Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - Relief granted to certain vice-presidentsof a reporting issuer from the insider reporting requirementssubject to certain conditions as outlined in CSA Staff Notice55-306 - Applications for Relief from the Insider ReportingRequirements by Certain Vice Presidents.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 1(1), 107, 108, 121(2)(a)(ii).

Regulations Cited

Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am., Part VIII.

Instrument Cited

National Instrument 55-101 - Exemption FromCertain Insider Reporting Requirements.

CSA Staff Notice Cited

CSA Staff Notice 55-306 - Applications for Relieffrom the Insider Reporting Requirements by Certain Vice Presidents.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, SASKATCHEWAN, MANITOBA,ONTARIO, QUÉBEC,

NEWFOUNDLAND AND NOVA SCOTIA

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

ENCANA CORPORATION

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker" or, collectively,the "Decision Makers") in each of Alberta, Saskatchewan,Manitoba, Ontario, Québec, Newfoundland and Nova Scotia(the "Jurisdictions") has received an applicationfrom EnCana Corporation (the "Corporation") for adecision under the securities legislation of the Jurisdictions(the "Legislation") that the requirement in the Legislationto file insider reports shall not apply to certain individualswho are insiders of the Corporation or a major subsidiary ofthe Corporation by reason of having the title Vice-President;

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System")the Alberta Securities Commission (the "Commission")is the principal regulator for this application;

AND WHEREAS the Corporation has representedto the Decision Makers that:

1. The Corporation is a corporation incorporatedunder the Canada Business Corporations Act. The headoffice of the Corporation is located in Calgary, Alberta.The Corporation is a leading independent petroleum explorationand production company with approximately 3,600 employees.

2. Effective April 5, 2002, the Corporationand Alberta Energy Company Ltd. ("AEC") participatedin a share exchange, whereby AEC became an indirect wholly-ownedsubsidiary of the Corporation. Holders of common shares ofAEC ("AEC Shares") received 1.472 common sharesof the Corporation ("EnCana Shares") for each AECShare that they owned. The transaction was carried out byway of a plan of arrangement involving AEC and its shareholdersand optionholders (the "Arrangement") under theBusiness Corporations Act (Alberta). The Corporationamalgamated with AEC and EnCana Midstream Limited effectiveJanuary 1, 2003 and the amalgamated corporation retained thename "EnCana Corporation".

3. The EnCana Shares are listed and postedfor trading on The Toronto Stock Exchange and the New YorkStock Exchange.

4. The Corporation is a reporting issuer (orthe equivalent thereof) in each of the Provinces and Territoriesof Canada. The Corporation is not on the list of defaultingreporting issuers maintained under the Legislation.

5. As at May 1, 2003, the Corporation had14 directors (one of whom is also the President & ChiefExecutive Officer), 1 Senior Executive Vice-President, 7 ExecutiveVice-Presidents, 24 Senior Vice-Presidents, 3 Regional Presidentsand 72 Vice-Presidents and 80 other senior officers (as definedin the applicable securities legislation) for a total of 201persons who are insiders of the Corporation by reason of beinga director or officer of the Corporation or one of its subsidiaries(the "Insiders").

6. 71 of the Insiders are exempt from theinsider reporting requirements contained in the Legislationby reason of an existing exemption such as National Instrument55-101 ("NI 55-101") or a previous decision or order.

7. The Corporation has developed a policygoverning corporate disclosure and insider trading (the "Policy")that applies to all of the Insiders.

8. The objectives of the Policy are to ensure(i) that communications to the investing public about theCorporation are: timely, factual, accurate and broadly disseminatedin accordance with all applicable legal and regulatory requirements,and (ii) that the Corporation's directors, officers and designatedemployees who are "insiders" under the Legislationare aware of their responsibilities under the Legislationand to assist them in complying with the Legislation. ThePolicy also applies to other employees of the Corporationwho have knowledge of material undisclosed information.

9. The Corporation has also established acommittee (the "Disclosure Committee") to overseethe Policy practices, to set thresholds for the preliminaryassessment of materiality and to determine whether informationis deemed material and when events justify public disclosure.The Disclosure Committee reports annually to the board ofdirectors of the Corporation through the Nominating and CorporateGovernance Committee of the Board regarding any significantinfractions of the Policy or any recommended changes.

10. Under the Policy, the Insiders and otheremployees with knowledge of material undisclosed informationmay not trade in securities of the Corporation. In addition,the Insiders may not trade in securities of the Corporationduring certain prescribed "black-out" periods aroundthe preparation of financial results or any other "black-out"period as determined by the Disclosure Committee.

11. The Disclosure Committee (comprised ofthe President & Chief Executive Officer, Executive Vice-President& Chief Financial Officer and Executive Vice-President,Corporate Development (or the Senior Vice-President, InvestorRelations when designated) considered the job requirementsand principal functions of the Insiders to determine whichof them met the definition of "nominal vice president"contained in Canadian Securities Administrators Staff Notice55-306 (the "Staff Notice") and has caused a listto be compiled of those Insiders who, in the opinion of theDisclosure Committee, meet the criteria set out in the StaffNotice (the "Designated Persons").

12. The Corporation has provided the DecisionMakers with a list of Designated Persons (the "DesignatedPersons List"). Each Designated Person:

(a) is a Vice-President of the Corporationor one of its major subsidiaries;

(b) is not in charge of a principal businessunit, division or function of the Corporation or a "majorsubsidiary" of the Corporation (as such term is definedin NI 55-101);

(c) does not in the ordinary course receiveor have access to information as to material facts or materialchanges concerning the Corporation before the material factsor material changes are generally disclosed; and

(d) is not an insider of the Corporationin any other capacity other than as Vice-President.

13. The Corporation shall:

(a) maintain the Designated Persons Listin accordance with the terms of the Decision;

(b) maintain a continuing review of thefacts contained in the representations upon which this Decisionis made; and

(c) upon the request of any of the DecisionMakers or their staff, provide any information necessaryto determine whether Designated Persons are or are not exemptedby this Decision.

14. The Disclosure Committee will assess anyfuture employee of the Corporation who has the title of Vice-Presidenton the same basis as set out above, and will re-assess allDesignated Persons who experience a change in job requirementsor functions, to determine if such individuals meet, or continueto meet, the definition of "nominal vice president"contained in the Staff Notice.

15. If an individual who is designated asa Designated Person no longer satisfies the definition of"nominal vice president" contained in the StaffNotice, the Disclosure Committee, or a person designated bythe Disclosure Committee, will inform him or her of the renewedobligation to file an insider report in respect of any trades.

16. The Corporation has filed with the DecisionMakers in connection with this application a copy of the Policyand the list of Designated Persons.

AND WHEREAS under the System, this DecisionDocument evidences the decision of each Decision Maker (collectively,the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the Jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the requirement contained in the Legislationto file insider reports shall not apply to the Designated Personsor to any other employee of the Corporation who hereafter isgiven the title Vice-President provided that:

(a) they satisfy the definition of "nominalvice president" contained in the Staff Notice;

(b) the Corporation prepares and maintainsthe Designated Persons List, submits the Designated PersonsList on an annual basis to the board of directors of the Corporationfor approval, and files the Designated Persons List with theDecision Makers;

(c) the Corporation files with the DecisionMakers a copy of its internal policies and procedures, asmay be amended from time to time, relating to monitoring andrestricting the trading activities of its insiders and otherpersons whose trading activities are restricted by the Corporation;and

(d) the relief granted will cease to be effectiveon the date when NI 55-101 is amended.

June 6, 2003.

"Agnes Lau"