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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
ENTERPRISE PRODUCTS PARTNERS L.P.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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[Enterprise Logo]
Enterprise Products Partners L.P.
2727 North Loop West
Houston, Texas 77008-1038
Dear Public Unitholders:
You are cordially invited to attend a special meeting of public unitholders
of Enterprise Products Partners L.P. ("Enterprise" or the "Partnership"), that
will be held on Friday, June 9, 2000, at the Sheraton Brookhollow Hotel, 3000
North Loop West, Houston, Texas 77092. The meeting will start at 9:00 a.m.,
Houston time.
At this important meeting, you will be asked to consider and vote upon a
proposal to amend our partnership agreement to increase the number of
additional common units that may be issued for any Partnership purpose without
obtaining any further approval of the public unitholders from 22,775,000 units
to 47,775,000 units. This proposal is a part of our strategic plans to expand
our business and our potential in the market place.
The agreement of limited partnership of Enterprise, which is the legal
document that governs our operations, provides that the Partnership may issue
up to 22,775,000 additional common units for any Partnership purpose without
prior approval of a majority of public unitholders. As part of the
consideration for our acquisition of Tejas Natural Gas Liquids, LLC (the "TNGL
acquisition") from Tejas Energy, LLC (now Coral Energy, LLC), an affiliate of
Shell Oil Company, on September 17, 1999, we issued 14,500,000 units of a
special class of limited partner units to Coral Energy, LLC and also agreed to
issue up to 6,000,000 additional special units to Coral Energy, LLC in the
future if certain post-closing conditions are satisfied in 2000 and 2001. Since
these special units will be converted into an equal number of common units in
the future in accordance with their terms, only 2,275,000 unrestricted common
units remain available for issuance without the approval of public unitholders.
We are requesting that the public unitholders approve the above proposal so
that we may retain the flexibility to issue units in the future without the
delay involved with calling a special meeting of public unitholders. This gives
us the ability to raise additional capital in a more timely manner to reduce
outstanding indebtedness and interest expense and will provide us financial
flexibility in connection with acquisitions and other transactions. The Board
of Directors of the General Partner has carefully studied the proposed
amendment to our partnership agreement and unanimously recommends that you
approve it.
TO VOTE YOUR UNITS, you may use the enclosed proxy card, or you may be able
to vote by telephone or over the Internet where such services are available, or
you may attend the special meeting of public unitholders.
YOUR VOTE IS VERY IMPORTANT. APPROVAL OF THE PROPOSAL REQUIRES THE
AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY OF THE OUTSTANDING COMMON UNITS,
EXCLUDING UNITS HELD BY THE GENERAL PARTNER AND ITS AFFILIATES. To vote FOR the
proposal, you must cast a "yes" vote by following the instructions stated on
the enclosed proxy card or given over the telephone or via the Internet.
We believe the proposed amendment to our partnership agreement will enhance
our financial flexibility, thereby offering us opportunities to expand our
business in exciting new ways. We urge you to vote FOR this proposal.
If you have any questions, please contact our Investor Relations department
at 713-880-6694.
Very truly yours,
ENTERPRISE PRODUCTS GP, LLC.,
General Partner
/s/ O.S. Andras
O. S. Andras
President and Chief Executive
Officer
This proxy statement is dated April 14, 2000, and is first being mailed to
public unitholders on or about April 17, 2000.
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ENTERPRISE PRODUCTS PARTNERS L.P.
2727 North Loop West
Houston, Texas 77008-1038
NOTICE OF SPECIAL MEETING OF COMMON UNITHOLDERS
Time:
9:00 a. m., Houston time
Date:
June 9, 2000
Place:
Sheraton Brookhollow Hotel
3000 North Loop West
Houston, Texas 77092
Purpose:
To amend the Second Amended and Restated Agreement of Limited
Partnership of Enterprise Products Partners L.P. to increase the
number of additional common units (or other units having rights to
distribution or in liquidation ranking on a parity with common units)
that may be issued for any Partnership purpose without the prior
approval of the common unitholders from 22,775,000 units to 47,775,000
units; and
To conduct other business if properly raised.
Only common unitholders other than the General Partner and all affiliates
thereof (the "public unitholders") of record on April 11, 2000, may vote at
the meeting. All unitholders and guests of Enterprise are welcome to attend
the meeting.
Your vote is important. Please promptly complete, sign, date and return
your proxy card in the enclosed envelope. Where such services are available
you may be able to authorize the individuals named in your proxy card to
vote your units by calling the toll-free telephone number or using the
Internet as described in the instructions included with your proxy card.
ENTERPRISE PRODUCTS GP, LLC,
General Partner
/s/ Richard H. Bachmann
Richard H. Bachmann
Secretary
Houston, Texas
April 14, 2000
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
QUESTIONS AND ANSWERS ABOUT THE PROPOSAL................................... 3
FORWARD LOOKING STATEMENTS................................................. 4
THE SPECIAL MEETING........................................................ 4
Time and Place; Purpose.................................................. 4
Record Date; Voting Rights, Vote Required for Approval................... 4
Voting and Revocation of Proxies......................................... 5
THE PROPOSAL............................................................... 6
The Partnership's Authority to Issue Additional Common Parity Units...... 6
Proposed Amendment....................................................... 7
Factors Considered by the General Partner................................ 7
Conflicts of Interest.................................................... 7
Federal Income Tax Consequences of the Proposed Amendment................ 8
General Partner Recommendation........................................... 8
PRINCIPAL UNITHOLDERS OF ENTERPRISE........................................ 8
DESCRIPTION OF UNITS....................................................... 9
INDEPENDENT AUDITORS....................................................... 14
SUBMISSION OF UNITHOLDER PROPOSALS......................................... 14
WHERE YOU CAN FIND MORE INFORMATION........................................ 15
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 15
</TABLE>
APPENDIX A--AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF ENTERPRISE PRODUCTS PARTNERS L.P.
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QUESTIONS AND ANSWERS ABOUT THE PROPOSAL
Q: When and where is the special meeting?
A: The meeting will take place on June 9, 2000, at 9:00 a. m., Houston time, at
the Sheraton Brookhollow Hotel, 3000 North Loop West, Houston, Texas 77092.
Q: What do I need to do now?
A: Just mail your signed proxy card in the enclosed return envelope or where
such services are available you may be able to vote by telephone or via the
Internet, as soon as possible, so that your units may be represented at the
meeting. In order to ensure that your vote is obtained, please give your proxy
as instructed on your proxy card even if you currently plan to attend the
meeting in person. The Board of Directors of the General Partner unanimously
recommends that unitholders vote FOR the proposal.
Q: What do I do if I want to change my vote?
A: Just send in a later-dated, signed proxy card to Enterprise or vote again by
telephone or on the Internet before the meeting. Or, you can attend the meeting
in person and vote. You may also revoke your proxy by sending a notice of
revocation to Enterprise at the address set forth at the end of this section.
Q: If my units are held in "street name" by my broker, will my broker vote my
units for me?
A: If you do not provide your broker with instructions on how to vote your
"street name" units, your broker might not vote them on the proposal.
Therefore, you should be sure to provide your broker with instructions on how
to vote your units. Please check the voting form used by your broker to see if
it offers telephone or Internet voting.
Q: What is required for approval of the proposal?
A: The proposal must be approved by the holders of at least a majority of the
outstanding common units, excluding units held by the General Partner and its
affiliates.
Q. What happens if the proposal is approved?
A. The number of common units or other units having rights to distribution or
in liquidation ranking on a parity to common units (collectively, "common
parity units") that Enterprise may issue for any Partnership purpose without
any further approval by the public unitholders will be increased by 25,000,000
units. Enterprise may issue these units in public or private offerings or in
connection with future acquisitions or for other Partnership purposes.
Q. What happens if the proposal is not approved?
A. Enterprise will have the unrestricted right to issue only 2,275,000
additional common parity units, which would limit our flexibility in connection
with acquisitions and other financial transactions.
Q. Has there been a recent development that is the reason for the proposal?
A. The TNGL acquisition, completed on September 17, 1999, was a significant
transaction that was immediately accretive to Enterprise's net income and cash
flow and broadened Enterprise's platform for future growth opportunities. It
provided a base to increase the quarterly distribution to $0.50 from $0.45,
effective with the distribution paid in February 2000. As partial consideration
for the acquisition, we issued 14,500,000 special units and will issue up to
6,000,000 additional special units if certain conditions are satisfied. These
special units are deemed to be common parity units because they will convert
into an equal number of common units in the future in accordance with their
terms. Consequently, the number of common parity units that Enterprise has
available for issuance without a public unitholder vote has been reduced from
the 22,775,000 units currently authorized by the Partnership Agreement to only
2,275,000 units.
Q: Who can I call with questions?
A: If you have any questions about the transaction, please call Enterprise
Investor Relations at 713-880-6694.
If you would like additional copies of this proxy statement or any document we
refer to in this proxy statement, you should call Enterprise at 713-880-6694 or
write Enterprise Products Partners, L.P., P. O. Box 4324, Houston, Texas 77210-
4324, Attention: Investor Relations. This proxy statement and other documents
are also available at Enterprise's web site at www.epplp.com.
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FORWARD LOOKING STATEMENTS
This proxy statement includes and incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 with respect to the financial condition, results of operations, cash
flows, distributions, financing plans, business strategies, operating
efficiencies or synergies, capital and other expenditures, competitive
positions, growth opportunities, plans and objectives of management, and other
matters. Statements made in this document that are not historical fact are
hereby identified as "forward-looking statements" for the purpose of the safe
harbor provided in Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"). Such forward-looking statements, including
those relating to the future business prospects, revenues, working capital,
liquidity, capital needs, and income relating to Enterprise, wherever they
occur or are incorporated by reference in this proxy statement, are necessarily
estimates that are based on the belief of Enterprise and the General Partner,
as well as assumptions made by and information currently available to
Enterprise and the General Partner.
When used in this document, words such as "anticipate," "estimate,"
"project," "expect," "plan," "forecast," "intend," "could," and "may," and
similar expressions and statements regarding our business strategy and plans
and objectives for future operations, are intended to identify forward-looking
statements. These forward-looking statements are found in various places
throughout this proxy statement. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. Enterprise undertakes no obligation to publicly release any revisions
to these forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
THE SPECIAL MEETING
This proxy statement is furnished in connection with the solicitation of
proxies from the public unitholders of Enterprise common units by the General
Partner for use at the Enterprise special meeting of public unitholders. The
proxy statement and accompanying form of proxy are first being mailed to the
public unitholders of Enterprise on or about April 17, 2000.
Time and Place; Purpose
The special meeting of public unitholders will be held at the Sheraton
Brookhollow Hotel, 3000 North Loop West, Houston, Texas 77092, on Friday, June
9, 2000, at 9:00 a. m., Houston time. At the special meeting (and any
postponement or adjournment thereof), public unitholders of Enterprise will be
asked to approve a proposal to amend Enterprise's agreement of limited
partnership to increase the number of common parity units authorized for
issuance for any Partnership Purpose without prior approval by the public
unitholders from 22,775,000 units to 47,775,000 units.
Record Date; Voting Rights, Vote Required for Approval
The General Partner has fixed the close of business on April 11, 2000, as
the record date for determination of the public unitholders of Enterprise
entitled to receive notice of and to vote at the special meeting and any
adjournments or postponements thereof. Only public unitholders on the record
date are entitled to notice of and to vote at the special meeting. Each such
public unitholder of record is entitled to cast one vote per unit on all
matters submitted to unitholders.
On April 1, 2000, there were 45,552,915 common units outstanding, of which
35,046,499 common units were held by affiliates of the General Partner. The
balance of 10,508,866 common units held by public unitholders (the "public
units") are entitled to be voted at the special meeting. A complete list of
such public unitholders will be available for inspection in the Investor
Relations department at the offices of Enterprise,
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2727 North Loop West, Houston, Texas 77008-1038, during normal business hours
upon written demand by any public unitholder or the public unitholder's agent
or attorney beginning five business days after the date of this Proxy Statement
and continuing through the special meeting. Any public unitholder or public
unitholder's agent or attorney may, upon written notice and subject to Section
17-305 of the Delaware Revised Uniform Limited Partnership Act, copy the list
of public unitholders during regular business hours during the inspection
period at the public unitholder's expense. If you have common units registered
in the name of a brokerage firm or trustee and plan to attend the special
meeting, please obtain from the firm or trustee a letter, account statement or
other evidence of your beneficial ownership of those common units to facilitate
your admittance to the meeting.
The presence, in person or by proxy, of holders of a majority of the public
units is necessary to constitute a quorum for the special meeting.
Voting and Revocation of Proxies
All common units owned by public unitholders that are represented by
properly executed proxies received prior to or at the special meeting and not
revoked will be voted in accordance with the instructions indicated in such
proxies. If no instructions are indicated on a properly executed, returned
proxy, such proxy will be voted FOR the approval of the proposal. Proxies voted
against the proposal will not be voted in favor of any adjournment or
postponement of the special meeting for the purpose of soliciting additional
proxies.
Abstentions may be specified on the proposal. A properly executed proxy
marked "ABSTAIN" with respect to the proposal will be counted as present for
purposes of determining whether there is a quorum. Because the affirmative vote
required for approval of the proposal is, as described above, a majority of all
public units, whether or not voted, a proxy marked "ABSTAIN" with respect to
the proposal will have the effect of a vote against the proposal.
Under New York Stock Exchange ("NYSE") rules, brokers who hold units in
street name for customers have the authority to vote on certain "routine"
proposals, such as this proposal, when they have not received instructions from
beneficial owners. However, absent specific instructions from the beneficial
owner of such units, brokers may elect to not vote such units with respect to
the approval and adoption of the proposal. (i.e., "broker non-votes"). Since an
affirmative vote of holders of a majority of the public units is required to
approve the proposal, a broker non-vote will have the effect of a vote against
the proposal.
A holder of units may revoke such holder's proxy at any time prior to its
use by delivering to the General Partner a signed notice of revocation or a
later-dated, signed proxy, or by executing a later-dated proxy by telephone or
Internet, or by attending the special meeting and voting in person. Attendance
at the special meeting will not in itself constitute the revocation of a proxy.
The cost of solicitation of proxies will be paid by Enterprise. In addition
to solicitation by mail, officers and employees of the General Partner may
solicit proxies in person or by mail, telephone, facsimile, or other means of
electronic transmission. Enterprise has retained D.F. King & Co. Inc., for a
fee of $5,000 (plus expenses), to aid in the solicitation of proxies and to
verify certain records related to the solicitations. The extent that this will
be necessary depends entirely upon how promptly proxy cards are returned.
Arrangements will be made with brokerage houses and other custodians, nominees,
and fiduciaries to send proxy materials to beneficial owners; and Enterprise
will, upon request, reimburse such brokerage houses and custodians for their
reasonable expenses in so doing. Unitholders are urged to send in their proxies
without delay.
If a unitholder wishes to give such holder's proxy to someone other than
Enterprise's proxy committee, all three names appearing in the proxy card must
be crossed out and the name of another individual or individuals (not more than
three) inserted. The signed card must be presented at the special meeting by
the individual or individuals representing such unitholder.
As a matter of policy, proxies, ballots, and voting tabulations that
identify individual unitholders are kept private by Enterprise. Such documents
are available for examination only by the inspectors of election and certain
personnel associated with processing proxy cards and tabulating the vote. The
vote of any unitholder is not disclosed except as necessary to meet legal
requirements.
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Telephone Proxies
Unitholders who hold their units directly and not through a trustee or
brokerage account ("unitholders of record") may use a toll-free number to
authorize Enterprise's proxy committee to vote their units. The enclosed proxy
card contains the specific instructions to be followed by unitholders for
telephone voting. Unitholders whose units are held in the name of a trustee or
broker should follow the voting instructions provided by the trustee or broker.
The availability of telephone voting will depend on the voting processes of the
trustee or broker.
Internet Voting
The availability of Internet voting to public unitholders whose units are
held in the name of a trustee or broker will depend on the voting processes of
the trustee or broker. The proxy card received from the trustee or broker will
contain instructions for Internet voting. Unitholders of record will not have
the ability to submit a proxy by Internet and must return an executed proxy
card to cast their votes.
THE PROPOSAL
The proposal, if approved by the requisite majority vote of all public
unitholders, will increase the number of additional common parity units that
may be issued for any Partnership purpose, without the prior approval of the
public unitholders by 25,000,000 units. In accordance with Section 13.2 of the
Second Amended and Restated Agreement of Limited Partnership of the Partnership
dated as of September 17, 1999 (the "Partnership Agreement"), the text of the
proposed amendment to the Partnership Agreement is set forth in Appendix A
hereto.
The Partnership's Authority to Issue Additional Common Parity Units
The Partnership Agreement grants the General Partner the authority to cause
the Partnership to issue additional partnership interests for any Partnership
purpose, subject to certain limitations. Section 5.7(a) of the Partnership
Agreement currently prohibits (with certain exceptions) the issuance during the
Subordination Period (as defined in the Partnership Agreement) of an aggregate
of more than 22,775,000 additional common parity units, without the prior
approval of the holders of a majority of the public units. The earliest date on
which the Subordination Period could expire under the Partnership Agreement is
June 30, 2003.
As a result of the TNGL acquisition on September 17, 1999, 14,500,000 of the
available 22,775,000 common parity units have been issued and an additional
6,000,000 common parity units have been reserved for issuance to Coral Energy,
LLC. Therefore, only 2,275,000 common parity units remain available under
Section 5.7(a) of the Partnership Agreement for issuance by the Partnership
without obtaining prior approval of the public unitholders. At a market price
of $20.00 per common unit, the maximum amount of capital that could be raised
by the Partnership from the sale of those common units would be only
approximately $46 million.
Under Section 5.7(b) of the Partnership Agreement, the Partnership is also
entitled to issue an unlimited number of additional common parity units during
the Subordination Period without a unitholder vote if they are issued in
connection with an acquisition (or the financing thereof within one year after
the acquisition is consummated) involving properties and assets that would
have, if acquired by the Partnership as of the date that is one year prior to
the first day of the quarter in which such acquisition is to be consummated,
resulted in an increase in (A) the amount of adjusted operating surplus (as
defined in the Partnership Agreement) generated by the Partnership on a per-
unit basis with respect to each of the four most recently completed quarters
(determined on a pro forma basis assuming that all of the units to be issued in
connection with such acquisition had been issued and outstanding as of the
commencement of such four-quarter period) over (B) the actual amount of
adjusted operating surplus generated by the Partnership on a per-unit basis
with respect to each of such four quarters. The General Partner believes that
this provision is inadequate to give the Partnership the
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flexibility it needs to make acquisitions for two reasons. First, certain
acquisitions, such as the TNGL acquisition, cannot meet this pro forma
historical test, but are accretive to the Partnership's adjusted operating
surplus immediately following consummation of the acquisition because of
operating efficiencies and synergies realized by those assets as a part of the
Partnership's operations. Second, the foregoing test can be applied only if the
seller has available financial information for the assets being acquired that
is prepared on a basis that will permit pro forma comparisons. In many cases,
the Partnership will pursue acquisitions of assets that represent only a
portion of the seller's business where no separate financial statements would
be available with respect to those assets. If the proposed amendment to the
Partnership Agreement is approved, the Partnership will have the flexibility to
issue up to 25,000,000 additional common parity units in connection with the
foregoing types of acquisitions without seeking a vote of the public
unitholders.
Proposed Amendment
If the proposed amendment is approved by the requisite vote of the holders
of a majority of the public units, the Partnership will be entitled to issue up
to 27,275,000 additional common parity units without the prior approval of the
public unitholders, including the remaining 2,275,000 common parity units that
the Partnership is now entitled to issue, and excluding the 20,500,000 special
units issued or issuable to Coral Energy, LLC, as described above. No limited
partner other than Coral Energy, LLC is entitled to any preemptive right to
purchase any common units or other limited partnership interests of the
Partnership; under certain circumstances Coral Energy, LLC may have preemptive
rights to purchase common units.
The proposed amendment will have no effect on the restrictions currently
contained in Section 5.7(c) prohibiting the Partnership from issuing, during
the Subordination Period, Partnership securities having rights to distributions
or in liquidation ranking prior or senior to the common units, without the
prior approval of the holders of a majority of the public units.
Factors Considered by the General Partner
The General Partner believes that the proposed increase in authorized common
parity units will provide it with the flexibility to consider all available
financing alternatives in pursuing potential growth opportunities for the
Partnership and will facilitate raising capital for expansion, acquisitions or
other Partnership purposes. The General Partner has no present plans,
understandings or agreements for the issuance of any of the additional common
parity units. The increase in authorized common parity units is being proposed
now, because, if authorization of an increased amount of common parity units
were postponed until a specific need arose, a significant amount of time and
expense would be required to obtain public unitholder approval of the proposed
issuance. In the context of acquisitions, the delay and uncertainty associated
with that process would put the Partnership at a disadvantage to other bidders
who are able to issue additional equity securities without unitholder or
shareholder approval. In the context of a public offering of common units, such
delay and uncertainty could cause the Partnership to miss a period of favorable
market conditions.
In making this proposal, the General Partner has considered that the
issuance of common units on other than a pro rata basis to all unitholders
would dilute the voting power and equity interests of current unitholders. In
addition, the issuance of common units in connection with an acquisition could
dilute the Partnership's net income per unit, but any such dilution would be
expected to be only for the short term. After consideration of these issues,
however, the General Partner has determined that providing the General Partner
with the flexibility to issue up to 25,000,000 additional common parity units
is in the best long-term interests of the Partnership and its unitholders, and
any immediate impact of dilution is offset by the potential long-term benefits
to the unitholders.
Conflicts of Interest
The General Partner does not believe that adoption of the proposed amendment
to the Partnership Agreement will create any potential or actual conflict of
interest between the General Partner and the Partnership or the public
unitholders. The economic interests of Enterprise Products Company, which
controls the General Partner, are aligned with those of the public unitholders
through its ownership of 33,552,915 common units and 21,409,870 subordinated
units. See "Principal Unitholders of Enterprise."
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Federal Income Tax Consequences of the Proposed Amendment
The proposed amendment will not result in the loss of limited liability of
any limited partner or cause the Partnership to be treated as a corporation for
federal income tax purposes. As required by Section 13.3(d) of the Partnership
Agreement, the Partnership has obtained an opinion of counsel from Vinson &
Elkins L.L.P. to the foregoing effect.
General Partner Recommendation
The proposed amendment of the Partnership Agreement will become effective if
approved by the holders of a majority of the public units. The Board of
Directors of the General Partner unanimously recommends a vote FOR approval of
the proposed amendment.
PRINCIPAL UNITHOLDERS OF ENTERPRISE
The following table sets forth certain information as of April 1, 2000,
regarding the beneficial ownership of (a) the common units and (b) the
subordinated units of Enterprise by each director of the General Partner, all
directors and executive officers of the General Partner as a group and all
persons known by the General Partner to own beneficially more than 5% of the
common units. None of the common units shown in the table are public units,
since all persons and entities shown in the table are affiliates of the General
Partner. Therefore, the holders of these common units are not entitled to vote
at the special meeting.
<TABLE>
<CAPTION>
Percentage
Percentage of Percentage
Common Units of Common Subordinated Subordinated of Total
(1) Units Units (1) Units Total Units Units
Beneficially Beneficially Beneficially Beneficially Beneficially Beneficially
Owned Owned Owned Owned Owned Owned
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Enterprise Products
Company (2)............ 34,623,615 76.0% 21,409,870 100.0% 56,033,485 83.7%
Dan L. Duncan (2)(3).... 34,890,815 76.6% 21,409,870 100.0% 56,300,685 84.1%
O.S. Andras............. 140,600 0.3% -- -- 140,600 0.2%
Randa L. Duncan......... -- -- -- -- -- --
Gary L. Miller.......... -- -- -- -- -- --
Dr. Ralph S.
Cunningham............. -- -- -- -- -- --
Curtis R. Frasier....... -- -- -- -- -- --
Lee W. Marshall, Sr..... -- -- -- -- -- --
Stephen H. McVeigh...... -- -- -- -- -- --
All directors and
executive officers as a
group (16 persons)..... 35,046,449 76.9% 21,409,870 100.0% 56,456,319 84.3%
</TABLE>
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(1) For a discussion of the units in general, see "Description of Units."
Subordinated units are non-voting.
(2) Enterprise Products Company holds 33,552,915 of the common units and all of
the subordinated units through its wholly-owned subsidiary EPC Partners II,
Inc. Dan L. Duncan, Chairman of the Board of Directors of the General
Partner, owns 57.1% of the voting stock of Enterprise Products Company and,
accordingly, exercises sole voting and dispositive power with respect to
the units held by Enterprise Products Company. The remaining shares of
Enterprise Products Company capital stock are held primarily by trusts for
the benefit of the members of Mr. Duncan's family, including Randa L.
Duncan, a director and executive officer of the General Partner. The
address of Enterprise Products Company is 2727 North Loop West, Houston,
Texas 77008. The remaining 1,070,700 common units are held by Compass Bank,
as trustee under the Enterprise Products 1998 Unit Option Plan Trust, with
Dan Duncan (through Enterprise Products Company) having sole dispositive
power and sharing voting power with Compass Bank.
(3) Dan Duncan LLC holds 267,200 of these common units as trustee under a
revocable grantor trust established to fund future liabilities of
Enterprise Products Company under a long-term incentive plan. Mr. Duncan
has sole voting and dispositive power with respect to these shares.
8
<PAGE>
DESCRIPTION OF UNITS
Units
Common units, subordinated units, and special units represent limited
partner interests in Enterprise that entitle the holders thereof to the rights
and privileges specified thereto under the Partnership Agreement. As of April
11, 2000, there are issued and outstanding 45,552,915 common units, 21,409,870
special units, and 14,500,000 subordinated units representing an aggregate 99%
limited partnership interest in Enterprise. Except as described below, the
common units and subordinated units generally participate pro rata in
Enterprise's income, gains, losses, deductions, credits and distributions.
No person is entitled to preemptive rights in respect of issuances of
securities by Enterprise, other than the General Partner's right to purchase
sufficient Partnership securities to maintain its 1% equity interest in the
Partnership and Coral Energy's right to purchase common units under certain
limited circumstances.
Common Units
The common units are registered under the Exchange Act and are listed for
trading on the NYSE. Each holder of a common unit is entitled to one vote per
unit on all matters presented to the limited partners for a vote. Holders of
common units share pro rata in all distributions to the holders of common
units.
Subordinated Units
All of the subordinated units are held by EPC Partners II, Inc., a wholly-
owned subsidiary of Enterprise Products Company. Subordinated units do not have
the right to vote on any matters requiring the vote or approval of a percentage
of the holders of common units. Subordinated units are entitled to share in
allocations of income, gain, loss, and deductions and distribution of available
cash only after the outstanding common units have been distributed a minimum
quarterly distribution of $0.45 per unit. See "Distribution from Operating
Surplus During Subordination Period" below.
Subordinated units will convert into common units on certain dates specified
in the Partnership Agreement. When subordinated units convert to common units,
they will have all of the rights and privileges of the outstanding common units
to vote and receive distributions. Generally, if Enterprise has made all
required minimum quarterly distributions on a cumulative basis, 5,352,468 of
the subordinated units will convert to common units on June 30, 2001, an
additional 5,352,468 subordinated units will convert to common units on June
30, 2002, and the remaining subordinated units will convert to common units on
June 30, 2003. All subordinated units automatically convert to common units if
the General Partner is removed as the general partner of Enterprise without
cause by a vote of the holders of common units.
Special Units
The special units represent the limited partnership interests issued to
Coral Energy, LLC in connection with the TNGL acquisition. The special units
have no voting rights and do not have the right to participate in allocations
of income, gain, loss, or deductions, or distributions of available cash made
with respect to common units prior to their conversion. The 14.5 million
special units outstanding will convert on a one-for-one basis into common units
automatically on August 1, 2000 (for 1.0 million units), August 1, 2001 (for
5.0 million units) and August 1, 2002 (for 8.5 million units). If the 6.0
million contingent special units are earned, they will convert into common
units on August 1, 2002 (for 1.0 million units) and August 1, 2003 (for 5.0
million units). In connection with the TNGL acquisition, the General Partner,
Enterprise, EPC Partners II and Enterprise Products Company entered into a
Unitholder Rights Agreement with Coral Energy, LLC as the holder of the special
units. The Unitholder Rights Agreement provides Coral Energy, LLC with a voice
in the management of the Partnership, including representation and a vote (but
not control) on all boards and committees of Enterprise and the General
Partner.
9
<PAGE>
Cash Distribution Policy
Enterprise distributes to its partners, on a quarterly basis, all of its
available cash. Available cash generally means all cash on hand at the end of a
quarter less the amount of cash reserves that are necessary or appropriate in
the reasonable discretion of the General Partner to (1) provide for the proper
conduct of Enterprise's business, (2) comply with applicable law or any
Partnership debt instrument or other agreement, or (3) provide funds for
distributions to unitholders and the General Partner in respect of any one or
more of the next four quarters.
Cash distributions are characterized as distributions from either operating
surplus or capital surplus. This distinction affects the amounts distributed to
unitholders relative to the General Partner, and under certain circumstances it
determines whether holders of subordinated units receive any distributions.
Operating surplus refers generally to (1) the sum of (a) the cash balance of
Enterprise on July 31, 1998, and (b) all cash receipts of Enterprise from its
operations since July 31, 1998 (excluding certain cash receipts designated by
the General Partner as operating surplus), less (2) the sum of (a) all
Partnership operating expenses, (b) debt service payments (including reserves
therefor but not including payments required in connection with the sale of
assets or any refinancing with the proceeds of new indebtedness or an equity
offering), (c) maintenance capital expenditures, and (d) reserves established
for future Partnership operations, in each case since July 31, 1998. Capital
surplus will generally be generated only by borrowings (other than borrowings
for working capital purposes), sales of debt and equity securities, and sales
or other dispositions of assets for cash (other than inventory, accounts
receivable, and other assets disposed of in the ordinary course of business).
To avoid the difficulty of trying to determine whether available cash
distributed by Enterprise is from operating surplus or from capital surplus,
all available cash distributed by Enterprise from any source will be treated as
distributed from operating surplus until the sum of all available cash
distributed since July 31, 1998, equals the operating surplus as of the end of
the quarter prior to such distribution. Any available cash in excess of such
amount (irrespective of its source) will be deemed to be from capital surplus
and distributed accordingly.
When available cash from capital surplus distributed in respect of each
common unit equals $22.00, plus any common unit arrearages, the distinction
between operating surplus and capital surplus will cease, and all distributions
of available cash will be treated as if they were from operating surplus.
Enterprise does not anticipate that there will be significant distributions
from capital surplus.
The subordinated units are a separate class of interests in Enterprise, and
the rights of holders of such interests to participate in distributions to
partners differ from the rights of the holders of common units. For any given
quarter, any available cash will be distributed to the General Partner and to
the holders of common units, and may also be distributed to the holders of
subordinated units depending upon the amount of available cash for the quarter,
the amount of common unit arrearages, if any, and other factors discussed
below.
The incentive distributions represent the right of the General Partner to
receive an increasing percentage of quarterly distributions of available cash
from operating surplus if certain target distribution levels are achieved. The
target distribution levels are based on the amounts of available cash from
operating surplus distributed in excess of the payments made with respect to
the minimum quarterly distribution of $0.45 per unit and common unit
arrearages, if any, and the related 2% distribution to the General Partner.
Quarterly Distributions of Available Cash
Enterprise will make distributions to its partners, with respect to each
quarter of operations prior to its liquidation, in an amount equal to 100% of
its available cash for such quarter. Enterprise expects to make distributions
of all available cash within 45 days after the end of each quarter to holders
of record on the applicable record date.
10
<PAGE>
With respect to each quarter during the Subordination Period, to the extent
there is sufficient available cash, the holders of common units have the right
to receive a minimum quarterly distribution of $0.45 per unit, plus any common
unit arrearages, prior to any distribution of available cash to the holders of
subordinated units. Upon expiration of the Subordination Period, all
subordinated units will convert on a one-for-one basis into common units and
will participate pro rata with all other common units in future distributions
of available cash. Under certain circumstances, up to 50% of the subordinated
units may convert into common units prior to the expiration of the
Subordination Period. Common units will not accrue arrearages with respect to
distributions for any quarter after the Subordination Period, and subordinated
units will not accrue any arrearages with respect to distributions for any
quarter.
Distributions from Operating Surplus During Subordination Period
The Subordination Period will generally extend until the first day of any
quarter beginning after June 30, 2003, in respect of which (1) distributions of
available cash from operating surplus on the common units and the subordinated
units with respect to each of the three consecutive, non-overlapping, four-
quarter periods immediately preceding such date equal or exceed the sum of
$0.45 per unit on all of the outstanding common units and subordinated units
during such periods, (2) the adjusted operating surplus generated during each
of the three consecutive, non-overlapping, four-quarter periods immediately
preceding such date equaled or exceeded the sum of $0.45 per unit on all of the
common units and subordinated units that were outstanding during such period on
a fully diluted basis and the related distribution on the general partner
interests in Enterprise and its subsidiary, Enterprise Products Operating L.P.
(the "Operating Partnership") and (iii) there are no outstanding common unit
arrearages.
Prior to the end of the Subordination Period, a portion of the subordinated
units will convert into common units on a one-for-one basis on the first day
after the record date established for the distribution in respect of any
quarter ending on or after (a) June 30, 2001, with respect to 5,352,468
subordinated units and (b) June 30, 2002, with respect to 5,352,468
subordinated units, in respect of which (1) distributions of available cash
from operating surplus on the common units and the subordinated units with
respect to each of the three consecutive, non-overlapping, four-quarter periods
immediately preceding such date equaled or exceeded the sum of $0.45 per unit
on all of the outstanding common units and subordinated units during such
periods, (2) the adjusted operating surplus generated during each of the three
consecutive, non-overlapping, four-quarter periods immediately preceding such
date equaled or exceeded the sum of $0.45 per unit on all of the common units
and subordinated units that were outstanding during such period on a fully
diluted basis and the related distribution on the general partner interests in
Enterprise and the Operating Partnership and (3) there are no outstanding
common unit arrearages; provided, however, that the early conversion of the
second 5,352,468 subordinated units may not occur until at least one year
following the early conversion of the first 5,352,468 subordinated units.
In addition, if the General Partner is removed as the general partner of
Enterprise without cause and common units held by the General Partner and its
affiliates are not voted in favor of such removal, (1) the Subordination Period
will end and all outstanding subordinated units will immediately convert into
common units on a one-for-one basis, (2) any existing common unit arrearage
will be extinguished, and (3) the General Partner will have the right to
convert its general partner interest into common units or to receive cash in
exchange for such interests.
Adjusted operating surplus for any period generally means operating surplus
generated during such period, less (1) (a) any net increase in working capital
borrowings during such period and (b) any net reduction in cash reserves for
operating expenditures during such period not relating to an operating
expenditure made during such period, plus (2)(a) any net decrease in working
capital borrowings during such period and (b) any net increase in cash reserves
for operating expenditures during such period required by any debt instrument
for the repayment of principal, interest or premium.
11
<PAGE>
Distributions by Enterprise of available cash from operating surplus with
respect to any quarter during the Subordination Period will be made in the
following manner:
. first, 98% to the common unitholders, pro rata, and 2% to the General
Partner, until there has been distributed in respect of each common unit
an amount equal to $0.45 per unit;
. second, 98% to the common unitholders, pro rata, and 2% to the General
Partner, until there has been distributed in respect of each outstanding
common unit an amount equal to any common unit arrearages accrued and
unpaid with respect to any prior quarters during the Subordination
Period;
. third, 98% to the subordinated unitholders, pro rata, and 2% to the
General Partner, until there has been distributed in respect of each
outstanding subordinated unit an amount equal to $0.45 per unit; and
. thereafter, in the manner described in "Incentive Distributions" below.
The above references to the 2% of available cash from operating surplus
distributed to the General Partner are references to the amount of the
percentage interest of the General Partner in distributions from Enterprise and
the Operating Partnership (exclusive of any interest as a holder of common
units or subordinated units). The General Partner owns a 1% general partner
interest in Enterprise and a 1.0101% general partner interest in the Operating
Partnership.
Distributions from Operating Surplus after Subordination Period
Upon expiration of the Subordination Period, all remaining subordinated
units will convert into common units on a one-for-one basis and will thereafter
participate, pro rata, with the other common units in distributions of
available cash.
. Distributions by Enterprise of available cash from operating surplus with
respect to any quarter after the Subordination Period will be made in the
following manner:
. first, 98% to all unitholders, pro rata, and 2% to the General Partner,
until there has been distributed in respect of each unit an amount equal
to $0.45 per unit; and
. thereafter, in the manner described in "Incentive Distribution" below.
Incentive Distributions
For any quarter for which available cash from operating surplus is
distributed to the common and subordinated unitholders in an amount equal to
$0.45 per unit on all units and to the common unitholders in an amount equal to
any unpaid common unit arrearages, then any additional available cash from
operating surplus in respect of such quarter will be distributed among the
unitholders and the General Partner in the following manner:
. first, 98% to all unitholders, pro rata, and 2% to the General Partner,
until the unitholders have received (in addition to any distributions to
common unitholders to eliminate common unit arrearages) a total of $0.506
for such quarter in respect of each outstanding unit (the "First Target
Distribution");
. second, 85% to all unitholders, pro rata, and 15% to the General Partner,
until the unitholders have received (in addition to any distributions to
common unitholders to eliminate common unit arrearages) a total of $0.617
for such quarter in respect of each outstanding unit (the "Second Target
Distribution");
. third, 75% to all unitholders, pro rata, and 25% to the General Partner,
until the unitholders have received (in addition to any distributions to
common unitholders to eliminate common unit arrearages) a total of $0.784
for such quarter in respect of each outstanding unit (the "Third Target
Distribution"); and
. thereafter, 50% to all unitholders, pro rata, and 50% to the General
Partner.
12
<PAGE>
The distributions to the General Partner set forth above that are in excess
of its aggregate 2% general partner interest represent the incentive
distributions.
The following table illustrates the percentage allocation of the additional
available cash from operating surplus between the unitholders and the General
Partner up to the various target distribution levels.
<TABLE>
<CAPTION>
Total
Quarterly
Distribution Marginal Percentage
Target Interest in
Amount Distributions
------------ -------------------
General
Unitholders Unitholders Partner
------------ ----------- -------
<S> <C> <C> <C>
Minimum Quarterly Distribution........... $0.450 98% 2%
First Target Distribution................ $0.506 98% 2%
Second Target Distribution............... $0.617 85% 15%
Third Target Distribution................ $0.784 75% 25%
Thereafter............................... above $0.784 50% 50%
</TABLE>
Adjustment of Minimum Quarterly Distribution and Target Distribution Levels
The minimum quarterly distribution of $0.45 per unit, the target
distribution levels, the number of additional common units issuable during the
Subordination Period without a unitholder vote, the number of common units
issuable upon conversion of the subordinated units, and other amounts
calculated on a per unit basis will be proportionately adjusted upward or
downward, as appropriate, in the event of any combination or subdivision of
common units (whether effected by a distribution payable in common units or
otherwise), but not by reason of the issuance of additional common units for
cash or property. For example, in the event of a two-for-one split of the
common units (assuming no prior adjustments), the minimum quarterly
distribution of $0.45 per unit and each of the target distribution levels would
each be reduced to 50% of its initial level.
The minimum quarterly distribution and the target distribution levels may
also be adjusted if legislation is enacted or if existing law is modified or
interpreted by the relevant governmental authority in a manner that causes
Enterprise to become taxable as a corporation or otherwise subjects Enterprise
to taxation as an entity for federal, state or local income tax purposes.
Distributions of Cash upon Liquidation
Following the commencement of the dissolution and liquidation of Enterprise,
assets will be sold or otherwise disposed of from time to time and the
partners' capital account balances will be adjusted to reflect any resulting
gain or loss. The proceeds of such liquidation will, first, be applied to the
payment of creditors of Enterprise in the order of priority provided in the
partnership agreement and by law and, thereafter, be distributed to the
unitholders and the General Partner in accordance with their respective capital
account balances as so adjusted.
The allocations of gains and losses upon liquidation are intended, to the
extent possible, to entitle the holders of outstanding common units to a
preference over the holders of outstanding subordinated units upon the
liquidation of Enterprise, to the extent required to permit common unitholders
to receive their unrecovered capital plus any unpaid common unit arrearages.
Thus, net losses recognized upon liquidation of Enterprise will be allocated to
the holders of the subordinated units to the extent of their capital account
balances before any loss is allocated to the holders of the common units, and
net gains recognized upon liquidation will be allocated first to restore
negative balances in the capital account of the General Partner and any
unitholders and then to the common unitholders until their capital account
balances equal their unrecovered capital plus unpaid common unit arrearages.
However, no assurance can be given that there will be sufficient gain upon
liquidation of Enterprise to enable the holders of common units to fully
recover all of such amounts, even though there may be cash available after such
allocation for distribution to the holders of subordinated units.
13
<PAGE>
Transfer Agent and Registrar
ChaseMellon Shareholder Services, LLC serves as registrar and transfer agent
for the common units.
Transfer of Common Units
Enterprise has issued certificates to evidence common units. The common
units are securities and are freely transferable except as restricted by
federal and state securities laws. Enterprise is entitled to treat the record
or nominee holder of a common unit as the absolute owner thereof for all
purposes, and the beneficial owner's rights will be limited solely to those
that it has against the nominee holder as a result of or by reason of any
understanding or agreement between such beneficial owner and nominee holder.
Transferees of common units (or their brokers, agents, or nominees on their
behalf) who wish to become unitholders of record are required to execute
transfer applications before the purchase or transfer of such common units will
be registered on the records of the transfer agent and before cash
distributions or federal income tax allocations can be made to the purchaser or
transferee.
An assignee will become a substituted limited partner of Enterprise in
respect of the transferred common units upon the consent of the General Partner
and the recordation of the name of the assignee on the books and records of
Enterprise. Such consent may be withheld in the sole discretion of the General
Partner.
A purchaser or transferee of common units who does not execute and deliver a
transfer application will not receive cash distributions or federal income tax
allocations unless the common units are held in a nominee or "street name"
account and the nominee or broker has executed and delivered a transfer
application with respect to such common units, and may not receive certain
federal income tax information or reports furnished to record holders of common
units.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, independent auditors, have been the independent
auditors for the Partnership since its formation in 1998. The Board of
Directors of the General Partner expects that Deloitte & Touche LLP will
continue as the Partnership's independent auditors. Representatives of Deloitte
& Touche LLP are expected to be present at the Special Meeting, with the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions from the public unitholders.
SUBMISSION OF UNITHOLDER PROPOSALS
Under the applicable Delaware laws and the Partnership Agreement, Enterprise
is not required to hold an annual meeting of unitholders (limited partners).
Special meetings may be called by the General Partner or by limited partners
owning 20% or more of the outstanding units. Any Enterprise unitholder who
wishes to submit a proposal for inclusion in the proxy materials for any future
special meeting must submit such proposal a reasonable time before Enterprise
begins to print and mail its proxy materials.
Securities and Exchange Commission ("SEC") rules set forth standards as to
what proposals are required to be included in a proxy statement for a meeting.
Any unitholder proposal that is not received by Enterprise within a
reasonable time before it mails its proxy materials will be considered
untimely. The proxy solicited by the General Partner will confer discretionary
authority on the named proxies to vote on any proposal that is not submitted in
a timely manner.
14
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Enterprise files annual, quarterly and special reports, proxy statements,
and other information with the SEC. You may read and copy reports, statements
or other information we file at the SEC's Public Reference Section at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Our SEC filings are also available to the public from commercial document
retrieval services and at the Internet world wide web site maintained by the
SEC at www.sec.gov. Our SEC filings are also available on our web site at
www.epplp.com.
You may also read reports, proxy statements and other information relating
to Enterprise at the offices of the New York Stock Exchange at 20 Broad Street,
New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Enterprise hereby incorporates by reference into this proxy statement the
following documents that have been filed with the SEC (File No. 1-14323):
(1)Annual Report on Form 10-K for the year ended December 31, 1999; and (2)
Current Reports on Form 8-K dated March 2, 2000, March 14, 2000 and March 20,
2000.
Enterprise also hereby incorporates by reference into this proxy statement
the Partnership Agreement and the Unitholders Rights Agreement filed as
Exhibits 99.5 and 99.7, respectively, to Enterprise's Current Report on Form
8-K/A dated October 27, 1999.
All documents and reports filed by Enterprise pursuant to Section 13(a),
13(c), 14, or 15(d) of the Exchange Act after the date of this proxy statement
and on or prior to the date of the special meeting are deemed to be
incorporated by reference in this proxy statement from the date of filing of
such documents or reports. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this proxy statement will be
deemed to be modified or superseded for purposes of this proxy statement to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference in this
proxy statement modifies or supersedes such statement. Any statement so
modified or superseded will not be deemed, except as so modified or superseded,
to constitute a part of this proxy statement.
Any person receiving a copy of this proxy statement may obtain, without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference except for the exhibits to such documents (other than
the exhibits expressly incorporated in such documents by reference). Requests
should be directed to: Enterprise Products Partners L.P., P. O. Box 4324,
Houston, Texas 77210-4324, Attention: Investor Relations (telephone number
713/880-6694). A copy will be provided by first class mail or other equally
prompt means within one business day after receipt of your request.
This proxy statement is dated April 14, 2000. The information contained in
this proxy statement speaks only as of such date unless the information
specifically indicates that another date applies.
15
<PAGE>
APPENDIX A
AMENDMENT NO. 1
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENTERPRISE PRODUCTS PARTNERS L.P.
This Amendment No. 1, dated as of , 2000 (this "Amendment"), to
the Second Amended and Restated Agreement of Limited Partnership of Enterprise
Products Partners L.P. dated as of September 17, 1999 (the "Partnership
Agreement"), is entered into by and among Enterprise Products GP, LLC, a
Delaware limited liability company, as the General Partner, and the Limited
Partners as provided herein. Each capitalized term used but not otherwise
defined herein shall have the meaning assigned to such term in the Partnership
Agreement.
W I T N E S S E T H:
WHEREAS, the first sentence of Section 5.7(a) of the Partnership Agreement
limits the unrestricted number of additional Parity Units that the Partnership
may issue during the Subordination Period without prior approval of the holders
of a Unit Majority to 22,775,000 Parity Units;
WHEREAS, the General Partner deems it advisable to increase such number of
additional Parity Units to 47,775,000 to give the Partnership more flexibility
in connection with acquisitions and capital raising transactions;
WHEREAS, on March 28, 2000, the Board of Directors of the General Partner
approved this Amendment and directed that it be presented to the holders of the
Outstanding Common Units excluding any Common Units held by the General Partner
and its Affiliates (the "Public Unitholders"), for their approval;
WHEREAS, in accordance with the provisions of Article XIII of the
Partnership Agreement, the General Partner presented the Amendment to the
Public Unitholders for their approval at a special meeting held on June 9, 2000
and the approval of the Amendment was received at that meeting by the holders
of a Unit Majority, as required by Section 13.2 of the Partnership Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:
1. The first sentence of Section 5.7(a) of the Partnership Agreement is
hereby amended to read in its entirety as follows:
"During the Subordination Period, the Partnership shall not issue (and
shall not issue any options, rights, warrants or appreciation rights
relating to) an aggregate of more than 47,775,000 additional Parity Units
without the prior approval of the holders of a Unit Majority."
2. As amended hereby, the Partnership Agreement is in all respects ratified,
confirmed and approved and shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER:
ENTERPRISE PRODUCTS GP, LLC
By: __________________________________________
O. S. Andras
President and Chief Executive
Officer
LIMITED PARTNERS:
All Limited Partners now and
hereafter admitted as Limited
Partners of the Partnership,
pursuant to Powers of Attorney now
and hereafter executed in favor of,
and granted and delivered to the
General Partner.
By: Enterprise Products GP, LLC
General Partner, as attorney-in-fact
for the Limited Partners pursuant to
the Powers of Attorney granted
pursuant to Section 2.6.
By: _________________________________
O. S. Andras
President and Chief Executive
Officer
2
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Notice of Special
Meeting of Common Unitholders of Enterprise Products Partners L.P. of our
report dated February 25, 2000 appearing in the Annual Report on Form 10-K of
Enterprise Products Partners L.P. for the year ended December 31, 1999 and of
our report (which report expresses an unqualified opinion and includes an
explanatory paragraph relating to the basis of presentation and a notation that
the financial statements are not intended to be a complete presentation of the
net assets or operations of Tejas Natural Gas Liquids, LLC and subsidiaries)
dated September 17, 1999 on the statement of assets acquired and liabilities
assumed as of December 31, 1998 (pursuant to the Contribution Agreement by and
among Tejas Midstream Enterprises, LLC, Tejas Energy, LLC, Enterprise Products
Partners L.P., Enterprise Products Operating L.P., Enterprise Products GP, LLC,
EPC Partners II, Inc. and Enterprise Products Company, dated September 17,
1999) and the related statements of revenues and direct operating expenses for
the years ended December 31, 1998, 1997 and 1996 of Tejas Natural Gas Liquids,
LLC and subsidiaries appearing in the Amended Current Report on Form 8-K/A-1
dated October 27, 1999 of Enterprise Products Partners L.P.
DELOITTE & TOUCHE LLP
Houston, Texas
April 14, 2000
<PAGE>
ENTERPRISE PRODUCTS PARTNERS L.P.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ENTERPRISE PRODUCTS GP, LLC, THE GENERAL PARTNER OF THE PARTNERSHIP
The undersigned hereby (a) acknowledges receipt of the Notice of Special
Meeting of Common Unitholders of Enterprise Products Partners L.P. (the
"Partnership") to be held at 9:00 a.m. Houston time, on June 9, 2000, at the
Sheraton Brookhollow Hotel, 3000 North Loop West, Houston, Texas 77092 (the
"Special Meeting"), (b) acknowledges receipt of the Proxy Statement of the
General Partner in connection therewith, dated April 14, 2000, (c) appoints
Dan L. Duncan, O. S. Andras and Richard H. Bachmann, or any of them, each with
full power to appoint his substitute, as Proxies of the undersigned, and (d)
authorizes the Proxies to represent and vote, as designated on the reverse side
hereof, all the Common Units of the Partnership which the undersigned would be
entitled to vote if personally present at the Special Meeting or any adjournment
thereof.
The undersigned hereby revokes any proxy to vote Common Units held by the
undersigned previously given to the extent such proxy permits the holder thereof
to vote on the matter covered by this Proxy. THE UNDERSIGNED ACKNOWLEDGES THAT
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED UNITHOLDER AND THAT, IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN FAVOR OF THE PROPOSAL.
This Proxy may be revoked at any time prior to the voting of this Proxy by
the execution and submission of a revised proxy or by voting in person at the
Special Meeting.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ACCOMPANYING
POSTPAID ENVELOPE.
(Continued and to be signed on the reverse side.)
SEE REVERSE SIDE
<PAGE>
The Board of Directors of the General partner recommends a vote "FOR" the
Proposal.
1. Approval of a proposal to amend the Partnership Agreement to authorize
the Partnership to issue up to 25,000,000 additional Common Units (or other
units having rights to distribution or in liquidation ranking on a parity with
the Common Units) for any Partnership purpose without the approval of the Common
Unitholders, all as more particularly described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, upon any other business that may be properly
raised at the Special Meeting.
Dated:
______________________ ________________________________________________
Signature(s) of Unitholder(s)
(Executors, administrators, guardians, trustees,
attorneys and officers signing for corporations or
other organizations should give full title. If a
partnership or jointly owned, each owner should
sign.)
If you need assistance in voting your shares, please call D. F. King & Co.,
Inc. at 1-800-207-3159, or, outside the United States, collect at (212) 269-
5550.
