============= Page 1 of 398 ============= BOARD OF DIRECTORS MEETING DECEMBER 14, 1999 E0004388366 CONFIDENTIAL EXH002-02010 GOVERNMENT EXHIBIT 553 Crim. No. H-04-25 (S-2) ============= Page 2 of 398 ============= r- (0 M 00 0 M 'IT O O U W EXH002-02011 ============= Page 3 of 398 ============= R. A. Belfer V N. P. Blake, Jr. U~ R. C. Chan J. H. Duncan J. H. Foy / W. L. Gramm K. L. Harrison / . R. K. Jaedicke ' f C. A. LeMaistre K. L. Lay, Chairman R.P. Mark-Jusbasche ~~ J. Mendelsohn / J. J. Meyer P.V. Ferraz Pereira F. Savage V J. K. Skilling '/ J. A. Urquhart ' J. Wakeham H. S. Winokur, Jr. V` AGENDA MEETING OF THE BOARD OF DIRECTORS ENRON CORP. 8:00 A.M., December 14, 1999 Boardroom, Enron Building Houston, Texas EXECUTIVE SESSION: 1. Approve minutes of meetings of the Board of Directors held on September 17 and October 11-12,1999-Mr. Lay 2. Report on Executive Committee meeting held on October 20, 1999 and Approve minutes of Executive Committee meetings held on September 3, 14, and 24, 1999 - Mr. Duncan 3. Report on Compensation and Management Development Committee meeting held on December 13, 1999 - Dr. LeMaistre i~~ ?' t,(a) Compensation and Management Development Committee Agenda included for information purposes only v(b) Approve amendment to the 1991 Stock Plan to provide clarification of grant limits as a result of the Company's stock split and change references to "Management Committee" to "Executive Committee" of the Company t,(c Approve amendment to the 1994 Stock Plan to provide clarification of grant limits as a result of the Company's stock split 4. Report on Audit and Compliance Committee meeting held on December 13, 1999 - Dr. Jaedicke Audit and Compliance Committee Agenda included for information purposes only E0004388368 =XH002-02012 ============= Page 4 of 398 ============= 5. Report on Joint Audit and Compliance and Finance Committee Meeting held on December 13, 1999 - Mr. Winokur Joint Audit and Compliance and Finance Committee Agenda included for information purposes only 6. Report on Finance Committee Meeting held on December 13, 1999 - Mr. Winokur (a) Finance Committee Agenda included for information purposes only / (b) Approve Revision of Cash Management Policy ' ~EĢ.'. R .pRJ (c) Approve Enron Caribbean/Middle East Project Dolphin Note: Appoval of the Operating Plan Financing, as recommended by the Finance ! Committee, will occur after the presentation of the Operating Plan (See agenda item 12) (d) Approve Turbine Purchases (e) Approve Enron North America Project EEX (f) Approve Revision to Risk Management Policy .' (g) Approve Subsidiary Preferred Stock Financing (h) Approve Bahia Las Minas (Panama) Sell Down (i) Merchant and Strategic Transactions approved by the Office of the Chairman since the last Board meeting included for information purposes only 7. Report o 1n Year 2000 Oversight Committee meeting held on December 13, 1999 - Mr. Causey Year 2000 Oversight Committee Agenda included for information purposes only 8. Financial and earnings report - Mr. Causey 9. Stock Performance Report - Mr. Koenig 10. Other business to be considered in executive session - Mr. Lay C r.' , ; E0004388369 =XH002-02013 ============= Page 5 of 398 ============= OPEN SESSION: 11. 1999 Performance against Objectives - Mr. Sutton 12. Presentation and Approval of the 2000 Operating Plan - Mr. Skilling Approve Operating Plan Financing - Mr. Winokur 13. Special Reports/Updates: (a) ResCo Presentation and Approve Private Placement Transaction - Mr. Pai (b) Florida Pipeline Expansion - Messrs. Horton - ~.~ . (c) Global Recruiting and Retention - Ms. Olson (d) eCommerce and EnronOnline - Mr. McConnell and Ms. Kitchen 14. Legal report - Mr. Derrick 15. General corporate matters: (a) Approve date, time, and place of the 2000 Annual Meeting of Shareholders and record date to establish shareholders entitled to vote at such meeting - Mr. Lay (b) Approve 2000 Board meeting dates - Mr. Lay (c) Approve the declaration of dividend on the S..i~'u i f- -tin C'cnveztihle Preferred Stock - Mr. Skilling (d) Approve election of corporate officer - Mr. Skilling (e) Approve designation of Section 16 officers as "Executive Officers" - Mr. Derrick 16. Othr Business 17. Adjournment I I C) THE NEXT REGULAR MEETING OF THE BOARD WILL BE HELD ON FEBRUARY 7-8, 2000 IN HOUSTON, TEXAS. DIRECTOR ROOM RESERVATIONS WILL BE MADE AT THE FOUR SEASONS HOTEL. H:\a Minutes\121499\Agenda.doc E0004388370 =XH002-02014 ============= Page 6 of 398 ============= EXH002-02015 ============= Page 7 of 398 ============= DRAFT MINUTES SPECIAL MEETING OF THE BOARD OF DIRECTORS ENRON CORP. September 17,1999 Minutes of a special meeting of the Board of Directors of Enron Corp. ("Company"), held pursuant to due notice at 4:30 p.m., C.D.T., on September 17, 1999 at the Enron Building in Houston, Texas. The following Directors were present, constituting a quorum, in person or by telephone conference connection whereby each of the participants could hear the comments and discussions by the other participants and join in the discussions: Mr. Kenneth L. Lay, Chairman Mr. Robert A. Belfer Mr. Norman P. Blake, Jr. Mr. Ronnie C. Chan Mr. John H. Duncan Mr. Joe H. Foy Dr. Wendy L. Gramm Mr. Ken L. Harrison Dr. Robert K. Jaedicke Dr. Charles A. LeMaistre Dr. John Mendelsohn Mr. Jerome J. Meyer Mr. Jeffrey K. Skilling Mr. John A. Urquhart Lord John Wakeham Mr. Herbert S. Winokur, Jr. Director Rebecca P. Mark was absent from the meeting. Messrs. Jeffrey McMahon and Joseph W. Sutton and Ms. Rebecca C. Carter, all of the Company, also attended the meeting. The Chairman, Mr. Lay, presided at the meeting, and the Secretary, Ms. Carter, recorded the proceedings. Mr. Lay called the meeting to order and inquired if the Committee members had received the material for the meeting, and each responded that he or she had received the material. He stated that the meeting had been called for the Board to E0004388372 XH002-02016 ============= Page 8 of 398 ============= consider a financing transaction and called upon Mr. McMahon to present the matter. Mr. McMahon stated that in December of 1997 the Company, with the Board's approval, had put in place a financing structure referred to as "Condor". He reviewed the original Condor transaction and stated that the Company and an outside third-party ("Nighthawk") had each contributed $500 million cash to a financing vehicle ("Whitewing"). Whitewing then paid the Company $1 billion cash for the Company's mandatory convertible preferred stock. He stated that the primary purpose of the transaction had been to convert debt to equity. He stated that the value of the preferred stock in Whitewing, in which the Company has a 50% ownership interest, had increased significantly since the original transaction. He stated that the Company was proposing a redemption of the original preferred stock and the issuance of a similar preferred stock. He stated that this would allow the Company to take advantage of the increase in value of the preferred stock. He discussed how Condor would be structured after the redemption of the preferred stock, noting that Whitewing would be funded by a private placement sale of bonds to institutional investors and outside equity. The Company would then contribute assets from its "Merchant Portfolio" and receive cash from Whitewing. Following a discussion in which Mr. McMahon answered questions from the Committee, upon motion duly made by Mr. Duncan, seconded by Mr. Blake, and carried, the following resolutions were approved: WHEREAS, Enron Corp. (the "Company") desires to consummate a structured finance transaction using a newly established series of Mandatorily Convertible Junior Preferred Stock, Series B of the Company (the "Preferred Shares") which are to be exchanged for the outstanding Series A Junior Voting Convertible Preferred Stock of the Company ("Exchanged Shares") presently held by Whitewing Associates L.L.C. ("Whitewing") to raise up to approximately $1.5 billion of funding for general corporate purposes (approximately $930 million) and to restructure the outstanding equity of Whitewing and provide funds for the repayment of a previous structured financing (approximately $570 million) which transaction involves the sale by Donaldson, Lufkin & Jenrette Securities Corporation, Deutsche Bank Securities Inc., Bear, Steams & Co. Inc., and Salomon Smith Barney Inc. (together the "Initial Purchasers") of up to $1,400,000,000 of senior secured notes (the "Osprey Notes") of a newly formed entity, Osprey Trust, and the issuance and sale by Osprey Trust of approximately $100 million of trust certificates (the "Osprey Trust Certificates") and the purchase by Osprey Trust using the proceeds of such offerings of a limited partner interest in Whitewing (which will be converted into a limited partnership in connection with such transactions) (all transactions 2 E0004388373 :XH002-02017 ============= Page 9 of 398 ============= necessary to recapitalize Whitewing and to consummate the sale of the Osprey Notes and the Osprey Trust Certificates are herein referred to as the "Osprey Transactions"); NOW, THEREFORE, IT IS RESOLVED, that the Osprey Transactions and the issuance of the Preferred Shares are hereby authorized and approved, and that the Company shall proceed with the consummation of such transactions in accordance with the resolutions hereby adopted; RESOLVED FURTHER, that the issuance of the Preferred Shares and the Osprey Transactions shall be subject to the following terms and conditions (the "Board Conditions"): (i) the Preferred Shares shall have the terms and conditions and powers, preferences, and relative, participating, optional, or other special rights, and the qualifications, limitations, and restrictions set forth in the Statement of Resolutions attached hereto as Exhibit A and which is incorporated herein by this reference as if fully set forth herein (together with any changes thereto consistent with the Board Conditions negotiated by and among the Initial Purchasers, the purchasers of the Osprey Trust Certificates, and the Company and approved by an officer of the Company or other person authorized and empowered to act pursuant to these resolutions, the execution and filing of which by any such officer or person, in the name and on behalf of the Company, with the appropriate agencies of the State of Oregon to be conclusive evidence of the approval by such officers or person of the contents thereof; (ii) the maximum number of Preferred Shares to be issued shall be an indefinite number of shares up to the number of shares necessary to fulfill the Company's obligations pursuant to the Share Settlement Agreement (as defined in Exhibit A), but in no event more than the number of authorized but unissued shares of Preferred Stock, with 250,000 shares to be initially issued; (iii) the Preferred Shares shall initially be convertible into no more than 50,000,000 shares of common stock of the Company ("Common Stock") (the same number of shares of Common Stock into which the Exchanged Shares are presently convertible), and the number of shares of Common Stock which the Company may ultimately be obligated to issue at the maturity of the Osprey Transactions shall also be increased by (a) antidilution adjustments to be provided in the terms of the Preferred Shares and (b) the requirements of the 3 E0004388374 XH002-02018 ============= Page 10 of 398 ============= Share Settlement Agreement upon a resale by the share trust pursuant to Remarketing (as defined in the remarketing and registration rights agreement associated with the Preferred Shares) based on the closing price per share of Common Stock on or about the date of such resale or such Remarketing, but in no event more than the number of authorized but unissued shares of Common Stock that have not been reserved by the Board of Directors for other purposes as of the date of such resale or such Remarketing (or as of such other date determined by any officer of the Company authorized to act in accordance with these resolutions); (iv) the liquidation preference per share of the Preferred Shares, exclusive of accrued dividends, shall not exceed $4,000 (an aggregate of $1.0 billion) in respect of initially issued Preferred Shares; and (v) the number of shares of Common Stock that may be issued after the Preferred Shares have been issued pursuant to the remarketing and registration rights agreement referred to above shall not exceed the number of authorized but unissued shares of Common Stock that have not been reserved by the Board of Directors for other purposes as of the date of such issuance; RESOLVED FURTHER, that each of the Chairman and Chief Executive Officer, the President and Chief Operating Officer, any Vice Chairman or any Vice President is hereby authorized, empowered, and directed, with the power and authority of the full Board of Directors to the fullest extent permitted by law, to authorize and approve (or ratify if already executed or taken) all agreements, instruments, and documents, and the taking of all actions, as any such officer may deem necessary, advisable, convenient, or proper to consummate the Osprey Transactions and the issuance of the Preferred Shares (subject, however, in all respects, to the Board Conditions), including, without limitation: (i) the determination of all or any part of the terms of the issuance of the Preferred Shares; (ii) the determination of all or any part of the designation and relative rights, preferences, and limitations of the Preferred Shares; (iii) the approval of a form certificate representing the Preferred Shares; 4 E0004388375 =XH002-02019 ============= Page 11 of 398 ============= (iv) all matters insofar as they affect the Company or any of its subsidiaries or affiliates associated with the issuance of the Osprey Notes and the Osprey Trust Certificates and the authorization, execution, and delivery by the purchasers of the Osprey Certificates of a trust agreement for Osprey Trust with such terms and conditions relative to the Company and any of its subsidiaries or affiliates as such officer shall approve; (v) the authorization, execution, and delivery of a purchase agreement among the Company, Osprey Trust, and the purchasers of the Osprey Trust Certificates for the sale of the Osprey Trust Certificates with such terms and conditions (including pricing terms) as such officer shall approve; (vi) the authorization, execution, and delivery of a purchase agreement among the Company, Osprey Trust, and the Initial Purchasers for the sale of the Osprey Notes with such terms and conditions (including pricing terms) as such officer shall approve; (vii) the authorization, execution, and delivery of an indenture among Osprey Trust, Osprey I, Inc. and a trustee to be selected with such terms and conditions as such officer shall approve; (viii) the approval insofar as they affect the Company or any of its subsidiaries or affiliates of a form of note representing the Osprey Notes and a certificate representing the Osprey Certificates; (ix) the authorization, execution, and delivery of a participation agreement (the Osprey Participation Agreement") among the Company, Osprey Trust, Whitewing, Whitewing Management LLC, Egret I LLC, Peregrine I LLC, Condor Share Trust, and the Indenture Trustee providing for the parties' participation in the Osprey Transactions and certain undertakings made by each of the parties, with such terms and conditions as such officer shall approve; (x) the authorization, execution, and delivery of (a) a remarketing and registration rights agreement among the Company, Condor Share Trust, Osprey Trust, Whitewing Associates L.P., Whitewing Management LLC, the Indenture Trustee, and the Initial Purchasers providing for, among other things, the registration of the Preferred Shares or Common Stock into which it is convertible, and (b) the related Share Settlement Agreement providing for the potential issuance of additional Preferred Shares or Common Stock to the extent required by the remarketing and registration rights agreement 5 E0004388376 XH002-02020 ============= Page 12 of 398 ============= and such Share Settlement Agreement with such terms and conditions as such officer shall approve; (xi) all matters insofar as they affect the Company or any of its subsidiaries or affiliates associated with the formation of Whitewing Associates L.P. (by the conversion of Whitewing into a limited partnership) and its subsidiary, Condor Share Trust, including the authorization, execution, and delivery of a trust agreement for the formation of Condor Share Trust with such terms and conditions as such officer shall approve; and (xii) the negotiation, authorization, execution, and delivery of such other agreements, instruments, and documents relating to the Osprey Transactions and the Preferred Shares, including, but not limited to, agreements, instruments, and documents that provide, among other things, for the indemnification of third parties, and the payment of fees and expenses of third parties as such officer may deem necessary, advisable, convenient, or proper in connection with the Osprey transactions or any other matters addressed by these resolutions; RESOLVED FURTHER, that Ben Glisan is hereby appointed as agent and attorney-in-fact of the Company and is authorized, empowered, and directed, with the power of the full Board of Directors, subject to control and direction by the Company, to the fullest extent permitted by law, to authorize and approve all agreements, instruments, and documents and the taking of all actions as such agent and attorney-in-fact may deem necessary or desirable and shall have all the powers of an officer of the Company with respect to these resolutions (subject, however, in all respects, to the Board Conditions) solely for the purpose of consummating the Osprey Transactions (excluding, however, the issuance of the Preferred Shares and the matters set forth in or contemplated by (ii) and (iii) in the immediately preceding resolution); it is the intent of the Board of Directors that Mr. Glisan, in his capacity as agent and attorney-in-fact of the Company, shall have all the duties, obligations, and responsibilities of an officer of the Company for purposes of the Osprey Transactions, as if he were an officer of the Company; RESOLVED FURTHER, that pursuant to the authority expressly granted and vested in this Board of Directors by the Company's Amended and Restated Articles of Incorporation (the "Articles"), and pursuant to the appointment and authorization by 5 E0004388377 :XH002-02021 ============= Page 13 of 398 ============= this Board of Directors to the officers of the Company set forth above, this Board of Directors hereby authorizes the amendment of the Articles for the purpose of the creation of the Preferred Shares, and hereby authorizes the officers of the Company to authorize, execute, and deliver for filing the Articles of Amendment, setting forth the Statement of Resolutions of the terms of the Preferred Shares, with the Office of the Secretary of State of the State of Oregon and such other offices as the officers of the Company shall deem necessary or advisable; RESOLVED FURTHER, upon issuance of certificates for the 250,000 initially issued Preferred Shares in exchange for the Exchanged Shares in accordance with the foregoing resolutions, such Preferred Shares shall be validly issued, fully paid, and nonassessable; RESOLVED FURTHER, upon issuance of certificates for any Preferred Shares required to be issued pursuant to the terms of the Share Settlement Agreement in accordance with the terms of the Share Settlement Agreement and in accordance with the foregoing resolutions, such Preferred Shares shall be validly issued, fully paid, and nonassessable; RESOLVED FURTHER, that the 50 million common shares currently reserved for Whitewing (in connection with the Exchanged Shares) shall remain reserved under the remarketing and registration rights agreement referred to above in for use in upon the conversion of the Preferred Shares; RESOLVED FURTHER, that, subject to the Board Conditions, effective immediately upon issuance of the Preferred Shares, there will be reserved 20 million additional shares of Common Stock of the Company and 100,000 Preferred Shares of the Company for issuance under the Share Settlement Agreement; RESOLVED FURTHER, that upon any adjustment to the conversion price of the Preferred Shares, sufficient additional shares of Common Stock shall be reserved and kept available so that the maximum number of shares of Common Stock issuable upon conversion of the Preferred Shares shall at all times be reserved and kept available; RESOLVED FURTHER, that the Company is authorized to issue such shares of Common Stock of the Company upon 7 E0004388378 XH002-02022 ============= Page 14 of 398 ============= conversion of the Preferred Shares, and that upon any such issuance in accordance with the terms of the Preferred Shares, such shares of Common Stock shall be validly issued, fully paid, and non- assessable; RESOLVED FURTHER, that upon issuance of certificates for any shares of Common Stock required to be issued pursuant to the terms of the Share Settlement Agreement in accordance with the terms of the Share Settlement Agreement and in accordance with the foregoing resolutions, such shares of Common Stock shall be validly issued, fully paid, and nonassessable; RESOLVED FURTHER, that if it is deemed necessary or advisable by the officers of the Company that the Preferred Shares and/or the Common Stock issuable upon conversion of the Preferred Shares be qualified or registered for sale under the applicable Blue Sky Laws or securities acts of any jurisdiction, or that a filing be made in any jurisdiction to secure or obtain an exemption from qualification or registration, or that a listing application be filed with any national securities exchange, the officers of the Company are each authorized to perform on behalf of the Company any and all such acts as any one or more of them may deem necessary or advisable in order to comply with such laws of such jurisdiction or the rules of such exchanges, and in connection therewith, to execute and file all requisite papers and instruments and to make any and all payments of filing, registration, or other fees, costs, and expenses, and to take any and all further action in connection with the foregoing which any one or more of them shall deem necessary or advisable; RESOLVED FURTHER, that the execution by any officer of the Company of any papers and instruments or the performance by any one or more of them of any act in connection with the foregoing resolutions shall conclusively establish their authority therefor from the Company and the approval and ratification by the Company of the papers and instruments so executed and the actions so taken; RESOLVED FURTHER, that the actions of the officers of the Company heretofore taken on behalf of the Company in connection with the above resolutions and the actions contemplated thereby are, in all respects, confirmed and ratified, and the officers of the Company, together or individually, may take any and all action and do any and all things as may be deemed by any of them to be necessary or advisable to effectuate the lawful issuance and sale of s E0004388379 --XH002-02023 ============= Page 15 of 398 ============= the Preferred Shares, and the taking of any and all such actions and the performance of any and all such things in connection with the foregoing shall conclusively establish their authority from the Company and the approval and ratification by the Company; and RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, proper, or advisable to carry into effect the purposes and intentions of this and each of the foregoing resolutions. Messrs. Lay and Skilling then gave the Board a brief update on activities throughout the Company. There being no further business to come before the Board, the meeting was adjourned at 4:50 p.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\1999 Minutes\91799sp.doc 9 E0004388380 :XH002-02024 ============= Page 16 of 398 ============= DRAFT MINUTES MEETING OF THE BOARD OF DIRECTORS ENRON CORP. October 11-12, 1999 Minutes of a meeting of the Board of Directors of Enron Corp. ("Company") noticed to begin at 7:00 p.m., C.D.T., but actually begun at 7:20 p.m., C.D.T., on October 11, 1999 at the Four Seasons Hotel, Whitney Room, in Houston, Texas. The following Directors were present, constituting a quorum: Mr. Kenneth L. Lay, Chairman Mr. Robert A. Belfer Mr. Norman P. Blake, Jr. Mr. John H. Duncan Mr. Joe H. Foy Dr. Wendy L. Gramm Mr. Ken L. Harrison Dr. Robert K. Jaedicke Dr. Charles A. LeMaistre Ms. Rebecca P. Mark Dr. John Mendelsohn Mr. Jerome J. Meyer Mr. Jeffrey K. Skilling Mr. John A. Urquhart Lord John Wakeham Mr. Herbert S. Winokur, Jr. Director Ronnie C. Chan was absent from the meeting. The meeting was begun in executive session, during which Messrs. Richard A. Causey, Andrew S. Fastow, Mark E. Koenig, Jeffrey McMahon, and Joseph W. Sutton and Ms. Rebecca C. Carter, all of the Company or affiliates thereof, and Messrs. Paulo V. Ferraz Pereira and Frank Savage, candidates for election to the Company's Board of Directors, were also in attendance. The Chairman, Mr. Lay, presided at the meeting, and the Secretary, Ms. Carter, recorded the proceedings. Mr. Lay called the meeting to order and called for a revised agenda to discuss the election of two new directors to the Company's Board of Directors. He called upon Lord Wakeham to present the candidates. Lord Wakeham noted E0004388381 XH002-02025 ============= Page 17 of 398 ============= that the Nominating Committee of the Board was recommending that Messrs. Paulo Ferraz Pereira and Frank Savage be elected to the Company's Board. He proposed that Mr. Pereira be asked to join the Finance and Audit and Compliance Committees of the Board and Mr. Savage be asked to join the Finance and Compensation and Management Development Committees of the Board. Lord Wakeham moved approval of the recommendation, his motion was duly seconded by Dr. Gramm, and carried, and the following resolutions were approved: RESOLVED, that Paulo V. Ferraz Pereira and Frank Savage be, and each of them hereby is, elected a director of the Company, effective October 12, 1999, to serve during the ensuing year until the next Annual Meeting of Shareholders and until their successors shall have been duly elected and qualified; RESOLVED FURTHER, that Paulo V. Ferraz Pereira be, and hereby is, elected a member of the Finance Committee and the Audit and Compliance Committee of the Board of Directors of the Company, to serve for the ensuing year and until his successor is duly elected and qualified; and RESOLVED FURTHER, that Frank Savage be, and hereby is, elected a member of the Finance Committee and the Compensation and Management Development Committee of the Board of Directors of the Company, to serve for the ensuing year and until his successor is duly elected and qualified. Mr. Lay called upon Mr. Causey for the financial and earnings and the Year 2000 ("Y2K") Oversight Committee reports, and copies of Mr. Causey's presentations are filed with the records of the meeting. Mr. Causey discussed diluted earnings per share ("EPS") for the third quarter and first nine months of 1999 and compared them to the 1999 Operating Plan. He discussed the impact on third quarter earnings of the Company's sale of its ownership interest in Enron Oil & Gas Company ("EOG") and write-down of its MTBE facility. He noted that certain recent events led the Company to the decision that the MTBE asset value was impaired. He discussed the growth in EPS from 1998 to 1999, results for the third quarter and first nine months by operating unit, and certain items that had impacted the operating units' performance. He presented a roll-forward, from the end of 1998, of balance sheet debt and noted that the Company was in a strong position from a debt level and cash flow perspective. Mr. Causey then updated the Board on the Company's Y2K readiness program. He gave a general overview of the status of the Y2K project, noting that work on mission-critical applications, embedded systems, and third-party evaluations was essentially complete and that residual risk analyses were 2 E0004388382 KHO02-02026 ============= Page 18 of 398 ============= complete. He noted that there was one remaining Y2K compliance review to be performed in India, the legal review of documentation was underway, and detailed contingency planning continued. He discussed the status of mission-critical items and stated that all business units except some international regions had achieved 99% or 100% completion on mission critical items. He discussed what the potential consequences of inaction in making systems Y2K compliant would have been and noted that the majority of power plant control systems had not previously been Y2K compliant. He commented on the benefits of the Y2K efforts, which included risk mitigation, standardization, investment in performance enhancing solutions, and a thorough review of the business processes throughout the Company. He reviewed the contingency planning milestones and noted that risks had been prioritized by site, task level contingencies were under development, alternative communications were in place, and a crisis management center was under construction. He commented on the contingency planning tasks remaining and noted that the biggest concerns regarded any acquisitions made prior to year- end and the Y2K readiness of external entities, particularly internationally. Mr. Lay called upon Mr. Koenig for an investor relations update, a copy of which is filed with the records of the meeting. Mr. Koenig reviewed the Company's total return to shareholders for the first nine months of 1999, of 45.2%, and noted that it substantially exceeded the total return achieved by the S&P 500, of 5.4%, and the Company's peer group, of 15.6%. He reported on the Company's price-to-earnings ("p/e") valuation for 2000 compared to that of the S&P 500 and the Company's peer group and discussed the p/e ratios of the Company's industry peers. He presented the Company's largest shareholders and reviewed holdings by mutual funds. He discussed the top twenty holdings of the largest mutual funds owning the Company's stock ("investment peers") and displayed charts showing the investment peers' market capitalizations, expected five year earning-per-share growth rates, p/e ratios, and dividend yields. He commented on the investment analysts' current consensus valuations and the valuation methodology for each business unit commonly used. Mr. Lay stated that minutes of a meeting of the Board held on August 10, 1999 had been distributed to the Directors and were included in the meeting material. He called for additions, corrections, or comments. There being none, upon motion duly made by Mr. Foy, seconded by Lord Wakeham, and carried, the minutes of the meeting held August 10, 1999 were approved as distributed. He called upon Mr. Duncan to discuss Executive Committee meetings. Mr. Duncan reported on meetings of the Executive Committee of the Board of Directors held on September 3, 14, and 24, 1999. He stated that at the September 3, 1999 meeting the Executive Committee considered a transaction by Enron Energy Services, LLC ("EES") regarding the acquisition of a publicly traded equipment breakdown insurance company. He noted that the Company was 3 E0004388383 XH002-02027 ============= Page 19 of 398 ============= only seeking an indication from the Committee as to whether or not the potential acquisition warranted additional attention and stated that the potential acquisition was still being reviewed. He stated that at its September 14, 1999 meeting the Executive Committee considered a transaction proposed by Enron Communications, Inc. ("ECI") regarding the acquisition of a publicly traded company that is a leading provider of global network services. He stated that there were some concerns from the Executive Committee regarding the structure of the transaction and that the Committee asked for additional information before making a decision. He stated that at the September 24, 1999 meeting the Executive Committee approved the signing of financing documents related to the Cuiaba energy project in Brazil. He noted that minutes of the July 16, 1999 Executive Committee meeting, discussed at the August Board meeting, were included in the meeting material and moved the acceptance of the report and approval of the minutes of the July 16, 1999 meeting. Mr. Duncan's motion was duly seconded by Dr. LeMaistre and carried, and the reports of the Executive Committee were accepted and the minutes of the July 16, 1999 meeting were approved. Consideration of the approval of the minutes of the September 3, 14, and 24, 1999 meetings was deferred to a subsequent meeting. Dr. LeMaistre reported on the meeting of the Compensation and Management Development Committee held on October 11, 1999. He stated that at the meeting, the Committee approved for recommendation to the Board: (i) proposed amendments to the Enron. Corp. 1991 and 1994 Stock Plans to provide delegation of authority to an Administrative Committee, composed of at least two members of the Office of the Chairman, in granting awards to employees other than Section 16 officers subject to the terms and provisions of the Plans; (ii) proposed amendments to the Enron. Corp. 1991 and 1994 Stock Plans to change the definition of retirement to avoid constructive receipt and defer taxation relating to grants of restricted stock; (iii) a proposed amendment to the Enron Corp. 1994 Stock Plan to address certain grants of stock options that were priced and communicated to recipients on Friday, June 25, 1999 but not approved by the Committee until Monday, June 28, 1999; and (iv) the proposed adoption of the Enron Corp. 1999 Stock Plan ("1999 Plan"). He stated that the purpose of the 1999 Plan was to provide a funding source for the issuance of common stock of the Company in connection with special situations, including, but not limited to, divestitures, outsourcing, remuneration payable under compensatory programs sponsored by the Company, and any other circumstance deemed a special situation by the Committee. Dr. LeMaistre moved approval of the amendments and adoption of the 1999 Plan, his motion was duly seconded by Mr. Blake, and carried, and the following resolutions were approved: E0004388384 4 =XH002-02028 ============= Page 20 of 398 ============= Approval of Amendments to the 1991 Stock Plan WHEREAS, ENRON CORP. (the "Company") and the stockholders of the Company have heretofore approved and adopted the Enron Corp. 1991 Stock Plan (As Amended and Restated Effective May 4, 1999)(the "Plan"); and WHEREAS, the Company desires to amend the Plan; NOW, THEREFORE, the Plan is amended as follows: 1. Section 2.2 is deleted and the following is inserted in its place: "2.2 Subject to the terms of the Plan and applicable law, the Committee shall have sole power, authority, and discretion to: (i) designate Participants; (ii) determine the types of Awards to be granted to a Participant under the Plan; (iii) determine the number of Shares to be covered by or with respect to which payments, rights, or other matters are to be calculated in connection with Awards; (iv) determine the terms and conditions of any Award; . (v) determine whether, to what extent, under what circumstances, and how Awards may be settled or exercised in cash, Shares, other securities, other Awards, or other property, or may be canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret, construe, and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (ix) make a determination as to the right of any person to receive payment of an Award or other benefit; (x) except for awards made to persons subject to Section 16 of the Securities Exchange Act of 1934, as amended, or New York Stock Exchange listing requirements, delegate to individuals in specified officer positions of the Company the authority to make and issue awards for a specified number of Shares subject to the terms and provisions of the Plan, and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. E0004388385 5 XH002-02029 ============= Page 21 of 398 ============= NOW, THEREFORE, IT IS RESOLVED, that the Issued Grants are hereby ratified and approved, and that the Plan, with respect to the Authorized Grants and such related Issued Grants only, is amended to provide that the per share purchase price of the Authorized Grants shall be the Fair Market Value of shares of Company common stock on June 25, 1999; and RESOLVED FURTHER, that the Chairman of the Compensation Committee and proper officers of the Company and its counsel are hereby authorized, empowered, and directed to take all such further action, to amend, execute, and deliver all such instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses, as in their judgment may be necessary, appropriate, or advisable in order to fully carry into effect the purposes and intentions of this and the foregoing resolution. Approval of Adoption of the 1999 Stock Plan WHEREAS, it is the desire of the Company to adopt an Enron Corp. 1999 Stock Plan (the "Plan"); NOW, THEREFORE, IT IS RESOLVED, that the proper officers of the Company be, and they are, authorized and directed to prepare and execute a Plan document substantially in the form as outlined at this meeting, providing, among other things, for the issuance of stock options and shares of restricted stock, not exceeding an aggregate of 3,000,000 shares of Common Stock of the Company, to be granted only to persons who are not subject to Section 16 of the Securities Exchange Act of 1934, and for the administration of the Plan by the Compensation Committee of the Board of Directors of the Company; RESOLVED FURTHER, that upon execution of such Plan document prepared according to the above provisions, the Plan shall be deemed adopted by this Board and is hereby ratified and approved; RESOLVED FURTHER, that the officers of the Company be, and they hereby are, authorized to take all actions necessary to finalize and put the Plan into effect, including the authority and power to execute, in the name and on behalf of the Company and under its corporate seal, as registrant, a Registration Statement on Form S-8 for the registration under the Securities Act of 1933 of 3,000,000 shares of Common Stock of the Company for the Plan, said Registration 8 E0004388388 =XH002-02030 ============= Page 22 of 398 ============= waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (ix) make a determination as to the right of any person to receive payment of an Award or other benefit; (x) except for awards made to persons subject to Section 16 of the Securities Exchange Act of 1934, as amended, or New York Stock Exchange listing requirements, delegate to individuals in specified officer positions of the Company the authority to make and issue awards for a specified number of Shares subject to the terms and provisions of the Plan, and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. 2. Paragraph (u) under Section 9 regarding definitions is deleted and the following definition of "Retirement" is inserted in its place: (u) "Retirement" shall mean (i) with respect to an Employee of the Company or one of its Affiliates, with the consent of the Committee, after age 55 with at least five years of service, the Employee's termination of employment, and (ii) upon or after age 71 the employee's termination of employment and commencement of receipt of benefits accrued under the Enron Corp. Cash Balance Plan." Approval of Amendment to the 1994 Stock Plan WHEREAS, the Compensation Committee of the Company's Board of Directors, on June 28, 1999, authorized and approved grants of stock options to certain eligible employees under the 1994 Stock Plan (the "Plan") to purchase shares of Company common stock (the "Authorized Grants"); WHEREAS, the Company, pursuant to such authorization, issued written grants of stock options under the Plan dated June 25, 1999, having as the exercise price the Fair Market Value, as defined in the Plan, of shares of Company common stock on June 25, 1999 (the "Issued Grants"); WHEREAS, the Plan provides that the per share purchase price of an Option shall not be less than the Fair Market Value of a share on the date of grant of such Option; and WHEREAS, the Board has determined that the date of grant of such Authorized Grants was June 28, 1999; 7 E0004388387 XH002-02031 ============= Page 23 of 398 ============= 2. Paragraph (u) under Section 11 regarding definitions is deleted and the following definition of "Retirement" is inserted in its place: (u) "Retirement" shall mean (i) (a) with respect to an Employee of the Company or one of its Affiliates, with the consent of the Committee, after age 55 with at least five years of service, the Employee's termination of employment, or (b) upon or after age 71 the employee's termination of employment and commencement of receipt of benefits accrued under the Enron Corp. Cash Balance Plan, and (ii) with respect to a Director of the Company, with the consent of a majority of the Board of Directors of the Company, termination of service as a Director or Honorary Director after at least five (5) years of continuous service, or upon or after the date the Director attains age 72." Approval of Amendments to the 1994 Stock Plan WHEREAS, ENRON CORP. (the "Company") has heretofore adopted and maintains the Enron Corp. 1994 Stock Plan (the "Plan"); and WHEREAS, the Company desires to amend the Plan; NOW, THEREFORE, the Plan is amended effective October 11, 1999, as follows: 1. Section 2.2 is deleted and the following is inserted in its place: "2.2 Subject to the terms of the Plan and applicable law, the Committee shall have sole power, authority, and discretion to: (i) designate Participants; (ii) determine the types of Awards to be granted to a Participant under the Plan; (iii) determine the number of Shares to be covered by or with respect to which payments, rights, or other matters are to be calculated in connection with Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, under what circumstances, and how Awards may be settled or exercised in cash, Shares, other securities, other Awards, or other property, or may be canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret, construe, and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (viii) establish, amend, suspend, or 6 E0004388386 XH002-02032 ============= Page 24 of 398 ============= Statement to be in such form as shall be approved by the officers of the Company, and by at least a majority of the Directors of the Company, whose approval shall be conclusively evidenced by their signatures thereon, in person or by power of attorney; and the officers of the Company be, and they hereby are, further authorized to cause said Registration Statement, when executed, to be, filed with the Securities and Exchange Commission, and thereafter to execute and file with said Commission, in the name and on behalf of the Company from time to time, any amendments to said Registration Statement, which in the judgment of said officers, may be necessary or advisable for the registration of said Common Stock under said Act; RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized, in the name and on behalf of the Company, to make application to such securities exchange(s) as the officers acting shall deem necessary or appropriate for the listing thereon of any issue of the Securities subject to the Plan and that each such officer, or such other person as such officer may designate in writing, is authorized to appear before any official or officials or before any body of any such exchange, and to execute and deliver any and all papers and agreements, specifically including, without limitation, indemnity agreements for the benefit of any such exchange relating to the use of facsimile signatures, and to do any and all things which may be necessary to effect such listing; RESOLVED FURTHER, that the officers of the Company be, and they hereby are, authorized and empowered to execute, in the name and on behalf of the Company, any application, amendments, or other documents, including powers of attorney, for the receipt or acceptance of service of process, necessary or proper for the qualification or the registration by the Company of the Securities subject to the Plan, in any state of the United States under any State Securities Act, Blue Sky Law, or similar statutes, and to do any and all things, and to take any and all action, necessary or desirable in connection therewith; and RESOLVED FURTHER, that the proper officers of the Company and its counsel are hereby authorized, empowered, and directed to take all such further action, to amend, execute, and deliver all such instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses, as in their judgment may be necessary, appropriate, or advisable in order to fully carry into effect the purposes and intentions of this and the foregoing resolutions, including the execution of any 9 E0004388389 XH002-02033 ============= Page 25 of 398 ============= further amendments, forms, or documents recommended by counsel or required by any governmental agency, and to do anything necessary to effect compliance with applicable law or regulation. Mr. Winokur reported on the Finance Committee meeting that was held on October 11, 1999. He stated that the Finance Committee had approved certain items for recommendation to the Board. He stated that the first item related to a proposed "shelf' registration statement to be filed with the Securities and Exchange Commission. He noted that the proposed resolution was necessary to increase the number of shares that could be offered and sold from time to time pursuant to the registration statement to reflect the impact of the Company's recent stock split. He then discussed a proposed resolution to allow a Special Committee of the Board to approve the issuance and sale of shares of the Company's common stock in connection with acquisitions. He stated that this would enable the Company to use small amounts of stock to make relatively small acquisitions without having to bring the matter before the full Board. Mr. Winokur moved approval of the proposals, his motion was duly seconded by Mr. Blake, and carried, and the following resolutions were approved: Approval of Equity Shelf Registration WHEREAS, the Company desires to file with the Securities and Exchange Commission (the "Commission") a registration statement and post-effective amendments (collectively, the "shelf registration statement") for the registration and sale from time to time of shares of Common Stock; and WHEREAS, this Board desires to provide for the issuance and sale from time to time of Common Stock by the Company; RESOLVED, that the Board of Directors hereby deems it advisable and in the best interests of the Company for the Company to issue and sell from time to time up to 15 million (Fifteen Million) shares of its Common Stock, no par value (the "Common Stock") (of which amount 7.5 million shares have been previously registered pursuant to the Securities Act of 1933), at prices to be agreed upon and established by the Special Common Stock Committee referred to below, and to be sold from time to time in public or private offerings; RESOLVED FURTHER, that the Company enter into one or more purchase agreements, underwriting agreements, sales agency agreements, or other agreements, however designated, together with all necessary agreement wires, confirmation letters, or term 10 E0004388390 XH002-02034 ============= Page 26 of 398 ============= agreements (collectively the "Common Stock Agreements"), with such underwriting firm or firms or with such institutions or dealers or purchasers as may, in the judgment of the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, or any Vice President of the Company be necessary to effect the sale of the Common Stock; that the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, or any Vice President of the Company, be and each of them hereby is, authorized and directed to execute and deliver the Agreements, for and in the name and on behalf of the Company, in such forms as the officer executing such Common Stock Agreements shall approve, such approval to be conclusively evidenced by such execution; and that the Company be, and it hereby is, authorized and directed to perform in full all of its obligations under the Common Stock Agreements; RESOLVED FURTHER, that the officers of the Company be, and they hereby are, authorized, empowered, and directed to cause to be prepared, executed, and filed with the Commission (i) one or more Registration Statements, including exhibits thereto (collectively, the "Registration Statement"), and (ii) such amendments and post-effective amendments to the Registration Statement or supplements to the Prospectuses constituting a part thereof, and to take all such further action, including the filing of final forms of the Prospectuses, as may, in the judgment of such officers, be necessary, desirable, or appropriate to secure and thereafter to maintain the effectiveness of the Registration Statement; RESOLVED FURTHER, that the Board of Directors of the Company, in accordance with Section 60.354 of the Oregon Business Corporation Act and Article IV of the Bylaws of the Company, as amended, does hereby create a special Common Stock pricing committee (the "Special Common Stock Committee") and designate Kenneth L. Lay and Jeffrey K. Skilling as the members of the Special Common Stock Committee, and that the Special Common Stock Committee is hereby authorized and empowered to determine, for and in the name and on behalf of the Company, the price per share of Common Stock to be received by the Company in the offerings, and any other term of any Common Stock Agreement and all such other matters as may be determined by such Special Common Stock Committee consistent with Oregon law and these resolutions, such Special Common Stock Committee's approval of such terms and conditions to be conclusively determined by their 11 E0004388391 XH002-02035 ============= Page 27 of 398 ============= inclusion in the executed copies of any Common Stock Agreements; and that the Special Common Stock Committee is hereby authorized to take any and all action and to do or cause to be done any or all things which may appear to the Special Common Stock Committee to be necessary or advisable in order to offer, issue, and sell the Common Stock, to the full extent and with the same effect as the Board of Directors of the Company could take such action or do or cause such things to be done; and that a majority of the members of the Special Common Stock Committee shall constitute a quorum for the transaction of business; and that the Special Common Stock Committee shall keep a written record of its meetings, shall present such record to the meetings of the Special Common Stock Committee, and shall file a copy of such record in the corporate minutes of the Company; RESOLVED FURTHER, that the Chairman of the Board, any Vice Chairman of the Board, the President of the Company, any Vice President of the Company, the Corporate Secretary, any Deputy Corporate Secretary, or any Assistant Secretary of the Company be, and each of them hereby is, authorized and directed, for and in the name and on behalf of the Company, to sign, under the corporate seal of the Company (if required), any or all of the certificates of Common Stock and that the signatures of the aforesaid authorized officers and the corporate seal of the Company (if required) may be facsimile, and that the Company hereby adopts and approves any such facsimile signatures and seal; RESOLVED FURTHER, that the facsimile signatures which appear upon any of the certificates of Common Stock shall be valid regardless of whether such officer ceases to hold such office prior to the issuance of the Common Stock; RESOLVED FURTHER, that the.Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior 'Vice President, or any Vice President, and the Senior Vice President and Secretary, any Deputy Corporate Secretary, or any Assistant Secretary of the Company be, and each of them hereby is, authorized and directed, for and in the name and on behalf of the Company, to take any and all action which they may deem necessary or advisable in order to obtain a permit, to register or to qualify part or all of the Common Stock for issuance and sale or to request an exemption from registration of part or all of the Common Stock or to register or obtain a license for the Company as a dealer or broker under the securities laws of such of the states of the United States of America 12 EOO04388392 =XH002-02036 ============= Page 28 of 398 ============= and of such foreign jurisdictions as such officers may deem advisable, and in connection with such registrations, permits, licenses, qualifications, and exemptions, to execute, acknowledge, verify, deliver, file, and publish all such applications, reports, resolutions, irrevocable consents to service of process, powers of attorney, and other papers and instruments as may be required under such laws, and to take any and all further action which they may deem necessary or advisable in order to maintain such registration in effect for as long as they may deem to be in the best interests of the Company; RESOLVED FURTHER, that if the officers of the Company determine that it is necessary for the Company to do so, the Company make application to the New York Stock Exchange, Inc. and one or more other national securities exchanges for listing of the Common Stock in the number of shares issued or reserved for issuance; that the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, or any Vice President of the Company be, and each of them hereby is, authorized and directed to execute and deliver on behalf of the Company to the New York Stock Exchange, Inc. or other such L securities exchanges such indemnity agreements in such form as may be necessary to effect the aforesaid listing; and that the officers of the Company be, and they hereby are, authorized and directed to execute and deliver any applications, documents, or agreements, to take any and all actions, to appear before such exchanges if necessary, to appoint any banking or other institution as an agent of the Company for any purpose, and to do or cause to be done any and all things as may appear to them to be necessary or desirable in order to effect such listing; and RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, proper, or advisable to carry into effect the purposes and intentions of this and each of the foregoing resolutions. 13 E0004388393 KH002-02037 ============= Page 29 of 398 ============= Approval of Granting Authority to a Special Committee of the Board in connection with certain acquisitions WHEREAS, the Company desires to issue and sell from time to time shares of Company Common Stock in connection with the Company's acquisition of assets and securities of other parties; and WHEREAS, this Board desires to provide for the issuance and sale from time to time of Common Stock by the Company for such purpose; RESOLVED, that the Board of Directors hereby deems it advisable and in the best interests of the Company for the Company to issue and sell from time to time up to 500,000 (Five Hundred Thousand) shares of its Common Stock, no par value (the "Common Stock"), at prices to be agreed upon and established by the Special Common Stock Committee referred to below, and to be sold from time to time in public or private offerings, solely and specifically for the purpose of utilizing such shares as consideration currency in connection with the Company's acquisition of assets or securities of other companies or entities; RESOLVED FURTHER, that the Company enter into one or more purchase agreements, underwriting agreements, sales agency agreements, or other agreements, however designated, together with all necessary agreement wires, confirmation letters, or terms agreements (collectively the "Common Stock Agreements"), with such underwriting firm or firms or with such institutions or dealers or other counter-parties as may, in the judgment of the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, or any Vice President of the Company be necessary to effect the sale of the Common Stock; that the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, or any Vice President of the Company be, and each of them hereby is, authorized and directed to execute and deliver the Common Stock Agreements, for and in the name and on behalf of the Company, in such forms as the officer executing such Common Stock Agreements shall approve, such approval to be conclusively evidenced by such execution; and that the Company be, and it hereby is, authorized and directed to perform in full all of its obligations under the Common Stock Agreements; E0004388394 14 XH002-02038 ============= Page 30 of 398 ============= RESOLVED FURTHER, in connection with the sale of Common Stock pursuant to the Common Stock Agreements, that the officers of the Company be, and they hereby are, authorized, empowered, and directed to cause to be prepared, executed, and filed with the Commission (i) one or more Registration Statements, including exhibits thereto (collectively, the "Registration Statement"), and (ii) such amendments and post-effective amendments to the Registration Statement or supplements to the Prospectuses constituting a part thereof, and to take all such further action, including the filing of final forms of the Prospectuses, as may, in the judgment of such officers, be necessary, desirable, or appropriate to secure and thereafter to maintain the effectiveness of the Registration Statement; RESOLVED FURTHER, that the Board of Directors of the Company, in accordance with Section 60.354 of the Oregon Business Corporation Act and Article IV of the Bylaws of the Company, as amended, does hereby create a special Common Stock pricing committee (the "Special Common Stock Committee") and designate Kenneth L. Lay and Jeffrey K. Skilling as the members of the Special Common Stock Committee, and that the Special Common Stock Committee is hereby authorized and empowered to determine, for and in the name and on behalf of the Company, the price per share of Common Stock to be received by the Company in the offerings, and any other term of any Common Stock Agreement and all such other matters as may be determined by such Special Common Stock Committee consistent with Oregon law and these resolutions, such Special Common Stock Committee's approval of such terms and conditions to be conclusively determined by their inclusion in the executed copies of any Common Stock Agreements; and that the Special Common Stock Committee is hereby authorized to take any and all action and to do or cause to be done any or all things which may appear to the Special Common Stock Committee to be necessary or advisable in order to offer, issue and sell the Common Stock, to the full extent and with the same effect as the Board of Directors of the Company could take such action or do or cause such things to be done; and that a majority of the members of the Special Common Stock Committee shall constitute a quorum for the transaction of business; and that the Special Common Stock Committee shall keep a written record of its meetings, shall present such record to the meetings of the Special Common Stock Committee, and shall file a copy of such record in the corporate minutes of the Company; 15 E0004388395 XH002-02039 ============= Page 31 of 398 ============= RESOLVED FURTHER, that the Chairman of the Board, any Vice Chairman of the Board, the President of the Company, any Vice President of the Company, the Corporate Secretary, any Deputy Corporate Secretary, or any Assistant Secretary of the Company be, and each of them hereby is, authorized and directed, for and in the name and on behalf of the Company, to sign, under the corporate seal of the Company (if required), any or all of the certificates of Common Stock and that the signatures of the aforesaid authorized officers and the corporate seal of the Company (if required) may be facsimile, and that the Company hereby adopts and approves any such facsimile signatures and seal; RESOLVED FURTHER, that the facsimile signatures which appear upon any of the certificates of Common Stock shall be valid regardless of whether such officer ceases to hold such office prior to the issuance of the Common Stock; RESOLVED FURTHER, that the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, or any Vice President, and the Senior Vice President and Secretary, any Deputy Corporate Secretary, or any Assistant Secretary of the Company be, and each of them hereby is, authorized and directed, for and in the name and on behalf of the Company, to take any and all action which they may deem necessary or advisable in order to obtain a permit, to register or to qualify part or all of the Common Stock for issuance and sale or to request an exemption from registration of part or all of the Common Stock or to register or obtain a license for the Company as a dealer or broker under the securities laws of such of the states of the United States of America and of such foreign jurisdictions as such officers may deem advisable, and in connection with such registrations, permits, licenses, qualifications, and exemptions, to execute, acknowledge, verify, deliver, file, and publish all such applications, reports, resolutions, irrevocable consents to service of process, powers of attorney, and other papers and instruments as may be required under such laws, and to take any and all further action which they may deem necessary or advisable in order to maintain such registration in effect for as long as they may deem to be in the best interests of the Company; RESOLVED FURTHER, that if the officers of the Company determine that it is necessary for the Company to do so, the Company make application to the New York Stock Exchange, Inc. and one or more other national securities exchanges for listing of the 16 E0004388396 :H002-02040 ============= Page 32 of 398 ============= Common Stock in the number of shares issued or reserved for issuance; that the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, or any Vice President of the Company be, and each of them hereby is, authorized and directed to execute and deliver on behalf of the Company to the New York Stock Exchange, Inc. or other such securities exchanges such indemnity agreements in such form as may be necessary to effect the aforesaid listing; and that the officers of the Company be, and they hereby are, authorized and directed to execute and deliver any applications, documents, or agreements, to take any and all actions, to appear before such exchanges if necessary, to appoint any banking or other institution as an agent of the Company for any purpose, and to do or cause to be done any and all things as may appear to them to be necessary or desirable in order to effect such listing; and RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, proper, or advisable to carry into effect the purposes and intentions of this and each of the foregoing resolutions. Mr. Winokur then discussed information concerning an unaffiliated investment partnership, LJM 2, and stated that the partnership could possibly provide the Company with an alternative, optional source of private equity to manage its investment portfolio risk, funds flow, and financial flexibility. He noted that Mr. Andrew S. Fastow would be acting as the managing partner of LJM 2 and discussed Mr. Fastow's role in the LJM 2 partnership. He commented on the controls that would be put in place to manage any transactions between the Company and LJM 2 and noted that the Company and LJM 2 were not obligated to one another in any way. He noted that the controls include review and approval of all transactions by the Chief Accounting Officer and the Chief Risk Officer of the Company. He stated that the Audit and Compliance Committee would, on an annual basis, review all transactions completed within the past year and make any recommendations they deemed appropriate. He stated that the Company's Conduct of Business Affairs Policies (relating to investments and outside business interests of officers and employees) would prohibit Mr. Fastow from participating in LJM 2 as managing partner due to his position as Executive Vice President and Chief Financial Officer of the Company, absent appropriate reviews and waivers from the Board and a finding that such participation does not adversely affect the best 17 E0004388397 XH002-02041 ============= Page 33 of 398 ============= interests of the Company. He recommended that such review and findings be made in this instance, his motion was duly seconded by Mr. Urquhart, and carried, and the following resolutions were approved: WHEREAS, Andrew S. Fastow serves as the Executive Vice President and Chief Financial Officer of the Company; WHEREAS, Mr. Fastow has the opportunity to participate in the formation of an investment partnership (the "Partnership") that would not be affiliated with the Company; WHEREAS, it is anticipated that Mr. Fastow will serve as the managing partner/manager of the Partnership; WHEREAS, it is anticipated that the Partnership will invest in energy and communications-related businesses and assets, including businesses and assets of the Company; WHEREAS, the Partnership, as a potential ready purchaser of the Company's businesses and assets or as a potential contract counterparty, could provide liquidity, risk management, and other financial benefits to the Company; WHEREAS, the Office of the Chairman of the Company has determined, for the foregoing reasons, that Mr. Fastow's participation as the managing partner/manager of the Partnership will not adversely affect the interests of the Company; NOW, THEREFORE IT IS RESOLVED, that the Board hereby adopts and ratifies the determination by the Office of the Chairman pursuant to the Company's Conduct of Business Affairs/Investments and Outside Business Interests of Officers and Employees that participation of Mr. Fastow as the managing partner/manager of the Partnership will not adversely affect the interests of the Company; and RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, 18 E0004388398 =XH002-02042 ============= Page 34 of 398 ============= proper, or advisable to carry into effect the purposes and intentions of this and each of the foregoing resolutions. Mr. Winokur stated that the Finance Committee had discussed the Company's dividend level taking into consideration the Company's increasing capital needs and investment opportunities. He recommended that the Board keep the dividend level constant and approve the declaration of dividends payable in the fourth quarter of 1999 for the common and preferred issues of stock; his motion was duly seconded by Mr. Blake, and carried, and the following resolutions were adopted: RESOLVED, that a dividend of $3.413 per share on the Cumulative Second Preferred Convertible Stock of the Company, covering the quarter ending December 31, 1999, be, and it hereby is, declared payable on January 3, 2000, to shareholders of record of said stock at the close of business on December 10, 1999; and RESOLVED FURTHER, that a dividend of $0.125 per share on the Common Stock of the Company be, and it hereby is, declared payable on December 20, 1999, to shareholders of record of said stock at the close of business on December 1, 1999, out of the net profits or surplus of the Company available for the payment of dividends. Mr. Winokur stated that the Committee had also discussed the Company's liquidity and noted that the Company had significantly increased its available capacity and lowered its cost by utilizing surety bonds, issued by insurance companies, in lieu of letters of credit. He stated that Messrs. Fastow, McMahon, and Skilling had met recently with Moody's Investor Services and formally requested an upgrade to the Company's credit rating. Mr. Lay called upon Dr. Jaedicke to report on the Audit and Compliance Committee's meeting held on October 11, 1999. Dr. Jaedicke stated that Mr. Causey and Mr. David B. Duncan, of Arthur Andersen, LLP ("AA"), had given a status report on the Company's internal controls. He noted that Mr. Richard B. Buy had given credit and market risk reports and Mr. Causey had discussed the progress made on the SAP implementation. He stated that the Committee also heard a report from Ms. Sharon A. Butcher, of the Company, regarding the Company's compliance with its Conduct of Business Affairs Policies. He stated that the Committee held an executive session with AA to discuss the adequacy of the Company's financial disclosure and he noted that AA was very comfortable with the Company's level of disclosure. 19 E0004388399 :XH002-02043 ============= Page 35 of 398 ============= Mr. Lay call upon Mr. Sutton to discuss a proposed Human Rights Policy, a copy of which is filed with the records of the meeting. Mr. Sutton stated that the Company was working on launching a program for Social and Environmental Responsibility which would include clear policies on expected behavior, training mechanisms for staff and contractors, and better interface with nongovernmental organizations in the human rights and environmental fields. He stated that, as a first step in its program for Social and Environmental Responsibility, the Company was proposing the adoption of a Human Rights Policy. He outlined the basic framework of the Policy and following a discussion, upon motion duly made by Mr. Duncan, seconded by Mr. Blake, and carried, the Enron Human Rights Policy discussed at the meeting, including any minor revisions authorized by Mr. Lay, was approved. Mr. Lay called on Mr. Skilling to present other general corporate matters for consideration by the Board. Mr. Skilling stated that the Company had recently hired three new corporate officers, Messrs. J. Mark Metts and Wesley H. Colwell and Ms. Charlene R. Jackson, and discussed each individual's role within the Company. He also noted that there had also been some individuals promoted to Vice President within the Company and recommended that the Board approve the election of Company officers. Upon motion duly made by Mr. Blake, seconded by Dr. LeMaistre, and carried, the following resolutions were approved: RESOLVED, that the following persons be, and each hereby is, elected to the position set forth opposite their names, to serve for the ensuing year and until their successors are duly elected and qualified: Kenneth L. Lay Jeffrey K. Skilling Joseph W. Sutton Richard B. Buy Richard A. Causey James V. Derrick, Jr. Andrew S. Fastow Steven J. Kean Mark E. Koenig Michael S. McConnell Jeffrey McMahon Chairman and Chief Executive Officer President and Chief Operating Officer Vice Chairman Executive Vice President and Chief Risk Officer Executive Vice President and Chief Accounting Officer Executive Vice President and General Counsel Executive Vice President and Chief Financial Officer Executive Vice President and Chief of Staff Executive Vice President, Investor Relations Executive Vice President, Technology Executive Vice President, Finance and Treasurer E0004388400 20 =XH002-02044 ============= Page 36 of 398 ============= J. Mark Metts Cindy K. Olson Rebecca C. Carter Joseph M. Hirko Terence H. Thorn Robert H. Walls, Jr. Wesley H. Colwell Charlene R. Jackson Mitchell S. Taylor Joe H. Allen Melissa A. Becker Philippe A. Bibi Robert H. Butts Edward R. Coats Angus H. Davis William R. Donovan James A. Ginty Alberto Gude, Jr. Robert J. Hermann E. Joseph Hillings Mary K. Joyce Drew C. Lynch R. Davis Maxey Peggy B. Menchaca Mark A. Palmer Christie A. Patrick Louis E. Potempa Greek L. Rice Paula H. Rieker Rex R. Rogers Richard S. Shapiro William W. Brown Executive Vice President, Corporate Development Executive Vice President, Human Resources and Community Relations Senior Vice President, Board Communications and Secretary Senior Vice President Senior Vice President and Chief Environmental Officer Senior Vice President and Deputy General Counsel Managing Director, Accounting Transaction Managing Director, Intellectual Capital Managing Director, Corporate Development Vice President, External Affairs Vice President, Strategic Initiatives Vice President, Technology Vice President and Controller Vice President, Tax, Audits Vice President and Deputy Corporate Secretary Vice President, Corporate Administrative Services Vice President, Tax, International Vice President, IT Compliance Vice President and General Tax Counsel Vice President and General Manager, Federal Government Affairs Vice President, Human Resources Vice President, Employee Relations Vice President, Tax, Planning Vice President and Assistant Secretary Vice President, Communications Vice President, North American Indian Affairs Vice President, Corporate Development Vice President, Tax, GPG Vice President, Investor Relations Vice President, Associate General Counsel and Assistant Secretary Vice President, State Government Affairs and Federal Regulatory Affairs Deputy Treasurer 21 E0004388401 =XH002-02045 ============= Page 37 of 398 ============= Michael F. Jakubik Elaine V. Overturf Kate B. Cole Denise A. Ernest Gary L. Foster Geneva K. Holland Linda F. Jenkins Timothy A. Despain Mary A. Perkins Deputy Treasurer Deputy Corporate Secretary Assistant Secretary Assistant Secretary Assistant Secretary Assistant Secretary Assistant Secretary Assistant Treasurer Assistant Treasurer RESOLVED FURTHER, that the effective date of following persons' election be, and hereby is, May 1, 1999. Edward R. Coats James A. Ginty R. Davis Maxey Greek L. Rice Vice President,Tax, Audits Vice President,Tax, International Vice President,Tax, Planning Vice President,Tax, GPG RESOLVED FURTHER, that the effective date of J. Mark Metts' election be, and hereby is, August 23, 1999. Mr. Lay recessed the executive session at 9:02 p.m., C.D.T. on October 11, 1999 and reconvened the meeting at 8:00 a.m., C.D.T., on October 12, 1999 in open session at the Enron Building in Houston, Texas. All of the Directors noted in attendance on the previous evening returned to the meeting and Messrs. James P. Badum, Robert B. Butts, Joseph E. Earle, John B. Echols, Joseph M. Hirko, Gene E. Humphrey, Daniel P. Leff, Michael S. McConnell, Mark S. Muller, Lou L. Pai, Kenneth D. Rice, Martin Sunde, Joseph W. Sutton, Greg L. Whalley, and Thomas E. White and Mesdames Rebecca C. Carter, Louise J. Kitchen, Rebecca A. McDonald, and Victoria T. Sharp, all of the Company or affiliates thereof, joined the meeting. Messrs. James A. Bannantine, Donald W. Black, Richard A. Causey, Orlando R. Gonzalez, and Ricky L. Waddell, all of the Company or affiliates thereof, joined the meeting in progress as noted below. Mr. Lay called upon Mr. Whalley to discuss the Company's Global Risk Management function. Mr. Whalley stated that as the Chief Executive Officer of Risk Management he had three groups, Insurance, EnronOnline, and Research, reporting directly to him. He discussed each of the group's roles within the Company and the number of employees. He noted that in addition to his direct reports, he had indirect supervisory authority over all trading operations, in all commodities, throughout the Company. He discussed the reports related to the Company's trading operations, including volumes traded, profit and loss, and net open positions that were produced daily for his review. He stated that his groups' primary responsibilities included reviewing major commodity risks taken by the 22 E0004388402 :XH002-02046 ============= Page 38 of 398 ============= business units, facilitating the transfer of information and skill sets across the business units, assisting in staffing and training for the trading organizations, and consulting with local traders on general market conditions and global information relevant to the Company's operations. He gave an overview of the current market conditions, focusing on gas and power markets liquidity and the growth in the power markets on the Continent. Mr. Skilling then gave a brief overview of EnronOnline, the Company's new online trading system, and called upon Ms. Kitchen to present the matter. Ms. Kitchen noted that EnronOnline was a free, internet-based transaction system that will allow the Company's counterparties to view real time prices from the Company's traders and transact online. She stated that the system was multi- currency, multi-commodity, and would eventually be offered globally. She presented a demonstration how the system will operate and discussed the information that would be available to users. She commented on the support work that had gone into the development, the different systems built to support EnronOnline, and the timeline for when the system would be available in different areas of the world. She discussed the projected number of transactions that would be done online over the next two years and noted that by the end of 2001 the Company estimated that over two-thirds of all transactions would be done online. Ms. Kitchen answered questions from the Board regarding the security built into the system, potential credit issues, applicable laws and regulations that could impact the ability to transact online, and the counterparties ability to customize their EnronOnline screens. A copy of Ms. Kitchen's presentation is filed with the records of the meeting. Messrs. McConnell, Skilling, and Whalley and Ms. Kitchen left the meeting following the presentation. Mr. Lay called upon Mr. White to update the Board on EES. Mr. White stated that EES' presentation would be focused on the details of execution related to contracts that had previously been signed and the progress to date on previously stated goals. He discussed the strong market response to total energy outsourcing that EES has experienced and stated that both third and fourth quarter results would be very strong. He noted that EES had put in place an organization to successfully execute the deals already signed and stated that financial goals for the year would be met. He introduced the other employees from EES in attendance and called upon Mr. Sunde to discuss the sales function. Mr. Sunde stated that the biggest issues EES faced in executing transactions included the counterparties' concerns regarding the length of the contract obligation, typically ten years, and EES' concern regarding change of control risk. He noted that the biggest obstacle EES faced was a "business as usual" philosophy. He discussed the deals in progress for the third and fourth quarters 23 E0004388403 =XH002-02047 ============= Page 39 of 398 ============= and noted whether they were outsourcing, commodity, upsell, or other types of contracts. He commented on the stages of deal development, the time frame involved, and the percentage of initiated transactions that typically closed. Mr. Sunde answered questions from the Board concerning the average contractual savings offered to customers and change of control unwind provisions in contracts. Mr. Sunde stated that in addition to spending considerable time negotiating the unwind provisions EES also took reserves when the contract was recorded related to the potential for a change of control at the counterparty company. Mr. White called upon Mr. Echols to discuss EES's risk management function. Mr. Echols discussed EES' near-term and long-term value levers, or the manner in which the Company makes money on a transaction. He stated that near-term value came from optimizing the operations at companies that had outsourced operations to EES and included establishing best practices/processes, making capital investments in more energy efficient equipment, and better management of the commodity price aspect of the business. He stated that long- term value related to scale procurement, improved technology, and more efficient use of labor. Mr. Echols introduced Mr. Leff to discuss EES execution account management division. Mr. Leff discussed EES' existing portfolio of contracts, including the total contract value ("TCV"), a measure of the value of the contract over the entire life of the deal, and the potential additional value that could come from selling incremental services to the customer. He discussed the five divisions within his organization and the roles and responsibilities of each division. He commented on how the effectiveness of his organization was measured and noted that customer satisfaction was considered the most important measurement. He showed the results of customer satisfaction surveys from earlier in the year, differentiated by type of customer, and stated that his organization had established a "referral threshold" that they felt was necessary to achieve in order to get business referrals. Mr. Leff called upon Mr. Earle to discuss EES' facility services division. Mr. Earle stated that the group's goal was to be the premier nationwide provider of comprehensive services for energy systems. He noted that facility services included facilities management, mechanical and electrical construction, heating, ventilation, and air conditioning ("HVAC") service and HVAC franchising. He commented on the strategy of the group going forward and the anticipated financial performance for 1999. Mr. Earle called upon Mr. Muller to discuss EES' international operations. Mr. Muller discussed the status of commercial development, including the deals currently in place, the status of the market, and EES' evaluation of opportunities in Europe, the Southern Cone, the Pacific Rim, and other markets. He discussed 24 E0004388404 :XH002-02048 ============= Page 40 of 398 ============= completed deals in Europe and noted the TCV of the transactions, countries where delivery of services would occur, and the projected timeline for closing the transactions. He discussed a proposed acquisition of a publicly traded equipment breakdown insurance company that EES had discussed with the Executive Committee of the Board but noted that due to changes in market conditions EES was now considering an outsourcing contract as opposed to an acquisition. Mr. Muller called upon Mr. Pai to update the Board on EES' residential business ("ResCo"). Mr. Pai stated that opportunities in the residential market were improving and that EES had recently executed a letter of intent with America OnLine that would give ResCo a six-year exclusive. He stated that the initial funding for ResCo was coming from external sources and discussed the amounts each of the external sources had committed to. He noted that EES was still anticipating an initial public offering of common stock in ResCo in early 2000 and discussed the estimated valuation and the anticipated percentage of ResCo that the Company would retain. Mr. Pai then discussed the financial performance of EES during 1999 and that projected for 2000. He commented on the TCV of deals closed during 1999 and the margins that had been created, noting whether the contracts were bundled/outsource, facility services, or commercial gas. He discussed the projected gross margin, operating expenses, and earnings for each quarter of 2000. Messrs. Earle, Echols, Leff, Muller, Pai, Sunde and White left the meeting and Messrs. Bannantine, Black, and Waddel joined the meeting following the presentation. Mr. Lay called upon Mr. Humphrey to discuss Enron Economic Development Corp. ("EEDC"). Mr. Humphrey showed a short video that focused on EEDC's current customers and purpose, to create a profit-oriented "social investing" business that focused on historically underserved and economically disadvantaged communities. He then discussed the number of deals that had been closed, evaluated, or rejected during the third quarter and the third-party investor commitments that had been received thus far to help fund EEDC's initiatives. He gave a brief summary of each company that had received funding from EEDC and the amount and closing date of the funding. He discussed the expected return on the capital funded to the companies and the range of ownership that EEDC would hold in the companies. He noted that EEDC was working to establish a national economic opportunity fund and discussed how it would be structured and the targeted cities. Mr. Humphrey left the meeting and Mr. Causey joined the meeting following the presentation. 25 E0004388405 =XH002-02049 ============= Page 41 of 398 ============= Mr. Lay then called upon Ms. McDonald to discuss the Company's operations in the Asia/Pacific region, Africa, and China ("APACHI"). Ms. McDonald displayed a map outlining the facilities that the APACHI group currently has under development or in operation. She stated that there was significant disparity within the regions as to the availability of natural resources and noted that some countries have existing networks that the APACHI group could leverage off of while in other countries there was the opportunity for the APACHI group to develop a network. She discussed the forecasted versus plan 1999 net income by region and discussed reasons for a shortfall in the China region. She outlined the group's rationale for concentrating on certain regions and noted that two factors, strategic importance to the Company and execution lead- time, were important in determining which regions to focus on. She discussed Japan's liberalizing power market, high industrial power prices, and desirable market characteristics. She discussed in detail APACHI's two-pronged approach to Japan, (i) focusing on generation aggregation and (ii) offering a full array of the Company's products and services to the country. She updated the Board on the Company's current investment in Korea and outlined the factors necessary to establish a viable origination and trading business. She discussed the Company's electricity trading and projected revenues in Australia and gave a brief overview of regions where APACHI is not currently focusing its efforts. A copy of Ms. McDonald's presentation is filed with the records of the meeting. Mr. Skilling rejoined the meeting during Ms. McDonald's presentation. Mr. Lay called upon Mr. Rice to discuss ECI. Mr. Rice discussed the outlook for the internet and e-commerce markets over the next three years and stated that ECI's vision was to be the world's first global eBusiness network. He displayed charts showing ECI's five year projections for different aspects of the internet and e-commerce businesses, including access speed, content revenue rates, broadband and bandwidth market size and potential, and revenue potential. He gave an update on ECI's domestic and international strategy and noted it focused on two areas, (i) network reach, including a global, flexible backbone with a broad distribution network and (ii) network commerce, which includes the Enron Intelligent Network, bandwidth commerce, financing, trading, streaming video, data storage and archiving, and distributed computing. He updated the Board on the domestic and international network reach currently in place and that anticpated by the end of 2000. He commented on video streaming that ECI had recently performed for the Country Music Awards and discussed the number of viewers who had participated. He discussed the competitive landscape and noted where competitors fell within the internet value chain, from content providers to internet service providers. He concluded by stating that business will increasingly move toward electronic, internet-based commerce, there is a need for a global eBusiness network provider, and that the Company is capable of creating the global 26 E0004388406 XH002-02050 ============= Page 42 of 398 ============= eBusiness platform. Mr. Hirko joined Mr. Rice in answering questions from the Board. Messrs. Causey, Hirko, and Rice and Ms. McDonald left following the presentation. Mr. Lay called upon Mr. Bannantine to begin the presentation on Enron South America ("ESA"). Mr. Bannantine displayed a map showing ESA's existing assets and operations and projects/businesses under construction and discussed the rapid expansion of the Company's activities in South America over the last three years. He explained how ESA was organized and the number of personnel employed. He commented on ESA's successes in 1999 including a consolidation of the Company's position in Elektro, beginning commercial operations at the Cuiaba power facility, and flowing gas on the Bolivia to Brazil pipeline. He discussed how capital was employed in South America and commented on whether the capital was invested in strategic assets, completed expansion/exploitation opportunities, or expansion/exploitation opportunities in progress. He commented on ESA's South American market outlook over the next five years and noted that the Company was a dominant player in a large and fast growing energy market. He called upon Mr. Gonzalez to discuss Elektro. Mr. Gonzalez discussed ESA's Elektro concession, which gave ESA the right to generate and distribute electricity from two hydroelectric facilities, and commented on the area served, number of customers, area population, revenues, and number of employees. He discussed the 1999 major accomplishments which included achieving a tariff increase, reducing operating costs, completing a successful reorganization, and being chosen the best electric distribution company in Brazil. He discussed Elektro's targets for 2000 of continued improvement in profitability, environmental, health and safety performance, and successfully pursuing joint development opportunities with the Company's other business units. He then called upon Mr. Waddell to discuss ESA's gas business unit. Mr. Waddell discussed the locations of ESA's Brazilian gas local distribution companies, Gaspart and CEG/RIOGAS, and commented on the Brazilian states where they operated and the population of the regions. He then discussed the gas business unit's 1999 accomplishments and the action plan for 2000. He called upon Mr. Christodoulou to discuss ESA's overall strategy. Mr. Christodoulou stated that ESA's strategy was to fully transition its asset holdings and merchant functions into an integrated Southern Cone business. He noted that the Company's selective asset positions gave it an opportunity to deliver unique merchant services. He stated that there were three phases to the strategy, (i) build a strategic asset position whereby the Company would receive regulated returns, (ii) expansion/exploitation of the strategic assets for an enhanced return on 27 E0004388407 .XH002-02051 ============= Page 43 of 398 ============= equity, and (iii) establish a network integration of gas and power trading, communications functions, an EES type business, and asset monetizations which would lead to an increasing return on intellectual capital. He discussed the key areas of focus for the merchant business and the potential need for additional strategic assets and commented on the potential expansion/exploitation opportunities they could bring to the Company. There being no further business to come before the Board, the meeting was adjourned at 12:30 p.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\1999 Minutes\101299.doc 28 E0004388408 XH002-02052 ============= Page 44 of 398 ============= rn O co 00 M O O U W =XH002-02053 ============= Page 45 of 398 ============= MINUTES MEETING OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS ENRON CORP. September 3, 1999 Minutes of a meeting of the Executive Committee ("Committee") of the Board of Directors of Enron Corp. ("Company"), held pursuant to due notice at 9:00 a.m., C.D.T., on September 3, 1999 at the Enron Building in Houston, Texas. The following Committee members were present, either in person or by telephone conference connection, where each participant could hear the comments of the others and join in the discussion, constituting a quorum: Mr. Robert A. Belfer Mr. Joe H. Foy Mr. Kenneth L. Lay Dr. Charles A. LeMaistre Mr. Jeffrey K. Skilling Mr. Herbert S. Winokur, Jr. Chairman John H. Duncan was absent from the meeting. Messrs. John B. Echols, Jeffrey R. Golden, Mark E. Koenig, J. Mark Metts, Lou L. Pai, and Thomas E. White and Ms. Rebecca C. Carter, all of the Company or affiliates thereof, also attended the meeting. Mr. Joseph W. Sutton, of the Company, joined the meeting in progress as noted below. With the Committee's permission, Mr. Lay acted as Chairman and presided at the meeting and the Secretary, Ms. Carter, recorded the proceedings. Mr. Lay called the meeting to order and inquired if the Committee members had received the material for the meeting, and each responded that he had received the material. He noted that the purpose of the meeting was for the Committee to consider a potential transaction that had previously been discussed with Mr. Winokur and Director Norman P. Blake, Jr. He called upon Mr. Skilling, who indicated that the meeting had been called for the Committee to discuss a potential acquisition by Enron Energy Services, LLC ("EES"). He noted that the Company was only seeking an indication from the Committee as to whether or not the potential acquisition warranted additional attention and that approval of the potential transaction was not being sought at the time. Mr. Skilling gave an overview of the potential transaction, "Project Newton" and noted that the company being considered for acquisition was publicly traded. He discussed the anticipated purchase price, strategic rationale for the potential transaction, E0004388410 :XH002-02054 ============= Page 46 of 398 ============= and proposed timeline for completion of a definitive agreement, if appropriate. He discussed the valuation analysis performed by the Company and the price-to-earnings ("P/E") multiples of companies in the same industry as Newton. Mr. Sutton joined the meeting. Mr. Skilling stated that there were different aspects of Newton that made the company an appealing acquisition target for EES. He discussed Newton's two business segments, analyzing the P/E multiples of each and discussing how each segment could be optimized if acquired by the Company. He commented on the potential synergies between EES and Newton and discussed the financial impact the acquisition would have on the Company. A copy of Mr. Skilling's presentation is filed with the records of the meeting. A discussion ensued, with Messrs. Lay, Pai, Skilling, and White answering questions from the Committee regarding Newton's reputation within the industry and the expected reaction from investment analysts and investors if the Company were to proceed and complete this type of an acquisition. Following a discussion, upon motion duly made by Mr. Foy, seconded by Mr. Belfer, and carried, the Committee approved the Company going forward with due diligence on Project Newton. There being no further business to come before the Committee, the meeting was adjourned at 9:30 a.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\1999 Minutes\9399EX.doc 2 E0004388411 EXH002-02055 ============= Page 47 of 398 ============= DRAFT MINUTES MEETING OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS ENRON CORP. September 14, 1999 Minutes of a meeting of the Executive Committee ("Committee") of the Board of Directors of Enron Corp. ("Company"), held pursuant to due notice at 9:15 a.m., C.D.T., on September 14, 1999 at the Enron Building in Houston, Texas. All of the Committee members were present, either in person or by telephone conference connection, where each participant could hear the comments of the others and join in the discussion: Mr. John H. Duncan, Chairman Mr. Robert A. Belfer Mr. Joe H. Foy Mr. Kenneth L. Lay Dr. Charles A. LeMaistre Mr. Jeffrey K. Skilling Mr. Herbert S. Winokur, Jr. Messrs. C. Kevin Garland, Joseph M. Hirko, Steven J. Kean, J. Mark Metts, Kenneth D. Rice, and Joseph W. Sutton and Ms. Rebecca C. Carter, all of the Company or affiliates thereof, also attended the meeting. The Chairman, Mr. Duncan, presided at the meeting, and the Secretary, Ms. Carter, recorded the proceedings. Mr. Duncan called the meeting to order and inquired if the Committee members had received the material for the meeting, and each responded that he had received the material. He asked Mr. Lay to present the business of the meeting. Mr. Lay indicated that the meeting had been called for the Committee to consider transactions proposed by Enron Communication, Inc. ("ECI") and Enron Energy Services, LLC ("EES"). He called upon Mr. Skilling to present the ECI transaction and to solicit preliminary comments from the Committee. Mr. Skilling noted that ECI was considering an acquisition of a publicly traded company that was a leading provider of global network services ("Mountaineer"). He discussed the strategic rationale for the acquisition and noted that Mountaineer provided a similar range of services to those provided by ECI. He noted that the acquisition of E0004388412 EXH002-02056 ============= Page 48 of 398 ============= Mountaineer primarily related to the purchase of intellectual capital and market position as opposed to assets. He called upon Mr. Rice to present an overview of the transaction. Mr. Rice stated that the primary goal of ECI was to become a global e-commerce company, with significant scale and scope throughout the world. He stated that Mountaineer had been involved in the market for two to three years and had established very good customer relationships. He gave a brief overview of the total transaction cost, supplied additional information on the strategic rationale for the acquisition, and called upon Mr. Hirko to give a business overview. Mr. Hirko stated that Mountaineer provided customers a global network with a total outsourcing of e-commerce applications utilizing low bit rate applications, as opposed to ECI's current orientation, which utilized high bit rate technology. He discussed Mountaineer's customer base, regional data centers, the experience level of the senior management, and the strategic fit between the Company and Mountaineer. He called upon Mr. Garland to discuss the proposed purchase price. Mr. Garland discussed Mountaineer's market capitalization and valuation, including current and 52 week high and low share prices. He noted that Mountaineer has traded at a significant discount to its comparable companies. He reviewed an analysis of comparable companies and noted that the industry's stocks typically traded based on revenues rather than earnings or cash flow. He discussed the impact the acquisition would have on the Company's earnings and credit ratios, noting that it would be dilutive to earnings. Mr. Skilling joined in a discussion of potential options regarding the goodwill amortization period. Mr. Hirko discussed how the acquisition would be financed and the anticipated timing if the transaction were approved. He and Messrs. Rice and Skilling answered questions from the Committee regarding competitors, ongoing capital requirements, financing possibilities, stock ownership of and retention issues affecting Mountaineer's management, and the structure of the transaction. Following a discussion, the Committee agreed by consensus that it had concerns about the consequences on the Company's stock of the dilution which would result from the proposed transaction and the ability to retain and motivate the key managers of Mountaineer and that additional information was needed before the Committee could recommend the transaction. Mr. Lay left the meeting following the discussion. Mr. Duncan called upon Mr. Skilling to discuss the proposed EES transaction. Mr. Skilling stated that EES was proposing to acquire Torpy Group, a small, privately-held United Kingdom ("UK") based company providing engineering and facility management services in the UK and continental Europe. He noted that the Company's management 2 E0004388413 EXH002-02057 ============= Page 49 of 398 ============= could have approved an acquisition of this size but because the transaction called for 25% of the consideration to be paid in Company stock it required the Committee's approval. Following a discussion, upon motion duly made by Mr. Foy, seconded by Mr. Belfer, and carried, the following resolutions were approved: RESOLVED, that in connection with the acquisition by Enron Energy Services Operations, Inc. or its affiliates ("EESOI") of the outstanding capital stock of Torpy M&E Engineers Limited, Torpy & Partners Limited, and Torpy M&E Engineers (Northern) Limited (collectively, "Torpy"), the Chairman of the Board, any Vice Chairman of the Board, the President, any Vice President, the Chief Financial Officer, the Treasurer, or any Deputy Treasurer of the Company (each an "Authorized Officer") be, and each of them hereby is, in consideration of the acquisition by EESOI of the capital stock of Torpy ("Acquisition"), authorized at any time or from time to time to: (a) cause EESOI to purchase, on one or more of the stock exchanges on which the common stock, no par value, of the Company ("Common Stock") is listed for trading, a number of shares of Common Stock (such shares being hereinafter referred to as "Purchased Shares") equal to (i) $1,000,000, divided by (ii) the average of the last reported sales prices of the Common Stock on the New York Stock Exchange on the 20 trading days immediately preceding the date of closing of the Acquisition; (b) determine the price to be paid by EESOI for the Purchased Shares; (c) cause EESOI to transfer and assign the Purchased Shares to the shareholders of Torpy as part of the consideration for the Acquisition; and (d) negotiate and execute any agreements providing for the purchase and subsequent transfer and assignment of the Purchased Shares to the shareholders of Torpy (the "Definitive Agreements") and take any and all other actions and do or cause to be done any or all things that may appear to the Authorized Officers to be necessary or advisable in order to purchase, transfer, and assign the Purchased Shares, to the full extent and with the same effect as the Board of Directors of the Company could take such action or do or cause such things to be done; RESOLVED FURTHER, that the Authorized Officers be, and each hereby is, authorized, empowered, and directed (any one of them acting 3 E0004388414 =XH002-02058 ============= Page 50 of 398 ============= alone) to take such further actions as such officer deems necessary or desirable to cause the purchase, transfer, and assignment of the Purchased Shares at any time or from time to time and to consummate the Acquisition, including, without limitation, (i) the issuance of certificates of the Company evidencing the Purchased Shares, with or without restrictive legends as may be necessary for such issuances, (ii) the making of any federal or state securities or "blue sky" filings or applications in conjunction with the issuances, and (iii) the making of any other required regulatory filings; RESOLVED FURTHER, that the Authorized Officers be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone), for and in the name of the Company, to negotiate, execute, deliver, amend, and consummate the Definitive Agreements, in such forms as shall be approved by the officer executing same, such approval to be conclusively evidenced by the execution thereof by such officer; RESOLVED FURTHER, that the Authorized Officers be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone), for and in the name and on behalf of the Company, to take any and all action which they may deem necessary or advisable in order to obtain a permit or to qualify part or all of the Purchased Shares for sale to the shareholders of Torpy, or to request an exemption from registration of part or all of the Purchased Shares, or to register or obtain a license for the Company as a dealer or broker under the securities laws of the United States of America and any states thereof and of such foreign jurisdictions as such officers may deem advisable, and in connection with such permits, licenses, qualifications, and exemptions, to execute, acknowledge, verify, deliver, file, and publish all such applications, reports, resolutions, irrevocable consents to service of process, powers of attorney, and other papers and instruments as may be required under such laws; RESOLVED FURTHER, that the signature of any of the Authorized Officers and the corporate seal of the Company on any or all of the certificates representing the Purchased Shares may be facsimile, and that the Company hereby adopts and approves any such facsimile signatures and seal; RESOLVED FURTHER, that the facsimile signatures which appear on any of the certificates representing the Purchased Shares shall be valid regardless of whether such officer ceases to hold such office prior to the issuance of the Common Stock; 4 E0004388415 =XH002-02059 ============= Page 51 of 398 ============= RESOLVED FURTHER, that the Authorized Officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary or desirable to carry into effect the purposes and intentions of this and each of the foregoing resolutions; and RESOLVED FURTHER, that all actions heretofore taken by any officer of the Company related to or in connection with the transactions contemplated by these resolutions be, and hereby are, adopted, ratified, confirmed, and approved in all respects. There being no further business to come before the Committee, the meeting was adjourned at 10:20 a.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\1999 Minutes\91499EX.doc 5 E0004388416 XH002-02060 ============= Page 52 of 398 ============= DRAFT MINUTES MEETING OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS ENRON CORP. September 24, 1999 Minutes of a meeting of the Executive Committee ("Committee") of the Board of Directors of Enron Corp. ("Company"), held pursuant to due notice at 9:30 a.m., C.D.T., on September 24, 1999 at the Enron Building in Houston, Texas. All of the Committee members were present, either in person or by telephone conference connection, where each participant could hear the comments of the others and join in the discussion: Mr. John H. Duncan, Chairman Mr. Robert A. Belfer Mr. Joe H. Foy Mr. Kenneth L. Lay Dr. Charles A. LeMaistre Mr. Jeffrey K. Skilling Mr. Herbert S. Winokur, Jr. Messrs. James M. Bannantine, James V. Derrick, Jr., Richard A. Lammers, and Joseph W. Sutton and Ms. Rebecca C. Carter, all of the Company or affiliates thereof, also attended the meeting. The Chairman, Mr. Duncan, presided at the meeting, and the Secretary, Ms. Carter, recorded the proceedings. Mr. Duncan called the meeting to order and inquired if the Committee members had received the material for the meeting, and each responded that he had received the material. He asked Mr. Sutton to present the business of the meeting. Mr. Sutton indicated that the meeting had been called for the Committee to approve the financing documents related to the Cuiaba Integrated Energy Project ("the Project") in Brazil. He stated that the Board of Directors had originally provided authorization to construct the Project in November of 1997 but did not explicitly provide approval to execute financing documents. He called upon Mr. Bannantine to provide an update on the project. E0004388417 =XH002-02061 ============= Page 53 of 398 ============= Mr. Bannantine gave a description of the Project and noted that it was the first power project tied to the Company's Bolivia to Brazil pipeline. He discussed the different phases of the Project, the status of the construction, and the financing approvals obtained from third parties. Following a discussion, upon motion duly made by Mr. Belfer, seconded by Dr. LeMaistre, and carried, the Committee authorized the Company or its designated affiliate to sign financing documents related to the Cuiaba Integrated Energy Project. There being no further business to come before the Committee, the meeting was adjourned at 9:40 a.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\1999 Minutes\92499EX.doc 2 E0004388418 EXH002-02062 ============= Page 54 of 398 ============= rn d- cc cc (Y) 0 0 U w Compensation Committee Agenda Fuunm_mnF,~ ============= Page 55 of 398 ============= Charles A. LeMaistre - Chairman Norman P. Blake John H. Duncan Robert K. Jaedicke Frank Savage AGENDA MEETING OF THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS ENRON CORP. 1:00 p.m. on Monday, December 13,1999 The Enron Building - 50`h Floor - 50M Dining Houston, Texas 1. Approve minutes of the meeting held on October 11, 1999. 2. Approve and recommend to the Enron Board an amendment to the 1991 and 1994 Stock Plans to provide clarification of grant limits as a result of the August 13, 1999 stock split and an amendment to the 1991 Stock Plan to change the definition of the "Management Committee." 3. Review total shareholder return relative to the Performance Unit Plan and discuss replacement for Sonat. 4. Stock Plan items. a) Revisions to All-Employee Stock Program (AESOP) operating guidelines. b) Approve expansion of Enron's equity program for key performers. 5. Other Business. 6. Executive Session. a) Grants to executives pursuant to contractual agreements. b) Quarterly update of Executive Committee compensation values. c) Other Executive Items. 7. Adjournment. E0004388420 EXH002-02064 ============= Page 56 of 398 ============= N Co 00 M 'IT O O U W 3 (b) EXH002-02065 ============= Page 57 of 398 ============= AGENDA ITEM 3(b) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, Enron Corp. (the "Company") and the shareholders of the Company have heretofore approved and adopted the Enron Corp. 1991 Stock Plan (As Amended and Restated Effective May 4, 1999) (the "Plan"); and WHEREAS, the Company desires to amend the Plan; NOW, THEREFORE, IT IS RESOLVED, that the proper officers of the Company be, and they are authorized and directed to prepare an amendment to the Plan incorporating the form of amendment presented at this meeting; RESOLVED FURTHER; that upon execution of such amendment prepared according to the above provisions, such amendment shall be deemed adopted by this Board and is hereby ratified and approved; and RESOLVED FURTHER, that the proper officers of the Company and its counsel are hereby authorized, empowered, and directed to take all such further action, to amend, execute, and deliver all such instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses, as in their judgment may be necessary, appropriate, or advisable in order fully to carry into effect the purposes and intentions of this and each of the foregoing resolutions, including the execution of any further amendments, forms, or documents recommended by counsel or required by any governmental agency, and to do anything necessary to effect compliance with applicable law or regulation. J:\User\rcarter\a Minutes\121499\3rd amendment to 1991 Stock Plan as restated -F.doc E0004388422 EXH002-02066 ============= Page 58 of 398 ============= M N ~T 00 M d' O O U W EXH002-02067 ============= Page 59 of 398 ============= AGENDA ITEM 3(c) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, ENRON CORP. (the "Company") has heretofore adopted and maintains the Enron Corp. 1994 Stock Plan (As Amended and Restated Effective October 11, 1999) (the "Plan"); and WHEREAS, the Company desires to amend the Plan; NOW, THEREFORE, IT IS RESOLVED, that the proper officers of the Company be, and they are authorized and directed to prepare an amendment to the Plan incorporating the form of amendment presented at this meeting; RESOLVED FURTHER; that upon execution of such amendment prepared according to the above provisions, such amendment shall be deemed adopted by this Board and is hereby ratified and approved; and RESOLVED FURTHER, that the proper officers of the Company and its counsel are hereby authorized, empowered, and directed to take all such further action, to amend, execute, and deliver all such instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses, as in their judgment may be necessary, appropriate, or advisable in order fully to carry into effect the purposes and intentions of this and each of the foregoing resolutions, including the execution of any further amendments, forms, or documents recommended by counsel or required by any governmental agency, and to do anything necessary to effect compliance with applicable law or regulation. J:\User\rcarter\a Minutes\121499\lst amendment to 1994 Stock Plan as restated.doc E0004388424 EXH002-02068 ============= Page 60 of 398 ============= N ~T 00 OD M fit' O O U W FXH002-02069 ============= Page 61 of 398 ============= Dr. Robert K Jaedicke, Chairman Mr. Ronnie C. Chan Mr. Joe H. Foy Dr. Wendy L. Gramm Dr. John Mendelsohn Mr. Paulo V. Ferraz Pereira Lord John Wakeham Agenda Meeting of the Audit and Compliance Committee of the Board of Directors Enron 2:30 p.m., December 13,1999 Boardroom - Enron Building Houston, Texas 1. Approve minutes of meeting of the Audit Committee held on October 11, 1999. - Dr. Jaedicke. 2. 1999 Internal Controls Update. -Mr. Causey and Messrs. Duncan and Bauer, Arthur Andersen LLP. 3. Review of Enron Compliance Report for 1998. - Ms. Butcher and Ms. Backus, VINSON & ELKINS L.L.P. 4. Other Business, including executive session with auditors and/or management as deemed necessary. - Dr. Jaedicke. 5. Adjourn to the joint session of the Audit and Compliance Committee and the Finance Committee. E0004388426 EXH002-02070 ============= Page 62 of 398 ============= N 00 aD M O O W Joint Audit & Finance Committee Agenda rvunny))n71 ============= Page 63 of 398 ============= Audit and Compliance and Finance Committees Robert K. Jaedicke - Chairman, Audit and Compliance Committee Herbert S. Winokur, Jr. - Chairman, Finance Committee Robert A. Belfer Norman P. Blake, Jr. Ronnie C. Chan Joe H. Foy Wendy L. Gramm John Mendelsohn Jerome J. Meyer Paulo V. Ferraz Pereira Frank Savage John A. Urquhart John Wakeham AGENDA JOINT MEETING OF THE AUDIT AND COMPIANCE AND FINANCE COMMITTEES OF THE ENRON CORP. BOARD OF DIRECTORS December 13, 1999 3:00 p.m. (C.S.T.) Enron Corp. Boardroom Houston, Texas 1. Merchant Portfolio Summary Mr. Buy 2. Merchant Investment Returns Mr. Buy 3. Market Risk Update Mr. Murphy 4. Enron Online Risk Perspective Mr. Buy 5. Enron Energy Services Risk Perspective Mr. Buy 6. Other Business 7. Adjourn E0004388428 EXH002-02072 ============= Page 64 of 398 ============= FxHnm-02073 ============= Page 65 of 398 ============= Herbert S. Winokur, Jr. - Chairman Robert A. Belfer Norman P. Blake, Jr. Ronnie C. Chan Jerome J. Meyer Paulo V. Ferraz Pereira Frank Savage John A. Urquhart AGENDA MEETING OF THE FINANCE COMMITTEE OF THE ENRON CORP. BOARD OF DIRECTORS 4:00 p.m. (C.S.T.), December 13,1999 Boardroom, Enron Building Houston, Texas 1. Approval of October 11, 1999 Finance Committee Minutes 2. Chief Financial Officer Report 3. Treasurer Report • Revision of Cash Management Policy Approve for Recommendation to the Board • Operating Plan Financing Approve for Recommendation to the Board 4. Projects and Amendments • Enron Caribbean/Middle East Project Dolphin Approve for Recommendation to the Board • Turbine Purchases North America Southern Cone EE&CC Approve for Recommendation to the Board • Enron North America EEX Project Approve for Recommendation to the Board • Revision to the Risk Management Policy Approve for Recommendation to the Board Mr. Winokur Mr. Fastow Mr. McMahon Mr. Sutton Mr. Sutton Mr. Buy Mr. Buy E0004388430 =XH002-02074 ============= Page 66 of 398 ============= • Subsidiary Preferred Stock Financing Mr. Causey Approve for Recommendation to the Board • Bahia Las Minas (Panama) Sell Down Mr. Causey Approve for Recommendation to the Board 5. Other Business 6. Adjourn EOO04388431 EXH002-02075 ============= Page 67 of 398 ============= N M Iq OD co M O O 6 (b) w EXH002-02076 ============= Page 68 of 398 ============= AGENDA ITEM 6(b) (SUGGESTED FORM OF RESOLUTIONS) RESOLVED, that the Cash Management Policy (the "Cash Management Policy") be, and the same hereby is, approved and adopted, in the form presented to and discussed at this meeting, a copy of which is attached to the minutes of the meeting as Exhibit I; RESOLVED FURTHER, that the Cash Management Policy shall supersede and replace all prior policies or guidelines relating to the cash management process; and RESOLVED FURTHER, that the Chairman of the Board, the Vice Chairman of the Board, the President, the Chief Financial Officer, the Treasurer, any Deputy Treasurer and any Assistant Treasurer of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, proper, or advisable to carry into effect the purposes and intentions of this and each of the foregoing resolutions. J:\User\rcarter\a Minutes\121499\rl38coa.doc E0004388433 EXH002-02077 ============= Page 69 of 398 ============= EXHIBIT I Cash Management Policy OBJECTIVE: Enron Corp's (the Company) primary objectives are to: 1) Protect the cash assets of the Company with respect to cash management; 2) Effectively employ the cash resources of the Company; 3) Provide strong controls for the operation and maintenance of cash accounts and cash information; and 4) Manage bank relationships and services. SCOPE: This policy will apply to all entities and joint ventures where Enron Corp. directly or indirectly owns greater than 50% of the voting rights of the entity (Enron Companies). SERVICES: All administrative aspects relating to cash management and banking services will be managed centrally by Enron Corp. Cash Management (Treasury). Cash management services provided by Treasury include: • Administration of bank accounts, including managing the opening, closure, authorized signatories, and maintenance of the account. • Selection or approval of financial institutions with which accounts are maintained. • Management of draw-downs and repayments of borrowings that directly affect Enron Corp.'s balance sheet. • Investment of excess account balances in compliance with the Enron Corp Investment Policy. • Execution of foreign exchange transactions associated with liquidity. • Administration of inter-company funding agreements. • Negotiation and management of payment, collection, and other banking services BORROWINGS OR OTHER OBLIGATIONS: All third-party agreements (any agreement with a non-Enron entity) that represent current or future obligations of Enron Companies to borrow money must be approved by the Treasurer of Enron Corp. prior to execution. REGIONAL TREASURY: Treasury may establish regional treasury offices to facilitate this policy. Regional Treasuries operate under the direction of Enron Corp. E0004388434 EXH002-02078 ============= Page 70 of 398 ============= OPERATING PROCEDURES: Treasury is responsible for maintaining operating procedures for the implementation of this policy. The procedures will be approved by the Treasurer of Enron Corp. COMPLIANCE: It is the responsibility of each operating unit to ensure compliance with this policy. Compliance shall be monitored in conjunction with regular internal audit procedures. Exceptions to this policy may be granted by the Treasurer of Enron Corp. This policy replaces the Financial Institutions Account & Funding Policy previously approved by the Enron Corp. Board of Directors in October 1995. E0004388435 EXH002-02079 ============= Page 71 of 398 ============= (D M ' d. co M M O O U W EXH002-02080 ============= Page 72 of 398 ============= AGENDA ITEM 6(c) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, pursuant to a Project Development Agreement (the "PDA") to be executed by and among (a) Enron Gulf Holdings Ltd., a company organized and existing under the laws of the Cayman Islands ("EGHL") and an indirect, partially owned subsidiary of the Company, (b) The United Arab Emirates Offsets Group, an instrumentality of the Government of the United Arab Emirates ("UOG") and (c) Elf Gulf Limited, a company organized and existing under the laws of Bermuda ("Elf') and an indirect, partially owned subsidiary of Elf Acquitaine, EGHL, UOG and Elf (collectively, the "Project Sponsors") intend to engage in the development, construction, financing, ownership, operation and maintenance of a major natural gas pipeline and related facilities and infrastructure project designed to source natural gas and associated liquids from Qatar and transport and market such natural gas in the United Arab Emirates, Oman, Pakistan and eventually Northwestern India, as well as transporting and marketing the associated liquids on a worldwide basis (the "Project"); and WHEREAS, the Project Sponsors intend to carry out all Project activities through DTC Limited, a company organized and existing under the laws of Jersey, Channel Islands, and various subsidiaries of DTC (collectively, "DTC"), and in connection therewith, EGHL requires funding for its share of initial equity funding contributions to DTC of approximately $25 million and working capital (debt) contributions of approximately $5 million, the full amount of such contributions being refundable to EGHL upon withdrawal from the Project subject to certain conditions within the earlier to occur of (a) one (1) year or (b) the signing of a definitive Joint Venture Agreement governing th