Document:

10.2 walterguaranty

EXHIBIT 10.3
EXECUTION COPY

GUARANTY

THIS GUARANTY (this “Guaranty”) is made as of March 17, 2014 by WALTER INVESTMENT MANAGEMENT CORP., a Maryland Corporation (“Guarantor”), for the benefit of FANNIE MAE, a corporation chartered under the laws of the United States (“Fannie Mae”).

BACKGROUND

A.    Green Tree Servicing LLC, a Delaware limited liability company (“Subsidiary”) has entered into a Mortgage Selling and Servicing Contract with Fannie Mae (as amended from time to time, “Subsidiary’s MSSC”), effective as of March 23, 2005, as subsequently amended by the related Addendum dated as of April 4, 2012 establishing Subsidiary as an approved seller and servicer of mortgage loans and participation interests and providing the terms and conditions of the sale to and servicing of mortgage loans for, Fannie Mae.
    
B.    Guarantor indirectly owns 100% of the membership interests of Subsidiary, and as such, Guarantor will receive a direct and material economic benefit from Subsidiary’s MSSC and the transactions contemplated thereby.

C.    Subsidiary is party to and bound by various agreements with Fannie Mae, including, without limitation, the MSSC and the Fannie Mae Selling and Servicing Guides (as amended or supplemented from time to time, the “Selling Guide” and the “Servicing Guide”; together, the “Guides,” which term shall include anything that, in whole or in part, supersedes or is substituted for the Guides; the MSSC, the Guides and all other agreements with Fannie Mae to which the Subsidiary is a party or bound by now or hereafter in effect are referred to herein as the “Fannie Mae Contracts”);

D.    Citimortgage, Inc. and Everbank have requested approval from Fannie Mae to transfer the servicing of certain loans to the Subsidiary and it is a condition to Fannie Mae’s consent to those servicing transfers that Guarantor enter into this Agreement; and

NOW THEREFORE, in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, Guarantor agrees as follows:

1.Unconditional Guaranty of Performance and Payment.

(a)Guarantor unconditionally, irrevocably and absolutely guarantees to Fannie Mae, as primary obligor and not merely as a surety, the prompt performance and punctual payment (whether at stated maturity, by acceleration or otherwise) of all Servicing Obligations (as hereinafter defined) required to be performed or paid by Subsidiary under Subsidiary’s Fannie Mae Contracts relating to any mortgage loans or participation interests that Subsidiary services or has serviced for, or on behalf of, Fannie Mae, including, without limitation, interest, fees, penalties, fines, costs and expenses (including attorneys’ fees) accruing on such obligations after the commencement, whether voluntary or involuntary, of a bankruptcy, reorganization, liquidation or other similar federal or state law proceeding by or against Subsidiary, without regard to whether or not such interest, fees, penalties, fines, costs and expenses are allowed claims in such proceeding (collectively, “Subsidiary’s Obligations”).  “Servicing Obligations” include all servicing responsibilities, obligations, covenants, representations and warranties made or assumed with respect to any loan Subsidiary has serviced or is servicing on behalf of Fannie Mae, including, but not limited to, requirements relating to day-to-day loan administration activities, reporting and remitting, and foreclosure and loss mitigation activities. This Guaranty is a continuing guarantee of the performance and payment of Subsidiary’s Obligations.  For the avoidance of doubt, “Servicing Obligations” shall not include Subsidiary’s obligations relating to the selling representations and warranties made or assumed by Subsidiary in connection with the sale and/or securitization of mortgage loans to and/or by Fannie Mae under the Fannie Mae Contracts; however, “Servicing Obligations” shall include selling representation and warranties Subsidiary has assumed, or may, subsequent to the execution of this Guaranty, have assumed in connection with Subsidiary’s purchase of servicing rights related to mortgage loans owned, guaranteed or securitized by Fannie Mae. Without limiting the generality of the foregoing, as part of Guarantor’s guarantee of the performance of Subsidiary’s Obligations, Guarantor shall take all actions required to ensure that Subsidiary is in compliance at all times with all requirements under Fannie Mae  Contracts relating to Subsidiary’s capital, net worth, liquidity, and all other eligibility requirements set forth in the Fannie Mae Contracts. 

(b)This is a guaranty of performance and payment and not of collection.  Guarantor shall discharge forthwith on written demand by Fannie Mae, and at no cost to Fannie Mae, all of Subsidiary’s Obligations, whenever arising.  Fannie Mae, in its sole discretion, may make demand under this Guaranty, at one or more times and from time to time, of all or any part of the obligations of Guarantor hereunder.  

(c)    Guarantor agrees to promptly pay to Fannie Mae all costs and out-of-pocket expenses, including, without limitation, court costs and expenses and the reasonable fees and disbursements of legal counsel, incurred by or on behalf of Fannie Mae arising from or in connection with the negotiation and execution of this Guaranty, any enforcement of Guarantor’s obligations under this Guaranty or the protection, assertion or enforcement of Fannie Mae’s rights or remedies under this Guaranty or the Fannie Mae Contract.  The agreement contained in this Section 1(c) shall survive the termination of this Guaranty.

(d)    Guarantor agrees to indemnify Fannie Mae and hold Fannie Mae harmless from and against all losses, damages, judgments, claims, legal actions, and legal fees that are based on, or result from, the Subsidiary’s failure or alleged failure to satisfy its Servicing Obligations for mortgage loans or MBS pools it services for Fannie Mae under the provisions of the Fannie Mae Contract.  The agreement contained in this Section 1(d) shall survive the termination of this Guaranty.

(e)All payments to be made hereunder by Guarantor shall be made in lawful money of the United States of America at the time of payment, shall be made in immediately available funds, and shall be made without any deduction (whether for taxes or otherwise) or offset whatsoever.

2.Primary Guaranty.  The obligations of Guarantor hereunder shall be promptly performed and paid without demand on Subsidiary and shall be unaffected by (a) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Guaranty, the Fannie Mae Contract or any other agreement, document or instrument to which Guarantor and/or Subsidiary is or may become a party, (b) the insolvency or financial condition of Guarantor and/or Subsidiary, (c) the existence, value or condition of, or failure to perfect any security interest or lien against, any collateral for Subsidiary’s Obligations or any action, or the absence of any action, by Fannie Mae in respect thereof (including, without limitation, the release of any such security interest or lien), (d) any act or omission that, but for this Section 2, could or might act as a release, discharge or modification of the obligations of Guarantor hereunder, or (e) any other action or circumstance that might otherwise constitute a legal or equitable discharge or defense of a surety or a guarantor.

3.Waivers and Acknowledgements  by Guarantor.

(a)    Guarantor hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty.  

(b)    Without limiting the generality of Section 2 or Section 3(a) above, Guarantor hereby waives, to the extent permitted by applicable law: 

(i)diligence, presentment, demand of payment, protest and all notices (whether for non-payment, protest, acceptance, maturity, acceleration, extension of time, change in nature or form of Subsidiary’s Obligations, acceptance of further security, release of security, composition or agreement arrived at as to the amount of, or the terms of, any of Subsidiary’s Obligations, notice of adverse change in Subsidiary’s financial condition or any other fact, circumstance or action, whether or not it might increase the risk to Guarantor, or otherwise);

(ii)any defense of the statute of limitations (which is six (6) years in duration or shorter) in any action against Guarantor under this Guaranty;

(iii)notice of acceptance of this Guaranty and of the incurring by Guarantor of any of its obligations hereunder;

(iv)all demands whatsoever; and 

(v)all rights and remedies to require Fannie Mae to:

(1) proceed against Subsidiary (or any other person or entity);

(2) proceed against or exhaust any collateral held by Fannie Mae to secure the performance or payment of any of Subsidiary’s Obligations; or 

(3) pursue any other remedy, whether at law or in equity, it may now or hereafter have against Subsidiary (or any other person or entity), including, but not limited to, any rights to an “election of remedies” or marshalling of assets.

4.Reinstatement.  If for any reason at any time performance and/or payment of Subsidiary’s Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by Fannie Mae, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, then (i) such amounts shall not constitute a release of liability of Guarantor hereunder and Guarantor agrees to promptly perform and/or pay such obligations to Fannie Mae on demand, and (ii) any prior release or discharge from the terms of this Guaranty given to Guarantor by Fannie Mae shall be without effect, and this Guaranty shall remain in full force and effect.

5.[Reserved]

6.Subrogation.  Until all of Subsidiary’s Obligations have been indefeasibly performed and/or paid in full in cash to Fannie Mae and this Guaranty has been terminated as provided hereinafter, Guarantor expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off or to any other rights that could accrue to a surety against a principal, to a guarantor against a principal, to a guarantor against a maker or obligor, to an accommodation party against the party accommodated, to a holder or transferee against a maker, or to the holder of any claim against any person or entity, that Guarantor may have or hereafter acquire against Subsidiary.

7.Representations and Warranties.  

(a)Guarantor hereby represents and warrants the following to Fannie Mae, each and all of which shall survive the execution and delivery of this Guaranty:

(i)This Guaranty has been duly authorized, executed and delivered, and is a valid and legally binding agreement, enforceable against Guarantor in accordance with its terms.  The execution, delivery and performance of this Guaranty does not and will not (1) violate (a) any provision of any law or regulation, (b) any order of any court or governmental agency, (c) any agreement of any kind to which Guarantor is a party, or by which Guarantor is bound, or (d) Guarantor’s charter or by-laws, the breach or violation of which would affect or limit Guarantor’s performance under or compliance with any terms of this Guaranty; (2) conflict with or result in the breach of, or constitute a default under, or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which Guarantor is a party or by which Guarantor or any of its property is bound; and/or (3) result in the creation or imposition of any security interest or lien upon any of the property or assets of Guarantor;

(ii)Each consent, approval or authorization of any kind required to be obtained by Guarantor in connection with the execution and delivery of this Guaranty or the performance of its obligations hereunder has been duly obtained and is in full force and effect;

(iii)There are no investigations, actions, suits or proceedings pending, or to the knowledge of Guarantor (following due and diligent inquiry) threatened against Guarantor, in any court or before any federal, state, municipal or other governmental department or commission, board, bureau, agency or instrumentality, or before any arbitrator or other tribunal that, if adversely determined, will materially and adversely affect Guarantor’s business or financial condition or results of operations or the validity and enforceability of this Guaranty or Guarantor’s ability to perform its obligations hereunder;

(iv)The execution of this Guaranty has been (1) specifically approved by the Board of Directors of Guarantor and such approval is reflected in the minutes of the meetings of such Board of Directors, or (2) approved by an officer of Guarantor who was duly authorized by the Board of Directors to enter into transactions of the type set forth in this Guaranty and such authorization is reflected in the minutes of the Board of Directors’ meetings.  This Guaranty constitutes the “written agreement” of Guarantor and Guarantor shall continuously maintain all components of such “written agreement” as an official record of Guarantor or of any successor thereto; and

(v)Guarantor’s obligations hereunder are not subject to any offsets or defenses.

Guarantor shall deliver to Fannie Mae an executed opinion of counsel in the form attached hereto as Addendum “A” contemporaneously with the execution and delivery of this Guaranty. 

8.Notices.  Any demand, notice or other communication required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or by recognized overnight national courier service or if sent by registered or certified mail, return receipt requested, first class postage prepaid, addressed to the applicable party at the address for notices set forth in this Section 8.  Any demand, notice or other communication so given shall be deemed to have been received at the time the notice is delivered to such address.

Guarantor:    Walter Investment Management Corp.
3000 Bayport Drive, Suite 1100
Tampa, FL 33607
Fax: 213-281-5635
Attention: General Counsel

Fannie Mae:    Fannie Mae
3900 Wisconsin Avenue, NW
Washington, D.C. 20016
Attention:  Vice President, Single Family Operations

With a copy to:    Fannie Mae
3900 Wisconsin Avenue, NW
Washington, D.C. 20016
Attention: General Counsel
        

9.GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.  THE VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF GUARANTOR AND FANNIE MAE, SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO NEW YORK’S PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION. GUARANTOR HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS GUARANTY SHALL BE TRIED AND DETERMINED ONLY IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, OR, AT THE SOLE OPTION OF FANNIE MAE, IN ANY OTHER COURT IN WHICH FANNIE MAE SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

10.WAIVER OF JURY TRIAL.  GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS GUARANTY, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF GUARANTOR AND FANNIE MAE WITH RESPECT TO THIS GUARANTY, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.  GUARANTOR HEREBY AGREES THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT FANNIE MAE MAY FILE A COPY OF THIS SECTION 10 WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

11.Further Assurances.  Guarantor agrees, at any time and from time to time, upon written request by Fannie Mae to promptly take, or cause to be taken, any action and to execute and deliver any additional documents that, in the sole discretion of Fannie Mae, may be necessary in order to assure to Fannie Mae the full benefits of this Guaranty, in each case at the sole cost and expense of Guarantor.

12.Amendments; Termination; Delays; Rights Cumulative; Termination.  Neither this Guaranty nor any term or provision hereof may be modified, amended, changed, waived or discharged, except by an instrument in writing signed by Fannie Mae and Guarantor expressly referring to this Guaranty and to the provision so modified, amended, changed, waived or discharged.  No such waiver shall extend to or affect any obligation not expressly waived or impair any right consequent to such obligation.  No course of dealing or delay or omission on the part of Fannie Mae in exercising any right, power or remedy under this Guaranty, the Fannie Mae Contract or applicable law shall operate as a waiver thereof or otherwise be prejudicial thereto, nor shall any single or partial exercise of any right, power or remedy preclude any other or future exercise thereof or the exercise of any other right, power or remedy.  The rights, powers and remedies hereunder provided to Fannie Mae are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights, powers and remedies provided at law or in equity.  This Guaranty may not be terminated prior to Guarantor’s full and complete performance and indefeasible payment of all of Subsidiary’s Obligations, and then only to the extent of such performance and payment.

13.Severability.  Fannie Mae is relying and is entitled to rely upon each and all of the provisions of this Guaranty; and accordingly, if any provision or provisions of this agreement should be held to be invalid or ineffective, then all other provisions shall continue in full force and effect.

14.References to Guaranty.  References to this “Guaranty” shall mean this Guaranty, including all amendments, modifications and supplements and any annexes, exhibits and schedules to any of the foregoing, and shall refer to this Guaranty as the same may be in effect at the time such reference becomes operative.

15.Successors and Assigns.  This Guaranty shall be binding upon Guarantor, its successors (including a debtor-in-possession on behalf of Guarantor) and assigns, and shall inure to the benefit of Fannie Mae and its successors, endorsees, transferees and assigns; provided, however, Guarantor shall not assign this Guaranty or delegate any of its obligations hereunder without Fannie Mae’s prior written consent.  Any assignment or delegation without the prior written consent of Fannie Mae shall be absolutely void.  In the event of any assignment or other transfer of rights by Fannie Mae, the rights and benefits herein conferred upon Fannie Mae shall automatically extend to and be vested in such assignee or other transferee.  

16.Entire Agreement.  This Guaranty constitutes the entire agreement between the parties hereto with respect to the subject matter hereof superseding all other discussions, promises, representations, warranties, agreements and understandings, whether written or oral, relating to a guaranty by Guarantor of the obligations under the Fannie Mae Contract.  Nothing herein contained shall impair, as between Subsidiary and Fannie Mae, the obligations of Subsidiary under the Fannie Mae Contract.

17.Construction; Headings.  This Guaranty has been reviewed by Guarantor and its counsel, and shall be construed and interpreted neither against nor in favor of either Fannie Mae or Guarantor but rather in accordance with the fair meaning thereof.  The headings in this Guaranty are for convenience or reference only and shall not be construed in any way to limit or define the content, scope or intent of the provisions hereof.

18.Financial Statements.  Within 90 days after the end of each fiscal year, Guarantor shall submit copies of its audited, consolidated financial statements prepared in accordance with generally accepted accounting principles to Fannie Mae at the following address:

Fannie Mae
Attn:  Counterparty Risk Monitoring Unit
One South Wacker Drive, Suite 1400
Chicago, IL  60606 

Guarantor shall cause Subsidiary to continue to submit to Fannie Mae its financial statements and reports, as required by Subsidiary’s MSSC and the Fannie Mae Selling and Servicing Guides, as each may be modified, supplemented or amended from time to time.

Subject to a mutually acceptable non-disclosure agreement, Guarantor shall submit copies of unaudited financial information (to the extent available) to Fannie Mae at the address above upon request by Fannie Mae. 

[Signature Page to follow]

IN WITNESS WHEREOF, this Guaranty has been duly executed by the undersigned to be effective as of the date first above written.

                        

WALTER INVESTMENT MANAGEMENT CORP.

By:  ______________________________
Name: ____________________________
Title: _____________________________

ADDENDUM “A” TO GUARANTY

Date:

Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C.   20016
Attention:     Vice President & Deputy General Counsel
Single Family Marketing and Customer Management

Ladies and Gentlemen:

We have acted as counsel to ____________________, a _________________ (“Guarantor”), in connection with the execution by Guarantor of that certain Guaranty (the “Guaranty”) by Guarantor for the benefit of Fannie Mae, dated as of _____________ 1, 20____.  This opinion is being given pursuant to Section 7 of the Guaranty.

We have examined the following documents:

(a)    the Guaranty, and

(b)    such corporate records of Guarantor, documents and matters as we have deemed necessary and appropriate to render the opinion set forth in this letter.

In reaching the opinions set forth below, we have assumed the following:  (i) the genuineness of all signatures, other than that of the officer of Guarantor executing the Guaranty, and (ii) the authenticity of all documents submitted to us as originals, and the conformity with the originals (and the authenticity) of all documents submitted to us as copies.

Based upon our review of the foregoing documents, and subject to the assumptions set forth herein, it is our opinion that, as of the date of this opinion letter:

1.    The execution and delivery of the Guaranty by Guarantor has been duly and validly authorized by all necessary action on the part of Guarantor.

2.    The Guaranty has been duly and validly executed by Guarantor, and constitutes a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, except as such enforceability may be subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar law affecting creditors’ rights generally and to the effect of general principles of equity.

The opinions expressed in this letter are for the exclusive reliance of Fannie Mae and its successors, endorsees, transferees and assigns.

Sincerely, 

-1-SE-2014.03.31 Ex10.1

SPECTRA ENERGY CORP
PHANTOM STOCK AWARD AGREEMENT

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

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

AWARD

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

Section 1.    Number and Nature of Phantom Stock Units and Tandem Dividend Equivalents.  The number of Phantom Stock units and the number of tandem Dividend Equivalents subject to this Award are each ___________ (____).  Each Phantom Stock unit, upon becoming vested before its expiration, represents a right to receive payment in the form of cash equal to the Fair Market Value of one (1) share of Common Stock.  Each tandem Dividend Equivalent represents a right to receive cash payments equivalent to the amount of cash dividends declared and paid on one (1) share of Common Stock after the Date of Grant and before the Dividend Equivalent expires.  Phantom Stock units and Dividend Equivalents are used solely as units of measurement, and are not shares of Common Stock and the Grantee is not, and has no 

2014 Phantom Award Agreement - Cash

rights as, a shareholder of the Company by virtue of this Award.  The Phantom Stock units and Dividend Equivalents subject to this Award have been awarded to the Grantee in respect of services to be performed by the Grantee exclusively in and after the year in which the Award is made.

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

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

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

(c)      Death or Disability.  If Grantee’s employment with the Company, including Subsidiaries, terminates (i) as the result of Grantee’s death or (ii) as the result of Grantee’s “permanent and total disability,” as defined in Section 1 of Schedule A hereto or Section 2 of Schedule B hereto, as applicable to the Grantee, 100% of the Phantom Stock units subject to this Award shall vest immediately.

2014 Phantom Award Agreement - Cash    2

(d)     Involuntary Termination Without Cause.  If Grantee’s employment is terminated by the Company, or employing Subsidiary, other than for Cause, regardless of reason for termination or the party giving notice, (i) the number of Phantom Stock units and tandem Dividend Equivalents to which the Grantee shall have a right to payment hereunder shall be prorated to reflect the number of months of Active Employment during the Vesting Period, and shall vest immediately, and (ii) the remaining Phantom Stock units shall be forfeited.  Solely for purposes of calculating the prorated payment in clause (i) of the preceding sentence, if the Grantee’s Active Employment continued for at least one (1) day during a calendar month in the Vesting Period, Grantee’s Active Employment shall be considered to have continued for the entire month, but in no event for more than thirty-six (36) months.  The additional provisions of Section 3 of Schedule B hereto are incorporated herein if Schedule B is applicable to the Grantee.               

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

For the purposes of this Agreement, “Change in Control” means: 

		
	(1)
	Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule 13d‐3 promulgated under the Exchange Act) of 30% or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Subsection (1), the following acquisitions shall not constitute a Change of Control:  (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (iv) any acquisition pursuant to a transaction that complies with Subsections (3)(A), (3)(B) and (3)(C) below;

		
	(2)
	Individuals who, as of the date hereof, 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 the date hereof whose election, or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent 

2014 Phantom Award Agreement - Cash    3

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 other than the Board;
		
	(3)
	Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its Subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its Subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company 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 Company or all or substantially all of the Company’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 Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any parent or other entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or 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 (C) 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 at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or 

		
	(4)
	Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding anything in the foregoing to the contrary, with respect to compensation (i) that is subject to Code Section 409A and (ii) for which a 

2014 Phantom Award Agreement - Cash    4

Change in Control would accelerate the timing of payment thereunder, the term “Change in Control” shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company as defined in Code Section 409A and authoritative guidance thereunder, but only to the extent inconsistent with the above definition and as necessary to comply with Code Section 409A as determined by the Company.
Further, by acceptance of, and in consideration of receipt of, this Award, Grantee hereby agrees and acknowledges that, effective as of the date hereof, with respect to any awards granted to Grantee under the Plan prior to the date hereof that are outstanding as of the date hereof, the definition of “Change in Control” shall be the definition of “Change in Control” as set forth in this Section 2(e).

For the purposes of this Agreement, “Good Reason” is defined as the occurrence (without the Grantee’s express written consent) of any of the following, unless such act or failure to act is corrected, prior to the effective date of Grantee’s termination of employment, as specified in Grantee’s notice termination, as provided in the following paragraph: (A) a substantial adverse alteration in the nature or status of the Grantee’s responsibilities; (B) a reduction in the Grantee’s annual base salary, provided that there is not an across-the-board reduction similarly affecting all or substantially all similarly-situated employees of the Company and employing Subsidiaries; (C) a reduction in the Grantee’s target annual bonus, provided that there is not an across-the-board reduction similarly affecting all similarly-situated employees of the Company and employing Subsidiaries; (D) the elimination of any material employee benefit plan in which the Grantee is a participant or the material reduction of Grantee’s benefits under such plan, unless the Company either (1) immediately replaces such employee benefit plan or unless the Grantee is permitted to immediately participate in other employee benefit plan(s) providing the Grantee with a substantially equivalent value of benefits in the aggregate to those eliminated or materially reduced, or (2) immediately provides the Grantee with other forms of compensation of comparable value to that being eliminated or reduced; (E) a relocation without the written consent of the Grantee that requires the Grantee to report to a work location more than thirty-five (35) miles from the work location to which the Grantee was assigned prior to the Change in Control. 

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

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

2014 Phantom Award Agreement - Cash    5

    
Section 3.    Definition of “Cause.”  For the purposes of this Agreement, “Cause” for termination by the Company or an employing Subsidiary of the Grantee’s employment shall include: (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a (A) felony, (B) crime or criminal offense involving moral turpitude, or (C) criminal or summary conviction offense that is related to the Grantee’s employment with the Company or an employing Subsidiary, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its affiliates, or (vi) the usual meaning of just cause under Canadian common law, if applicable; all as determined by the Company in its sole discretion.

Section 4.    Violation of Grantee Obligation.   In consideration of the continued vesting opportunity provided under Section 2 following the termination of Grantee’s continuous employment by the Company, including Subsidiaries, if Grantee is considered “retired”, Grantee agrees to the noncompetition and other restrictions set forth in Section 2 of Schedule A hereto or Section 4 of Schedule B hereto, as applicable to the Grantee.
 
Section 5.    Forfeiture/Expiration.  Any Phantom Stock unit subject to this Award shall be forfeited upon notice of the termination of Grantee’s continuous employment with the Company and its Subsidiaries, whether such notice is given by the Grantee or by the Company, including Subsidiaries, from the Date of Grant, except to the extent otherwise provided in Section 2, and, if not previously vested and paid, or deferred, or forfeited, shall expire immediately before the third anniversary of the Date of Grant.  Any Dividend Equivalent subject to this Award shall expire at the time the unit of Phantom Stock with respect to which the Dividend Equivalent is in tandem (i) is vested and paid, or, to the extent permitted by the laws of the applicable jurisdiction, deferred, (ii) is forfeited, or (iii) expires.  The additional provisions of Section 5 of Schedule B hereto are incorporated herein if Schedule B is applicable to the Grantee.           

Section 6.    Dividend Equivalent Payments.  Payment with respect to any Dividend Equivalent subject to this Award that is in tandem with a Phantom Stock unit that is vested and paid shall be paid in a single lump sum cash payment as soon as practicable following the vesting and payment of the Phantom Stock unit, and in no event later than the end of the third calendar year following the year of the Date of Grant, except, if the vested Phantom Stock unit is deferred by the Grantee as provided in Section 7, payment with respect to the tandem Dividend Equivalent shall likewise be deferred.  Payment under this Section 6 shall be made not later than thirty (30) days after payment hereunder of the related tandem Phantom Stock units.  The Dividend Equivalent payment amount shall equal the aggregate cash dividends declared and 

2014 Phantom Award Agreement - Cash    6

paid with respect to one (1) share of Common Stock for the period beginning on the Date of Grant and ending on the date the vested, tandem Phantom Stock unit is paid or deferred and before the Dividend Equivalent expires.  However, should the Grantee receive payment of Phantom Stock units under this Award without the right to receive a dividend and, because of the timing of the declaration of such dividend, the Grantee is not otherwise entitled to payment under the expiring Dividend Equivalent with respect to such dividend, the Grantee, nevertheless, shall be entitled to such payment.  Dividend Equivalent payments shall be subject to withholding for taxes.  Notwithstanding any other provision hereof, to the extent necessary for this Agreement not to be construed as a salary deferral arrangement under Canadian law, in no event will any Dividend Equivalent to which the Grantee may be entitled vest, or will the right to receive a payment in respect of any Dividend Equivalent arise, after December 30 of the calendar year which is three years following the end of the year in which any portion of the services to which the award of such Dividend Equivalent relates were performed by the Grantee, and in the event this would, apart from this provision, occur, notwithstanding any other provision hereof, the applicable Dividend Equivalent will vest and the Grantee will be entitled to receive payment of such Dividend Equivalent on December 30 (or the first date prior thereto that is not a Saturday, Sunday or holiday) in the first calendar year which is three years following the end of the year in which any portion of the services to which the award of such Dividend Equivalent relates were performed by the Grantee.
  
Section 7.    Payment of Phantom Stock Units.  Payment of Phantom Stock units subject to this Award shall be made to the Grantee in a single lump sum cash payment as soon as practicable following the time such units become vested in accordance with Section 2 prior to their expiration but in no event later than thirty (30) days following such vesting and in no event later than the end of the third calendar year following the year of the Date of Grant, except to the extent deferred by Grantee in accordance with such procedures as the Committee, or its delegatee, may prescribe consistent with the requirements of Code Section 409A or any Canadian law equivalent, as applicable.  Any deferral of Phantom Stock units by the Grantee hereunder shall apply to both the shares of Common Stock and the related tandem Dividend Equivalents.  Payment shall be subject to withholding for taxes.  Payment shall be in the form of cash equal to the Fair Market Value of one (1) share of Common Stock for each full vested unit of Phantom Stock, and any fractional vested unit of Phantom Stock shall be rounded up to the next whole share for purposes of both vesting under Section 2 and payment under this Section 7.  

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

Section 9.    Nonalienation.  The Phantom Stock units and Dividend Equivalents subject to this Award are not assignable or transferable by the Grantee.  Upon any attempt to transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such 

2014 Phantom Award Agreement - Cash    7

Phantom Stock unit or Dividend Equivalent, or of any right or privilege conferred hereby, or upon the levy of any attachment or similar process upon such Phantom Stock unit or Dividend Equivalent, or upon such right or privilege, such Phantom Stock unit or Dividend Equivalent, or right or privilege, shall immediately become null and void.

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

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

Section 12.  Code Section 409A.  Notwithstanding any provision of this Agreement to the contrary, for the purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt from, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.  Further, notwithstanding any provision of this Agreement to the contrary, if any payment or other benefit provided herein would be subject to unfavorable tax consequences under Code Section 409A because the timing of such payment is not delayed as provided in Code Section 409A for a “specified employee” (within the meaning of Code Section 409A), then if the Grantee is a “specified employee,” any such payment that the Grantee would otherwise be entitled to receive during the first six (6) months following Grantee’s termination of employment from the Company, including Subsidiaries, shall be accumulated and paid, within thirty (30) days after the date that is six (6) months following the Grantee’s date of termination of employment from the Company, including Subsidiaries, or such earlier date upon which such amount can be paid under Code Section 409A without being subject to such unfavorable tax consequences such as, for example, upon the Grantee’s death.

Section 13.    Conflicts with Plan, Correction of Errors, Grantee’s Consent, and Amendments.  In the event that any provision of this Agreement conflicts in any way with a provision of the Plan, such Plan provision shall be controlling and the applicable provision of this Agreement shall be without force and effect to the extent necessary to cause such Plan provision to be controlling.  In the event that, due to administrative error, this Agreement does not accurately reflect a Phantom Stock Award properly granted to Grantee pursuant to the Plan, the Company, acting through its Executive Compensation Department, reserves the right to cancel any erroneous document and, if appropriate, to replace the cancelled document with a corrected document.  It is the intention of the Company and the Grantee that this Agreement either (i) comply with the salary deferral arrangement rules under Canadian law and Code Section 409A, as applicable, or (ii) not be construed as a salary deferral arrangement under Canadian law and be exempt from Code Section 409A, to the extent applicable.  Accordingly, this 

2014 Phantom Award Agreement - Cash    8

Agreement shall be interpreted as necessary and to the extent legally permissible to comply with the requirements of, or exemption under, Canadian law and Code Section 409A, as applicable, as determined by the Committee or its delegatee.  Grantee shall also be deemed to consent to any amendment of the Plan or the Agreement as the Committee may reasonably make in furtherance of such intention, and the Committee shall promptly provide, or make available to, the Grantee a copy of any such amendment.  Finally, this Agreement may be amended or modified at any time and from time to time by action of the Committee.   

Section 14.    Grantee Confidentiality Obligations.  In accepting this Phantom Stock Award, Grantee acknowledges that Grantee is obligated under Company policy, and under federal, state, provincial and other applicable law, to protect and safeguard the confidentiality of trade secrets and other proprietary and confidential information belonging to the Company and its affiliates that are acquired by Grantee during Grantee’s employment with the Company and its affiliates, and that such obligations continue beyond the termination of such employment.  Grantee agrees to notify any subsequent employer of such obligations and that the Company and its affiliates, in order to enforce such obligations, may pursue legal recourse not only against Grantee, but against a subsequent employer of Grantee.  Grantee agrees that he shall not disclose the existence or terms of this Agreement to anyone other than his spouse, tax advisor(s) and/or attorney(s), provided that he first obtains the agreement of such persons to be bound by the confidentiality provisions of this paragraph.  Grantee also agrees to immediately give the Company written notice in accordance with the provisions of this Agreement in the event he is legally required to disclose any of the confidential information covered by the provisions of this paragraph.

Section 15.  Nonsolicitation. Grantee further agrees that he will not, either directly or indirectly, solicit, hire or employ, or cause any other person, company, or entity to solicit, hire or employ, any employee or contractor retained or employed by the Company or its affiliates during the period of Grantee’s employment and for the period set forth in Section 3 of Schedule A hereto or Section 6 of Schedule B hereto, as applicable to the Grantee. The provisions of this paragraph shall not apply to contact initiated by an employee or contractor of the Company or its affiliates in response to a general solicitation of applications for employment.  Grantee agrees that this Agreement is subject to the provisions of this paragraph. 

Section 16.  Notices.  All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their signatures below or at such other address as may be designated in writing by either party to the other party, or to their permitted transferees if applicable.  Notices shall be effective upon receipt.

Section 17.    Payments Subject to Clawback.  To the extent that any payment under this Agreement is subject to clawback under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, 

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such amount will be clawed back in appropriate circumstances, as determined under the terms and conditions prescribed by such Act and the authority issued thereunder.

Section 18.  Equitable Remedies.  Grantee hereby acknowledges and agrees that a breach of Grantee’s obligations under this Agreement would result in damages to the Company that could not be adequately compensated for by monetary award.  Accordingly, in the event of any such breach by Grantee, in addition to all other remedies available to the Company at law or in equity, the Company will be entitled as a matter of right to apply to a court of competent jurisdiction for such relief by way of restraining order, injunction, decree or otherwise, as may be appropriate to ensure compliance with the provisions of this Agreement.

Section 19.  Arbitration Agreement.  The Grantee and the Company both agree that any dispute arising out of or related to this Agreement, which does not involve the Company seeking a court injunction or other relief as provided for in Section 18, shall be resolved by binding arbitration under the employment dispute resolution rules of the American Arbitration Association and that any proceeding under the provisions of this Section 19 shall be held in Houston, Texas.  The parties both irrevocably WAIVE ANY AND ALL RIGHTS TO A JURY as to any and all claims and issues in any such dispute.  By this provision, both the Grantee and the Company understand and agree that any and all claims and issues in such dispute shall be decided by such arbitration proceeding.

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

[Signature Page Follows]

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

ATTEST:    SPECTRA ENERGY CORP                

By:          By:  ________________________________
       Corporate Secretary             President & CEO, Spectra Energy Corp

Address for Notices: 

5400 Westheimer Court
Mail Drop 1O23
Houston, Texas 77056

Attention: Karen Gowder

Acceptance of Phantom Stock Award

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

    
_______________________________
        Grantee’s Signature

_______________________________        (print name)

_______________________________
(employee ID)

Address for Notices:

_______________________________
(address)

_______________________________
(address)

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SCHEDULE A

This Schedule A and the provisions hereof shall apply to the Grantee if (and only if) the Grantee is on the payroll of one of the Company’s directly or indirectly held or majority or greater-owned subsidiaries or affiliates that is a United States entity.

Section 1.    For purposes of Section 2(c) of the Agreement, “permanent and total disability” shall have the meaning set forth in Code Section 22(e)(3).

Section 2.    The following provisions shall apply for purposes of Section 4 of the Agreement:

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

2014 Phantom Award Agreement - Cash    A-1

employment.  The Company and Grantee intend the above restrictions on competition in geographical areas to be entirely severable and independent, and any invalidity or enforceability of this provision with respect to any one or more of such restrictions, including geographical areas, shall not render this provision unenforceable as applied to any one or more of the other restrictions, including geographical areas.  If any part of this provision is held to be unenforceable because of the duration, scope or area covered, the Company and Grantee agree to modify such part, or that the court making such holding shall have the power to modify such part, to reduce its duration, scope or area, including deletion of specific words and phrases, i.e., “blue penciling”, and in its modified, reduced or blue pencil form, such part shall become enforceable and shall be enforced.  Nothing herein shall be construed to prohibit Grantee being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict Grantee providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

Section 3.    The nonsolicitation period for purposes of Section 15 of the Agreement is a period of three (3) years following Grantee’s termination of employment with the Company and its affiliates.

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SCHEDULE B

This Schedule B and the provisions hereof shall apply to the Grantee if (and only if) the Grantee is on the payroll of one of the Company’s directly or indirectly held or majority or greater-owned subsidiaries or affiliates that is a Canadian entity.

Section 1.    The following provisions shall be incorporated at the end of Section 2(b) of the Agreement:  

The date of the termination of Grantee’s continuous employment with the Company for the purposes of this Section 2(b) shall be deemed to be the date on which any notice of termination of employment provided to or by such Grantee is stated to be effective (or in the case of an alleged constructive dismissal, the date on which the alleged constructive dismissal is alleged to have occurred), and not during or as of the end of any period following such date during which the Grantee is in receipt of, or entitled to receive, statutory, contractual, or common law notice of termination or any compensation in lieu of such notice.

Section 2.    For purposes of Section 2(c) of the Agreement, an individual shall be considered to have a “permanent and total disability” if the individual is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

Section 3.    The following provisions shall be incorporated at the end of Section 2(d) of the Agreement:  

The date that the Grantee’s employment is terminated by the Company, including Subsidiaries, other than for Cause for the purposes of this Section 2(d) shall be deemed to be the date on which any notice of termination of employment provided to such Grantee is stated to be effective (or in the case of an alleged constructive dismissal, the date on which the alleged constructive dismissal is alleged to have occurred), and not during or as of the end of any period following such date during which the Grantee is in receipt of, or entitled to receive, statutory, contractual, or common law notice of termination or any compensation in lieu of such notice.

Section 4.    The following provisions shall apply for purposes of Section 4 of the Agreement:

Grantee agrees that during the period beginning with such termination of employment and ending with the earlier of (1) the third anniversary of the Date of Grant or (2) the first anniversary of the date of such termination of 

2014 Phantom Award Agreement - Cash    B-1

employment ("Restricted Period"), Grantee shall not (i) without the prior written consent of the Company, or its delegatee, become employed by, serve as a principal, partner, or member of the board of directors of, or in any similar capacity with, or otherwise provide service to, a competitor, to the detriment, of the Company or any Subsidiary or (ii) violate any of Grantee's other noncompetition obligations, or any of Grantee's nonsolicitation or nondisclosure obligations, to the Company or any Subsidiary.  The noncompetition obligations of clause (i) of the preceding sentence shall be limited in scope and shall be effective only to competition with the Company or any Subsidiary in the businesses of: gathering, processing or transmission of natural gas or crude oil, resale or arranging for the purchase or for the resale, brokering, marketing, or trading of natural gas, electricity or derivatives thereof; energy management and the provision of energy solutions; gathering, compression, treating, processing, fractionation, transportation, trading, marketing of natural gas components, including natural gas liquids, or of crude oil; sales and marketing of electric power and natural gas, domestically and abroad; and any other business in which the Company, including Subsidiaries, is engaged at the termination of Grantee’s continuous employment by the Company, including Subsidiaries; and within the geographical area of the province in which Grantee was employed at termination of employment from the Company and employing Subsidiaries.  If any part of this provision is held to be unenforceable because of the duration, scope or area covered, the Company and Grantee agree to modify such part, or that the court making such holding shall have the power to modify such part, to reduce its duration, scope or area, including deletion of specific words and phrases, i.e., "blue penciling", and in its modified, reduced or blue pencil form, such part shall become enforceable and shall be enforced.  Nothing herein shall be construed to prohibit Grantee being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict Grantee providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

Section 5.    The following provisions shall be incorporated at the end of Section 5 of the Agreement:  

The date of the termination of Grantee’s continuous employment with the Company, including Subsidiaries, for the purposes of this Section 5 shall be deemed to be the date on which any notice of termination of employment provided to or by such Grantee is stated to be effective (or in the case of an alleged constructive dismissal, the date on which the alleged constructive dismissal is alleged to have occurred), and not during or as of the end of any period following such date during which the Grantee is in receipt of, or entitled to receive, statutory, contractual, or 

2014 Phantom Award Agreement - Cash    B-2

common law notice of termination or any compensation in lieu of such notice.

Section 6.    The nonsolicitation period for purposes of Section 15 of the Agreement is a period of one (1) year following Grantee’s termination of employment with the Company and its affiliates.

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