

Amended and restated with effect from January 1, 2010,

and reflective with amendments made as of July 20, 2010, February 24, 2015,
February 22, 2016 and February 14, 2018

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TABLE OF CONTENTS

 

Section

       Page  

1.

 

PREAMBLE AND DEFINITIONS

     1  

2.

 

CONSTRUCTION AND INTERPRETATION

     10  

3.

 

EFFECTIVE DATE AND EMPLOYMENT RIGHTS

     11  

4.

 

PSU GRANTS AND PERFORMANCE PERIODS

     11  

5.

 

ACCOUNTS, DIVIDEND EQUIVALENTS AND REORGANIZATION

     12  

6.

 

OPTIONAL FUNDING OF PSU AWARDS

     13  

7.

 

ELIGIBLE PSUs AND PERFORMANCE CRITERIA

     14  

8.

 

VESTING AND PAYMENT OF PSU AWARDS

     14  

9.

 

CURRENCY

     20  

10.

 

SHAREHOLDER RIGHTS

     20  

11.

 

ADMINISTRATION

     21  

12.

 

ASSIGNMENT

     23  

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PERFORMANCE SHARE UNIT PLAN FOR EMPLOYEES

OF ENCANA CORPORATION

(Amended and restated with effect from January 1, 2010,

and reflective with amendments made as of July 20, 2010, February 24, 2015,
February 22, 2016 and February 14, 2018)

 

1.

PREAMBLE AND DEFINITIONS

 

  1.1

Title.

The Plan described in this document shall be called the “Performance Share Unit
Plan for Employees of Encana Corporation”.

 

  1.2

Purpose of the Plan.

The purposes of the Plan are:

 

  (a)

to promote an alignment of interests between employees and shareholders of the
Corporation;

 

  (b)

to associate a portion of eligible employees’ compensation with the performance
of the Corporation over the medium to longer term; and

 

  (c)

to attract and retain employees with the knowledge, experience and expertise
required by the Corporation.

 

  1.3

Definitions.

 

  1.3.1

“Achieved Performance Criteria” means the Performance Criteria which have been
satisfied, as, when and to the extent determined by the Committee in respect of
any particular Performance Period, and which shall be published on the
Corporation’s internal employee website or otherwise communicated in writing to
the employees (or, where necessary, to a Participant who has retired, or to the
legal representative of a Participant who is deceased) of the Corporation and
its Affiliates.

 

  1.3.2

“Affiliate” means any corporation, partnership or other entity in which the
Corporation, directly or indirectly, has a majority ownership interest.

 

  1.3.3

“Applicable Law” means any applicable provision of law, domestic or foreign,
including, without limitation, applicable securities legislation, together with
all regulations, rules, policy statements, rulings, notices, orders or other
instruments promulgated thereunder, and Stock Exchange Rules.

 

  1.3.4

“Blackout Period” means a trading blackout period imposed by the Corporation
under the Corporation’s Securities Trading and Insider Reporting Policy (as
amended, supplemented or replaced by the Corporation from time to time).

 

  1.3.5

“Board” means the Board of Directors of the Corporation.

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Performance Share Unit Plan for Employees

of Encana Corporation

(With amendments as of February 14, 2018 )

 

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  1.3.6

“Business Day” means any day other than a Saturday or a Sunday, a statutory
holiday in Alberta or any day on which the principal chartered banks located in
Calgary are not open for business during normal banking hours.

 

  1.3.7

“CIC Cause” following a Change in Control for purposes of this Plan means,
unless otherwise provided in an Grant Agreement, (i) “cause” as defined in any
employment agreement, change in control agreement or similar arrangement with
the Corporation to which the Participant is a party as of the Date Employment
Ceases, or (ii) if there is no such arrangement or if it does not define “cause”
or CIC Cause: (A) conviction of, or plea of guilty or nolo contendere (or its
equivalent) by, the Participant for committing an indictable offence in Canada
or a felony under U.S. federal law or the law of the state in which such action
occurred, (B) willful and deliberate failure on the part of the Participant in
the performance of his or her employment duties in any material respect that
remains uncured thirty (30) days after receipt of written notice from the
Corporation specifying in reasonable detail the alleged failure, (C) dishonesty
in the course of fulfilling the Participant’s employment duties that results in
material harm to the Corporation, or (D) a material violation of the Corporation
Policies. For purposes of this Plan, any determination by the Committee as to
whether CIC Cause exists shall be subject to de novo review.

 

  1.3.8

“Change in Control” shall be deemed to have occurred for purposes of this Plan
if:

 

  (a)

any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, or any persons acting jointly or in
concert with the foregoing (each, a “Person”), is or becomes the beneficial
owner directly or indirectly of 30% or more of either (A) the then-outstanding
shares of common stock of the Corporation (the “Outstanding Corporation Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors (the “Outstanding Corporation Voting Securities”); provided, however,
that, for purposes of this Section 1.3.8(a), the following acquisitions of
shares or other voting securities of the Corporation shall not constitute a
Change in Control: (i) any acquisition directly from the Corporation, (ii) any
acquisition made by the Corporation, (iii) any acquisition by any employee plan
(or related trust) sponsored or maintained by the Corporation or any of its
subsidiaries, or (iv) any acquisition pursuant to a transaction that complies
with Sections 1.3.8(b)(1), 1.3.8(b)(2) and 1.3.8(b)(3);

 

  (b)

consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving the Corporation or any of its
subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Corporation, or the acquisition of assets or securities of another
entity by the Corporation or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1) all
or substantially all of the individuals and entities that

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Performance Share Unit Plan for Employees

of Encana Corporation

(With amendments as of February 14, 2018 )

 

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were the beneficial owners of the Outstanding Corporation Common Stock and the
Outstanding Corporation Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (or,
for a non-corporate entity, equivalent governing body), as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns the
Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding Corporation Common Stock and the Outstanding Corporation Voting
Securities, as the case may be, (2) no Person (excluding any entity resulting
from such Business Combination or any employee plan (or related trust) of the
Corporation or of such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of, respectively, the
then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) of the entity resulting from such Business Combination or
the combined voting power of the then-outstanding voting securities of such
entity, except to the extent that such ownership existed prior to the Business
Combination, and (3) at least a majority of the members of the board of
directors (or, for a non-corporate entity, equivalent governing body) of the
entity resulting from such Business Combination were members of the Incumbent
Board (as defined below) at the time of the execution of the initial agreement
or of the action of the Board providing for such Business Combination;

 

  (c)

individuals who, as of Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to
Effective Date whose election, or nomination for election by the Corporation’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person or entity other than the Board; or

 

  (d)

approval by the shareholders of the Corporation of a complete liquidation or
dissolution of the Corporation.

For the purposes of this Section 1.3.8:

 

  (a)

the term “acting jointly or in concert” shall be interpreted in accordance with
Section 159 of the Securities Act (Alberta), as amended; and

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Performance Share Unit Plan for Employees

of Encana Corporation

(With amendments as of February 14, 2018 )

 

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  (b)

the term “beneficial ownership” shall be interpreted in accordance with Sections
5 and 6 of the Securities Act (Alberta) and “beneficial owner” shall have a
corresponding meaning, except that for purposes of this Plan, options and
convertible securities granted by the Corporation to employees, officers or
directors shall not be included in determining the percentage of beneficial
ownership of any Person.

 

   

Notwithstanding the foregoing, with respect to PSUs granted prior to
February 14, 2018, any event or transaction that would have constituted a
“Change in Control” under the definition of such term in effect immediately
prior to the February 14, 2018 amendment of the Plan shall also be deemed to
constitute a “Change in Control” for purposes of this Plan, regardless of
whether it would constitute a “Change in Control” within the meaning of the
definition set forth in this Section 1.3.8.

 

  1.3.9

“Change in Control Value” has the meaning set out in Section 8.5.1(b).

 

  1.3.10

“Code” means the United States Internal Revenue Code, as amended from time to
time.

 

  1.3.11

“Committee” means the Human Resources and Compensation Committee of the Board or
such other committee of the Board, as constituted from time to time, which may
be appointed by the Board to, among other things, interpret, administer and
implement the Plan, including any corresponding Grant Agreement. Any reference
in this Plan or corresponding Grant Agreement to action by the Committee means
action by or under the authority of: (i) the Committee; or (ii) if no such
Committee has been designated, or such authority has not been delegated by the
Board, the Board.

 

  1.3.12

“Committee Meeting Date” means the date of the meeting of the Committee held to
review matters related to the PSUs, including the Committee’s determination of
whether and, where applicable, the degree to which the Performance Criteria for
a particular Performance Period have been satisfied and constitute Achieved
Performance Criteria, which meeting shall occur at least once annually and by no
later than June 1 of the year immediately following the applicable Performance
Period.

 

  1.3.13

“Corporation” means Encana Corporation and any successor corporation whether by
amalgamation, merger or otherwise.

 

  1.3.14

“Corporation Policies” means, at a particular time, the applicable policies,
plans and practices of the Corporation or an Affiliate, as applicable, which
employs the Participant, as published on the Corporation’s or an Affiliate’s, as
applicable, internal website or as otherwise communicated to employees of the
Corporation or an Affiliate, as applicable from time to time.

 

  1.3.15

“Date Employment Ceases” means:

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Performance Share Unit Plan for Employees

of Encana Corporation

(With amendments as of February 14, 2018 )

 

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  (i)

in the case of voluntary Termination of Employment initiated by the Participant,
the last date the Participant is, for the purposes of receiving his regular
salary, on the payroll of the Corporation or an Affiliate;

 

  (ii)

in the case of involuntary Termination of Employment by the Corporation or an
Affiliate for cause (as determined by the Corporation or the Affiliate, as
applicable), the date written notification of dismissal from employment is
delivered to the Participant;

 

  (iii)

in the case of involuntary Termination of Employment by the Corporation or an
Affiliate other than for cause (as determined by the Corporation or the
Affiliate, as applicable), the date identified in the written notification of
Termination of Employment delivered to the Participant as the “Termination Date”
or “Departure Date” and, where both dates are so referred to, the earlier
thereof, and, where such date is not identified in the written notification, the
date written notification of dismissal from employment is delivered to the
Participant;

 

  (iv)

in the case where the Participant is employed by an Affiliate and for any reason
including, without limitation, by reason of the sale, disposition or other
divestiture thereof, in whole or in part, such employer ceases to be an
Affiliate of the Corporation, the effective date (in the case of a sale,
disposition or other divestiture, the closing date of such transaction or series
of transactions, as determined by the Corporation) upon which the Participant’s
employer ceases to be an Affiliate;

 

   

but, for greater certainty, shall not include the date the Participant ceases to
be an employee of the Corporation or an Affiliate upon the Participant’s death
or Retirement, or the date the Participant commences a Period of Absence or an
Unpaid Leave of Absence in accordance with the provisions hereof.

 

  1.3.16

“Date of Retirement” means the last day the Participant is, for the purposes of
receiving his regular salary, on the payroll of the Corporation or an Affiliate
immediately prior to the date the Participant commences Retirement.

 

  1.3.17

“Disability” means the Participant’s physical or mental incapacity that prevents
the Participant from substantially fulfilling his duties and responsibilities on
behalf of the Corporation or an Affiliate, and in respect of which the
Participant commences receiving disability benefits under the Corporation’s or
an Affiliate’s short-term or long-term disability plan, as applicable, in
respect of such incapacity.

 

  1.3.18

“Dividend Equivalent PSU” has the meaning set out in Section 5.2.

 

  1.3.19

“Eligible PSUs” means, in respect of a grant of PSUs under this Plan,

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Performance Share Unit Plan for Employees

of Encana Corporation

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those PSUs that are determined by the Committee as being eligible to vest on the
Vesting Date pursuant to Sections 7 and 8, based upon the Corporation’s
achievement of the Performance Criteria in respect of a particular Performance
Period, as set out in the applicable, Grant Agreement.

 

  1.3.20

“Eligible PSU Amount” means, where applicable, the notional value of the
Eligible PSUs (including any related Dividend Equivalent PSUs), as determined by
the Committee, credited by the Corporation to the Participant’s PSU Account in
respect of a particular Performance Period in accordance with Section 7, which
amount shall be used to determine the value of any Vested PSUs relating to such
Performance Period which may vest and become payable to the Participant on the
Vesting Date in accordance with Section 8.

 

  1.3.21

“Family Leave” means, a period during which, pursuant to the Corporation
Policies or Applicable Law, the Participant is considered to be on family leave,
and does not provide employment services to the Corporation or an Affiliate.

 

  1.3.22

“Good Reason” means (i) “Good Reason” as defined in any employment agreement,
change in control agreement or similar arrangement with the Corporation or an
Affiliate to which the Participant is a party as of the Date Employment Ceases,
or (ii) if there is no such arrangement or if it does not define Good Reason,
and the Participant holds the title of “Vice-President” or above as of
immediately prior to the Change in Control, the occurrence of any of the
following on or after the Change in Control, unless the Participant shall have
given express written consent thereto: (A) a material diminution in the scope of
the Participant’s duties or responsibilities from those in effect immediately
prior to the Change in Control, provided that any change in the Participant’s
duties or responsibilities resulting solely from the fact that the Corporation
is no longer publicly traded, or no longer the ultimate parent company of its
affiliated group, due to the Change in Control shall not be deemed to be a
material diminution in the scope of the Participant’s duties or
responsibilities; (B) a reduction in the Participant’s annual base salary as in
effect immediately prior to the Change in Control; (C) a material reduction in
the Participant’s short-term or long-term incentive compensation opportunity
(measured based on grant date fair value of any equity-based awards) in effect
immediately prior to the Change in Control; (D) the failure by the Corporation
or an Affiliate to pay the Participant (1) any portion of the Participant’s then
current compensation, except pursuant to an across-the-board compensation
deferral similarly affecting other such Vice-Presidents and required by
applicable law, or (2) any installment of deferred compensation at the time such
installment is due under any deferred compensation program of the Corporation or
an Affiliate; or (E) a requirement that the Participant be based more than 50
miles from where the Participant is based immediately prior to the Change in
Control, except for: (1) required travel on the Corporation’s or Affiliate’s
business to an extent substantially consistent with the Participant’s business
travel obligations in the ordinary course of business immediately prior to the

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Performance Share Unit Plan for Employees

of Encana Corporation

(With amendments as of February 14, 2018 )

 

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Change in Control; or (2) if the Participant has been relocated or repatriated
by the Corporation or an Affiliate prior to the Change in Control, such
relocation as may be required by applicable law or performed in accordance with
an agreement (whether written or unwritten) entered into between the Corporation
(or an Affiliate) and the Participant prior to the Change in Control; provided,
that, a Participant may only resign for Good Reason under this clause (ii) if
the Participant has provided written notice to the Corporation and, if the
Participant is employed by an Affiliate, such Affiliate, of the event or
circumstance alleged to constitute Good Reason within ninety (90) days following
the initial existence thereof, the Corporation or Affiliate, as applicable, has
failed to cure such event or circumstance within thirty (30) days after receipt
of such notice, and the Participant resigns within thirty (30) days after the
expiration of such cure period. If the Participant is not covered by clause
(i) or (ii) above, then Good Reason shall not be applicable to such Participant.

 

  1.3.23

“Grant Agreement” means an agreement between the Corporation and the Participant
under which a PSU is granted, as contemplated by Section 4.1, together with such
schedules, amendments, deletions or changes thereto as are permitted under the
Plan, subject to the terms and conditions of such Grant Agreement and the Plan.

 

  1.3.24

“Grant Date” means the effective date of a grant of PSUs to a Participant by the
Corporation or an Affiliate, as applicable, as stated in the Participant’s
applicable Grant Agreement. Where the Corporation determines to grant any PSUs
on a date which is within a Blackout Period or where, for any reason: (i) the
grant of PSUs falls on a day that is within a Blackout Period; or (ii) the
Market Value of the grant of PSUs would be calculated using a Trading Day that
is within a Blackout Period, then the Grant Date of any such PSUs shall
automatically occur and be effective on the sixth Trading Day immediately
following the end of such Blackout Period to permit the Market Value of such
PSUs to be determined based on Trading Days which occur immediately following
the end of any such Blackout Period.

 

  1.3.25

“Market Value” means, with respect to any particular date, the volume-weighted
average (rounded to two decimal places) of the trading price per Share on the
applicable Stock Exchange during the immediately preceding five (5) Trading Day
period prior to that particular date.

 

  1.3.26

“Maximum Performance Criteria” means, in respect of each PSU grant under this
Plan, the maximum Performance Criteria applicable to a Performance Period, as
determined by the Committee, and as set forth in the applicable Grant Agreement.

 

  1.3.27

“Median Performance Criteria” means, in respect of each PSU grant under this
Plan, the median Performance Criteria applicable to a Performance Period, as
determined by the Committee, and as set forth in the applicable Grant Agreement.

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Performance Share Unit Plan for Employees

of Encana Corporation

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  1.3.28

“Military Leave” means a period during which, pursuant to the Corporation
Policies or Applicable Law, the Participant is considered to be on a military
leave, and does not provide employment services to the Corporation or an
Affiliate.

 

  1.3.29

“Minimum Performance Criteria” means, in respect of each PSU grant under this
Plan, the minimum Performance Criteria applicable to a Performance Period, as
determined by the Committee, and as set forth in the applicable Grant Agreement.

 

  1.3.30

“Paid Leave of Absence” means in respect of a Participant, a period of time
during which, pursuant to the Corporation Policies or Applicable Law, the
Participant is considered to be on an approved leave of absence and continues to
receive his salary from, but does not provide employment services to, the
Corporation or an Affiliate.

 

  1.3.31

“Participant” means such employee of the Corporation or an Affiliate as the
Committee may designate from time to time as eligible to participate in the
Plan.

 

  1.3.32

“Performance Criteria” means, in respect of a PSU, the performance criteria as
determined by the Committee as being applicable to a grant of a PSU under the
Plan, and as set forth in the applicable Grant Agreement.

 

  1.3.33

“Performance Period” means, in respect of a grant of a PSU, the particular
designated period of time in respect of which the Performance Criteria is
assessed and may be determined by the Committee to be satisfied in order for
such PSU to become an Eligible PSU pursuant to Section 7 and a Vested PSU
pursuant to Section 8, and as set forth in the applicable Grant Agreement.

 

  1.3.34

“Period of Absence” means, with respect to a Participant, a period of time
throughout which the Participant is on a Family Leave, Military Leave, Paid
Leave of Absence, an unpaid leave of absence of 31 days or less approved by the
Corporation or Affiliate, as applicable, or is experiencing a Disability, but
does not include a period of time throughout which the Participant is on an
Unpaid Leave of Absence.

 

  1.3.35

“Plan” means this amended and restated Performance Share Unit Plan for Employees
of Encana Corporation, including any schedules or appendices hereto, as amended
from time to time.

 

  1.3.36

“PSU” means a performance share unit granted to a Participant under the Plan
that is represented by a bookkeeping entry on the books of the Corporation or an
Affiliate, the value of which shall be determined in accordance with the Plan
and the applicable Grant Agreement.

 

  1.3.37

“PSU Account” has the meaning set out in Section 5.1.

 

  1.3.38

“Retirement” means the early or normal retirement of the Participant from

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Performance Share Unit Plan for Employees

of Encana Corporation

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employment with the Corporation or an Affiliate, as applicable, in accordance
with the Corporation Policies.

 

  1.3.39

“Section 409A Amount” means any cash or Shares provided or to be provided
pursuant to the Plan or a Grant Agreement that: (a) are provided or are to be
provided to a U.S. Participant; and (b) constitute a deferral of compensation
subject to section 409A of the Code.

 

  1.3.40

“Share” means a common share in the capital of the Corporation and such other
share as may be substituted for it as a result of amendments to the articles of
the Corporation, arrangement, re-organization or otherwise, including any rights
that form a part of the common share or substituted share.

 

  1.3.41

“Specified Period” means (i) for a Participant who is an executive officer of
the Corporation as of immediately prior to the Change in Control, 24 months,
(ii) for a Participant who is not an executive officer of the Corporation and
holds the title of “Vice-President” or above as of immediately prior to the
Change in Control, 18 months, and (iii) for any Participant not covered by
clauses (i) and (ii), 12 months, in each case, inclusive of the date on which
the Change in Control occurs, or, in each case, such longer period specified in
the Grant Agreement or as provided for in any employment agreement, change in
control agreement or similar arrangement with the Corporation or an Affiliate to
which the Participant is a party as of the Date Employment Ceases.

 

  1.3.42

“Stock Exchange” means, in respect of a PSU, the Toronto Stock Exchange or the
New York Stock Exchange as specified in the Participant’s respective Grant
Agreement relating to such PSU or, if the Shares are not listed on the Toronto
Stock Exchange or the New York Stock Exchange, as applicable, such other stock
exchange on which the Shares are listed, or if the Shares are not listed on any
stock exchange, then on the over-the-counter market.

 

  1.3.43

“Stock Exchange Rules” means, in respect of a PSU, the applicable rules of the
particular Stock Exchange pertaining to such PSU, as specified in the
Participant’s Grant Agreement, upon which the Shares are listed.

 

  1.3.44

“Termination of Employment” means an event by which the Participant ceases to be
an employee of the Corporation or an Affiliate, as applicable, but, for greater
certainty, shall not include an event whereby the Participant ceases to be an
employee of the Corporation or an Affiliate, as applicable, upon the
Participant’s death or Retirement or where the Participant commences a Period of
Absence or an Unpaid Leave of Absence in accordance with the provisions hereof.

 

  1.3.45

“Trading Day” means any date on which the applicable Stock Exchange is open for
the trading of Shares and on which Shares are actually traded.

 

  1.3.46

“Trust Fund” means one or more trust funds, as specified by the

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Performance Share Unit Plan for Employees

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Committee, as may be established by the Corporation or an Affiliate, as
applicable, for the purpose of funding awards of PSUs granted to Participants
pursuant to the Plan.

 

  1.3.47

“Trustee” means such person or persons who is or are independent from and not
affiliated with the Corporation or an Affiliate as may from time to time be
appointed by the Corporation as trustee of the Trust Fund(s).

 

  1.3.48

“Unpaid Leave of Absence” means in respect of a Participant, a period of time
during which, pursuant to the Corporation Policies or Applicable Law, the
Participant is considered by the Corporation or an Affiliate, as applicable, to
be on an approved leave of absence and does not continue to receive his salary
from, or provide employment services to, the Corporation or an Affiliate, as
applicable, which, for the purposes of the Plan, shall be deemed to commence on
the 32nd day following the day on which the Participant commences such approved,
unpaid leave, as communicated in writing to the Participant by the Corporation
or an Affiliate, as applicable, in accordance with the Corporation Policies or
Applicable Law.

 

  1.3.49

“U.S. Participant” means a Participant who is a citizen or permanent resident of
the United States for purposes of the Code or a Participant for whom
compensation subject to deferral under this Plan would otherwise be subject to
United States federal income taxation under the Code.

 

  1.3.50

“Vested PSUs” has the meaning set out in Section 8.1.

 

  1.3.51

“Vesting Date” means, in respect of a grant of PSUs, the date specified in the
Participant’s applicable Grant Agreement upon which the Participant’s Eligible
PSUs shall vest and become payable in accordance with Section 8, subject to the
terms and conditions of the Plan and the applicable Grant Agreement.

 

2.

CONSTRUCTION AND INTERPRETATION

 

  2.1

Gender, Singular, Plural. In the Plan, references to the masculine include the
feminine; and references to the singular shall include the plural and vice
versa, as the context shall require.

 

  2.2

Governing Law. The Plan shall be governed and interpreted in accordance with the
laws of the Province of Alberta and any actions, proceedings or claims
pertaining in any manner or respect to the Plan, including without limitation,
an applicable Grant Agreement or a PSU grant in respect thereof, shall be
commenced in the courts of the Province of Alberta.

 

  2.3

Severability. If any provision or part of the Plan is determined to be void or
unenforceable in whole or in part, such determination shall not affect the
validity or enforcement of any other provision or part thereof.

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Performance Share Unit Plan for Employees

of Encana Corporation

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  2.4

Headings, Sections. Headings wherever used herein are for reference purposes
only and do not limit or extend the meaning of the provisions herein contained.
A reference to a section or schedule shall, except where expressly stated
otherwise, mean a section or schedule of the Plan, as applicable.

 

3.

EFFECTIVE DATE AND EMPLOYMENT RIGHTS

 

  3.1

Effective Date. The Corporation is amending and restating the Plan effective
January 1, 2010.

 

  3.2

No Employment Rights. Nothing contained in the Plan shall be deemed to give any
person the right to be retained as an employee or an officer of the Corporation
or of an Affiliate. For greater certainty, a period of notice, if any, (whether
pursuant to statute or common law) or payment in lieu thereof, arising upon or
attributed to a Termination of Employment, whether wrongful or otherwise, shall
not be considered as extending the period of employment or the active service of
a Participant with the Corporation or an Affiliate beyond the Date Employment
Ceases.

 

4.

PSU GRANTS AND PERFORMANCE PERIODS

 

  4.1

Annual Grant of PSUs. Each Participant may receive in respect of a calendar
year, a grant of PSUs in such number and subject to such Performance Criteria,
Performance Period(s) and other terms and conditions as the Committee may
specify. Each PSU grant to a Participant shall be governed by and subject to the
terms and conditions of this Plan and the applicable Grant Agreement.

 

  4.2

Grant Agreement. Each PSU grant and each Participant’s participation in the Plan
shall be evidenced by a Grant Agreement between the Corporation and the
Participant in the form approved by the Committee. The Grant Agreement shall
specify, at the time PSUs are granted to the Participant, the applicable
Performance Criteria, the basis upon which such PSUs will become Eligible PSUs
and valued, whether such PSUs (and Dividend Equivalent PSUs relating thereto)
are, upon becoming Vested PSUs pursuant to Section 8, to be payable to the
Participant on the Vesting Date in Canadian currency or United States currency,
and the applicable Stock Exchange to be used to determine the Market Value of
such PSUs, any other Share price or other methodology used to determine the
value of such PSUs, and the applicable Vesting Date.

 

  4.3

PSUs. Subject to the terms and conditions of the Plan, and the applicable Grant
Agreement, each PSU will give a Participant the right to receive a payment in
cash or in Shares, as determined by the Committee, in an amount and on such date
or dates, including the Vesting Date, as may be determined in accordance with
the terms of the Plan and the applicable Grant Agreement. For greater certainty,
a Participant shall have no right to receive a cash payment or Shares with
respect to any PSUs that do not become both Eligible PSUs pursuant to Section 7
and Vested PSUs pursuant to Section 8, as applicable. Further, unless otherwise
expressly authorized by this Plan (including, without limitation, Section 8) or
the applicable Grant Agreement, a Participant shall have no right to receive

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a cash payment or Shares if the Participant is not actively employed by the
Corporation or an Affiliate, as applicable, on the Vesting Date.

 

  4.4

Performance Period. The Committee shall specify the Performance Period or
Performance Periods applicable to each PSU grant under Section 4.1, the first
day of which, unless otherwise provided in a Grant Agreement, shall commence
with the calendar year in which the Grant Date occurs.

 

  4.5

Other Terms and Conditions. Subject to the terms of the Plan, the Committee or
the Board may determine other terms or conditions of, or take actions relating
to, any PSUs, or any grant thereof, including:

 

  (a)

any additional conditions with respect to the vesting of PSUs, in whole or in
part, or the payment of cash or provision of Shares under the Plan;

 

  (b)

restrictions on the resale of Shares, including escrow arrangements;

 

  (c)

exercising such discretion as may be set out in the Plan or a particular Grant
Agreement; and

 

  (d)

any other terms and conditions the Committee may, in its discretion, determine,

 

   

which other terms or conditions shall be set out in the Grant Agreement.

 

   

Except as otherwise provided in Section 11.8, the Committee may, in its
discretion, after the Grant Date of a PSU, waive any term or condition in
respect of such PSU or determine that it has been satisfied.

 

  4.6

Payment Date. For greater certainty, and notwithstanding any other provision of
the Plan or an applicable Grant Agreement, no term or condition imposed under
this Plan or a Grant Agreement may have the effect of causing payment of the
value of a PSU to a Participant, or his legal representative, to occur after
December 31 of the third calendar year following the calendar year in which the
Grant Date occurs.

 

  4.7

No Certificates. No share or other certificates shall be issued with respect to
PSUs.

 

5.

ACCOUNTS, DIVIDEND EQUIVALENTS AND REORGANIZATION

 

  5.1

PSU Account. An account, called a “PSU Account”, shall be maintained by the
Corporation for each Participant and will be credited with such notional grants
of PSUs as may be received by a Participant from time to time pursuant to
Sections 4.1 and 5.2 and, where applicable, with the Eligible PSU Amount
relating to a particular Performance Period as may be determined pursuant to
Section 7. For clarity, unless otherwise expressly authorized by this Plan
(including, without limitation, Section 8) or the applicable Grant Agreement,
the Participant shall have no entitlement or right to any PSUs granted, credited
to or recorded in the Participant’s PSU Account, or to any Eligible PSU Amount
credited to or

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recorded in such PSU Account, whether expressed in PSUs or dollar value form,
prior to the Vesting Date if the Participant is not actively employed by the
Corporation or an Affiliate, as applicable, on the Vesting Date.

 

  5.2

Dividend Equivalent PSUs. In the event cash dividends are paid by the
Corporation on the Shares, additional PSUs shall be credited to the
Participant’s PSU Account in accordance with this Section 5.2 (“Dividend
Equivalent PSUs”). The number of such Dividend Equivalent PSUs (including
fractional PSUs) and the date upon which such Dividend Equivalent PSUs are
credited to the Participant’s PSU Account shall be determined by the Corporation
in accordance with the applicable Grant Agreement. Except where provided
otherwise in a Grant Agreement, Dividend Equivalent PSUs shall vest and be paid
to the Participant at the same time as the Eligible PSUs to which they relate.

 

  5.3

Adjustments. In the event of any stock dividend, stock split, combination or
exchange of shares, capital reorganization, consolidation, spin-off or other
distribution (other than normal cash dividends) of Corporation assets to
shareholders, or any other similar changes affecting the Shares, proportionate
adjustments to reflect such change or changes may be made with respect to the
number of PSUs outstanding under the Plan, or securities into which the Shares
are changed or are convertible or exchangeable may be substituted for Shares
under this Plan, on a basis proportionate to the number of PSUs in the
Participant’s PSU Account on some other appropriate basis, all as determined by
the Board in its discretion.

 

6.

OPTIONAL FUNDING OF PSU AWARDS

 

  6.1

Contributions to Trust Fund. Except as otherwise provided in Section 11.8, the
Corporation may, in its sole discretion, from time to time, on its own behalf
and on behalf of such of its Affiliates as employ Participants, or any Affiliate
may, make contributions to a Trust Fund in such amounts and at such times as may
be specified by the Committee or the Board for the purpose of funding, in whole
or in part, awards of PSUs which become payable to Participants pursuant to the
Plan. For clarity, this Section 6 does not obligate the Corporation or any
Affiliate to create a Trust Fund, nor to make contributions to a Trust Fund in
any amounts or at all nor does it require the funding in whole or in part of any
award of PSUs granted under this Plan.

 

  6.2

Share Purchases. Where applicable, any purchases of Shares by the Trustee or
otherwise pursuant to the Plan shall be made on the open market by a broker
designated by the Trustee who is independent of the Corporation in accordance
with Stock Exchange Rules and who is a member of the Stock Exchange. Subject to
the foregoing part of this Section 6.2, any such designation may be changed from
time to time. For clarity, this Section 6 does not obligate the Corporation or
any Affiliate to purchase shares for the purposes of funding or settling, in
whole or in part, awards of PSUs which may become payable to Participants
pursuant to the Plan.

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7.

ELIGIBLE PSUs AND PERFORMANCE CRITERIA

 

  7.1

Eligible PSUs. PSUs granted to a Participant under Section 4.1 (and Dividend
Equivalent PSUs granted to the Participant in respect of such PSUs) shall become
“Eligible PSUs” in accordance with Section 7.2 and subject to the terms and
conditions of the Plan and applicable Grant Agreement. PSUs granted to a
Participant which do not become Eligible PSUs in accordance with this Section 7
or do not become Vested PSUs pursuant to Section 8, as applicable, shall be
forfeited by the Participant or, where applicable, the Participant’s legal
representative, and the Participant and, where applicable, the Participant’s
legal representative, shall have no further right, title or interest in such
PSUs. In such event, the Participant hereby waives any and all claims and/or
rights to compensation or damages in consequence of the Termination of
Employment (whether lawfully or unlawfully) or otherwise for any reason
whatsoever insofar as these rights arise or may arise from the Participant
ceasing to have rights to receive any cash payment or Shares in respect of PSUs
granted under the Plan or any applicable Grant Agreement pursuant to this
Section 7 or Section 8.

 

  7.2

Eligibility Based on Achievement of Performance Criteria. PSUs granted to a
Participant may only become Eligible PSUs upon satisfaction of the Performance
Criteria referred to in Section 7.3, as determined by the Committee, in its
discretion, and pursuant to the terms and conditions set forth in the Plan and
the applicable Grant Agreement.

 

  7.3

Determination of Performance Criteria. With respect to each grant of PSUs
pursuant to Section 4.1, the Committee shall cause to be determined at the
Committee Meeting Date applicable to a particular Performance Period, the
Achieved Performance Criteria in respect of that Performance Period, as set out
in the applicable Grant Agreement, for purposes of determining whether, and the
extent to which (as applicable), such PSUs have become Eligible PSUs.

 

  7.4

Eligible PSU Amount. With respect to the Eligible PSUs relating to a particular
Performance Period, the Committee shall also cause to be determined at the
applicable Committee Meeting Date, the Eligible PSU Amount relating to such
Eligible PSUs, which amount shall be used to determine the value relating to
such Eligible PSUs on the Vesting Date, subject to and in accordance with the
terms and conditions of the Plan and the applicable Grant Agreement. The
Committee may, in its discretion, determine whether to adjust the Eligible PSU
Amount, and where such an adjustment is to be made, the adjustment mechanism in
respect thereof.

 

8.

VESTING AND PAYMENT OF PSU AWARDS

 

  8.1

Vesting of Eligible PSUs. Subject to Sections 8.3, 8.4 and 8.5, Eligible PSUs
relating to a grant of PSUs shall become Vested PSUs on the Vesting Date set
forth in the applicable Grant Agreement. Except where the context requires
otherwise, each Eligible PSU which vests pursuant to Section 8 shall be referred
to for the purposes of the Plan and the applicable Grant Agreement as a “Vested
PSU”. Eligible PSUs which do not become Vested PSUs in accordance with this
Section 8 shall be forfeited by the Participant and the Participant will have no

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further right, title or interest in such PSUs. In such event, the Participant
hereby waives any and all claims and/or rights to compensation or damages in
consequence of the Participant’s Termination of Employment (whether lawfully or
unlawfully, wrongful or otherwise) or otherwise for any reason insofar as these
rights arise or may arise from the Participant ceasing to have rights to receive
any cash payment or Shares in respect of PSUs granted under the Plan or any
applicable Grant Agreement pursuant to this Section 8.

 

  8.2

Payment in Cash or Shares. Subject to Sections 8.3, 8.4 and 8.5, each
Participant shall be entitled to receive in cash or in Shares (or a combination
thereof), as determined by the Committee, a payment in respect of the Vested
PSUs relating to a particular Performance Period, as determined pursuant to
Section 8.1, equal to the Participant’s Eligible PSU Amount in respect of such
Performance Period (as may be adjusted pursuant to Section 7.4). Except as
otherwise provided in Sections 8.3, 8.4, 8.5 and 11.8 and/or the applicable
Grant Agreement(s), the cash or Shares in the amount determined pursuant to this
Section 8.2 shall be paid or distributed to the Participant or their legal
representative, as applicable, as soon as practicable following the Vesting Date
set forth in the applicable Grant Agreement(s) and, in any event, prior to
December 31 of the calendar year in which the applicable Vesting Date occurs,
provided the Participant remains actively employed with the Corporation or an
Affiliate, as applicable, on such date. Notwithstanding the foregoing or any
other provision of the Plan, in respect of Vested PSUs, the Committee shall not
settle in Shares any Vested PSUs for PSUs originally granted to the Participant
after May 2, 2017 unless all approvals of such PSUs and/or the issuance of
Shares in settlement of such PSUs, by shareholders or otherwise, as are required
under Applicable Laws, are received prior to the applicable Vesting Date.

 

  8.3

Death, Retirement, Period of Absence or Unpaid Leave of Absence.

 

  8.3.1

Death. Unless otherwise determined by the Committee, in the event the
Participant ceases to be an employee of the Corporation or an Affiliate, as
applicable, by reason of the Participant’s death, the following shall apply:

 

  (a)

Where the Participant’s date of death occurs on a date that is prior to the date
the Participant attains the age of 60 years, then:

 

  (i)

All Vested PSUs credited to the Participant’s PSU Account as of the
Participant’s date of death, if any, if not already paid or distributed, shall
be paid or distributed to the Participant’s legal representative in accordance
with Section 8.2; and

 

  (ii)

Unless otherwise determined by the Committee, in the event of the Participant’s
death prior to the Vesting Date relating to a grant of PSUs, PSUs granted to the
Participant prior the Participant’s date of death which become Eligible PSUs
pursuant to Section 7.2 shall vest and become payable to the Participant’s legal
representative on the applicable Vesting Date in accordance with Section 8.2 in
proportion to the number of calendar months (rounded up to the nearest whole
month) following the applicable Grant Date before the date of death.

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  (b)

Where the Participant’s date of death occurs on a date following the date that
the Participant attains the age of 60 years, then:

 

  (i)

All Vested PSUs credited to the Participant’s PSU Account as of the
Participant’s date of death, if any, if not already paid or distributed, shall
be paid or distributed to the Participant’s legal representative in accordance
with Section 8.2;

 

  (ii)

Unless otherwise determined by the Committee, PSUs granted to the Participant
prior to the Participant’s date of death which become Eligible PSUs pursuant to
Section 7.2 shall vest and become payable to the Participant’s legal
representative on the applicable Vesting Date in accordance with Section 8.2.

 

  (c)

For clarity, no additional PSUs (whether pursuant to Section 4.1 or in the form
of Dividend Equivalent PSUs) shall be granted to the Participant following the
Participant’s date of death.

 

  8.3.2

Retirement. Unless otherwise determined by the Committee, in the event the
Participant ceases to be an employee of the Corporation or an Affiliate by
reason of the Participant’s Retirement, the following shall apply:

 

  (a)

Where the Participant’s Date of Retirement occurs on a date that is prior to the
date the Participant attains the age of 60 years, then:

 

  (i)

All Vested PSUs credited to the Participant’s PSU Account as of the
Participant’s Date of Retirement, if any, if not already paid or distributed,
shall be paid or distributed to the Participant in accordance with Section 8.2;
and

 

  (ii)

Unless otherwise determined by the Committee, in the event of the Participant’s
Retirement prior to the Vesting Date relating to a grant of PSUs under
Section 4.1, PSUs granted to the Participant prior the Participant’s Date of
Retirement which become Eligible PSUs pursuant to Section 7.2 shall vest and
become payable to the Participant on the applicable Vesting Date in accordance
with Section 8.2 in proportion to the number of calendar months (rounded up to
the nearest whole month) following the applicable Grant Date before the Date of
Retirement.

 

  (b)

Where the Participant’s Date of Retirement occurs on a date that is on or after
the date the Participant attains the age of 60 years, then:

 

  (i)

All Vested PSUs credited to the Participant’s PSU Account as of the
Participant’s Date of Retirement, if any, if not already paid or distributed,
shall be paid or distributed to the Participant in accordance with Section 8.2;

 

  (ii)

Unless otherwise determined by the Committee, PSUs granted to the Participant
prior to the Participant’s Date of Retirement which

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become Eligible PSUs pursuant to Section 7.2 shall vest and become payable to
the Participant on the applicable Vesting Date in accordance with Section 8.2.

 

  (c)

For clarity, no additional PSUs (whether pursuant to Section 4.1 or in the form
of Dividend Equivalent PSUs) shall be granted to the Participant following his
Date of Retirement.

 

  8.3.3

Period of Absence. Unless otherwise determined by the Committee, in the event of
a Participant’s Period of Absence, PSUs credited to the Participant’s PSU
Account immediately prior to such Period of Absence (and any related Dividend
Equivalent PSUs) shall continue to be and become Eligible PSUs in accordance
with the provisions of Section 7.2 and such Eligible PSUs (if any) shall
continue to become Vested PSUs in accordance with Section 8.1 and the
Participant shall be entitled to receive a payment relating to such Vested PSUs
determined in accordance with Section 8.2 in respect of each Performance Period
that ends during the period of such Period of Absence and thereafter, unless
there occurs a Termination of Employment during a Performance Period, in which
case the provisions of Section 8.4 shall apply, or unless the Participant’s
death occurs during a Performance Period, in which case the provisions of
Section 8.3.1 shall apply, or unless there occurs a Retirement of the
Participant during a Performance Period, in which case the provisions of
Section 8.3.2 apply.

 

  8.3.4

Unpaid Leave of Absence. Unless otherwise determined by the Committee, in the
event of a Participant’s Unpaid Leave of Absence, PSUs shall not become Eligible
PSUs nor shall any PSUs become Vested PSUs during the Participant’s Unpaid Leave
of Absence and the provisions of this Section 8.3.4 shall be applicable. The
Participant shall only become entitled to have his PSUs become Eligible PSUs or,
as applicable, his Eligible PSUs to become Vested PSUs on the date when the
Participant’s Unpaid Leave of Absence ends and the Participant returns to active
employment with the Corporation or an Affiliate. If the Participant does not
return to active employment with the Corporation or an Affiliate from the Unpaid
Leave of Absence, all unvested PSUs regardless of whether such PSUs are or are
not Eligible PSUs shall not vest and shall be forfeited and cancelled and the
Participant waives any and all right to compensation or damages in consequence
of the Participant ceasing to have rights or be entitled to receive any cash or
Shares under the Plan pursuant to this Section 8.3.4. Notwithstanding anything
contained herein to the contrary, in no event shall this Section 8.3.4 cause a
Section 409A Amount to be paid in a calendar year later than the calendar year
such Section 409A Amount would have been paid had the Participant not been on an
Unpaid Leave of Absence. For greater certainty, and notwithstanding any other
provision in the Plan or a Grant Agreement, in no event shall this Section 8.3.4
cause a Section 409A Amount to be paid in a calendar year later than the
calendar year such Section 409A Amount would have been paid had the Participant
not been on an Unpaid Leave of Absence and instead such Section 409A Amount
shall either be forfeited or paid on or before December 31 of the

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calendar year in which such amount would have been paid had the Participant not
been on an Unpaid Leave of Absence, as determined by the Committee.

 

  8.4

Termination of Employment. Unless otherwise determined by the Committee, a
Participant shall not be entitled to any further grant or vesting of PSUs nor
shall any PSUs become Eligible PSUs and the Participant shall not be entitled to
any cash, Shares or other payment (including without limitation any Eligible PSU
Amount) in respect of any unvested PSUs following a Termination of Employment.
Except as otherwise provided in Section 8.5.2, PSUs (including any related
Dividend Equivalent PSUs) which do not become Eligible PSUs or which do not vest
in accordance with Section 8 prior to the Date Employment Ceases shall be
cancelled without payment. The Participant waives any and all right to
compensation or damages which may arise or may be deemed to arise in consequence
of the Participant’s Termination of Employment (whether lawfully or unlawfully)
or otherwise for any reason whatsoever insofar as those rights arise or may
arise from the Participant ceasing to have rights or be entitled to receive any
cash, Shares or other payment under the Plan pursuant to this Section 8.4. Any
Vested PSUs credited to a Participant’s PSU Account as of the Date Employment
Ceases shall be payable in accordance with Section 8.2.

 

  8.5

Change in Control.

 

  8.5.1

PSUs granted prior to February 14, 2018. With respect to PSUs granted to the
Participant prior to February 14, 2018, notwithstanding any other provision of
the Plan, unless otherwise specified by the Board or the Committee with respect
to any portion of a PSU that does not constitute a Section 409A Amount, in the
event of a Change in Control:

 

  (a)

all Eligible PSUs credited to the Participant’s PSU Account immediately prior to
such Change in Control shall become Vested PSUs immediately prior to the time of
such Change in Control; and all PSUs credited to the Participant’s PSU Account
that are not Eligible PSUs immediately prior to the time of such Change in
Control shall become Eligible PSUs determined as if the Median Performance
Criteria in respect of each applicable Performance Period have been achieved,
and shall become Vested PSUs immediately prior to the time of such Change in
Control;

 

  (b)

as soon as practicable, and in any event within 30 days, following a Change in
Control, (i) to the extent a Participant’s Vested PSUs are expressed in dollar
value form in the PSU Account (including, without limitation, as a dollar value
Eligible PSU Amount), the Participant shall receive a cash payment equal to such
dollar value; and (ii) to the extent a Participant’s PSUs are expressed in PSU
form in the PSU Account, the Participant shall receive in cash or in Shares (or
a combination thereof), as may be determined by the Board or the Committee, a
payment equal to the number of Vested PSUs (including as determined pursuant to
Section 8.5.1(a)) credited to the Participant’s PSU Account at the time of the
Change in Control (rounded up to the nearest whole number of Vested PSUs)
multiplied by the price at which the Shares are valued for the purpose of the
transaction or series of transactions giving rise to the

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Change in Control, or if there is no such transaction or transactions, the
simple average of the closing price per Share on the applicable Stock Exchange
on each day in the thirty day period ending on the date of the Change in Control
(as applicable, the “Change in Control Value”); and

 

  (c)

with respect to any Section 409A Amount (i) if the Change in Control constitutes
a change in the ownership or effective control of a corporation, or a change in
the ownership of a substantial portion of the assets of a corporation, as such
terms are used in Section 409A of the Code and related regulations (a “409A
Change of Control”), such Section 409A Amount shall be paid in accordance with
Section 8.5.1(b), and (ii) if the Change in Control does not constitute a 409A
Change of Control, such Section 409A Amount shall in all events be paid during
the calendar year or years in which such amount would have been paid had there
been no Change in Control.

 

  8.5.2

PSUs granted on or after February 14, 2018. The provisions of this Section 8.5.2
shall apply to PSUs granted to the Participant on or after February 14, 2018,
notwithstanding any other provision of the Plan.

 

  (a)

In the event of a Change in Control, all Eligible PSUs credited to the
Participant’s PSU Account immediately prior to such Change in Control shall
become Vested PSUs immediately prior to the time of such Change in Control, and
each PSU credited to the Participant’s PSU Account that are not Eligible PSUs
immediately prior to the time of such Change in Control shall become Eligible
PSUs with the Achieved Performance Criteria in respect of the applicable
Performance Period deemed to be the greater of (x) the Median Performance
Criteria and (y) the level of achievement of the Performance Criteria applicable
to the Performance Period as determined by the Committee no later than the date
of the Change in Control, taking in account performance through the latest date
preceding the Change in Control as to which performance can, as a practical
matter, be determined (but no later than the end of the Performance Period), and
shall become Vested PSUs immediately prior to the time of such Change in
Control, except to the extent that an award of PSUs meeting the requirements set
out below in this Section 8.5.2(a) (such award, a “Replacement Award”) is
provided to the Participant to replace such award of PSUs (each award of PSUs
intended to be replaced by a Replacement Award, a “Replaced Award”) effective on
or immediately after the time of such Change in Control. An award of PSUs shall
meet the requirements of this Section 8.5.2(a) (and hence qualify as a
Replacement Award) if (A) it has a value equal to the value of the Replaced
Award as of the date of the Change in Control determined with reference to the
Change in Control Value of the PSUs comprising the Replaced Award and the fair
market value of the securities underlying the Replacement Award, (B) it relates
to publicly traded equity securities of the Corporation, the entity surviving
the Corporation following the Change in Control or the parent company of such
surviving entity, (C) it contains terms relating to vesting that are
substantially identical to those of the Replaced Award (except that for any
Replaced Award that is performance-based, the Replacement Award shall be subject
solely to time-based vesting for the remainder of the applicable Performance

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Period (or such shorter period as determined by the Committee) and the Achieved
Performance Criteria in respect of the applicable Performance Period shall be
deemed to be the greater of (x) the Median Performance Criteria and (y) the
level of achievement of the Performance Criteria applicable to a Performance
Period as determined by the Committee no later than the date of the Change in
Control, taking in account performance through the latest date preceding the
Change in Control as to which performance can, as a practical matter, be
determined (but no later than the end of the Performance Period)), and (D) its
other terms and conditions are not less favorable to the Participant than the
terms and conditions of the Replaced Award (including the provisions that would
apply in the event of a subsequent Change in Control) as of the date of the
Change in Control. Without limiting the generality of the foregoing, a
Replacement Award may take the form of a continuation of the applicable Replaced
Award if the requirements of the preceding sentence are satisfied. If a
Replacement Award is granted, the Replaced Award shall not immediately vest upon
the Change in Control giving rise to the replacement. The determination whether
the conditions of this Section 8.5.2(a) are satisfied shall be made by the
Committee, as constituted immediately before the Change in Control, in its sole
discretion. All PSUs that become Vested PSUs pursuant to this Section 8.5.2(a)
shall be paid in accordance with Sections 8.5.1(b) or 8.5.1(c), as applicable.

 

  (b)

Notwithstanding any other provision of this Plan to the contrary, upon the
Participant’s Termination of Employment by the Corporation or an Affiliate, as
applicable, without CIC Cause, or by the Participant for Good Reason, within the
Specified Period following a Change in Control, all Replacement Awards held by
such Participant shall become Vested PSUs immediately prior to the time of such
Termination of Employment, and shall be paid as soon as practicable, and in any
event within 30 days, following such Termination of Employment; provided that if
the Replacement Award is a Section 409A Amount, and the Change in Control is not
a 409A Change in Control, then such Replacement Award shall in all events be
paid during the calendar year or years in which it would have been paid had
there been no Change in Control. For clarity, in this Section 8.5.2(b), the
defined term “Vested PSUs” shall be deemed to apply, mutatis mutandis, to
Replacement Awards that are not a continuation of Replaced Awards.

 

9.

CURRENCY

 

  9.1

Currency. Except where expressly provided otherwise, all references in the Plan
to currency refer to lawful Canadian currency.

 

10.

SHAREHOLDER RIGHTS

 

  10.1

No Rights to Shares. PSUs are not Shares and neither the grant of PSUs nor the
fact that Shares may be acquired by, or provided from, a Trust Fund or otherwise
in satisfaction of Vested PSUs will entitle a Participant to any shareholder
rights, including, without limitation, voting rights, dividend entitlement or
rights on liquidation.

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11.

ADMINISTRATION

 

  11.1

Committee. Unless otherwise determined by the Board, or as specified in
Section 11.6, the Plan shall be administered by the Committee.

 

  11.2

Compliance with Laws and Policies. The Corporation’s issuance of any PSUs and
its obligation to make any payments or discretion to provide any Shares
hereunder is subject to compliance with Applicable Law. Each Participant shall
acknowledge and agree (and shall be conclusively deemed to have so acknowledged
and agreed by participating in the Plan) that the Participant will, at all
times, act in strict compliance with Applicable Law and all other laws and any
policies of the Corporation applicable to the Participant in connection with the
Plan including, without limitation, furnishing to the Corporation all
information and undertakings as may be required to permit compliance with
Applicable Law. Such laws, regulations, rules and policies shall include,
without limitation, those governing “insiders” or “reporting issuers” as those
terms are construed for the purposes of applicable securities laws, regulations
and rules.

 

  11.3

Delegation. The Committee may also delegate to any director, officer or employee
of the Corporation such duties and powers relating to the Plan or in respect of
an applicable Grant Agreement as it may see fit.

 

  11.4

Withholdings. Notwithstanding any other provision in this Plan, to ensure that
the Corporation, an Affiliate or a Trust Fund, as applicable, will be able to
comply with the applicable provisions of any federal, provincial, state or local
law relating to the withholding of tax or other required deductions, including
on the amount, if any, includable in the income of a Participant, the
Corporation, or an Affiliate may withhold or cause to be withheld from any
amount payable to a Participant, either under this Plan, or otherwise, such
amount, or may require the sale of such number of Shares by the Trustee, as may
be necessary to permit the Corporation, the Affiliate or a Trust Fund, as
applicable, to so comply.

 

  11.5

No Additional Rights. Neither designation of an employee as a Participant nor
the grant of any PSUs to any Participant at any time entitles any person to the
grant, or any additional grant, as the case may be, of any PSUs under the Plan.

 

  11.6

Amendment, Termination. The Plan may be amended or terminated at any time by the
Board in whole or in part. No amendment of the Plan shall, without the consent
of the Participants affected by the amendment, or unless required by Applicable
Law, adversely affect the rights accrued to such Participants with respect to
PSUs granted prior to the date of the amendment. Notwithstanding any provision
in the Plan to the contrary, the Plan may be amended to prevent any adverse tax
results under Section 409A of the Code.

 

  11.7

Administration Costs. The Corporation will be responsible for all costs relating
to the administration of the Plan. For greater certainty and unless otherwise
determined by the Committee, a Participant shall be responsible for brokerage
fees and other administration or transaction costs relating to the transfer,
sale or other disposition of Shares on behalf of the Participant that have been
previously distributed to or provided to the Participant pursuant to the Plan.

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Performance Share Unit Plan for Employees

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  11.8

Section 409A.

 

  11.8.1

Section 409A Amounts. To the extent applicable to any Section 409A Amount, it is
intended that the Plan and any Grant Agreement or other agreement that amends or
otherwise affects such Section 409A Amount will comply with Section 409A of the
Code and any regulations and guidance issued thereunder, and the Plan and any
such Grant Agreement or other agreement shall be interpreted accordingly. The
provisions of this Section 11.8 shall apply to any Section 409A Amount
notwithstanding anything in the Plan or a Grant Agreement to the contrary. In no
event shall a Section 409A Amount be distributed at a time or pursuant to an
event that is not specified in Section 409A(a)(2) of the Code.

 

  11.8.2

Retirement or Termination of Employment. The Plan does not provide for payment
to occur upon (or on a specified date or within a specified period following) a
Termination of Employment or Retirement; however, to the extent any Grant
Agreement or other agreement provides that any Section 409A Amount is to be
distributed upon (or on a specified date or within a specified period following)
the date of a U.S. Participant’s Termination of Employment or Retirement, such
U.S. Participant shall be deemed to have experienced a Termination of Employment
or Retirement when (and only when) a separation from service (within the meaning
of Treasury Regulation Section 1.409A-1(h)) has occurred.

 

  11.8.3

Specified Employees. If a U.S. Participant is a “specified employee” for
purposes of Section 409A of the Code, no payment, distribution or other benefit
provided pursuant to a Section 409A Amount that is required to be delayed to
comply with Section 409A(a)(2)(B)(i) of the Code shall be provided before the
date that is six months after the date of such separation from service (or, if
earlier than the end of such six-month period, the date of death of the
Participant). Any payment, distribution or other benefit that is delayed
pursuant to the prior sentence shall be paid on the first Business Day following
the six-month anniversary of the Participant’s separation from service or date
of death, as the case may be.

 

  11.8.4

Time of Payment. In no event shall a Participant be entitled to designate the
taxable year in which any Section 409A Amount is to be paid. Except with respect
to payments following a Change in Control pursuant to Section 8.5.3, Shares or
cash to be paid in respect of any Section 409A Amount pursuant to Vested PSUs
shall in all events be paid within the calendar year in which the applicable
Vesting Date set forth in the applicable Grant Agreement(s) occurs, which for
purposes of Section 409A Amounts shall always be defined as occurring within a
single calendar year. Payments with respect to Dividend Equivalent PSUs shall be
paid at the same time as the PSU to which such Dividend Equivalent PSU relates.

 

  11.8.5

No Acceleration of Payments. In no event shall a change in a Performance Period,
a waiver, amendment, exercise of discretion to adjust the Eligible PSU Amount
under Section 7.4, or other modification

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of any terms or conditions of a PSU or any determination by the Committee or the
Board, as applicable in each case, that occurs after the Grant Date cause any
Section 409A amount to be paid in a calendar year that is different than the
calendar year in which payment would have occurred but for such change to the
Performance Period, waiver, amendment, modification, exercise of discretion, or
determination.

 

  11.8.6

Trusts. Notwithstanding Section 6.1 hereof, no funds with respect to any
Section 409A Amount shall be set aside in a trust located outside the United
States or in any other trust or arrangement described under Section 409A(b)(1)
of the Code.

 

12.

ASSIGNMENT

 

  12.1

Assignment. The assignment or transfer of the PSUs, or any other benefits under
this Plan, shall not be permitted other than by operation of law.

* * * *