Encana Corporation NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND INFORMATION CIRCULAR ANNUAL MEETING/CALGARY, ALBERTA/MAY 13, 2014 ENCANA CORPORATION NOTICE OF ANNUAL MEETING OF SHAREHOLDERS THE HOLDERS OF COMMON SHARES OF ENCANA CORPORATION ARE INVITED TO OUR ANNUAL MEETING OF SHAREHOLDERS (THE “MEETING”) WHEN WHERE May 13, 2014 BMO Centre, Palomino Room 10:00 a.m. (Calgary time) 20 Roundup Way S.E. Calgary, Alberta, Canada T2G 2W1 WHAT THE MEETING IS ABOUT The purposes of the Meeting are: 1. to receive the Consolidated Financial Statements and the Auditor’s Report for the year ended December 31, 2013; 2. to elect directors; 3. to appoint the auditors for the ensuing year and authorize the directors to fix their remuneration; 4. to hold a non-binding advisory vote approving the Corporation’s approach to executive compensation, as described in the accompanying Information Circular; 5. to consider, and if deemed advisable, to pass, with or without variation, an ordinary resolution to confirm amendments to the Corporation’s By-Law No. 1 to add an advance notice requirement for nominations of directors by shareholders in certain circumstances, as more particularly described in the accompanying Information Circular; and 6. to transact such other business as may properly be brought before the Meeting or any adjournments thereof. WHO HAS THE RIGHT TO VOTE You are entitled to receive notice of and vote at the Meeting, or any adjournment or postponement, if you were a holder of common shares of Encana Corporation (“Common Shares”) as at the close of business on March 14, 2014. YOUR VOTE IS IMPORTANT As a shareholder, it is very important that you read this material carefully and then vote your shares, either in person or by proxy, at the Meeting. To be used at the Meeting, completed proxies must be received by our registrar and transfer agent, CST Trust Company, 600 The Dome Tower, 333–7Avenue S.W., Calgary, Alberta, Canada T2P 2Z1, by 10:00 a.m. (Calgary time) on May 9, 2014 or, in the case of any adjournment or postponement of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time of the adjourned or postponed Meeting. The accompanying Information Circular tells you more about how to vote your Common Shares. If you have any questions, please contact our proxy solicitation agent, CST Phoenix Advisors, toll free in North America at 1-800-926-4985 or by email at [email protected]. IDENTIFICATION, ENTRY AND WEBCAST Shareholders, duly appointed proxyholders and registered guests may be requested to present government-issued or other appropriate identification prior to being permitted to enter the Meeting. The Corporation’s authorized representatives may also inspect bags and shall be entitled to require that bags not be brought into the Meeting. Persons who are not shareholders or duly appointed proxyholders and who wish to attend the Meeting as a registered guest should, in advance of the Meeting, request permission to attend via email to [email protected] or by mail to Investor Relations at Suite 4400, 500 Centre Street S.E., P.O. Box 2850, Calgary, Alberta, T2P 2S5. Only shareholders and duly appointed proxyholders are entitled to vote and participate in the business of the Meeting. A live audio webcast of the Meeting will be available on our website at www.encana.com. By Order of the Board of Directors of Encana Corporation, Jeffrey G. Paulson Vice-President, Corporate Legal Services & Corporate Secretary Calgary, Alberta March 14, 2014 ENCANA CORPORATION INFORMATION CIRCULAR General Information 2 Compensation Governance Practices 47 Voting Information 3 Compensation Risk Management 47 Matters To Be Voted On 4 Executive Share Ownership Guidelines 48 How to Vote – Registered Shareholders 4 Incentive Compensation Clawback Policy 48 Completing the Proxy Form – Registered Shareholders 5 No Hedging Policy 49 How to Vote – Non-Registered (or Beneficial) Shareholders 6 Performance Graph 49 How the Votes are Counted 7 Changes to our Program for 2014: What to Expect 51 Governance Overview – 2013 7 Our 2014 Company Scorecard 51 Purposes of the Meeting 8 2014 Compensation Decisions 51 Financial Statements 8 Summary Compensation Table 52 Election of Directors 8 Outstanding Option-Based Awards 53 Director Compensation 14 Outstanding Share-Based Awards 54 Appointment of Auditors Incentive Plan Awards – Value Vested or Earned During the Year 16 55 Auditors’ Fees 16 Retirement & Pension Plan Benefits 55 Non-Binding Advisory Vote on Approach to Executive Defined Contribution Pension Table 56 Compensation (“Say On Pay”) 16 Defined Benefit Pension Table 57 Amendments to By-Law No. 1 – Advance Notice of Nominations Termination and Change in Control Arrangements 59 of Directors 17 Change in Control Table 60 Statement of Executive Compensation 18 Conclusion 61 Letter to Shareholders 18 Equity Compensation Plan Information 62 Compensation Discussion and Analysis 22 Employee Stock Option Plan (“ESOP”) 62 Executive Overview 22 Performance Share Unit Plan (“PSU Plan”) 64 Human Resources and Compensation Committee 24 Restricted Share Unit Plan (“RSU Plan”) 65 Role and Responsibilities 24 Securities Authorized for Issuance Under Equity HRCC Independent Compensation Advisor 25 Compensation Plans 66 Human Resources Management 25 Statement of Corporate Governance Practices 67 Other Compensation Advisory Services 26 Encana’s Objectives 67 Our Compensation Approach 27 Board of Directors 69 Our Compensation Philosophy 27 Board of Directors’ Mandate 70 Compensation Elements 27 Position Descriptions 71 Total Direct Compensation 29 Orientation and Continuing Education of Directors 71 Compensation Peer Group 29 Ethical Business Conduct 73 Compensation Decision-Making Process 30 Nomination of Directors 73 New CEO: Compensation Arrangements 32 Corporate Governance 74 2013 Compensation Decisions 33 Compensation Committee 74 Former CEO 33 Audit Committee 75 Interim CEO 33 Other Board Committees 76 Annual Base Salary 34 Assessments of the Board 76 Annual Incentive (or “Bonus”) Plan 34 Key Governance Documents 76 Company Score 34 Other Matters 77 Determining Annual Bonus Eligibility 34 Shareholder Proposals 77 Changes to our Company Scorecard in 2013 35 Additional Information 77 2013 Company Scorecard 35 Questions and Other Assistance 78 Approved 2013 Company Score 37 Directors’ Approval 78 2013 Bonus Awards 37 Appendix A A-1 2013 Executive Officer LTI Grants 41 Amendments to By-Law No. 1 – Advance Notice of Determination of LTI Award Value 41 Nominations of Directors A-1 Mix of LTI Vehicles 42 Appendix B B-1 Performance Share Units (“PSUs”) 42 Advisory Regarding Reserves Data and Other Stock Options 45 Oil and Gas Information B-1 Restricted Share Units (“RSUs”) 45 Non-GAAP Measures B-1 NEO Departures in 2013 46 Appendix C C-1 Other Compensation Elements 46 Board of Directors’ Mandate C-1 Executive Benefits & Perquisites 46 Pension and Retirement Arrangements 46 Employee Deferred Share Unit Plan 47 1 GENERAL INFORMATION This Information Circular is dated March 17, 2014 and delivered in connection with the solicitation of proxies by and on behalf of the management of Encana Corporation for use at the Annual Meeting of Shareholders (the “Meeting”) and any adjournment or postponement thereof. In this document, “we”, “us”, “our”, “Company”, “Corporation” and “Encana” refer to Encana Corporation. The solicitation will be primarily by mail, but proxies may also be solicited personally by employees and agents of Encana. We have retained CST Phoenix Advisors (“Phoenix”) to solicit proxies for us in Canada and the United States at a fee of approximately C$35,000, plus out-of-pocket expenses. All expenses in connection with the solicitation of proxies will be borne by Encana. If you have questions about the information contained in this Information Circular or require assistance in completing your proxy or voting instruction form, please call Phoenix at 1-800-926-4985 (North American toll-free) or by email at [email protected]. Unless otherwise stated, the information contained in this Information Circular is given as at March 17, 2014 and all dollar amounts are expressed in Canadian dollars (“C$”), except for the dollar amounts contained in the “Director Compensation” and “Statement of Executive Compensation” sections, which are expressed in United States dollars (“US$” or “U.S. dollars”), except as otherwise stated. 2 VOTING INFORMATION YOUR VOTE IS IMPORTANT – AS A SHAREHOLDER, IT IS VERY IMPORTANT THAT YOU READ THIS INFORMATION CIRCULAR CAREFULLY AND THEN VOTE YOUR COMMON SHARES, EITHER BY PROXY OR IN PERSON, AT THE MEETING. VOTING You may convey your voting instructions as follows: 1. by mail; 2. by fax; 3. by telephone; 4. on the internet; or 5. by appointing another person to attend the Meeting and vote your Common Shares for you (“your proxyholder”). You may authorize the directors of Encana who are named on the enclosed proxy form to vote your Common Shares at the Meeting or any adjournment or postponement thereof. You have the right to appoint another person to act as your proxyholder. If you appoint someone else, he or she must be present at the Meeting to vote your Common Shares. If you are voting your Common Shares by proxy, our registrar and transfer agent, CST Trust Company (“CST”), or other agents we appoint, must receive your completed proxy form by 10:00 a.m. (Calgary time) on May 9, 2014 or, in the case of any adjournment or postponement of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time of the adjourned or postponed Meeting. Registered Shareholders You are a Registered Shareholder if Common Shares are registered in your name and you have a physical (paper) share certificate. Non-Registered (or Beneficial) Shareholders You are a Non-Registered Shareholder if a broker, investment dealer, bank, trust company, trustee, nominee or other intermediary holds your Common Shares for you (your “Intermediary”). Non-Registered Shareholders do not ordinarily have a physical (paper) share certificate.