============= Page 1 of 128 ============= ENRON CORP. BOARD OF DIRECTORS MEETING DECEMBER 12, 2000 Endless possibilities.TM CONFIDENTIAL E0004392147 EXH005-02321 GOVERNMENT EXHIBIT 237 Crim. No. H-04-25 (S-2) ============= Page 2 of 128 ============= EXH005-02322 ============= Page 3 of 128 ============= K. L. Lay, Chairman R. A. Belfer J. Mendelsohn N. P. Blake, Jr. J. J. Meyer R. C. Chan P.V. Ferraz Pereira J. H. Duncan F. Savage W. L. Gramm J. K. Skilling K. L. Harrison J. A. Urquhart R. K. Jaedicke J. Wakeham C. A. LeMaistre H. S. Winokur, Jr. AGENDA MEETING OF THE BOARD OF DIRECTORS ENRON CORP. 8:00 A.M., December 12, 2000 Boardroom, Enron Building Houston, Texas EXECUTIVE SESSION: 1. Approve the minutes of a meeting of the Board of Directors held on August 7-8, 2000 - Mr. Lay 2. Report on Compensation and Management Development Committee meeting held on December 11, 2000 - Dr. LeMaistre Compensation and Management Development Committee Agenda included for information purposes only (a) Approve Fifth Amendment to the Enron Corp. 1994 Stock Plan 3. Report on Audit and Compliance Committee meeting held on December 11, 2000 Audit and Compliance Committee Agenda included for information purposes only 4. Report on Finance Committee Meeting held on December 11, 2000 - Mr. Winokur Finance Committee Agenda included for information purposes only (a) Approve Revision to Risk Management Policy (b) Approve Revision to the Transaction Approval Process (c) Approve Enron North America Project Inga E0004392149 EXH005-02323 ============= Page 4 of 128 ============= (d) Approve Enron North America Fountain Valley Power Project (e) Approve Enron Wind Corp. Indian Messa ii rroject (f) Approve Enron Energy Services Texas Project (g) Approve Enron Energy Services Eli Lilly Project (h) Approve Enron Net Works Partners Fund (i) Approve Enron Industrial Markets Projects Crane and Canary (j) Approve Enron South America Cuiba Project Merchant and Strategic Transactions approved by the Office of the Chairman since the last Board meeting included for information purposes only 5. Report on Nominating and Corporate Governance Committee meeting held on December 11, 2000 - Lord Wakeharn Nominating and Corporate Governance Committee Committee Agenda included for information purposes only 6. Financial and earnings report - Mr. Causey 7. Stock Performance Report - Mr. Koenig OPEN SESSION: 8. 2000 Performance against Objectives - Mr. Causey 9. Presentation and Approval of the 2001 Operating Plan - Mr. Skilling 10. Special Reports/Updates: (a) Enron North America- Messrs. Frevert and Delainey (b) Enron's Corporate Responsibility Program - Ms. Kelly L. Kimberly 11. Legal report - Mr. Derrick 12. General corporate matters: (a) Approve date, time, and place of the 2001 Annual Meeting of Shareholders and record date to establish shareholders entitled to vote at such meeting - Mr. Lay E0004392150 EXH005-02324 ============= Page 5 of 128 ============= (b) Approve 2001 Board meeting dates - Mr. Lay (c) Approve the declaration of dividend on the Mandatorily Convertible Junior Preferred Stock, Series B - Mr. Skilling (d) Approve election of corporate officers - Mr. Skilling 13. Other Business 14. Adjournment THE NEXT REGULAR MEETING OF THE BOARD IS SCHEDULED TO BE HELD ON MONDAY, FEBRUARY 12TH IN HOUSTON, TEXAS. DIRECTOR ROOM RESERVATIONS WILL BE MADE AT THE FOUR SEASONS HOTEL. K:\a Minutes\2000 Minutes\12122000\Agenda.doc E0004392151 EXH005-02325 ============= Page 6 of 128 ============= N if) N Q) M O O C) W EXH005-02326 ============= Page 7 of 128 ============= ENRON CORP. CORPORATE STAFF December 4, 2000 CURRENT POSITION Executive Vice President & General Counsel PRIOR ENRON EXPERIENCE 1991 SVP & Gen Counsel Legal PRIOR NON-ENRON EXPERIENCE 1984 Adjunct Prof of Law University of Texas, School of Law VICE PRESIDENT EXEC 1971 Partner Vinson & Elkins 1970 Law Clerk 5th Judicial Circuit & GENERAL COUNSEL EDUCATIONAL BACKGROUND Jim Derrick Jim Derrick 1970 Jurls Doctor, Law - Univ of Texas 1967 BA Government - Univ of Texas EXECUTIVE CERTIFICATES ASSISTANT 1970 Texas - Admission to the Bar Stephanie Harris SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT CHIEF MANAGING DIRECTOR & & DEPUTY GENERAL BOARD COMMUNICATIONS LITIGATION GENERAL COUNSEL COUNSEL & SECRETARY COUNSEL GAS PIPELINE GROUP Rob Walls Rebecca Carter Chuck Cheek Mike Moran MANAGING DIRECTOR & VICE PRESIDENT & SR VICE PRESIDENT, GEN'L MANAGING DIRECTOR & GENERAL COUNSEL ASSOCIATE COUNSEL & CORP SEC GENERAL COUNSEL ENRON ENERGY SERVICES GENERAL COUNSEL PORTLAND GEN'L ELEC ENRON NORTH AMERICA Vicki Sharp Rex Rogers Al Alexanderson Mark Haedicke VICE PRESIDENT & GENERAL COUNSEL VICE PRESIDENT & MANAGING DIRECTOR & GENERAL COUNSEL ENRON EUROPE GENERAL COUNSEL GENERAL COUNSEL EPCO APACHI ENRON BROADBAND Elizabeth Labanowski Mark Evans Bruce Lundstrom Kristina Mordaunt VICE PRESIDENT & VICE PRESIDENT & ASST GENERAL COUNSEL VICE PRESIDENT & GENERAL COUNSEL GENERAL COUNSEL ENRON MIDDLE EAST GENERAL COUNSEL ENRON RENEWABLE ENERGY GPG ENRON CARIBBEAN BASIN Eric Newell Janet Place Dan Rogers Frank Sayre GENERAL COUNSEL VICE PRESIDENT & VICE PRESIDENT & VICE PRESIDENT & EE & CC GENERAL COUNSEL ASST GENERAL COUNSEL GENERAL COUNSEL GLOBAL FINANCE GLOBAL EXPLORATION & PRODUCTION SOUTH AMERICA John Schwartzenburg Jordan Mintz ` Stephen Wallace Randy Young * Dual Reporting E0004392153 EXH005-02327 ============= Page 8 of 128 ============= ENRON CORP CORPORATE STAFF December 4, 2000 CURRENT POSITION Executive Vice President Investor Relations PRIOR ENRON EXPERIENCE 1998 SVP Investor Relations 1992 VP Investor Relations 1991 Assistant Treasurer PRIOR NON-ENRON EXPERIENCE 1978 Assistant Treasurer Peter Kiewit Sons, Inc. Mark Koenig EDUCATIONAL BACKGROUND 1980 MBA Finance - Univ of Nebraska 1977 Accounting - Univ of Nebraska CERTIFICATES 1989 CFA EXEC VICE PRESIDENT INVESTOR RELATIONS Mark Koenig MANAGING DIRECTOR VICE PRESIDENT VICE PRESIDENT DIRECTOR INVESTOR RELATIONS INVESTOR RELATIONS INVESTOR RELATIONS INVESTOR RELATIONS AZURIX NORTHERN BORDER Paula Rieker Cedric Burgher Liz Ivers Ellen Konsdorf E0004392154 EXH005-02328 ============= Page 9 of 128 ============= ENRON CORP. ENRON WHOLESALE SERVICES December 4, 2000 CURRENT POSITION Chairman & CEO Enron Wholesale Services PRIOR ENRON EXPERIENCE 1999 Chairman & CEO Europe 1999 CEO Europe 1998 President London Executive 1996 Managing Dir London Exec PRIOR NON-ENRON EXPERIENCE 1981 Economist Natomas North America 1978 Controller/General Manager Maxus Energy EDUCATIONAL BACKGROUND 1980 ABD Economics Rice University 1974 BA Economics & Math Albion College CURRENT POSITION President & CEO Enron Americas PRIOR ENRON EXPERIENCE 1999 President & COO - ENA 1998 Managing Director - NAES 1998 Managing Director Western US Origination 1996 Vice President Canada Gas Marketing PRIOR NON-ENRON EXPERIENCE 1994 Marketing Coordinator Shell Canada 1993 Budget Analyst - Shell Canada 1991 US Sales Analyst Shell Canada EDUCATIONAL BACKGROUND 1990 BS Finance Univ. of Saskatchewan Mark Frevert Dave Delainey ENRON WHOLESALE SERVICES CHAIRMAN & CEO Mark Frevert PRESIDENT & COO Greg Whalley ENRON AMERICAS PRESIDENT & CEO Dave Delainey CHIEF OPERATING OFFICER John Lavorato ENRON EUROPE (w/JAPAN AND AUSTRALIA) PRESIDENT & CEO John Sherriff CHIEF OPERATING OFFICER Michael Brown ENRON NET WORKS PRESIDENT & CEO Louise Kitchen CHIEF TECHNOLOGY OFFICER Philippe Bibi ENRON INDUSTRIAL MARKET PRESIDENT & CEO Jeff McMahon CHIEF OPERATING OFFICER Ray Bowen Greg Whalley John Lavorato E0004392155 ENRON GLOBAL MARKETS PRESIDENT & CEO Mike McConnell CHIEF OPERATING OFFICER Jeff Shankman ENRON GLOBAL ASSETS PRESIDENT & CEO Rebecca McDonald CHIEF OPERATING OFFICER Jim Hughes CURRENT POSITION President & COO Enron Wholesale Services PRIOR ENRON EXPERIENCE 2000 CEO - Enron Networks 2000 Pres. & COO North America 1999 CEO Risk Management 1998 Managing Dir Executive Trading 1998 Managing Dir IES Crude Trading PRIOR NON-ENRON EXPERIENCE 1984 Armor Officer US Army EDUCATIONAL BACKGROUND 1992 MBA - Stanford University 1984 BS - US Military Academy CURRENT POSITION Chief Operating Officer Enron Americas PRIOR ENRON EXPERIENCE 1998 President & CEO Enron Canada - Oil & Gas Integrated 1994 Manager/DIrNP/MD Enron Canada - Trading 1993 Associate/Manager Enron Corp. - Trading PRIOR NON-ENRON EXPERIENCE 1990 Manager, Risk Management Canadian Imperial Bank of Commerce (CIBC) EDUCATIONAL BACKGROUND 1993 MBA Northwestern University 1989 BA University of Western Ontario EXH005-02329 ============= Page 10 of 128 ============= ENRON CORP. OFFICE OF THE CHAIRMAN December 4, 2000 CHAIRMAN OF THE BOARD & CHIEF EXECUTIVE OFFICER Ken Lay PRESIDENT & CHIEF OPERATING OFFICER Jeff Skilling OFFICE OF THE CHAIRMAN ENRON WHOLESALE SERVICES Mark Frevert Greg Whalley OFFICE OF THE CHAIRMAN ENRON BROADBAND SERVICES Ken Rice Kevin Hannon VICE CHAIRMAN & CHIEF STRATEGIC OFFICER Cliff Baxter EXEC VICE PRESIDENT & CHIEF RISK OFFICER Rick Buy EXEC VICE PRESIDENT & CHIEF FINANCIAL OFFICER Andy Fastow EXEC VICE PRESIDENT & CHIEF OF STAFF Steve Kean CEO & PRESIDENT PORTLAND GENERAL ELECTRIC Peggy Fowler OFFICE OF THE CHAIRMAN AZURIX Herbert "Pug" Wlnokur John Garrison Colin Skellet EXEC VICE PRESIDENT & CHIEF ACCOUNTING OFFICER Rick Causey CHAIRMAN & CEO ENRON TRANSPORTATION SERVICES COMPANY Stan Horton EXEC VICE PRESIDENT & GENERAL COUNSEL Jim Derrick EXEC VICE PRESIDENT INVESTOR RELATIONS Mark Koenig EXEC VICE PRESIDENT CORPORATE DEVELOPMENT Mark Metts E0004392156 OFFICE OF THE CHAIRMAN ENRON ENERGY SERVICES Lou Pal Tom White EXH005-02330 ============= Page 11 of 128 ============= ENRON CORP. OFFICE OF THE CHAIRMAN December 4, 2000 CHAIRMAN OF THE BOARD & CHIEF EXECUTIVE OFFICER Ken Lay PRESIDENT & CHIEF OPERATING OFFICER Jeff Skilling OFFICE OF THE CHAIRMAN ENRON WHOLESALE SERVICES Mark Frevert Greg Whalley OFFICE OF THE CHAIRMAN ENRON BROADBAND SERVICES Ken Rice Kevin Hannon VICE CHAIRMAN & CHIEF STRATEGIC OFFICER Cliff Baxter EXEC VICE PRESIDENT & CHIEF RISK OFFICER Rick Buy EXEC VICE PRESIDENT & CHIEF FINANCIAL OFFICER Andy Fastow EXEC VICE PRESIDENT & CHIEF OF STAFF Steve Kean CEO & PRESIDENT PORTLAND GENERAL ELECTRIC Peggy Fowler OFFICE OF THE CHAIRMAN AZURIX Herbert "Pug" Winokur John Garrison Colin Skellet EXEC VICE PRESIDENT & CHIEF ACCOUNTING OFFICER Rick Causey CHAIRMAN & CEO ENRON TRANSPORTATION SERVICES COMPANY Stan Horton EXEC VICE PRESIDENT & GENERAL COUNSEL Jim Derrick EXEC VICE PRESIDENT INVESTOR RELATIONS Mark Koenig EXEC VICE PRESIDENT CORPORATE DEVELOPMENT Mark Metts E0004392157 OFFICE OF THE CHAIRMAN ENRON ENERGY SERVICES Lou Pal Tom White EXH005-02331 ============= Page 12 of 128 ============= ENRON CORP. CORPORATE STAFF December 4, 2000 CURRENT POSITION Vice Chairman & Chief Strategic Officer PRIOR ENRON EXPERIENCE 1999 Chairman & CEO - ENA 1999 EVP Corporate Development 1996 Managing Dir- NAES 1995 VP-NAES Cliff Baxter VICE CHAIRMAN & CHIEF STRATEGIC OFFICER Cliff Baxter EXECUTIVE ASSISTANT Susan Skarness EXECUTIVE VICE PRESIDENT ASSET MONETIZATION PROJECTS David Haug MANAGING DIRECTOR ENRON SOUTH AMERICA Joe Kishkill PRESIDENT & CEO ENRON GLOBAL EXPLORATION & PRODUCTION Jeff Sherrick PRIOR NON-ENRON EXPERIENCE 1989 Vice President - Kemper Securities 1986 Associates - Paine Webber 1980 Captain - US Air Force EDUCATIONAL BACKGROUND 1987 MS Finance/Acct - Columbia Univ 1980 BS Finance/Mgmt - New York Univ PRESIDENT & CHIEF EXECUTIVE OFFICER ENRON WIND Jim Noles E0004392158 EXH005-02332 ============= Page 13 of 128 ============= ENRON CORP. CORPORATE STAFF December 4, 2000 MANAGING DIRECTOR CORP. ACCOUNTING & FINANCIAL REPORTING Bob Butts MANAGING DIRECTOR STRATEGIC SOURCING George Wasaff EXEC VICE PRESIDENT & CHIEF ACCOUNTING OFFICER Rick Causey EXECUTIVE ASSISTANT 1 Sharron Westbrook Rick Causey VICE PRESIDENT STRATEGIC INITIATIVES Melissa Becker CURRENT POSITION Executive Vice President & Chief Accounting Officer PRIOR ENRON EXPERIENCE 1997 SVP Chief Acctg. & Info Officer 1996 Managing Dir ECT Retail Risk Mgmt 1996 VP Comm ECT Retail Risk Mgmt PRIOR NON-ENRON EXPERIENCE 1982 Audit Mgr Arthur Andersen EDUCATIONAL BACKGROUND 1982 BBA Accounting - University of Texas CERTIFICATES 1983 Certified Public Accountant - Texas MANAGING DIRECTOR VICE PRESIDENT & GENERAL COUNSEL TRANSACTION ACCOUNTING Bob Hermann Rodney Faldyn MANAGING DIRECTOR REGIONAL CHIEF ASSURANCE SERVICE & ACCOUNTING IT COMPLIANCE OFFICERS Tod Lindholm NORTH AMERICA Was Colwell FINANCE Mark Lindsey INT'L ACCTG & REPORTING Jeff Sommers EECC Keith Marlow GLOBAL E&P EUROPE E .... a.... GLOBAL RISK MGMT Howard Selzer Fernley Dyson Sally Beck INDIA EBS ENERGY SERVICES Carol Howes John Echols i Kevin Hughes TRANSPORTATION SERVICES ASSET OPERATIONS AZURIX Rod Hayslett Dave Gunther Kenny Bickett PGE GLOBAL MARKETS ` ... FS RISK MANAGEMENT Mary Turina Brent Price Price Wanda Curry E0004392159 EXH005-02333 ============= Page 14 of 128 ============= ENRON CORP. CORPORATE STAFF December 4, 2000 CURRENT POSITION Senior VP Marketing, Communication & PR Enron Broadband Services Senior VP, Corporate Responsibility Enron Corp. PRIOR ENRON EXPERIENCE 1998 SVP, Marketing Communication & PR Enron International 1997 Vice President, PR Enron International 1997 Senior Director Enron International 1996 Director Asia PR Enron International PRIOR NON-ENRON EXPERIENCE 1995 Director, Public & Government Affairs Tenaska, Inc. 1984 VP & Senior Counsel Leslie Associates, Inc. 1982 Communication Director American Heart Association EDUCATIONAL BACKGROUND 1990 MA - University of Nebraska at Omaha 1980 BS - University of Nebraska - Kearney ACCREDITED BY The Public Relations Society of America E0004392160 CURRENT POSITION Executive Vice President & Chief of Staff PRIOR ENRON EXPERIENCE 1998 SVP Government Affairs 1995 VP NAES Regulatory PRIOR NON-ENRON EXPERIENCE 1988 Sr Counsel Utillcorp - CPSI 1985 Sr Counsel El Paso Natural Gas EDUCATIONAL BACKGROUND 1985 JD Law - University of Iowa 1982 BA Political Science - University of Iowa CERTIFICATES 1989 Nebraska State Bar 1988 Texas Stale Bar 1985 Iowa State Bar Dual Reporting EXH005-02334 ============= Page 15 of 128 ============= ENRON CORP GLOBAL FUNCTIONS December 4, 2000 Dual Reporting MANAGING DIRECTOR GLOBAL EQUITY MARKETS & STRUCTURED FINANCE Michael Kopper EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER Andy Fastow EXECUTIVE ASSISTANT Bridget Maronge CURRENT POSITION Executive Vice President & Chief Financial Officer PRIOR ENRON EXPERIENCE 1997 SVP Enron Capital Mgmt - Treasury 1996 Managing Dir ECT Treasury 1995 VP Enron Energy Services 1990 Enron Finance Group - EGS PRIOR NON-ENRON EXPERIENCE Sr Director Asset Securitization Continental Bank Andy Fastow EDUCATIONAL BACKGROUND MBA Finance - Kellogg Graduate School of Mgmt - Northwestern University BA Economics and Chinese - Tufts University VICE PRESIDENT & VICE PRESIDENT GENERAL COUNSEL FINANCE & TREASURER GLOBAL FINANCE Jordan Mintz * Ben Glisan E0004392161 EXH005-02335 ============= Page 16 of 128 ============= ENRON CORP. CORPORATE STAFF December 4, 2000 EXECUTIVE VICE PRESIDE & CHIEF RISK OFFICER Rick Buy EXECUTIVE ASSISTANT Karen Heathman VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT MARKET INVESTMENT CREDIT RISK RISK MANAGEMENT VALUATION MANAGEMENT Ted Murphy Mark Ruane Bill Bradford VICE PRESIDENT VICE PRESIDENT UNDERWRITING LONDON RAC TEAM David Gorte Steve Young Rick Buy VICE PRESIDENT DUE DILIGENCE, ASSET MANAGEMENT & COMPLIANCE Rick Carson CURRENT POSITION Executive Vice President & Chief Risk Officer PRIOR ENRON EXPERIENCE 1999 SVP Risk Assessment & Control 1998 Managing Dir Risk Assessment & Control 1997 VP ECT Risk Control PRIOR NON-ENRON EXPERIENCE 1992 VP Bankers Trust 1991 VP Chase Manhattan 1985 VP Bankers Trust EDUCATIONAL BACKGROUND 1983 MS Petroleum Engineer - University of Houston 1976 MS Industrial Admin - Rensselaer Polytechnic Inst 1974 BS Mechanical Engineer - Rensselaer Polytechnic Inst CERTIFICATES NASD Series Professional Engineer E0004392162 EXH005-02336 ============= Page 17 of 128 ============= ION C_ .. ENRON BROADBAND SERVICES December 4, 2000 CURRENT POSITION Chief Executive Officer Enron Broadband Services PRIOR ENRON EXPERIENCE 2000 CCO - EBS 2000 Co-Chairman EBS 1999 Co-Chief Executive Officer 1997 Chairman & CEO NAES Exe 1995 Mng Dir NAES Exec 1993 Pres EGS Enron Power Mktc PRIOR NON-ENRON EXPERIENC 1986 Sales Director Houston P/L 1983 Acct Executive NNG 1980 Engr/Proj Engr NNG EDUCATIONAL BACKGROUND 1984 MS Finance - Crelghton Univ 1980 BS Elec Eng - University of Nebraska CURRENT POSITION Chief Operating Officer n Broadband Services IR ENRON EXPERIENCE COO North America President & COO ECT President & COO CTS President CTS IR NON-ENRON EXPERIENCE Assoc/Risk Mgr Banker's Trust Fin Analyst Federal Reserve Economist Commerce Dept. CATIONAL BACKGROUND MBA Finance - Cornell University BA Economics - Lemoyce-Owen College E00043921 b3 EXH005-02337 ============= Page 18 of 128 ============= ENRON CORP. ENRON ENERGY SERVICES December 4, 2000 CURRENT POSITION Chairman & Chief Executive Officer Enron Energy Services PRIOR ENRON EXPERIENCE 1999 Chairman & CEO EES 1998 Chairman & CEO EES 1995 President & COO EES '" PRIOR NON-ENRON EXPERIENCE Economist Corp Planning - Conoco EDUCATIONAL BACKGROUND Lou Pal 1973 MA Economics - Univ of Maryland ENRON ENERGY SERVICES CHAIRMAN & CHIEF EXECUTIVE OFFICER Lou Pal I VICE CHAIRMAN I Tom White PRESIDENT & CHIEF EXECUTIVE OFFICER GLOBAL ENERGY SERVICES Dan Leff PRESIDENT & CHIEF EXECUTIVE OFFICER EUROPE Matthew Scrimshaw PRESIDENT & CHIEF EXECUTIVE OFFICER EES NORTH AMERICA Marty Sunde PRESIDENT & CHIEF EXECUTIVE OFFICER NEW BUSINESS VENTURES Mark Muller VICE PRESIDENT & CHIEF ACCOUNTING OFFICER MANAGEMENT SUPPORT Kevin Hughes CO-CHIEF OPERATING OFFICERI I CO-CHIEF OPERATING OFF SALES AND MARKETING DEAL MANAGEMENT & STRUCTURING Harold Buchanan Jeremy Blackman MANAGING DIRECTOR & GENERAL COUNSEL LEGAL Vicki Sharp CHIEF EXECUTIVE OFFICER ENRON SOUTH AMERICA Jim Bannantine Tom White MANAGING DIRECTOR MARKETING, HUMAN RESOURCES & CUSTOMER SATISFACTION Beth Tilney PRESIDENT & CEO EE & CC Larry Izzo CURRENT POSITION Vice Chairman Enron Energy Services PRIOR ENRON EXPERIENCE 1997 Chairman & CEO EVC 1994 Co-Chairman EOC 1993 President & CEO EPC PRIOR NON-ENRON EXPERIENCE 1989 Exec Asst to Chrmn, Joint Chiefs of Staff US Army 1989 Deputy Dir of Oper, Joint Chiefs of Staff US Army 1988 Dir Armor/Anti Armo, Office Chief of Staff US Army EDUCATIONAL BACKGROUND 1974 MS Oper Res/Sys Anal - US Naval Post Grad School 1967 BS - US Military Academy E0004392164 EXH005-02338 ============= Page 19 of 128 ============= URRENT POSITION hairman & Chief Executive Officer nron Transportation Services ompany RIOR ENRON EXPERIENCE 196 Chairman & CEO GPG/Enron Operations 196 Pres & COO Enron Operations RIOR NON-ENRON EXPERIENCE /A DUCATIONAL BACKGROUND 177 MS Mgmt - Rollins College 173 BS Fin & Accting - University of Central Florida E0004392165 EXH005-02339 ENRON CORP. ENRON TRANSPORTATION SERVICE COMPANY December 4, 2000 ============= Page 20 of 128 ============= ENRON CORP. CORPORATE STAFF December 4, 2000 CURRENT POSITION Executive Vice President Corporate Development PRIOR ENRON EXPERIENCE n/a EXECUTIVE VICE PRESIDENT CORPORATE DEVELOPMENT Mark Metts EXECUTIVE ASSISTANT Dolores Fisher GENERAL MANAGER Jessica Uhl GENERAL MANAGER Amit Walia MANAGING DIRECTOR Mitch Taylor Mark Metts PRIOR NON-ENRON EXPERIENCE 1999 Partner, Vinson & Elkins EDUCATIONAL BACKGROUND 1983 J.D., University of Texas 1980 BA, University of Texas CERTIFICATES 1983 Texas - Admission to the Bar VICE PRESIDENT Dwight Larson E0004392166 EXH005-02340 ============= Page 21 of 128 ============= ENRON CORP. PORTLAND GENERAL ELECTRIC December 4, 2000 CURRENT POSITION Chief Executive Officer & President PRIOR ENRON EXPERIENCE Us PRIOR NON-ENRON EXPERIENCE !000 President PGE 997 President and COO PGE Dist. 996 EVP & GOO PGE 995 SVP Energy Svcs PGE :DUCATIONAL BACKGROUND 973 BS Chemistry - George Fox College :ERTIFICATES Public Utility Exec Prog E0004392167 EXH005-02341 ============= Page 22 of 128 ============= ENRON CORP. AZURIX December 4, 2000 CURRENT POSITION Interim Chairman Azurix PRIOR ENRON EXPERIENCE 1998 Exec. Director - Tech Enviorn. PRIOR NON-ENRON EXPERIENCE 1988 Group Chief Exec. - Wessex Water 1986 Reg. Div. Mgr. - Wessex Water 1980 Div. Recovery Controller - Wessex Water INTERIM CHAIRMAN John Garrison EDUCATIONAL BACKGROUND Colin Skellet AZURIX 1979 MSC Water Engineering - City Herbert "Pug" Winokur University PRESIDENT & CEO 1970 Hons. DI Chemistry - North John Garrison Staffs Polytechnic VICE PRESIDENT Colin Skellet EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR PRESIDENT MANAGING DIRECTOR & PRESIDENT GENERAL COUNSEL LURGI BAMAG HUMAN RESOURCES & NORTH AMERICA ADMINISTRATION Amanda Martin John Ale Frank Stieler Phil Bazelides MANAGING DIRECTOR CHIEF FINANCIAL PRESIDENT WESSEX WATER MARKETING, COMM & OFFICER WATERDESK CORP. PUBLIC RELATIONS Diane Bazelides Michael Anderson Alex Perwich Sam Allen MANAGING DIRECTOR VICE PRESIDENT & MEXICO MENDOZA ENGINEERING & CHIEF INFORMATION CONCESSIONS MUNICIPAL OFFICER Libby Gawith Philip Couch Mike Jones BRAZIL PRESIDENT & CEO BUENOS AIRES CONCESSIONS Flavio Godinho Juan Martin "Tino" Lutteral CURRENT POSITION President & CEO Azurix PRIOR ENRON EXPERIENCE 1995 Principal, Enron Development 1993 VP, Enron Development 1992 General Mgr., Enron Power Development PRIOR NON-ENRON EXPERIENCE 1999 VP & Gen. Mgr. - Case Corp. 1992 Assoc. Prof. Dept. Social Sciences, Westpoint 1990 Captain, US Army EDUCATIONAL BACKGROUND 1990 MBA - Harvard University 1982 BS Engineering -US Military Academy E0004392168 EXH005-02342 ============= Page 23 of 128 ============= rn (D N CD M V O O C) W EXH005-02343 ============= Page 24 of 128 ============= DRAFT MINUTES MEETING OF THE BOARD OF DIRECTORS ENRON CORP. AUGUST 7-8,2000 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 7:25 p.m., C.D.T., on August 7, 2000 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. 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 Ms. Rebecca P. Mark Dr. John Mendelsohn Mr. Paulo Ferraz Pereira Mr. Frank Savage Mr. Jeffrey K. Skilling Mr. John A. Urquhart Lord John Wakeham Director Herbert S. Winokur was absent from the meeting. Messrs. Richard A. Causey, Andrew S. Fastow, Mark E. Koenig, 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 called for a revised agenda to begin the meeting with the Financial and Earnings and Stock Performance reports. He called upon Mr. Causey to begin his presentation, a copy of which is filed with the records of the meeting. E0004392170 EXH005-02344 ============= Page 25 of 128 ============= Mr. Causey discussed the second quarter and six months ended June 30, 2000 diluted earnings per share, net income, and earnings by business segment and compared them to the 2000 Operating Plan. He commented that net income in 2000 was more than 30% higher than the comparable period in 1999 primarily due to stronger performances by the Wholesale Energy Operations and Retail Energy Services business units. He discussed the Company's balance sheet debt and provided a roll-forward from yearend 1999 balances. He commented on the decrease in working capital and noted that it was driven by an increase in margin calls during the first six months of the year as natural gas volumes marketed and prices increased significantly. Mr. Lay then 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 year-to-date 2000, of 76.3%, and noted that it substantially exceeded the total return achieved by the Company's energy and broadband peer groups, the S&P 500, and the Dow Jones Industrial Average. He noted that the Company's energy peer group's return, of 44.6%, benefited from some of the companies' exposure to oil and gas prices. He presented the year-to- date stock price performance for the Company, the S&P 500, and the NASDAQ and he commented that the Company had significantly outperformed both of the indices. He reported on the Company's price-to-earnings valuation ("P/E") as of December 1999, April 2000, and August 2000 as compared to that of the S&P 500 and the Company's peer group and he stated that the Company's increase in stock price from April to August was due to an increase in earnings rather than an increase in the P/E multiple. He discussed the total return to shareholders since August 1997, when the Company took a significant write-off related to a gas contract in the North Sea, and noted that it was considerably higher than either the S&P 500 or the NASDAQ. Mr. Koenig then reviewed the Company's shareholder composition and the investor style of its institutional investors, noting that 59% were growth-oriented investors. He commented on the Company's largest shareholders and discussed changes in ownership since April 2000. He discussed Motley Fool's "Now 50" Index, an index designed to include businesses exhibiting leadership in innovation, superior use of technology, global branding, and strategic vision, and noted that the Index replicated portfolios that hold the Company's stock. He stated that the Company's year-to-date total return to shareholders was the highest of any company in the Now 50 Index. He commented on how the Wall Street Analysts valued the Company and presented a segment valuation of the Company that portrayed each business segment's contribution to the Company's stock price. Mr. Skilling joined him for a discussion of the segment valuation, the impact of a recently announced transaction with Blockbuster Video on the valuation and stock price, and the marketing strategy for Enron Net Works. E0004392171 2 EXH005-02345 ============= Page 26 of 128 ============= Messrs. Causey, Fastow, and Koenig left the meeting following the presentation. Mr. Lay then stated that minutes of meetings of the Board held on April 3 and May 1-2, 2000 had been distributed to the Directors and were included in the meeting material. He called for any additions, corrections, or comments. There being none, upon motion duly made by Dr. Jaedicke, seconded by Mr. Blake, and carried, the minutes of the meetings held April 3 and May 1-2, 2000 were approved as distributed. Mr. Lay then called upon Mr. Duncan to report on an Executive Committee meeting held on June 22, 2000. Mr. Duncan noted that at the meeting the Committee approved the following items: 1) an Enron North America Corp. ("ENA") transaction, "Project Comhusker", whereby ENA would acquire a 10% limited partnership interest and an off-balance sheet enterprise would acquire the general partnership interests in a partnership that owns a 258-megawatt power plant in Texas, 2) an Asia-Pacific/Africa/China group project to sell 270 megawatts of power from nine barges, purchased by Enron in 1999, at a site in Lagos, Nigeria, and 3) Raptor II, a second risk management program identical in structure to Raptor I which was approved at the May 2, 2000 Board meeting. Mr. Duncan then noted that minutes of Executive Committee meetings held on March 2, May 17, and June 1, 2000, previously discussed with the Board at the February Board meeting, were included in the meeting materials and moved the acceptance of the report and approval of the minutes of the March 2, May 17, and June 1, 2000 meetings. Mr. Duncan's motion was duly seconded by Mr. Blake, and carried, and the report of the Executive Committee meeting was accepted and the minutes of the March 2, May 17, and June 1, 2000 meetings were approved as distributed. Mr. Lay then called upon Dr. LeMaistre for a report on meetings of the Compensation and Management Development Committee held on May 26 and August 7, 2000. Dr. LeMaistre stated that at the May 26, 2000 meeting the Committee approved compensation adjustments for certain executives to take into consideration recent reorganizations and promotions that had led to the employees having increased responsibilities. He stated that, as previously approved by the Committee, the Company could utilize three different alternatives in structuring the executives' long-term compensation. Dr. LeMaistre then stated that at the August 7, 2000 meeting the Committee had approved the following items for recommendation to the Board: 1) the partial termination of the Enron Corp. Cash Balance Plan as adopted for EOG Resources, Inc. employees, 2) amendments to the 1994 Enron Corp. Deferral Plan and the amended and restated Trust Documents to ensure that it incorporated sufficient protection to participants in the Enron Corp. 1994 Deferral Plan in the event of a 3 E0004392172 EXH005-02346 ============= Page 27 of 128 ============= change in control, 3) an amendment to the 1991 Enron Corp. Stock Plan to expand the eligibility for stock option transfers for all grants made under the 1991 Stock Plan, and 4) amendments to the 1994 Enron Corp. Stock Plan to clarify the definition of retirement and to allow for stock option transfers for grants made under the 1994 Stock Plan. Following a discussion, he moved acceptance of the items, his motion was duly seconded by Mr. Blake, and carried, and the following resolutions were approved: Enron Corp. Cash Balance Plan RESOLVED, that the Company partially terminate the Enron Corp. Cash Balance Plan as adopted for the benefit of employees of EOG Resources, Inc. in accordance with the terms and provisions of that instrument entitled "Partial Termination of Enron Corp. Cash Balance Plan" subject to and conditioned upon execution by EOG Resources, Inc. of a written agreement to return to the Company the $1,850,000 (less reasonable expenses plus, as determined appropriate by the appropriate officers of the Company, earnings) which the Company transferred to EOG Resources, Inc. pursuant to Section 5.7(b) of that Share Exchange Agreement dated July 19, 1999 by and between the Company and Enron Oil & Gas Company; RESOLVED FURTHER, that the partial termination referenced in the foregoing resolution be effected substantially in accordance with that instrument entitled "Partial Termination of Enron Corp. Cash Balance Plan," a copy of which is attached hereto; RESOLVED FURTHER, that the appropriate officers of the Company shall be and they are hereby directed to work with counsel and such other consultants or advisors as they deem appropriate and necessary to proceed to finalize the partial termination document adopted pursuant to the foregoing resolution and, upon such finalization, the resulting document shall be deemed approved and adopted by this Board as if presented at this meeting and shall be directed to be marked for identification and filed with the records of the Company; and RESOLVED FURTHER, that the appropriate officers of the Company shall be and they are hereby authorized and directed to execute all instruments and take such other actions including, without limitation, actions in the nature of providing notices to affected individuals regarding the partial termination of the Plan, as they deem appropriate and necessary and to secure and maintain for the Plan a qualified status under applicable provisions of the Internal 4 E0004392173 EXH005-02347 ============= Page 28 of 128 ============= Revenue Code of 1986, as amended and of the Employee Retirement Income Security Act of 1974, as amended. Enron Corp. 1994 Deferral Plan WHEREAS, the Company has heretofore established the Enron Corp. 1994 Deferral Plan (As Restated Effective August 11, 1997) (the "Deferral Plan"); and WHEREAS, the Company desires to amend the Deferral Plan and adopt the Trust Under The Enron Corp. 1994 Deferral Plan; NOW, THEREFORE, IT IS RESOLVED, that the proper officers of the Company be, and they hereby are, authorized and directed to prepare and execute such amendment to the Deferral Plan on behalf of the Company substantially in the form of amendment presented at this meeting; RESOLVED FURTHER, that upon execution of such amendment, such amendment shall be deemed adopted by this Board and is hereby ratified and approved; RESOLVED FURTHER, that the Trust Under The Enron Corp. 1994 Deferral Plan is hereby adopted and made a part of the Deferral Plan, and that the proper officers of the Company be, and they hereby are, authorized to execute such Trust on behalf of the Company substantially in the form of presented at this meeting; 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. E0004392174 5 EXH005-02348 ============= Page 29 of 128 ============= Enron Corp. 1991 Stock Plan 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 hereby are, authorized and directed to prepare and execute 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. Enron Corp. 1994 Stock Plan WHEREAS, ENRON Corp. (the "Company") has heretofore adopted and maintains the Enron Corp. 1994 Stock Plan (As Amended and Restated Effective October 12, 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 hereby are, authorized and directed to prepare an amendment to the Plan incorporating the form of amendment presented at this meeting; E0004392175 6 EXH005-02349 ============= Page 30 of 128 ============= 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. Mr. Lay called upon Dr. Jaedicke to report on the Audit and Compliance Committee meeting held on August 7, 2000. Dr. Jaedicke stated that the Committee had discussed selected items impacting the Company's second quarter performance. He noted that the Committee received an update on SEC initiatives, including efforts to strengthen the effectiveness of audits and to establish outside auditor independence standards. He stated that the Committee had a discussion with representative of Arthur Andersen LLP regarding the SEC's rulemaking proposal regarding auditor independence. He noted that the most significant change from past practice related to the scope of services area which, as proposed, would restrict a company from using its financial statement auditors for assistance in the design and implementation of financial information systems and for internal audit outsourcing. Mr. Lay then called upon Ms. Carter to report on the Finance Committee meeting held on August 7, 2000. Ms. Carter stated that at the August 7, 2000 meeting the Finance Committee had approved the following items for recommendation to the Board: 1) revisions to the Enron Corp. Risk Management Policy to: a) increase the aggregate Value-at-Risk ("VAR") limit, b) increase the limits of certain existing commodity groups, c) incorporate certain technical revisions, and d) increase the North American Electricity position and VAR limits if the Company was successful in its bidding for certain power purchase arrangements in Canada and 2) Project Tammy, the formation of a new company to serve as an intermediate financing vehicle for the Company. Following a discussion, upon motion duly made by Mr. Blake, seconded by Mr. Urquhart, and carried, the revision to the Enron Corp. Risk Management Policy, as filed with the records of the meeting, and the following resolutions were approved: Creation of Enron Finance Partners E0004392176 7 EXH005-02350 ============= Page 31 of 128 ============= RESOLVED, that the formation and capitalization of Enron Finance Partners, LLC, a Delaware limited liability company ("EFP"), by the Company, Enron Capital Investments Corp., a Delaware corporation ("ECIC"), Smith Street Land Company, a Delaware corporation ("SSLC"), and EOGI-India, Inc., a Delaware corporation (" EOGI"), all wholly-owned subsidiaries of the Company, pursuant to that certain Limited Liability Company Agreement of Enron Finance Partners, LLC, dated as of July 21, 2000 ("LLC Agreement"), be, and hereby is, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that the appointment and admission of the Company as the sole Managing Member of EFP be, and hereby is, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that, in connection with the formation of EFP, the execution and delivery by the Company of a Demand Promissory Note, dated as of July 21, 2000, in the original principal amount of $200 Million Dollars, with a maturity date of July 21, 2010, and bearing an interest rate of eight percent per annum ("Promissory Note"), made payable to ECIC as a contribution to the capital of ECIC be, and hereby is, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that upon receipt of the Promissory Note, ECIC contributed the Promissory Note to EFP as a capital contribution by ECIC, and such contribution by ECIC to EFP of the Promissory Note be, and hereby is, authorized, approved, ratified, and confirmed, and the Company hereby recognizes EFP as the holder of the Promissory Note; RESOLVED FURTHER, that in addition to its initial cash capital contribution to EFP in consideration of its admission as a member of EFP, EOGI caused a further capital contribution to EFP by contributing to EFP all of the issued and outstanding capital stock of Enron Oil & Gas India Ltd., a Cayman Islands company ("EOG Cayco"), pursuant to transfer of share/stock power (the "EOG Cayco Contribution"), and the EOG Cayco Contribution be, and hereby is, authorized, approved, ratified, and confirmed; E0004392177 8 EXH005-02351 ============= Page 32 of 128 ============= RESOLVED FURTHER, that in connection with the EOG Cayco Contribution, EOGI assumed approximately $523 million of debt of Enron Corp. (the "Enron-EOGI Debt Obligations"), which debt was assumed pursuant to an Assumption Agreement, dated as of July 21, 2000 (the "EOGI Assumption Agreement"), between the Company and EOGI, and such assumption by EOGI of the Enron- EOGI Debt Obligations, and the execution and delivery of the EOGI Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that upon assumption of the Enron- EOGI Debt Obligations by EOGI, EFP assumed the Enron-EOGI Debt Obligations pursuant to a Supplemental Assumption Agreement, dated as of July 21, 2000 (the "EOGI Supplemental Assumption Agreement"), between EOGI and EFP, and such assumption by EFP of the Enron-EOGI Debt Obligations and the execution and delivery of the EOGI Supplemental Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that as a result of the EOGI Assumption Agreement and the EOGI Supplemental Assumption Agreement, the Company has not been released from the Enron- EOGI Debt Obligations; RESOLVED FURTHER, that in addition to its initial cash capital contribution to EFP in consideration of its admission as a member of EFP, SSLC caused a further capital contribution to EFP by executing an Option Agreement, dated as of July 27, 2000 ("Option Agreement"), between SSLC and EFP, granting EFP an exclusive and irrevocable option until July 27, 2010 to purchase all of the shares of capital stock of Enron Renewable Energy Corp., a Delaware corporation ("EREC"), held by SSLC, and that the execution, delivery, and performance of such Option Agreement and contribution be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that in connection with the execution and delivery of the Option Agreement, SSLC assumed approximately $524 million of debt of Enron Corp. (the "Enron- SSLC Debt Obligations"), which debt was assumed pursuant to an Assumption Agreement, dated as of July 27, 2000 (the "SSLC Assumption Agreement"), between the Company and SSLC, and such assumption by SSLC of the Enron-SSLC Debt Obligations and 9 E0004392178 EXH005-02352 ============= Page 33 of 128 ============= the execution and delivery of the SSLC Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that upon assumption of the Enron- SSLC Debt Obligations by SSLC, EFP assumed the Enron-SSLC Debt Obligations pursuant to a Supplemental Assumption Agreement, dated as of July 27, 2000 (the "SSLC Supplemental Assumption Agreement"), between SSLC and EFP, and such assumption by EFP and the execution and delivery of the SSLC Supplemental Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that as a result of the SSLC Assumption Agreement and the SSLC Supplemental Assumption Agreement, the Company has not been released from the Enron- SSLC Debt Obligations; RESOLVED FURTHER, that the initial $1,000 cash capital contribution and the proposed additional capital contribution by Enron Caribbean Basin LLC, a Delaware limited liability company ("ECB"), of 10,900 Ordinary shares, $1.00 par value per share, of Enron LNG Power (Atlantic) Ltd., a Cayman Islands company ("Enron LNG"), owned by ECB to EFP, pursuant to a transfer of share/stock power (the "Enron LNG Contribution") be, and hereby is, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that in connection with the Enron LNG Contribution, Atlantic Commercial Finance, Inc., a Delaware corporation ("ACFI"), will assume approximately $120 million of debt of the Company (the "Enron-ACFI Debt Obligations"), which debt will be assumed pursuant to an Assumption Agreement (the "ACFI Assumption Agreement") between the Company and ACFI, and such assumption by ACFI of the Enron-ACFI Debt Obligations and the execution and delivery by the Company of the ACFI Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that upon assumption of the Enron- ACFI Debt Obligations by ACFI, ECB will assume the Enron-ACFI Debt Obligations pursuant to a Supplemental Assumption Agreement (the "ECB Supplemental Assumption Agreement"), between ACFI and ECB, and such assumption by ECB of the Enron- ACFI Debt Obligations and the execution and delivery of the ECB Supplemental Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; 10 E0004392179 EXH005-02353 ============= Page 34 of 128 ============= RESOLVED FURTHER, that upon assumption of the Enron- ACFI Debt Obligations by ECB, EFP will further assume the Enron- ACFI Debt Obligations pursuant to a Supplemental Assumption Agreement (the "EFP Supplemental Assumption Agreement"), between ECB and EFP, and such assumption by EFP of the Enron- ACFI Debt Obligations and the execution and delivery of the EFP Supplemental Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that as a result of the ACFI Assumption Agreement, the ECB Supplemental Assumption Agreement, and the EFP Supplemental Assumption Agreement, the Company has not been released from the Enron-ACFI Debt Obligations; RESOLVED FURTHER, that an additional capital contribution by the Company of 11,500,000 shares of common stock, $0.01 par value per share, of EOG Resources Inc., a Delaware corporation formerly known as Enron Oil & Gas Company ("EOG"), owned by the Company to EFP, pursuant to an irrevocable stock power (the "EOG Contribution") be, and hereby is, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that in connection with the EOG Contribution, EFP will assume approximately $440 million of debt of the Company (the "Enron-EOG Debt Obligations"), which debt may include assumption by EFP of the obligations of the Company under 11,500,000 Exchangeable Notes issued by the Company on August 17, 1999 (commonly referred to as ACES), which debt will be assumed pursuant to an Assumption Agreement (the "Enron-EFP Assumption Agreement") between the Company and EFP, and such assumption by EFP of the Enron-EOG Debt Obligations and the execution and delivery by the Company and EFP of the Enron-EFP Assumption Agreement be, and hereby are, authorized, approved, ratified, and confirmed; RESOLVED FURTHER, that in connection with the EOG Contribution, the Company, EFP, and EOG will enter into a Consent and Amendment Agreement for the purposes of (i) providing consent by EOG to the proposed EOG Contribution by the Company to EFP under the Share Exchange Agreement, dated as of July 19, 1999 ("Share Exchange Agreement"), between the Company and EOG, (ii) acknowledging and agreeing to the standstill, voting, and other provisions applicable to Enron and EFP under the Share Exchange 11 E0004392180 EXH005-02354 ============= Page 35 of 128 ============= Agreement, and (iv) extending such provisions until July 31, 2002 (the maturity date of the ACES obligations); RESOLVED FURTHER, that as a result of the Enron-EFP Assumption Agreement, the Company will not be released from the Enron-EOG Debt Obligations; RESOLVED, that following implementation of the actions contemplated by the foregoing resolutions, and pursuant to Section 351 of the Internal Revenue Code, as amended, the Company will convey to ECIC 95% of its membership interests in EFP in exchange for shares of stock of ECIC of equivalent value; RESOLVED FURTHER, that in order to provide financing and liquidity for construction and operation of the new Enron Building in Houston, Texas and to facilitate other businesses and financings of the Company, the Company is hereby authorized, in its own capacity and in its capacity as Managing Member of EFP, to: (a) cause EFP to loan funds to one or more third parties or to the Company or to affiliates of the Company, or receive as a loan, contribution, or investment funds by one or more third parties, the Company, or affiliates of the Company, in connection with the business of EFP and the Company; (b) seek the participation or investment by any affiliated or unaffiliated investors, and cause the issuance and/or sale of equity or debt securities or membership interests in EFP in such amounts and at such times as determined by the Company, which issuances may be to an affiliate of the Company or to an investor or investor group not affiliated with the Company; (c) engage any financial, legal, or other advisors to implement financings, loans, and issuances of equity or debt securities or membership interests for EFP, the Company, or their respective affiliates; and (d) form and capitalize all entities necessary or appropriate to effectuate the foregoing transactions. 12 E0004392181 EXH005-02355 ============= Page 36 of 128 ============= RESOLVED FURTHER, that the Company hereby authorizes the implementation of all actions necessary or appropriate to accomplish the purposes of the foregoing resolution, including, without limitation, (i) the creation of entities (including, but not limited to, corporate entities, limited liability companies, branches, and/or partnerships under the laws of the United States, the states thereof, and foreign jurisdictions), (ii) the issuance of or purchase of shares or other interests by the Company, EFP, and their respective subsidiaries and affiliates, (iii) contributions of capital to EFP and to subsidiaries and affiliates of EFP and the Company, (iv) transfers by the Company, EFP, or their respective subsidiaries or affiliates of receivables or other assets (including, without limitation, third party, Company, EFP, or their respective subsidiaries' or affiliates' notes or other financial obligations), (v) making guarantees and indemnifications by the Company, EFP, or their respective subsidiaries or affiliates, (vi) borrowing or providing lending by the Company, EFP, or their respective subsidiaries or affiliates, (vii) acquisitions of securities of the Company, EFP, or their respective subsidiaries or affiliates, and (viii) the sale of securities by the Company, EFP, or their respective subsidiaries or affiliates to third parties, all of the foregoing subject to the applicable charter and governing documents of the Company, EFP, and their respective subsidiaries and affiliates, and the execution and delivery of contractual agreements as deemed necessary or appropriate and approved and executed by officers or representatives of the Company or EFP acting on the advice of counsel, which is hereby authorized and which shall be conclusively evidenced by their signatures on documents intended to be final documents; RESOLVED FURTHER, that a Committee of the Board consisting of Kenneth Lay and Jeffrey Skilling (with Kenneth Lay to serve as chairman) be, and hereby is, constituted under Section 3, Article IV of the Company's Bylaws with full power and authority on behalf of the Board (except as otherwise contemplated by Section 6, Article IV of the Company's Bylaws) to: (a) settle and approve the terms and authorize execution on behalf of the Company of such additional documents relating to the transaction undertaken or proposed to be undertaken by the foregoing resolutions as may be required or necessary in order to enable the Company and its affiliates to fulfill their respective obligations in connection with the foregoing resolutions; 13 E0004392182 EXH005-02356 ============= Page 37 of 128 ============= (b) pay or authorize the payment of all fees, expenses, or charges incurred by or on behalf of the Company or its affiliates in connection with the transactions contemplated by the foregoing resolutions, including (but without limitation) the fees and expenses of the Company's and its affiliates' financial, legal, and professional advisers; and (c) take any and all such further action as they shall deem necessary or desirable in connection with the transactions contemplated by the foregoing resolutions; RESOLVED FURTHER, that the Chairman of the Board, any Vice Chairman of the Board, the President or any Vice President (including any Executive Vice President, Senior Vice President, or Vice President), the Treasurer or any Deputy Treasurer of the Company and its counsel be, and each hereby is, authorized, empowered, and directed (and 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 and/or EFP, under their respective corporate seals 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 or representative 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; 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. Ms. Carter then stated that at the August 7, 2000 meeting the Finance 14 E0004392183 EXH005-02357 ============= Page 38 of 128 ============= Committee had approved for recommendation to the Board that Messrs. Lay or Skilling have the authority to approve the following items after final review and completion of definitive documents: 1) Enron South America's ("ESA's") RioGen project, a project to build, own, and operate a 355-megawatt skid mounted merchant power plant near Rio de Janeiro, Brazil, 2) the financing related to ESA's Cuiaba Integrated Energy Project ("Cuiaba"), and 3) the Company's participation, on an equal basis with Shell, in the purchase of Transredes' interest in Cuiaba. Following a discussion, upon motion duly made by Mr. Blake, seconded by Mr. Urquhart, and carried, the following resolutions were approved: Enron South America Rio Gen Project WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that Enron South America LLC and certain of its wholly-owned subsidiaries (and affiliates) (the "Project Participants") build, own, and operate a 355MW skid mounted merchant power plant near Rio de Janeiro, Brazil (the "Project"), the total cost of which project is estimated to be US$230 million dollars; and WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that approvals be granted, as set forth below, in connection with its development of the Project; NOW, THEREFORE, IT IS RESOLVED, that the appropriate officers of the Company and/or the Project Participants be, and hereby are, authorized to execute, deliver, and perform the obligations of all agreements in connection with the Project, including engineering, procurement, and construction contract(s) with the Project's turnkey construction contractor, joint venture, shareholder, and participation agreements with other project participants, operations and maintenance, fuel supply, power purchase, and tolling agreements, financing and loan agreements with various project lenders, and other various agreements related to the Project; 15 E0004392184 EXH005-02358 ============= Page 39 of 128 ============= RESOLVED FURTHER, that the Company and/or the Project Participants be, and hereby are, authorized to make equity contributions in order to fund construction of the Project in the amount of up to US$230,000,000; RESOLVED FURTHER, that the officers, directors, and authorized legal representatives of the Company and the Project Participants be, and hereby are, authorized to execute and deliver such other certificates, powers of attorney, affidavits, agreements, assignments, documents, guarantees, and instruments as are required in connection with the above-referenced Project; RESOLVED FURTHER, that all actions heretofore taken by the officers and representatives of the Company and the Project Participants with respect to the transactions contemplated above be, in all respects, approved, confirmed, and ratified; and RESOLVED FURTHER, that the proper officers of the Company and the Project Participants 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 and the Project Participants, under a 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 the foregoing resolutions. 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. E0004392185 16 EXH005-02359 ============= Page 40 of 128 ============= Enron South America Cuiaba Contingent Support WHEREAS, certain wholly-owned subsidiaries of the Enron South America LLC, including Enron do Brazil Holdings Ltd. and Enron Brazil Power Holdings I Ltd. (the "Enron Project Participants"), have participated with Shell Cuiaba Holdings Ltd. and Shell Gas (Latin America) B.V. (together with their affiliates, "Shell") in the development and ownership of the Cuiaba Integrated Energy Project (the "Cuiaba Project" or the "Project"); WHEREAS, in order to secure funding for the Cuiaba Project, the Project Participants and Shell, along with their jointly owned subsidiaries involved in the Project, have entered into a Common Terms Agreement dated as of September 30, 1999, with Overseas Private Investment Corporation, Kreditanstalt fur Wiederaufbau, the banks or other financial institutions that become parties thereto, Citibank, N.A., Bolivia, Citibank, N.A., Brazil, and Citibank, N.A. (the "Lenders"), as amended by Amendment No. 1 to Common Terms Agreement, dated as of July 21, 2000, and also various mortgages, loan agreements, security documents, and other documents required in connection with the financing (the "Project Financing"); and WHEREAS, the Lenders have required the following guarantees and pledges in connection with the Project Financing: (i) guarantee of the fuel supply to the Cuiaba Project through May 31, 2003, with the subsequent guarantee of outstanding debt of the Project if the Project is unable to obtain an adequate replacement fuel supply (the "Fuel Standby Arrangement"); (ii) indemnification of the Lenders against potential debt service deficiencies resulting from inadequate prior approval by the Banco Central do Brasil (the "Central Bank") for U.S. dollar accounts and cross-guarantees required by the Lenders (the "Central Bank Indemnity"); (iii) sponsor support for cost overruns associated with change orders and delays under the Project's construction contracts (the "Contingent Equity Guarantee"); (iv) guarantee of the Enron Project Participants' contributions to the Chiquitano Forest Conservation Foundation Program in Bolivia (the "NGO/Chiquitano Foundation Support"); (v) liquidity support to the power plant portion of the Cuiaba Project in the event of an economic equilibrium event until the Project is reimbursed for such event under the Project's Power Purchase Agreement (the "Liquidity Facility"); and (vi) guarantee of potential gas price differential resulting from index price differences between the Project's Power Purchase Agreement and its Gas Supply 17 E0004392186 EXH005-02360 ============= Page 41 of 128 ============= Agreement (the "Gas Price Floor"); NOW, THEREFORE, IT IS RESOLVED, that the guarantees required in connection with the Cuiaba Project are approved up to the following amounts: the Fuel Standby Arrangement in an amount up to US$365,000,000; the Central Bank Indemnity in an amount up to US$262,400,000; the Contingent Equity Guarantee in an amount up to US$100,240,000; the NGO/Chiquitano Foundation Support in an amount up to US$12,250,000; the Liquidity Facility in an amount of US$14,375,000; and the Gas Price Floor in an amount up to US$2,200,000 per annum; RESOLVED FURTHER, that the directors, officers, and attorneys-in-fact of the Company and the Enron Project Participants are hereby authorized, empowered, and directed (any one of them acting alone) to take any and all such actions necessary to execute and deliver all instruments and documents in support the Cuiaba Project and the Project Financing, under 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 and that all actions heretofore taken by the directors, officers, and attorneys-in- fact of the Company and the Enron Project Participants with respect to the transactions contemplated above be, in all respects, approved, confirmed, and ratified; 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. Enron South America Cuiaba Buy-Out WHEREAS, certain wholly-owned subsidiaries of the Enron South America LLC, including Enron do Brazil Holdings Ltd. (the "Project Participants") have participated with Shell Cuiaba Holdings Ltd. and Shell Gas (Latin America) B.V. (together with their affiliates, "Shell") in the development and ownership of the Cuiaba Integrated Project (the "Cuiaba Project), including partial ownership of Transredes-Transporte de Hidrocarburos S.A. ("Transredes"); 18 E0004392187 EXH005-02361 ============= Page 42 of 128 ============= WHEREAS, Transredes currently holds a participation in the Cuiaba Project consisting of 12.5% of EPE - Empresa Produtora de Energia S.A., 12.5% of GasOcidente do Mato Grosso Ltda. and 40% of GasOriente Boliviano Ltda., and Shell has made a firm offer to purchase all of such interests and has granted the Project Participants the opportunity to participate with Shell in such offer on a 50:50 basis (i.e., to purchase up to 50% of Transredes' interest in the Cuiaba Project) (the Buyout"); and WHEREAS, it is now in the best interests of the Company for the Project Participants to acquire this additional interest in the Cuiaba Project; NOW, THEREFORE, IT IS RESOLVED, that the Board of Directors hereby approves the purchase of up to 50% of Transredes' ownership in the Cuiaba Project; RESOLVED FURTHER, that the appropriate officers of the Company and/or the Project Participants be, and hereby are, authorized to execute, deliver, and perform the obligations of all agreements necessary or desirable in connection with the Buyout; RESOLVED FURTHER, that the Company and/or the Project Participants be, and hereby are, authorized to participate in the Buyout in the amount of up to US$59,600,000; RESOLVED FURTHER, that the officers, directors, and authorized legal representatives of the Company and the Project Participants be, and hereby are, authorized to execute and deliver such other certificates, powers of attorney, affidavits, agreements, assignments, documents, guarantees, and instruments as are required in connection with the above-referenced Buyout; RESOLVED FURTHER, that all actions heretofore taken by the officers and representatives of the Company and the Project Participants with respect to the transactions contemplated above be, in all respects, approved, confirmed, and ratified; and RESOLVED FURTHER, that the proper officers of the Company and the Project Participants 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 and the Project Participants, 19 E0004392188 EXH005-02362 ============= Page 43 of 128 ============= under a 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 the foregoing resolutions. Mr. Lay called upon Lord Wakeham to report on the Nominating and Corporate Governance Committee meeting held on August 7, 2000. Lord Wakeham stated that the Committee had discussed two individuals and he distributed the candidates' curriculum vitaes. He stated that the first individual had previously held a key position in Mexico's energy industry, was known by Messrs. Lay and Skilling, and was believed to have had extensive international business experience. He noted that no discussions had been held with the candidate and a discussion of the candidate by the Board ensued. He noted that the Committee had approved a continuation of the gathering of information regarding the potential candidate and, pending the outcome of receipt of additional information, having discussions with him regarding a possible Board membership. Lord Wakeham then called upon Mr. Lay to discuss Mr. Richard N. Foster. Mr. Lay stated that Mr. Foster, currently a Senior Partner and Director of McKinsey & Co., Inc., ("McKinsey"), had recently joined him on the board of directors of a private company, Trust Company of the West. He discussed Mr. Foster's background and a book, Innovation: The Attacker's Advantage, which Mr. Foster had written. Mr. Skilling noted that he had worked with Mr. Foster at McKinsey and discussed Mr. Foster's abilities and expertise in areas relevant to the Company. Mr. Lay stated that due to the nature of Mr. Foster's responsibilities at McKinsey he would not be able to join the Company's Board. He stated that the Nominating and Corporate Governance Committee had recommended that Mr. Foster become an advisor to the Company's Board and attend the Board meetings but have no voting privileges. Following a discussion, the Board unanimously approved offering Mr. Foster a position as an advisor to the Board. Mr. Lay then discussed the October Board meeting. He noted that the meeting was scheduled to take place in South America but due to the ongoing negotiations regarding Project Summer, a proposed transaction to sell certain of the Company's international assets previously discussed with the Board, he wanted to discuss the location with the Board. Ms. Carter distributed a handout outlining the proposed budget for the South American Board meeting, a preliminary budget for holding the meeting at an alternate site in North America, and a list of possible locations. Following a discussion, the Board unanimously agreed to hold the meeting in North America. Mr. Lay recessed the executive session at 9:15 p.m., C.D.T., on August 7, 2000 and reconvened the meeting at 8:00 a.m., C.D.T., on August 8, 2000 at the Enron Building in Houston, Texas. All of the Directors noted in attendance on the 20 E0004392189 EXH005-02363 ============= Page 44 of 128 ============= previous evening returned to the meeting and Messrs. J. Clifford Baxter, Causey, and Fastow and Ms. Carter also attended the session. Mr. Lay changed the agenda to begin with an update on Project Summer and called upon Mr. Skilling to begin the discussion. Mr. Skilling gave a general overview of the Project Summer transaction and provided an update on the status of negotiations. He discussed the Company's rationale for considering the transaction and commented on the potential upside that the Company would be forgoing by selling the assets. He then called upon Mr. Baxter to discuss the specifics of the proposed transaction. Mr. Baxter discussed the background of the leader of the investment group seeking to purchase the Project Summer assets, the current contract specifics, and certain ongoing obligations of the Company that would be in place if the transaction were completed. He then commented on the proposed capital structure for the transaction, the transition services that would be provided by the Company, and the timing of the different steps in the closing of the transaction. Ms. Mark left the meeting following Mr. Baxter's presentation. Mr. Skilling discussed the regional valuation breakdown of the Project Summer assets and the reasons the sale would be desirable for the Company and the purchaser. He briefly discussed management's current recommendation regarding the Company's dividend level if the Project Summer transaction were completed and the potential options regarding the use of the proceeds from the transaction. Messrs. Baxter and Lay joined him in answering questions from the Board regarding Project Summer. Mr. Lay ended the executive session at 9:30 a.m., C.D.T., and reconvened the meeting in open session at 9:45 a.m., C.D.T. Messrs. William A. Cordes, Robert A. Hill, Stanley C. Horton, Mark E. Koenig, Danny J. McCarty, Rockford G. Meyer, James C. Prentice, and Joseph W. Sutton and Mesdames Rosalee T. Fleming and Louise J. Kitchen, all of the Company or affiliates thereof, joined the meeting. Mr. Lay called upon Mr. Skilling to begin his presentation, a copy of which is filed with the records of the meeting. Mr. Skilling reviewed the Company's second quarter performance, including revenues, net income, and earnings per share. He discussed the Wholesale Energy Operations and Services business unit's significant increase from the prior year's second quarter in physical volumes, financial settlements, and income before interest and taxes. He commented on the Company's North American and European wholesale gas and power networks and the power volumes marketed during the quarter. He presented a chart displaying the daily transactions conducted by EnronOnline since its inception and he noted that during the month of June 59% of the 21 E0004392190 EXH005-02364 ============= Page 45 of 128 ============= Company's transactions were conducted via EnronOnline. He noted that the Company was the leading energy marketer in North America in both natural gas and power during the second quarter. Mr. Skilling then discussed Enron Energy Services, LLC ("EES") and the total contract value of transactions signed during the second quarter. He noted that EES had positive income before interest and taxes the last three quarters and he discussed recent contracting activity. He then discussed Enron Broadband Services, Inc. ("EBS") and the status of the Enron Intelligent Network's fiber, servers, and pooling points. He commented that EBS had streamed the Wimbledon telecast and over 90 countries had logged on to view the matches. He then discussed the Company's recent transaction with Blockbuster Video and he noted that it has impacted the Company's strategy regarding the "last mile of service". He stated that EBS was currently using DSL because it was more readily available but noted that the Company was considering other alternatives. He then discussed EBS' competitors in the different areas where it does business and commented on the top tier cities/markets where EBS was currently making prices available. He stated that EBS's year-to-date volumes were already ahead of the total volumes targeted for the year. Mr. Fastow left the meeting following Mr. Skilling's presentation and Mr. Skilling called upon Ms. Kitchen to discuss Enron Net Works. A copy of Ms. Kitchen's presentation is filed with the records of the minutes. Ms. Kitchen discussed the current market conditions that were leading to opportunities for Enron Net Works, including the legacy distribution channels that were currently utilized to sell commodity products, the lack of price transparency and pricing inefficiencies in the distribution channels, and the ability of the internet to provide immediate and inexpensive access to customers. She noted that the Company had the market making, risk management, back office, and eCommerce platform capabilities required to capture additional marketing opportunities. She stated that the Company had already modified and customized EnronOnline to accommodate additional commodities that were traded in vertical markets. She discussed Enron Net Work's target markets and its approach to entering those markets by streamlining the processes involved in transacting, increasing the Company's market share, and establishing positions in new markets. She noted that the Company was currently targeting the metals, pulp and paper, steel, lumber, credit/finance, data storage, settlements, and logistics markets. She commented on recent Net Works transactions and noted that Clickpaper.com was an example of a vertical market that Net Works was entering with customized and personalized content made available to the users. She stated that Net Works was also making its prices available on other exchanges, the majority of which are fee-based, in an effort to increase the liquidity of the markets. She discussed Net Works funding plan and noted that there were targeted investors for each of the vertical markets the Company was pursuing and 22 E0004392191 EXH005-02365 ============= Page 46 of 128 ============= that limited Company financial support would be required. Mr. Skilling joined Ms. Kitchen in answering questions from the Board regarding Enron Net Works. Mr. Causey and Ms. Kitchen left following the presentation and Mr. Lay called upon Mr. Horton to begin the Enron Gas Pipeline Group ("GPG") presentation, a copy of which is filed with the records of the meeting. Mr. Horton stated that GPG's mission was to be the leading energy transportation service company in North America offering innovative, efficient, safe, and reliable services for its customers. He discussed GPG's return on invested capital and noted that the base return was currently 18% but taking other items into consideration led to an implied return ranging from 24% to 50%. He commented on GPG's earnings before interest and taxes and items that would contribute to revenue growth in the future, including certain development projects, new services, and eCommerce and eBusiness initiatives. He called upon Mr. Cordes to discuss Northern Natural Gas Company ("NNG"). Mr. Cordes stated that NNG had undertaken efforts to monetize the value of its base gas in storage by selling the gas and then purchasing a gas balancing arrangement to functionally replace the base gas. He stated that NNG had a team working on the development of market area power plants and noted that the plants would primarily be off-peak, summertime plants. He commented on Transwestern Pipeline Company's ("Transwestern") average throughput over the last five years, an expansion project that was placed in-service on May 1, 2000, and certain new interconnects to power plant markets east of California that would be in-service by the second quarter of 2001. He discussed the natural gas capacity and demand in the state of California and noted that new capacity would be needed in the next five years. He commented on proposed power plant projects that could be built along Transwestern's system and stated that this could lead to increased throughput on Transwestern. He discussed the subscribed and unsubscribed capacity on the system and the Company's view regarding the market over the next five years. He then discussed the remaining terms and conditions to be finalized to extend Transwestern's Navajo right-of-way and GPG's utilization of EnronOnline to offer capacity bidding. Mr. Horton then called on Mr. Meyer to discuss Florida Gas Transmission ("FGT"). Mr. Meyer discussed FGT's Phase IV market area expansion, including the contracted volumes, projected costs, anchor customer, constructions status, and targeted in-service date. He then discussed the Phase V expansion and noted that the additional capacity would be needed to meet electric generation requirements. He stated that an amended application was filed with the Federal Energy Regulatory Commission ("FERC") in August and that the expansion was anticipated to be in-service in April of 2002. He noted that FGT was meeting with customers regarding a Phase VI expansion, targeted to repowering projects and independent power producer's merchant plants, and he discussed the projected 23 E0004392192 EXH005-02366 ============= Page 47 of 128 ============= capital requirements and the anticipated in-service date. He commented on the potential competing pipelines in the area and noted that certain recent court decisions could impact the potential for new pipelines. Mr. Horton then called on Mr. Hill to discuss Northern Border Partners ("NBP"). Mr. Hill discussed Northern Border Project 2000, a 34-mile extension with a capacity of 544 MMcf per day, and noted that it would strategically position NBP in certain industrial markets and for future projects. He noted that NBP had reached a settlement in principle regarding its rate case filed with the FERC and that NBP was currently drafting stipulation and tariff sheets. He then discussed NBP's purchase of a gathering system that would expand NBP's diversification into the non-regulated fee for service areas and NBP's project 20/20, the purchase of ENA's interest in certain gas gathering assets. Mr. Horton then called on Mr. Prentice to discuss Enron Clean Fuels ("ECF" ). Mr. Prentice stated that MTBE margins had strengthened considerably over the last few months and were currently considerably higher than plan. He noted that methanol margins had also increased but higher natural gas prices during June and July had reduced the margins somewhat. He commented on the current political environment for MTBE and stated that several bills had been introduced in both the Congress and certain state legislatures seeking to curtail the use of MTBE. He then commented on efforts to divest the Company's ECF business. Mr. Horton then summarized GPG's presentation and noted that GPG was on target to meet its 2000 objectives and positioned to remain the leading energy transportation services company. Mr. Lay then stated that the declaration of dividends payable for the third quarter of 2000 would be postponed until a later meeting and called upon Mr. Skilling to discuss general corporate matters and other business for consideration by the Board. Mr. Skilling noted that due to recent reorganizations and promotions there were certain individuals that needed to be elected as corporate officers. Following a discussion, upon motion duly made by Mr. Urquhart, seconded by Dr. LeMaistre, and carried, the following resolution was 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: Cedric R. Burgher Vice President, Investor Relations Rodney L. Faldyn Vice President, Transaction Accounting 24 E0004392193 EXH005-02367 ============= Page 48 of 128 ============= Christie A. Patrick Vice President, Public Affairs James D. Steffes Vice President, Public Affairs Michael F. Terraso Vice President, Environmental, Health & Safety & Chief Environmental Officer Mr. Skilling then noted that EES was proposing a transaction to acquire all of the outstanding equity interests of Integrated Process Technologies, LLC ("IPT"), a web-based vendor management network used to dispatch heating, ventilation, and air conditioning ("HVAC") service providers and to process data to provide preventive maintenance of HVAC equipment. He discussed IPT's customers and the specifics of the transaction. Following a discussion, upon motion duly made by Mr. Urquhart, seconded by Mr. Blake, and carried, the following resolutions were approved: WHEREAS, Enron Corp. (the "Company") desires to acquire all of the outstanding equity interests of Integrated Process Technologies, LLC ("IPT"); WHEREAS, Enron Energy Services Operations, Inc. ("EESO") has entered into a letter of intent dated July 12, 2000, with Gary A. Weiss ("Weiss") providing, among other things, for the acquisition by the Company of all of the outstanding capital stock of Weiss Holding Company, which owns 49% of the equity interests of IPT in exchange for the issuance of $15 million worth of shares of Common Stock of the Company to Weiss; WHEREAS, it is contemplated that in connection with the transaction an aggregate of approximately $6.5 million to $11.5 million of Company stock options will be issued to Weiss and certain other key employees; and WHEREAS, EESO has entered into a letter of intent dated July 12, 2000, with HSB Group, Inc. ("HSB Group") providing, among other things, for the acquisition by the Company of 51% of the outstanding equity interests of IPT in exchange for the issuance of $13.5 million worth of shares of Common Stock of the Company to HSB Group; NOW, THEREFORE, IT IS RESOLVED, that the Company shall negotiate the aforesaid transactions (the "Transactions") and that the definitive contracts and agreements relating to the Transactions shall have such terms and conditions as may be negotiated and approved by an officer of the Company or other person authorized and empowered to act pursuant to these resolutions, the execution of which by any such officer or person, in 25 E0004392194 EXH005-02368 ============= Page 49 of 128 ============= the name and on behalf of the Company, shall be conclusive evidence of the approval by such officers or person of the contents thereof; RESOLVED FURTHER, that each of the Chairman and Chief Executive Officer, the President and Chief Operating Officer, any Vice Chairman, any Managing Director, 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 Transactions, including, without limitation, the authorization, execution, and delivery of agreements providing for either or both of the Transactions, which agreements may provide for, among other things, the registration of any shares of Company Common Stock that may be delivered by the Company in connection with the Transactions, with such terms and conditions as such officer shall approve; RESOLVED FURTHER, that the Board of Directors hereby approves the issuance of up to $20 million worth of shares of Common Stock of the Company to Weiss in consideration for the purchase of all of the outstanding capital stock of Weiss Holding Company and that upon any such issuance in accordance with the terms of definitive agreements relating to the Transactions, such shares of Company Common Stock shall be validly issued, fully paid, and non-assessable; RESOLVED FURTHER, that the Board of Directors hereby approves the issuance of up to $13.5 million worth of shares of Common Stock of the Company to HSB Group in consideration for the purchase of 51 % of the outstanding equity interests of IPT and that upon any such issuance in accordance with the terms of definitive agreements relating to the Transactions, such shares of Company Common Stock shall be validly issued, fully paid, and non-assessable; RESOLVED FURTHER, that if required in connection with the Transactions the officers of the Company be, and they hereby are, authorized, empowered, and directed to cause to be prepared, executed, and filed with the Securities and Exchange 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 26 E0004392195 EXH005-02369 ============= Page 50 of 128 ============= 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, the Company may make application to the New York Stock Exchange, Inc. and one or more other national securities exchanges for listing of the Enron Common Stock to be issued in the Transactions; that the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, any Managing Director, or any Vice President 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 any necessary exchanges, to appoint any banking or other institution as an agent of the Company for any purpose, and to do so 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; 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 therefore 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 and employees of the Company acting under the supervision of the officers 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, or direct the taking of such action or the doing of such things by employees of the Company acting under the supervision of the officer(s) as may be deemed by any of them to be necessary or advisable to effectuate the Transactions, 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, 27 E0004392196 EXH005-02370 ============= Page 51 of 128 ============= 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. Skilling then distributed a suggested form of resolutions relating to a proposed risk management program, Raptor III. He stated that management was proposing Raptor III to provide for the creation of up to two additional structures and related risk management transactions. He stated that Raptor III would be similar in structure to Raptor I and Raptor II, approved by the Board at the May 2, 2000 meeting and by the Executive Committee at the June 22, 2000 meeting, respectively. He noted that Raptor III would provide additional mechanisms to hedge the profit and loss volatility of the Company's investments. Following a discussion, upon motion duly made by Mr. Meyer, seconded by Mr. Ferraz, and carried, the following resolutions were approved: WHEREAS, Enron Corp. (the "Company") desires to authorize the creation of up to two additional structures and related risk management transactions similar to those approved by the Company's Board of Directors on May 2, 2000 involving Harrier I LLC and Talon I LLC and by the Executive Committee of the Company's Board of Directors on June 22, 2000 involving Harrier II LLC and Talon II LLC, including, without limitation, (1) the issuance by each of one or more existing or newly organized subsidiaries of the Company (each a "Subsidiary") of a debt security (each a "Subsidiary Note") in consideration of (a) the execution and delivery of a Master Agreement described below and a Security Agreement described below, and (b) the contemporaneous issuance to Subsidiary by one or more entities (each an "Entity") owned or to be owned directly or indirectly by LJM2 Co-Investment, L. P. (together with its subsidiaries and affiliates, "LJM2") or another third-party entity and Subsidiary of (i) an equity interest in Entity, and (ii) a debt security having a like tenor to the subject Subsidiary Note (each an "Entity Note"), (2) the guarantee by the Company of the indebtedness of each Subsidiary under its Subsidiary Note and the performance of the obligations of Subsidiary under the subject Entity Derivatives and the Securities Agreement described below, (3) the guarantee by the Company of the performance of a Subsidiary's obligation to purchase LJM2's (or other third-party entity's) interest in an Entity upon the occurrence of certain events set forth in the subject Entity constitutional documents, (4) the entry by the Company or Subsidiary into a series of agreements with 28 E0004392197 EXH005-02371 ============= Page 52 of 128 ============= Entity providing for the risk management by the Company against (a) fluctuations in value of, or returns receivable in respect of, equity securities (and derivatives with respect thereto) designated by the Company or its subsidiaries and affiliates, including, without limitation, equity securities acquired or to be acquired by the Company in connection with its broadband activities and merchant assets generated in the Company's wholesale business, and (b) fluctuations in value of a number of shares of Common Stock of the Company to be agreed between the Company and LJM2 (or other third-party entity, if applicable) from a price to be established by agreement between the Company and LJM2 (or other third-party entity, if applicable) (each an "ENE Derivative"), through the execution of a master agreement and related derivative securities and risk management transactions under the terms agreed in the documents to be executed in connection with the transaction, and (5) as partial consideration for the issuance of a Subsidiary Note and equity interest in an Entity to a Subsidiary, the entry by such Subsidiary and Entity into an agreement (each a "Securities Agreement") granting Entity the right to acquire an agreed number of shares of Common Stock of the Company in which Subsidiary will own (after giving effect to the transactions contemplated by these resolutions) an indirect beneficial interest, and (6) any types or combinations of transactions or series of transactions similar to those outlined in (1) through (5) of this paragraph (transactions (1) through (6) collectively referred to herein as the "Transactions"). NOW, THEREFORE, IT IS RESOLVED, that the Transactions, including without limitation, the execution and delivery by each Subsidiary of a Subsidiary Note, an Entity Derivatives described below, and a Securities Agreement, the execution and delivery by the Company of each ENE Derivative and the guarantee agreements referred to above and the acquisition by any Entity of shares of Company Common Stock, if any, issued in settlement of an ENE Derivative and a Securities Agreement, are hereby authorized and approved subject to the following terms and conditions (the "Board Conditions"): (i) specific Transactions must be approved and authorized by either the Company's Chairman and Chief Executive Officer or President and Chief Operating Officer; (ii) subject to the immediately preceding clause (i), the definitive contracts and agreements relating to the Transactions shall have such terms and conditions as are negotiated and approved by an officer of the Company or other person 29 E0004392198 EXH005-02372 ============= Page 53 of 128 ============= authorized and empowered to act pursuant to these resolutions, the execution of which by any such officer or person, in the name and on behalf of the Company, shall be conclusive evidence of the approval by such officers or person of the contents thereof; (iii) the maximum aggregate principal amount of each Subsidiary Note or other debt instrument to be issued by a Subsidiary in connection with the Transactions shall not exceed $50 Million and the stated interest rate payable thereon shall not exceed 7%; (iv) the maximum aggregate principal amount of all Subsidiary Notes or other debt instruments contemplated by the immediately preceding clause (iii) shall not exceed $100 Million; (v) the maximum number of shares of Company Common Stock (a) subject to each ENE Derivative shall not exceed 8.0 million shares, and (b) issuable under each Securities Agreement shall not exceed 8.0 million shares; and (vi) the maximum number of shares of Company Common Stock (a) subject to all ENE Derivatives contemplated by the immediately preceding clause (v) shall not exceed 16 million shares, and (b) issuable under all Securities Agreements contemplated by the immediately preceding clause (v) shall not exceed 16 million shares; RESOLVED FURTHER, that each of the Chairman and Chief Executive Officer, the President and Chief Operating Officer, any Vice Chairman, any Managing Director, any Vice President, and the Treasurer or any Deputy Treasurer is hereby authorized, empowered, and directed, with the power and authority of the 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 Transactions (subject, however, in all respects, to the Board Conditions), including, without limitation: (i) all matters insofar as they affect the Company or any of its subsidiaries or affiliates associated with the formation of each Entity and the acquisition by a Subsidiary of an equity interest therein, including, without limitation, the execution 30 E0004392199 EXH005-02373 ============= Page 54 of 128 ============= and delivery of constituent agreements establishing an Entity and the terms thereof and the establishment of the amount and form of any capital contribution to be made to an Entity in respect of a Subsidiary's equity interest therein; (ii) the authorization, execution, and delivery of each guarantee agreement whereby the Company guarantees the indebtedness under a Subsidiary Note and the performance of a Subsidiary's obligations under an Entity Derivatives and a Securities Agreement; (iii) the authorization, execution, and delivery of each guarantee agreement whereby the Company guarantees the performance of a Subsidiary's obligation to purchase LJM2's (or other third-party's) interest in an Entity upon the occurrence of certain events set forth in the Entity constitutional documents; (iv) the authorization, execution, and delivery of one or more master agreements (each a "Master Agreement") providing for the general terms and conditions upon which the risk management activities contemplated by the Transactions will take place, the related form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border), as modified by agreements of the parties and individual confirmations relating to particular transactions (collectively, the "Entity Derivatives"), and the security agreement granting the Company and a Subsidiary a security interest in amounts received by Entity in order to secure Entity's obligations under an Entity Note, Entity Derivatives, and ENE Derivative (each a "Security Agreement"), in each case having such terms and conditions (including, without limitation, pricing terms) as such officer shall approve; (v) the authorization, execution, and delivery of each Subsidiary Note and Securities Agreement, in each case, with such terms and conditions (including, without limitation, pricing terms) as such officer shall approve; (vi) the approval insofar as they affect the Company or any of its subsidiaries or affiliates of each form of note representing an Entity Note and the issuance by an Entity of such Entity Note; 31 E0004392200 EXH005-02374 ============= Page 55 of 128 ============= (vii) the authorization, execution, and delivery of each registration rights agreement between the Company and an Entity providing for, among other things, the registration of any shares of Common Stock of the Company that may be delivered by the Company or its affiliates in performance of an ENE Derivative and a Securities Agreement, with such terms and conditions as such officer shall approve; and (viii) the negotiation, authorization, execution, and delivery of such other agreements, instruments, and documents relating to the Transactions, including, but not limited to, documents relating to each ENE Derivative and 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 Transactions or any other matters addressed by these resolutions; RESOLVED FURTHER, that an aggregate of 16.0 million shares of Company Common Stock are hereby reserved for issuance in settlement of the ENE Derivatives referred to above in the event the Company elects to make settlement thereunder in shares of Company Common Stock; RESOLVED FURTHER, that the Company is authorized to issue such shares of Common Stock of the Company in settlement of ENE Derivatives, and to offer and sell any such shares delivered in settlement of any Securities Agreement and that upon any such issuance in accordance with the terms of the subject ENE Derivative and Securities Agreement, such shares of Common Stock shall be validly issued, fully paid, and non-assessable; RESOLVED FURTHER, that if it is deemed necessary or advisable by the officers of the Company that the Common Stock issuable upon settlement of an ENE Derivative or Securities Agreement 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, 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, and in connection therewith, to execute and file all requisite papers and instruments and to make any and all payments of filing, registration 32 E0004392201 EXH005-02375 ============= Page 56 of 128 ============= 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 if the officers of the Company determine that it is desirable for the Company to do so, the Company may make application to the New York Stock Exchange, Inc. and one or more other national securities exchanges for listing of the Company Common Stock to be issued in the Transactions; that the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive or Senior Vice President, any Managing Director, any Vice President, the Treasurer, or any Deputy Treasurer 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; 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 therefore 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 and employees of the Company acting under the supervision of the officers 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, or direct the taking of such action or the doing of such things by employees of the Company acting under the supervision of the officer(s) as may be deemed by any of them to be necessary or advisable to effectuate the Transactions, 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 33 E0004392202 EXH005-02376 ============= Page 57 of 128 ============= 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. There being no further business to come before the Board, the meeting was adjourned at 11:20 a.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\2000 Minutes\080800.doc 34 E0004392203 EXH005-02377 ============= Page 58 of 128 ============= Compensation Committee Agenda It 0 N N 0) Co 0 0 U W EXH005-02378 ============= Page 59 of 128 ============= Dr. Charles A. LeMaistre - Chairman Mr. Norman P. Blake, Jr. Mr. John H. Duncan Dr. Robert K. Jaedicke Mr. Frank Savage AGENDA MEETING OF THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS ENRON CORP. 3:00 p.m. on Monday, December 11, 2000 The Enron Building - 50th Floor - (50M Dining) Houston, Texas 1. Approve minutes of the meeting held on October 6, 2000. 2. Discuss the Towers Perrin 2000 Annual Incentive Plan Review and approve the preliminary 2000 Annual Incentive Plan funding recommendation. 3. Enron Performance Results. a) Review Total Shareholder Return results relative to the Performance Unit Plan. b) Review Enron's performance relative to the S&P 500 for the Executive Compensation Long-Term Incentive Program. 4. Stock Plan items. a) Approve EnronOptions operating guidelines. b) Approve Black-Scholes ratios. c) Approve Fifth Amendment to the Enron Corp. 1994 Stock Plan (as amended and restated October 12, 1999) for recommendation to the Board of Directors d) Stock Utilization Report. 5. Other Business. 6. Executive Session. a) Quarterly update of Policy and Executive Committee compensation values. 7. Adjournment. E0004392205 EXH005-02379 ============= Page 60 of 128 ============= 2(a) CD 0 N N 0) Cr) 0 0 U w EXH005-02380 ============= Page 61 of 128 ============= AGENDA ITEM 2(a) (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 12, 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. K:\a Minutes\2000 Minutes\12122000\5TH AMEND 1994 STOCK PLAN.doc E0004392207 EXH005-02381 ============= Page 62 of 128 ============= 00 O N N O C*o O O U W Audit Committee Agenda EXH005-02382 ============= Page 63 of 128 ============= Dr. Robert K Jaedicke, Chairman Mr. Ronnie C. Chan 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 Corp. 2:00 p.m. (CDT), December 11, 2000 Boardroom - Enron Building Houston, Texas 1. Approve minutes of meeting of the Audit Committee held on October 6, 2000. - Dr. Jaedicke. 2. 2000 Internal Controls Update, including update on recent SEC ruling regarding Auditor Independence. -Mr. Causey and Mr. Duncan, Arthur Andersen LLP. 3. 2001 Calendar of Audit Activities. - Mr. Causey. 4. Credit and Market Risk Update. - Mr. Buy 5. Review of Incident Log for Compliance Related Activities. - Mr. Derrick 6. Other business, including executive session with auditors, internal audit and/or management as deemed necessary. - Dr. Jaedicke. E0004392209 EXH005-02383 ============= Page 64 of 128 ============= Audit and Compliance Committee Calendar of 2001 Activities Scheduled Meetings February May August` October December I. Audit Committee Composition and Meetings • Assess independence and financial literacy of audit committee, submit written affirmation to NYSE X _ • Review charter (publish in proxy every 3 years) X • Audit Committee Chair to approve meeting agenda X X X X X • Executive session with auditors, internal audit, management, committee X * * * e • Maintain minutes and report to Board X X X X X II. Audit Committee Responsibilities and Duties • Recommend appointment of auditors X • Approve audit fees X • Discuss auditor independence, obtain written statement of all relationships X X • Review plans for financial statement audit X • Review annual financial statements prior to release- discuss with mgmt, auditors X • Discuss quality of accounting principles-approve major changes X • Review adequacy of financial and EDP internal controls X • Review internal control plan X • Discuss results of year-end audit and other matters required by SAS 61 X • Prepare report to shareholders to be included in the annual proxy X • Review quarterly results and findings prior to filing X X X X • Review policies and practices for management's communications with analysts X • Review/Approve for recommendation to the Board policies and procedures regarding compliance with laws and si nificant olic X • Review credit and market risk with RAC X X X X X • Review legal matters with general counsel X • Conduct special investigations, studies or tests * e * * # • Review director and officer use of aircraft X X = Recommended Timing * = As Needed E0004392210 EXH005-02384 ============= Page 65 of 128 ============= r- N N 0) M O O U w EXH005-02385 ============= Page 66 of 128 ============= AGENDA Meeting of the Finance Committee of the Board of Directors of Enron Corp. 4:00 p.m. (CDT), December 11, 2000 50th Floor Boardroom, Enron Building Houston, Texas 1. Approval of October 6, 2000 Finance Committee Minutes Mr. Winokur 2. Chief Financial Officer Report Mr. Fastow 3. Treasurer Report Mr. Glisan 4. Chief Risk Officer Report Mr. Buy Quarterly Risk Update - Merchant Portfolio Summary - Foreign Exchange Project Update - EES Status Report - Market Risk Update 5. Projects and Amendments A) Revision to the Risk Management Policy Mr. Buy - Approve for Recommendation to the Board B) Revision to the Transaction Approval Process Mr. Buy - Approve for Recommendation to the Board C) Project Inga Mr. Delainey - Approve for Recommendation to the Board D) Fountain Valley Mr. Delainey - Approve for Recommendation to the Board E) Indian Mesa II Mr. Umanoff - Approve for Recommendation to the Board F) Project Texas Mr. Blachman - Approve for Recommendation to the Board G) Eli Lilly Mr. Blachman - Approve for Recommendation to the Board H) Enron Net Works Fund Mr. McMahon - Approve for Recommendation to the Board I) Projects Crane & Canary Mr. McMahon - Approve for Recommendation to the Board J) Cuiaba Mr. Lammers - Approve for Recommendation to the Board 6. Other Business 7. Adjourn E0004392212 0 See Addendum for Deal Approval Sheets approved between Board meetings Finance Committee Meeting EXH005-02386 ============= Page 67 of 128 ============= N N 0) C7 O O U W EXH005-02387 ============= Page 68 of 128 ============= Interoffice Memorandum To: The Finance Committee of the Board of Directors From: Jeff Skilling and Rick Buy Subject: Changes to the Risk Management Policy Department: Risk Assessment and Control Date: December 11, 2000 I. We are recommending BOD approval of the following amendments to the Risk Management Policy: Note: Enron Corp. Aggregate VaR Limit --- NO CHANGE REQUESTED --- $100 MM • Permanent Limit increases to Permanent Commodity Groups within the Trading Portfolio: Additional Proposed Discretionary Existing Permanent Limits * Permanent Pulp & Paper Net Open Position Limit 500,000 MT 300,000 MT Maturity / Gap Limit 500,000 MT 300,000 MT VaR Limit $5 MM $2 MM $3 MM North American Natural Gas Net Open Position Limit 500 Bcf 300 Bcf Maturity / Gap Limit 200 Bcf 3-month 350 Bcf 12-month VaR Limit $60 MM (no change) $60 MM • Permanent Limits requested for Commodity Groups under the Interim Policy: Proposed Discretionary Existing Permanent Limits • Interim Lumber Net Open Position Limit 44 MM Board Feet 44 MM Board Feet " Maturity / Gap Limit 44 MM Board Feet 44 MM Board Feet " VaR Limit $0.5 MM $0.5 MM " Steel Net Open Position Limit 1,500,000 MT 80,000 MT 100,000 MT Maturity / Gap Limit 2,500,000 MT 160,000 MT 200,000 MT VaR Limit $5 MM $1 MM $1 MM E0004392214 Discretionary Limits will expire upon approval of proposed permanent limits Lumber interim limits granted 5/4/00 were increased and extended on 10/31/00 to these amounts under the interim policy Respect Integrity Communication Excellence Form 000-469-1 !7/92) Finance committee Meeting EXH005-02388 ============= Page 69 of 128 ============= Permanent Limits requested or modified for Interim or Permanent Commodity Groups: Credit Trading Net Open Position Limit Maturity / Gap Limit VaR Limit Proposed Combined Permanent Limits $750,000 DV01/bp total $ 50,000 DV01/bp individual N/A $5 MM North America Cross-commodity Proposed (rename as NA Portfolio Management) Permanent Limit VaR Limit (no position limits) $5 MM • New Commodity Group was granted limits under the Interim Policy: DRAM Chips Net Open Position Limit Maturity / Gap Limit VaR Limit Existing Debt Permanent Limits $250 MM N/A $2 MM Existing Discretionary Limit $5 MM Interim Limits 2 MM 128M SDRAM PC100 Equivalent Chips 1.5 MM 128M SDRAM PC100 Equivalent Chips $1 MM Modification to Commodity Group limits already granted under the Interim Policy: Agricultural Trading - Soft Commodities, Grain, Livestock Extended to 3/31/01 Advertising Trading Extended to 3/31/01 Columbian Electricity Cancelled 11/30/00 • Loss Notification Requirements: Proposed Requirements Existing Requirements Daily Loss in any Commodity group or Portfolio: • Report to Business Unit Office of the Chairman 100% of VaR • Report to Enron Corp. President 125% of VaR • Report to Enron Corp. Chairman 150% of VaR • Report to Audit Committee no reporting at commodity group level Cumulative 5-day Loss in any Commodity Group or Portfolio: • Report to Business Unit Office of the Chairman 125% of VaR • Report to Enron Corp. President 150% of VaR (no change) • Report to Enron Corp. Chairman 175% of VaR (no change) • Report to Audit Committee no reporting at commodity group level Enron Corp. Aggregate Daily Loss: • Report to Enron Corp. President • Report to Enron Corp. Chairman • Report to Finance Committee Chairman Enron Corp. Aggregate Cumulative 5-day Loss: • Report to Enron Corp. President • Report to Enron Corp. Chairman 50% of VaR (no change) 75% of VaR (no change) 115% of VaR (no change) not specifically stated 50% of VaR 75% of VaR all are reported quarterly not specifically stated 75% of VaR 100% of VaR all are reported quarterly E0004392215 50% of VaR 75% of VaR 115% of VaR 75% of VaR (no change) 75% of VaR 100% of VaR (no change) 100% of VaR Your Personal Best Makes Enron Best Communicate- Facts Are Friendly Better, Faster, Simpler Form 000-469-1 (5/92) EXH005-02389 Existing Credit Interim Limits $100 MM N/A $1 MM r3 ============= Page 70 of 128 ============= ENRON CORP. Proprietary and Confidential RISK MANAGEMENT POLICY Approved by Enron Corp. Board of Directors Approved: October 1, 1996 Amended: December 8, 1998 Amended: May 3, 1999 Amended: August 10, 1999 Amended: October 20, 1999 Amended: December 14, 1999 Amended: February 7, 2000 Amended: May 2, 2000 Amended: August 8, 2000 Amended: October 7, 2000 Amended: December 12, 2000 1. General Authorization Enron Corp. is authorized to execute Transactions and manage these Transactions within certain authorized Portfolios in support of its businesses. All Transactions covered by this policy must be conducted in compliance with all Enron Corp. policies, as each may be amended, supplemented or restated from time to time (collectively the "Enron Corp. Policies"). II. Portfolios Designated Enron Business Units are authorized to enter into Transactions which create Positions for Enron Corp. and its affiliates, other Enron Business Units or their respective customers within the authorized Commodity Groups and limits, specified in the Appendices. These Positions are managed in the following Portfolios: A. Trading Portfolio - designed to capture and manage risks related to physical delivery of energy and other commodities, to provide related risk management services, to take advantage of market arbitrage opportunities and to manage positions within the approved limits. This portfolio includes commodity transactions, financial instruments and securities transactions. B. Merchant Portfolio - designed to capture and manage merchant investments in public and private companies, including the active management of embedded exposures and to provide greater liquidity for Enron's merchant investment activities, consistent with Enron Corp.'s core competencies within the approved limits. This portfolio includes equity, "equity-like," debt and "debt-like" investments in the public and private sector. C. Capital Portfolio - designed to accommodate positions and transactions in Enron's own stock or derivatives thereof which may occur from time to time in the execution of approved structural transactions (for example, stock buy-backs, hedging of stock option programs, etc.). III. Position and Loss Notification Requirements Generally, Enron Business Units' business activities are subject to a combination of limits. These limits include, but are not limited to: Net Open Position, Maturity/Gap Risk, Potential Exposure (VaR), Regulated Exchange limits, and Loss Notifications, as appropriate for the type of business activity under consideration. Limits will he applied at the Commodity Group and Portfolio level, as appropriate, and monitored daily. E0004392216 ~0 Finance Committee Meeting EXH005-02390 ============= Page 71 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY Proprietary and Confidential A. Net Open Position Limits. Enron Business Units' activities are subject to the Net Open Position limits at the Commodity Group level, as specified in the Appendices. B. Maturity/Gap Risk Limits. Enron Business Units' activities are subject to the Maturity/Gap Risk limits at the Commodity Group level, as specified in the Appendices. C. Potential Exposure Limits. Enron Business Units' activities are subject to potential exposure analysis using stress-testing and scenario analysis, as directed by the Enron Corp. Chief Risk Officer, and limits based on Value- at-Risk (VaR), as specified in the Appendices, calculated daily or as appropriate to the business activity under consideration at the Portfolio level and at the Commodity Group level. D. Regulated Exchange Limits. Enron Business Units may be subject to limits imposed by regulated exchanges on which they transact. Enron Business Units shall comply with any such limits imposed on them, as such limits may he modified from time to time. E. Loss Notifications. Daily Losses and Cumulative 5-day Losses resulting from Enron Business Units' activities are subject to the reporting requirements, as specified in Section IV.C.. All Enron Business Units are expected to formulate limits subordinate to limits specified in the Appendices, which should be monitored internally and act as triggers for reference to and action by senior Enron Business Unit management. IV. Limit Violation/Loss Notification Requirements Notwithstanding the other provisions of this Policy, any violation of limits must be reported to the Enron Corp. Chief Risk Officer. Such report should be made prior to entering into a Transaction if there is a sufficient reason to believe that a limit violation will occur. Requirements for limit violations and loss notifications, each accompanied by an explanation, will he as follows: A. Net Open Position Limits; Maturity/Gap Risk Limits. If the limit violation equals or exceeds the applicable limit by greater than five percent (5%), the Enron Corp. Chief Risk Officer shall ensure the prompt communication of the occurrence to the President of Enron Corp. If the limit violation equals or exceeds the applicable limit by greater than ten percent (10%), the Enron Corp. Chief Risk Officer shall ensure the prompt communication of the occurrence to the Chairman of Enron Corp. B. Value-at-Risk Limits. If the Aggregate VaR Limit is exceeded, or if the VaR for any Commodity Group or Portfolio equals or exceeds the applicable limit by greater than five percent (5%), the Enron Corp. Chief Risk Officer shall ensure the prompt communication of the occurrence to the President of Enron Corp. If the Aggregate VaR or the VaR for any Commodity Group or Portfolio equals or exceeds the applicable limit by greater than ten percent (10%) or fifteen percent (15%), the Enron Corp. Chief Risk Officer shall ensure the prompt communication of the occurrence to the Chairman of Enron Corp or the Chairman of the Finance Committee of Enron Corp., respectively. C. Loss Notifications. The Enron Corp. Chief Risk Officer shall ensure the prompt communication to the Enron Business Unit Office of the Chairman, the Enron Corp. President, or the Enron Corp. Chairman, if a Daily Loss in any Commodity Group or Portfolio is equal to or in excess of 100%, 125%, or 150% of the corresponding VaR limit, respectively. The Enron Corp. Chief Risk Officer shall ensure the prompt communication to the Enron Corp. President, the Enron Corp. Chairman, or the Chairman of the Finance Committee of Enron Corp, if the aggregate Daily Loss is equal to or in excess of 50%, 75%, or 115% of the Aggregate VaR Limit, respectively. The Enron Corp. Chief Risk Officer shall ensure the prompt communication to the Enron Business Unit Office of the Chairman, the Enron Corp. President, or the Enron Corp. Chairman, if a Cumulative 5-day Loss in any E0004392217 Finance Committee Meeting EXH005-02391 ============= Page 72 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY Proprietary and Confidential Commodity Group or Portfolio is equal to or in excess of 125%, 150%, or 175% of the corresponding VaR limit, respectively. The Enron Corp. Chief Risk Officer shall ensure the prompt communication to the Enron Corp. President or the Enron Corp. Chairman, if the aggregate Cumulative 5-day Loss is equal to or in excess of 75% or 100% of the corresponding VaR limit, respectively. D. Reporting to the Audit and Finance Committees of the Board of Directors. Aggregate loss notifications and limit violations shall be communicated to the Chairman of the Finance Committee by the Chief Risk Officer of Enron Corp., as specified in Section IV. of this policy. These and other limit violations along with a summary of Enron's market risks will be reported to the Audit Committee of the Board of Directors by the Chief Risk Officer of Enron Corp. at all regularly scheduled Audit Committee meetings. V. Operations and Controls A. Segregation of Duties. Enron Business Units shall keep segregated from the business groups or individuals entering into Transactions each of the following activities: recording and aggregation of Transactions; preparation, issuance and verification of Enron Corp. or third-party documentation; reporting of Positions and Commodity Group information; review of the reasonableness of prices and models, periodic validation of prices from independent market sources; monitoring of limits; physical and/or financial settlement of Transactions; reconciliation of accounts; and preparation of financial statements. B. Position Reporting. Designated Enron Business Units shall prepare, distribute and make available data constituting a daily report ("Daily Position Report") including Commodity Group Net Open Position, Maturity/Gap position, profit or loss, potential exposure (VaR) and any other parameters as may be required by the President or the Chief Risk Officer of Enron Corp. The Daily Position Reports at the Commodity Group level will also report various limits compared to their respective actual amounts and will he signed off by the Commodity Group Manager of the position(s) and the head of the commercial support group responsible for their preparation, before any subsequent trading occurs. The President of Enron Corp. and Enron Corp. Chief Risk Officer shall designate individuals who are authorized to approve the Daily Position Report on behalf of Enron Corp.. After approval, a consolidated Daily Position Report shall be distributed to the Chairman, the President, the Chief Accounting Officer, the Chief Risk Officer of Enron Corp. and others as designated by the President or the Chief Risk Officer of Enron Corp. C. Stress and Scenario Testing. On a monthly basis, or as markets dictate, designated Enron Business Units shall formulate and examine the effects of extreme changes in the market parameters relevant to exposures and positions. Results of these tests should be made available to the Enron Corp. Chief Risk Officer, or his designee(s). D. Valuation. On a monthly basis, or as markets dictate, designated Enron Business Units shall provide evidence of verification of all market parameters used in the calculation of risk metrics and profits and losses. This should be made available to the Enron Corp. Chief Risk Officer, or his designee(s). E. Transaction Approvals. Only those employees designated by the Enron Corp. Chief Risk Officer or his designee(s) will he authorized to enter into Transactions on behalf of Enron. The Chief Risk Officer must also maintain a record of those employees responsible for the individual Commodity Groups (Commodity Group Manager) as specified in the Appendices. All Transactions must be entered into in compliance with current policies of the Credit Group, Market Risk Management Group, and other relevant groups, as determined by the Enron Corp. Chief Risk Officer. E0004392218 V10 Finance Committee Meeane EXH005-02392 ============= Page 73 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY Proprietary and Confidential F. Brokerage Accounts. Designated Enron Business Units periodically open trading accounts with clearing brokers to facilitate the conduct of their business. All openings or revisions of trading accounts with a broker or brokers will be reviewed and approved by the Enron Corp. Chief Risk Officer or his designee(s). The Enron Corp. Chief Risk Officer or his designee(s) will also notify the brokers of the names of personnel authorized to trade futures, options or other contracts on regulated exchanges. G. Calculation of the Net Open Position by Commodity Group. For purposes of monitoring the Net Open Position Limits, as specified in Section IIIA, all Positions within a Commodity Group shall he aggregated into a reference Benchmark Position assigned to each group. Subject to approval by the Enron Corp. Chief Risk Officer, certain Positions within a Commodity Group may be authorized to have those Positions designated to a second Commodity Group for use as Cross-Commodity Hedges. If designated for this purpose, the relevant Position will be reported and monitored in the second Commodity Group for the purposes of limit monitoring. Affiliate positions are excluded from the Net Open Position calculation for purposes of limit monitoring. VI. Policy Amendment Authority A. Portfolios, Commodity Groups and Positions. Subject to the authorization of the Board of Directors, the Enron Corp. Chairman, the President of Enron Corp. and the Enron Corp. Chief Risk Officer, additional Portfolios may be created and additional Commodity Groups may be added within existing Portfolios, and the related limits will be created or revised accordingly. The President of Enron Corp. and the Enron Corp. Chief Risk Officer can authorize additional Positions within the existing Commodity Groups, provided that such Positions can be aggregated within the limits of a currently authorized Commodity Group. Any amendment that authorizes additional Positions should be communicated to the Enron Corp. Chairman and the Board of Directors. B. Position Measurement Parameters. Any changes to parameters used in the aggregation and measurement of Positions must be approved by the Enron Corp. Chief Risk Officer or his designee(s). This includes, but is not limited to, the Benchmark Positions, VaR parameters, Maturity/Gap Risk periods, conversion ratios, volatility factors and correlation factors. Any material change as determined by the Chief Risk Officer will be communicated to Enron's Board at the next regularly scheduled Board of Directors' meeting. C. Interim Policy for New Commodity Groups. The President of Enron Corp. and the Chief Risk Officer of Enron Corp. may approve positions in new Commodity Group(s) prior to approval in the next meeting of the Enron Corp. Board of Directors, subject to the following criteria: (i) maximum VaR of $1 million, along with corresponding position limits, (ii) maximum initial term of six (6) months, subject to one extension for an additional term prior to review by the Board of Directors for permanent limits, and (iii) interim VaR limits do not change the Aggregate VaR Limit. D. Discretionary VaR. The President of Enron Corp. and the Chief Risk Officer of Enron Corp. may allocate "Discretionary VaR" to the existing Commodity Groups listed in Appendix I, along with the corresponding adjustments to Net Open Position limits and Maturity/Gap Position limits, under the following guidelines: (i) allocation is limited to 100% of the existing VaR limit in Appendix I, (ii) VaR allocation and corresponding adjustments to position limits adjust the limit violation and loss notification requirements at the commodity group level, (iii) term of allocation is determined by President and Chief Risk Officer, (iv) allocation of Discretionary VaR increases the Aggregate VaR Limit until such time the allocation expires, and (v) Discretionary VaR allocations which are converted to permanent limits reduce the available Discretionary VaR. Discretionary VaR allocations are to be reported to the Enron Corp. Board of Directors at each regularly scheduled Board of Directors' meeting. E00 04392219, r' Finance Committee Meeiine EXH005-02393 ============= Page 74 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY Proprietary and Confidential E. Temporary Limits. The Board of Directors of Enron Corp. may from time to time approve temporary limits to encompass certain specific approved positions. These temporary limits adjust the limit violation and loss notification requirements at the commodity group level until the granted limits expire, but they do not change the Aggregate VaR Limit. F. Limit Changes and Other Policy Amendments. Any modification of limits or other amendments, supplements or updates to this Policy, unless otherwise covered by this Section VI, must be either approved by (i) the Enron Corp. Board of Directors, or (ii) the Enron.Corp. President and Chief Risk Officer and ratified by the Enron Corp. Board of Directors at the next regularly scheduled Board of Directors' meeting. VII. Miscellaneous Employee Trading. No employee of any Enron Business Unit may engage in the trading of any Position for the benefit of any party other than an Enron Business Unit (whether for their own account or for the account of any third party) where such Position relates to (i) any financial instrument, security, financial asset or liability which falls within such employee's responsibility at an Enron Business Unit, or (ii) any other commodity not covered by (i) included in any Commodity Group. Employee Review of Policies. As determined by the Chief Risk Officer or his designee(s), an employee of any Enron Business Unit participating in any activity or transaction within the coverage of this Policy shall sign on an annual basis or upon any material revision to this Policy, a statement approved by the Enron Corp. Chief Risk Officer that such employee (i) has read this Policy, (ii) understands this Policy, and (iii) has complied and will comply with this Policy. Compliance with Policy. All Business Units and their employees should comply with this Policy. Dispensation for non-compliance should be sought from the President of Enron Corp., the Enron Corp. Chief Risk Officer or their designee(s). Willful or deliberate non-compliance or falsification of risk metrics or profits and losses referred to by this Policy will be regarded as gross misconduct. Supersedes Prior Policies. This Policy supersedes and replaces all previous Policies of Enron Corp. approved by the Enron Corp. Board of Directors concerning risk management or trading. This Risk Management Policy was approved by the Enron Corp. Board of Directors on October 1, 1996, and as permitted hereunder it has been amended as of the date reflected on the first page hereof. VIII. Definitions "Affiliate Position" shall mean the Position between a Designated Enron Business Unit and any other Enron Business Unit ("Affiliate Transactions"), and any such other Transaction designated as a hedge of any Affiliate Transaction, in accordance with the Affiliate Policy. "Ag= egate Valk Limit" shall mean the total Enron Trading Portfolio VaR Limit as specified on Appendix I, less the unallocated amount of Discretionary VaR, as determined by the Chief Risk Officer or his designee(s). Discretionary VaR that is initially allocated then subsequently converted to permanent approved limits in Appendix I reduces the available Discretionary VaR. Temporary VaR limits and Interim VaR limits are not considered to increase the Aggregate VaR Limit. E0004392220 . '~ Finance Committee Meeting EXH005-02394 ============= Page 75 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY P rc~prictary and Confidential "Benchmark Position" shall mean the Position within a Commodity Group into which all other Positions within the same Commodity Group can be converted using price volatility and correlation based conversion factors. Such conversion factors shall he established and authorized by the Enron Corp. Chief Risk Officer, in conjunction with the President of Enron Corp. "Commodity Group" shall mean a collection of Positions having sufficient relationship and correlation (as approved by the Enron Corp. President and Enron Corp. Chief Risk Officer) that allow for aggregation into a Benchmark Position. "Cross Commodity Hedge" shall mean a Position within a certain Commodity Group that is suitably used as a hedge for another Position within a different Commodity Group (i.e. Natural Gas position used to hedge an Electricity position). The suitability and approval of Cross-Commodity Hedges for each Position for purposes of limit measurement shall be reviewed and approved by the Chief Risk Officer of Enron Corp. or his designee(s). "Cumulative 5-day Loss" shall mean a sum of Daily Losses for the last consecutive five days. Upon occurrence of a Cumulative Loss Limit violation, Cumulative Loss calculation is reset and begins with the Daily Loss following the day on which the violation took place. "Daily Loss" shall mean the loss in value of any Commodity Group (other than the Affiliate Position) on a daily basis, exclusive of originations and prudence. The Daily Loss will be calculated using the mark-to-market method on a net present value basis. "Daily Position Report" shall mean a hard or soft copy report including, but not limited to the following, for each major commodity and price curve traded: Commodity Group Net Open Position, Maturity/Gap position, profit or loss, potential exposure (VaR), and for all positions regardless of financial accounting treatment: 1. The amounts by which the mark-to-market value of the portfolio can change for small (or unit) changes in all "market parameters", as a term structure (i.e. by time "bucket") and on a net aggregate basis. 2. For portfolios with option or non-linear risks, the concentration of sensitivities (delta, gamrita, vega) according to expiry date and strike price ("strike concentration"). 3. The VaR for the portfolios, according to Enron's approved methodology. "Discretionary VaR" shall mean VaR capital approved by the Enron Board of Directors that may be periodically allocated by the Enron Corp. President and Enron Corp. Chief Risk Officer to permanent Commodity Groups listed in Appendix I as provided in Section VI. D. of this policy. "Enron Business Unit(s)" shall mean Enron Corp. and any entity controlled, directly or indirectly, by Enron Corp., (including internal groups created for the purposes of trading, or aligned according to the commodities set out in the Appendices), or any entity directly or indirectly under common control of Enron Corp. For this purpose, the criteria for establishing "control" of any entity include but are not limited to, ownership of more than fifty percent (50%) of the voting power of such entity. "Market Parameters" shall mean market spot and forward prices/curves, market spot and forward volatility, correlation (where appropriate), market interest rates, spot foreign exchange rates (where appropriate). "Maturity/Gap Risk" shall mean the risks related to non-parallel changes of forward prices or interest rates. For purposes of this Policy, the Maturity/Gap Risk related to commodity Positions with forward prices shall be measured using a rolling total of the net open position per period, which may he modified based on the market structure of the underlying Position and pending authorization of the Chief Risk Officer of Enron Corp. "Net Open Position" shall mean the aggregate of the open Positions in a Commodity Group on a Benchmark Position equivalent basis. E0004392221 d Finance Committee Meetini --XH005-02395 ============= Page 76 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY Proprietary and Confidential "Position" shall mean, collectively, the risk components (including, but not limited to, price risk, basis risk, index risk, credit risk and liquidity risk) of all commodities, financial instruments, securities, equities, financial assets or liabilities which have been authorized for trading in the Enron Corp. Risk Management Policy, any of the Enron Corp. Policies or approved for trading through any amendments to this Policy. "Transactions" shall mean, collectively, forwards, futures, swaps, options, any combination of these instruments and any other derivative or cash market instruments creating a Position. "Value-at-Risk" (VaR) shall mean the Potential Exposure related to a Commodity Group or Position representing the potential change in value resulting from changes including: market prices, interest rates, currency rates, counterparty credit condition, liquidity, funding and settlement risk, among others. VaR shall be calculated using the Enron Corp. adopted VaR methodology at the 95% confidence interval using a 1-day time horizon. Any recalibration or modification of the VaR methodology or parameters that take into account observed or anticipated changes in market factors or developments in VaR technologies must be approved by the Enron Corp. Chief Risk Officer or his designee(s). EOO04392222 Finance Committee Meeting EXH005-02396 ============= Page 77 of 128 ============= EN RON CORP. RISK MANAGEMENT POLICY I'roprictary and C'onfidcnlial Permanent Policy Limits (page 1 of 2): Appendix I Commodity Group Benchmark Position Net Open Position Limit Maturity / Gap Risk Limit VaR Limit TRADING PORTFOLIO $100 MM Discretionary VaR (1) $15 MM North American Natural Gas NYMEX Henry Hub Equivalents 500 Bcf 200 Bcf (Rolling 3-Month) $60 MM North American Electricity North American Electricity Equivalents 90 Twh 25 Twh (Rolling 12-Month) $50 MM North American Portfolio Management N/A N/A N/A $5 MM Southern Cone Natural Gas Southern Cone Natural Gas Equivalents 35 Bcf 20 Bcf (Rolling 12-Month) $2 MM Southern Cone Electricity Southern Cone Electricity Equivalents 3.5 Twh 3.5 Twh (Rolling 12-Month) $5 MM Metals & Minerals LME Copper Futures Equiv. 375,000 MT 600,000 MT (Rolling 12-Month) $8 MM European Natural Gas (2) UK Northern Balancing Point Gas Equiv. 60 Bcf 90 Bcf (Rolling 12-Month) $7.5 MM UK Electricity (2) UK Electricity Equivalents 35 Twh 15 Twh (Rolling 12-Month) $10 MM Continental Electricity Continental Electricity Equivalents 20 Twh 20 Twh (Rolling 12-Month) $4 MM Nordic Electricity Nordic Electricity Equivalents 20 Twh 20 Twh (Rolling 12-Month) $5 MM Australian Electricity Australian Electricity Equivalents 3 Twh 6 Twh (Rolling 12-Month) $3 MM Japanese Electricity Japanese Electricity Equivalents 4 Twh 4 Twh (Rolling 12-Month) $4 MM Credit Trading Market Value in USD $750,000 DVOI/bp total, $50,000 DVOI/h individual N/A $5 MM Global Products NYMEX WTI Equivalents 12.5 Mil BbI 15 Mil Bbl (Rolling 12-Month) $8 MM Weather Derivatives Maximum USD Exposure $100 MM N/A $3 MM Coal & Freight U.S. Eastern Coal Equivalents 15 MM MT 15 MM MT (Rolling 12-Month) $4 MM Emissions S02 Credits 1,000,000 Credits 1,000,000 Credits (Rolling 12-Month) $3 MM Pulp & Paper Pulpex NBSK (Pulp) Futures Equiv. 500,000 MT 500,000 MT (Rolling 12-Month) $5 MM Lumber Board Feet (BF) 44 MM BF 44 MM BF $500,000 Steel Hot Rolled Coil Steel Equivalent Metric Tonnes (MT) 1.5 MM MT 2.5 MM MT $5 MM Financial Instruments $3 MM Interest Rate USD Notional Equivalent (V AA Libor $100,000 / hp $50,000 / hp (<= 2 years) $3 MM (combined Interest Rate/FX) Foreign Currency USI) Spot Rate Notional Equivalents $100 MM N/A $3 MM (combined Interest Rate/FX) Ec u Tradi_ Market Value in t1SD $100 MM N/A $6 MM (1) See Discretionary Limit allocations - Appendix III (2) See Temporary Limits - Appendix III E0004392223 EXH005-02397 ============= Page 78 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY Proprietary and Confidential Permanent Policy limits (page 2 of 2): Appendix I Commodity Group Benchmark Position Net Open Position Limit Maturity / Gap Risk Limit VaR Limit Broadband N/A N/A N/A $2 MM Enron Energy Services - (1) North American Natural Gas and North American Electricity N/A N/A N/A $5 MM (1) MERCHANT PORTFOLIO Market Value in USD N/A N/A N/A CAPITAL PORTFOLIO $10 MM Enron Companies Market Value in USD $300 MM N/A Other S&P Equivalents $200 MM N/A (1) See Discretionary Limit allocations - Appendix III (2) See Temporary Limits - Appendix III E0004392224 =XH005-02398 ============= Page 79 of 128 ============= ENRON CORE'. RISK MANAGEMENT POLICY Proprietary and Confidential INTERIM POLICY LISTING: Appendix II Commodity Group Benchmark Position Net Open Position Limit Maturity / Gap Risk Limit VaR Limit Expiration Limit Advertising Swaps DRAM Chips Livestock Trading Cost per Point (CPP) Equivalents 128M SI)RAM PC] 00 Equiv. Chips Futures Contract Equivalents 782 CPP 2 MM Benchmark Equiv. Chips 1,000 Contracts 782 CPP 1.5 MM Benchmark Equiv. Chips 1,000 Contracts $1 MM $1 MM $0.75 MM 3/31/01 5/15/01 3/31/01 Live Cattle Futures (I Contract = 40,000 lbs.) Lean Hogs Futures (1 Contract = 40,000 lbs.) Feeder Cattle Futures (I Contract = 50,000 lbs.) Frozen Pork Bellies Futures Grain Trading (I Contract = 40,000 lbs.) Futures Contract Equivalents 1,000 Contracts 1,000 Contracts $0.5 MM 3/31/01 Corn Futures (I Contract = 5,000 bushels) Soybean Futures (I Contract = 5,000 bushels) Wheat Futures (I Contract = 5,000 bushels) Soft Commodities Futures Contract Equivalents 2,000 Contracts 2.000 Contracts $0.75 MM 3/31/01 Sugar Futures (I Contract= 112,000 lbs.) Coffee Futures (I Contract = 37,500 lbs.) Cocoa Futures (1 Contract = 22,046 lbs. Or 10 MT) - E0004392225 EXH005-02399 ============= Page 80 of 128 ============= ENRON CORP. RISK MANAGEMENT POLICY l i l)riclary and Confidential TEMPORARY POLICY LISTING: Appendix I11 Commodity Group Benchmark Position Net Open Position Limit Maturity /Gap Risk Limit VaR Limit Expiration Date European Natural Gas UK NBP Gas Equivalents 260 Bcf 90 Bcf (Rolling 12-Month) $7.5 MM 12/31/00 UK Electricity UK Electricity Equivalents 85 Twh 15 Twh (Rolling 12-Month) $18 MM (1) (1) (1) Limit amortization schedule for UK Electricity: NOP VaR 7/1/00 76.5 Twh $16.65 MM 10/1/00 68.0Twh $15.30 MM 1/1/01 59.5 Twh $13.95 MM 4/1/01 51.0 Twh $12.60 MM 7/1/01 42.5 Twh $11.25 MM 10/1/01 35.0 Twh $10.00 MM (permanent limits per Appendix I) DISCRETIONARY VaR ALLOCATION as of December 12, 2000 (2): Commodity Group Allocation Permanent VaR Discretionary Adjusted VaR Discretionary VaR Date (Appendix I VaR Limit Expiration Date Enron Energy Services - 11122100 $5 MM $2 MM $7 MM 12/15/00 North American Natural Gas and North American Electricity (2) All other Discretionary allocations to date have now requested permanent limits - see Appendix I. E0004392226 EXH005-02400 ============= Page 81 of 128 ============= 4(b) N N N O) 0-) d' O C U W EXH005-02401 ============= Page 82 of 128 ============= AGENDA ITEM 4(b) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, the Board of Directors of the Company approved resolutions on October 12, 1998 adopting the Enron Corp. Transaction Approval Process (the "Transaction Approval Process") which provides for (i) a process for review and approval of Capital Expenditures (as defined in the revised policy attached to these minutes) and (ii) a process for prior transactions involving Capital Expenditures to be reviewed for performance and results; and WHEREAS, the Board of Directors of the Company approved amendments to the Transaction Approval Process at meetings held on February 8, 1999, August 10, 1999, February 7th and 8`h, 2000 May 2, 2000 and October 7, 2000; WHEREAS, it would be in the best interest of the Company to further amend the Transaction Approval Process in order to reflect the following changes: (1) amend the definitional provisions of the Transaction Approval Process to reflect changes in assignments and organizational structure of Enron Corp. and changes to the definition of Non-Conforming transactions; (2) increase the expenditure threshold amount limit for transactions subject to review under the Transaction Approval Process; and (3) add a separate approval process (E-DASH) for certain prepays and embedded debt financing in commodity transactions; NOW THEREFORE, IT IS RESOLVED, that the Company revise the Transaction Approval Process to that attached to these minutes and as set forth in these resolutions; RESOLVED FURTHER, that the revised Transaction Approval Process is adopted and approved, that a copy of the revised policy be attached to the minutes as Exhibit A, and that the persons, officers and Approving Units identified therein shall perform the responsibilities as specified; for the purposes of this policy a certification by the President, the Chief Financial Officer, the Treasurer, the Chief Risk Officer (or his or her designee), or any Senior Vice President to the effect that this policy has been complied with in connection with any transaction involving Capital Expenditures shall be conclusive evidence of compliance and may be relied upon by all persons interested in or participating in such transaction, including (without limitation) the officers signing transactional documents E0004392228 EXH005-02402 ============= Page 83 of 128 ============= on behalf of the Company and attorneys issuing legal opinions with respect to the transaction; RESOLVED FURTHER, that the revised Transaction Approval Process shall not apply to the approval process for guarantees except as to those guaranteeing the obligations of unaffiliated third parties. The approval process for all other guarantees shall continue as described in the Company's existing "Policy for Approval of Guarantees, Letters of Credit, Letters of Indemnity, and Other Support Arrangements", and shall be reviewed by the Finance Group and the Risk Assessment and Control Group; RESOLVED FURTHER, that the Chairman of the Board and Chief Executive Officer, the President and Chief Operating Officer, the Vice Chairman, the Executive Vice President and Chief Risk Officer, the Executive Vice President and Chief Financial Officer, the Vice President, Finance and Treasurer, any Vice President of the Company, or any other person authorized by the Board to act on behalf of the Company be, and each of them hereby is, authorized and empowered to negotiate, enter into, execute, and deliver on behalf of the Company any agreements and documentation in connection with any transaction involving Capital Expenditures which has been approved in accordance with the revised Transaction Approval Process and as the officers executing such agreements shall approve, such approval to be conclusively evidenced by such execution; and RESOLVED FURTHER, that all actions heretofore taken by the Chairman of the Board and Chief Executive Officer, the President and Chief Operating Officer, the Vice Chairman, the Executive Vice President and Chief Risk Officer, the Executive Vice President and Chief Financial Officer, the Vice President, Finance and Treasurer or any Vice President, in the name and on behalf of the Company, related to or in connection with transactions of the type contemplated by the new review process attached to these minutes but which originated prior to these resolutions, including, without limitation, the execution and delivery of any instruments or other documents as any such officer shall have deemed necessary, proper, or advisable, are hereby adopted, ratified, confirmed, and approved in all respects. 2 E0004392229 EXH005-02403 ============= Page 84 of 128 ============= Enron Corp. Transaction Approval Process Revised 12-12-00 ORIGINATING ENTITY Request for: Capital Expenditure, Risk Adjusted Capital Or Prepaid or Embedded Debt Financing (>$2,500,000) (1) RISK ASSESSMENT DEAL SIZE APPROVING & CONTROL $MM UNIT (RAC) TRANSACTION <5 REVIEW 2 < 20 ( ) CAPITAL REGION / BUSINESS (2) PRICING < 75 Conforming 75 INVESTMENT + REGIOWBUSINESS GROUP HEADS WHOLESALE-':S ERVICES ,OOC. ENE-BOD i I I I I I VALUATION i PORTFOLIO REVIEW GLOBAL FUNCTIONS < 2 GLOBAL FUNCTIONS - ~ GROUP:HEAD ; 2 I~E E" - - ) < 75 ( O OC faH - 75 ENE-BOD ---~+ + I i I I I a' < 25 (2) ENE:000 - - - - i+ . F G ......... .............................. .......... ......... ........ * NON-CONFORMIN 25+(3) ENE-BOD - - - - Deal - Sheet With All ures L - - --- (1) Except Venture Capital deals for which the expenditure limit is $500,000 unless authorized by the Company's charter. (2) Transaction Deal Approval Sheets will be distributed to the ENE-BOD (Finance Committee) after approval. (3) Transactions deemed Non-Conforming only due to "Returns Below Capital Price" will not require BOD approval if < $75MM. E0004392230 Finance Committee Meeting EXH005-02404 ============= Page 85 of 128 ============= Approval Process for Originated Contractual Transactions Revised 12-12-00 RISK ASSESSMENT & CONTROL (RAC) COMMODITY VaR POSITION RISK ORIGINATION AND STRUCTURING GROUPS CAPITAL $ INVESTMENT (IF ANY) ORIGINATED RISK RAC TRANSACTION ADJUSTED APPROVAL TRANSACTION* CAPITAL PROCESS CREDIT RESERVE RISK 'Characteristics: -Non-standard documentation pV8`SAYINGE OR y. GUARANtEE •Deal results In violation of (OR existing limits EQUIVALEN E0004392231 Finance Committee Meeting EXH005-02405 ============= Page 86 of 128 ============= E-DASH Process (1 Revised 12-12-00 AAA-/Aaa3 <= 7 years <= 7 years <= 5 years <= 5 years <= 5 years DASH AA-/Aa3 <= 6 years <= 5 years <= 4 years <= 3 years DASH DASH A-/A3 <= 5 years <= 3 years <= 2 years DASH DASH DASH BBB+/Baal <= 4 years <= 2 years DASH DASH DASH DASH BBB/Baa2 <= 3 years DASH DASH DASH DASH DASH BBB-/Baa3 <= 1 year DASH DASH DASH DASH DASH BB-/Ba3 <= 6 months DASH DASH DASH DASH DASH B+/B1 or lower or unrated <= 3 months DASH DASH DASH DASH DASH TRANSACTION APPROVAL PROCESS Example Transactions Include: • Tilted swaps • Prepays • Restructurings M Approval to be documented in an Expedited DASH approved by EGF, RAC, and Region / Business Group Heads only. (2) in the case of split-rated entities, the lowest applicable rating level shall apply (e.g., an A+/A2 counterparty is classified as A-/A3 or higher and a BBB-/Ba2 counterparty is classified as BB/Ba2 or higher) n . E0004392232 Finance Committee Meeting FxHnnn_m4nF ============= Page 87 of 128 ============= 4949 r. Transaction Approval Process DEFINITIONS Revised 12-12-00 REGION/BUSINESS Cliff Baxter - EWC, EGEP, ESA Rebecca McDonald - Global Assets GROUP HEADS Dave Delainey - Americas Jeff McMahon - EIM Andy Fastow - EGF Lou Pal - EES Kevin Hannon - EBS Ken Rice - EBS Stan Horton - ETS John Sherriff - Europe (w/ Japan & Australia) Louise Kitchen - ENW Greg Whalley - Wholesale Services Mike McConnell - EGM Tom White - EES GLOBAL FUNCTIONS Larry Izzo - EE&CC GROUP HEAD WHOLESALE SERVICES Chairman of Wholesale Services Approval defined as Mark Frevert ENE-OOC Enron Corp. Office of the Chairman Approval defined as Ken Lay or Jeff Skilling ENE-BOD Enron Corp. Board of Directors Executive Committee between Board Meetings DEAL Capital Expenditure Net to Enron Funding Vehicle exposure included in Enron exposure RAC Risk Assessment and Control Group at Enron Chief Risk Officer, responsible for RAC activities Capital Expenditure All major corporate commitments by Enron and any of its subsidiaries Acquisitions/Divestitures (Merchant Asset Divestitures exceeding $500 MM and Strategic Assets Divestitures exceeding $200 MM require Board Approval) Disposal of Assets Providing a guarantee of obligations of unaffiliated third parties or of "Non-Conforming" obligation, directly or indirectly Providing debt, subordinated debt, equity or partnership capital A commodity or financial position that results in an exposure outside of Board Approved Limits Risk Adjusted Capital The aggregation of exposure in a transaction that results from commodity positions, credit and guaranties; such exposure translated to an equivalent amount of capital Conforming Routine non-budgeted Capital Expenditure within the general business lines of Enron Capital Expenditure made in an industry where Enron has established expertise Capital Expenditure made in a country where Enron has established a local presence and is currently conducting business RAC Group will determine if Conforming Non-Conforming Capital Expenditure outside the general business lines of Enron or in an industry where Enron has little or no expertise Capital Expenditure made in a country where Enron has no local expertise or where the overall exposure to the country is excessive Capital Expenditure made to an entity or within an industry that would result in excessive exposure to that entity or industry Transactions will be deemed Non-Conforming if the Deal Approval Sheet indicates "Returns Below Capital Price" or "Do Not Proceed" RAC Group will determine if Non-Conforming Merchant Portfolio Limit The sum of all Merchant transactions less any syndicated amounts The numerical limit is set forth in the most recent Enron Risk Management and Trading Policy E0004392233 O Finance Committee Meeting EXH005-02407 ============= Page 88 of 128 ============= 4(c) It co N N 0) co O O U w EXH005-02408 ============= Page 89 of 128 ============= AGENDA ITEM 4(c) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that Enron North America Corp. ("ENA") participate in the transaction known as "Project Inga," whereby 100% of the equity ownership in Ahlstrom Development Corp. ("ADC") is acquired from Ahlstrom Holdings, Inc., which, through a variety of subsidiaries, owns equity ownership in five Qualifying Facilities, two fuel supply companies, and two project management companies, the total cost of which acquisition is estimated to be US$105,250,000 dollars (the "Acquisition"); and WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that approvals be granted, as set forth below, in connection with such Acquistion; NOW, THEREFORE, IT IS RESOLVED, that the appropriate officers of the Company and/or ENA be, and hereby are, authorized to execute, deliver, and perform the obligations of all agreements in connection with the Acquisition, including any stock purchase agreements, shareholder and participation agreements with other shareholders, operations and maintenance, fuel supply, power purchase and tolling agreements, financing, loan agreements, and swap agreements with various parties, and other various agreements related to the Acquisition and the financing thereof; RESOLVED FURTHER, that the officers, directors, and authorized legal representatives of the Company and ENA be, and hereby are, authorized to execute and deliver such other certificates, powers of attorney, affidavits, agreements, assignments, documents, guarantees, and instruments as are required in connection with the above-referenced Acquisition; RESOLVED FURTHER, that all actions heretofore taken by the officers and representatives of the Company and ENA with respect to the transactions contemplated above be, in all respects, approved, confirmed, and ratified; and RESOLVED FURTHER, that the proper officers of the Company and ENA be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any E0004392235 EXH005-02409 ============= Page 90 of 128 ============= 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 and ENA, under a 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 the foregoing resolutions. RESOLVED FURTHER, that the proper officers of the Company, ENA, 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. K:\a Minutes\2000 Minutes\12122000\inga res.doc E0004392236 2 EXH005-02410 ============= Page 91 of 128 ============= N M N N 0) Co 0 0 U W 4(d) EXH005-02411 ============= Page 92 of 128 ============= AGENDA ITEM 4(d) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that Fountain Valley Power, L.L.C. ("Developer") enter into a power purchase agreement ("PPA") with Public Service Company of Colorado ("PSCO"), which would obligate Developer to construct an approximately 240 MW natural gas fired power plant in El Paso County, Colorado (the "Project"), the total cost of which project is currently estimated to be US$177.5 million dollars; and WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that approvals be granted, as set forth below, in connection with Developer's development of the Project; and WHEREAS, certain support by the Company is required in order to assist Developer in obtaining and completing the Project; NOW, THEREFORE, IT IS RESOLVED, that Mark Frevert be, and hereby is, authorized to determine the extent of participation appropriate for the Company relating to the Project, to determine that the Conditions (defined further below) have been met, and to of documents to be executed on behalf of the approve the terms Company relating to the Project which are required or appropriate for execution by the Company to fulfill the intent of these resolutions; RESOLVED FURTHER, that the Chairman of the Board, the President, the Vice Chairman of the Board, any Vice President (including any Executive Vice President, Senior Vice President, or Vice President), the Chief Financial Officer, the Treasurer or any Deputy Treasurer of the Company and its counsel be, and each hereby is, authorized, empowered, and directed (and any one of them acting alone) to execute and deliver all such instruments and documents, for and in the name and on behalf of the Company, as Mark Frevert shall deem necessary or desirable in connection with the Project, and to cause the Company to pay all such expenses as in their discretion appear to be necessary or desirable to effectuate the purposes and intent of these resolutions relating to the Project; and E0004392238 EXH005-02412 ============= Page 93 of 128 ============= RESOLVED FURTHER, that all actions heretofore taken by any officer or representative of the Company or its affiliates related to or in connection with the transactions contemplated by these resolutions be, and hereby are, adopted, ratified, confirmed, and approved in all respects; and RESOLVED FURTHER, that the foregoing resolutions shall be effective only if both of the following occur on or before December 15, 2000 and shall be null and void if they do not (collectively, the "Conditions"): (a) Developer shall have obtained approval of its pending rezoning application and its pending special use permit for construction of the Project, in each case for the site upon which the Project is to be built, and (b) PSCo shall have obtained an affirmative indication, based upon the Colorado Public Utility Commission's ("CPUC") deliberations at an open meeting of the CPUC, that the CPUC is likely to grant PSCo the required approvals described in Section 18.1(B) of the PPA. K:\a Minutes\2000 Minutes\12122000\Fountain Valley res.doc E0004392239 K:\a Minutes\2000 Minutes\12122000\Fountain Valley res.doc 2 EXH005-02413 ============= Page 94 of 128 ============= O It N N 0) cr) It O O C-) W EXH005-02414 ============= Page 95 of 128 ============= AGENDA ITEM 4(e) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, a proposal has been made by Enron Wind Corp. ("EWC"), or one or more of its subsidiaries, pursuant to which EWC will develop, construct, and operate a 135-megawat wind turbine power project located near Iraan, Texas (the "Indian Mesa II Project"); and WHEREAS, to develop and construct the Indian Mesa II Project, it will be necessary for Enron Corp. (the "Company") to (a) make a bridge equity investment in the Indian Mesa II Project, of up to $153 million, or, in lieu thereof to provide a guaranty of up to $153 million for the benefit of a bridge lender to the Indian Mesa II Project (the "Bridge Commitment"), and (b) provide a power purchase agreement guaranty of up to $10 million and an interconnection agreement guaranty or letter of credit of up to $30 million (the "Guarantees") for the Indian Mesa II Project; NOW, THEREFORE, IT IS RESOLVED, that the participation by the Company described above in the development and construction of the Indian Mesa II Project is hereby approved, provided that a wind evaluation report prepared by an independent wind consultant supports debt financing for the Indian Mesa II Project as determined by the Chief Financial Officer, the Treasurer or a Deputy Treasurer of the Company; RESOLVED FURTHER, that the Bridge Commitment and the Guarantees are hereby approved, in the form and on terms approved by the Chief Financial Officer, the Treasurer or a Deputy Treasurer of the Company, whose signature shall be conclusive evidence of such approval and that the wind evaluation report is acceptable; and RESOLVED FURTHER, that the foregoing 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. K:\a Minutes\2000 Minutes\12122000\Indian Mesa Wind res.doc E0004392241 EXH005-02415 ============= Page 96 of 128 ============= N 14- N N 0) (e.) IT 0 0 U W EXH005-02416 ============= Page 97 of 128 ============= AGENDA ITEM 4(f) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that the Company or its affiliates make a binding proposal or proposals (the "Proposal"), in response to the United States Government's request for proposals relating to electric, natural gas, water and wastewater utility systems at the following sites: Dyess AFB, Goodfellow AFB, Lackland AFB, Laughlin AFB, Randolph AFB, Seguin Auxiliary Air Field, Sheppard AFB, Spofford Auxiliary Air Field, Ellington Field ANGB, NAS JRB Fort Worth, and Fort Bliss (collectively, the "Project"); and WHEREAS, it is appropriate for the Board to appoint a special Committee concerning the Proposal and the Project, which generally contemplates that (i) the Company or its affiliates will receive title to the assets for financing purposes (no cash payment will be made by the Company or its affiliates) of all of or certain combinations of electric, natural gas, water and wastewater systems at the aforementioned military bases, (ii) the Company or its affiliates shall have an obligation to provide up to US$84.3 million dollars in senior debt financing to the United States Government; (iii) the United States Government will use such senior debt financing to pay the Company or its affiliates, who shall be responsible for performing the initial capital upgrades, for the costs associated with the initial capital upgrades; and (iv) the Company or its affiliates will be responsible for, and will be compensated by the United States Government for, renewal and replacement services and operations and maintenance services during the term of the Project. NOW THEREFORE, IT IS RESOLVED, that a special Committee of the Board consisting of Kenneth Lay and Jeffrey Skilling (with Kenneth Lay to serve as chairman) be, and hereby is, constituted under Section 3, Article IV of the Company's Bylaws with full power and authority on behalf of the Board (except as otherwise contemplated by Section 6, Article IV of the Company's Bylaws) to: (a) approve the terms and authorize execution on behalf of the Company or its affiliates of such documents relating to the transaction undertaken or proposed to be undertaken by the E0004392243 EXH005-02417 ============= Page 98 of 128 ============= foregoing resolutions as may be required or necessary in order to enable the Company and its affiliates to fulfill their respective obligations in connection with the foregoing resolutions, the Proposal and the Project; and (b) take or authorize any and all such further action as they shall deem necessary or desirable in connection with the transactions contemplated by the foregoing resolutions; RESOLVED FURTHER, that all actions heretofore taken by any officer or representative of the Company or its affiliates related to or in connection with the Proposal or the Project contemplated by these resolutions be, and hereby are, adopted, ratified, confirmed, and approved in all respects; and RESOLVED FURTHER, that the Chairman of the Board, the President, the Vice Chairman of the Board, the Chief Financial Officer, the Treasurer, any Deputy Treasurer, or any Vice President (including any Executive Vice President, Senior Vice President, or Vice President), of the Company and its counsel be, and each hereby is, authorized, empowered, and directed (and 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 or its affiliates, under their respective corporate seals 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. K:\a Minutes\2000 Minutes\12122000\Proj Texas res.doc 2 E0004392244 EXH005-02418 ============= Page 99 of 128 ============= 4(g) ..~ ~. LX) I N N Q) CY) O 0 U W EXH005-02419 ============= Page 100 of 128 ============= AGENDA ITEM 4(g) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, Enron Energy Service Operations, Inc. ("EESO"), a wholly-owned subsidiary of the Company and certain of its affiliates and Eli Lilly and Company ("Lilly"), an Indiana corporation, desire to implement an energy management program ("Program") designed to outsource the management of Lilly's energy requirements; WHEREAS, in connection with the implementation of this Program, EESO or an affiliate of EESO and Lilly desire to enter into (i) a Commodity Management Agreement ("CMA") and (ii) a Limited Liability Company Agreement ("LLC Agreement") forming a Delaware limited liability company ("LLC") which LLC will enter into an Energy Services Agreement (the "Services Agreement") with Lilly under which the LLC will cause EESO to provide certain management and operation services to Lilly for up to fifteen (15) years, including services associated with Lilly's use and receipt of electricity, natural gas, other energy sources, water and conditioned air; the design, procurement, installation and financing of certain energy projects; the operations, maintenance, repair and capital replacement of energy infrastructure at designated Lilly facilities, all pursuant to and in accordance with a Project Management Agreement ("PMA"), an Operations, Maintenance and Repair Agreement, (OM&RA") and a Master Lease Agreement ("Lease") each between EESO and the LLC (collectively the CMA, LLC Agreement, Services Agreement, PMA, OM&RA and Lease are referred to herein as the "Agreements"); and WHEREAS, as security for EESO's and its affiliates' obligations under the Agreements, the Company is required to guaranty the obligations of EESO and its affiliates thereunder; and WHEREAS, the Company deems it is in its best interests that EESO and its affiliates enter into the Agreements and that the Company guarantee the obligations of EESO and its affiliates under the Agreements; NOW, THEREFORE, IT IS RESOLVED, that the Board of Directors of the Company hereby approves in principle EESO's and its affiliates entering into the Agreements, and the performance of their respective obligations thereunder. E 0004392246 EXH005-02420 ============= Page 101 of 128 ============= RESOLVED FURTHER, that the Office of the Chairman be, and hereby is, authorized, empowered and directed on behalf of the Company, under its corporate seal and otherwise, to take such further action, as may be deemed necessary or appropriate in connection with the Agreements, including, without limitation, the authority and power to approve the execution of the Agreements and any agreement to be entered into in connection with the Agreements and to approve a guaranty agreement (the "Guaranty"), each with such terms, conditions and obligations as the Office of the Chairman shall approve, such approval and the approval of this Board of Directors of the Company to be evidenced conclusively by the execution and delivery thereof by an officer of the Company, EESO or other subsidiary of the Company authorized by the Office of the Chairman: RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized, empowered and directed in the name and on behalf of the Company, under its corporate seal or otherwise, to take such further action as any such Officer may deem necessary or appropriate in connection with the Company's obligations under the Guaranty, including the execution of the Guaranty and of any other certificates or documents as the officers of the Company shall approve, such approval and the approval of this Board of Directors to be evidenced conclusively by the execution and delivery of such other certificates or documents; RESOLVED FURTHER, that the officers of the Company and its counsel be, and each of them hereby is, authorized and directed (anyone of them acting alone) to take any and all such further action from time to time as any such Officer may deem necessary or appropriate in connection with the Agreements and the Company's obligations under the Guaranty, including any amendment or modification of the Guaranty, and to execute and deliver all such further instruments, certificates, notices, waivers and documents for 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; and RESOLVED FURTHER, that all actions heretofore taken by an officer of the Company, or a subsidiary thereof, related to or in connection with the Agreements and the Guaranty and the transaction contemplated by these resolutions are hereby adopted, ratified, confirmed and approved in all respects. 2 E0004392247 =XH005-02421 ============= Page 102 of 128 ============= 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. K:\a Minutes\2000 Minutes\12122000\EIi Lilly res.doc 3 ECO04392248 EXH005-02422 ============= Page 103 of 128 ============= O) N N O) M O O U W 4(h) EXH005-02423 ============= Page 104 of 128 ============= AGENDA ITEM 4(h) (SUGGESTED FORM OF RESOLUTIONS) RESOLVED, that the establishment of Enron Net Works Partners, LP, a Delaware limited partnership (the "Partnership"), to pursue asset acquisitions in the pulp and paper and lumber industries and, to the extent contemplated by the partnership agreement of the Partnership, certain other industries, where, by utilizing the Company's business model, there is an opportunity to become a leading principal based market maker and the related offering of up to $1.5 billion in limited partnership interests to eligible investors, including the Company and its affiliates, on the terms and conditions presented to the Board of Directors with the final approval of the Committee of the Board delegated herein, is hereby approved; RESOLVED FURTHER, that a Committee of the Board consisting of Kenneth Lay and Jeffrey Skilling (with Kenneth Lay to serve as chairman) be, and hereby is, constituted under Section 3, Article IV of the Company's Bylaws with full power and authority on behalf of the Board (except as otherwise contemplated by Section 6, Article IV of the Company's Bylaws) to settle and approve the terms and authorize execution on behalf of the Company or its affiliates of such documents relating to the transaction undertaken or proposed to be undertaken by the following resolutions as may be required or necessary in order to enable the Company and its affiliates to fulfill their respective obligations in connection with the following resolutions; RESOLVED FURTHER, that an affiliate of the Company will acquire limited partnership interests in the Partnership in consideration for cash in an amount of up to $325,000,000, the contribution of certain existing pulp and paper assets and Garden State Paper Company LLC and, as necessary, will underwrite an additional $200,000,000 of limited partnership interests to be sold after December 31, 2000; RESOLVED FURTHER, that Enron Net Works Management LLC, an affiliate of the Company, will acquire the general partner interest in the Partnership, manage the business and affairs of the Partnership and shall contribute certain management capabilities, technical capabilities and credit enhancement of the Partnership's activities, including guarantees and other enhancing arrangements; RESOLVED FURTHER, that the Chairman of the Board, the Vice Chairman of the Board, the President, any Vice President, the Treasurer, or any Deputy Treasurer of the Company as well as the Chairman, President, any Managing Director, or any Vice President of the General Partner of the Partnership (any one of them acting alone), is hereby authorized and empowered for and on behalf of the Company or the Partnership, as applicable, to negotiate E0004392250 EXH005-02424 ============= Page 105 of 128 ============= the terms, provisions, and conditions of, and to execute and deliver, any and all definitive documents to be executed in connection with the formation of the Partnership, including but not limited to, the Amended and Restated Limited Partnership Agreement and the related Services Agreement (through which the Company or its affiliates will provide certain administrative services to the Partnership) and Trading Agreement (by which the Partnership, through the Company or its affiliates, will participate in the physical and financial trading of commodities utilized in the industries), together with any other documents or instruments which may be executed in connection therewith and any subsequent amendments or supplements thereto (collectively, the "Principal Agreements"), as may be acceptable or agreeable to any of said officers, such acceptance and agreement to be conclusively evidenced by any of said officers' execution and delivery thereof; RESOLVED FURTHER, that all Principal Agreements authorized under these resolutions may be expected to benefit, directly or indirectly, the Company, and it is in the best interest of the Company to authorize the formation of the Partnership, and the Principal Agreements are necessary or convenient to the conduct, promotion, or attainment of the business of directly or indirectly wholly- owned subsidiaries of the Company; RESOLVED FURTHER, that any of said officers (any one of them acting alone) is authorized and empowered to do or cause to be done all such acts or things, in the name and on behalf of the Company or the Partnership, as any of them, in their discretion, may deem necessary, advisable or appropriate to effectuate or carry out the purposes and intent of the foregoing resolutions and to perform the obligations of the Company or the Partnership, as applicable, under all instruments executed on behalf of the Company or the Partnership in connection with the Principal Agreements or other documentation related thereto; RESOLVED FURTHER, that the execution by any of the said officers of any document authorized by the foregoing resolutions or any document executed in the accomplishment of any action or actions so authorized is (or shall become upon delivery) the enforceable and binding act and obligation of the Company or the Partnership, as applicable, without the necessity of the signature or attestation of any other officer of the Company or the Partnership or the affixing of the corporate seal; RESOLVED FURTHER, that all acts, transactions or agreements undertaken prior to the adoption of these resolutions by any officers or representatives of the Company in its or the Partnership's name in connection with the foregoing matters are hereby ratified, confirmed and adopted by the Company; and E0004392251 2 EXH005-02425 ============= Page 106 of 128 ============= RESOLVED FURTHER, that any of said officers 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 or the Partnership, as applicable, 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 the foregoing resolutions. K:\a Minutes\2000 Minutes\12122000\NET WORKS RES..doc 3 E0004392252 EXH005-02426 ============= Page 107 of 128 ============= M In N N 0) M "j- CD O C) W EXH005-02427 ============= Page 108 of 128 ============= AGENDA ITEM 4(i) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that Enron Industrial Markets LLC or an affiliate thereof ("EIM") acquire from Daishowa North America Corporation, a Canadian company, all of the outstanding capital stock of Daishowa Forest Products, Ltd., a Canadian corporation, the total cost of which acquisition is estimated to be US$367,400,000, on the terms and conditions presented to the Board of Directors (the "Acquisition"); and WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that approvals be granted, as set forth below, in connection with the Acquisition; NOW, THEREFORE, IT IS RESOLVED, that the appropriate officers of the Company and/or EIM be, and hereby are, authorized to execute, deliver, and perform the obligations of all agreements in connection with the Acquisition, including any stock purchase agreements, financing and loan agreements with various lenders, and any other various agreements related to the Acquisition; RESOLVED FURTHER, that the Company and/or EIM be, and hereby are, authorized to commit an amount of up to US$367,400,000 for the Acquisition; RESOLVED FURTHER, that the officers, directors, and authorized legal representatives of the Company and EIM be, and hereby are, authorized to execute and deliver such other certificates, powers of attorney, affidavits, agreements, assignments, documents, guarantees, and instruments as are required in connection with the above-referenced Acquisition; RESOLVED FURTHER, that all actions heretofore taken by the officers and representatives of the Company and EIM with respect to the transactions contemplated above be, in all respects, approved, confirmed, and ratified; E0004392254 EXH005-02428 ============= Page 109 of 128 ============= RESOLVED FURTHER, that the proper officers of the Company and EIM 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 and EIM, under a 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 the foregoing resolutions; and RESOLVED FURTHER, that the proper officers of the Company, EIM, 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 or EIM, 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. K:\a Minutes\2000 Minutes\12122000\crane res..doc 2 E0004392255 EXH005-02429 ============= Page 110 of 128 ============= AGENDA ITEM 4(i) ' , (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that Enron Industrial Markets LLC or an affiliate thereof ("EIM") either (i) purchase a 420,000 ton per year kraft pulp mill (the "Mill") and related Mill assets located in Castlegar, British Columbia, owned by Stone Venepal (Celgar) Pulp Inc., through KPMG Inc. ("KPMG"), as receiver and trustee; or (ii) purchase all of the outstanding capital stock of Stone Venepal (Celgar) Pulp Inc. from Smurfitt Stone and/or KPMG; the total cost of either such acquisition is estimated to be US$360,000,000, on the terms and conditions presented to the Board of Directors (the "Acquisition"); WHEREAS, the Board of Directors of the Company deems it advisable and in the best interests of the Company that approvals be granted, as set forth below, in connection with the Acquisition; NOW, THEREFORE, IT IS RESOLVED, that a Committee of the Board consisting of Kenneth Lay and Jeffrey Skilling (with Kenneth Lay to serve as chairman) be, and hereby is, constituted under Section 3, Article IV of the Company's Bylaws with full power and authority on behalf of the Board (except as otherwise contemplated by Section 6, Article IV of the Company's Bylaws) to settle and approve the terms and authorize execution on behalf of the Company or its affiliates of such documents relating to the Acquisition undertaken or proposed to be undertaken by the following resolutions as may be required or necessary in order to enable the Company and its affiliates to fulfill their respective obligations in connection with the following resolutions; RESOLVED FURTHER, that the appropriate officers of the Company and/or EIM be, and hereby are, authorized to execute, deliver, and perform the obligations of all agreements in connection with the Acquisition, including any stock purchase agreements or asset purchase agreements, financing and loan agreements with various lenders, and other various agreements related to the Acquisition; RESOLVED FURTHER, that the Company and/or EIM be, and hereby are, authorized to commit an amount of up to US$360,000,000 for the Acquisition; RESOLVED FURTHER, that the officers, directors, and authorized legal representatives of the Company and EIM be, and hereby are, authorized to execute and deliver such other certificates, powers of attorney, affidavits, agreements, assignments, documents, guarantees, and instruments as are required in connection with the above-referenced Acquisition; E0004392256 EXH005-02430 ============= Page 111 of 128 ============= RESOLVED FURTHER, that all actions heretofore taken by the officers and representatives of the Company and EIM with respect to the transactions contemplated above be, in all respects, approved, confirmed, and ratified; and RESOLVED FURTHER, that the proper officers of the Company and EIM 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 and EIM, under a 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 the foregoing resolutions. RESOLVED FURTHER, that the proper officers of the Company, EIM, 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 and EIM, 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. K:\a Minutes\2000 Minutes\12122000\CANARY RES.doc 2 E0004392257 EXH005-02431 ============= Page 112 of 128 ============= 00 N N 6) Co 'mot O 0 U W EXH005-02432 ============= Page 113 of 128 ============= AGENDA ITEM 4(j) (SUGGESTED FORM OF RESOLUTIONS) WHEREAS, the Committee approved on November 14, 1997 that certain wholly-owned subsidiaries of the Enron South America LLC ("ESA"), including Enron do Brazil Holdings Ltd. and Enron Brazil Power Holdings I Ltd. (the "Project Participants") participated with Shell Cuiaba Holdings Ltd. and Shell Gas (Latin America) B.V. in the development and ownership of a 480-megawatt independent power plant in Cuiaba, Brazil and a 641km pipeline from Bolivia to Brazil, the Cuiaba Integrated Energy Project (the "Cuiaba Project" or the "Project"); and WHEREAS, the Committee authorized on September 24, 1999 the Company or its designated affiliate to sign financing documents related to the Cuiaba Project; WHEREAS, the Committee approved on August 8, 2000 the guarantees required by the lenders in connection with the financing of the Cuiaba Project; WHEREAS, the construction of the Cuiaba Project is almost complete and the conditions precedent for financial closing are nearly satisfied; WHEREAS, due to certain construction delays and cost related overruns related to environmental matters, the Cuiaba Project will require additional equity funding to complete construction prior to financial closing; NOW, THEREFORE, IT IS RESOLVED, that ESA and its affiliates are authorized to spend additional equity funds required for the completion of the Cuiaba Project in the amount of US$259,586,000 for an aggregate total equity investment in the Cuiaba Project by ESA and/or its affiliates in the amount of US$401,174,000 prior to financial close; RESOLVED FURTHER, that ESA and its affiliates are authorized to spend additional permanent equity funds required for the completion of the Cuiaba Project in the amount of US$45,872,000 for a total aggregate permanent equity investment in the Cuiaba Project by ESA and/or its affiliates in the amount of US$187,460,000 from and after financial close; E0004392259 EXH005-02433 ============= Page 114 of 128 ============= RESOLVED FURTHER, that the directors, officers, and attorneys-in-fact of the Company and the Project Participants are hereby authorized, empowered, and directed (any one of them acting alone) to take any and all such actions necessary to execute and deliver all instruments and documents in support the Cuiaba Project, under 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 and that all actions heretofore taken by the directors, officers, and attorneys-in-fact of the Company and the Project Participants with respect to the transactions contemplated above be, in all respects, approved, confirmed, and ratified. 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. K:\a Minutes\2000 Minutes\12122000\cuiba res.doc 2 ECO04392260 --XH005-02434 ============= Page 115 of 128 ============= O (N N 0) M O 0 U W EXH005-02435 ============= Page 116 of 128 ============= Enron Transaction Approval Summary Merchant Transactions Board of Directors Meeting: TODAY'S DATE: December 12, 2000 December 5, 2000 Tab No. Region/ Business Investment Class Date Approved Transaction Name RAC Recommendation Transaction Size Approval Authority* Net Amount M-1 EUROPE Conforming 15-Nov-00 Arcos Pre-NTP II 1 Proceed with Transaction $ 6,500,000 WHOLESALE OOC $ 6,500,000 M-2 EES Conforming 29-Se -00 General Growth Properties Proceed with Transaction $ 8,600,000 ENE-OOC $ 8,600,000 M-3 CALME Conforming 27-Oct-00 IeC - CALME II 2 Proceed with Transaction $ 500,000 WHOLESALE OOC $ 500,000 M-4 EPMI Conforming 15-Nov-00 Reed Creek Proceed with Transaction $ 10,300,000 WHOLESALE OOC $ 10,300,000 M-5 ENA Conforming 24-Se -00 Tridium (Equity) Proceed with Transaction $ 10,000,000 ENE-OOC $ 10,000,000 Total Funded Capital Approved: $ 35,900,000 $ 35,900,000 A. - -I~~ v Tab v No. Region! Business Investment Class Date Approved Transaction Name RAC Recommendation Transaction Size Approval Authority* Net Amount M-6 EES Conforming 04-Oct-00 American National Can ANC Proceed with Transaction $ 10,150,000 WHOLESALE OOC $ 10,150,000 M-7 Enron Credit Non-Conforming 19-Oct-00 Citibank/RVI Credit Swap 3 Proceed with Transaction $ 200,000 ENE-OOC/CRO $ 200,000 M-8 ENA Conforming 31-Oct-00 Cross Timbers Proceed with Transaction $ 21,420,000 ENE-OOC/CRO $ 21,420,000 Total Commodities $ 31,770,000 $ 31,770,000 V Tab"' No. Y, v Region/ Business Investment Class Date Approved Transaction Name RAC Recommendation Transaction Size Approval Authority* Net Amount M-9 ENA Conforming 13-Oct-00 Basic Energy Services, Inc. Proceed with Transaction $ 40,000,000 ENE-CEO/COO $ 37,500,000 M-10 ENA Conforming 13-Oct-00 Bri ham Exploration Company, Inc. Proceed with Transaction $ 20,000,000 WHOLESALE OOC $ 12,500,000 M-11 Enron Canada Conforming 02-Nov-00 Calder (Beau Canada Exploration) Proceed with Transaction $ 10,000,000 WHOLESALE OOC $ 6,000,000 M-12 EBS Conforming 24-Oct-00 Li hTrade Proceed with Transaction $ 27,800,000 ENE-CEO/COO $ 27,800,000 M-13 Caribbean Conforming 25-Se -00 PQP LLC Equity Sale to CDC Proceed with Transaction $ 11,000,000 ENE-OOC $ 11,000,000 M-14 ENA Conforming 20-Se -00 Project 20/20 Proceed with Transaction $ 204,000,000 ENE-CEO/COO $ 204,000,000 M-15 Corporate Tax Conforming 30-Se -00 Project Tomas Windup Proceed with Transaction $ 273,788,730 ENE-CEO/COO $ 273,788,730 M-16 ENA Conforming 21-Nov-00 Quicksilver Proceed with Transaction $ 9,382,835 WHOLESALE OOC $ 5,629,701 M-17 ENA Conforming 13-Oct-00 Thornweil Proceed with Transaction $ 28,000,000 ENE-CEO/COO $ 28,000,000 Total Divestitures $ 623,971,565 $ 606,218,431 Approved under authority granted at the August 1999 Board meeting. Included for information purposes only. (1) Total Exposure after this transaction is $12.5 MM (2) Total Exposure after this transaction is $5.2 MM (3) Total Exposure after this transaction is $45.0 MM E0004392262 EXH005-02436 ============= Page 117 of 128 ============= Enron Transaction Approval Summary Strategic Transactions Board of Directors Meeting: TODAY'S DATE: December 12, 2000 December 5, 2000 Tab No. Region/ Business Investment Class Date Approved Transaction Name RAC Recommendation Transaction Size Approval Authority* Net Amount S-1 ENA/EECC Conforming 28-Se -00 AIG Proceed with Transaction $ 25,000,000 ENE-OOC $ 25,000,000 S-2 EBS Conforming 04-Nov-00 EBS Network Buildout/Protective Inadequate Returns $ 21,600,000 ENE-OOC/CRO $ 21,600,000 S-3 EIP Conforming 20-Se -00 Cambium Proceed with Transaction $ 10,000,000 ENE-OOC $ 10,000,000 S-4 Corp. HR Conforming 27-Nov-00 ClickAtHome Proceed with Transaction $ 43,940,000 ENE-CEO/COO $ 43,940,000 S-5 Enron Metals Conforming 03-Oct-00 Cook 1 Proceed with Transaction $ 16,000,000 ENE-OOC $ 16,000,000 S-6 ENA Conforming 12-Se -00 Cypress - Interim Funding 2 Proceed with Transaction $ 4,904,000 ENE-CEO/COO $ 4,904,000 S-7 EWC Conforming 19-Se -00 Europe Headquarters 3 Proceed with Transaction $ 8,200,000 ENE-OOC $ 8,200,000 S-8 EBS Conforming 15-Oct-00 Hamachi Proceed with Transaction $ 41,200,000 ENE-CEO/COO $ 41,200,000 S-9 EES Conforming 8-Se -00 Macerich Proceed with Transaction $ 10,160,000 ENE-OOC $ 10,160,000 S-10 EBS Conforming 29-Oct-00 Motorola Set To Box STB 4 Proceed with Transaction $ 2,600,000 WHOLESALE OOC $ 2,600,000 S-11 ENA Conforming 19-Oct-00 Na oleonville Integration Proceed with Transaction $ 6,900,000 WHOLESALE OOC $ 6,900,000 S-12 EES Conforming 21-Nov-00 Simon JV 5 Proceed with Transaction $ 4,070,000 ENE-CEO/COO $ 4,070,000 S-13 EES Conforming 29-Oct-00 VA Medical Center 6 Inadequate Returns $ 962,670 ENE-OOC/CRO $ 962,670 S-14 ENA Conforming 30-Se -00 VITRO 7 Proceed with Transaction $ 49,800,000 ENE-CEO/COO $ 49,800,000 Total Funded Capita l Approved: $ 245,336,670 $ 245,336,670 Divestitures Tab No. Region/ Business Investment Class Date Approved Transaction Name RAC Recommendation Transaction Size Approval Authority* Net Amount S-15 APACHI Conforming 14-Nov-00 Nigeria Power Holding Ltd. 8 Proceed with Transaction $ 127,230,000 ENE-CEO/COO $ 127,230,000 Total Divestitures $ 127,230,000 $ 127,230,000 Approved under authority granted at the August 1999 Board meeting. Included for information purposes only. (1) Amount represents Capital Commitment. The deal has an additional $15.5 MM In a guarantee. (2) Total Exposure after this transaction $87.4MM ($55.9MM - net of cash back). (3) Total Exposure after this transaction is $15.5MM. (4) Total Exposure after this transaction $8.7MM. (5) Total Exposure after this transaction $74.24MM. (6) Total Exposure after this transaction $23.2 MM (7) Amount represents Capital Commitment. The deal has an additional $11.5MM in guarantees and $23.OMM in L/C. (8) Guaranty (up to $180 MM) to the seller to secure our subsidiary's obligations under the Purchase and Sale Agreement. ECOO4392263 =XH005-02437 ============= Page 118 of 128 ============= co N N O) co d' 0 0 U W EXH005-02438 ============= Page 119 of 128 ============= Lord John Wakeham, Chairman Dr. Wendy L. Gramm Dr. John Mendelsohn Mr. Jerome J. Meyer AGENDA MEETING OF THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE OF THE BOARD OF DIRECTORS December 11, 2000 Enron Corp. 1400 Smith Street, EB50MO3 Houston, Texas 1. Directors' Assessment 2. Other Business 3. Adjournment. K:\a Minutes\2000 Minutes\12122000\Nom. Agenda.doc E0004392265 EXH005-02439 ============= Page 120 of 128 ============= p. General Corporate Matters O (0 N N 0) c) O O 0 W ============= Page 121 of 128 ============= CD N N O) C l) O O U W EXH005-02441 ============= Page 122 of 128 ============= AGENDA ITEM 12(a) (SUGGESTED FORM OF RESOLUTIONS) RESOLVED, that the meeting date, location, and time of the 2000 Annual Meeting of Shareholders be, and it hereby is, set for May 1, 2001, at the Doubletree Hotel at Allen Center, 400 Dallas Street, Houston, Texas, at 10:00 a.m., C.D.T.; and RESOLVED FURTHER, that the close of business on March 2, 2001, be, and it hereby is, approved and fixed as the record date for determining shareholders entitled to vote at the 2001 Annual Meeting of Shareholders. E0004392268 EXH005-02442 ============= Page 123 of 128 ============= rn N N m c') IT 0 O U W EXH005-02443 ============= Page 124 of 128 ============= AGENDA ITEM 12(b) 2001 SCHEDULE ENRON CORP. BOARD OF DIRECTORS' MEETINGS Monday, February 12th Houston Tuesday, May 1" (Annual Meeting) Houston Tuesday, August 14th Houston Tuesday, October 9th Houston Tuesday, December 11th Houston* *Spouses included. K:\a Minutes\2000 Minutes\12122000\2001 bod schedule.doc E0004392270 EXH005-02444 ============= Page 125 of 128 ============= N N 0) CO It 0 0 U W EXH005-02445 ============= Page 126 of 128 ============= AGENDA ITEM 12(c) (SUGGESTED FORM OF RESOLUTIONS) RESOLVED, that a dividend of $132.89 per share on the Mandatorily Convertible Junior Preferred Stock, Series B of the Company (for an aggregate dividend payment of $32,222,222), covering the dividend period from and including July 1, 2000 through December 31, 2000 be, and it hereby is, declared payable on January 9, 2001 to stockholders of record of said stock at the close of business on December 31, 2000. K:\a Minutes\2000 Minutes\12122000UR PREFERRED RES.doc E0004392272 EXH005-02446 ============= Page 127 of 128 ============= CIO N N N 0) (Y) ,I- C) 0 U W EXH005-02447 ============= Page 128 of 128 ============= rW AGENDA ITEM 12(d) (SUGGESTED FORM OF RESOLUTIONS) 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: Daniel L. Bruce Vice President, E-Commerce Technology Linda L. Robertson Vice President, Federal Government Affairs Lori Pinder Metz Assistant Secretary E0004392274 =XH005-02448