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Kenneth L. Lay and Linda P. Lay
CAR Comments
August 23, 1994

The attached CAR documents approval of a $7.5MM revolving line of credit for Ken and Linda Lay.
This credit facility will replace a contemplated $7.5MM credit facility which was going to be provided
by Charter Bank. The borrower decided to consolidate his banking relationship at NationsBank based on
the responsiveness of Private Banking with regards to the $16MM credit facilities. Since closure of the
$16MM credit facilities was being held up by Charter's responsiveness on the proposed $7.5MM credit
facility, Ken Lay decided to replace Charter. Ken and Linda were scheduled to sign documents on the
$16MM credit facilities on 8/23/94 and offered to move the Charter Bank debt to NationsBank could
meet the closing date.

The proposed $7.5MM line of credit will be subject to a 50% advance on listed stock (acceptable to
NationsBank) and include a 75% margin call. Pricing will be the same as the other secured credit
facilities. Initially, NationsBank will fund approximately $3.5MM under the proposed credit facility to
completely pay off Charter Bank.

This facility will be a purpose credit under Regulation U, accordingly, advances will be limited to 50%
of the collateral value. At a later date, NationsBank may decide to split the $7.5MM facility into two
separate facilities (one for purpose credit and one for non purpose ere it); however, er erms and
conditions will remain unchanged. Also, the facility will have a margin call at a 75% LTV, requiring
Lay to pledge additional acceptable collateral or reduce the loan balance to return to a 70% LTV.
Pricing will be at LIBOR + 175bps; with repayment of interest only due the earlier of quarterly or the
expiration of each LIBOR contract, and principal due at maturity. The proposed risk rating of "4-Good"
is assigned based on the marketability and collateral coverage of the listed stock held as collateral.
Further, the credit exposure strategy of "Maintain" is appropriate given the size ($27MM committed with
the acceptance of this proposal) and performance of Mr. Lay's overall relationship with NationsBank.

For further background and financial information, please refer to the CAR Comments dated July
15, 1994.

Nathan Crowell ~~
Credit Analyst U~
(713) 247-7189 ~~ , J c 0 ~/;J~3"~u

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  BOA/FBI/LAY: 30342
_ 02-00239