Document:

EX-10.16

 Exhibit 10.16 
  

 
 DEFERRED SHARE UNIT PLAN FOR EMPLOYEES 

OF ENCANA CORPORATION 

Adopted with effect from December 18, 2002 

and reflective of amendments made as of October 23, 2007, 

October 22, 2008, and July 20, 2010 

 TABLE OF CONTENTS 

 

							
	 Section
	  	Page	 
			
	1.	 	 PREAMBLE AND DEFINITIONS
	  	 	1	  
			
	2.	 	 CONSTRUCTION AND INTERPRETATION
	  	 	3	  
			
	3.	 	 ELIGIBILITY
	  	 	4	  
			
	4.	 	 DEFERRED SHARE UNIT GRANTS AND ACCOUNTS
	  	 	4	  
			
	5.	 	 ACCOUNTS, DIVIDEND EQUIVALENTS AND REORGANIZATION
	  	 	6	  
			
	6.	 	 REDEMPTION
	  	 	7	  
			
	7.	 	 CURRENCY
	  	 	8	  
			
	8.	 	 SHAREHOLDER RIGHTS
	  	 	8	  
			
	9.	 	 ADMINISTRATION
	  	 	8	  
			
	10.	 	 ASSIGNMENT
	  	 	9	  

 Schedules were amended effective October 22, 2008: 

 

			
	Schedule A	  	Participation Agreement
		
	Schedule B	  	Election Notice
		
	Schedule C	  	Redemption Notice
		
	Special Appendix        	  	Special Provisions Applicable to Eligible Employees Subject to Section 409A of the United States Internal Revenue Code

 DEFERRED SHARE UNIT PLAN FOR EMPLOYEES 

OF ENCANA CORPORATION 

(Adopted with effect from December 18, 2002 

and reflective of amendments made as of October 23, 2007, 

October 22, 2008, and July 20, 2010.) 
  

	1.	PREAMBLE AND DEFINITIONS 

  

	 	1.1	Title 

 The Plan herein described, and as amended from time to time, shall be
called the “Deferred Share Unit Plan for Employees of Encana Corporation”. 
  

	 	1.2	Purposes of the Plan 

 The purposes of the Plan are: 

 

	 	(a)	to promote a greater alignment of interests between employees and the shareholders of the Corporation; 

  

	 	(b)	to provide a compensation system for senior executives and employees that is reflective of the responsibility, commitment and risk accompanying their respective roles; 

 

	 	(c)	to assist the Corporation to attract and retain individuals to be employees of the Corporation; and 

  

	 	(d)	to allow eligible employees of the Corporation to participate in the long-term success of the Corporation. 

  

	 	1.3	Definitions 

  

	 	1.3.1	“Affiliate” means an affiliate of the Corporation as the term “affiliate” is defined in paragraph 8 of Canada Revenue Agency Interpretation Bulletin
IT-337R4 (Consolidated), Retiring Allowances, or any successor publication thereto. 

  

	 	1.3.2	“Blackout Period” means a trading blackout period imposed by the Corporation under the Corporation’s Policy on Disclosure, Confidentiality and Employee Trading (as amended,
supplemented or replaced from time to time); 

  

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

  

	 	1.3.4	“Bonus Plan” means the High Performance Results Plan applicable to an Eligible Employee for a year, pursuant to which the Eligible Employee may receive cash awards, based on corporate performance and
the Eligible Employee’s individual contribution to the Corporation’s financial results and/or the financial results of a Related Corporation measured against predetermined objectives. 

			
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 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
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	 	1.3.5	“Cease Trade Date” has the meaning ascribed thereto in Section 6.3. 

  

	 	1.3.6	“Committee” means the Human Resources and Compensation Committee of the Board. 

  

	 	1.3.7	“Conversion Date” means, with respect to any calendar year, the date used to determine the Market Value for purposes of determining the number of HPR DSUs to be awarded to an Eligible
Employee, which date shall be the last business day in the relevant Performance Period. 

  

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

  

	 	1.3.9	“Deferred Share Unit” means a bookkeeping entry on the books of the Corporation, the value of which on any particular date shall be equal to the Market Value. 

 

	 	1.3.10	“Deferred Share Unit Account” has the meaning ascribed thereto in Section 5.1. 

  

	 	1.3.11	“Eligible Employee” means such employees of the Corporation or a Related Corporation as the Board may designate from time to time as eligible to participate in the Plan. 

 

	 	1.3.12	“Employed” means, with respect to an Eligible Employee, that: 

  

	 	(a)	he is performing work at a workplace of the Corporation or an Affiliate and has not been given or received a notice of termination of employment by the Corporation or an Affiliate; or 

 

	 	(b)	he is not actively at work at a workplace of the Corporation or an Affiliate due to an approved leave of absence, maternity or parental leave or disability and has not been given or received a notice of termination of
employment by the Corporation or an Affiliate. 

 For greater certainty, an Eligible Employee shall not be considered
“Employed” or otherwise an employee of the Corporation or an Affiliate during a notice period that arises upon the involuntary termination of employment of the Eligible Employee by the Corporation or an Affiliate, as applicable. 

 

	 	1.3.13	“HPR DSUs” means a Deferred Share Unit credited to the Deferred Share Unit Account of an Eligible Employee in accordance with Section 4.4. 

 

	 	1.3.14	“Market Value” means, with respect to any particular date, the closing price per share for a Share on the Stock Exchange on the Trading Day immediately prior to that date or, in the event of the Cease
Trade Date, such other value as may be determined pursuant to Section 6.3. 

			
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 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
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	 	1.3.15	“Performance Period” means a calendar year in respect of which an Eligible Employee may be or become entitled to an award of HPR DSUs or a cash award under the Bonus Plan or both. 

 

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

 

	 	1.3.17	“Redemption Date” has the meaning ascribed thereto in Section 6.1. 

  

	 	1.3.18	“Related Corporation” means a corporation related to the Corporation for the purposes of the Income Tax Act (Canada). 

 

	 	1.3.19	“Share” means a common share of the Corporation and such other share as is substituted therefor as a result of amendments to the articles of the Corporation, reorganization or otherwise, including any
rights that form a part of the common share or substituted share but not including any other rights that are attached thereto and trade therewith or any other share that is added thereto. 

 

	 	1.3.20	“Stock Exchange” means the Toronto Stock Exchange, or if the Shares are not listed on the Toronto Stock Exchange, 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. 

  

	 	1.3.21	“Termination Date” means, with respect to an Eligible Employee the earliest date on which both of the following conditions are met: (i) the Eligible Employee has ceased to be Employed by the
Corporation, or any Affiliate thereof for any reason whatsoever; and (ii) the Eligible Employee is not a member of the Board nor a director of an Affiliate of the Corporation. 

 

	 	1.3.22	“Trading Day” means any date on which the Stock Exchange is open for the trading of Shares and on which one or more Shares actually traded. 

 

	2.	CONSTRUCTION AND INTERPRETATION 

  

	 	2.1	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	The Plan shall be governed and interpreted in accordance with the laws of the Province of Alberta and the laws of Canada. 

  

	 	2.3	If any provision of the Plan or part hereof 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.

  

	 	2.4	Headings wherever used herein are for reference purposes only and do not limit or extend the meaning of the provisions herein contained. 

			
	 Encana Corporation
 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
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	3.	ELIGIBILITY 

  

	 	3.1	The Corporation is establishing the Plan for Eligible Employees, effective on December 18, 2002. 

  

	 	3.2	Nothing herein contained shall be deemed to give any person the right to be retained as an employee or director of the Corporation or of an Affiliate. 

 

	4.	DEFERRED SHARE UNIT GRANTS AND ACCOUNTS 

  

	 	4.1	Each Eligible Employee shall receive, subject to the conditions stated herein and in the written agreement referred to below in this Section 4.1, a grant of such number of Deferred Share Units as may be specified
by the Committee in such written agreement, with effect from the date set out in such written agreement, which date shall not be earlier than the effective date of the Plan, provided that, for greater certainty, any conditions attached to such
Deferred Share Units shall in no case cause such Deferred Share Units or the Plan to cease to comply with the requirements of paragraph 6801(d) of the Income Tax Regulations. The participation of an Eligible Employee in the Plan shall be evidenced
by a written agreement between the Corporation and the Eligible Employee in the form of Schedule A hereto. 

  

	 	4.2	An Eligible Employee may, with respect to any particular Performance Period, commencing with the 2003 Performance Period, elect to participate in the Plan and be eligible to receive HPR DSUs. In order to elect to
participate in the Plan with respect to any particular Performance Period, an Eligible Employee shall complete and deliver to the Corporation a written election, in a manner prescribed by the Corporation and published on the Corporation’s
internal employee website, or otherwise communicated to Eligible Employees from time to time, and substantially in the form set out in Schedule B hereto, before the last business day of the calendar year immediately preceding the Performance Period.
With respect to the 2003 Performance Period only, an Eligible Employee must complete and deliver his written election to the Secretary of the Corporation on or prior to the later of December 31, 2002 and the date that is fifteen business days
after the Corporation receives an advance ruling on the Plan from the Canada Revenue Agency in a form satisfactory to the Corporation. 

  

	 	4.3	An Eligible Employee who wishes to participate in the Plan with respect to a particular Performance Period in order to become eligible to receive HPR DSUs shall be entitled to elect on an irrevocable basis one of the
following four options: 

  

	 	(i)	25% of the Eligible Employee’s potential incentive compensation award under the Bonus Plan relating to that Performance Period in the form of HPRs DSUs; 

 

	 	(ii)	50% of the Eligible Employee’s potential incentive compensation award under the Bonus Plan relating to that Performance Period in the form of HPR DSUs; 

			
	 Encana Corporation
 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
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	 	(iii)	75% of the Eligible Employee’s potential incentive compensation award under the Bonus Plan relating to that Performance Period in the form of HPR DSUs; or 

 

	 	(iv)	100% of the Eligible Employee’s potential incentive compensation award under the Bonus Plan relating to that Performance Period in the form of HPR DSUs. 

Notwithstanding an Eligible Employee’s election under Section 4.2 and this Section 4.3, the Committee may, in its sole
discretion, decline to award HPR DSUs in respect of a particular Performance Period, limit the percentage an Eligible Employee may elect to receive pursuant to this Section 4.3, require the Eligible Employee to receive a percentage, as
specified by the Committee, of the Eligible Employee’s potential incentive compensation under the Bonus Plan for that Performance Period in the form of HPR DSUs, or limit the total number of HPR DSUs available to all Eligible Employees in
respect of a particular Performance Period and make any corresponding changes to the number of HPR DSUs to be received by an Eligible Employee. 
  

	 	4.4	The Committee may, from time to time, award HPR DSUs to Eligible Employees who have elected pursuant to Section 4.2 to participate in the Plan for a particular Performance Period. The Committee shall specify the
Conversion Date of each award of HPR DSUs under this Section 4.4 and the date as of which each such award of HPR DSUs is to be credited to the Deferred Share Unit Account of the applicable Eligible Employee. Each award of HPR DSUs shall be
confirmed by an instrument in writing issued by the Corporation. Where any specified Conversion Date falls on a date which is within a Blackout Period, then the Conversion Date shall automatically occur on and be effective following the end of such
Blackout Period to permit the Market Value of any such HPR DSUs to be determined on a Trading Day which occurs immediately following the end of any such Blackout Period. 

 

	 	4.5	Where the Committee chooses not to award HPR DSUs to an Eligible Employee under Section 4.4 in respect of a Performance Period, such Eligible Employee shall remain eligible to receive a cash incentive compensation
award in respect of such Performance Period in accordance with the terms of the Bonus Plan as if such Eligible Employee had not elected to participate in the Plan for such Performance Period. 

 

	 	4.6	 For the purpose of determining the number of HPR DSUs to be awarded to an Eligible Employee in accordance with
Section 4.4, the Committee shall compute the amount of incentive compensation award that would have been awarded to the Eligible Employee pursuant to the Bonus Plan had such employee not elected to participate in the Plan for the relevant
Performance Period (the “Global Dollar Amount”). The Committee (subject to its discretion under Section 4.3) shall award a number of HPR DSUs (including fractional HPR DSUs) to the Eligible Employee equal to the quotient determined by
dividing: (i) the product determined by multiplying (a) the percentage amount elected by the Eligible Employee in accordance with option (i), (ii) (iii) or (iv) of Section 4.3 (as

			
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 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
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applicable), and (b) the Global Dollar Amount, by (ii) the Market Value determined on the Conversion Date. 

 

	 	4.7	HPR DSUs and any additional Deferred Share Units granted under Section 5.2 in respect of any HPR DSUs will be fully vested upon being credited to an Eligible Employee’s Deferred Share Unit Account and the
Eligible Employee’s entitlement to payment of such HPR DSUs and related additional Deferred Share Units at his Termination Date shall not thereafter be subject to satisfaction of any requirements as to any minimum period of employment or other
conditions. Deferred Share Units granted to an Eligible Employee under Section 4.1 and any additional Deferred Share Units granted under Section 5.2 in respect thereof shall vest in the Eligible Employee at such time or times, in such
number and subject to such conditions as the Committee may specify in the written agreement referred to in Section 4.1. The Eligible Employee shall forfeit all rights, title and interest with respect to any such Deferred Share Units that do not
vest in accordance with the terms of such written agreement, together with any additional Deferred Share Units granted under Section 5.2 as dividend equivalents in respect of any Deferred Share Units granted under Section 4.1 that have
been forfeited. 

  

	5.	ACCOUNTS, DIVIDEND EQUIVALENTS AND REORGANIZATION 

  

	 	5.1	An account, to be known as a “Deferred Share Unit Account” shall be maintained by the Corporation for each Eligible Employee and will be credited with such notional grants of Deferred Share Units as are
received by an Eligible Employee from time to time. Deferred Share Units that fail to vest in an Eligible Employee or that are redeemed by the Eligible Employee or his legal representative shall be cancelled and shall cease to be recorded in the
Eligible Employee’s Deferred Share Unit Account as of the date on which such Deferred Share Units fail to vest or are redeemed, as the case may be. 

  

	 	5.2	 Whenever cash dividends are paid on the Shares, additional Deferred Share Units will be credited to the Eligible
Employee’s Deferred Share Unit Account. The number of such additional Deferred Share Units will be calculated by dividing the dividends that would have been paid to such Eligible Employee if the Deferred Share Units recorded in the Eligible
Employee’s Deferred Share Unit Account as at the record date for the cash dividend had been Shares by the Market Value on the date on which the dividends are paid on the Shares. If a board lot of Shares does not trade on such date, then the
value of a Deferred Share Unit on such date shall equal the closing price on the last preceding Trading Day on which a board lot of the Shares traded on the Stock Exchange. Notwithstanding the foregoing, following a Cease Trade Date, the value of a
Share (or the share of a Related Corporation) used to calculate the number of additional Deferred Share Units under this Section 5.2 shall be the value determined on a reasonable and equitable basis by the Board. Where the date on which
dividends are deemed paid on the Deferred Share Units falls on a date which is within a Blackout Period, then the deemed dividend payment date shall automatically occur and be effective on the second Trading Day immediately following the end of such
Blackout Period to permit the Market Value to be 

			
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 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
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determined on a Trading Day which occurs immediately following the end of any such Blackout Period. 

  

	 	5.3	In the event of any stock dividend, stock split, combination or exchange of shares, merger, arrangement, re-organization,
re-capitalization, consolidation, spin-off or other distribution (other than normal cash dividends) of Corporation assets to shareholders, or any other similar changes
affecting the Shares, such proportionate adjustments to reflect such change or changes shall be made with respect to the number of Deferred Share Units outstanding under the Plan, all as determined by the Board in its sole discretion.

  

	 	5.4	For greater certainty, no amount will be paid to, or in respect of, an Eligible Employee (or a person with whom the Eligible Employee does not deal with at arm’s length, within the meaning of the Income Tax
Act (Canada)) under the Plan or pursuant to any other arrangement, and no additional Deferred Share Units will be granted to an Eligible Employee to compensate for a downward fluctuation in the fair market value of the Shares, nor will any other
form of benefit be conferred upon, or in respect of, an Eligible Employee for such purpose. 

  

	6.	REDEMPTION 

  

	 	6.1	Subject to Section 4.7, the value of the Deferred Share Units credited to an Eligible Employee’s Deferred Share Unit Account shall be redeemable by the Eligible Employee (or, where the Eligible Employee has
died, his estate) at the Eligible Employee’s option (or after the Eligible Employee’s death at the option of his legal representative) following the Termination Date. The Eligible Employee (or, after the Eligible Employee’s death, his
legal representative) shall, by filing a written notice of redemption in the form set out in Schedule C hereto with the Vice-President, Corporate Human Resources, or such other officer designated and communicated to the Eligible Employees from time
to time, specify a redemption date (the “Redemption Date”) which in any event must be after the date on which the notice of redemption is filed with the Corporation and within the period from the Eligible Employee’s Termination Date
to December 15 of the first calendar year commencing after the Eligible Employee’s Termination Date. 

  

	 	6.2	The value of the Deferred Share Units redeemed by or in respect of an Eligible Employee pursuant to Section 6.1 shall be determined based on the Market Value on the Eligible Employee’s Redemption Date and
shall be paid to the Eligible Employee (or, if the Eligible Employee has died, to his estate) in the form of a lump sum cash payment, net of any applicable withholdings as soon as practicable after the Eligible Employee’s Redemption Date,
provided that in any event, such payment date shall be no later than December 31 of the first calendar year commencing after the Eligible Employee’s Termination Date. 

 

	 	6.3	 In the event that the Eligible Employee’s Redemption Date is after the date on which the Shares ceased to be
traded on the Stock Exchange, provided such cessation in trading is not reasonably expected to be temporary (the “Cease Trade Date”), the value of the Deferred Share Units redeemed by or in respect of

			
	 Encana Corporation
 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
	  	Page 8

  

	 	
the Eligible Employee pursuant to Section 6.1 shall be determined in accordance with the following: 

  

	 	(a)	where the Eligible Employee’s Termination Date is before or not more than 365 days after the last Trading Day before the Cease Trade Date, the value of each Deferred Share Unit credited to the Eligible
Employee’s Deferred Share Unit Account at his Redemption Date shall be equal to the Market Value on the last Trading Day before the Cease Trade Date; or 

  

	 	(b)	where the Eligible Employee’s Termination Date is after the date that is 365 days after the last Trading Day before the Cease Trade Date, the value of each Deferred Share Unit credited to the Eligible
Employee’s Deferred Share Unit Account at his Redemption Date shall be based on the fair market value of a Share of the Corporation or of a Related Corporation at his Redemption Date as is determined on a reasonable and equitable basis by the
Board after receiving the advice of one or more independent firms of investment bankers of national repute. 

 The value of an
Eligible Employee’s Deferred Share Units determined in accordance with paragraph (a) or (b) of this Section 6.3, as applicable, shall be paid to the Eligible Employee (or, if the Eligible Employee has died, to his estate) in the form
of a lump sum cash payment, net of any applicable withholdings as soon as practicable after the Eligible Employee’s Redemption Date, provided that in any event, such payment date shall be no later than December 31 of the first calendar
year commencing after the Eligible Employee’s Termination Date. 
  

	7.	CURRENCY 

  

	 	7.1	All references in the Plan to currency refer to lawful Canadian currency. 

  

	8.	SHAREHOLDER RIGHTS 

  

	 	8.1	Deferred Share Units are not Shares or other securities of the Corporation and will not entitle an Eligible Employee to any shareholder rights, including, without limitation, voting rights, dividend entitlement or
rights on liquidation. 

  

	9.	ADMINISTRATION 

  

	 	9.1	Unless otherwise determined by the Board, the Plan shall remain an unfunded and unsecured obligation of the Corporation. 

  

	 	9.2	Unless otherwise determined by the Board, the Plan shall be administered by the Committee. 

  

	 	9.3	 The Plan may be amended or terminated at any time by the Board, except as to rights already accrued hereunder by
the Eligible Employees. Notwithstanding the foregoing, any amendment or termination of the Plan shall be such that the 

			
	 Encana Corporation
 Deferred Share Unit Plan for
Employees
 (With amendments as of July 20, 2010)
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Plan continuously meets the requirements of paragraph 6801(d) of the Income Tax Regulations or any successor provision thereto. 

 

	 	9.4	The Corporation will be responsible for all costs relating to the administration of the Plan. 

  

	10.	ASSIGNMENT 

  

	 	10.1	The assignment or transfer of the Deferred Share Units, or any other benefits under this Plan, shall not be permitted other than by operation of law. 

* * * * 

 Schedule A 

Deferred Share Unit Plan for Employees of 

Encana Corporation (the “Plan”) 

PARTICIPATION AGREEMENT – Section 4.1 of the Plan 

I hereby acknowledge the crediting of                     
{insert number} Deferred Share Units as defined in the Plan (“DSUs”) to my Plan account pursuant to Section 4.1 of the Plan as at
                     {insert date}. 
 I confirm
that: 
  

	 	1.	I have received and reviewed a copy of the terms of the Plan and agree to be bound by them. 

  

	 	2.	I understand that my DSUs granted under the Plan may not be redeemed by Encana Corporation (the “Corporation”) until I am no longer either a director or an employee of the Corporation or of an Affiliate.

  

	 	3.	I recognize that when DSUs credited pursuant to the Plan are redeemed in accordance with the terms of the Plan after I am no longer either a director or employee of the Corporation or of an Affiliate, income tax and
other withholdings as required will arise at that time. Upon redemption of the DSUs, the Corporation or the Affiliate, as applicable, will make all appropriate withholdings as required by law at that time. 

 

	 	4.	The value of DSUs are based on the value of the common shares of the Corporation from time to time and therefore are not guaranteed. 

 

	 	5.	No funds will be set aside to guarantee the payment of DSUs. Future payment of DSUs will remain an unfunded and unsecured liability recorded on the books of the Corporation. 

 

	 	6.	I understand that, to the extent I am (or become) subject to United States federal income taxes, my DSUs credited pursuant to the Plan, and my rights with respect to such DSUs, will be subject to the terms of the
Special Appendix to the Plan (the “Special Appendix”), which Special Appendix contains terms and conditions that are intended to cause DSUs to comply with Section 409A of the United States Internal revenue Code. I also understand that the
Special Appendix is a part of the Plan and references to the Plan shall be deemed to include a reference to the Special Appendix, to the extent applicable. 

The foregoing is only a brief outline of certain key provisions of the Plan. For more complete information, reference should be made to the
Plan text which governs in the case of conflict or inconsistency with this Participation Agreement. All capitalized expressions used herein shall have the same meaning as in the Plan unless otherwise defined herein. 

 

					
	  
	 		 	  

	Date	 		 	(Name of Employee)
			
		 		 	  

		 		 	(Signature of Employee)

  
 A-1 

 Schedule B 

Deferred Share Unit Plan for 

Employees of Encana Corporation (the “Plan”) 

ELECTION NOTICE – Section 4.3 of the Plan 
  

	I.	Election 

 Subject to Part II of this Notice, I hereby elect to receive: 

}
25%            or            }
50%            or            }
75%            or            } 100% 

of my potential award under the Bonus Plan for the period January 1,          to December 31,
         in the form of Deferred Share Units (“DSUs”) and the balance of any such award in cash, net of applicable withholdings. 

 

	II.	Acknowledgement 

 I confirm and acknowledge that: 

 

	 	1.	I have received and reviewed a copy of the terms of the Plan and agree to be bound by them. My election with respect to the Performance Period is conditional upon Encana Corporation receiving an advance tax ruling on
the Plan in a form satisfactory to it. 

  

	 	2.	I understand that, notwithstanding this election, subject to the terms of the Special Appendix (as defined below), if applicable, the Committee retains discretion to decline to grant DSUs, in which case I will remain
eligible to receive an award under the Bonus Plan in accordance with terms of that plan. 

  

	 	3.	My DSUs granted under the Plan may not be redeemed by Encana Corporation (the “Corporation”) or any Affiliate thereof until I am no longer either an employee or a director of the Corporation or an Affiliate.

  

	 	4.	When DSUs credited to my account pursuant to this election are redeemed in accordance with the terms of the Plan after I am no longer either an employee or a director of the Corporation or any Affiliate, income tax and
other withholdings as required will arise at that time. Upon redemption of the DSUs, the Corporation or the Affiliate, as applicable, will make all appropriate withholdings as required by law at that time. 

 

	 	5.	The value of DSUs are based on the value of the common shares of the Corporation and therefore are not guaranteed. 

  

	 	6.	No funds will be set aside to guarantee the payment of DSUs. Future payment of DSUs will remain an unfunded liability recorded on the books of the Corporation. 

  
 B-1 

	 	7.	This election is irrevocable. 

  

	 	8.	The foregoing is only a brief outline of certain key provisions of the Plan. In the event of any discrepancy between the terms of the Plan and the terms of this Election Notice, the terms of the Plan shall prevail. All
capitalized expressions used herein shall have the same meaning as in the Plan unless otherwise defined herein. 

  

	 	9.	To the extent I am (or become) subject to United States federal income taxes, my DSUs credited pursuant to the Plan, and my rights with respect to such DSUs, will be subject to the terms of the Special Appendix to the
Plan (the “Special Appendix”), which Special Appendix contains terms and conditions that are intended to cause DSUs to comply with Section 409A of the United States Internal revenue Code. I also understand that the Special Appendix is a
part of the Plan and references to the Plan shall be deemed to include a reference to the Special Appendix, to the extent applicable. 

  

	III.	Effective Date 

 This election shall be effective on the date on which this election is
received by the Committee. 
  

					
	  
	 		 	  

	Date	 		 	(Name of Employee)
			
		 		 	  

		 		 	(Signature of Employee)

  
 B-2 

 Schedule C 

Deferred Share Unit Plan for 

Employees of Encana Corporation (the “Plan”) 

REDEMPTION NOTICE 

Pursuant to Section 6.1 of the Plan, I hereby advise Encana Corporation (the “Corporation) that I wish to redeem all the
Deferred Share Units credited to my account under the Plan on                      {insert Redemption Date, which shall be no later than
December 15 (and, for employees subject to United States federal income taxes, shall not be earlier than January 1) of the first calendar year commencing after the year in which the Employee ceases to be any of an employee or
director of the Corporation or of an Affiliate}. 
  

					
	  
	 		 	  

	Date	 		 	(Name of Employee)
			
		 		 	  

		 		 	(Signature of Employee)

 If the Redemption Notice is signed by a legal representative, documents providing the authority of such signature must be
provided to the Corporation. 

  
 C-1 

 Special Appendix 

to 
 DEFERRED SHARE UNIT
PLAN FOR EMPLOYEES OF 
 ENCANA CORPORATION 

Special Provisions Applicable to Eligible Employees Subject to Section 409A of the United States Internal Revenue Code 

This special appendix sets forth special provisions of the Plan that apply to US Employees. This special appendix shall become effective on October 22,
2008; however, Sections 2.4 and 2.6 of this special appendix shall not apply in the case of a US Employee’s termination or death that occurs in 2008. For avoidance of doubt, nothing in this special appendix shall be deemed to modify the Plan as
it relates to Eligible Employees who are not US Employees. 
  

	1.	Definitions 

 For purposes of this special appendix: 

 

	1.1	“Code” means the United States Internal Revenue Code of 1986, as amended, and any applicable Treasury Regulations and other binding regulatory guidance thereunder. 

 

	1.2	“Section 409A” means section 409A of the Code. 

  

	1.3	“Separation From Service” shall have the meaning set forth in Section 409A(a)(2)(A)(i) of the Code. 

  

	1.4	“Specified Employee” means a US Employee who meets the definition of “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code. 

 

	1.5	“US Employee” means an Eligible Employee subject to Section 409A. 

  

	2.	Compliance with Section 409A 

  

	2.1	In General. Notwithstanding any provision of the Plan to the contrary, it is intended that, with respect to US Employees, the provisions of the Plan comply with Section 409A, and all provisions of the Plan shall
be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. Each US Employee is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or
for the account of such US Employee in connection with the Plan or any other Plan maintained by the Corporation (including any taxes and penalties under Section 409A), and neither the Corporation nor any affiliate of the Corporation shall have
any obligation to indemnify or otherwise hold such US Employee (or any beneficiary) harmless from any or all of such taxes or penalties. 

			
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 Deferred Share Unit Plan
for Employees
	  	Page ii

  

	2.2	Election to Receive Deferred Share Units. A US Employee who wishes to have all or any part of his potential incentive compensation award under the Bonus Plan for a given calendar year paid as HPR DSUs shall
irrevocably elect payment in the form of HPR DSUs prior to the commencement of the calendar year during which the potential incentive compensation award under the Bonus Plan is to be earned. Such election shall be made in accordance with procedures
established by the Committee for such purpose. Any election made under this Section 2.2 shall apply to potential incentive compensation awards under the Bonus Plan earned in future calendar years unless and until the US Employee makes a later
election in accordance with the terms of this Section 2.2. 

  

	2.3	Committee’s Ability to Decline to Issue HPR DSUs. Notwithstanding anything in the Plan to the contrary, the Committee may only exercise its discretion pursuant to Sections 4.3 and 4.4 of the Plan either to
elect or decline to award HPR DSUs in respect of a particular Performance Period (notwithstanding an election by a US Employee to participate in the Plan for the Performance Period) if it does so on or before the deadline for the US Employee to
elect payment in the form of HPR DSUs pursuant to Section 2.2. 

  

	2.4	Distributions to US Employees. Notwithstanding the provisions of Section 6.1 of the Plan to the contrary, the value of a US Employee’s Deferred Share Unit Account shall be redeemed during the calendar
year next following the calendar year in which the US Employee’s Termination Date occurs. If the US Employee does not select a Redemption Date, his Deferred Share Unit Account shall be redeemed by the Committee in sufficient time so that
payment may be made on the last business day of the calendar year following the year in which the US Employee’s Termination Date occurs. For avoidance of doubt, a US Employee may not specify a Redemption Date that is earlier than January 1
or later than December 15 of the calendar year following the calendar year in which the US Employee’s Termination Date occurs. A US Employee’s Termination Date shall be the date on which the US Employee experiences a Separation From
Service or dies. If the US Employee’s Termination Date results from the US Employee’s death, payments shall be deemed for purposes of Section 409A to be made upon death rather than Separation From Service, and shall be paid pursuant to
Section 2.6. 

  

	2.5	Distributions to Specified Employees. Solely to the extent required by Section 409A, Deferred Share Unit Accounts which become redeemable on account of the Separation From Service of a US Employee who is
determined to be a Specified Employee shall not be redeemed and paid before the date which is 6 months after the Specified Employee’s Separation from Service (or, if earlier, the date of death of the Specified Employee). 

 

	2.6	 Distributions on Death. The Deferred Share Unit Account of a US Employee whose Termination Date results
from death shall be redeemed and paid to the US Employee’s estate during the calendar year next following the calendar year in which the death occurs. If the US Employee (or the US Employee’s estate) does not select a Redemption Date, his
Deferred Share Unit Account shall be redeemed by the Committee in sufficient time so that payment may be made on the last business day of the calendar year following the year in which the death

			
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 Deferred Share Unit Plan
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occurs. To the extent payment pursuant to this Section 2.6 could be made in more than one calendar year, neither the US Employee nor the US Employee’s estate may select, directly or
indirectly, the calendar year in which the payment will be made. 

  

	2.7	Notwithstanding anything contained in this Special Appendix, if a US Employee becomes subject to tax pursuant to the provisions of the Income Tax Act (Canada), on amounts under the Plan prior to receipt of such amounts
pursuant to Section 2.4 or 2.6 of this Special Appendix, a portion of the US Employee’s Deferred Share Unit Account shall be redeemed so that payment may be made in an amount equal to the “Tax Payment Amount” as soon as
practicable (but not later than 90 days) after the date such amounts become subject to tax pursuant to the provisions of the Income Tax Act (Canada). The “Tax Payment Amount” shall equal the amount of taxes due by the US Employee (or the
US Employee’s estate) under the Income Tax Act (Canada) on amounts under the Plan, plus, to the maximum extent permitted under Section 409A, an amount necessary to pay any (a) income taxes required to be withheld on wages under section
3401 of the Code as a result of payments made pursuant to this section 2.7 and (b) FICA taxes imposed under section 3101, 3121(a) and 3121(v)(2) that are required to be withheld as a result of payments made pursuant to this Section 2.7.

  

	3.	Amendment of Appendix 

 The Board shall retain the power and authority to amend or modify
this special appendix to the extent the Board in its sole discretion deems necessary or advisable to comply with any guidance issued under Section 409A. Such amendments may be made without the approval of any US Employee. 

* * * *EX-10.17

 Exhibit 10.17 
  

 
 DEFERRED SHARE UNIT PLAN FOR DIRECTORS 

OF ENCANA CORPORATION 

Adopted with effect from December 18, 2002 and reflective with 

amendments made as of April 26, 2005, October 22, 2008, 

December 8, 2009, July 20, 2010, February 13, 2013 and December 1, 2014 

 TABLE OF CONTENTS 

 

							
	 Section
	  	 Page
	 
			
	 1.
	 	PREAMBLE AND DEFINITIONS	  	 	1	  
			
	 2.
	 	CONSTRUCTION AND INTERPRETATION	  	 	3	  
			
	 3.
	 	ELIGIBILITY	  	 	3	  
			
	 4.
	 	DEFERRED SHARE UNIT GRANTS	  	 	4	  
			
	 5.
	 	ACCOUNTS, DIVIDEND EQUIVALENTS AND REORGANIZATION	  	 	6	  
			
	 6.
	 	REDEMPTION ON RETIREMENT OR DEATH	  	 	7	  
			
	 7.
	 	CURRENCY	  	 	8	  
			
	 8.
	 	SHAREHOLDER RIGHTS	  	 	9	  
			
	 9.
	 	ADMINISTRATION	  	 	9	  
			
	 10.
	 	ASSIGNMENT	  	 	9	  

 Schedules were amended effective December 1, 2014: 

 

					
	Schedule A	  	Participation Agreement	  	
			
	Schedule B	  	Election Notice	  	
			
	Schedule C	  	Redemption Notice	  	
		
	Special Appendix        	  	Special Provisions Applicable to Directors Subject to Section 409A of the United States Internal Revenue Code

 DEFERRED SHARE UNIT PLAN FOR DIRECTORS 

OF ENCANA CORPORATION 

(Adopted with effect from December 18, 2002 and reflective with 

amendments made as of April 26, 2005, October 22, 2008, 

December 8, 2009, July 20, 2010, February 13, 2013 and December 1, 2014.) 

 

	1.	PREAMBLE AND DEFINITIONS 

  

	 	1.1	Title 

 The Plan herein described shall be called the “Deferred Share Unit Plan for
Directors of Encana Corporation”. 
  

	 	1.2	Purpose of the Plan 

 The purpose of the Plan is to promote a greater alignment of interests
between Directors and the shareholders of the Corporation. 
  

	 	1.3	Definitions 

  

	 	1.3.1	“Affiliate” means an affiliate of the Corporation as the term “affiliate” is defined in paragraph 3 of Canada Customs and Revenue Agency Interpretation Bulletin
IT-337R3, Retiring Allowances. 

  

	 	1.3.2	“Annual Remuneration” means: 

  

	 	1.3.2.1	for all periods ending on or before December 31, 2014, all amounts payable to a Director or the Chairman of the Board by the Corporation in respect of the services provided to the Corporation by the Director or the
Chairman of the Board as a member of the Board in a calendar year, including without limitation (i) the annual base retainer fee for serving as a Director, (ii) the annual retainer fee for serving as a member of a Board committee,
(iii) the annual retainer fee for chairing a Board committee, (iv) the fees for attending meetings of the Board or Board committees, but excluding (x) amounts received by a Director or Chairman of the Board as a reimbursement
for expenses incurred in attending meetings and (y) the initial and annual grants of Deferred Share Units granted pursuant to Sections 4.1 and 4.3 hereof; and 

 

	 	1.3.2.2	 for all periods commencing on or after January 1, 2015, all amounts payable to a Director or the Chairman of
the Board by the Corporation in respect of the services provided to the Corporation by such person in his or her capacity as a member of the Board and/or Chairman of the Board in a calendar year, including without limitation (i) the annual
Board retainer payable for serving as a Director, (ii) the annual retainer payable for chairing a Board committee and (iii) in the case of the Chairman of the Board, all amounts payable to the

			
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 Deferred Share Unit Plan for
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Chairman of the Board in a calendar year as annual retainer for serving as Chairman of the Board, but excluding (x) all amounts received by a Director or Chairman of the Board
as a reimbursement for expenses incurred in connection with their service to the Corporation as a Director or Chairman of the Board; and (y) the initial and annual grants of Deferred Share Units granted pursuant to Sections 4.1 and 4.3 hereof;

  

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

  

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

  

	 	1.3.5	“Cease Trade Date” has the meaning ascribed thereto in Section 6.3. 

  

	 	1.3.6	“Chairman of the Board” means a director who is not an employee of the Corporation who has been elected or appointed as the non-executive Chairman of the Board of
Encana Corporation. 

  

	 	1.3.7	“Committee” means the Nominating and Corporate Governance Committee of the Board. 

  

	 	1.3.8	“Conversion Date” means, with respect to any Quarter, the date used to determine the Market Value for purposes of determining the number of Deferred Share Units to be awarded in respect of that Quarter
to a Director, which date shall be the date recommended by the Committee and confirmed by the Board and which shall for the Quarter commencing on the effective date of the Plan be the last day of that Quarter and thereafter shall generally be the
last day of each Quarter and, in any event, shall not be earlier than the first business day, or later than December 31, of the year in respect of which the Deferred Share Units are being provided 

 

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

  

	 	1.3.10	“Deferred Share Unit” means a bookkeeping entry on the books of the Corporation, the value of which on any particular date shall be equal to the Market Value. 

 

	 	1.3.11	“Deferred Share Unit Account” has the meaning ascribed thereto in Section 5.1. 

  

	 	1.3.12	“Director” means a director of the Corporation who is not an employee of the Corporation otherwise than in his or her capacity as a member of the Board, and for the purposes of this Plan does not
include the Chairman of the Board. 

			
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 Deferred Share Unit Plan for
Directors
 (With amendments as of December 1, 2014)
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	 	1.3.13	“Market Value” means, with respect to a particular date, the closing price for a Share on the Stock Exchange on the Trading Day immediately prior to that date or, in the event of the Cease Trade Date,
such other value as may be determined pursuant to Section 6.3. 

  

	 	1.3.14	“Quarter” means a fiscal quarter of the Corporation, which, until changed by the Corporation, shall be the three month period ending March 31, June 30, September 30 or December 31 in
any calendar year. 

  

	 	1.3.15	“Redemption Date” has the meaning ascribed thereto in Section 6.1. 

  

	 	1.3.16	“Share” means a common share of the Corporation and such other share as is substituted therefore as a result of amendments to the articles of the Corporation, reorganization or otherwise, including any
rights that form a part of the common share or substituted share but not including any other rights that are attached thereto and trade therewith or any other share that is added thereto; 

 

	 	1.3.17	“Stock Exchange” means The Toronto Stock Exchange, or if the Shares are not listed on The Toronto Stock Exchange, 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. 

  

	 	1.3.18	“Termination Date” has the meaning ascribed thereto in Section 6.1. 

  

	 	1.3.19	“Trading Day” means any date on which the Stock Exchange is open for the trading of Shares and on which one or more Shares actually traded. 

 

	2.	CONSTRUCTION AND INTERPRETATION 

  

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

 

	 	2.2	The Plan shall be governed and interpreted in accordance with the laws of the Province of Alberta and the laws of Canada. 

  

	 	2.3	If any provision of the Plan or part hereof 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.

  

	 	2.4	Headings wherever used herein are for reference purposes only and do not limit or extend the meaning of the provisions herein contained. 

 

	3.	ELIGIBILITY 

  

	 	3.1	The Corporation is establishing the Plan, effective on December 18, 2002. 

			
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 Deferred Share Unit Plan for
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 (With amendments as of December 1, 2014)
	  	Page 4

  

	 	3.2	Nothing herein contained shall be deemed to give any person the right to be retained as a Director of the Corporation or an employee of the Corporation or of an Affiliate. 

 

	4.	DEFERRED SHARE UNIT GRANTS 

  

	 	4.1	Subject to the conditions stated herein: 

  

	 	(i)	For all periods commencing prior to January 1, 2010 each Director and the Chairman of the Board shall receive an annual grant of 5,000 Deferred Share Units; 

 

	 	(ii)	For all periods commencing after January 1, 2010 but prior to January 1, 2015 each Director and the Chairman of the Board shall receive an annual grant of 10,000 Deferred Share Units. 

 

	 	(iii)	For all periods commencing after January 1, 2015 each Director shall receive an annual grant of 9,800 Deferred Share Units and the Chairman of the Board shall receive an annual grant of 18,000 Deferred Share Units.

  

	 	4.2	The participation of a Director and the Chairman of the Board in the Plan shall be evidenced by a written agreement between the Corporation and the eligible Director in the form of Schedule A hereto. The first grant of
Deferred Share Units shall be effective January 1, 2006. For years following 2006, each such annual grant of Deferred Share Units shall, except as otherwise provided in Sections 4.1 to 4.3, be effective on January 1st of such year. Where January 1st falls within a Blackout Period, then the date of such annual grant of Deferred Share Units shall automatically
occur and be effective on the next business day following the last day of such Blackout Period. 

  

	 	4.3	In the case of a Director or a Chairman of the Board who commences being a Director or a Chairman of the Board during a calendar year on a date which occurs after any annual grant of Deferred Share Units for that
particular year: 

  

	 	(i)	in any such year occurring prior to 2010, each such Director or Chairman of the Board shall receive 5,000 Deferred Share Units; 

  

	 	(ii)	in any such year occurring in or after 2010 but prior to 2015, 10,000 Deferred Share Units shall be granted to each Director or the Chairman of the Board, in each such case under this Section 4.3 (i) or
(ii) on the date on which such Director or Chairman of the Board is first elected or appointed to the Board; 

  

	 	(iii)	in any such year occurring in or after 2015, 9,800 Deferred Share Units shall be granted to each Director and 18,000 Deferred Share Units shall be granted to the Chairman of the Board on the date on which such Director
and Chairman of the Board are first elected or appointed to the Board. 

			
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 Deferred Share Unit Plan for
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 The foregoing notwithstanding, effective December 1, 2014, any grant of Deferred Share
Units made pursuant to this Section 4.3 shall be subject to pro-rata adjustment based on the proportion the number of calendar days in the calendar year during which such individual was a Director or
Chairman of the Board is of 365 days. Where any date specified herein for the grant of Deferred Share Units falls on a date which is within a Blackout Period, then the date of such grant of Deferred Share Units shall automatically occur and be
effective on the next business day following the last day of such Blackout Period. 
  

	 	4.4	Subject to Sections 4.5 through 4.7 and such rules, regulations, approvals and conditions as the Committee may impose, a Director or Chairman of the Board may also elect to receive his Annual Remuneration for years
commencing with 2003 in the form of Deferred Share Units or cash or any combination thereof. 

  

	 	4.5	To elect to receive all or a portion, as specified in Section 4.6, of his Annual Remuneration in respect of the 2003 year in the form of Deferred Share Units, a Director or the Chairman of the Board, as the case
may be, shall complete and deliver to the Corporate Secretary of the Corporation an initial written election in the form attached as Schedule B hereto by no later than 15 business days before the end of the 1st Quarter of 2003, which shall, subject
to Section 4.7, apply to all Annual Remuneration payable on and after the end of such Quarter. 

  

	 	4.6	A Director or the Chairman of the Board shall be entitled to elect on an irrevocable basis, subject to Section 4.5 and Section 4.7, one of the following four (4) options with respect to the payment of his
Annual Remuneration: 

  

	 	(i)	25% of the Director’s or Chairman of the Board’s Annual Remuneration in the form of Deferred Share Units; 

  

	 	(ii)	50% of the Director’s or Chairman of the Board’s Annual Remuneration in the form of Deferred Share Units; 

  

	 	(iii)	75% of the Director’s or Chairman of the Board’s Annual Remuneration in the form of Deferred Share Units; or 

  

	 	(iv)	100% of the Director’s or Chairman of the Board’s Annual Remuneration in the form of Deferred Share Units. 

  

	 	4.7	 A Director’s or Chairman of the Board’s latest election received by the Corporate Secretary of the
Corporation with respect to the percentages of his Annual Remuneration to be provided in the form of Deferred Share Units and cash (if applicable) shall be irrevocable and shall continue to apply with respect to Annual Remuneration for the year
commencing immediately following the date of the election and for any subsequent year unless the Director or Chairman of the Board wishes to change the portion of his Annual Remuneration to be provided in the form of Deferred Share Units for
subsequent years. In order to effect such a change, the Director or the Chairman of the Board shall complete and deliver to the Corporate Secretary of the Corporation a new written election, in the form prescribed by the Committee, in accordance
with Section 4.6 which shall be effective for all Annual Remuneration payable in respect of all calendar years 

			
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 Deferred Share Unit Plan for
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commencing after the date on which such new election is delivered (unless subsequently changed again for future years in accordance with this Section 4.7). 

 

	 	4.8	The portion of Annual Remuneration payable to a Director or Chairman of the Board in respect of a Quarter or other period within the year to which such Annual Remuneration relates shall be paid in cash (net of
applicable withholdings) or provided in the form of Deferred Share Units as set out in Section 5.1 as soon as practicable after the last day of each Quarter or such other applicable period in respect of which the Annual Remuneration may be
payable, provided that, notwithstanding any election by a Director or Chairman of the Board under the Plan, the Committee may, in its sole discretion, decline to award Deferred Share Units on account of his Annual Remuneration and instead require
the Director or Chairman of the Board, as the case may be, to receive such Annual Remuneration in cash. Where any date specified herein for the grant of Deferred Share Units falls on a date which is within a Blackout Period, then the date of such
grant of Deferred Share Units shall automatically occur and be effective on the second Trading Day immediately following the end of such Blackout Period to permit the Market Value of any such Deferred Share Units to be determined on a Trading Day
which occurs immediately following the end of any such Blackout Period. 

  

	5.	ACCOUNTS, DIVIDEND EQUIVALENTS AND REORGANIZATION 

  

	 	5.1	An account, to be known as a “Deferred Share Unit Account” shall be maintained by the Corporation for each Director and the Chairman of the Board and will be credited with grants of Deferred Share Units
received by a Director and the Chairman of the Board from time to time. Where Deferred Share Units are granted pursuant to Section 4.8, such Deferred Share Units shall be credited to the eligible Deferred Share Unit Account as of the Conversion
Date applicable for the Quarter or other period to which the Deferred Share Units relate. The number of Deferred Share Units to be credited to a Deferred Share Unit Account as of a particular Conversion Date shall be determined by dividing
(i) the portion of the Annual Remuneration for the applicable Quarter or other applicable period to be satisfied by Deferred Share Units as elected by the Director or the Chairman of the Board, as the case may be, pursuant to any of options
(i) through (iv) of Section 4.6, by (ii) the Market Value on the particular Conversion Date. Deferred Share Units will be fully vested upon being credited to a Deferred Share Unit Account and the entitlement to payment of such
Deferred Share Units at a Director’s or the Chairman of the Board’s Termination Date shall not thereafter be subject to satisfaction of any requirements as to any minimum period of membership on the Board or other conditions.

  

	 	5.2	 Whenever cash dividends are paid on the Shares, additional Deferred Share Units will be credited to each Deferred
Share Unit Account. The number of such additional Deferred Share Units will be calculated by dividing the dividends that would have been paid if the Deferred Share Units recorded in the Deferred Share Unit Account as at the record date for the cash
dividend had been Shares by the Market Value on the date on which the dividends are paid on the Shares. Notwithstanding the foregoing, following a Cease Trade Date, the value of a 

			
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 Deferred Share Unit Plan for
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Share (or the share of a Related Corporation) used to calculate the number of additional Deferred Share Units under this Section 5.2 shall be the value determined on a reasonable and
equitable basis by the Board. Where the date on which dividends are deemed paid on the Deferred Share Units falls on a date which is within a Blackout Period, then the deemed dividend payment date shall automatically occur and be effective on the
second Trading Day immediately following the end of such Blackout Period to permit the Market Value to be determined on a Trading Day which occurs immediately following the end of any such Blackout Period. 

 

	 	5.3	In the event of any stock dividend, stock split, combination or exchange of shares, merger, arrangement, re-organization,
re-capitalization, consolidation, spin-off or other distribution (other than normal cash dividends) of Corporation assets to shareholders, or any other similar changes
affecting the Shares, such proportionate adjustments, to reflect such change or changes shall be made with respect to the number of Deferred Share Units outstanding under the Plan, all as determined by the Board in its sole discretion.

  

	 	5.4	For greater certainty, no amount will be paid to, or in respect of, a Director or the Chairman of the Board under the Plan or pursuant to any other arrangement, and no additional Deferred Share Units will be granted to
a Director or the Chairman of the Board to compensate for a downward fluctuation in the fair market value of the Shares, nor will any other form of benefit be conferred upon, or in respect of, a Director or the Chairman of the Board for such
purpose. 

  

	6.	REDEMPTION ON RETIREMENT OR DEATH 

  

	 	6.1	 The value of the Deferred Share Units credited to a Deferred Share Unit Account shall be redeemable by the
Director or the Chairman of the Board (or, where the Director or the Chairman of the Board has died, his estate) at the Director’s or the Chairman of the Board’s option (or after the Director’s or the Chairman of the Board’s
death at the option of his legal representative) following the event, including death, causing the Director or the Chairman of the Board to be no longer a director or an employee of the Corporation, or a director or employee of an Affiliate (the
“Termination Date”). The Director or the Chairman of the Board (or after the Director’s or Chairman of the Board’s death, his legal representative) shall, by filing a written notice of redemption in the form of Schedule C hereto
with the Corporate Secretary of the Corporation, specify the number of Deferred Share Units to be redeemed and a redemption date (the “Redemption Date”) in respect of such Deferred Share Units which in any event must be after the date on
which the notice of redemption is filed with the Corporation and within the period from the Termination Date to December 15 of the first calendar year commencing after the Termination Date (the “Redemption Deadline”). A Director or
the Chairman of the Board (or after the Director’s or the Chairman of the Board’s death, his legal representative) shall be entitled to file one or more additional notices of redemption in accordance with the foregoing terms until such
time as all of the Deferred Share Units credited to the corresponding Deferred Share Unit Account have been redeemed. In the event the Director or the Chairman of the Board or his respective legal representative has made no such election or has
failed to redeem all Deferred Share Units credited to the 

			
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 Deferred Share Unit Plan for
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 (With amendments as of December 1, 2014)
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corresponding Deferred Share Unit Account prior to the Redemption Deadline, the Corporation shall be entitled to deem any such unredeemed Deferred Share Units as redeemed by the Director or the
Chairman of the Board or his respective legal representative effective as of the Redemption Deadline. 

  

	 	6.2	The value of the Deferred Share Units redeemed by or in respect of a Director or the Chairman of the Board pursuant to Section 6.1 shall be the Market Value on the applicable Redemption Date and shall be paid to
the Director or the Chairman of the Board (or, if the Director or Chairman of the Board has died, to his estate) in the form of a lump sum cash payment, net of any applicable withholdings as soon as practicable after the applicable Redemption Date,
provided that in any event such payment date shall be no later than December 31 of the first calendar year commencing after the Termination Date. 

  

	 	6.3	In the event that any applicable Redemption Date is after the date on which the Shares ceased to be traded on the Stock Exchange, provided such cessation in trading is not reasonably expected to be temporary (the
“Cease Trade Date”), the value of the Deferred Share Units redeemed by or in respect of the Director or the Chairman of the Board on such Redemption Date pursuant to Section 6.1 shall be determined in accordance with the following:

  

	 	(a)	where the Termination Date is before or not more than 365 days after the last Trading Day before the Cease Trade Date, the value of each Deferred Share Unit credited to the corresponding Deferred Share Unit Account at
Redemption Date shall be equal to the Market Value on the last Trading Day before the Cease Trade Date; 

  

	 	(b)	where the Termination Date is after the date that is 365 days after the last Trading Day before the Cease Trade Date, the value of each Deferred Share Unit credited to the Deferred Share Unit Account at Redemption Date
shall be based on the fair market value of a share of the Corporation or of a corporation related thereto at Redemption Date as is determined on a reasonable and equitable basis by the Board after receiving the advice of one or more independent
firms of investment bankers of national repute. 

 The value of Deferred Share Units determined in accordance with paragraph
(a) or (b) of this Section 6.3, as applicable, shall be paid to the Director or the Chairman of the Board (or, if the Director or the Chairman of the Board has died, to his estate) in the form of a lump sum cash payment, net of any
applicable withholdings as soon as practicable after the applicable Redemption Date, provided that in any event such payment date shall be no later than December 31 of the first calendar year commencing after the Termination Date. 

 

	7.	CURRENCY 

  

	 	7.1	All references in the Plan to currency refer to lawful Canadian currency. 

			
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 Deferred Share Unit Plan for
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 (With amendments as of December 1, 2014)
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	8.	SHAREHOLDER RIGHTS 

  

	 	8.1	Deferred Share Units are not Shares or other securities of the Corporation and will not entitle a Director or the Chairman of the Board to any shareholder rights, including, without limitation, voting rights, dividend
entitlement or rights on liquidation. 

  

	9.	ADMINISTRATION 

  

	 	9.1	Unless otherwise determined by the Board, the Plan shall remain an unfunded and unsecured obligation of the Corporation. 

  

	 	9.2	Unless otherwise determined by the Board, the Plan shall be administered by the Committee. 

  

	 	9.3	The Plan may be amended or terminated at any time by the Board, except as to rights already accrued hereunder by the Directors and the Chairman of the Board. Notwithstanding the foregoing, any amendment or termination
of the Plan shall be such that the Plan continuously meets the requirements of paragraph 6801(d) of the Income Tax Regulations or any successor provision thereto. 

 

	 	9.4	The Corporation will be responsible for all costs relating to the administration of the Plan. 

  

	10.	ASSIGNMENT 

  

	 	10.1	The assignment or transfer of the Deferred Share Units, or any other benefits under this Plan, shall not be permitted other than by operation of law. 

* * * * 

 Schedule A 

Deferred Share Unit Plan for Directors of 

Encana Corporation (the “Plan”) 

PARTICIPATION AGREEMENT – Sections 4.1 to 4.3 of the Plan 

I hereby confirm that, as of the date written below, I am a member of the Board of Directors of Encana Corporation and acknowledge that I will be granted
Deferred Share Units (“DSUs”) under Sections 4.1 to 4.3 of the Plan on an annual basis subject to and in accordance with the terms of the Plan. 

I confirm that: 
  

	 	1.	I have received and reviewed a copy of the terms of the Plan and agree to be bound by them. 

  

	 	2.	I understand that my DSUs granted under the Plan may not be redeemed by Encana Corporation (the “Corporation”) until I am no longer either a director or an employee of the Corporation or of an Affiliate.

  

	 	3.	I recognize that when DSUs credited pursuant to the Plan are redeemed in accordance with the terms of the Plan after I am no longer either a director or employee of the Corporation or of an Affiliate, income tax and
other withholdings as required will arise at that time. Upon redemption of the DSUs, the Corporation will make all appropriate withholdings as required by law at that time. 

 

	 	4.	The value of DSUs are based on the value of the common shares of the Corporation from time to time and therefore are not guaranteed. 

 

	 	5.	No funds will be set aside to guarantee the payment of DSUs. Future payment of DSUs will remain an unfunded and unsecured liability recorded on the books of the Corporation. 

 

	 	6.	I understand that, to the extent I am (or become) subject to United States federal income taxes, my DSUs credited pursuant to the Plan, and my rights with respect to such DSUs, will be subject to the terms of the
Special Appendix to the Plan (the “Special Appendix”), which Special Appendix contains terms and conditions that are intended to cause DSUs to comply with Section 409A of the United States Internal revenue Code. I also understand that the
Special Appendix is a part of the Plan and references to the Plan shall be deemed to include a reference to the Special Appendix, to the extent applicable. 

The foregoing is only a brief outline of certain key provisions of the Plan. For more complete information, reference should be made to the Plan text which
governs in the case of a conflict or inconsistency with this Participation Agreement. All capitalized expressions used herein shall have the same meaning as in the Plan unless otherwise defined herein. 

 

					
	  
	 		 	  

	Date	 		 	(Name of Director)
			
		 		 	  

		 		 	(Signature of Director)

  
 A-1 

 Schedule B 

Deferred Share Unit Plan for 

Directors of Encana Corporation (the “Plan”) 

ELECTION NOTICE – Section 4.5 of the Plan 
  

	I.	Election 

 Subject to Part II of this Notice, I hereby elect to receive: 

} 25%            or
            } 50%            or            }
75%            or            } 100% 

of the Annual Remuneration that may be payable to me after the effective date of this election in the form of Deferred Share Units
(“DSUs”) and the balance of any such Annual Remuneration in cash, net of applicable withholdings. 
  

	II.	Acknowledgement 

 I confirm and acknowledge that: 

 

	 	1.	I have received and reviewed a copy of the terms of the Plan and agree to be bound by them. 

  

	 	2.	I understand that, notwithstanding this election, subject to the terms of the Special Appendix (as defined below), if applicable, the Committee retains discretion to decline to grant DSUs, in which case I will remain
eligible to receive my Annual Remuneration in cash. 

  

	 	3.	My DSUs granted under the Plan may not be redeemed by Encana Corporation (the “Corporation”) or any Affiliate thereof until I am no longer either a director or an employee of the Corporation or an Affiliate.

  

	 	4.	When DSUs credited to my account pursuant to this election are redeemed in accordance with the terms of the Plan after I am no longer either a director or employee of the Corporation or any Affiliate, income tax and
other withholdings as required will arise at that time. Upon redemption of the DSUs, the Corporation will make all appropriate withholdings as required by law at that time. 

 

	 	5.	The value of DSUs are based on the value of the common shares of the Corporation and therefore are not guaranteed. 

  

	 	6.	No funds will be set aside to guarantee the payment of DSUs. Future payment of DSUs will remain an unfunded liability recorded on the books of the Corporation. 

 

	 	7.	 This election is irrevocable with respect to Annual Remuneration payable after the effective date described in
Part III below, subject to my right under the Plan to make a new election with respect to Annual Remuneration payable in calendar 

  
 B-1 

	 	
years commencing after such new election notice is received by the Corporate Secretary of the Corporation. 

  

	 	8.	The foregoing is only a brief outline of certain key provisions of the Plan. In the event of any discrepancy between the terms of the Plan and the terms of this Election Notice, the terms of the Plan shall prevail. All
capitalized expressions used herein shall have the same meaning as in the Plan unless otherwise defined herein. 

  

	 	9.	To the extent I am (or become) subject to United States federal income taxes, my DSUs credited pursuant to the Plan, and my rights with respect to such DSUs, will be subject to the terms of the Special Appendix to the
Plan (the “Special Appendix”), which Special Appendix contains terms and conditions that are intended to cause DSUs to comply with Section 409A of the United States Internal revenue Code. I also understand that the Special Appendix is a
part of the Plan and references to the Plan shall be deemed to include a reference to the Special Appendix, to the extent applicable. 

  

	III.	Effective Date 

 This election shall be effective for the year commencing after the date
on which this election is received by the Corporate Secretary of the Corporation. 
  

					
	  
	 		 	  

	Date	 		 	(Name of Director)
			
		 		 	  

		 		 	(Signature of Director)

  
 B-2 

 Schedule C 

Deferred Share Unit Plan for 

Directors of Encana Corporation (the “Plan”) 
  

	To:	Corporate Secretary 

 Encana Corporation 

REDEMPTION NOTICE 

Pursuant to Section 6.1 of the Plan, I hereby advise Encana Corporation (the “Corporation) that I wish to redeem the number of
Deferred Share Units specified below which are currently credited to my account under the Plan on the
                                        
{Redemption Date specified below, which shall be no later than December 15 (and for directors subject to United States federal income taxes, shall not be earlier than January 1) of the first calendar year commencing after the year in which the
Director [or the Chairman of the Board, as applicable] ceases to be any of a director or an employee of the Corporation or of an Affiliate.}. 
  

					
	Number of Deferred Share Units redeemed:	  	  
	  	
		  	                (If all, specify “All”)	  	

  

					
	Redemption Date(s):	  	  
	  	
		  	(Must be after the date which this Notice of Redemption is filed with the Corporation)	  	
		
		  	If multiple redemptions, specify the number of Deferred Share Units to be redeemed on the corresponding date.

 If the Redemption Notice is signed by a legal representative, documents providing the authority of such
signature must be provided to the Corporation. 
 Payment is to be received as follows (check one): 

 

					
	If Canadian:            	  	             mailed to my home address	  	             direct deposit
			
	If US:	  	             mailed to my home address	  	             wire transfer

 Send cheque/check to: 
  

					
	Address:	  	  
	  	

  

													
	City:	 	  
	 	Province/State:	 	  
	 	Postal Code/Zip:	  	  
	  	

 If payment is direct deposited please complete the following if your banking information has changed and attach a void
cheque/check: 
  

					
	Bank Name:	  	  
	  	
			
	Branch Address:	  	  
	  	

 
					
			
	City / Province:	  	  
	  	

 
					
			
	Branch Transit Number (5 digits):	  	  
	  	

 
					
			
	Bank Number (3 digits):	  	  
	  	

 
					
			
	Account Number:	  	  
	  	

 I hereby authorize Encana Corporation to credit payment, due to me to my account, which I certify is my account, is
in my name and under my direction and control. I make this authorization to the financial institution above designated. I understand that if the information provided is incorrect or illegible, I will not receive payment until the correct information
is received by Encana Corporation. If you are not supplying a void cheque/check, we require a document approved in writing from your banking institution confirming this information, or alternatively their stamp/approval that the information supplied
on this form is correct. In completing this form, you are acknowledging all information to be accurate and correct to the best of your knowledge. 
  

					
	  
	 		 	  

	Date	 		 	(Name of Director)
			
		 		 	  

		 		 	(Signature of Director)

 Return this form to the Corporate Secretary of the Corporation as per Section 6.1 of the Encana Corporation Deferred
Share Unit Plan for Directors. 

  
 C-1 

 Special Appendix 

to 
 DEFERRED SHARE UNIT
PLAN FOR DIRECTORS OF 
 ENCANA CORPORATION 

Special provisions applicable to directors of Encana Corporation subject to 

Section 409A of the United States Internal Revenue Code 

This special appendix sets forth special provisions of the Plan that apply to U.S. Directors. This special appendix shall become effective on October 22,
2008; however, Sections 2.5 and 2.7 of this special appendix shall not apply in the case of a U.S. Director’s termination or death that occurs in 2008. For avoidance of doubt, nothing in this special appendix shall be deemed to modify the Plan
as it relates to directors of Encana Corporation who are not U.S. Directors. 
  

	1.	Definitions 

 For purposes of this special appendix: 

 

	1.1	“Code” means the United States Internal Revenue Code of 1986, as amended, and any applicable Treasury Regulations and other binding regulatory guidance thereunder. 

 

	1.2	“Section 409A” means section 409A of the Code. 

  

	1.3	“Separation From Service” shall have the meaning set forth in Section 409A(a)(2)(A)(i) of the Code. 

  

	1.4	“Specified Employee” means a U.S. Director who meets the definition of “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code. 

 

	1.5	“U.S. Director” means a director of Encana Corporation subject to Section 409A. 

  

	2.	Compliance with Section 409A 

  

	2.1	In General. Notwithstanding any provision of the Plan to the contrary, it is intended that, with respect to U.S. Directors, the provisions of the Plan comply with Section 409A, and all provisions of the Plan
shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. Each U.S. Director is solely responsible and liable for the satisfaction of all taxes and penalties that may be
imposed on or for the account of such U.S. Director in connection with the Plan or any other Plan maintained by the Corporation (including any taxes and penalties under Section 409A), and neither the Corporation nor any affiliate of the Corporation
shall have any obligation to indemnify or otherwise hold such U.S. Director (or any beneficiary) harmless from any or all of such taxes or penalties. 

  

	2.2	 Election to Receive Deferred Share Units. A U.S. Director who wishes to have
all or any part of his Annual Remuneration for a given calendar year paid as Deferred Share Units shall irrevocably elect payment in the form of Deferred Share Units prior to the commencement of the calendar year during which the Annual Remuneration
is to be earned. Notwithstanding the foregoing, to the extent permitted by Section 409A, in the first calendar year in which a U.S. Director becomes eligible to participate in the Plan,

			
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 Deferred Share Unit Plan
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the U.S. Director may elect payment of all or any part of the Annual Remuneration payable for services to be performed after the election in the form of Deferred Share Units, provided that such
election is made within 30 days after the date the U.S. Director first becomes eligible to participate in the Plan. Any election under this Section 2.2 shall be made in accordance with procedures established by the Committee for such purpose.
Any election made under this Section 2.2 shall apply to the Annual Remuneration earned in future calendar years unless and until the U.S. Director makes a later election in accordance with the terms of this Section 2.2. 

 

	2.3	Payment Deadline for Annual Remuneration Paid in Cash. Notwithstanding Section 4.8 of the Plan, payment of the Annual Remuneration payable in cash shall in all events be paid within 60 days after the last
day of each Quarter. 

  

	2.4	Committee’s Ability to Decline to Issue Deferred Share Units. Notwithstanding Section 4.8 of the Plan, the Committee may only exercise its discretion pursuant to Section 4.8 of the Plan to decline
to award Deferred Share Units for a given calendar year (notwithstanding an election by a U.S. Director under the Plan to have all or any part of his Annual Remuneration for a given calendar year paid as Deferred Share Units) if it does so on or
before the deadline for the U.S. Director to make such election pursuant to Section 2.2. 

  

	2.5	Distributions to U.S. Directors. Notwithstanding the provisions of Section 6.1 of the Plan to the contrary, the value of a U.S. Director’s Deferred Share Unit Account shall be redeemed during the
calendar year next following the calendar year in which the U.S. Director’s Termination Date occurs. If the U.S. Director does not select one or more Redemption Dates such that all Deferred Share Units in a U.S. Director’s Deferred Share
Unit Account are redeemed, his Deferred Share Unit Account shall be redeemed by the Committee in sufficient time so that payment may be made on the last business day of the calendar year following the year in which the Termination Date occurs. For
avoidance of doubt, a U.S. Director may not specify any Redemption Date that is earlier than January 1 or later than December 15 of the calendar year following the calendar year in which the Termination Date occurs. The Termination Date
shall be the date on which the U.S. Director experiences a Separation From Service or dies. If the Termination Date results from the U.S. Director’s death, payments shall be deemed for purposes of Section 409A to be made upon death rather than
Separation From Service, and shall be paid pursuant to Section 2.7. 

  

	2.6	Distributions to Specified Employees. Solely to the extent required by Section 409A, Deferred Share Unit Accounts which become redeemable on account of the Separation From Service of a U.S. Director who is
determined to be a Specified Employee shall not be redeemed and paid before the date which is 6 months after the Specified Employee’s Separation from Service (or, if earlier, the date of death of the Specified Employee). 

 

	2.7	 Distributions on Death. The Deferred Share Unit Account of a U.S. Director whose Termination Date results
from death shall be redeemed and paid to the U.S. Director’s estate during the calendar year next following the calendar year in which the death occurs. If the U.S. Director (or the U.S. Director’s estate) does not select an applicable
Redemption Date, his Deferred Share Unit Account shall be redeemed by the 

			
	 Special Appendix
 Deferred Share Unit Plan
for
 Directors of Encana Corporation
	  	Page 3

  

	 	
Committee in sufficient time so that payment may be made on the last business day of the calendar year following the year in which the death occurs. 

 

	2.8	Notwithstanding anything contained in this Special Appendix, if a U.S. Director becomes subject to tax pursuant to the provisions of the Income Tax Act (Canada), on amounts under the Plan prior to receipt of such
amounts pursuant to Section 2.5 or 2.7 of this Special Appendix, a portion of the U.S. Director’s Deferred Share Unit Account shall be redeemed so that payment may be made in an amount equal to the “Tax Payment Amount” as soon as
practicable (but not later than 90 days) after the date such amounts become subject to tax pursuant to the provisions of the Income Tax Act (Canada). The “Tax Payment Amount” shall equal the amount of taxes due by the U.S. Director (or the
U.S. Director’s estate) under the Income Tax Act (Canada) on amounts under the Plan, plus an additional amount to cover any taxes imposed on the payment made pursuant to this Section 2.8 to the maximum extent permitted under Section 409A.

  

	3.	Amendment of Appendix 

 The Board shall retain the power and authority to amend or modify
this special appendix to the extent the Board in its sole discretion deems necessary or advisable to comply with any guidance issued under Section 409A. Such amendments may be made without the approval of any U.S. Director. 

* * * *

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