Docstoc

FORT CHICAGO ENERGY PARTNERS L.P. NOTICE OF MEETING

Document Sample
FORT CHICAGO ENERGY PARTNERS L.P. NOTICE OF MEETING Powered By Docstoc
					                                 FORT CHICAGO ENERGY PARTNERS L.P.

                                             NOTICE OF MEETING

                 Notice of Annual Meeting of Holders of Class A Limited Partnership Units
                                   to be held on Tuesday, May 6, 2008


        NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of Class A limited partnership
units ("Class A Units") of Fort Chicago Energy Partners L.P. (the "Partnership") will be held at Livingston
Place (South Tower) in the Livingston Club Conference Centre, Plus 15, 222 – 3rd Avenue S.W., Calgary,
Alberta, on Tuesday, May 6, 2008 at 4:00 p.m. (Calgary time) for the following purposes, namely:

1.      to receive and consider the consolidated financial statements of the Partnership for the years ended
        December 31, 2007 and 2006, together with the report of the auditor thereon;

2.      to designate nominees to be recommended to Computershare Trust Company of Canada for the purpose
        of electing directors of Fort Chicago Energy Management Ltd., the general partner of the Partnership,
        for the ensuing year or until their successors are elected or appointed;

3.      to appoint the auditor of the Partnership for the ensuing year; and

4.      to transact such other business as may be properly brought before the meeting or any adjournment
        thereof.

        The specific details of the matters proposed to be put before the meeting are set forth in the Information
Circular accompanying and forming part of this Notice of Meeting.

        DATED at the City of Calgary, in the Province of Alberta, this 17th day of March, 2008.


                                                            By Order of the Board of Directors of Fort Chicago
                                                            Energy Management Ltd., the General Partner of
                                                            Fort Chicago Energy Partners L.P.




                                                            Kevan S. King
                                                            Vice President, General Counsel and Secretary

Note:

Holders of Class A Units who are unable to be present at the meeting or any adjournment thereof are requested to date,
sign and return, in the envelope provided for that purpose, the accompanying form of proxy for use at the meeting or any
adjournment thereof. In order to be valid, the completed form of proxy must be received by Computershare Trust
Company of Canada, 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1 not later than 4:00 p.m. (Calgary time)
on the last business day before the day of the meeting or any adjournment thereof.
                               FORT CHICAGO ENERGY PARTNERS L.P.

                                        INFORMATION CIRCULAR

                  For the Annual Meeting of Holders of Class A Limited Partnership Units
                                   to be held on Tuesday, May 6, 2008

                                       GENERAL PROXY MATTERS

Solicitation of Proxies

        This Information Circular is furnished in connection with the solicitation of proxies by the management
of Fort Chicago Energy Management Ltd. (the "General Partner"), the general partner of Fort Chicago Energy
Partners L.P. ("Fort Chicago" or the "Partnership"), to be used at the Annual Meeting of holders of Class A
limited partnership units ("Class A Units") of the Partnership (the "Meeting") to be held on Tuesday, May 6,
2008 at 4:00 p.m. (Calgary time) at Livingston Place (South Tower) in the Livingston Club Conference Centre,
Plus 15, 222 – 3rd Avenue S.W., Calgary, Alberta, and at any adjournment thereof, for the purposes set forth in
the Notice of Meeting accompanying this Information Circular.

         Solicitation of proxies will be primarily by mail, but proxies may also be solicited personally by
telephone or other means of communication by the directors or executive officers of the General Partner. The
cost of solicitation by management of the General Partner will be borne by the Partnership.

         The information contained in this Information Circular is given as of March 17, 2008, unless otherwise
noted.

Appointment of Proxyholders

         The management nominees for proxyholder named in the enclosed form of proxy are directors and/or
executive officers of the General Partner. A holder of Class A Units has the right to appoint a person, who
need not be a holder of Class A Units, as his proxyholder to attend and act for him at the Meeting instead
of the management nominees named in the form of proxy. To exercise such right, the holder of Class A
Units must insert the name of the proxyholder in the blank space provided for that purpose and must
delete or strike out the names of the management nominees, such deletion to be initialled by the person or
officer signing the form of proxy.

        In order to be valid, a form of proxy must be dated and signed by the holder of Class A Units or his
attorney authorized in writing or, if the holder of Class A Units is a corporation, the form of proxy must be
executed under its corporate seal or by an officer or attorney thereof duly authorized. The form of proxy must
be deposited with Computershare Trust Company of Canada at 9th Floor, 100 University Avenue, Toronto,
Ontario, M5J 2Y1 or proxies may also be voted using the internet at www.investorvote.com or by calling the
following toll free number: 1-866-732-VOTE (8683). Regardless of the method of voting used, proxies or
voting instructions must be received by Computershare Trust Company of Canada not later than 4:00 p.m.
(Calgary time) on the last business day preceding the date of the Meeting or any adjournment thereof at which
the proxy is to be used.

Revocation of Proxies

        Proxies given by holders of Class A Units for use at the Meeting or any adjournment thereof may be
revoked at any time prior to their use. In addition to revocation in any other manner permitted by law, a holder
of Class A Units giving a proxy may revoke the proxy by an instrument in writing executed by the holder of
Class A Units or his attorney authorized in writing or, if the holder of Class A Units is a corporation, under its
corporate seal or by an officer or attorney thereof duly authorized, and deposited either with the Secretary of the
General Partner, c/o Computershare Trust Company of Canada, 9th Floor, 100 University Avenue, Toronto,
Ontario, M5J 2Y1 at any time up to 4:00 p.m. (Calgary time) on the last business day preceding the day of the
Meeting or any adjournment thereof, at which the proxy is to be used, or with the chair of such meeting on the
day of the Meeting or adjournment thereof, and upon either of such deposits the proxy is revoked.

Exercise of Discretion by Proxyholders

        The enclosed form of proxy affords holders of Class A Units an opportunity to specify that the Class A
Units registered in their name shall be (i) voted for or withheld from voting for those persons identified in this
Information Circular as nominees to be recommended to Computershare Trust Company of Canada for the
purpose of electing directors of the General Partner, and (ii) voted for or withheld from voting for the
appointment of the auditor of the Partnership for the ensuing year.

        The management proxyholders named in the enclosed form of proxy will vote or withhold from voting
the Class A Units in respect of which they are appointed in accordance with the directions of the holder of Class
A Units appointing them on any ballot that may be called for at the Meeting or any adjournment thereof. In the
absence of such directions, such Class A Units will be voted at the Meeting or any adjournment thereof in
favour of all of the matters referred to in the Notice of Meeting.

        The enclosed form of proxy confers discretionary authority upon the persons named therein with
respect to any amendments or variations to matters referred to in the Notice of Meeting and to any other
business which may properly come before the Meeting. At the time of printing this Information Circular,
management of the General Partner knows of no such amendments, variations or other business to come before
the Meeting other than the matters referred to in the Notice of Meeting. However, if any amendment,
variation or other business properly comes before the Meeting, the enclosed form of proxy confers
discretionary authority upon the persons named therein to vote on any such amendment, variation or
other business in accordance with their best judgment.

                                        VOTING OF CLASS A UNITS

General

        As at March 17, 2008, there were 131,788,304 Class A Units issued and outstanding. Each Class A
Unit confers upon the holder thereof the right to one vote.

         The General Partner, on behalf of the Partnership, has prepared, as of the close of business on March 17,
2008, a list of registered holders of Class A Units entitled to receive the Notice of Meeting and the number of
Class A Units held by each such holder of Class A Units. A holder of Class A Units named in the list is entitled
to vote the Class A Units shown opposite his name at the Meeting except to the extent that such holder has
transferred the ownership of his Class A Units after March 17, 2008 and the transferee of those Class A Units
establishes that he owns the Class A Units and requests, not later than 10 days before the Meeting, that his name
be included in the list of holders of Class A Units eligible to vote at the Meeting, in which case the transferee of
the Class A Units will be entitled to vote such Class A Units at the Meeting. Any holder of Class A Units may
examine the list of holders of Class A Units during usual business hours at the head office of the General Partner
or at the Meeting. The register of transfers will not be closed.

Advice to Beneficial Holders of Class A Units

        The information set forth in this section is of significant importance to many holders of Class A
Units as a substantial number of holders of Class A Units do not hold Class A Units in their own name.
Holders of Class A Units who do not hold their Class A Units in their own name (referred to in this Information
Circular as "Beneficial Unitholders") should note that only proxies deposited by holders of Class A Units
whose names appear on the records of the Partnership as the registered holders of Class A Units can be



                                                         2
recognized and acted upon at the Meeting. If Class A Units are listed in an account statement provided to a
holder of Class A Units by a broker, then, in almost all cases, those Class A Units will not be registered in the
holder's name on the records of the Partnership. Such Class A Units will more likely be registered under the
name of the holder's broker or an agent of that broker. In Canada, the vast majority of such Class A Units are
registered under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc.,
which acts as nominee for many Canadian brokerage firms). Class A Units held by brokers or their agents or
nominees can only be voted (for or against resolutions) upon the instructions of the Beneficial Unitholder.
Without specific instructions, a broker and its agents and nominees are prohibited from voting Class A Units for
the broker's clients. Therefore, Beneficial Unitholders should ensure that instructions respecting the voting
of their Class A Units are communicated to the appropriate person.

         Applicable regulatory rules require intermediaries/brokers to seek voting instructions from Beneficial
Unitholders in advance of meetings of holders of Class A Units. Every intermediary/broker has its own mailing
procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial
Unitholders in order to ensure that their Class A Units are voted at the Meeting. Often, the form of proxy
supplied to a Beneficial Unitholder by its broker (or the agent of the broker) is identical to the form of proxy
provided to registered holders of Class A Units. However, its purpose is limited to instructing the registered
holder of Class A Units (the broker or agent of the broker) how to vote on behalf of the Beneficial Unitholder.
The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge.
Broadridge typically prepares a Voting Instruction Form ("VIF") and mails the VIF to the Beneficial
Unitholders and asks Beneficial Unitholders to return the VIF to Broadridge. Broadridge then tabulates the
results of all instructions received and provides appropriate instructions respecting the voting of Class A Units
to be presented at the Meeting. A Beneficial Unitholder receiving a VIF from Broadridge cannot use that
VIF to vote Class A Units directly at the Meeting. The VIF must be returned to Broadridge well in
advance of the Meeting in order to have the Class A Units voted.

        Although a Beneficial Unitholder may not be recognized directly at the Meeting for purposes of voting
Class A Units registered in the name of his broker (or an agent of the broker), a Beneficial Unitholder may
attend at the Meeting as proxyholder for the registered holder of Class A Units and vote the Class A Units in
that capacity. Beneficial Unitholders who wish to attend the Meeting and indirectly vote their Class A Units as
proxyholder for the registered holder of Class A Units should enter their own names as proxyholders in the
blank space on the form of proxy provided to them and return the same to their broker (or the broker's agent) in
accordance with the instructions provided by such broker (or agent), well in advance of the Meeting.

        There are two types of Beneficial Unitholders: (i) those who object to their name being made known to
the issuers of the securities that they own ("OBOs" or "Objecting Beneficial Owners"); and (ii) those who do
not object to their name being made known to the issuers of the securities that they own ("NOBOs" or "Non-
Objecting Beneficial Owners").

        Under National Instrument 54-101 – Communication with Beneficial Owners of Securities of Reporting
Issuers (the "Instrument"), issuers, including the Partnership, may request and obtain a list of their NOBOs
from intermediaries through their transfer agent, namely Computershare Trust Company of Canada (the
"Transfer Agent") in the case of the Partnership. The Partnership may use this NOBO list for the distribution
of proxy-related materials directly (not through Broadridge) to NOBOs.

         Again this year, the Partnership has decided to take advantage of those provisions of the Instrument that
permit it to directly deliver proxy-related materials to its NOBOs. As a result, NOBOs can expect to receive a
scannable VIF from the Transfer Agent. These VIFs are to be completed and returned to the Transfer Agent in
the envelope provided for that purpose. In addition, the Transfer Agent provides for both telephone voting and
internet voting as described in the VIF, which contains complete instructions. The Transfer Agent will tabulate
the results of the VIFs received from NOBOs and will provide appropriate instructions at the Meeting with
respect to the Class A Units represented by the VIFs it receives.



                                                        3
                                      PRINCIPAL HOLDERS OF CLASS A UNITS

        To the knowledge of directors or senior officers of the General Partner, no person beneficially owns, or
controls or directs, directly or indirectly, 10% or more of the outstanding Class A Units as at March 17, 2008,
except as set forth below:

                                                                                                             Percentage of
        Name and Municipality of                Type of                                                      Outstanding
              Residence                        Ownership            Number of Class A Units                  Class A Units

      CDS & Co. (1)                               Legal                     127,661,266                          96.9%
      Toronto, Ontario

Note:

(1)        The directors and senior officers of the General Partner understand that CDS & Co. is a nominee and not a beneficial owner of
           the Class A Units referred to in the table above. See "Voting of Class A Units – Advice to Beneficial Holders of Class A
           Units".

                                                 ELECTION OF DIRECTORS

         All of the issued and outstanding shares of the General Partner have been settled upon a trust which is
governed by a trust agreement dated November 21, 1997 (the "Trust Agreement") among the initial
shareholder of the General Partner, the General Partner and Computershare Trust Company of Canada, as trustee
(the "Trustee"). The Trustee is a trust corporation authorized to act as a trustee pursuant to the Trustee Act
(Alberta). The Trustee is the registered owner of all of the issued and outstanding shares of the General Partner.
The General Partner is a party to the Trust Agreement to ensure that no additional shares of the General Partner
are issued except to the Trustee. The beneficiaries of the trust created by the Trust Agreement are the holders of
the Class A Units from time to time provided that in the event of the dissolution of the Partnership or if the
General Partner ceases to be the General Partner of the Partnership, then the beneficiary of the trust shall be a
registered charity.

         Pursuant to the Trust Agreement, the Trustee is not permitted to deal with the shares of the General
Partner in any way except that the Trustee shall annually elect the directors of the General Partner. Each
director elected holds office until the next annual meeting of the General Partner or until his successor is duly
elected or appointed by the Trustee. The Trustee has unfettered discretion in its election of directors. In
exercising this discretion, the Trustee may consider, together with such other factors as the Trustee in its
discretion considers relevant and in the best interests of the beneficiaries of the trust, the recommendation of the
holders of the Class A Units who will be afforded an opportunity in each year to vote on this matter at the
annual meeting of holders of Class A Units.

        Management of the General Partner does not contemplate that any of the nominees will be unable to
serve as a director but, if that should occur for any reason prior to the Meeting, such nominee will be removed
from the list of nominees to be recommended to the Trustee. There is no certainty that the Trustee will
accept the recommendation of the holders of the Class A Units or that the named nominees will be elected
by the Trustee as directors of the General Partner.

        The following table sets forth the names of all persons proposed to be included as nominees to be
recommended to the Trustee for the purpose of electing directors of the General Partner, together with his
municipality of residence, age, date first elected or appointed a director of the General Partner, present principal
occupation and trustee or director positions held with any other reporting issuer (or the equivalent) in Canada
and the United States.




                                                                   4
Name, Municipality
of Residence, Age, Date of Board Appointment
and Current Committee Appointments (1)                 Present Principal Occupation/Other Directorships
David J. Drybrough (2)                                 Independent Businessman
East St. Paul, Manitoba                                Other Public Board Memberships:
71                                                     CanWest Global Communications Corp.
Director since May 13, 2003                            Temple Real Estate Investment Trust
Chair of the Audit Committee and Member of the
Corporate Governance and Nominating Committee


John E. Feick                                          Executive Chairman of Matrix Solutions Inc.
Calgary, Alberta                                       (environmental services) and Chair of Kemex
                                                       Engineering Services Inc. (engineering services)
64
                                                       Other Public Board Memberships:
Director since November 13, 1997
                                                       Occidental Petroleum Corporation (U.S.)
Chair of the Compensation Committee and Member
of the Corporate Governance and Nominating
Committee


Robert J. Iverach                                      Barrister & Solicitor, Robert J. Iverach Professional
Calgary, Alberta                                       Corporation
60                                                     Other Public Board Memberships:
Director since May 10, 2007                            RAMTelecom Inc.
Member of the Audit Committee and the Corporate
Governance and Nominating Committee


Verne G. Johnson (3) (4)                               Independent Businessman and Chairman of Fort
Calgary, Alberta                                       Chicago Energy Management Ltd.
64                                                     Other Public Board Memberships:
Director since October 9, 1997                         Builders Energy Services Trust
Chair of the Corporate Governance and Nominating       Gran Tierra Energy Inc. (U.S.)
Committee and Member of the Compensation               Harvest Energy Trust
Committee                                              Suroco Energy Inc.


Stephen W.C. Mulherin                                  Partner, Polar Capital Corporation (private investment
Calgary, Alberta                                       firm)
51                                                     Other Public Board Memberships:
Director since October 9, 1997                         Steeplejack Industrial Group Inc.
Member of the Audit Committee and the
Compensation Committee




                                                   5
      Name, Municipality
      of Residence, Age, Date of Board Appointment
      and Current Committee Appointments (1)                              Present Principal Occupation/Other Directorships
      Robert T.F. Reid                                                    Corporate Director and Chair, British Columbia
      White Rock, British Columbia                                        Transmission Corporation (electricity transmission)
      59                                                                  Other Public Board Memberships:
      Director since May 10, 2007                                         Portland General Electric Company (U.S.)
      Member of the Audit Committee and the
      Compensation Committee


      Stephen H. White (5)                                                President and Chief Executive Officer of Fort Chicago
      Calgary, Alberta                                                    Energy Management Ltd.
      50                                                                  Other Public Board Memberships:
      Director since January 1, 2003                                      Alliance Pipeline Ltd.


Notes:

(1)        Each of the nominees listed above were elected as directors at the annual meeting of holders of Class A Units held on May 10,
           2007. For more information about the committees (Audit, Corporate Governance and Nominating, and Compensation) of the
           board of directors of the General Partner ("Board of Directors"), as well as the Partnership’s approach with respect to
           corporate governance, see "Statement of Corporate Governance Practices".
(2)        Mr. Drybrough owns 7,235 Class A Units and Mr. Drybrough's wife owns 24,079 Class A Units, which are held in accounts
           over which she exercises absolute discretion.
(3)        Mr. Johnson was a director of Mystique Energy Inc. ("Mystique") until April 24, 2007. On that date, Mystique obtained an
           order from the Alberta Court of Queen's Bench for creditor protection under the Companies' Creditors Arrangement Act
           (Canada).
(4)        Mr. Johnson owns 15,000 Class A Units.
(5)        Although Mr. White is a discretionary beneficiary and one of three trustees under a family trust which beneficially owns,
           indirectly through a corporation, 65,000 Class A Units, he does not beneficially own, or control or direct, directly or indirectly,
           any Class A Units.



        Each of the directors of the General Partner have held their present principal occupations for the past
five years except as follows:

           Mr. David J. Drybrough was the Vice President, Finance of Gendis Inc. until December, 2003;

        Mr. Robert J. Iverach was a Partner of Felesky Flynn LLP until June, 2005; thereafter was Counsel with
Felesky Flynn LLP until December, 2005; and thereafter has been the President of Robert J. Iverach
Professional Corporation; and

        Mr. Verne G. Johnson was appointed the Chairman of Fort Chicago Energy Management Ltd. effective
January 1, 2008.

         For information concerning the Audit Committee (the "Audit Committee") of the Board of Directors,
including the text of the terms of reference of the Audit Committee, see "Audit Committee Information" in the
annual information form of the Partnership dated March 17, 2008 (the "AIF"). See "Additional Information" for
details regarding how to obtain a copy of the AIF. Information concerning the Audit Committee, Corporate
Governance and Nominating Committee and Compensation Committee, including a summary of the terms of
reference and the composition of each committee, can be found under "Statement of Corporate Governance




                                                                      6
        Practices – Board Committees". The full text of the terms of reference of each committee is also posted on the
        Partnership's website, www.fortchicago.com.

                                                         APPOINTMENT OF AUDITOR

                Management of the General Partner proposes to nominate PricewaterhouseCoopers LLP, Chartered
        Accountants, who have acted as the auditor of the Partnership since October 9, 1997, as the auditor of the
        Partnership to hold office until the close of the next annual meeting of holders of Class A Units.

                                                        EXECUTIVE COMPENSATION

        Summary of Executive Compensation

                 The following tables set out information concerning the total compensation paid during each of the
        years in the three year period ended December 31, 2007 to (i) the President and Chief Executive Officer and the
        Vice President, Finance and Chief Financial Officer of the General Partner, (ii) the three other most highly
        compensated executive officers of the Partnership and the Partnership's operating entities, who were serving as
        executive officers as at December 31, 2007, and (iii) any additional individuals for whom disclosure would have
        been provided under (ii) except that such individuals were not serving as executive officers as at December 31,
        2007 (the "Named Executive Officers"). The Named Executive Officers of the General Partner, Messrs. White
        and Kyle, are employees of and receive compensation from the Partnership. They do not receive any
        compensation as executive officers of the General Partner. The Named Executive Officers of the Partnership's
        operating entities, Messrs. Birch and McAdam, and Ms. Dodds, are employees of the operating entities
        identified in the table below and do not receive any compensation from the Partnership or the General Partner.

                                                         Summary Compensation Tables
                                    Compensation of the Named Executive Officers of the General Partner

                                                                                                                    Long-Term
                                                                    Annual Compensation                            Compensation

                                                                                                                           Long-Term
                                                                                                                            Incentive
                                                                                         Other Annual          UARs           Plan           All Other
Name and                                                 Salary           Bonus         Compensation (1)     Granted (2)   Payouts (3)     Compensation
Principal Position                          Year           ($)             ($)                ($)               (#)            ($)               ($)

Stephen H. White                            2007        358,750         350,000 (4)           17,938              --             --                 --
President and Chief Executive Officer
Fort Chicago Energy Management Ltd.         2006        335,250         502,875 (4)           16,763              --             --                 --

                                            2005        312,000         468,000 (4)           15,600           20,000            --                 --

Hume D. Kyle                                2007        220,000         109,100 (5)           11,000              --             --                 --
Vice President, Finance and Chief
Financial Officer                           2006        202,500         105,500 (5)           9,588               --             --                 --
Fort Chicago Energy Management Ltd.
                                            2005        191,750         153,400 (6)           9,013            12,500            --                 --


        Notes:

        (1)          Includes contributions to savings and registered retirement savings plans. Contributions by each Named Executive Officer of
                     the General Partner to a savings or retirement savings plan are matched by Fort Chicago up to a maximum amount equal to 5%
                     of such Named Executive Officer's annual base salary. For each of the Named Executive Officers, the value of perquisites and




                                                                             7
                  other personal benefits received by each of them in each financial year was not greater than 10% of the total annual salary and
                  bonus received for such financial year.
        (2)       The General Partner, on behalf of the Partnership, adopted a Unit Appreciation Rights Plan effective December 3, 1997 ("Unit
                  Appreciation Rights Plan") pursuant to which unit appreciation rights ("UARs") were granted to directors, officers,
                  employees and consultants of the General Partner and employees and consultants of the Partnership prior to January 1, 2006.
                  See "Unit Appreciation Rights Plan of the Partnership".
        (3)       Effective January 1, 2006, the Partnership adopted a Long-Term Incentive Plan ("LTIP"). See "Long-Term Incentive Plan of
                  the Partnership". The first amounts payable under the terms of the LTIP will be for awards made for the 2006 plan year and
                  will be paid in the first quarter of 2009 for performance to the end of 2008.
        (4)       These payments were made pursuant to Mr. White's Short-Term Cash Compensation Arrangements. See "Employment
                  Agreements – President and Chief Executive Officer of the General Partner". These payments relate to performance for the
                  year indicated and were paid in the first quarter of the following year.
        (5)       These payments were made pursuant to the Short-Term Incentive Plan adopted by the Partnership effective January 1, 2006
                  ("STIP"). See "Short-Term Incentive Plan of the Partnership". These payments relate to performance for the year indicated
                  and were paid in the first quarter of the following year.
        (6)       This payment was made pursuant to the Short-Term Cash Compensation Plan adopted by the Partnership effective January 1,
                  2003 ("Short-Term Cash Compensation Plan"). See "Short-Term Cash Compensation Plan of the Partnership". This
                  payment related to performance for the year indicated and was paid in the first quarter of the following year.


                           Compensation of the Named Executive Officers of the Partnership’s Operating Entities


                                                          Annual Compensation                             Long-Term Compensation

                                                                                                                         Long-Term
                                                                                     Other Annual         UARs          Incentive Plan        All Other
Name and                                    Salary                 Bonus             Compensation        Granted           Payouts          Compensation
Principal Position             Year           ($)                   ($)                   ($)              (#)               ($)                  ($)

Murray Birch (1)               2007        450,000               379,360 (3)            172,065 (4)          --                --                  --
President and Chief
Executive Officer              2006         425,000              349,940 (3)            157,250 (4)          --                --                  --
Alliance Pipeline Ltd. (2)
                               2005        348,717               270,440 (3)            169,219 (4)          --                --                  --

William McAdam                 2007      US $348,000          US $289,971 (6)         US $38,375 (7)         --       US $1,409,375 (8)            --
President and Chief
Executive Officer              2006      US $309,000         US $1,004,230 (6)        US $36,500 (7)         --         US $159,390 (8)            --
Aux Sable
Liquid Products Inc. (5)       2005      US $296,500          US $204,590 (6)         US $35,750 (7)         --                --                  --

Katherine Dodds                2007      US $239,865          US $125,100 (6)         US $31,875 (7)         --        US $395,910 (8)             --
Vice President, General
Counsel and                    2006      US $227,900          US $332,896 (6)         US $30,500 (7)         --         US $44,226 (8)             --
Corporate Secretary
Aux Sable                      2005      US $211,250           US $76,210 (6)         US $29,750 (7)         --                --                  --
Liquid Products Inc. (5)



        Notes:

        (1)       Mr. Birch was appointed President and Chief Executive Officer of Alliance Pipeline Ltd. on March 14, 2005.
        (2)       Alliance Pipeline Ltd. is the general partner of Alliance Pipeline Limited Partnership ("Alliance Canada"). Alliance Pipeline
                  Inc. is the managing general partner of Alliance Pipeline L.P. ("Alliance U.S."). Alliance Canada and Alliance U.S. are
                  collectively referred to herein as "Alliance". Alliance Canada and Alliance U.S. (including their respective general/managing
                  general partners) are considered to be operating entities of the Partnership on the basis that they are underlying entities of Fort
                  Chicago that generate cash flow.



                                                                               8
(3)     Bonuses earned relate to performance by Mr. Birch under the Alliance Canada Short-Term Incentive Plan (the "Alliance
        Canada STIP") for the year indicated and are payable the following year, generally within the first quarter. See "Short-Term
        Incentive Plan of Alliance". Included in Mr. Birch's 2007 bonus amount is $10,000 awarded by the compensation committee
        of the board of directors of Alliance Pipeline Ltd. in recognition of his performance during the year.
(4)     Alliance Canada provides a benefit allowance for Mr. Birch in lieu of corporate benefits, pension plans and other perquisites.
        Included in this column are the amounts paid to Mr. Birch in lieu of these corporate benefits, pension plans and other
        perquisites. Mr. Birch is responsible for the purchase of his own medical plans, disability and life insurance, pensions,
        parking, club memberships, auto leases and other related costs. The amounts shown also include pay in lieu of vacation not
        taken.
(5)     Aux Sable Liquid Products Inc. is the general partner of Aux Sable Liquid Products LP ("Aux Sable U.S."). Aux Sable
        Canada Ltd. is the general partner of Aux Sable Canada LP ("Aux Sable Canada"). Aux Sable Canada and Aux Sable U.S.
        are collectively referred to herein as "Aux Sable". Aux Sable Canada and Aux Sable U.S. (including their respective general
        partners) are considered operating entities of the Partnership on the basis that they are underlying entities of Fort Chicago that
        generate cash flow.
(6)     Except as otherwise stated in this Note, bonuses earned relate to performance by Mr. McAdam and Ms. Dodds under the Aux
        Sable Short-Term Incentive Plan (the "Aux Sable STIP") for the year indicated and are payable the following year, generally
        within the first quarter. See "Short-Term Incentive Plan of Aux Sable". For 2006, the payments under the Aux Sable STIP to
        Mr. McAdam and Ms. Dodds were US $261,730 and US $115,210, respectively. Bonuses for 2006 also include for Mr.
        McAdam an amount of US $742,500, and for Ms. Dodds an amount of US $217,686, awarded to each of them by the
        compensation committee of the board of directors of Aux Sable U.S., and paid to each of them during 2006, in recognition of
        their efforts during the latter part of 2005 and throughout 2006 in concluding a significant marketing transaction for Aux Sable.
        In connection with the payment of these bonuses, each of Mr. McAdam and Ms. Dodds agreed to cancel the awards made to
        them for 2005 under the Aux Sable LTIP, as defined in Note 8.
(7)     Includes payments in respect of perquisite accounts for Mr. McAdam (2007 – US $21,500; 2006 - US $20,000; 2005 - US
        $20,000) and for Ms. Dodds (2007 – US $15,000; 2006 - US $14,000; 2005 - US $14,000), and contributions to 401(k) plans
        for Mr. McAdam (2007 – US $16,875; 2006 – US $16,500; 2005 - US $15,750) and for Ms. Dodds (2007 – US $16,875; 2006
        - US $16,500; 2005 - US $15,750) .
(8)     The Aux Sable Long-Term Incentive Plan (the "Aux Sable LTIP") originally became effective January 1, 2002. The structure
        of the Aux Sable LTIP has remained consistent since then, with the yearly parameters being adjusted to align the Aux Sable
        LTIP with the applicable business drivers as approved by the compensation committee of the boards of directors of Aux Sable.
        See "Long-Term Incentive Plan of Aux Sable". For 2007, the payments under the Aux Sable LTIP to Mr. McAdam and Ms.
        Dodds were made for 2003 in the amounts of US $687,500 and US $186,750, respectively, and for 2004 in the amounts of US
        $721,875 and US $209,160, respectively. The payments made to Mr. McAdam and Ms. Dodds in 2006 relate to awards made
        under the Aux Sable LTIP for 2002.

Unit Appreciation Rights Plan of the Partnership (prior to January 1, 2006)

        Pursuant to the Unit Appreciation Rights Plan, UARs were granted to directors, officers, employees and
consultants of the General Partner, in its capacity as general partner of the Partnership, and employees and
consultants of the Partnership prior to January 1, 2006. Effective January 1, 2006, the Partnership adopted the
LTIP for such officers, directors and employees to replace the Unit Appreciation Rights Plan.

         The purpose of the Unit Appreciation Rights Plan was to encourage the interest and desire of directors,
officers, employees and consultants of the General Partner and employees and consultants of the Partnership to
increase and enhance the profitable operation and continued growth and development of the Partnership by
offering such persons the opportunity to receive supplemental remuneration based on increases in the market
value of the Class A Units and to thereby align the interests of such persons with the interests of holders of Class
A Units generally. The UARs previously granted under the Unit Appreciation Rights Plan are administered by
the Compensation Committee (the "Compensation Committee") of the Board of Directors.

         Each UAR previously granted under the Unit Appreciation Rights Plan entitles the holder thereof to
receive from the Partnership a cash amount equal to the positive difference, if any, obtained by subtracting the
exercise price of the UAR (the closing price of the Class A Units on the Toronto Stock Exchange ("TSX") on
the trading day prior to the date the UAR was granted) from the closing price of the Class A Units on the TSX



                                                                   9
  on the date of exercise. UARs and all benefits and rights accruing to the holder thereof are not transferable or
  assignable.

           The Board of Directors had the authority to determine the expiration date and the vesting of any UARs.
  Notwithstanding any other vesting provisions of the UARs, but subject to the expiry of such rights, all UARs
  will vest on the date immediately preceding a Change of Control (as defined in the Unit Appreciation Rights
  Plan) and a participant has 180 days to exercise all of the unexercised and vested UARs. A "Change of Control"
  includes, among other things: (i) the purchase or acquisition of any Class A Units or securities convertible into
  Class A Units by any person such that, assuming the conversion of the convertible securities owned by such
  person or over which control or direction is exercised by such person, would result in such person beneficially
  owning or exercising control or direction over more than 50% of the votes attaching to all Class A Units; (ii) the
  removal or withdrawal of the General Partner as the general partner of the Partnership; (iii) the approval by
  holders of Class A Units of (A) an arrangement, merger or other consolidation or combination of the Partnership
  with another entity pursuant to which holders of Class A Units would not own more than 50% of the votes
  attaching to all securities of the successor or continuing entity, (B) the liquidation, dissolution or winding-up of
  the Partnership, or (C) the sale, lease or other disposition of all or substantially all of the assets of the
  Partnership; or (iv) the completion of any transaction or series of transactions which would have the same or
  similar effect as any transaction or series of transactions referred to in clauses (i), (ii) or (iii) above.

           No UARs were granted to any of the Named Executive Officers of the General Partner during the years
  ended December 31, 2006 and 2007 and the Board of Directors does not intend to issue further UARs under the
  Unit Appreciation Rights Plan beyond those previously granted to officers, directors and employees of the
  General Partner and employees and consultants of the Partnership prior to January 1, 2006. Effective January 1,
  2006, the Partnership adopted the LTIP for such officers, directors and employees. See "Long-Term Incentive
  Plan of the Partnership".

          The following table sets out the aggregated UAR exercises by each of the Named Executive Officers of
  the General Partner during the year ended December 31, 2007.

                             Aggregated UAR Exercises During the Year Ended December 31, 2007 and
                                               Financial Year-End UAR Values
                                                                                                                          Value of
                                                                                                                        Unexercised
                                                                                            Unexercised                in-the-Money
                                                                                             UARs at                      UARs at
                                             Securities                                  December 31, 2007           December 31, 2007
                                             Acquired           Aggregate Value                 (#)                         ($) (1)
                                            on Exercise            Realized                Exercisable /                Exercisable /
Name                                            (#)                   ($)                  Unexercisable               Unexercisable

Stephen H. White                                 --                 313,750                  40,000 / Nil                  Nil / Nil
President and Chief Executive Officer
Fort Chicago Energy Management Ltd.

Hume D. Kyle                                     --                      --                  57,500 / Nil                64,675 / Nil
Vice President, Finance and Chief
Financial Officer
Fort Chicago Energy Management Ltd.


  Note:

  (1)       Based on the closing price of the Class A Units on the TSX on December 31, 2007 of $10.84, less the exercise price of the
            UAR.




                                                                    10
Long-Term Incentive Plan of the Partnership (effective January 1, 2006)

        Effective January 1, 2006, the Partnership established the LTIP, which offers selected employees of the
Partnership and directors of the General Partner ("LTIP Participants") the opportunity to receive payments
based upon the long-term total unitholder return of the Class A Units. The purpose of the LTIP is to closely tie
the compensation of LTIP Participants to the maintenance and creation of medium-term to long-term value for
the holders of Class A Units. It also serves as a tool to encourage the retention of LTIP Participants, to
recognize key contributors and to ensure that the Partnership's total compensation packages are competitive with
those of its peers. As a result of the adoption of the LTIP, no further UARs were granted in 2006 and 2007 and
no further UARs will be granted under the Unit Appreciation Rights Plan in the future.

        Under the LTIP, awards ("LTIP Awards") are based upon the total unitholder return of the Class A
Units, relative to the return of a defined group of comparator entities over a three year performance
measurement period ("LTIP Performance Period"). The group of comparator entities is reviewed by the
Compensation Committee on annual basis and entities are deleted or added to the list as determined appropriate,
taking into account takeovers, mergers, other acquisitions or dispositions and new or existing entities determined
to be appropriate comparators to the Partnership for the purposes of the LTIP. At the date hereof, the group of
comparator entities consists of 21 energy infrastructure and power entities trading on the TSX. LTIP Awards
are based upon the annual salary of an LTIP Participant and a target participation rate, expressed as a
percentage, ("LTIP TPR") established by the Compensation Committee taking into account the LTIP
Participant's role with the Partnership or the General Partner. If an LTIP Participant becomes an employee of
the Partnership, or becomes a director of the General Partner, after the commencement of a plan year, the LTIP
Award to that LTIP Participant may be pro-rated based upon the number of full months the LTIP Participant is
employed by the Partnership or serves as a director of the General Partner during the plan year.

         The LTIP Award to an LTIP Participant is determined by attributing to such LTIP Participant a notional
number of Class A Units ("Target Units") calculated by multiplying the LTIP Participant's annual salary by the
LTIP Participant's LTIP TPR and by dividing that amount by the volume weighted average price of the Class A
Units on the TSX for the 20 trading days prior to January 1 in each plan year ("Market Price"). At the end of
each calendar year during the LTIP Performance Period, the number of Target Units is increased by an amount
calculated by multiplying the distributions accruing on the Class A Units for that calendar year by the number of
Target Units at the start of the calendar year and by dividing that amount by the Market Price at the end of the
calendar year. At the end of the Performance Period, the total unitholder return of the Class A Units over the
LTIP Performance Period is measured relative to the total unitholder return of the group of comparator entities
referred to above over the same period and the relative ranking of the Partnership to such comparator group
determines a multiplier ("TUR Performance Factor") that is used to determine the LTIP Award to each LTIP
Participant by multiplying the Target Units attributed to each LTIP Participant at the end of the LTIP
Performance Period by the TUR Performance Factor. The TUR Performance Factor will equal zero if the
ranking of the Partnership is less than the 25th percentile, 0.75 if the ranking is equal to or greater than the 25th
percentile but less than the 50th percentile, 1.0 if the ranking is equal to or greater than the 50th percentile and
less than the 75th percentile and 1.50 if the ranking is equal to or greater than the 75th percentile. The
Compensation Committee may make any adjustments it deems necessary or advisable should the securities of
any of the comparator entities be changed or exchanged for a different number or kind of shares or other
securities of that issuer or another.

         An LTIP Participant whose employment with the Partnership is terminated by the Partnership without
cause, due to the death of the LTIP Participant or as a result of retirement or, if the LTIP Participant is a director
of the General Partner, who ceases to be a director as a result of retirement, will be entitled to receive any
unpaid LTIP Awards for LTIP Performance Periods that have been completed at the time of death or retirement,
an LTIP Award for any plan year that has been completed at the time of termination, death or retirement and, if
at the time of termination, death or retirement the LTIP Participant had been employed or served as a director
for only a portion of a plan year, a pro-rated LTIP Award based on the number of months employed or months
served as a director during such plan year. For the purposes of the LTIP, "retirement" means retirement by an


                                                         11
    employee from the Partnership at or after age 55 after at least two completed years of service with the
    Partnership or the retirement from service as a director of the General Partner after serving at least two
    completed terms of service as a director of the General Partner. If the employment of an LTIP Participant as an
    employee of the Partnership is terminated as a result of the resignation of the employee or by the Partnership for
    cause, the LTIP Participant will be entitled to receive payment of any unpaid LTIP Awards where the applicable
    LTIP Performance Period has been completed at the time of termination and will forfeit all LTIP Awards where
    the applicable LTIP Performance Period has not been completed at the time of termination. An LTIP Award for
    any plan year may also be pro-rated where an LTIP Participant is on leave of absence or short or long-term
    disability for a period exceeding 30 days in that plan year.

            The Compensation Committee may amend the terms and conditions of the LTIP to correct, remedy or
    reconcile any inconsistency in the LTIP or in any LTIP Award to the extent it shall be deemed necessary to
    carry the LTIP into effect.

            LTIP Awards for a given plan year are granted and vest at the end of the LTIP Performance Period
    applicable to the plan year. At the point of vesting, the amount vested is paid in full.

           The following table sets out information regarding amounts targeted for LTIP Awards under the LTIP to
    the Named Executive Officers of the Partnership during the year ended December 31, 2007.

                               LTIP Awards Under the LTIP During the Year Ended December 31, 2007

                                                                                                        Estimated Future Payouts Under
                                                                                                      Non-Securities-Price-Based Plans (1)
                                         Securities,
                                            Units
                                          or Other       Performance or Other Period Until        Threshold (3)     Target (4)     Maximum (5)
Name                                      Rights (2)           Maturation or Payout                   ($)             ($)              ($)

Stephen H. White                              --                  January 1, 2007 to                269,063          358,750          538,125
President and Chief Executive Officer                             December 31, 2009
Fort Chicago Energy Management Ltd.

Hume D. Kyle                                  --                  January 1, 2007 to                  66,000          88,000          132,000
Vice President, Finance and Chief                                 December 31, 2009
Financial Officer
Fort Chicago Energy Management Ltd.


    Notes:

    (1)      The LTIP Award to Mr. White was based on his annual salary for 2007 and an LTIP TPR of 100%. The LTIP Award to Mr.
             Kyle was based on his annual salary for 2007 and an LTIP TPR of 40%. In each case, the amounts shown for estimated future
             payouts are based upon the annual salary and LTIP TPR described in the foregoing and do not include amounts representing
             future distributions on, or any change in the market value of, the Class A Units.
    (2)      Participation in the LTIP is determined by the Compensation Committee and once included in the LTIP, the Named Executive
             Officer's right to participate in an LTIP Award is based on the Named Executive Officer's annual salary and LTIP TPR for the
             applicable plan year.
    (3)      "Threshold" refers to the minimum amount payable under the LTIP, if an award is payable. No payments will be made under
             the LTIP if the ranking of the Partnership to the comparator group is less than the 25th percentile. The award under this column
             assumes the overall award is made at 75% of LTIP TPR.
    (4)      "Target" refers to the amount payable if the overall award is made at 100% of LTIP TPR.
    (5)      "Maximum" refers to the maximum payout possible under the LTIP, which is at 150% of LTIP TPR.




                                                                      12
Short-Term Incentive Plan of the Partnership (effective January 1, 2006)

         Effective January 1, 2006, the Partnership established the STIP, which offers designated officers,
employees and consultants of the General Partner and designated employees and consultants of the Partnership
(other than the President and Chief Executive Officer of the General Partner prior to January 1, 2008) (the
"STIP Participants"), the opportunity to receive supplemental remuneration based on a number of factors
relating to the financial performance of the Partnership and to thereby align the interests of such persons with
the interests of holders of Class A Units generally. The STIP is also intended to encourage STIP Participants to
increase and enhance the value of the Class A Units. The STIP replaced the Short-Term Cash Compensation
Plan. See "Short-Term Cash Compensation Plan of the Partnership".

         Under the STIP, each STIP Participant is entitled to payment for any plan year (the calendar year in
respect of which an award is made) equal to the aggregate amount determined by multiplying each of four
weighted performance factors by the annual base salary of such STIP Participant and by a target participation
rate, expressed as a percentage, ("STIP TPR") established by the Compensation Committee taking into account
such STIP Participant's role with the Partnership (the STIP TPR for each of the Vice Presidents of the General
Partner for the 2007 plan year was 40%). The four performance factors in the STIP, which are measured against
base, maximum and target amounts, and the weighting of each in the determination of the STIP awards, are: the
fully-diluted distributable cash per Class A Unit (weighting – 30%); the relative ranking of the Partnership,
based upon relative yield (aggregate distributions or dividends paid or payable on units or shares of an entity, as
applicable, divided by the market value of the units or shares as at the year end), to a defined group of
comparator entities (the comparator group presently consists of 15 energy infrastructure and power income
trusts and limited partnerships trading on the TSX) (weighting – 30%); the achievement by the Partnership and
it subsidiaries and affiliates, and Alliance Pipeline and Aux Sable, in the pursuit of growth initiative projects
(weighting – 30%); and the aggregate earnings before interest, taxes, depreciation and amortization of Alberta
Ethane Gathering System L.P., a subsidiary partnership of the Partnership, in any plan year compared to a pre-
established base amount (weighting – 10%). The Compensation Committee may also make any adjustments it
deems necessary or advisable should the securities of any of the comparator entities be changed or exchanged
for a different number or kind of shares or other securities of that issuer or another.

         The STIP TPR and the base, maximum or target amounts for each of the applicable performance factors
are established by the Compensation Committee at the time awards are made under the STIP. Each of the four
performance factors will be an amount from 0 to 2 depending upon the performance by the Partnership in
achieving the pre-established base, maximum or target amounts, as determined by the Compensation
Committee. As a consequence, assuming a STIP TPR of 40%, the award to such STIP Participant under the
STIP in any plan year may be an amount of 0 up to 80% of the annual base salary paid to such STIP Participant
in that year. In addition, pursuant to the terms of the STIP, the aggregate award to any particular STIP
Participant may be increased or decreased by the Compensation Committee by a factor of up to 10% based upon
the STIP Participant's individual performance during the plan year, taking into account any goals or objectives
for such STIP Participant established by management of the Partnership or the General Partner for such plan
year. For the 2007 plan year, the Compensation Committee determined that the aggregate STIP performance
factor amount was 1.2935, meaning that the base award, prior to taking into account the individual performance
factor, for each STIP Participant would be their STIP TPR multiplied by 1.2935 multiplied by such STIP
Participant's annual base salary.

         A STIP Participant whose employment with the Partnership is terminated by the Partnership without
cause, due to the death of the STIP Participant or as a result of retirement, will be entitled to receive any unpaid
STIP Award for any plan year that has been completed at the time of termination, death or retirement and, if at
the time of termination, death or retirement the STIP Participant had been employed for only a portion of a plan
year, a pro-rated STIP Award based on the number of months employed during such plan year. For the
purposes of the STIP, "retirement" means retirement by an employee from the Partnership at or after age 55 after
at least two completed years of service with the Partnership. If the employment of a STIP Participant as an
employee of the Partnership is terminated as a result of the resignation of the employee or by the Partnership for


                                                        13
cause, the STIP Participant will be entitled to receive payment of any unpaid STIP Awards where the applicable
plan year has been completed at the time of termination and will forfeit any STIP Award where the applicable
plan year has not been completed at the time of termination. A STIP Award for any plan year may also be pro-
rated where a STIP Participant is on leave of absence or short or long-term disability for a period exceeding 30
days in that plan year.

         The Compensation Committee may amend the STIP to correct, remedy or reconcile any inconsistency
in the STIP and in any grants under the STIP to the extent it shall be deemed desirable to carry the STIP into
effect. The Compensation Committee may adjust or amend the terms and conditions of the STIP in the event of
a combination, subdivision or consolidation of the outstanding Class A Units, in the event the Partnership is
reorganized, merged or consolidated with another entity or in any other similar event as deemed appropriate by
the Compensation Committee.

Short-Term Cash Compensation Plan of the Partnership (prior to January 1, 2006)

        The Short-Term Cash Compensation Plan, which was in effect prior to January 1, 2006, entitled
directors, officers, employees and consultants of the General Partner and employees and consultants of the
Partnership (other than the President and Chief Executive Officer of the General Partner) (the "Participants") to
receive annual payments based upon the achievement by the Partnership of a target amount of distributable cash
per Class A Unit per year as determined annually by the Board of Directors. The Short-Term Cash
Compensation Plan was replaced by the STIP effective January 1, 2006.

         Under the Short-Term Cash Compensation Plan, each Participant was entitled to an annual payment
equal to (i) the lesser of the actual amount of distributable cash per Class A Unit and the target amount of
distributable cash per Class A Unit plus $0.10 per Class A Unit, less (ii) the target amount of distributable cash
per Class A Unit, multiplied by (iii) the amount of annual base salary actually paid to such Participant in the
fiscal year, multiplied by (iv) a multiplier determined annually by the Board of Directors (8 for Vice Presidents).
Each annual payment to a Participant was targeted at approximately 40% of such Participant's annual base salary
and could not exceed a percentage of such Participant's annual base salary determined annually by the Board of
Directors (80% for Vice Presidents). The maximum aggregate amount that could be paid under the Short-Term
Cash Compensation Plan for any fiscal year to all Participants could not exceed an amount equal to (i) the actual
amount of distributable cash per Class A Unit, less (ii) the target amount of distributable cash per Class A Unit,
multiplied by (iii) the average number of Class A Units outstanding for such fiscal year, multiplied by (iv) 3%.

Long-Term Incentive Plan of Alliance

        The purpose of the Alliance Canada Key Employee Incentive Plan ("Alliance Canada KEIP") is to
closely tie the compensation of key employees to the creation of medium to long-term value for Alliance
Canada’s owners. It also serves as a tool to encourage the retention of key employees, to recognize key
contributors and to ensure that Alliance Canada’s total compensation packages are competitive with those of its
peers.

         The Alliance Canada KEIP is a cash plan that became effective January 1, 2001. Under the Alliance
Canada KEIP, awards are made when certain threshold corporate performance measures, set by the
compensation committee of the board of directors of Alliance Pipeline Ltd. at the beginning of each year, are
met. Each plan year has a three-year performance measurement period ("Alliance Performance Period").
Awards are based upon the annual salary of a participant and a target participation rate ("Alliance TPR")
established by the compensation committee of the board of directors of Alliance Pipeline Ltd. A participant's
Alliance TPR is determined by the participant’s role in Alliance Canada, expressed as a percentage.

        There are two elements, each weighted at 50%, used in calculating the overall award made to a
participant. The first measures the increase in net present value ("NPV") of the owners' interests in Alliance
Canada over the Alliance Performance Period ("NPV Award") and the second is based upon the total unitholder



                                                        14
    return of the units of each of the two owners of Alliance Canada, Fort Chicago and Enbridge Income Fund
    ("Alliance TUR"), relative to the return of a comparator group of entities over the Alliance Performance Period
    ("TUR Award"). For the 2005 plan year, the maximum NPV Award was 2 times Alliance TPR and the
    maximum TUR Award was 1.5 times Alliance TPR, for a combined maximum award of 1.75 times Alliance
    TPR. Commencing January 1, 2006, the maximum NPV Award is 4.5 times Alliance TPR and the maximum
    TUR Award is 1.5 times Alliance TPR, which results in a combined maximum award of 3 times Alliance TPR.

            Awards for a given plan year are granted and vest at the end of the Alliance Performance Period
    applicable to the plan year. At the point of vesting, the amount vested is paid in full.

           The following table sets out information regarding amounts targeted for awards under the Alliance
    Canada KEIP to the Named Executive Officers of the Partnership's operating entities during the year ended
    December 31, 2007.

                     LTIP Awards Under the Alliance Canada KEIP During the Year Ended December 31, 2007

                                                                                                      Estimated Future Payouts Under
                                                                                                    Non-Securities-Price-Based Plans (1)
                                         Securities,
                                            Units
                                          or Other      Performance or Other Period Until       Threshold (3)     Target (4)     Maximum (5)
Name                                      Rights (2)          Maturation or Payout                  ($)             ($)              ($)

Murray Birch                                 --                  January 1, 2007 to                180,000         360,000        1,080,000
President and Chief Executive                                    December 31, 2009
Officer
Alliance Pipeline Ltd.



    Notes:

    (1)       Based on the base salary of the Named Executive Officer for 2007 and does not include amounts to be included in awards
              under the TUR Award portion of the Alliance Canada KEIP representing distributions on the securities used as a basis for
              determining awards thereunder.
    (2)       Participation in the Alliance Canada KEIP is determined by the compensation committee of the board of directors of Alliance
              Pipeline Ltd. and once included in the plan, the Named Executive Officer's right to participate in awards under the Alliance
              Canada KEIP is based on the Named Executive Officer's annual salary and Alliance TPR for the applicable plan year.
    (3)       "Threshold" refers to the minimum amount payable under the Alliance Canada KEIP, if an award is payable. No payments
              will be made under the Alliance Canada KEIP if NPV does not exceed a pre-established value and if Alliance TUR is below
              the 25th percentile. The award under this column assumes the overall award is made at 50% of Alliance TPR.
    (4)       "Target" refers to the amount payable if the overall award is made at 100% of Alliance TPR.
    (5)       "Maximum" refers to the maximum payout possible under the Alliance Canada KEIP, which is at 300% of Alliance TPR.

    Short-Term Incentive Plan of Alliance

             Through the Alliance Canada STIP, a portion of the annual compensation of the Named Executive
    Officer of Alliance Pipeline Ltd. is linked to the achievement of pre-defined corporate and individual
    performance objectives set out at the beginning of the year. Target incentive payments based on the
    participant’s level of responsibility within the organization are established as a percentage of base salary and
    reflect competitive practice within a comparator group of entities. The Alliance Canada STIP provides for the
    payment of awards that may be below or in excess of target awards. For 2007, the Named Executive Officer of
    Alliance Pipeline Ltd. had corporate performance measures that included pipeline system reliability and
    optimization, effective management of operating costs, health, safety and environmental stewardship, business
    integrity and owner distributions. The compensation committee of the board of directors of Alliance Pipeline
    Ltd. has the flexibility to make final determinations in respect of awards made under the Alliance Canada STIP.



                                                                     15
   Long-Term Incentive Plan of Aux Sable

           The purpose of the Aux Sable LTIP, which became effective January 1, 2002, is to provide a long-term
   incentive program that motivates and retains key employees over a multi-year period. Under the Aux Sable
   LTIP, awards are made when certain threshold corporate performance measures are exceeded over the Aux
   Sable Performance Period, as defined below. These measures are set by the compensation committees of the
   boards of directors of Aux Sable at the beginning of each year. Awards are calculated as follows: (i) base salary
   as of January 1 of each plan year, multiplied by (ii) a target participation rate. The target participation rate is
   determined by the participant's role in Aux Sable. Each plan year has a three year performance measurement
   period beginning January 1st ("Aux Sable Performance Period").

            The calculation of the overall award made to a participant for 2007 under the Aux Sable LTIP is based
   on three performance factors. The three performance factors are: (i) 60% based on the total earnings before
   interest, taxes and depreciation of Aux Sable ("Aux Sable EBITDA") over the Aux Sable Performance Period;
   (ii) 20% based on the total unitholder return of the Class A Units of Fort Chicago relative to the returns of a
   comparator group of entities over the Aux Sable Performance Period; and (iii) 20% is based on the Aux Sable
   EBITDA generated from new investments in the third year of the Aux Sable Performance Period.

            Aux Sable LTIP awards will be paid based on achieving target value-added over the Aux Sable
   Performance Period. The maximum payout is set at two and one half times the target participation rate. The
   first payouts under the Aux Sable LTIP were made in 2006.

           The following table sets out information regarding amounts targeted for awards under the Aux Sable
   LTIP to the Named Executive Officers of the Partnership's operating entities during the year ended December
   31, 2007.

                        LTIP Awards Under the Aux Sable LTIP During the Year Ended December 31, 2007

                                                                                       Estimated Future Payouts Under Non-Securities-
                                                                                                    Price-Based Plans (1)
                                     Securities,
                                        Units          Performance or Other
                                      or Other        Period Until Maturation        Threshold (3)         Target (4)         Maximum (5)
Name                                  Rights (2)             or Payout                   ($)                 ($)                  ($)

William McAdam                            --             January 1, 2007 to          US $187,200          US $374,400         US $936,000
President and Chief Executive                            December 31, 2009
Officer
Aux Sable Liquid Products Inc.

Katherine Dodds                           --             January 1, 2007 to           US $63,855          US $127,710         US $319,275
Vice President, General Counsel                          December 31, 2009
and Corporate Secretary
Aux Sable Liquid Products Inc.

   Notes:

   (1)       Based on the annual salary of each Named Executive Officer as of January 1, 2007.
   (2)       Participation in the Aux Sable LTIP is determined by the compensation committees of the boards of directors of Aux Sable and
             once included in the plan, each Named Executive Officer's right to participate in awards under the Aux Sable LTIP is based on
             such Named Executive Officer's annual salary and target participation rate for the applicable plan year.
   (3)       "Threshold" refers to the parameter set for each Aux Sable Performance Period below or at which there is no payout for a any
             performance factor under the Aux Sable LTIP. The amount set forth in this column assumes an award is made at 50% of target
             participation rate.
   (4)       "Target" refers to the amount payable if an award is made at 100% of target participation rate.
   (5)       "Maximum" refers to the maximum payout possible under the Aux Sable LTIP, which is at 250% of target participation rate.




                                                                     16
Short-Term Incentive Plan of Aux Sable

         Under the Aux Sable STIP, a portion of the executive officers' annual compensation is linked to the
achievement of pre-defined corporate and individual performance objectives set out at the beginning of each
year. Target incentive payments based on each participant's level of responsibility within the organization are
established as a percentage of such participant's base salary and reflect competitive practice within a comparator
group of entities. The Aux Sable STIP provides for the payment of awards that may be below or in excess of
target awards (up to a maximum of two times the target award for corporate performance and one and one half
times the target award for individual performance). For 2007, the Named Executive Officers of Aux Sable
Liquid Products Inc. had corporate performance measures that included safety and environmental performance,
operations excellence and economic performance.

Employment Agreements

President and Chief Executive Officer of the General Partner

        The General Partner, on behalf of the Partnership, entered into an executive employment agreement
dated December 22, 2003 with Mr. Stephen H. White in connection with his appointment as the President and
Chief Executive Officer of the General Partner effective January 1, 2003. This agreement replaced an earlier
executive employment agreement dated January 1, 1998 which Mr. White had entered into in his previous
capacity as the President and Chief Financial Officer of the General Partner. The General Partner, on behalf of
the Partnership, entered into an amending agreement dated May 11, 2006 with Mr. White to amend the short-
term cash compensation arrangements for Mr. White, which are discussed in further detail below. Pursuant to
the agreement, as amended, Mr. White is an employee of and receives compensation from the Partnership. Mr.
White does not receive any compensation as an executive officer of the General Partner. The General Partner,
on behalf of the Partnership, entered into a further amending agreement dated March 6, 2008 with Mr. White
which terminated the short-term cash compensation arrangements for Mr. White effective December 31, 2007
and confirmed Mr. White's right to participate in the STIP from and after January 1, 2008. Prior to January 1,
2008, Mr. White was not entitled to participate in the STIP.

        Effective April 1, 2007, the annual base salary payable to Mr. White is $365,000 and is reviewed by the
Board of Directors (or any committee so appointed by the Board of Directors) at least annually and may from
time to time be increased as approved by the Board of Directors. Mr. White is also generally entitled to
participate in any bonus plan or similar plan developed by the General Partner for Mr. White or the employees
of the Partnership and for the directors, officers and employees of the General Partner. Prior to the adoption of
the LTIP effective January 1, 2006, Mr. White was eligible to receive an annual grant of UARs as determined by
the Board of Directors in its sole discretion up to a maximum value equal to 75% of Mr. White's annual base
salary. Mr. White has been entitled to participate in the LTIP since its inception effective January 1, 2006.

         Mr. White's employment agreement provided that he was entitled to participate in the short-term cash
compensation arrangements contemplated therein (the "Short-Term Cash Compensation Arrangements") up
until December 31, 2007. The Short-Term Cash Compensation Arrangements were terminated effective
December 31, 2007 and replaced with the participation of Mr. White in the STIP effective January 1, 2008. The
Short-Term Cash Compensation Arrangements entitled Mr. White to receive an annual payment based upon the
achievement by the Partnership of a target amount of distributable cash per Class A Unit per year. For each
fiscal year of the Partnership to which the Short-Term Cash Compensation Arrangements applied (originally
fiscal 2003 through to fiscal 2012), the Board of Directors set a target amount of distributable cash per Class A
Unit to be achieved. Mr. White was then entitled to an annual payment equal to (i) the actual amount of
distributable cash per Class A Unit, less (ii) the target amount of distributable cash per Class A Unit, multiplied
by (iii) the average number of Class A Units outstanding for such fiscal year, multiplied by (iv) 3%. Each
annual payment to Mr. White was targeted at approximately 50% of Mr. White's annual base salary and for
financial years ending prior to January 1, 2007 was capped at 150% of Mr. White's annual base salary, and for



                                                        17
financial years ending after January 1, 2007 was capped at 100% of Mr. White's annual base salary. In the event
the annual payment payable to Mr. White exceeded the cap amount, the amount of such excess was carried
forward and was payable to Mr. White in any future year when the annual payment was otherwise less than the
cap amount, subject again to the cap on the annual payment in any year of 150%, for financial years ending
prior to January 1, 2007, and 100%, for financial years ending after January 1, 2007, of Mr. White’s annual base
salary. In connection with the calculation of the annual payment to Mr. White, the operations of Aux Sable and
Alliance Canada Marketing L.P. were excluded.

        In the event Mr. White's employment agreement is terminated by the Partnership at any time and for
whatever reason (other than just cause) upon written notice to Mr. White or by Mr. White within six months
following the occurrence of certain events including, among other things, a "Change of Control" as defined in
the agreement (this definition is the same as the definition for "Change of Control" contained in the Unit
Appreciation Rights Plan), the Partnership must pay to Mr. White an amount equal to the sum of: (i) two times
Mr. White's annual base salary; (ii) 30% of Mr. White's annual base salary to cover the cost of life, disability,
medical, dental, health and accident benefits; and (iii) two times the arithmetic mean of any annual bonuses
(excluding any amounts paid or payable under the LTIP or the STIP) paid to Mr. White in the prior three year
period, and Mr. White's rights to payments in respect of any awards made to him under the LTIP and the STIP
shall be determined in accordance with the terms of those plans, see "Executive Compensation – Long-Term
Incentive Plan of the Partnership" and "Executive Compensation – Short-Term Incentive Plan of the
Partnership".

Vice President, Finance and Chief Financial Officer of the General Partner

        The General Partner, on behalf of the Partnership, entered into a letter agreement dated April 4, 2003
with Mr. Hume D. Kyle in connection with his appointment as the Vice President, Finance and Chief Financial
Officer of the General Partner effective May 1, 2003. Effective April 1, 2007, the annual base salary payable to
Mr. Kyle is $225,000 and is reviewed by the Board of Directors (or any committee so appointed by the Board of
Directors) at least annually and may from time to time be increased as approved by the Board of Directors.
Prior to the adoption of the LTIP and the STIP, each effective January 1, 2006, Mr. Kyle was entitled to
participate in the Unit Appreciation Rights Plan and the Short-Term Cash Compensation Plan. Since January 1,
2006, Mr. Kyle has been entitled to participate in the STIP and the LTIP. In the event of any involuntary
termination of his employment, Mr. Kyle is entitled to receive a minimum payment equal to 12 months pay.

Executive Officers of the Partnership's Operating Entities

        Alliance Pipeline Ltd. entered into an employment agreement dated January 1, 2005 with Mr. Murray
Birch, who served as the Interim President from December 9, 2004 to March 13, 2005 and was appointed
President and Chief Executive Officer of Alliance Pipeline Ltd. effective March 14, 2005. This agreement
provides that should Mr. Birch be involuntarily terminated (other than for cause) or if Mr. Birch terminates the
agreement in accordance with certain provisions thereof, he will receive, in addition to any salary accruing to
the date of termination: (i) a portion of the Alliance Canada STIP pro-rated based on Alliance’s performance in
that year to the date of termination; (ii) such amounts as may be due to Mr. Birch in accordance with the
provisions of the Alliance Canada KEIP with 24 months used for the purpose of the notice period; (iii) 24
months base salary at the salary in effect at the time of termination; (iv) two times the annual award of the
Alliance Canada STIP at the target participation rate in effect at the time of termination; and (v) a lump sum
equivalent cash value of the benefit allowance payable to Mr. Birch for a 24 month period.

        Aux Sable Liquid Products Inc. has entered into an employment agreement dated September 1, 2000
with Mr. William McAdam, the President and Chief Executive Officer of Aux Sable Liquid Products Inc. This
agreement provides that should Mr. McAdam be involuntarily terminated (other than for cause) or if Mr.
McAdam terminates the agreement in accordance with certain provisions thereof, he will receive: (i)
continuation of his annual base salary and benefits coverage or cash equivalent for a period of 24 months from
the date of termination; (ii) payment for 24 months from the date of termination of the bonus he would have



                                                       18
received under the Aux Sable STIP had he remained employed during such 24 month period, payable at his
target participation rate in effect at the time of his termination; and (iii) vesting for 24 months of any grants that
had been granted to him at the time of termination under the Aux Sable LTIP, or under any other long-term
incentive plan maintained by an affiliated or related entity of Aux Sable in which he was a participant at the time
of termination.

         Aux Sable Liquid Products Inc. has entered into an employment agreement dated April 5, 2000 with
Ms. Katherine Dodds, the Vice-President, General Counsel and Corporate Secretary of Aux Sable Liquid
Products Inc. This agreement provides that should Ms. Dodds be involuntarily terminated (other than for cause)
or if Ms. Dodds terminates the agreement in accordance with certain provisions thereof, she will receive: (i)
continuation of her annual base salary and benefits coverage or cash equivalent for a period of 18 months from
the date of termination; (ii) payment for 18 months from the date of termination of the bonus she would have
received under the Aux Sable STIP had she remained employed during such 18 month period, payable at her
target participation rate in effect at the time of her termination; and (iii) vesting for 18 months of any grants that
had been granted to her at the time of termination under the Aux Sable LTIP, or under any other long-term
incentive plan maintained by an affiliated or related entity of Aux Sable in which she was a participant at the
time of termination.




                                                         19
Composition of the Compensation Committee of the General Partner

         The members of the Compensation Committee consist of Messrs. John E. Feick (Chair), Verne G.
Johnson, Stephen W. C. Mulherin and Robert T.F. Reid. Each of these individuals has been a member of the
Compensation Committee since he was elected to the Board of Directors in 1997, other than Mr. Reid who was
elected to the Board of Directors and appointed to the Compensation Committee on May 10, 2007. No member
of the Compensation Committee, other than Mr. Reid, is or has been an officer or employee of, or has had any
relationship with, the General Partner, Fort Chicago or any of their respective subsidiaries except as a director of
the General Partner and each of Fort Chicago's subsidiary corporations. Mr. Reid was a member of the board of
directors of Alliance Pipeline Ltd., the general partner of Alliance Canada, and the board of directors of Alliance
Pipeline Inc., the general partner of Alliance U.S., from May 30, 2001 until January 31, 2003. Mr. Reid also
served as Chairman of the board of directors of each of Alliance Pipeline Ltd. and Alliance Pipeline Inc., and as
Chairman of the audit committee of each of those boards, from March 19, 2002 until January 31, 2003.

Report on Executive Compensation of the Partnership

        This report relates only to the compensation paid by the Partnership to executive officers of the General
Partner, including Messrs. White and Kyle. This report does not address any matters relating to the
compensation paid to the executive officers of the Partnership's operating entities, including Messrs.
Birch and McAdam, and Ms. Dodds.

Mandate of the Compensation Committee

         The Compensation Committee is responsible for: (i) assisting the Board of Directors in respect of
executive compensation policies and guidelines generally for the Partnership and for administering the
Partnership's executive compensation program; (ii) reviewing compensation strategies for the Partnership and
the structure and competitiveness of the Partnership's executive compensation program; (iii) assessing the
performance of the officers of the General Partner in fulfilling their responsibilities, other than the President and
Chief Executive Officer of the General Partner, and meeting objectives and making recommendations to the
Board of Directors regarding the compensation of those officers; (iv) reviewing and making recommendations to
the Board of Directors regarding the compensation of the President and Chief Executive Officer of the General
Partner, taking into account the assessment of his performance by the Corporate Governance and Nominating
Committee (the "Corporate Governance and Nominating Committee") of the Board of Directors; and (v)
undertaking on behalf of the Board of Directors such other initiatives as may be necessary or desirable to assist
the Board of Directors in discharging its responsibilities to ensure that the appropriate compensation policies,
strategies and performance evaluations are in place and operating effectively.

Compensation Philosophy

         The Board of Directors continues to believe that the structure of the Partnership's executive
compensation program should be similar to that adopted by publicly traded corporations and other entities.
Accordingly, since the Partnership was created in 1997, the Board of Directors has not caused the Partnership to
enter into a management agreement with the General Partner and there is no current intention to do so. Pursuant
to the Partnership Agreement, the General Partner is only entitled to be reimbursed for all costs and expenses
incurred by it in the performance of its duties thereunder. The executive compensation program has been
designed to be competitive with comparable corporations and other entities, to attract and retain highly qualified
and experienced individuals at the executive level and to align their interests with those of holders of Class A
Units. The Compensation Committee places considerable emphasis on performance-based remuneration
focusing on the Partnership's financial objectives and long-term interests as well as the Partnership's overall
performance.




                                                         20
Components of Compensation

        The executive officers of the General Partner are employees of and receive compensation from the
Partnership. They do not receive any compensation from the General Partner. The Partnership's executive
compensation program consists of three major components: (i) base salary and benefits; (ii) the payment of
annual cash awards to the President and Chief Executive Officer under a short-term incentive compensation
program prior to January 1, 2008, and under the STIP effective January 1, 2008, and the payment of annual cash
awards to the other executive officers of the General Partner who are also employees of the Partnership under
the STIP; and (iii) long-term awards, prior to January 1, 2006, under the Unit Appreciation Rights Plan and,
since January 1, 2006, under the LTIP.

        (i)     Base Salaries

        The base salaries for the executive officers of the General Partner who are also employees of the
Partnership are determined having regard to each executive officer's leadership qualities, responsibilities,
individual performance and experience, and the assessment by the Compensation Committee of such other
matters as it determines to be appropriate. Base salaries are also based on an informal review of compensation
paid to executive officers of other entities having similar roles and levels of responsibility. Base salaries are
reviewed annually by the Compensation Committee.

        (ii)    Annual Cash Awards and STIP Awards

        Prior to January 1, 2008, the General Partner's compensation philosophy was also to encourage the
growth of distributable cash per unit of the Partnership by paying annual cash awards to the President and Chief
Executive Officer of the General Partner under a short-term incentive compensation program pursuant to which
accretive growth in the Partnership's distributable cash was the sole focus. This program was developed to
complement the Unit Appreciation Rights Plan which was a long-term equity incentive plan and comprised a
substantial portion of senior management's annual compensation. Annual cash awards to the President and
Chief Executive Officer of the General Partner were based upon the achievement by the Partnership of a target
amount of distributable cash per Class A Unit which was determined annually by the Board of Directors.

         In determining the target amount of distributable cash per Class A Unit used to calculate the annual cash
award for the President and Chief Executive Officer of the General Partner, the Board of Directors excluded the
operations of Aux Sable Canada LP, Aux Sable Liquid Products LP and Alliance Canada Marketing L.P. and
fluctuations in foreign exchange rates. The President and Chief Executive Officer of the General Partner was
eligible for an additional annual compensation payment equal to a percentage of his base salary as determined
by the Board of Directors in its sole discretion based upon a substantial improvement in the operations of Aux
Sable Canada LP, Aux Sable Liquid Products LP and Alliance Canada Marketing L.P. that was not attributable
to changes in commodity prices, foreign exchange rates or basin differentials.

        An annual cash award to the President and Chief Executive Officer of the General Partner in any fiscal
year was targeted at approximately 50% and, prior to January 1, 2007, could not exceed 150% of his annual
base salary and, after January 1, 2007, could not exceed 100% of his annual base salary. For further details of
the terms governing the annual cash award to the President and Chief Executive Officer, see "Executive
Compensation – Employment Agreements – President and Chief Executive Officer of the General Partner".
Effective January 1, 2008, the short-term incentive compensation program for the President and Chief Executive
Officer of the General Partner was terminated and thereafter he is entitled to participate in the STIP.

         Effective January 1, 2006, the Partnership established the STIP, which offers designated directors,
officers, employees and consultants of the General Partner and employees and consultants of the Partnership
(other than the President and Chief Executive Officer of the General Partner prior to January 1, 2008) the
opportunity to receive supplemental remuneration based on a number of factors relating to the financial
performance of the Partnership and to thereby align the interests of such persons with the interests of holders of



                                                       21
Class A Units generally. The STIP replaced the Short-Term Cash Compensation Plan. See "Executive
Compensation – Short-Term Cash Compensation Plan of the Partnership". For details of the terms governing
the awards under the STIP, see "Executive Compensation – Short-Term Incentive Plan of the Partnership".

        (iii)   Unit Appreciation Rights and LTIP Awards

        The General Partner's compensation philosophy is to encourage the growth of unitholder value by
making long-term equity incentives a component of compensation. Prior to January 1, 2006, the Partnership had
granted UARs pursuant to the Unit Appreciation Rights Plan to employees of the Partnership in amounts relative
to position and performance. The Unit Appreciation Rights Plan was intended to offer employees of the
Partnership the opportunity to receive supplemental remuneration based on increases of the market value of the
Class A Units and to align the interests of such persons with the interests of holders of Class A Units generally.
See "Executive Compensation – Unit Appreciation Rights Plan of the Partnership".

         Effective January 1, 2006, the LTIP, a new long-term incentive cash compensation plan for selected
employees of the Partnership and directors of the General Partner, was developed and approved by the
Compensation Committee and the Board of Directors. As a result of the adoption of the LTIP, no further UARs
were granted during 2006 and 2007 and no further UARs will be granted under the Unit Appreciation Rights
Plan in the future.

        The LTIP is intended to closely tie the compensation of participants in the LTIP to the maintenance and
creation of medium-term to long-term value for the holders of Class A Units. It also serves as a tool to
encourage the retention of key employees and directors, to recognize key contributors and to ensure that the
Partnership's total compensation packages are competitive with those of its peers. See "Executive
Compensation – Long-Term Incentive Plan of the Partnership".

Compensation of the President and Chief Executive Officer

         The President and Chief Executive Officer of the General Partner, Mr. Stephen H. White, was appointed
to that position on January 1, 2003. Mr. White's compensation, other than his Short-Term Cash Compensation
Arrangements in effect prior to January 1, 2008, are determined on the same basis as the other executive officers
of the General Partner. Effective April 1, 2007, Mr. White was paid an annual base salary of $365,000 and his
annual salary effective April 1, 2008, has been increased to $410,000. Pursuant to Mr. White's Short-Term Cash
Compensation Arrangements, he received a cash payment in the amount of $350,000 for 2007. See "Executive
Compensation –Employment Agreements – President and Chief Executive Officer of the General Partner".

        For the 2007 plan year, an LTIP Award was made to the President and Chief Executive Officer of the
General Partner. The LTIP Award was based on Mr. White's annual salary for 2007 and an LTIP TPR of 150%.
For further details of the LTIP, see "Executive Compensation – Long-Term Incentive Plan of the Partnership".

Submitted by:

John E. Feick, Chair, Verne G. Johnson, Stephen W.C. Mulherin and Robert T.F. Reid




                                                       22
Performance Graph of the Partnership

        The following performance graph compares the yearly percentage change in the cumulative total return
of the Class A Units commencing on December 31, 2002 and ending on December 31, 2007 (assuming a $100
investment was made on December 31, 2002 at the closing price of the Class A Units on the TSX of $8.25 and
assuming the reinvestment of distributions paid by the Partnership during the period) with the cumulative total
return of the S&P/TSX Composite Index, assuming reinvestment of dividends or distributions, during the same
period.

 $240
 $230
 $220
 $210
 $200
 $190
 $180
 $170
 $160
 $150
 $140
 $130
 $120
 $110
 $100
  $90
          Dec. 31, 2002       Dec. 31, 2003       Dec. 31, 2004   Dec. 31, 2005     Dec. 31, 2006     Dec. 31, 2007



                                       Dec. 31,        Dec. 31,    Dec. 31,       Dec. 31,    Dec. 31,      Dec. 31,
                                        2002            2003        2004           2005        2006          2007
 ♦ Fort Chicago Energy Partners L.P.    $100            $131         $170          $194        $201          $207
 ● S&P/TSX Composite Index
   (Total Return)                       $100            $127         $145          $180        $211          $232


Compensation of Directors of the General Partner

Annual Fees and Meeting Fees

        During the year ended December 31, 2007, the directors of the General Partner (other than the President
and Chief Executive Officer of the General Partner) were paid by the Partnership an annual fee of $25,000
(except for the Chair, who was paid an annual fee of $55,000), a fee of $1,500 for each directors' meeting and
committee meeting attended in person or by telephone, the Chair of each of the Compensation Committee and
the Corporate Governance and Nominating Committee was paid an annual fee of $5,000 and the Chair of the
Audit Committee was paid an annual fee of $10,000. The chair of any meeting of the Board of Directors or a
committee had the option to designate any meeting dealing with routine matters or only one or two items of
business a "telephone meeting", for which a fee of $750 was payable regardless of whether or not any director
chose to attend the meeting in person. The total directors’ fees paid in 2007 were $402,000.

       The following table summarizes fees paid to individual directors (other than the President and Chief
Executive Officer of the General Partner) during the year ended December 31, 2007:




                                                             23
                       Fees Paid to Directors of the General Partner During the Year Ended December 31, 2007


                                Board Annual        Committee Chair         Total Board         Total Committee
                                  Retainer          Annual Retainer       Attendance Fees       Attendance Fees        Total Fees Paid
Name                                 ($)                 ($)                    ($)                    ($)                   ($)

David J. Drybrough                  25,000                10,000                18,000                10,500                63,500


John E. Feick                       25,000                 5,000                16,500                10,500                57,000


Robert J. Iverach (1)               18,750                  --                  13,500                6,000                 38,250


Verne G. Johnson                    25,000                 5,000                16,500                10,500                57,000


Arthur V. Mauro (2)                 12,500                  --                  7,500                 4,500                 24,500


Stephen W. C. Mulherin              25,000                  --                  18,000                9,000                 52,000


Robert T.F. Reid (1)                18,750                  --                  13,500                4,500                 36,750


Guy J. Turcotte (3)                 55,000                  --                  18,000                  --                  73,000



Notes:

(1)       Each of Messrs. Iverach and Reid was elected as a director of the General Partner at the annual meeting of the holders of Class
          A Units held on May 10, 2007.
(2)       Mr. Mauro did not stand for re-election as a director of the General Partner at the annual meeting of the holders of Class A
          Units held on May 10, 2007.
(3)       Mr. Turcotte resigned as a director and Chairman of the General Partner effective December 31, 2007.

        During a portion of 2007, Mr. Guy J. Turcotte, a director of the General Partner, served as one of the
Partnership's nominees on the board of directors of each of the general partners/managing general partners of
Alliance. In connection therewith, Mr. Turcotte received fees in the amount of $6,500. Director fees for the
Partnership’s nominees on the board of directors of each of the general partners/managing general partners of
Alliance who are also employees of the Partnership are paid to the Partnership. All of the foregoing fees were
calculated on the same basis as the fees paid by the Partnership to the directors of the General Partner during
2007.

Unit Appreciation Rights

         Directors of the General Partner have been entitled to participate in the Unit Appreciation Rights Plan of
the Partnership. See "Executive Compensation – Unit Appreciation Rights Plan of the Partnership". As noted,
the Partnership did not grant any UARs to directors during the years ended December 31, 2006 and 2007 and, as
a result of the adoption of the LTIP effective January 1, 2007, no further UARs will be granted under the Unit
Appreciation Rights Plan in the future. See "Executive Compensation – Long-Term Incentive Plan of the
Partnership".

       The following table sets forth the details of UARs held by, granted to and exercised by each director of
the General Partner (other than the President and Chief Executive Officer of the General Partner) during the year
ended December 31, 2007:




                                                                   24
                                   UARs Held By, Granted To and Exercised By Directors of the General Partner
                                                  During the Year Ended December 31, 2007


                                                                                                                         Balance            Value of
                                                                       Exercise or                                    Outstanding at       Unexercised
                                  Date UARs                            Base Price      Number of       Exercised      December 31,           UARs
Name                               Granted           Expiry Date        ($/UAR)          UARs         during 2007        2007 (1)             ($) (2)

David J. Drybrough               May 13, 2003       May 13, 2008              9.05       10,000            --             10,000              17,900
                                March 9, 2004       March 9, 2009           10.97        10,000            --             10,000                 --
                                March 16, 2005     March 16, 2010           11.60        10,000            --             10,000                 --
Total                                                                                                                     30,000              17,900
John E. Feick                   March 9, 2004       March 9, 2009           10.97        10,000            --             10,000                 --
                                March 16, 2005     March 16, 2010           11.60        10,000            --             10,000                 --
Total                                                                                                                     20,000                 --
                    (3)
Robert J. Iverach                      --                 --                 --             --             --                --                  --
Total                                                                                                                        --                  --
Verne G. Johnson                March 9, 2004       March 9, 2009           10.97        10,000            --             10,000                 --
                                March 16, 2005     March 16, 2010           11.60        10,000            --             10,000                 --
Total                                                                                                                     20,000                 --
                    (4)
Arthur V. Mauro                 March 9, 2004       March 9, 2009           10.97        10,000            --               Nil                  --
                                March 16, 2005     March 16, 2010           11.60        10,000            --               Nil                  --
Total                                                                                                                       Nil                  --
Stephen W. C. Mulherin          March 9, 2004       March 9, 2009           10.97        10,000            --             10,000                 --
                                March 16, 2005     March 16, 2010           11.60        10,000            --             10,000                 --
Total                                                                                                                     20,000                 --
Robert T.F. Reid (3)                   --                 --                 --             --             --                --                  --
Total                                                                                                                        --                  --
Guy J. Turcotte (5)             March 9, 2004       March 9, 2009           10.97        10,000            --             10,000                 --
                                March 16, 2005     March 16, 2010           11.60        10,000            --             10,000                 --
Total                                                                                                                     20,000                 --


        Notes:

        (1)         All of these UARs were vested and exercisable at December 31, 2007.
        (2)         Based on the closing price of the Class A Units on the TSX on December 31, 2007 of $10.84, less the exercise price of the
                    UAR.
        (3)         Each of Messrs. Iverach and Reid was elected as a director of the General Partner at the annual meeting of the holders of Class
                    A Units held on May 10, 2007 and neither has been granted any UARs.
        (4)         Mr. Mauro did not stand for re-election as a director of the General Partner at the annual meeting of the holders of Class A
                    Units held on May 10, 2007. All of the UARs held by Mr. Mauro subsequently expired in accordance with their terms.
        (5)         Mr. Turcotte resigned as a director and Chairman of the General Partner effective December 31, 2007.




                                                                             25
    LTIP Awards

            Directors of the General Partner are entitled to participate in the LTIP. See "Executive Compensation –
     Long-Term Incentive Plan of the Partnership". For the purposes of the LTIP, the annual salary payable to each
    of the directors (other than the President and Chief Executive Officer of the General Partner) for the 2007 plan
    year was deemed to be $20,000 and the LTIP TPR for the 2007 year for each of the directors was 100%.

            The following table sets out information regarding amounts targeted for LTIP Awards to each of the
    directors of the General Partner, other than the President and Chief Executive Officer of the General Partner,
    during the year ended December 31, 2007:

                                        LTIP Awards to Directors of the General Partner Under the LTIP
                                                During the Year Ended December 31, 2007

                                                                                                          Estimated Future Payouts Under
                                                                                                         Non-Securities-Price-Based Plans (1)
                                            Securities,
                                               Units
                                             or Other      Performance or Other Period Until        Threshold (3)      Target (4)     Maximum (5)
Name                                         Rights (2)          Maturation or Payout                   ($)              ($)              ($)

David J. Drybrough                              --                  January 1, 2007 to                 15,000           20,000           30,000
                                                                    December 31, 2009

John E. Feick                                   --                  January 1, 2007 to                 15,000           20,000           30,000
                                                                    December 31, 2009

Robert J. Iverach                               --                  January 1, 2007 to                 15,000           20,000           30,000
                                                                    December 31, 2009

Verne G. Johnson                                --                  January 1, 2007 to                 15,000           20,000           30,000
                                                                    December 31, 2009

Stephen W. C. Mulherin                          --                  January 1, 2007 to                 15,000           20,000           30,000
                                                                    December 31, 2009

Robert T.F. Reid                                --                  January 1, 2007 to                 15,000           20,000           30,000
                                                                    December 31, 2009

Guy J. Turcotte                                 --                  January 1, 2007 to                 15,000           20,000           30,000
                                                                    December 31, 2009



    Notes:

    (1)         Based on a deemed annual salary for 2007 of $20,000 and an LTIP TPR of 100%. In each case, the amounts shown for
                estimated future payouts are based upon the deemed annual salary and LTIP TPR and do not include amounts representing
                future distributions on, or any change in the market value of, the Class A Units.
    (2)         Participation in the LTIP is determined by the Compensation Committee and once included in the LTIP, the director's right to
                participate in awards under the LTIP is based on the director's deemed annual salary amount and the LTIP TPR for the
                applicable plan year.
    (3)         "Threshold" refers to the minimum amount payable under the LTIP, if an award is payable. No payments will be made under
                the LTIP if the ranking of the Partnership to the comparator group is less than the 25th percentile. The award under this column
                assumes the overall award is made at 75% of the LTIP TPR.
    (4)         "Target" refers to the amount payable if the overall award is made at 100% of the LTIP TPR.
    (5)         "Maximum" refers to the maximum payout possible under the LTIP, which is at 150% of the LTIP TPR.




                                                                         26
Board and Committee Attendance

       The following table sets forth the attendance of directors of the General Partner at Board of Directors
and committee meetings during the year ended December 31, 2007:

               Attendance By Directors of the General Partner at Board of Director and Committee Meetings
                                       During the Year Ended December 31, 2007

                                                                             Committee Meetings Attended
                                          Board Meetings      Audit            Corporate Governance and          Compensation
      Name                                   Attended       Committee           Nominating Committee              Committee

      David J. Drybrough                     12 of 12          4 of 4                      3 of 3                      N/A
                      (1)
      John E. Feick                          11 of 12          2 of 2                      3 of 3                     2 of 2
                            (2)
      Robert J. Iverach                       9 of 9           2 of 2                      2 of 2                      N/A
                             (1)
      Verne G. Johnson                       11 of 12          2 of 2                      3 of 3                     2 of 2
                            (3)
      Arthur V. Mauro                         5 of 5           2 of 2                      1 of 1                      N/A
                                    (4)
      Stephen W. C. Mulherin                 12 of 12          3 of 4                      1 of 1                     2 of 2
                            (5)
      Robert T.F. Reid                        9 of 9           2 of 2                       N/A                       1 of 1
      Guy J. Turcotte                        12 of 12           N/A                         N/A                        N/A
      Stephen H. White                       12 of 12           N/A                         N/A                        N/A


Notes:

(1)      Messrs. Feick and Johnson were members of the Audit Committee until May 10, 2007. Attendance is shown only for meetings
         held prior to or on that date.
(2)      Mr. Iverach was elected as a director of the General Partner at the annual meeting of the holders of Class A Units held on, and
         was appointed a member of each of the Audit Committee and the Corporate Governance and Nominating Committee on, May
         10, 2007. Attendance is shown only for meetings held after that date.
(3)      Mr. Mauro did not stand for re-election as a director of the General Partner at the annual meeting of the holders of Class A
         Units held on May 10, 2007. Attendance is shown only for meetings prior to or on that date.
(4)      Mr. Mulherin was a member of the Corporate Governance and Nominating Committee until May 10, 2007. Attendance is
         shown only for meetings held prior to or on that date.
(5)      Mr. Reid was elected as a director of the General Partner at the annual meeting of the holders of Class A Units held on, and
         was appointed a member of each of the Audit Committee and the Compensation Committee on, May 10, 2007. Attendance is
         shown only for meetings held after that date.

                                  STATEMENT OF CORPORATE GOVERNANCE PRACTICES

         The Board of Directors and management of the General Partner and the Partnership recognize that
effective corporate governance is central to the prudent direction and operation of the Partnership in a manner
that ultimately enhances unitholder value. The following discussion outlines the Partnership’s system of
corporate governance, including with respect to various matters addressed by National Instrument 58-101 –
Disclosure of Corporate Governance Practices (the "Disclosure Instrument") and National Policy 58-201 –
Corporate Governance Guidelines (the "Guidelines") as adopted by the Canadian Securities Administrators
with effect as of June 30, 2005.

        The corporate governance practices and policies of the Partnership have been developed under the
general stewardship of the Corporate Governance and Nominating Committee. The Corporate Governance and
Nominating Committee believes that the corporate governance practices of the Partnership are appropriate for a



                                                                  27
limited partnership such as the Partnership. As a result of evolving laws, policies and practices, the Corporate
Governance and Nominating Committee continuously reviews the practices and policies of the Partnership to
ensure that the Partnership complies with all applicable requirements. In this regard, the Corporate Governance
and Nominating Committee has developed and implemented, and continues to develop, implement and refine,
formal policies and procedures that reflect the Partnership’s commitment to exemplary corporate governance.

Board Terms of Reference and Composition

Terms of Reference

        The Board of Directors has plenary power to manage and supervise the business and operations of the
Partnership and has the duty to act in the best interests of the Partnership and holders of Class A Units. In
respect of its duties and responsibilities to the Partnership, the Board of Directors acts in accordance with the
partnership agreement which governs the Partnership and applicable laws. In respect of its duties and
responsibilities to the General Partner, the Board of Directors acts in accordance with the Business Corporations
Act (Alberta), the General Partner's articles of incorporation and by-laws, the terms of reference of each of the
committees of the Board of Directors and applicable laws. The Board of Directors approves all significant
decisions that affect the General Partner and the Partnership before such decisions are implemented. The Board
of Directors also supervises the implementation of such decisions and monitors the results. The Board of
Directors is responsible for: (i) adopting a strategic planning process for the Partnership; (ii) identifying and
understanding the principal risks of the Partnership's business and overseeing management's implementation of
systems to manage those risks; (iii) appointing senior management of the General Partner, including the Chief
Executive Officer; (iv) monitoring and assessing the performance of senior management and management
succession planning; (v) ensuring that management maintains an effective communication program that provides
for timely communication by the Partnership with its Unitholders; and (vi) implementing and maintaining
appropriate internal controls and information systems for the Partnership. A copy of the terms of reference of
the Board of Directors is appended to this Information Circular as Appendix A and is also available on the
Partnership’s website, www.fortchicago.com.

Composition of the Board

         The Board of Directors currently consists of seven directors who provide a wide diversity of business
experience. The Board of Directors has determined to fix the number of directors to be elected at the annual
meeting of the holders of Class A Units to be held on May 6, 2008 at seven. Six of the seven current members
of the Board of Directors are independent as defined under applicable Canadian securities legislation. In
accordance with such legislation, the Board of Directors defines a director to be "independent" if he or she has
no direct or indirect material relationship with the Partnership, as determined by the Board of Directors in
consultation with the Corporate Governance and Nominating Committee. A "material relationship" is a
relationship which could, in the Board of Directors' view, be reasonably expected to interfere with the exercise
of a director's independent judgement.

Board Committees

        The Board of Directors has three committees, the Audit Committee, the Compensation Committee and
the Corporate Governance and Nominating Committee. Each of the Audit Committee, the Compensation
Committee and the Corporate Governance and Nominating Committee have four members who are independent
directors. Each of the members of the Audit Committee is financially literate as defined under applicable
Canadian securities legislation. The terms of reference for each of the three committees are summarized below
and the full text of the terms of reference of each committee can be found on Fort Chicago’s website,
www.fortchicago.com. Each of the three committees is responsible for reviewing and assessing the adequacy of
its terms of reference on an annual basis and for making recommendations to the Board of Directors regarding
any proposed amendments thereto.




                                                       28
Audit Committee
Chair: David J. Drybrough
Members: Robert J. Iverach, Stephen W.C. Mulherin and Robert T.F. Reid

         The Audit Committee is responsible for: (i) assessing the independence of its members on at least an
annual basis and for determining whether or not new members are financially literate; (ii) reviewing and
recommending to the Board of Directors for approval, Fort Chicago’s annual financial statements and related
management’s discussion and analysis; (iii) reviewing Fort Chicago’s interim financial statements and related
management’s discussion and analysis; (iv) supervising the preparation and filing of the certification by the
Partnership’s officers of the annual and interim filings and financial statements of the Partnership; (v) reviewing
and approving, as prescribed, among other things, all earnings press releases and all other financial information
relating to the Partnership before such information is publicly disclosed; (vi) recommending to the Board of
Directors the auditor to be nominated for the Partnership and the compensation of the auditor; (vii) reviewing
and approving the terms of the engagement of the auditor as well as any non-audit services the auditor is to
perform; (viii) reviewing all audit processes and for overseeing the work of the auditor; (ix) interviewing the
auditor independently of management and ensuring the auditor is independent of the Partnership; (x) reviewing
Fort Chicago’s internal control procedures to determine their effectiveness and to ensure compliance with Fort
Chicago’s policies and avoidance of conflicts of interest; (xi) supervising the identification and understanding of
the principal risks of the Partnership's business and the oversight of management's implementation of systems to
manage these risks; (xii) supervising the Partnership's disclosure controls and procedures, and internal control
over financial reporting; and (xiii) establishing procedures for the receipt, retention and treatment of complaints
regarding the Partnership’s accounting, internal accounting controls or auditing matters, details of which are on
the Partnership's website, www.fortchicago.com. The Audit Committee has the authority to engage independent
counsel and other advisors as it determines necessary to carry out its duties and to set and pay the compensation
for such advisors.

        For information concerning the Audit Committee, including the text of the terms of reference of the
Audit Committee, see "Audit Committee Information" in the AIF. See "Additional Information" for details
regarding how to obtain a copy of the AIF.

Compensation Committee
Chair: John E. Feick
Members: Verne G. Johnson, Stephen W.C. Mulherin and Robert T.F. Reid

        For further information concerning the responsibilities, powers and operation of the Compensation
Committee see "Executive Compensation – Composition of the Compensation Committee of the General
Partner" and "Executive Compensation – Report on Executive Compensation of the Partnership – Mandate of
the Compensation Committee".

Corporate Governance and Nominating Committee
Chair: Verne G. Johnson
Members: David J. Drybrough, John E. Feick and Robert J. Iverach

         The Corporate Governance and Nominating Committee is responsible for developing and overseeing the
corporate governance practices of the General Partner, monitoring the relationship between the Board of
Directors and management of the General Partner and making appropriate recommendations to the Board of
Directors. Specifically, the Corporate Governance and Nominating Committee: (i) assesses annually the
independence of each director and the effectiveness of the Board of Directors as a whole, its committees and the
contributions of individual directors; (ii) reviews annually the size and composition of the Board of Directors
and each committee and recommends nominees for election to the Board of Directors; (iii) establishes objectives
for the President and Chief Executive Officer of the General Partner and monitors and assesses his performance
against these objectives; (iv) reviews and recommends for approval by the Board of Directors the descriptions
contained in any public disclosure documents concerning governance matters in respect of compliance with


                                                        29
applicable legislation, regulatory and/or stock exchange requirements and guidelines; (v) considers and, if
thought fit, approves requests from directors or committees for the engagement of special advisors from time to
time; and (vi) develops an orientation and education program for new directors.

Report of the Corporate Governance and Nominating Committee

      The following is a summary of some of the procedures undertaken by the Corporate Governance and
Nominating Committee and recommendations recently made to the Board of Directors, all of which
recommendations were accepted by the Board of Directors.

        •       Through a questionnaire which each director was asked to complete, the Corporate Governance
                and Nominating Committee conducted an evaluation of the effectiveness of the Board of
                Directors as a whole, its committees and the contributions of individual directors. The
                Corporate Governance and Nominating Committee was satisfied that, among other things, each
                member of the Corporate Governance and Nominating Committee is independent, the conduct
                of the Board of Directors is ethical and each committee has properly discharged its
                responsibilities as set out in their respective terms of reference. The Corporate Governance and
                Nominating Committee was also satisfied with the contributions of individual directors.

        •       The Chair of the Corporate Governance and Nominating Committee met with each of the
                directors individually to discuss their views on remaining as a director of the General Partner in
                the future in order to develop succession plans for the Board of Directors and to seek at an early
                stage to identify new candidates for election or appointment to the Board of Directors.

        •       The Corporate Governance and Nominating Committee has determined that the size and
                composition of the Board of Directors is appropriate having regard to the nature and complexity
                of the Partnership's structure and business. In addition, the Corporate Governance and
                Nominating Committee concluded the collective experience and expertise of the current
                directors standing for re-election is adequate to fully discharge the responsibilities of the Board
                of Directors.

        •       The Corporate Governance and Nominating Committee reviewed the terms of reference of each
                committee of the Board of Directors and the terms of reference of the Board of Directors to
                assess their appropriateness having regard to the views of the directors as to the appropriate
                roles and responsibilities of each of the committees and the Board of Directors, and having
                regard to any recent and proposed legislative and regulatory amendments. As a result of this
                review, and in consultation with each of the other committees, no amendments were made to
                any of the terms of reference. The terms of reference of each of the committees of the Board of
                Directors and the terms of reference of the Board of Directors can be found on the Partnership’s
                website, www.fortchicago.com. A copy of the terms of reference of the Board of Directors is
                also appended to this Information Circular as Appendix A.

        •       The performance objectives of the President and Chief Executive Officer of the General Partner
                were reviewed by the Corporate Governance and Nominating Committee and updated. The
                Corporate Governance and Nominating Committee will evaluate the performance of the
                President and Chief Executive Officer of the General Partner against these objectives on a semi-
                annual basis and report to the Board of Directors accordingly.

        •       The Corporate Governance and Nominating Committee reviewed: (i) the Code of Business
                Conduct and Ethics for the directors, officers and employees of the Partnership and the General
                Partner; (ii) the terms of reference for the Chair of the Board, the President and Chief Executive
                Officer of the General Partner and the committee chair; and (iii) the Disclosure Policy for the
                Partnership, having regard to any changes to such materials deemed to be desirable or necessary


                                                       30
                due to the experience of the   Partnership, the General Partner and the directors in dealing with
                such materials and having      regard to any recent and proposed legislative and regulatory
                amendments. No changes         to any of these materials were determined to be desirable or
                necessary.    All of these      documents may be viewed on the Partnership’s website,
                www.fortchicago.com.

        •       The Corporate Governance and Nominating Committee will monitor the development of new
                corporate governance and audit committee legislation, and develop for approval by the Board of
                Directors any further policies, or revisions to current policies, or take such steps as may be
                necessary or recommended to ensure compliance with such new legislation.

                       CORPORATE GOVERNANCE DISCLOSURE AND
                  COMPLIANCE WITH CORPORATE GOVERNANCE GUIDELINES

         The Canadian Securities Administrators adopted the Disclosure Instrument and the Guidelines, with
effect as of June 30, 2005. The Disclosure Instrument requires issuers such as the Partnership to disclose the
corporate governance practices that they have adopted, while the Guidelines provide guidance on corporate
governance practices. In this regard, a brief description of the Partnership’s system of corporate governance,
with reference to the items set out in the Disclosure Instrument and the Guidelines, is set forth in the table
appended to this Information Circular as Appendix B.

               INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

        No director or executive officer of the Partnership, the General Partner or a subsidiary of the Partnership
and no person who beneficially owns, or controls or directs, directly or indirectly, more than 10% of the
outstanding Class A Units (collectively, an "Informed Person") and no nominee for director of the General
Partner, or any associate or affiliate of any Informed Person or nominee for director of the General Partner, has
had any material interest, direct or indirect, in any transaction since the commencement of the Partnership's last
completed financial year or in any proposed transaction which has materially affected, or is reasonably expected
to materially affect, the Partnership or any of its subsidiaries.

                                       ADDITIONAL INFORMATION

        Additional information relating to the Partnership is available on the Partnership’s website,
www.fortchicago.com or on the System for Electronic Document Analysis and Retrieval (SEDAR) at
www.sedar.com. Financial information concerning the Partnership is provided in the Partnership's audited
consolidated financial statements and related management's discussion and analysis as at and for the year ended
December 31, 2007.

         The General Partner will provide to any person or company, upon written request to the investor
relations personnel of the General Partner, a copy of the latest Annual Information Form of the Partnership,
together with a copy of any document or the pertinent pages of any document incorporated by reference therein,
the 2007 Annual Report of the Partnership, interim financial statements of the Partnership for subsequent
periods and this Information Circular.




                                                        31
                                                 APPENDIX A


                            FORT CHICAGO ENERGY MANAGEMENT LTD.

                                          BOARD OF DIRECTORS

                                          TERMS OF REFERENCE

                                                     PART I

                                    COMPOSITION AND PROCEDURE

1.1     Composition

The board of directors (the “Board”) of Fort Chicago Energy Management Ltd. (the “General Partner”), the
general partner of Fort Chicago Energy Partners L.P. (the “Partnership”) shall consist of such number of
Directors as may be fixed from time to time by the Board, not being less than three (3) nor more than twelve
(12). All of the issued and outstanding shares of the General Partner have been settled upon a trust which is
governed by a trust agreement dated November 21, 1997 (the “Trust Agreement”) among the initial
shareholder of the General Partner, the General Partner and Computershare Trust Company of Canada, as trustee
(the “Trustee”). The Trustee is a trust corporation authorized to act as a trustee pursuant to the Trustee Act
(Alberta). The Trustee is the registered owner of all of the issued and outstanding shares of the General Partner.
The General Partner is a party to the Trust Agreement to ensure that no additional shares of the General Partner
are issued except to the Trustee. The beneficiaries of the trust created by the Trust Agreement are the holders of
the Class A Units (the “Units” and the holders thereof being referred to as “Unitholders”) from time to time
provided that in the event of the dissolution of the Partnership or if the General Partner ceases to be the General
Partner of the Partnership, then the beneficiary of the trust shall be a registered charity.

Pursuant to the Trust Agreement, the Trustee is not permitted to deal with the shares of the General Partner in
any way except that the Trustee shall annually elect the directors of the General Partner. Each director elected
holds office until the next annual meeting of the General Partner or until his successor is duly elected or
appointed by the Trustee. The Trustee has unfettered discretion in its election of directors. In exercising this
discretion, the Trustee may consider, together with such other factors as the Trustee in its discretion considers
relevant and in the best interests of the beneficiaries of the trust, the recommendation of the Unitholders who
will be afforded an opportunity in each year to vote on this matter at the annual meeting of Unitholders.

Management of the General Partner does not contemplate that any of the nominees will be unable to serve as a
director but, if that should occur for any reason prior to the Meeting, such nominee will be removed from the list
of nominees to be recommended to the Trustee.

At the first meeting of the Board held following the annual meeting of Unitholders, the Board shall elect a
chairperson to preside at all meetings of the Board. Where it is not appropriate to appoint an independent
director as chairperson, an independent director shall be appointed as lead director.




                                                        A-1
1.2     Meetings

The Board meets at least five times a year and as many additional times as it considers necessary to carry out its
responsibilities effectively. The Secretary of the General Partner is the Secretary of the meetings. The Board
meets separately at each meeting without management (including any member of management who is a director)
present.

1.3     Decisions

Decisions of the Board shall be evidenced by resolutions passed at meetings of the Board and recorded in the
minutes of the meeting or by a resolution in writing signed by all directors entitled to vote on that resolution at a
meeting of the Board.

1.4     Minutes

A copy of the draft minutes of each meeting of the Board shall be transmitted promptly by the Secretary to each
Director for adoption at the next meeting. A copy of any written resolutions evidencing decisions of the Board
shall be transmitted promptly by the Secretary to each director.

1.5     Authority to Engage Advisors

Each director shall be enabled, subject to the approval of the Corporate Governance and Nominating
Committee, to engage outside advisers, including counsel, as he or she determines necessary to carry out his or
her duties as a member of the Board. The General Partner shall provide appropriate funding to compensate any
such adviser, as determined by the Corporate Governance Committee in its capacity as a committee of the
Board.

                                                     PART II

                                    BOARD OF DIRECTORS MANDATE

2.1     Board Responsibilities

The Business Corporations Act (Alberta) requires directors to manage, or supervise the management of, the
business and affairs of the General Partner. The Board carries out this responsibility through a stewardship role.
The day to day management is delegated to the officers of the General Partner. In fulfilling this stewardship role
the Board has the responsibility to:

        (a)     Oversee the development and implementation of the annual strategic, financial and operating
                plans, including annual targets for the Partnership.

        (b)     Oversee the development and implementation by management of a strategic planning process to
                identify, manage and monitor the opportunities and principal risks of the Partnership’s business
                and ensure the implementation of appropriate systems to manage these risks.

        (c)     Ensure that management implements and maintains appropriate internal controls and
                management information systems for the Partnership.

        (d)     Oversee senior management succession planning and relevant management development plans
                (including appointing, training and monitoring senior management).



                                                         A-2
(e)   Ensure that management maintains an effective communication program that provides for
      timely communication by the Partnership with its Unitholders, debentureholders and other
      stakeholders including effective means to enable Unitholders, debentureholders and other
      stakeholders to provide feedback and communicate with senior management and the Board, and
      which communication program conforms to current practices for publicly traded entities in
      Canada.

(f)   Appoint the President and Chief Executive Officer and other officers of the General Partner.

(g)   Assess the performance of the President and Chief Executive Officer on at least an annual basis
      taking into account the recommendations of the Corporate Governance and Nominating
      Committee and any goals and responsibilities established for the President and Chief Executive
      Officer.

(h)   Approve the compensation of the President and Chief Executive Officer, taking into account the
      recommendations of the Compensation Committee

(i)   Appoint an Audit Committee comprised of independent directors, a Corporate Governance and
      Nominating Committee, a Compensation Committee and such other committees as the Board
      considers advisable to assist in carrying out its responsibilities effectively and to delegate to
      such committees any of the powers of the Board it is entitled to delegate pursuant to the
      Business Corporations Act (Alberta). The Board shall establish written Terms of Reference for
      each of any committees appointed by it and shall review such Terms of Reference on at least an
      annual basis.

(j)   Appoint a Chairman of each committee of the Board.

(k)   Ensure that all new directors receive a comprehensive orientation to the Board and the
      Partnership. The Board and the Partnership shall provide continuing education opportunities for
      all directors to maintain and enhance their skills and abilities as directors as well as to ensure
      knowledge and understanding of the Partnership’s business environment remains current.

(l)   Conduct regular assessments to evaluate the effectiveness and contributions of the individual
      directors and the Board as a whole.

(m)   Comply with the General Partner’s by-laws and the statutory and fiduciary obligations which
      generally exist for directors of publicly traded companies in Canada.

(n)   Comply with and conduct periodic assessments of the General Partner’s and the Partnership’s
      Code of Business Conduct and Ethics and oversee compliance therewith within the Partnership.

(o)   Satisfy itself, to the extent feasible, as to the integrity of the President & Chief Executive
      Officer and other executive officers of the General Partner and ensure that senior management
      creates a culture of integrity throughout the Partnership.

(p)   Establish and maintain a set of governance principles for the General Partner and the
      Partnership including practices that ensure that the Board functions independently of
      management.




                                             A-3
                                                    PART III

                                    RESPONSIBILITIES OF DIRECTORS

3.1     Director Responsibilities

The Business Corporations Act (Alberta) requires directors in exercising their powers and discharging their
duties to act honestly and in good faith with a view to the best interests of the General Partner, and to exercise
the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. As a
member of the Board, each director should:

        (a)     Exercise good judgment with integrity and with the benefit of his or her abilities and
                experience. Oversee the development and implementation of the annual strategic, financial and
                operating plans, including annual targets for the Partnership.

        (b)     Identify and disclose any conflict of interest to allow appropriate review.

        (c)     Respect confidentiality.

        (d)     Devote the necessary time and attention to be able to make an informed decision on issues.

        (e)     Be prepared for and strive to attend all Board meetings, to participate fully and frankly in the
                deliberations and discussions of the Board.

        (f)     Ask for all the information he or she believes is necessary to make informed decisions.

        (g)     Be generally knowledgeable of the Partnership’s operations and the industry within which it
                operates.

        (h)     Have an understanding of the regulatory, legislative, business, social and political environments
                within which the Partnership operates.

        (i)     Be an available resource to management.

        (j)     Be an effective ambassador and representative of the Partnership.

        (k)     Become acquainted with the officers and senior management of the Partnership.

        (l)     When appropriate, communicate with the Chairman of the Board and the President and Chief
                Executive Officer between meetings.

        (m)     Encourage free and open discussion at the meetings of the Board.

        (n)     Participate on committees, be knowledgeable of the mandate of the committee and ensure that
                the committee’s activities are consistent with, and fulfill, the mandate.




                                                        A-4
                                               APPENDIX B

                         CORPORATE GOVERNANCE DISCLOSURE AND
                    COMPLIANCE WITH CORPORATE GOVERNANCE GUIDELINES

Disclosure Item                Comments

1.   Board of Directors

•    Independence              •   The Board of Directors defines a director to be "independent" if he or she has no
                                   direct or indirect material relationship with the Partnership, as determined by the
                                   Board of Directors in consultation with the Corporate Governance and
                                   Nominating Committee. A "material relationship" is a relationship which could,
                                   in the Board of Directors' view, be reasonably expected to interfere with the
                                   exercise of a director's independent judgement.

                               •   The Board of Directors is responsible for determining whether or not each director
                                   is an independent director. To fulfill this responsibility, the Board of Directors
                                   analyzes all the relationships of the directors with the Partnership. The Board of
                                   Directors is presently comprised of seven directors, six of whom are independent.
                                   Messrs. David J. Drybrough, John E. Feick, Robert J. Iverach, Verne G. Johnson,
                                   Stephen W.C. Mulherin and Robert T.F. Reid are independent directors. The
                                   Partnership does not have a significant unitholder. None of the directors receive
                                   any fees from the Partnership or the General Partner other than as directors of the
                                   General Partner.

                               •   Mr. Stephen H. White is not an independent director on the basis that he is the
                                   President and Chief Executive Officer of the General Partner.

                               •   For further details about each director of the General Partner, see the information
                                   under the heading "Election of Directors".

•    Other Directorships       •   Several of the directors of the General Partner are presently directors of other
                                   reporting issuers (or the equivalent) in Canada and the United States. For further
                                   details, see the information about each director under the heading "Election of
                                   Directors".

•    In-camera Sessions        •   The Board of Directors held in-camera sessions at each meeting during the year
                                   ended December 31, 2007 at which non-independent directors and members of
                                   management were not in attendance. The Audit Committee meets in-camera with
                                   the auditor of the Partnership at each meeting without the presence of management
                                   and meets in-camera at each meeting without the presence of either management
                                   or the auditor. The Compensation Committee and the Corporate Governance and
                                   Nominating Committee conduct in-camera sessions without the presence of
                                   management at each meeting.

•    Board Chair               •   The Chair of the Board of Directors, Mr. Verne G. Johnson, is an independent
                                   director. The role and responsibilities of the Chair of the Board of Directors are
                                   described in the position description for the Chair, which is available on the
                                   Partnership's website, www.fortchicago.com.

•    Board Attendance Record   •   For information concerning the attendance record of each director for all Board of
                                   Directors and committee meetings held during the year ended December 31, 2007,
                                   refer to the chart under the heading "Executive Compensation – Compensation of
                                   Directors of the General Partner – Board and Committee Attendance".




                                                      B-1
Disclosure Item                   Comments

2.   Board Mandate

                                  •   A copy of the terms of reference of the Board of Directors is appended to this
                                      Information Circular as Appendix A and is also available on the Partnership’s
                                      website, www.fortchicago.com.

3.   Position Descriptions

•    Board Chair and              •   The Board of Directors, in consultation with the Corporate Governance and
     Committee Chairs                 Nominating Committee, has developed written position descriptions for the Chair
                                      of the Board of Directors and for each committee chair. Each of these position
                                      descriptions is available on the Partnership’s website, www.fortchicago.com.

•    President and Chief          •   The Board of Directors, in consultation with the Corporate Governance and
     Executive Officer                Nominating Committee, has developed a written position description for the
                                      President and Chief Executive Officer of the General Partner. This position
                                      description is available on the Partnership’s website, www.fortchicago.com.

4.   Orientation and Continuing
     Education

                                  •   The Corporate Governance and Nominating Committee provides new directors
                                      with certain important information regarding Fort Chicago including, among other
                                      things, historic public information about the Partnership and other relevant
                                      business and operational information. Senior management of the General Partner
                                      gives regular presentations to the Board of Directors regarding the Partnership's
                                      business and operations. The Corporate Governance and Nominating Committee
                                      has determined that further orientation and continuing education programs for
                                      directors are not necessary on the basis that it recruits directors with the
                                      experience and ability necessary to fulfill all of their duties and responsibilities.

5.   Ethical Business Conduct

•    Code of Business Conduct     •   The Partnership and the General Partner have adopted a Code of Business
                                      Conduct and Ethics governing the behavior of directors, officers and employees of
                                      the Partnership and the General Partner. The Code of Business Conduct and
                                      Ethics is available on the Partnership’s website, www.fortchicago.com, and on the
                                      SEDAR website, www.sedar.com.

                                  •   The Board of Directors monitors compliance with the Code of Business Conduct
                                      and Ethics through both the Corporate Governance and Nominating Committee
                                      and the Audit Committee. Each such committee receives an update on matters
                                      relating to the Code of Business Conduct and Ethics at its regularly scheduled
                                      meetings.

                                  •   No material change reports have been filed since January 1, 2007 that pertains to
                                      any conduct of a director or executive officer that constitutes a departure from the
                                      Code of Business Conduct and Ethics.




                                                          B-2
Disclosure Item                   Comments

                                  •   The Board of Directors, in consultation with the Corporate Governance and
                                      Nominating Committee, has developed and approved a Disclosure Policy for the
                                      Partnership and the General Partner in order to promote consistent disclosure
                                      practices aimed at informative, timely and broadly disseminated disclosure of
                                      material information to the market, in accordance with applicable securities
                                      legislation.

                                      The Audit Committee has also developed and approved Whistleblowing
                                      Procedures to provide for the receipt, retention and treatment of complaints
                                      received by the General Partner on behalf of the Partnership regarding: (i)
                                      accounting, internal accounting controls or auditing matters; and (ii) the
                                      confidential, anonymous submission by employees of the General Partner or the
                                      Partnership of concerns regarding questionable accounting or auditing matters.

                                      The Disclosure Policy and the Whistleblowing Procedures are available on the
                                      Partnership’s website, www.fortchicago.com.

6.   Nomination of Directors

•    Nomination Process           •   The Corporate Governance and Nominating Committee is responsible for
                                      considering the membership of the Board of Directors and its committees and
                                      making recommendations in respect thereof (including recommending nominees)
                                      and reviewing from time to time the composition of the Board of Directors and its
                                      committees and, when considered appropriate, making recommendations to the
                                      Board of Directors with respect to the composition of the Board of Directors and
                                      its committees.

                                  •   In identifying and assessing new candidates for the Board of Directors, the
                                      Corporate Governance and Nominating Committee considers what competencies
                                      and skill the Board of Directors as a whole should possess, the competencies and
                                      skills of each existing director and the competencies and skills, the independence
                                      and ability to devote sufficient time and resources to his or her duties that each
                                      new candidate will bring to the Board of Directors.

•    Nominating Committee         •   The Board of Directors has appointed a Corporate Governance and Nominating
                                      Committee, which consists of four independent directors. The terms of reference
                                      of the Corporate Governance and Nominating Committee are available on the
                                      Partnership’s website, www.fortchicago.com. For further information concerning
                                      the responsibilities, powers and operation of the Corporate Governance and
                                      Nominating Committee, see "Statement of Corporate Governance Practices –
                                      Board Committees – Corporate Governance and Nominating Committee".

7.   Compensation


•    Compensation Determination   •   The Compensation Committee is responsible for reviewing the amount and form
     for Directors                    of compensation for directors and for making recommendations to the Board of
                                      Directors. In making recommendations to the Board of Directors, the
                                      Compensation Committee considers, among other things, time commitment, risks
                                      and responsibilities of directors. The Compensation Committee also considers the
                                      compensation paid to directors of entities comparable to the Partnership. The
                                      Compensation Committee reviews the compensation of directors annually.

                                  •   Other than Mr. Stephen H. White, who receives compensation in his capacity as
                                      the President and Chief Executive Officer of the General Partner, the directors
                                      receive their compensation in the form of cash, unit appreciation rights (prior to
                                      January 1, 2006) and awards under the LTIP (from and after January 1, 2006).
                                                         B-3
Disclosure Item                   Comments

•    Compensation Determination   •   The Compensation Committee is responsible for reviewing and recommending for
     for Officers                     approval to the Board of Directors the compensation to be paid to the officers of
                                      the General Partner. For further information concerning the process by which it
                                      reviews and recommends for approval to the Board of Directors the compensation
                                      to be paid to the officers of the General Partner, see "Executive Compensation –
                                      Report on Executive Compensation of the Partnership".

•    Compensation Committee       •   The Board of Directors has appointed a Compensation Committee, which consists
                                      of four independent directors. The terms of reference of the Compensation
                                      Committee are available on the Partnership’s website, www.fortchicago.com. For
                                      further information concerning the responsibilities, powers and operation of the
                                      Compensation Committee, see "Executive Compensation – Composition of the
                                      Compensation Committee of the General Partner" and "Executive Compensation –
                                      Report on Executive Compensation of the Partnership – Mandate of the
                                      Compensation Committee".

•    Compensation Consultants     •   From time to time, the Compensation Committee retains independent human
                                      resources consultants to provide expert advice and opinions on compensation and
                                      other matters.

                                  •   During 2007, the Compensation Committee retained Hay Group Limited to
                                      provide a review of non-cash benefits of employees of the Partnership,
                                      comparative survey data for the compensation of the directors of the General
                                      Partner and comparative survey data for the compensation of the officers of the
                                      General Partner. During 2007, the Partnership paid Hay Group Limited an
                                      aggregate of $38,678 for services provided.

8.   Other Board Committees

                                  •   The Board of Directors does not have any standing committees other than the
                                      Audit Committee, the Compensation Committee and the Corporate Governance
                                      and Nominating Committee.

9.   Board and Committee
     Assessments

                                  •   The Corporate Governance and Nominating Committee annually assesses the
                                      effectiveness of the Board of Directors as a whole, its committees and the
                                      contribution of individual directors and makes recommendations to the Board of
                                      Directors. This assessment is done primarily by surveying directors to provide
                                      feedback in respect of each of these matters.

                                  •   For further information concerning the annual assessment of the Board of
                                      Directors, its committees and the contributions of individual directors by the
                                      Corporate Governance and Nominating Committee, see "Statement of Corporate
                                      Governance Practices – Board Committees – Corporate Governance and
                                      Nominating Committee". See also "Statement of Corporate Governance Practices
                                      – Report of the Corporate Governance and Nominating Committee".




                                                         B-4

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:6
posted:2/29/2012
language:English
pages:40