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EXHIBIT 99.1
AMENDED AND RESTATED
NORTHERN BORDER
PHANTOM UNIT PLAN
SECTION 1. PURPOSES OF THE PLAN. The purposes of this Northern Border
Phantom Unit Plan (the "Plan", which was formerly known as the Northern Plains
Natural Gas Company Phantom Unit Plan, are to provide employees of Northern
Plains Natural Gas Company and NBP Services Corporation an increased incentive
to contribute to the future success and prosperity of Northern Border Pipeline
Company and Northern Border Partners, L.P., as appropriate, thus enhancing the
value of the partnerships for the benefit of their owners, and to enhance the
ability of Northern Plains Natural Gas Company and of NBP Services Corporation
to attract and retain employees who are essential to the progress, growth and
profitability of the partnerships.
SECTION 2. ADMINISTRATION OF THE PLAN.
2.1. THE COMMITTEE. The Plan shall be administered by an administrative
committee comprised of one or more representatives of each Board of Directors of
Northern Plains Natural Gas Company and NBP Services Corporation (the
"Committee"). The decisions of the Committee must be by unanimous vote of those
present. The Committee may also appoint other members who need not be
directors of Northern Plains Natural Gas Company or NBP Services Corporation.
The Committee shall have all of the powers and duties specified for it under the
Plan, including, without limitation, the selection of Participants and the
determination of Grants of Phantom Units to be granted to each Participant. The
Committee may from time to time establish rules and procedures for the
administration of the Plan which are not inconsistent with the provisions of the
Plan, and any such rules and procedures shall be effective as if included in the
Plan.
2.2. MEETINGS. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. All action taken by the
Committee at a meeting shall be by the unanimous vote of those present at such
meeting, but any action may be taken by the Committee without a meeting upon
written consent signed by all of the members of the Committee. Members of the
Committee may participate in a meeting by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear or see the comments of one another. Notwithstanding any
other provisions in 2.1 and 2.2, no member of the Committee shall vote on any
matter directly affecting the amounts payable under the Plan to such member.
2.3. COMMITTEE DETERMINATIONS. All determinations of the Committee
shall be final, binding and conclusive upon all persons.
SECTION 3. ELIGIBILITY AND PARTICIPATION.
3.1. ELIGIBLE EMPLOYEES. Employees of Northern Plains Natural Gas
Company and of NBP Services Corporation are eligible to be selected by the
Committee for
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participation in the Plan. Participation in the Plan and the Grant of Phantom
Units to such eligible employees shall be in the discretion of the Committee,
and the Committee may from time to time establish further eligibility
requirements for participation in the Plan. Subject to provisions of the Plan,
Phantom Units granted to each Participant shall be determined in the sole
discretion of the Committee.
3.2. GRANT AGREEMENTS. The terms and provisions of each Grant of
Phantom Units, as determined by the Committee in its sole discretion, shall be
set forth in a written Grant Agreement, which shall incorporate by reference,
and be subject to, the terms and provisions of the Plan. Each Grant Agreement
shall contain such provisions not inconsistent with the Plan as the Committee
deems appropriate. The terms and provisions set forth in Grant Agreements may
vary among Participants. Phantom Units and all rights attendant thereto are
transferable only by will or the laws of descent and distribution, and are only
redeemable while the Participant remains an employee of Northern Plains Natural
Gas Company or NBP Services Corporation, or dies while an employee thereof
unless otherwise provided by a provision of the Plan or of the Participant's
Grant Agreement. Subject to the foregoing, the Committee has complete authority
to determine the identity of participants, the time of grant, time and
provisions for redemption and duration of a Grant of Phantom Units and any other
conditions or limitations applicable to the Grant and redemption of a Grant of
Phantom Units.
3.3. LIMIT ON PHANTOM UNITS. The number of Grants of Phantom Units,
including Grants of Phantom Units which have been redeemed, shall not exceed
forty thousand (40,000). If a Grant of Phantom Units is forfeited before its
redemption, then the number of Phantom Units attributable to such forfeited
Grant is available for Grants of Phantom Units subsequent to such forfeiture.
SECTION 4. PLAN ACCOUNTS. A bookkeeping account shall be established
for each Participant on books kept by Northern Plains Natural Gas Company and
NBP Services Corporation. Such account shall be unfunded and shall set forth the
initial Grant of Phantom Units to a Participant, the Phantom Units Value of such
Phantom Units at the time of such Grant and such other information as may be
necessary for administration of such Grant.
SECTION 5. PROVISIONS REGARDING PHANTOM UNITS.
5.1. GRANT OF PHANTOM UNITS. Phantom Units may be granted by the
Committee on such terms and conditions as the Committee may determine. A Phantom
Unit shall be a bookkeeping credit equal in value to the Phantom Unit Value at
the time of grant.
5.2. REDEMPTION. A Grant of Phantom Units shall be redeemed according
to the provisions of the Grant Agreement.
5.3. REDEMPTION PAYMENT. Upon redemption of a Grant of Phantom Units,
Northern Plains Natural Gas Company or NBP Services Corporation will pay or
cause to
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be paid to the Participant a Redemption Payment in Common Units of the
Partnership or in cash, or a combination thereof, as determined in the sole
discretion of the Committee. The Committee shall have final discretion in
determining the method and form of the Redemption Payment. The number of Common
Units of the Partnership paid pursuant to a redemption shall be determined using
the value of a Redemption Payment attributable to the number of Phantom Units
redeemed and the closing price of a Common Unit as reported on the New York
Stock Exchange on the Redemption Date. Subject to applicable law, such Common
Units of the Partnership shall be unrestricted and freely transferable, without
limitation.
5.4. PARTICIPANTS NOT SHAREHOLDERS OR UNITHOLDERS.
(1) The existence of the Plan and Grants of Phantom Units do
not restrict the right or power of the Partnership, Northern Plains
Natural Gas Company or NBP Services Corporation to effect any
organizational actions, including, but not limited to, issuance of
securities, changes of capital structure, and mergers or other
reorganizations. Participants will not have any rights of equity or
ownership in either the Partnership, Northern Plains Natural Gas
Company or NBP Services Corporation as a result of receiving or holding
Grants of Phantom Units.
(2) If an event occurs which results in the withdrawal of
Northern Plains Natural Gas Company pursuant to the provisions of the
Partnership Agreement (an "Event of Withdrawal"), then within thirty
(30) days of an Event of Withdrawal all unpaid Grants of Phantom Units
shall be fully redeemed and surrendered to Northern Plains Natural Gas
Company by each Participant who is an employee of Northern Plains
Natural Gas Company; and in such case each such Participant (or the
Participant's estate in the event of death) shall receive a Redemption
Payment for such Phantom Units from Northern Plains Natural Gas Company
pursuant to the provisions of the underlying Grant Agreement, using as
the Determination Date the date of Event of Withdrawal as determined by
the Committee.
(3) If the Event of Withdrawal identified in (2) above occurs,
then the Administrative Service Agreement will terminate (an "Event of
Termination"). Within thirty (30) days of an Event of Termination all
unpaid Grants Of Phantom Units shall be fully redeemed and surrendered
to NBP Services Corporation by each Participant who is an employee of
NBP Services Corporation; and in such case each such Participant (or
the Participant's estate in the event of death) shall receive a
Redemption Payment for such Phantom Units from NBP Services Corporation
pursuant to the provisions of the underlying Grant Agreement, using as
the Determination Date the date of Event of Termination as determined
by the Committee.
SECTION 6. NO RIGHT OF EMPLOYMENT. Neither the adoption of the Plan nor
a Grant of Phantom Units or crediting of amounts with respect thereto shall
confer on any person the right to continued employment by Northern Plains
Natural Gas Company or
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NBP Services Corporation, or affect in any way the right of Northern Plains
Natural Gas Company or NBP Services Corporation to terminate its employment of a
person at any time.
SECTION 7. PROHIBITION AGAINST ASSIGNMENT OR ENCUMBRANCE. No right,
title, interest or benefit hereunder shall ever be transferable or liable for or
charged with any of the torts or obligations of a Participant or any person
claiming under a Participant, or be subject to seizure by any creditor of a
Participant or any person claiming under a Participant. No Participant or any
person claiming under a Participant shall have the power to anticipate or
dispose of any right, title, interest or benefit hereunder in any manner until
the same shall have been actually distributed free and clear of the terms of the
Plan.
SECTION 8. AMENDMENT AND TERMINATION OF PLAN.
8.1. AMENDMENT OF PLAN. Both the Board of Directors of Northern Plains
Natural Gas Company and NBP Services Corporation shall each have the right to
alter or amend the Plan or any part thereof from time to time, except that such
Board shall not make any alteration or amendment which shall impair the rights
of a Participant in prior Grants of Phantom Units under the Plan without that
Participant's consent.
8.2. TERMINATION OF PLAN. Notwithstanding any other provision of the
Plan to the contrary, either Board of Directors of Northern Plains Natural Gas
Company or NBP Services Corporation may, in its sole discretion, terminate the
Plan at any time, except that termination of the Plan shall not impair the
rights of a Participant in prior Grants of Phantom Units under the Plan without
the Participant's consent. If not earlier terminated under the provisions of
this Section 8, the Plan shall terminate as of the Plan Termination Date.
SECTION 9. SOURCE OF PAYMENTS. The Plan shall constitute an unfunded,
unsecured obligation of Northern Plains Natural Gas Company to Participants who
are employees of Northern Plains Natural Gas Company and of NBP Services
Corporation to Participants who are employees of NBP Services Corporation to
make Redemption Payments according to the provisions of the Plan from its
respective general assets. Neither the establishment of the Plan nor the
allocation of Phantom Units or making bookkeeping credits to Participant
accounts with respect thereto shall be deemed to create a trust. By virtue of
being a Participant in the Plan, no Participant shall have any security or other
interest in any assets or equity of the Partnership, Northern Plains Natural Gas
Company or NBP Services Corporation. A Participant, his or her beneficiary and
any other person or persons having or claiming a right to payments hereunder or
to any interest in Phantom Units or this Plan shall rely solely on the unsecured
promise of Northern Plains Natural Gas Company or of NBP Services Corporation,
as the case may be, set forth herein, and nothing in this Plan shall be
construed to give a Participant, beneficiary or any other person or persons any
right, title, interest or claim in or to any specific asset, fund, reserve,
account or property of any kind whatsoever owned by the Partnership, Northern
Plains Natural Gas Company or NBP Services Corporation, or in
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which any of them may have any right, title or interest now or in the future;
but a Participant shall have the right to enforce a claim arising under the Plan
against Northern Plains Natural Gas Company or NBP Services Corporation, as the
case may be, in the same manner as any unsecured creditor.
SECTION 10. PLAN BINDING. This Plan shall be binding upon Northern
Plains Natural Gas Company and NBP Services Corporation, their successors and
assigns. Neither Northern Plains Natural Gas Company nor NBP Services
Corporation shall be a party to any merger, consolidation or reorganization,
unless and until the Plan and Northern Plains Natural Gas Company's and/or NBP
Services Corporation's obligations hereunder shall be expressly assumed by its
or their successor or successors.
SECTION 11. ADMINISTRATION OF PLAN.
11.1. COMMITTEE POWERS AND DUTIES. The Committee, in good faith, shall
supervise the administration and enforcement of the Plan according to the terms
and provisions hereof and shall have the sole discretionary authority and all
powers necessary to accomplish these purposes, including, but not by way of
limitation, the right, power, authority and duty:
1) to make rules, regulations and procedures for the administration of
the Plan which are not inconsistent with the terms and provisions
hereof, provided such rules, regulations and procedures are evidenced
in writing and copies thereof are delivered to Northern Plains Natural
Gas Company and to NBP Services Corporation;
2) to construe and interpret all terms, provisions, conditions and
limitations of the Plan;
3) to correct any defect, supply any omission, construe any ambiguous
or uncertain provisions, or reconcile any inconsistency that may appear
in the Plan, in such manner and to such extent as it shall deem
expedient to carry the Plan into effect;
4) to employ and compensate and delegate responsibilities to such
accountants, attorneys, investment advisors and other agents and
persons as the Committee may deem necessary or advisable in the proper
and efficient administration of the Plan;
5) to determine all questions and issues relating to eligibility;
6) to determine the amount, manner and time or payment of any benefits
under the Plan and to prescribe procedures to be followed by
Participants in obtaining benefits;
7) to cause to be prepared, filed and distributed, in such manner as
the Committee determines to be appropriate, such information and
material as is required by the reporting and disclosure requirements of
applicable statute or regulation; and
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8) to make a determination as to the right of any person to receive an
amount payable under the Plan.
11.2. NORTHERN PLAINS NATURAL GAS COMPANY AND NBP SERVICES CORPORATION
TO SUPPLY INFORMATION. Northern Plains Natural Gas Company and NBP Services
Corporation shall supply or cause to be supplied full and timely information to
the Committee relating to Participants and such pertinent facts as the Committee
may require. When making a determination in connection with the Plan, the
Committee shall be entitled to rely upon the aforesaid information furnished by
Northern Plains Natural Gas Company and NBP Services Corporation.
11.3. RELIANCE. The Committee and the Board shall not be liable for any
decision or action taken in good faith in connection with the administration of
the Plan. Without limiting the generality of the foregoing, any such decision or
action taken by the Board or the Committee in reliance upon any information
supplied to them by Northern Plains Natural Gas Company or NBP Services
Corporation, their legal counsel, or by their independent accountants in
connection with the administration of the Plan shall be deemed to have been
taken in good faith.
SECTION 12. GOVERNING LAW. This Plan shall be subject to, and governed
by, the laws of the State of Nebraska without regard to conflict of law
principles.
SECTION 13. CONSTRUCTION. In the event any parts of this Plan are found
to be void, the remaining provisions of this Plan shall nevertheless be binding
with the same effect as though the void parts were deleted.
SECTION 14. WITHHOLDING. Any payment provided for under the Plan shall
be made by Northern Plains Natural Gas Company and NBP Services Corporation as
provided herein and shall be reduced by any amount required to be withheld by
Northern Plains Natural Gas Company and NBP Services Corporation under
applicable local, state or federal withholding requirements.
SECTION 15. DEFINITIONS. For the purposes of this Plan, the terms
defined below shall have the following meanings:
"Administrative Services Agreement" shall mean the Administrative
Services Agreement between NBP Services Corporation, Northern Border Partners,
L.P. and Northern Border Intermediate Limited Partnership, as may be amended
from time to time.
"Common Units" or a " Common Unit" of the Partnership shall have the
same meaning as "Common Unit" is defined in the Partnership Agreement.
"Determination Date" means the date as of which a 1) Phantom Unit
Value, 2) a value equal to the closing price of a Common Unit on the New York
Stock Exchange
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(NYSE), or 3) any other value specified by the Committee for administration of
the Plan, is calculated.
"GP Distribution Rate" means the indicated annual distribution to the
general partners of the Partnership based on the most recently declared
distribution to limited partners of the Partnership divided by the number of
equivalent units represented by such general partners' interest in the
Partnership, as determined by the Committee.
"Distribution Yield" means the indicated annual Common Unit
distribution rate divided by the closing price of a Common Unit as reported on
the New York Stock Exchange on a Determination Date, as determined by the
Committee.
"Grant" means an award of Phantom Units pursuant to a Grant Agreement.
"Grant Agreement" means a written agreement making a Grant of Phantom
Units to a Participant.
"Phantom Unit" shall mean the interest granted to a Participant
pursuant to a Grant made by the Committee pursuant to the provisions of the
Plan.
"Phantom Unit Value" for a single Phantom Unit is the GP Distribution
Rate divided by the Distribution Yield.
"Participant" shall mean an eligible employee of Northern Plains
Natural Gas Company or of NBP Services Corporation who has been selected by the
Committee to participate in the Plan and who, with Northern Plains Natural Gas
Company or NBP Services Corporation, has entered into a Grant Agreement.
"Partnership" shall mean the limited partnership formed and continued
pursuant to the Partnership Agreement; presently, as of the effective date of
this Plan, Northern Border Partners, L.P.
"Partnership Agreement" shall mean the Amended and Restated Agreement
of Limited Partnership Of Northern Border Partners, L.P., as may be amended from
time to time.
"Permanent Disability" shall mean an injury or illness to or of a
Participant for which the Committee makes a determination that the Participant
is permanently and
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totally unable to perform his or her duties for the Participant's employer as a
result of any medically determinable physical or mental impairment as supported
by a written medical opinion satisfactory to the Committee by a physician
selected by the Committee, or if earlier, the date the Participant becomes
entitled to receive long term disability benefits under the long term disability
plan maintained or provided by the Participant's employer for its employees
generally.
"Plan Termination Date" shall mean the earlier date of a termination of
the Plan subject to the provisions of Section 8.2 of the Plan or December 31,
2004.
"Redemption Date" shall mean the date specified in a Grant Agreement
for redemption of the Grant of Phantom Units.
"Redemption Payment" shall mean a payment equal to the product of the
Phantom Unit Value as of the Determination Date multiplied by the number of the
Phantom Units being redeemed plus the amount of cash distributions credited to a
Participant's account pursuant to the applicable provisions of the underlying
Grant Agreement or according to the provisions of the Plan.
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