Common use of Vesting of Performance Share Units Clause in Contracts

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 and ending December 31, 2014 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Lower than 30th 0% 30th 50% * * 50th 100% * * 80th or higher 200% * When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units that do not so become vested during the Performance Period shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2011; B = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2014; and C = the number of additional shares owned assuming dividends are reinvested as paid throughout the measurement period. In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement period; (iii) The performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement period; (iv) no new companies will be added to the Peer Group during the measurement period (including a non-peer company that may acquire a member of the Peer Group); and, (v) the Committee retains discretion to reduce performance awards that were otherwise earned in the event that Spectra’s TSR during the measurement period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for cause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units subject to this Award shall vest at the end of the Performance Period upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee, by prorating on the basis of the portion of the Performance Period that such employment continued while Grantee was entitled to payment of salary (unless such termination occurs after the end of the Performance Period, in which event the number of Performance Share Units earned, if any, shall not be prorated). For the purposes of this Agreement, “Cause” for termination by the Company of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliates; all as determined by the Company in its sole discretion. For purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt under, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A. (c) In the event that (i) Grantee’s employment terminates (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) 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 Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal.

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 2015 and ending December 31, 2014 2017 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Percentile Ranking Vesting Percentage Lower than 30th 0% 30th 50% * * 50th 100% * * 80th or higher 200% * *When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units units that do not so become vested during upon the Performance Period written certification by the Committee, or its delegatee, in its sole discretion, or as otherwise provided in Sections 2(b) or 2(c), shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a one (1) share on the NYSE on the twenty consecutive trading days ending on December 31, 2011; B = average closing price of a share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 2014; B = average closing price of one (1) share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 2017; and C = based on one (1) share purchased at the beginning of the Performance Period and the number of additional shares owned assuming acquired through the reinvestment of dividends are reinvested as paid throughout during the measurement periodPerformance Period. 2015 Performance Award Agreement - Stock 2 In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance periodPerformance Period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period Performance Period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement periodPerformance Period; (iii) The the performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement periodPerformance Period; (iv) no new companies will be added to the Peer Group during the measurement period Performance Period (including a non-peer company that may acquire a member of the Peer Group); and, and (v) the Committee retains discretion to reduce performance awards Performance Awards that were otherwise earned in the event that Spectrathe Company’s TSR during the measurement period Performance Period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a Subsidiary 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that (A) Grantee is in violation of any obligation identified in Section 33 or (B) the termination of Grantee’s employment is for Cause, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for causeCause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units units subject to this Award shall vest at be prorated on the basis of the portion of the Performance Period that Grantee’s active employment with the Company, including Subsidiaries, (“Active Employment”) continued (unless such termination occurs after the end of the Performance Period Period, in which event the number of Performance Share units earned, if any, shall not be prorated) and shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegateedelegate. Solely for purposes of calculating the prorated payment in the preceding sentence, by prorating on if the basis of the portion of the Performance Period that such employment Grantee’s Active Employment continued while Grantee was entitled to payment of salary for at least one (unless such termination occurs after the end of 1) day during a calendar month in the Performance Period, Grantee’s Active Employment shall be considered to have continued for the entirety of such month, but in which no event for more than thirty-six (36) months. The additional provisions of Section 1 of Schedule B hereto are also incorporated herein if Schedule B is applicable to the number of Performance Share Units earned, if any, shall not be prorated)Grantee. For the purposes of this Agreement, “Cause” for termination by the Company Company, or employing Subsidiary, of the Grantee’s employment shall mean 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 felony (A) felony, (B) 2015 Performance Award Agreement - Stock 3 crime or crime 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 Affiliateaffiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliatesaffiliates, or (vi) the usual meaning of just cause under Canadian common law, if applicable; all as determined by the Company in its sole discretion. For purposes Further, if Grantee voluntarily terminates employment with the Company, including Subsidiaries, after the Performance Period has ended and prior to the date that the determination of this Agreementthe achievement of the Performance Goal is made, all as determined by the Company, or employing Subsidiary, in its sole discretion, the termination Performance Share units subject to this Award shall vest upon such determination of Grantee’s employment shall not result in the payment achievement of any amount hereunder that is subject tothe Performance Goal, and not exempt underat such vesting percentage determined by the Committee, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.or its delegate. (c) In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates before the Performance Period has ended (Ai.e., on or before the last day of the Performance Period) (i) as the result of the Grantee’s death, or (Bii) as the result of the Grantee’s “permanent and total disability within disability” as defined in Section 1 of Schedule A hereto or Section 2 of Schedule B hereto, as applicable to the meaning Grantee, the Performance Share units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of Code Section 22(e)(3), or, (ii) any subsequent determination of the achievement of the Performance Goal. In the event that a Change in Control occurs before the Performance Period has ended and (Ai) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminatesterminates during such Performance Period, or (Bii) after such employment terminates during the Performance Period, (1A) at a time when the Grantee is eligible for an immediately payable, early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2B) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units units subject to this Award shall vest upon such occurrence, at with the 100% vesting percentagepercentage determined as set forth in Section 2(a) except shall be based upon the Company’s TSR relative to the TSR of the peer group for the period beginning on January 1, irrespective 2015, and ending on the effective date of any subsequent the Change in Control. Further, for purposes of this determination, TSR shall be calculated using the formula set forth in Section 2(a) except that “B” shall equal the average closing price of one (1) share on the NYSE on the twenty (20) consecutive trading days ending on the effective date of the Change in Control. In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates after the Performance Period has ended (A) as the result of the Grantee’s death, or (B) as the result of the 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, all as determined by the Company, or employing Subsidiary, in its sole discretion, the Performance Share units subject to this Award 2015 Performance Award Agreement - Stock 4 shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee.

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 2011 and ending December 31, 2014 2013 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Lower than 30th 0% 30th 50% * * 50th 100% * * 80th or higher 200% * When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units that do not so become vested during the Performance Period shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 20112010; B = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 20142013; and C = the number of additional shares owned assuming dividends are reinvested as paid throughout the measurement period. In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement period; (iii) The performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement period; (iv) no new companies will be added to the Peer Group during the measurement period (including a non-peer company that may acquire a member of the Peer Group); and, (v) the Committee retains discretion to reduce performance awards that were otherwise earned in the event that Spectra’s TSR during the measurement period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for cause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units subject to this Award shall vest at the end of the Performance Period upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee, by prorating on the basis of the portion of the Performance Period that such employment continued while Grantee was entitled to payment of salary (unless such termination occurs after the end of the Performance Period, in which event the number of Performance Share Units earned, if any, shall not be prorated). For the purposes of this Agreement, “Cause” for termination by the Company of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliates; all as determined by the Company in its sole discretion. For purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt under, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.. (c) In the event that (i) Grantee’s employment terminates (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) 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 Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal.

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 2013 and ending December 31, 2014 2015 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Lower than 30th 00 % 30th 5050 % * * 50th 100100 % * * 80th or higher 200200 % * When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units units that do not so become vested during upon the Performance Period written certification by the Committee, or its delegatee, in its sole discretion, or as otherwise provided in Sections 2(b) or 2(c), shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a one (1) share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 20112012; B = average closing price of a one (1) share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 20142015; and C = based on one (1) share purchased at the beginning of the Performance Period and the number of additional shares owned assuming acquired through the reinvestment of dividends are reinvested as paid throughout during the measurement periodPerformance Period. In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance periodPerformance Period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period Performance Period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement periodPerformance Period; (iii) The the performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement periodPerformance Period; (iv) no new companies will be added to the Peer Group during the measurement period Performance Period (including a non-peer company that may acquire a member of the Peer Group); and, and (v) the Committee retains discretion to reduce performance awards Performance Awards that were otherwise earned in the event that Spectrathe Company’s TSR during the measurement period Performance Period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a Subsidiary 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for causeCause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units units subject to this Award shall vest at be prorated on the basis of the portion of the Performance Period that Grantee’s active employment with the Company, including Subsidiaries, (“Active Employment”) continued (unless such termination occurs after the end of the Performance Period Period, in which event the number of Performance Share units earned, if any, shall not be prorated) and shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegateedelegate. Solely for purposes of calculating the prorated payment in the preceding sentence, by prorating on if the basis of the portion of the Performance Period that such employment Grantee’s Active Employment continued while Grantee was entitled to payment of salary for at least one (unless such termination occurs after the end of 1) day during a calendar month in the Performance Period, Grantee’s Active Employment shall be considered to have continued for the entirety of such month, but in which no event the number of Performance Share Units earned, if any, shall not be prorated)for more than thirty-six (36) months. For the purposes of this Agreement, “Cause” for termination by the Company Company, or employing Subsidiary, of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliateaffiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliatesaffiliates; all as determined by the Company in its sole discretion. For purposes Further, if Grantee voluntarily terminates employment with the Company, including Subsidiaries, after the Performance Period has ended and prior to the date that the determination of this Agreementthe achievement of the Performance Goal is made, all as determined by the Company, or employing Subsidiary, in its sole discretion, the termination Performance Share units subject to this Award shall vest upon such determination of Grantee’s employment shall not result in the payment achievement of any amount hereunder that is subject tothe Performance Goal, and not exempt underat such vesting percentage determined by the Committee, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.or its delegate. (c) In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates before the Performance Period has ended (i.e., on or before the last day of the Performance Period) (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, or (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) 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 Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal. In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates after the Performance Period has ended (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), all as determined by the Company, or employing Subsidiary, in its sole discretion, the Performance Share units subject to this Award shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegate.

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 2014 and ending December 31, 2014 2016 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Lower than 30th 0% 30th 50% * * 50th 100% * * 80th or higher 200% * *When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units units that do not so become vested during upon the Performance Period written certification by the Committee, or its delegatee, in its sole discretion, or as otherwise provided in Sections 2(b) or 2(c), shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a one (1) share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 20112013; B = average closing price of a one (1) share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 20142016; and C = based on one (1) share purchased at the beginning of the Performance Period and the number of additional shares owned assuming acquired through the reinvestment of dividends are reinvested as paid throughout during the measurement periodPerformance Period. 2014 Performance Award Agreement - Stock 2 In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance periodPerformance Period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period Performance Period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement periodPerformance Period; (iii) The the performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement periodPerformance Period; (iv) no new companies will be added to the Peer Group during the measurement period Performance Period (including a non-peer company that may acquire a member of the Peer Group); and, and (v) the Committee retains discretion to reduce performance awards Performance Awards that were otherwise earned in the event that Spectrathe Company’s TSR during the measurement period Performance Period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a Subsidiary 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that (A) Grantee is in violation of any obligation identified in Section 33 or (B) the termination of Grantee’s employment is for Cause, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for causeCause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units units subject to this Award shall vest at be prorated on the basis of the portion of the Performance Period that Grantee’s active employment with the Company, including Subsidiaries, (“Active Employment”) continued (unless such termination occurs after the end of the Performance Period Period, in which event the number of Performance Share units earned, if any, shall not be prorated) and shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegateedelegate. Solely for purposes of calculating the prorated payment in the preceding sentence, by prorating on if the basis of the portion of the Performance Period that such employment Grantee’s Active Employment continued while Grantee was entitled to payment of salary for at least one (unless such termination occurs after the end of 1) day during a calendar month in the Performance Period, Grantee’s Active Employment shall be considered to have continued for the entirety of such month, but in which no event for more than thirty-six (36) months. The additional provisions of Section 1 of Schedule B hereto are also incorporated herein if Schedule B is applicable to the number of Performance Share Units earned, if any, shall not be prorated)Grantee. For the purposes of this Agreement, “Cause” for termination by the Company Company, or employing Subsidiary, of the Grantee’s employment shall mean 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 felony (A) felony, (B) 2014 Performance Award Agreement - Stock 3 crime or crime 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 Affiliateaffiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliatesaffiliates, or (vi) the usual meaning of just cause under Canadian common law, if applicable; all as determined by the Company in its sole discretion. For purposes Further, if Grantee voluntarily terminates employment with the Company, including Subsidiaries, after the Performance Period has ended and prior to the date that the determination of this Agreementthe achievement of the Performance Goal is made, all as determined by the Company, or employing Subsidiary, in its sole discretion, the termination Performance Share units subject to this Award shall vest upon such determination of Grantee’s employment shall not result in the payment achievement of any amount hereunder that is subject tothe Performance Goal, and not exempt underat such vesting percentage determined by the Committee, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.or its delegate. (c) In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates before the Performance Period has ended (i.e., on or before the last day of the Performance Period) (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s “permanent and total disability within disability” as defined in Section 1 of Schedule A hereto or Section 2 of Schedule B hereto, as applicable to the meaning of Code Section 22(e)(3)Grantee, or, or (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) 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 Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal.. In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates after the Performance Period has ended (A) as the result of the Grantee’s death, or (B) as the result of the 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, all as determined by the Company, or employing Subsidiary, in its sole discretion, the Performance Share units subject to this Award shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee. For the purposes of this Agreement, “Change in Control” means:

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 and ending December 31, 2014 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Percentile Ranking Vesting Percentage Lower than 30th 0% 30th 50% * * 50th 100% * * 80th or higher 200% * When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units that do not so become vested during the Performance Period shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2011; B = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2014; and C = the number of additional shares owned assuming dividends are reinvested as paid throughout the measurement period. In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement period; (iii) The performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement period; (iv) no new companies will be added to the Peer Group during the measurement period (including a non-peer company that may acquire a member of the Peer Group); and, (v) the Committee retains discretion to reduce performance awards that were otherwise earned in the event that Spectra’s TSR during the measurement period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for cause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units subject to this Award shall vest at the end of the Performance Period upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee, by prorating on the basis of the portion of the Performance Period that such employment continued while Grantee was entitled to payment of salary (unless such termination occurs after the end of the Performance Period, in which event the number of Performance Share Units earned, if any, shall not be prorated). For the purposes of this Agreement, “Cause” for termination by the Company of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliates; all as determined by the Company in its sole discretion. For purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt under, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A. (c) In the event that (i) Grantee’s employment terminates (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) 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 Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal.

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 2013 and ending December 31, 2014 2015 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Lower than 30th 00 % 30th 5050 % * * 50th 100100 % * * 80th or higher 200200 % * When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units units that do not so become vested during upon the Performance Period written certification by the Committee, or its delegatee, in its sole discretion, or as otherwise provided in Sections 2(b) or 2(c), shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a one (1) share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 20112012; B = average closing price of a one (1) share on the NYSE on the twenty (20) consecutive trading days ending on December 31, 20142015; and C = based on one (1) share purchased at the beginning of the Performance Period and the number of additional shares owned assuming acquired through the reinvestment of dividends are reinvested as paid throughout during the measurement periodPerformance Period. In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance periodPerformance Period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period Performance Period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement periodPerformance Period; (iii) The the performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement periodPerformance Period; (iv) no new companies will be added to the Peer Group during the measurement period Performance Period (including a non-peer company that may acquire a member of the Peer Group); and, and (v) the Committee retains discretion to reduce performance awards Performance Awards that were otherwise earned in the event that Spectrathe Company’s TSR during the measurement period Performance Period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for causeCause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units units subject to this Award shall vest at be prorated on the basis of the portion of the Performance Period that Grantee’s active employment with the Company, including Subsidiaries, (“Active Employment”) continued (unless such termination occurs after the end of the Performance Period Period, in which event the number of Performance Share units earned, if any, shall not be prorated) and shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegateedelegate. Solely for purposes of calculating the prorated payment in the preceding sentence, by prorating on if the basis of the portion of the Performance Period that such employment Grantee’s Active Employment continued while Grantee was entitled to payment of salary for at least one (unless such termination occurs after the end of 1) day during a calendar month in the Performance Period, Grantee’s Active Employment shall be considered to have continued for the entirety of such month, but in which no event the number of Performance Share Units earned, if any, shall not be prorated)for more than thirty-six (36) months. For the purposes of this Agreement, “Cause” for termination by the Company Company, or employing Subsidiary, of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a 2013 Performance Award Agreement - Cash 2 material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliatesaffiliates; all as determined by the Company in its sole discretion. For purposes Further, if Grantee voluntarily terminates employment with the Company, including Subsidiaries, after the Performance Period has ended and prior to the date that the determination of this Agreementthe achievement of the Performance Goal is made, all as determined by the Company, or employing Subsidiary, in its sole discretion, the termination Performance Share units subject to this Award shall vest upon such determination of Grantee’s employment shall not result in the payment achievement of any amount hereunder that is subject tothe Performance Goal, and not exempt underat such vesting percentage determined by the Committee, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.or its delegate. (c) In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates before the Performance Period has ended (i.e., on or before the last day of the Performance Period) (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, or (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) 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 Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal. In the event that (i) Grantee’s employment with the Company, including Subsidiaries, terminates after the Performance Period has ended (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), all as determined by the Company, or employing Subsidiary, in its sole discretion, the Performance Share units subject to this Award shall vest upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegate.

Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 2011 and ending December 31, 2014 2013 (“Performance Period”), at, or above, the 30th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule: Lower than 30th 0% 30th 50% * * 50th 100% * * 80th or higher 200% * When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage. All Performance Share Units that do not so become vested during the Performance Period shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows: A = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 20112010; B = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 20142013; and C = the number of additional shares owned assuming dividends are reinvested as paid throughout the measurement period. In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement period; (iii) The performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement period; (iv) no new companies will be added to the Peer Group during the measurement period (including a non-peer company that may acquire a member of the Peer Group); and, (v) the Committee retains discretion to reduce performance awards that were otherwise earned in the event that Spectra’s TSR during the measurement period is negative. (b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units subject to this Award shall be forfeited, except that if such employment terminates (i) 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 a 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 (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for cause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units subject to this Award shall vest at the end of the Performance Period upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee, by prorating on the basis of the portion of the Performance Period that such employment continued while Grantee was entitled to payment of salary (unless such termination occurs after the end of the Performance Period, in which event the number of Performance Share Units earned, if any, shall not be prorated). For the purposes of this Agreement, “Cause” for termination by the Company of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliates; all as determined by the Company in its sole discretion. For purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt under, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.. (c) In the event that (i) Grantee’s employment terminates (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) 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 Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal.