============= Page 1 of 130 ============= Enron Corp. Board of Directors Meeting August 8, 2000 Endless possibilities.TM E0004391389 Confidential =XH005-00689 ============= Page 2 of 130 ============= now W, _" or rte IV- A 1- fly Agenda 0 0 M V ~J \') 0 0 W a 2 EXH005-00690 ============= Page 3 of 130 ============= K. L. Lay, Chairman R. A. Belfer N. P. Blake, Jr. R. C. Chan J. H. Duncan W. L. Gramm K. L. Harrison R. K. Jaedicke C. A. LeMaistre AGENDA MEETING OF THE BOARD OF DIRECTORS ENRON CORP. EXECUTIVE SESSION: R.P. Mark J. Mendelsohn J. J. Meyer P.V. Ferraz Pereira F. Savage J. K. Skilling J. A. Urquhart J. Wakeham H. S. Winokur, Jr. 7:00 p.m. August 7, 2000 Four Seasons Hotel, Austin Room Houston, Texas 1. Approve minutes of meetings of the Board of Directors held on April 3 and May 2, 2000 - Mr. Lay 2. Report on Executive Committee meeting held on June 22 and approve minutes of Executive Committee meetings held on March 2, May 17, and June 1, 2000 - Mr. Duncan 3. Report on Compensation and Management Development Committee meetings held on May 26 and August 7, 2000 - Dr. LeMaistre (a) Compensation and Management Development Committee Agenda included for information purposes only (b) Approve the partial termination of the Enron Corp. Cash Balance Plan as adopted for EOG Resources, Inc. employees (c) Approve amendments to the 1994 Enron Corp. Deferral Plan and the amended and restated Trust Documents (d) Approve amendment to the 1991 Enron Corp. Stock Plan (e) Approve amendments to the 1994 Enron Corp. Stock Plan to clarify the retirement definition and to allow for stock option transfers for grants made under the 1994 Stock Plan 4. Report on Audit and Compliance Committee meeting held on August 7, 2000 - Dr. Jaedicke E0004391391 (H005-00691 ============= Page 4 of 130 ============= (a) Audit and Compliance Committee Agenda included for information purposes only 5. Report on Finance Committee Meeting held on August 7, 2000 - Mr. Winokur (a) Finance Committee Agenda included for information purposes only (b) Approve Revision to the Risk Management Policy (c) Approve Project Tammy (d) Approve Enron South America Rio Gen (e) Approve Enron South America Cuiaba Contingent Support (f) Approve Enron South America Cuiba Buy-Out (g) Merchant and Strategic Transactions approved by the Office of the Chairman since the last Board meeting included for informational purposes only 6. Report on Nominating and Corporate Governance Committee held on August 7, 2000 - Lord Wakeham 7. Financial and earnings report - Mr. Causey 8. Stock Performance Report - Mr. Koenig 9. Other business to be considered in executive session - Mr. Lay Attendees: Rebecca C. Carter Richard A. Causey Mark E. Koenig TALK TO DR. MENDELSOHN RE: UNIV. OF ST. THOMAS INSTITUTE FOR BOARD OF DIRECTORS ON NOVEMBER 2, 2000 E0004391392 :HO05-00692 ============= Page 5 of 130 ============= K. L. Lay, Chairman R. A. Belfer N. P. Blake, Jr. R. C. Chan J. H. Duncan W. L. Gramm K. L. Harrison R. K. Jaedicke C. A. LeMaistre R.P. Mark J. Mendelsohn J. J. Meyer P.V. Ferraz Pereira F. Savage J. K. Skilling J. A. Urquhart J. Wakeham H. S. Winokur, Jr. AGENDA MEETING OF THE BOARD OF DIRECTORS ENRON CORP. 8:00 am. August 8, 2000 Boardroom, Enron Building Houston, Texas OPEN SESSION: 10. Special Reports/Updates: (a) Enron Gas Pipeline Group - Mr. Horton (b) Project Summer - Mr. Skilling (c) General Business Update - Mr. Skilling 11. General corporate matters: (a) Approve the declaration of dividends payable in the third quarter of 2000 for the common and preferred issues of stock- Mr. Lay (b) Approve election of corporate officers - Mr. Skilling E0004391393 H005-00693 ============= Page 6 of 130 ============= 12. Other Business (a) Approve Enron Energy Service Project - Mr. Skilling 13. Adjournment THE NEXT REGULAR MEETING OF THE BOARD WILL BE HELD ON OCTOBER 9- 10, 2000 IN RIO DE JANEIRO, BRAZIL. TALK TO DR. MENDELSOHN RE: UNIV. OF ST. THOMAS INSTITUTE FOR BOARD OF DIRECTORS ON NOVEMBER 2, 2000 Attendees: Rebecca Carter Richard A. Causey William A. Cordes James V. Derrick, Jr. Andrew S. Fastow Robert A. Hill Stanley C. Horton Mark E. Koenig Danny J. McCarty Rockford G. Meyer James C. Prentice Joseph W. Sutton K:\a Minutes\2000 Minutes\882000\Agenda.doc E0004391394 :HO05-00694 ============= Page 7 of 130 ============= 12. Other Business (a) Approve Enron Energy Service Project - Mr. Skilling 13. Adjournment THE NEXT REGULAR MEETING OF THE BOARD WILL BE HELD ON OCTOBER 9- 10, 2000 IN RIO DE JANEIRO, BRAZIL. TALK TO DR MENDELSOHN RE: UNIV. OF ST. THOMAS INSTITUTE FOR BOARD OF DIRECTORS ON NOVEMBER 2, 2000 Attendees: Rebecca Carter Stanley C. Horton \7 Richard A. CauseyV William A. Cordes V' lark-£ -oecn#g Danny J. McCarty James- ~~ ' &riGL Tr Rockford G. Meyer Z Andrew S. FastowL- James C. Prentice v '- Robert A. Hill V Joseph W. Sutton v K:\a Minutes\2000 Minutes\882000Wgenda.doc E0004391395 :H005-00695 ============= Page 8 of 130 ============= AVE v 3a_ - ---------------------- Presenter Bio's not Ohl _ a 'teANA S (1/ M r 0) M '14 - 8 O W EXH005-00696 ============= Page 9 of 130 ============= ENRON CORP. OFFICE OF THE CHAIRMAN BUSINESS UNITS July 31, 2000 OFFICE OF THE CHAIRMAN AZURIX Rebecca P. Mark Colin Skellet John Garrison CHAIRMAN & CEO ENRON CARIBBEAN BASIN ENRON GLOBAL LNG ENRON MIDDLE EAST David Haug OFFICE OF THE CHAIRMAN ASIA PACIFIC AFRICA, CHINA Rebecca McDonald Jim Hughes CHAIRMAN OF THE BOARD & CHIEF EXECUTIVE OFFICER Ken Lay PRESIDENT & CHIEF OPERATING OFFICER Jeff Skilling VICE CHAIRMAN Joe Sutton OFFICE OF THE CHAIRMAN ENRON ENERGY SERVICES Lou Pai Tom White OFFICE OF THE CHAIRMAN ENRON BROADBAND SERVICES Ken Rice Kevin Hannon OFFICE OF THE CHAIRMAN ENRON SOUTH AMERICA Jim Bannantine Diomedes Christodoulou CHAIRMAN & CEO ENRON GAS PIPELINE GROUP Stan Horton OFFICE OF THE CHAIRMAN ENRON INDIA Sanjay Bhatnager Wade Cline CEO & PRESIDENT PORTLAND GENERAL ELECTRIC Peggy Fowler E0004391397 OFFICE OF THE CHAIRMAN ENRON NORTH AMERICA Mark Frevert Dave Delainey John Lavorato OFFICE OF THE CHAIRMAN ENRON EUROPE LTD Mark Frevert John Sherriff OFFICE OF THE CHAIRMAN ENRON GLOBAL MARKETS Mark Frevert Mike McConnell Jeff Shankman :XH005-00697 ============= Page 10 of 130 ============= ENRON CORP. CORPORATE STAFF & GLOBAL FUNCTIONS July 31, 2000 EXEC VICE PRESIDENT & GENERAL COUNSEL LEGAL Jim Derrick EXEC VICE PRESIDENT HR & COMMUNITY RELATIONS Cindy Olson PRESIDENT & CHIEF EXEC OFFICER EE&CC Larry Izzo EXEC VICE PRESIDENT & CHIEF STRATEGY OFFICER Cliff Baxter CHAIRMAN OF THE BOARD & CHIEF EXECUTIVE OFFICER Ken Lay PRESIDENT & CHIEF OPERATING OFFICER Jeff Skilling VICE CHAIRMAN Joe Sutton EXEC VICE PRESIDENT & CHIEF ACCOUNTING OFFICER Rick Causey OFFICE OF THE CHAIRMAN ENRON NETWORKS Greg Whalley, Jeff McMahon, Louise Kitchen, Philippe Bibi EXEC VICE PRESIDENT CORPORATE DEVELOPMENT Mark Metts EXEC VICE PRESIDENT INVESTOR RELATIONS Mark Koenig EXEC VICE PRESIDENT RISK ASSESSMENT & CONTROL Rick Buy EXEC VICE PRESIDENT & CHIEF FINANCIAL OFFICER Andy Fastow PRESIDENT & CEO ENRON EXPLORATION & PRODUCTION Jeff Sherrick EXEC VICE PRESIDENT & CHIEF OF STAFF Steve Kean PRESIDENT & CHIEF EXECUTIVE OFFICER ENRON WIND Jim Noles E0004391398 XHO05-00698 ============= Page 11 of 130 ============= ENRON CORP. CORPORATE STAFF July 31, 2000 MANAGING DIRECTOR CORP. ACCOUNTING & FINANCIAL REPORTING Bob Butts MANAGING DIRECTOR STRATEGIC SOURCING George Wasaff CURRENT POSITION Executive Vice President & Chief Accounting Officer Rick Causey EXEC VICE PRESIDENT & PRIOR ENRON EXPERIENCE CHIEF ACCOUNTING OFFICER 1997 SVP Chief Acctg & Info Officer Rick Causey 1996 Managing Dir ECT Retail Risk Mgmt 1996 VP Comm ECT Retail Risk EXECUTIVE ASSIST ANT Mgmt Sharron Westbroo k PRIOR NON-ENRON EXPERIENCE 1982 Audit Mgr Arthur Andersen EDUCATIONAL BACKGROUND MANAGING DIRECTOR VICE PRESIDENT VICE PRESIDENT 1982 BBA Accounting - University TAX TRANSACTION STRATEGIC of ofT Texas ACCOUNTING INITIATIVES Bob Hermann Rodney Faldyn Melissa Becker CERTIFICATES 1983 Certified Public Accountant - Texas SENIOR DIRECTOR VICE PRESIDENT REGIONAL CHIEF IT COMPLIANCE SPECIAL ACCOUNTING PROJECTS OFFICERS Andrew Parsons Wanda Curry i ........................................... ........................i...................... ............................................ NORTH AMERICA GLOBAL E&P EUROPE GLOBAL RISK MGMT Wes Colwell] Howard Selzer Femley Dyson ............................................ ............................................... Sally Beck SOUTH AMERICA FINANCE INDIA EBS Kent Castleman Mark Lindsey Carol Howes Tod Lindholm ASIA/PACIFIC/CHINA I ENERGY SERVICES CARIBBEAN ' I GAS PIPELINE Cassandra Schultz Kevin Hughes Jeff Sommers Rod Hayslett .............................................................................................................................................. ASSET OPERATIONS AZURIX EECC PGE Dave Gunther Kenny Bickett Keith Marlow Mary Turina E0004391399 :XH005-00699 ============= Page 12 of 130 ============= ..NROI..,.,, IP CORPORATE STAFF July 31, 2000 EXEC VICE PRESIDENT INVESTOR RELATIONS Mark Koenig ........................ MANAGING DIRECTOR VICE PRESIDENT VICE PRESIDENT INVESTOR RELATIONS INVESTOR RELATIONS INVESTOR RELATIONS AZURIX Paula Rieker Cedric Burgher Liz Ivers Mark Koenig ........................ DIRECTOR INVESTOR RELATIONS NORTHERN BORDER Ellen Konsdorf E0004391400 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. EDUCATIONAL BACKGROUND 1980 MBA Finance - Univ of Nebraska 1977 Accounting - Univ of Nebraska CERTIFICATES 1989 CFA =XH005-00700 ============= Page 13 of 130 ============= ENRON CORP. ENRON GAS PIPELINE GROUP July 31, 2000 Bill Cordes CURRENT POSITION President Clean Fuels PRIOR ENRON EXPERIENCE 1996 President , Transwestern Pipeline 1993 President NNG 1990 VP of Regulatory Affairs NNG PRIOR NON-ENRON EXPERIENCE 1980 Division Controller, Peoples Natural Gas 1977 Gen. Manager Regulatory Affairs, Peoples Natural Gas 1971 Accounting, Peoples Natural Gas EDUCATIONAL BACKGROUND 1970 BBA Accounting, University of Nebraska-Lincoln PRESIDENT NNG / TW Bill Cordes CURRENT POSITION President Citrus/Florida Gas PRIOR ENRON EXPERIENCE 1996 Pres. - Citrus Corp/Florida Gas 1994 VP Regulatory Affairs & Gen. Council - Transwestern Pipeline 1984 Corp. Legal - NNG PRIOR NON-ENRON EXPERIENCE 1976 Deputy County Atty. EDUCATIONAL BACKGROUND 1976 J. D. - Creighton Univ. 1973 BA Political Science - Univ Nebraska Stan Horton CURRENT POSITION Chairman & Chief Executive Officer Enron Gas Pipeline Group PRIOR ENRON EXPERIENCE 1996 Chairman & CEO GPG/Enron Operations 1996 Pres & COO Enron Operations PRIOR NON-ENRON EXPERIENCE N/A EDUCATIONAL BACKGROUND 1977 MS Mgmt - Rollins College 1973 BS Fin & Accting - University of Central Florida CHAIRMAN & CEO ENRON GAS PIPELINE GROUP Stan Horton PRESIDENT PRESIDENT CITRUS/ FLORIDA GAS CLEAN FUELS Rock Meyer Jim Prentice CURRENT POSITION Jim Prentice President Clean Fuels PRIOR ENRON EXPERIENCE SVP - Corp. Planning (Omaha) SVP - Corp. Admin. & HR EVP - Enron Liquid Fuels SVP - Enron Gas Pipeline SVP & Chief Tech. Officer - Enron Gas Pipeline SVP - HR - Enron Gas Pipeline PRIOR NON-ENRON EXPERIENCE 1971 Mkt. Mgr., Plant Mgr. & VP - Northern Petrochemical Co. 1967 Research Eng. - ESSO Research EDUCATIONAL BACKGROUND 1968 Masters Chemical Eng. - Northwestern University 1966 Bachelor Chemical Eng. - Univ Louisville MANAGING DIRECTOR CURRENT POSITION Managing Director PRIOR ENRON EXPERIENCE 1998 Managing Director, London Exec. 1993 Vice Presldent6, Power Svcs. 1992 Director, Power Svcs. Danny McCarty Danny McCarty E0004391401 PRIOR NON-ENRON EXPERIENCE 1987 Attorney, Law Office of Jack 1982 K&E Petroleum, Inc. EDUCATIONAL BACKGROUND BA Political Science, University of Nebraska JD University of Nebraska-Lincoln XH005-00701 ============= Page 14 of 130 ============= N O r O c7 O O U W EXH005-00702 ============= Page 15 of 130 ============= DRAFT MINUTES SPECIAL MEETING OF THE BOARD OF DIRECTORS ENRON CORP. April 3, 2000 Minutes of a special meeting of the Board of Directors of Enron Corp. ("Company"), held pursuant to due notice at 4:00 p.m., C.D.T., on April 3, 2000 at the Enron Building in Houston, Texas. The following Directors were present, constituting a quorum, either in person or by telephone conference connection, where each of the participants could hear the comments by the other participants and join in the discussions: Mr. Kenneth L. Lay, Chairman Mr. Robert A. Belfer Mr. Norman P. Blake, Jr. Mr. John H. Duncan Mr. Joe H. Foy Dr. Wendy L. Gramm Mr. Ken L. Harrison Dr. Robert K. Jaedicke Dr. Charles A. LeMaistre f~a Mr. Jerome J. Meyer Mr. Mr. Frank Savage Mr. Jeffrey K. Skilling Mr. John A. Urquhart Lord John Wakeham Mr. Herbert S. Winokur, Jr. Directors Ronnie C. Chan, Rebecca Mark-Jusbasche, John Mendelsohn, and Paulo V. Ferraz Pereira were absent from the meeting. Messrs. James V. Derrick, Jr., Richard G. DiMichele, Andrew S. Fastow, John L. Griebling, Kevin P. Hannon, Joseph M. Hirko, Mark S. Muller, Lou L. Pai, Kenneth D. Rice, Joseph W. Sutton, and Thomas E. White and Ms. Rebecca C. Carter, all of the Company or affiliates thereof, also attended the meeting. The Chairman, Mr. Lay, presided at the meeting, and the Secretary, Ms. Carter, recorded the proceedings. Mr. Lay called the meeting to order and inquired if the Committee members had received the material for the meeting, and each responded that he or she had E0004391403 KHO05-00703 ============= Page 16 of 130 ============= received the material, a copy of which is filed with the records of the meeting. He stated that the meeting had been called for the Board to consider a transaction by Enron Energy Services, LLC ("EES"), a transaction by Enron Broadband Services, Inc. ("EBS"), and certain other business. He called upon Mr. Pai to present the EES transaction. Mr. Pai noted that on December 31, 1997 EES had transacted a private placement of an interest in EES with Ontario Teachers' Pension Plan Board ("OTPPB") and the California Public Employees' Retirement System ("Ca1PERS") (together "the minority shareholders"). He discussed the specifics of the private placement and the current value of EES as independently determined by Wall Street analysts. He stated that OTPPB had agreed to exchange its EES interest for Enron stock based on a total valuation of EES of $7 billion. He noted that the exchange was calculated at a fixed share exchange of 4.9 million shares of Enron stock within a $65-$75 collar prior to signing definitive agreements. He stated that EES was currently in negotiations with Ca1PERS, that Ca1PERS had agreed to exchange its EES interest for cash, and that EES was still exploring the alternative of using Enron stock in the exchange. He noted that as part of the exchanges the minority shareholders would receive their pro rata ownership of EMW Energy Services Corp. ("ResCo"), an indirect majority-owned subsidiary of the Company formed for the purpose of engaging in retail sales and marketing of natural gas and electricity to small commercial and residential customers in the C-" U.S. He then discussed the original investment made by the minority shareholders, the exchange valuation, and the return on the minority shareholders' investments. Following a discussion, upon motion duly made by Dr. Jaedicke, seconded by Dr. Gramm, and carried, the following resolutions were approved: WHEREAS, Enron Corp. (the "Company") desires to acquire the interest of Ontario Teachers' Pension Plan Board ("OTPPB") in Enron Energy Services, LLC, a Delaware limited liability company ("EES"), and the interest in EES of Joint Energy Development Investments II Limited Partnership, a Delaware limited partnership ("JEDI II"); NOW, THEREFORE, IT IS RESOLVED, that the Company shall negotiate to acquire (the "OTPPB Transaction") the OTPPB interest in EES in consideration for the issuance to OTPPB of up to 4,900,000 shares of Enron common stock ("Enron Common Stock"), a portion of the securities of EMW Energy Services, Inc. ("Resco") currently owned by EES, and such other consideration to which OTPPB and the Company shall agree; 2 E0004391404 :H005-00704 ============= Page 17 of 130 ============= RESOLVED FURTHER, that the Company shall negotiate to acquire the JEDI II interest in EES (the "JEDI II Transaction," and together with the OTPPB Transaction, the "Transactions") in consideration for a cash payment to JEDI II at a valuation equivalent to that utilized in the transaction with OTPPB, a portion of the securities of ResCo currently owned by EES, and such other consideration to which JEDI II and the Company shall agree; RESOLVED FURTHER, 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 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 Executive Vice President, any Senior Vice President, any Vice President, and any Managing Director of the Company is hereby authorized, empowered, and directed 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 Enron 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 Company is authorized to issue up to an aggregate of 4,900,000 shares of Enron Common Stock in connection with the Transactions, and that upon any such issuance in accordance with the terms of definitive agreements relating to the Transactions, such shares of Enron 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) E0004391405 :H005-00705 ============= Page 18 of 130 ============= one or more Registration Statements, including exhibits thereto (collectively, the "Registration Statement"), and (ii) such amendments and post-effective amendments to the Registration Statement or supplements to the Prospectuses constituting a part thereof, and to take all such further action, including the filing of final forms of the Prospectuses, as may, in the judgment of such officers, be necessary, desirable, or appropriate to secure and thereafter to maintain the effectiveness of the Registration Statement; RESOLVED FURTHER, that 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 Enron Common Stock to be issued in the Transactions; that the Chairman and Chief Executive Officer, the President and Chief Operating Officer, any Vice Chairman, any Executive Vice President, any Senior Vice President, any Vice President, and any Managing Director 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 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 therefor from the Company and the approval and ratification by the Company of the papers and instruments so executed and the actions so taken; RESOLVED FURTHER, that the actions of the officers 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 4 E0004391406 -1005-00706 ============= Page 19 of 130 ============= things in connection with the foregoing shall conclusively establish their authority from the Company and the approval and ratification by the Company; and RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, proper, or advisable, to carry into effect the purposes and intentions of this and each of the foregoing resolutions. Mr. Lay then called upon Mr. DiMichele to present the EBS transaction. Mr. DiMichele stated that the Company had an opportunity to acquire WarpSpeed Communications ("WarpSpeed"), a California-based software development company specializing in real-time, on-demand connection management services. He stated that if the acquisition were approved it would give EBS broadband switching capabilities and enable it to create a network of networks. He discussed the total proposed consideration and noted that it would require the issuance of Enron stock. He presented an overview of WarpSpeed including its current ownership structure, the services it provides, the number of employees, and certain financial data. He discussed the Company's valuation of Warp Speed and noted 4 that EBS did a build versus buy analysis to determine the best avenue for obtaining the needed technology. Messrs. Harrison and Skilling joined Mr. DiMichele in answering questions from the Board regarding efforts the Company was taking to retain the employees of WarpSpeed after the acquisition, the expected timeframe necessary to adapt WarpSpeed's technology to fulfill EBS's needs, whether WarpSpeed's technology was proprietary, and the' transferability of small scale technology applications to more wide-spread usage. Mr. DiMichele then discussed the strategic rationale for the acquisition including the ability to develop connection-oriented switching, the scalability of the technology, the premium quality of service provided, and the ability of EBS to get to the market quickly with the technology. He discussed the deal structure and the financial impact of the transaction and noted that it would be structured as a tax-free merger and that it was slightly dilutive to the Company's earnings. He commented on the risks in the transaction and the mitigants there were or would be put in place. Following a discussion, upon motion duly made by Mr. Harrison, seconded by Mr. Blake, and carried, the following resolutions were approved: 5 E0004391407 :H005-00707 ============= Page 20 of 130 ============= WHEREAS, Enron Corp. (the "Company") desires to acquire WarpSpeed Communications, a California corporation ("WarpSpeed") pursuant to an Agreement and Plan of Reorganization dated as of March 28, 2000 (the "Agreement") by and among WarpSpeed, Enron Broadband Services, Inc., a Delaware corporation ("EBS"), Enron Broadband Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of the Company ("Merger Sub"), and the Company, which Agreement provides that (i) Merger Sub will merge with and into WarpSpeed, with WarpSpeed surviving (the "Merger"), (ii) the Company will issue to the holders of capital stock of WarpSpeed an aggregate of approximately 635,718 shares (subject to adjustment as provided in the Agreement) of the Company's common stock, which amount may be adjusted to account for changes in the amount of cash and debt of WarpSpeed prior to the Merger, as consideration for the cancellation of such stock (the "Enron Shares") and (iii) upon consummation of the Merger, the Company will own all of the shares of capital stock of Warp Speed; h: NOW, THEREFORE, IT IS RESOLVED, that the Merger and the form of Agreement is hereby authorized and approved, and that the Company shall proceed with the consummation of such Merger in accordance with the resolutions hereby adopted; RESOLVED FURTHER, that the Transactions shall be subject to the following terms and conditions (the "Board Conditions"): (i) the definitive contracts and agreements relating to the Merger, including the Agreement, 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 the name and on behalf of the Company, shall be conclusive evidence of the approval by such officers or person of the contents thereof; and (ii) the maximum number of shares of Company common stock issued in connection with the Merger shall not exceed 800,000 shares. RESOLVED FURTHER, that each of the Chairman and Chief Executive Officer, the President and Chief Operating Officer, any Vice Chairman, any Executive Vice President, any Senior Vice 6 E0004391408 H005-00708 ============= Page 21 of 130 ============= President, any Vice President, and any Managing Director of the Company and the Chief Executive Officer, Chief Operating Officer, and any Vice President of EBS is hereby authorized, empowered, and directed 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 Merger (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 Merger Sub and the merger of Merger Sub with and into WarpSpeed; (ii) the authorization, execution, and delivery of the Agreement by EBS and Merger Sub, and by the Company for the limited purpose of agreeing to the provisions set forth in Section 6.7 thereof (which provides for certain indemnification rights in favor of the holders of the capital stock of Warp Speed) and Article IX thereof (which provides for the registration of the Enron Shares); (iii) the authorization, execution, and delivery of an agreement that provides for the escrow of a portion of the Enron Shares to provide for indemnification of the Company and its subsidiaries in accordance with the Agreement; (iii) the authorization and delivery of such information statements as may be required to be delivered to the holders of capital stock of WarpSpeed in connection with the issuance of the Enron Shares to such holders in order to comply with the requirements of Rule 502 of Regulation D of the Securities Act of 1933, as amended; and (iv) the authorization and filing with the Securities and Exchange Commission of a notification of Regulation D transaction in connection with the issuance of the Enron Shares; RESOLVED FURTHER, that in addition to the officers appointed above, Richard DiMichele is hereby appointed as agent and attorney-in-fact of the Company and is authorized, empowered, and directed to authorize and approve all agreements, instruments, and documents, and the taking of all actions, as such agent and attorney-in-fact may deem necessary or desirable and shall have all the powers of an officer of the Company with respect to these resolutions (subject, however, in all respects, to the Board E0004391409 1005-00709 ============= Page 22 of 130 ============= Conditions) solely for the purpose of consummating the Merger; it is the intent of the Board of Directors that Richard DiMichele, in his capacity as agent and attorney-in-fact of the Company, shall have all the duties, obligations, and responsibilities of an officer of the Company for purposes of the Merger, as if he were an officer of the Company; _ RESOLVED FURTHER, that the Company is authorized to issue up to an aggregate of 800,000 shares of Common Stock of the Company as consideration for the Merger (including the grant of registration rights on such shares as described in the Agreement), and upon issuance of such shares pursuant to the terms of the 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 in connection with the Merger 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, or other fees, costs, and expenses, and to take any and all further action in connection with the foregoing which any one or more of them shall deem necessary or advisable; RESOLVED FURTHER, that the execution by any officer of the Company or EBS of any papers and instruments or the performance by any one or more of them of any act in connection with the foregoing resolutions shall conclusively establish their authority therefor from the Company and the approval and ratification by the Company of the papers and instruments so executed and the actions so taken; RESOLVED FURTHER, that the actions of the officers and employees of the Company or EBS 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 and EBS, together or individually, may take any and all 8 E0004391410 :H005-00710 ============= Page 23 of 130 ============= 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 Merger, 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 thereof by the Company; RESOLVED FURTHER, that the proper officers of the Company are, and each of them is, hereby authorized, empowered, and directed to take, or cause to be taken, all actions necessary or advisable to effect the listing and trading of the Enron Shares on the New York Stock Exchange ("NYSE") and all other securities exchanges on which the Enron Shares are to be listed, including the preparation, execution, and filing of all necessary applications, documents, forms, and agreements with the NYSE, such other securities exchanges, and the Securities and Exchange Commission, the payment by the Company of filing, listing, or application fees, the preparation of temporary and permanent certificates for the Enron Shares, and the appearance of any such officer before NYSE or other securities exchanges officials; and that any and all actions of such officers heretofore taken in such regard are hereby approved, ratified, and confirmed; and RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, proper, or advisable to carry into effect the purposes and intentions of this and each of the foregoing resolutions. Mr. Lay then stated that, as previously discussed with the Board, the slate of Directors included in the Company's Proxy Statement ("Proxy") was the current Directors with the exception of Joe H. Foy, who would be retiring effective with the Annual Meeting of Shareholders on May 2, 2000. Upon motion duly made by Dr. Jaedicke, seconded by Dr. Gramm, and carried, the slate of Directors for inclusion in the Company's Proxy was approved. Mr. Lay then updated the Board on the Company's first quarter earnings and an article in Fortune magazine regarding the Company. 9 EC004391411 1005-00711 ============= Page 24 of 130 ============= There being no further business to come before the Board, the meeting was adjourned at 4:40 p.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\2000 Minutes\040300sp.doc EOO04391412 10 H005-00712 ============= Page 25 of 130 ============= DRAFT MINUTES MEETING OF THE BOARD OF DIRECTORS ENRON CORP. MAY 2, 2000 Minutes of a meeting of the Board of Directors of Enron Corp. ("Company") held pursuant to due notice at 8:00 a.m., C.D.T., on May 2, 2000 at the Enron Building in Houston, Texas. The following Directors were present, constituting a quorum, either in person or by telephone conference connection, where each of the participants could hear the comments by the other participants and join in the discussions: Mr. Kenneth L. Lay, Chairman Mr. Robert A. Belfer Mr. Norman P. Blake, Jr. Mr. Ronnie C. Chan Mr. John H. Duncan Mr. Joe H. Foy Dr. Wendy L. Gramm Mr. Ken L. Harrison Dr. Robert K. Jaedicke Dr. Charles A. LeMaistre Ms. Rebecca Mark-Jusbasche Dr. John Mendelsohn Mr. Paulo Ferraz Pereira Mr. Frank Savage Mr. Jeffrey K. Skilling Mr. John A. Urquhart Lord John Wakeham Mr. Herbert S. Winokur, Jr. Director Jerome J. Meyer was absent from the meeting. The meeting began in executive session, during which Messrs. James V. Derrick, Jr. and Joseph W. Sutton and Ms. Rebecca C. Carter, all of the Company, were also in attendance. Messrs. Robert B. Butts, Richard A. Causey, and Mark E. Koenig, and Ms. Rosalee T. Fleming, all of the Company, joined the executive session in progress as noted. The Chairman, Mr. Lay, presided at the meeting, and the Secretary, Ms. Carter, recorded the proceedings. E0004391413 :H005-00713 ============= Page 26 of 130 ============= Mr. Lay stated that minutes of meetings of the Board held on December 14, 1999 and February 7-8, 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 Mr. Winokur, seconded by Lord Wakeham, and carried, the minutes of the meetings held December 14, 1999 and February 7-8, 2000 were approved as distributed. He called upon Mr. Duncan to discuss an Executive Committee meeting. Mr. Duncan reported on a meeting of the Executive Committee of the Board of Directors held on March 2, 2000. He noted that at the meeting the Committee approved an Enron Europe, LLC transaction to sell the Company's interest in the Sutton Bridge power station. He noted that the sale would lead to a significant increase in the Company's short power position in the United Kingdom ("U.K.") and therefore, the Committee also approved an increase in the U.K. Electricity net open position and value-at-risk limits of the Enron Corp. Risk Management Policy. Mr. Duncan then noted that minutes of an Executive Committee meeting held on January 20, 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 January 20, 2000 meeting. Mr. Duncan's motion was duly seconded by Mr. Blake and carried and the report of the 5 Executive Committee meeting was accepted and the minutes of the January 20, 2000 meeting were approved as distributed. Mr. Lay then called upon Dr. LeMaistre for a report on a meeting of the Compensation and Management Development Committee held on May 1, 2000. Dr. LeMaistre stated that at the meeting the Committee had discussed a proposed amendment to the 1991 Stock Plan to change the vesting date of Director grants. He noted that under the 1991 Stock Plan non-employee Directors receive annual grants of stock options and phantom stock units on the Monday following the Annual Meeting of Shareholders and that the options vested 20% at grant and 20% on each anniversary of the grant date. He noted that Director retirements generally coincided with the Annual Meeting at which time unvested stock options were cancelled. He noted that certain of these options would have vested the following Monday and that it was not the Company's intention to have options cancelled days before they would have vested. He stated that to remedy the situation the Company was proposing that' the vesting schedule for Director grants be modified so that the vesting date be May 1 instead of the anniversary of the grant date. Following a discussion, he moved acceptance of the proposed amendment, his motion was duly seconded by Dr. Jaedicke, and carried, and the following resolutions were approved: 2 E0004391414 H005-00714 ============= Page 27 of 130 ============= WHEREAS, Enron Corp. (the "Company") and the shareholders of the Company have heretofore. approved and adopted the Enron Corp. 1991 Stock Plan (As Amended and Restated Effective May 4, 1999) (the "Plan"); and WHEREAS, the Company desires to amend the Plan; NOW, THEREFORE, IT IS RESOLVED, that the proper officers of the Company be, and they are, authorized and directed to prepare 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. Dr. LeMaistre then noted that the Company had caused a study to be conducted to determine if the level of compensation for non-employee Directors was competitive with the marketplace. He stated that Towers 'Perrin had performed the study by reviewing the Company's non-employee Director compensation relative to a select group of comparable companies and had determined that the Director's total annualized stock value was below the Company's targeted 75th percentile. He stated that, based on the findings, the Committee approved granting an additional 3,335 stock options to Directors to bring total direct compensation to the 75th percentile. Mr. Lay called upon Dr. Jaedicke to report on the Audit and Compliance Committee's meeting held on May 1, 2000. Dr. Jaedicke noted that the Committee had received the quarterly audit report from Arthur Andersen LLP ("AA"), and he 3 E0004391415 :H005-00715 ============= Page 28 of 130 ============= stated that AA would be spending additional time during the year on the formalization of accounting models, policies, and procedures relating to Enron Energy Services, LLC ("EES"), Enron Broadband Services, Inc. ("EBS"), and Enron NetWorks. He stated that the Committee had received a report on AA's fees for audit and other services provided to the Company. ' He noted that AA had five full-time partners and over 80 professionals in Houston who were focused on providing services to the Company. He then discussed an amended Audit and Compliance Committee Charter ("the Charter") and he commented on the changes that had been incorporated. Dr. Jaedicke moved approval of the amended Charter, his motion was duly seconded by Mr. Foy, and carried, and the following resolution was approved: RESOLVED, that the Charter for the Audit and Compliance Committee of the Board of Directors be, and hereby is, approved and that a copy of the document be attached to the minutes as Exhibit A. Mr. Lay called upon Mr. Winokur to begin his report. Mr. Winokur stated that one of his acquaintances had told him of a situation at the Company in which an employee's wife had been fatally injured and his children seriously injured while on vacation in Africa. He discussed the extraordinary efforts the Company had undertaken on behalf of the employee and his family to provide for medical assistance and evacuation from Africa. He commented that he was very proud of the Company for its response and the compassion it had shown in the situation. Mr. Winokur then reported on the Finance Committee meeting held on May 1, 2000. He stated that at the meeting the Committee had received the standard financial reports and that the outlook for the year appeared very positive. He stated that the -Committee had also approved the following items for recommendation to the Board: 1) Project Raptor, a transaction to establish a risk management program to enable the Company to hedge the profit and loss volatility of investments, 2) the election of a new Treasurer and two Deputy Treasurers of the Company, 3) the authorization for Incremental Debt, 4) a revision to the Transaction Approval Process to change the limits relating to divestitures, and 5) a revision to the Enron Corp Risk Management Policy to add additional commodities. Following a discussion, Mr. Winokur moved approval of the items, his motion was duly seconded by Mr. Blake, and carried, and the revision to the Enron Corp. Risk Management Policy, as filed with the records of the meeting, and the following resolutions were approved: Project Raptor WHEREAS, Enron Corp. (the "Company") desires to consummate a series of risk management transactions involving (1) 4 E0004391416 1005-00716 ============= Page 29 of 130 ============= the issuance by a newly organized subsidiary entity of the Company to be named Harrier or a similar name ("Harrier") of a debt security (the "Harrier Note") in consideration of (a) the execution and delivery of the Master Agreement described below and the Security Agreement described below, and (b) the contemporaneous issuance to Harrier by a newly formed entity ("Talon") to be owned indirectly by LJM2 Co-Investment, L. P. (together with its subsidiaries and affiliates, "LJM2") and Harrier of (i) an equity interest in Talon, and (ii) a debt security having a like tenor to the Harrier Note (the "Talon Note") to Talon, (2) the guarantee by the Company of the indebtedness of Harrier under the Harrier Note and the performance of the obligations of Harrier under the Talon Derivatives described below and of any affiliate of the Company under the Securities Agreement described below, (3) the entry by the Company or such subsidiary of a series of agreements with Talon 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 from a price to be established by agreement between the Company and LJM2 (the "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, (4) as partial consideration for the issuance of the Talon Note and equity interest in Talon, the entry by an affiliate of the Company and Talon of an agreement (the "Securities Agreement") granting Talon the right to acquire an agreed number of shares of Common Stock of the Company in which such subsidiary presently owns an indirect beneficial interest, and (5) as partial consideration for the issuance of the Talon Note and equity interest in Talon, the assignment by the Company or an affiliate to Talon of rights to acquire shares of Common Stock of the Company (or equivalent value) (the "UBS Transaction") arising from amendment of certain existing agreements between the Company and an international banking institution (collectively referred to herein as the "Transactions"); NOW, THEREFORE, IT IS RESOLVED, that the Transactions, including, without limitation, the execution and 5 E0004391417 (H005-00717 ============= Page 30 of 130 ============= delivery by Harrier to Talon of the ENE Derivative and the acquisition by Talon of shares of Company Common Stock, if any, issued in settlement of the ENE Derivative and the Securities Agreement, are hereby authorized and approved, that any actions taken by officers and officials of the Company prior to the date hereof with respect to the Transactions are hereby ratified, and that the Company shall proceed with the consummation of the Transactions in accordance with the resolutions hereby adopted; RESOLVED FURTHER, that the Transactions shall be subject to the following terms and conditions (the "Board Conditions"): (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 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, to be conclusive evidence of the approval by such officers or person of the contents thereof; (ii) the maximum aggregate principal amount of the Harrier Note to be issued by Harrier to Talon in connection with the Transactions shall not exceed $50 million and the interest rate payable thereon shall not exceed 7%; and (iii) the maximum number of shares of Company Common Stock (i) subject to the ENE Derivative shall not exceed 7.5 million shares, and the ENE Derivative shall provide that any payment required to be made by Harrier or the Company thereunder may be made in either cash or shares of the Company's Common Stock, at the Company's sole option, and (ii) issuable under the Securities Agreement shall not exceed 4.2 million shares; RESOLVED FURTHER, that each of the Chairman and Chief Executive Officer, the President and Chief Operating Officer, any Vice Chairman, any Executive or Senior Vice President, 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, 6 E0004391418 :H005-00718 ============= Page 31 of 130 ============= convenient, or proper to consummate the Transactions (subject, however, in all respects, to the Board Conditions), including, without limitation: :F (i) all matters insofar as they affect the Company or any of its subsidiaries or affiliates associated with the formation of Talon and the acquisition by Harrier of an equity interest therein, including, without limitation, the execution and delivery of constituent agreements establishing Talon and the terms thereof and the establishment of the amount and form of any capital contribution to be made to Talon in respect of Harrier's equity interest therein; (ii) the authorization, execution, and delivery of a guarantee agreement whereby the Company guarantees the indebtedness under the Harrier Note and the performance of the obligations of Harrier under the Talon Derivatives and of any affiliate of the Company under the Securities Agreement; (iii) the authorization, execution, and delivery of a master agreement (the "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 "Talon Derivatives"), and the security agreement granting the Company a security agreement in amounts received by Talon in order to secure Talon's obligations under the Talon Note, the Talon Derivatives, and the ENE Swap (the "Security Agreement"), in each case having such terms and conditions (including pricing terms) as such officer shall approve; (iv) the authorization, execution, and delivery of the Harrier Note with such terms and conditions (including pricing terms) as such officer shall approve; (v) the approval insofar as they affect the Company or any of its subsidiaries or affiliates of a form of note representing the Talon Note and the issuance by Talon of such Talon Note; (vi) the authorization, execution, and delivery of a registration rights agreement among the Company and Talon providing for, among other things, the registration of any shares of Common Stock E0004391419 7 :H005-00719 ============= Page 32 of 130 ============= of the Company that may be delivered by the Company or its affiliates in performance of the ENE Derivative and the Securities Agreement, with such terms and conditions as such officer shall approve; and (vii) the negotiation, authorization, execution, and delivery of such other agreements, instruments, and documents relating to the Transactions, including, but not limited to, agreements affecting the UBS Transaction 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 in addition to the officers appointed above, Ben F. Glisan, Jr. is hereby appointed as agent and attorney-in-fact of the Company and is authorized, empowered, and directed, with the power of the full Board of Directors, subject to control and direction by the Company, to the fullest extent permitted by law, to authorize and approve (or ratify if already executed or taken) all agreements, instruments, and documents, and the taking of all actions as such agent and attorney-in-fact may deem necessary or desirable and shall have all the powers of an officer of the Company with respect to these resolutions (subject, however, in all respects, to the Board Conditions) solely for the purpose of consummating the Transactions; it is the intent of the Board of Directors that Mr. Glisan, in his capacity as agent and attorney-in-fact of the Company, shall have all the duties, obligations, and responsibilities of an officer of the Company for purposes of the Transactions, as if he were an officer of the Company; RESOLVED FURTHER, that an aggregate of 7.5 million shares of Common Stock are hereby reserved for issuance in settlement of the ENE Derivative 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 the ENE Derivative and to offer and sell any such shares delivered in settlement of the Securities Agreement, and that upon any such issuance in accordance with the terms of the ENE Derivative and 8 E0004391420 (H005-00720 ============= Page 33 of 130 ============= 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 the ENE Derivative or the 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 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 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 such exchanges if necessary, 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 therefor from the Company and the approval and ratification by the Company of the papers and instruments so executed and the actions so taken; RESOLVED FURTHER, that the actions of the officers and employees of the Company acting under the supervision of the E0004391421 9 H005-00721 ============= Page 34 of 130 ============= 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 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. Officer Elections 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: Ben F. Glisan, Jr. Timothy A. DeSpain Barry J. Schnapper Vice President, Finance and Treasurer Deputy Treasurer Deputy Treasurer Incremental Debt Authority WHEREAS, the Company desires to effect the issuance and sale from time to time of incremental, unsecured senior debt in an aggregate amount not to exceed $1,000,000,000 (at exchange rates current at the date of issuance, if and to the extent all or any portion of such senior debt is denominated in a currency other than United States Dollars), for general corporate purposes, at interest rates, durations, and such other terms (including whether the debt will be 10 E0004391422 H005-00722 ============= Page 35 of 130 ============= publicly offered in the United States, in Europe, or elsewhere or will be placed privately) as are approved by the Chairman of the Board, any Vice Chairman of the Board, the President, the Chief Financial Officer, the Treasurer, or any Deputy Treasurer of the Company, but which amount shall be exclusive of any and all borrowings under the Company's revolving credit facilities or issuances of commercial paper, or other debt issuances otherwise separately approved by this Board or the Executive Committee thereof (the "Debt Securities Authorization"); and WHEREAS, the Board believes that the Debt Securities Authorization and the transactions contemplated thereby are in the best interests of the Company and its shareholders; NOW, THEREFORE, IT IS RESOLVED, that the Company be, and it hereby is, authorized to issue and sell, from time to time, incremental, unsecured senior debt in an aggregate principal amount not to exceed $1,000,000,000 (at exchange rates current at the date of issuance, if and to the extent all or any portion of such senior debt is denominated in a currency other than United States Dollars), for general corporate purposes, at interest rates, durations, and such other terms (including whether the debt will be publicly offered in the United States, in Europe, or elsewhere or will be placed privately, collectively, the "Debt Instruments") as are approved by the Chairman of the Board, any Managing Director, any Vice Chairman of the Board, the President, the Chief Financial Officer, the Treasurer, or any Deputy Treasurer (each an "Authorized Officer")(which authorization shall exclude debt under revolving credit facilities or issuances of commercial paper, or other debt issuances otherwise separately approved by this Board or the Executive Committee thereof); RESOLVED FURTHER, that the Company is authorized and directed to execute and deliver any agreements evidencing such Debt Instruments and to observe and perform in full all of the obligations, conditions, covenants, and other terms set forth in or contemplated by any agreements evidencing the Debt Instruments as the same may be amended from time to time; RESOLVED FURTHER, that each Authorized Officer be, and each such officer hereby is, authorized in the name and on 11 E0004391423 H005-00723 ============= Page 36 of 130 ============= behalf of the Company to take or cause to be taken such action as such officer may deem necessary or desirable in connection with the performance by the Company of its obligations under any agreement, document, or instrument contemplated by these resolutions to which the Company is or will become a party; RESOLVED FURTHER, that each Authorized Officer be, and each of them hereby is, authorized in the name and on behalf of the Company, under its corporate seal or otherwise, to set the terms of the Debt Instruments, to negotiate, execute, deliver, amend, perform, and consummate such other agreements, instruments, or documents, however designated, including underwriting agreements, purchase agreements, distribution agreements, agency agreements, confirmation letters, or terms of agreements, as such officer may deem necessary or desirable to carry out the purpose and intent of the resolutions herein, in such forms as shall be approved by the officer executing the same, such approval to be conclusively evidenced by the execution thereof by such officer; RESOLVED FURTHER, that all actions heretofore taken by any officer of the Company, in the name and on behalf of the Company, related to or in connection with the transactions contemplated by these resolutions, including, without limitation, the execution and delivery of any instruments or other documents as any officer shall have deemed necessary, proper, or advisable, are hereby 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. 12 E0004391424 :HO05-00724 ============= Page 37 of 130 ============= Revision to Transaction Approval Process 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; 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, and February 7 and 8, 2000; and WHEREAS, it would be in the best interest of the Company to amend the definitional provisions of the Transaction Approval Process in order to further reflect the reorganization of Enron Corp. into regional business units and global functions and to reflect a change in the definition of capital expenditures as it relate to divestitures; NOW, THEREFORE, IT IS RESOLVED, that the Company revises 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 B, 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 on behalf of the Company and attorneys issuing legal opinions with respect to the transaction; 13 E0004391425 (H005-00725 ============= Page 38 of 130 ============= 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, any Executive or Senior Vice President, any Managing Director, 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, any Executive or Senior Vice President, any Managing Director, or any Vice President of the Company, 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. Messrs. Butts, Causey, and Koenig and Ms. Fleming joined the meeting. Mr. Lay discussed the aviation budget and the operating statistics for the Company's current aircraft. He noted that the Company was considering the purchase of an extended range aircraft due to increased activities in Asia, South America, and Europe. He noted that the operating costs per hour for the extended range aircraft are similar to those of the Company's current aircraft. He stated that, 14 E0004391426 (H005-00726 ============= Page 39 of 130 ============= after reviewing the situation further, the Company would make a recommendation to the Executive Committee regarding any purchase. Mr. Lay then called upon Mr. Causey for the Financial and Earnings report, a copy of which is filed with the records of the meeting. Mr. Causey discussed first quarter diluted earnings per share ("EPS"), net income, and earning by business segment and compared them to the 2000 Operating Plan. He noted that net income was ten percent higher than the plan due to strong performance from all of the business units and that the increase in recurring EPS was even greater. 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 63.0%, 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 there was a focus in the marketplace on the Company's wholesale business and especially EnronOnline. He reported on the Company's price-to- earnings valuation as of April compared to that of the S&P 500 and the Company's peer group and discussed the reasons that the Company had a premium valuation. He commented on how the Wall Street Analysts (the Analysts") valued the Company, presented a segment valuation of the Company that portrayed each business segment's contribution to the Company's stock price, and discussed the Analysts' target price for the Company's stock. He reviewed the Analysts' ratings for the Company and noted that there were some new Analysts that would soon be initiating coverage of the Company. He displayed a comparison of the total shares outstanding and the ownership profile over the last few years and discussed the Company's largest shareholders. He noted that the Company was now included in 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 he discussed the Investor Relations web site. Mr. Lay called upon Mr. Derrick to give the legal report. Mr. Derrick updated the Board on the status of litigation involving the CATS pipeline in the North Sea and the status of allegations pending against one of the Company's partners pertaining to certain oil and gas activities in India. Mr. Lay called upon Mr. Skilling to present other business to be considered in executive session. Mr. Skilling gave an update on Project California, a potential project that would involve the proposed sale of certain of the Company's international assets. E0004391427 15 RESOLVED FURTHER, that Joseph W. Sutton, Robert H. Walls, Jr., K. George Wasaff, Peter E..Weidler, and Robert C. Williams of the Company, Raymond Doak Bishop of the law firm of King & Spalding, Horacio Ruiz Moreno and Christian Rosso Alba of the law firm of Hope, Duggan & Silva, and Guido Santiago Tawil of the law firm of M. & M. Bomchil, shall be authorized, jointly or severally, to negotiate and consult with the Argentine Republic for the purpose of resolving this dispute, including but not limited to, providing notice to the Argentine government that a dispute has arisen, which negotiations, consultations and notice dated November 23, 1999, are hereby approved and ratified in all respects; RESOLVED FURTHER, that in the event negotiations and consultations do not result in the resolution of the dispute within six (6) months from the date the notice of dispute was received by the Argentine government, Joseph W. Sutton, Robert H. Walls, Jr., K. George Wasaff, Peter E. Weidler, and Robert C. Williams of the Company, Raymond Doak Bishop of the law firm of King & Spalding, Horacio Ruiz Moreno and Christian Rosso Alba of the law E0004391434 22 XH005-00734 ============= Page 47 of 130 ============= firm of Hope, Duggan & Silva, and Guido Santiago Tawil of the law firm of M. & M. Bomchil, shall be authorized on behalf of the Company, jointly or severally, to consent to, to initiate, and to prosecute to completion an arbitration proceeding before the International Centre for the Settlement of Investment Disputes pursuant to the Treaty Between the United States of America and the Argentine Republic concerning the Reciprocal Encouragement and Protection of Investment, which actions are hereby approved and ratified; RESOLVED FURTHER, that the officers of the Company, including but not limited to, Joseph W. Sutton, Robert H. Walls, Jr., K. George Wasaff, Peter E. Weidler, and Robert C. Williams, are hereby authorized and empowered, jointly or severally, for and on behalf of the Company, from time to time to take such actions and to execute and deliver such certificates, instruments, notices, and documents, or to effect such filings with any and all appropriate judicial or regulatory authorities, state, provincial, or federal, as may be required or as any such officer may deem necessary, appropriate, or advisable in order to carry out the purposes and intents of, the foregoing resolutions; all such actions to be performed in such manner, and all such certificates, instruments, notices, and documents to be executed and delivered in such form as the officer performing or executing the same shall approve, the performance or execution thereof by such officer to be conclusive evidence of the approval thereof by such officer and by this Board of Directors; RESOLVED FURTHER, that the execution by any authorized officers of any document authorized by the foregoing resolutions or any document executed in the accomplishment of any ~, action or actions so authorized, shall be (or shall become upon ' delivery) the enforceable and binding act and obligation of the Company, without the necessity of the signature or attestation of any other officer of the Company or the affixing of the corporate seal; RESOLVED FURTHER, that the authority granted to the officers of the Company under the foregoing resolutions shall be deemed to include, in the case of each such resolution, the authority to perform such further acts and deeds as may be necessary, appropriate, or advisable, in the judgment of such officers, to carry out the purposes and intents of the foregoing resolutions, and all actions and deeds previously performed by the officers or representatives of the Company prior to the date of these resolutions 23 E0004391435 CH005-00735 ============= Page 48 of 130 ============= that are within the authority conferred hereby, are ratified, confirmed, and approved in all respects as the authorized acts and deeds of the Company; and RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and each of them hereby is, authorized, empowered, and directed (any one of them acting alone) to take any and all such further action, to amend, execute, and deliver all such further instruments and documents, for and in the name and on behalf of the Company, under its corporate seal or otherwise, and to pay all such expenses as in their discretion appear to be necessary, proper, or advisable to carry into effect the purposes and intentions of this and each of the foregoing resolutions. Messrs. Anderson, Butts, and Skellet and Ms. Fleming left the meeting. Mr. Lay called upon Mr. Skilling to discuss other business to come before the Board. Mr. Skilling provided an update on EBS and noted that as EBS was evolving there were certain areas of the business that could benefit by adding specific assets or areas of expertise. He stated that EBS had considered purchasing companies that met the requirements but determined that it would be more efficient to build the infrastructure in-house. There being no further business to come before the Board, the meeting was adjourned at 1:50 p.m., C.D.T. Secretary APPROVED: Chairman H:\a Minutes\2000 Minutes\050200.doc E0004391436 24