TRANSITIONAL EMPLOYMENT AND SEPARATION AGREEMENT

Exhibit 10.1

Execution Copy

TRANSITIONAL EMPLOYMENT AND SEPARATION AGREEMENT

This Transitional Employment and Separation Agreement (“ Agreement ”) is made and entered into as of October 15, 2008 (“ Effective Date ”) between Spectra Energy Corp ¹ and Martha B. Wyrsch (“ Executive ”).

RECITALS

The Executive currently serves as the President and Chief Executive Officer of Spectra Energy Transmission, LLC and serves in various other capacities for the entities constituting the Spectra Group. The Executive and certain entities in the Spectra Group are parties to the following agreements:

The parties agree that Executive’s respective positions as an officer (including her positions as President and Chief Executive Officer) or director of the Spectra Group will terminate as of the Effective Date and the Spectra Group desires to avail itself of the experience, sources of information, advice and assistance available to or possessed by Executive and to, in turn, have Executive undertake certain transitional employment duties fully described below in this Agreement. Executive shall not be entitled to any salary, other form of compensation perquisites or other benefits after the Effective Date, except as specifically provided for in this Agreement.

The parties agree that the Agreement recitals are true and accurate, and that Executive does not occupy any offices or have rights to acquire, directly or indirectly, any Common Stock or options to purchase Common Stock of the entities constituting the Spectra Group, except as set forth in this Agreement.

Therefore, in consideration of the promises and mutual agreements set forth in this Agreement, the receipt and sufficiency of which is hereby acknowledged by all parties, the Spectra Group and Executive agree as follows:

EXECUTIVE’S TERMINATION AS OFFICER AND DIRECTOR & EMPLOYMENT

DURING TRANSITIONAL TERM

1. Termination of Executive From Officer and Director Positions. The Executive will be terminated from all positions as an officer of the Spectra Group, including her President and CEO position, effective as of the Effective Date. Likewise, Executive will be terminated from all positions as a director or chairman of the Spectra Group, as of the Effective Date. The Executive will continue to be employed as a Senior Advisor – SET for the Spectra Group from the Effective Date through December 22, 2008 (the “ Termination Date ,” and, the term being the “ Transitional Term ”), unless this Agreement is earlier terminated under Paragraph 11 hereof. During the Transitional Term, the Executive will be responsible for providing transitional assistance to the Spectra Group, as described more fully in Paragraph 2 hereof.

2

2. Description of the Transitional Employment Duties. Subject to the terms of this Agreement, the Spectra Group will continue to employ Executive as a Senior Advisor – SET on a full time basis and upon the request of the CEO of Spectra Energy Corp to (i) advise and assist the Spectra Group on all aspects of operations; and (ii) provide other advice to the Spectra Group and offer assistance on other matters as reasonably requested by the Spectra Group, including attending panels, conferences and other professional meetings as previously agreed upon between Executive and the Spectra Group (everything in (i) and (ii) collectively, the “ Transitional Employment Duties ”). Executive will use her reasonable efforts, skills, judgment, and abilities in this capacity. The Executive will report directly to the CEO of Spectra Energy Corp, and will be provided office space and secretarial/administrative assistance by Spectra Group at a mutually agreed location in Houston, Texas reasonably selected by Spectra Group.

3. Transitional Term Consideration. During the Transitional Term, the Spectra Group shall continue to pay Executive the same salary and benefits she received before the Effective Date.

4. Expenses. The Executive shall be entitled to reimbursement of all reasonable and documented costs and expenses incurred by Executive in performing the Transitional Employment Duties on the same basis applied to other executive officers of Spectra Group (including, without limitation, travel to and from panels, conferences and other professional meetings). Such expenses must be submitted to the Group Vice-President, Human Resources and Support Services (“ VP/HR ”). The Executive must obtain the VP/HR’s approval in advance for expenses outside the Spectra Group’s customary practices.

5. Limitations on the Spectra Group’s Liability. By entering into this Agreement and agreeing to employ the Executive for the Transitional Term, but subject to the terms of this Agreement, the Spectra Group shall not be liable for any damages, cost or claims of any kind caused by the dishonesty, gross negligence or willful misconduct of Executive in the performance of the Transitional Employment Duties or Executive’s breach of this Agreement. Except as provided in the preceding sentence of this Paragraph 5, Executive shall be indemnified by the Company to the fullest extent permitted by applicable law.

6. Executive’s Standard of Care. Subject to the other provisions of this Agreement, Executive shall perform her duties under this Agreement with the same degree of care, skill and prudence that would be customarily exercised by a Spectra Group employee and for what she reasonably believes to be in the best interest of the Spectra Group.

7. Confidentiality of Spectra Group Information. The Executive shall continue to abide by the Spectra Group’s confidentiality policies throughout the Transitional Term. The Executive will not at any time disclose to anyone, including, without limitation, any person, firm, corporation, or other entity, or publish, or use for any purpose, any Confidential Information (as defined in this Paragraph), except as the Spectra Group directs and authorizes. The Executive shall take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information and agrees to immediately notify the Spectra Group in the event of any unauthorized use or disclosure of the Confidential Information. “Confidential Information” includes, without limitation, all of the Spectra Group’s technical and business information, which is of a confidential, trade secret or proprietary character; lists of customers; identity of customers; identity of prospective customers; contract terms; bidding

3

information and strategies; rates of return of Spectra Group projects; pricing methods or information; photographs; internal policies, procedures, communications and reports; computer software; computer software methods and documentation; electronically stored information; graphic designs; hardware; the Spectra Group’s methods of operation; the procedures, forms and techniques used in servicing accounts; and other information or documents that the Spectra Group requires to be maintained in confidence for the Spectra Group’s continued business success. Confidential Information does not include any information that is readily available to the public or, upon reasonable investigation, is readily ascertainable in the public domain.

8. Confidentiality of Spectra Group Information – Post Termination. The Executive further acknowledges and agrees that all Confidential Information about the Spectra Group that was previously provided in the course of employment or through the Executive’s service for the Spectra Group and Confidential Information that will be provided to her in the course of the Transitional Term are and will continue to be the exclusive property of the Spectra Group. The Executive agrees to keep all Confidential Information in strict confidence, not disclosing any Confidential Information to any third person except (i) as consented to in writing by the CEO of Spectra Energy Corp, or (ii) as required by law or judicial or regulatory process; provided, however, that Executive shall not be obligated to keep in confidence any information which has become generally available to the public without any breach by Executive of this Paragraph 8. If requested by the Spectra Group, Executive will obtain from any third party to whom she discloses any Confidential Information the written agreement (in form and substance satisfactory to the Spectra Group in its sole discretion) of such third party to keep such information confidential.

9. Protective Covenants. The Executive acknowledges that she has received valuable Confidential Information during the course of her employment and that she will continue to remain responsible to safeguard and protect Spectra Group Confidential Information during the Transitional Term. As a result, it is necessary to enter into the following protective covenants, which are ancillary to the enforceable promises between the Spectra Group and Executive in the other Paragraphs in this Agreement:

(i) Non-Solicitation . The Executive agrees that during (A) the Transitional Term and (B) for a one-year period following the Transitional Term of the Agreement (collectively, the “ Restricted Period ”) Executive will not, directly or indirectly, either individually or as a principal, partner, agent, consultant, contractor, employee, or as a director or officer of any corporation or association, or in any other manner or capacity whatsoever, except on behalf of the Spectra Group, solicit business, or attempt to solicit business, in products or services competitive with products or services sold by the Spectra Group, from any customer or client, or prospective customer or client, with whom Executive had contact, solicited, or is aware and/or should have been aware that the Spectra Group solicited or contacted during the 12 months that immediately preceded the execution of this Agreement or during the Term of the Agreement.

(ii) Non-Competition . The Executive also agrees that during the Restricted Period, Executive will not within any of the markets in which the Spectra Group performs services or, to the extent that Executive is aware (or reasonably should have been aware) that Spectra Group has formulated within the 12 months that immediately preceded the execution of this Agreement, a plan to sell its services, without the prior written consent of the Spectra Group, engage in or contribute her knowledge to any employment, work, business, or endeavor which is directly

4

competitive with a product, process, service, or development of the Spectra Group or with respect to which Executive had access to the Spectra Group’s Confidential Information, provided, however, that nothing herein shall prohibit Executive from being a passive owner of not more than 3% of the outstanding stock of any class of a corporation which is publicly traded. During the Restricted Period, the Executive may request in writing exceptions to this restriction which shall be deemed approved by the Spectra Group if the Spectra Group has not provided written disapproval within forty-five (45) days of its receipt of such request. Nothing in this Sub-Paragraph 9(ii) shall be construed to prohibit the Executive being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict the Executive providing advise and counsel in such capacity, in any jurisdiction where such prohibition is contrary to law.

(iii) Non-Recruitment . The Executive also agrees that during the Restricted Period, she will not, directly or indirectly, hire, solicit, induce, recruit, engage, go into business with, encourage to leave their employment or contractor relationship with the Spectra Group, or otherwise cease their employment or contractor relationship with the Spectra Group, or otherwise contract for services with, any employee of the Spectra Group.

(iv) Nature of the Restrictions . The Executive agrees that the time, geographical area, and scope of restrained activities for the restrictions in Sub-Paragraphs 9(i)-(iii) of this Agreement are reasonable, especially in light of the Spectra Group’s desire to protect its Confidential Information. If a court or arbitrator concludes that any time period, geographical area, or scope of restrained activities specified in Sub-Paragraphs 9(i)-(iii) of this Agreement is unenforceable, the court or arbitrator is vested with the authority to reduce the time period, geographical area, and/or scope of restrained activities, so that the restrictions may be enforced to the fullest extent permitted by law. Additionally, if Executive violates any of the restrictions contained in Sub-Paragraphs 9(i)-(iii), the Restricted Period shall be suspended and will not run in favor of the Executive from the time of the commencement of any such violation until the time when the Executive cures the violation to the Spectra Group’s satisfaction.

(v) Equitable Relief and Restoration . Executive agrees that the Spectra Group may enforce this Agreement by obtaining a preliminary and permanent injunction or any other appropriate equitable relief in any court of competent jurisdiction. Executive acknowledges that the recovery of damages will not be an adequate means to redress a breach of this Agreement, and that nothing in this Sub-Paragraph 9(v) shall prohibit the Spectra Group from pursuing any remedies in addition to injunctive relief, including recovery of damages and/or any forfeiture or repayment obligations provided in this Agreement.

Executive also agrees that, in the event she violates the provisions of Paragraphs 7 or 8, or Sub-Paragraphs 9(i), 9(ii), or 9(iii) of this Agreement following the payment or commencement of any payments in accordance with Paragraph 13 of this Agreement, the Spectra Group will be entitled to receive and the Executive will be obligated to pay the Spectra Group the amount of one-million dollars ($1,000,000) (the “ Restoration ”) from the total amount of the Severance Payment, such amount representing a reasonable forecast of the damages to be incurred by Spectra Group as a result of the Executive’s breach of Paragraphs 7 or 8, of Sub-Paragraphs 9(i), 9(ii) or 9(iii). Executive specifically recognizes and affirms that the terms in Paragraphs 7 and 8, and Sub-Paragraphs 9(i), 9(ii), and 9(iii) are material terms of this Agreement, and Executive further agrees that should all or any part or application of

5

Paragraphs 7 or 8, or Sub-Paragraphs 9(i), 9(ii), or 9(iii) be held or found invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction or arbitrator in any action between the Executive and the Spectra Group, then the Spectra Group shall still be entitled to receive the Restoration from Executive.

10. Agreement to Return Spectra Group Property/Documents. At the end of the Transitional Term, Executive agrees that: (i) she will not take with her, copy, alter, destroy, or delete any Spectra Group files, documents or other materials whether or not embodying or recording any Confidential Information, including copies, without obtaining in advance the written consent of an authorized Spectra Group representative; and (ii) she will promptly return to the Spectra Group all Confidential Information, documents, files, records and tapes (written or electronically stored) that have been in her possession or control regarding the Spectra Group, and she will not use or disclose such materials in any way or in any format, including written information in any form, information stored by electronic means, and any and all copies of these materials. She further agrees to return to the Spectra Group immediately all Spectra Group property, including, without limitation, keys, equipment, computer(s) and computer equipment, devices, cellular phones, other telephonic equipment, credit cards, data, lists, information, correspondence, notes, memos, reports, or other writings prepared by the Spectra Group or herself on behalf of the Spectra Group. If Executive so elects, Executive may alternatively notify Spectra Group that she elects to purchase any such Spectra Group property in her possession and Spectra Group will sell such Spectra Group property, if practicable, to Executive at its fair market value as determined by Spectra Group.

11. Termination. Unless earlier terminated by (i) the dissolution, winding-up or termination of any of the entities constituting the Spectra Group or (ii) the commencement by any regulatory agency or governmental authority including, without limitation, the Securities and Exchange Commission, of an enforcement or similar type of proceeding against Executive, this Agreement will be automatically terminated on the Termination Date. This Agreement may also be terminated by the Spectra Group at any time during the Transitional Term for Cause and by the Executive for “Good Reason.” “ Cause ” means (i) a material breach or violation of this Agreement by Executive, unless cured to the Spectra Group’s satisfaction within ten (10) business days following written notice given to Executive by the Spectra Group; (ii) the failure or refusal of Executive to perform timely and fully in all material respects the Transitional Employment Duties or to comply fully in all material respects with her obligations under this Agreement, unless such default is cured to the Spectra Group’s satisfaction within ten (10) business days following written notice given to Executive by the Spectra Group; (iii) conviction of or a plea of nolo contendere or similar plea by Executive of a crime involving theft, dishonesty or moral turpitude, or the entry of a court order or administrative decree or order against the Executive, agreed or otherwise, involving allegations of criminal or civil fraud; (iv) Executive’s breach of the non-competition, non-solicitation, or non-recruitment covenants in Paragraph 9 of this Agreement; or (v) Executive’s breach of her confidentiality obligations in Paragraphs 7 or 8 of this Agreement. “ Good Reason ” means a material breach or violation of this Agreement by the Spectra Group, unless cured to Executive’s satisfaction within ten (10) business days following written notice given to the Spectra Group by Executive. If the Executive breaches her obligations under Paragraphs 7 or 8, or Sub-Paragraphs 9(i), 9(ii), or 9(iii) of this Agreement, she shall be obligated to pay the Spectra Group in accordance with Sub-Paragraph 9(v). If this Agreement is terminated by the Spectra Group without Cause, or if Executive terminates this Agreement for Good Reason, then the Spectra Group shall promptly

6

pay Executive for any unpaid and accrued salary and/or benefits in the time period specified by applicable state or federal law. Finally, if the Spectra Group terminates Executive for Cause or if Executive terminates her employment without Good Reason, either during the Agreement Term or Transitional Term, then Spectra Group will only be obligated to pay Executive any accrued salary and benefits through the Cause or without Good Reason termination date, and the Spectra Group will not be liable to pay Executive any Cash Payment or other compensation as described in Paragraphs 13 and 14 of this Agreement.

SEVERANCE AND RELEASE UPON EXECUTIVE’S TERMINATION

12. Global Release of Claims Upon Termination. Provided that this Agreement is not earlier terminated pursuant to Paragraph 11, Executive agrees to execute a Global Release (“ Release ”) of the “Spectra Group Released Parties,” in the form specified on the attached Exhibit A, upon her termination from the Spectra Group in the time period allotted by applicable state and federal law (the “ Consideration and Revocation Period ”), but not later than by the end of the twenty-one (21) calendar day consideration period set forth in Paragraph 5 of the Release. The “Spectra Group Released Parties” are defined as Spectra Energy Transmission, LLC, Spectra Energy Corp, and Spectra Energy Partners, LP, and each of their respective subsidiaries, predecessors, successors, parents, joint ventures, holding companies, subsidiaries, divisions, affiliates, assigns, partnerships, agents, directors, officers, employees, consultants, committees, employee benefit committees, fiduciaries, representatives, attorneys, and all persons and entities acting by, through, under or in concert or in any such capacity with any of them.

13. Termination of Other Agreements and Severance Payment. Executive agrees and acknowledges that except as specifically provided in this Agreement, any rights she may have to any payments, benefits, or other perquisites of any kind whatsoever under the terminated