<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 27, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<S> <C>
ENRON CORP. ENRON CAPITAL RESOURCES, L.P.
(EXACT NAME OF REGISTRANT (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
AS SPECIFIED IN ITS CHARTER) DELAWARE
(STATE OR OTHER JURISDICTION OF
DELAWARE INCORPORATION OR ORGANIZATION)
(STATE OR OTHER JURISDICTION OF [APPLIED FOR]
INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
47-0255140 C/O JAMES V. DERRICK, JR., ESQ.
(I.R.S. EMPLOYER IDENTIFICATION NO.) ENRON CORP.
JAMES V. DERRICK, JR., ESQ. SENIOR VICE PRESIDENT AND GENERAL COUNSEL
ENRON CORP. 1400 SMITH STREET, HOUSTON, TEXAS 77002
SENIOR VICE PRESIDENT AND GENERAL COUNSEL 713-853-6161
1400 SMITH STREET, HOUSTON, TEXAS 77002 (ADDRESS, INCLUDING ZIP CODE,
(713) 853-6161 AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
(ADDRESS, INCLUDING ZIP CODE, REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES
AND TELEPHONE NUMBER, INCLUDING AREA CODE, AND AGENT FOR SERVICE)
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES
AND AGENT FOR SERVICE)
</TABLE>
---------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined in
light of market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE PRICE(7) FEE
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Enron Corp. Debt Securities..........................
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Warrants to Purchase Debt Securities.................
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Warrants to Purchase Common Stock(1).................
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Enron Corp. Second Preferred Stock...................
- ----------------------------------------------------- $213,750,000(4) (5) $213,750,000 $ 73,707
Enron Corp. Depositary Shares(2).....................
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Enron Capital Resources, L.P. Preferred Shares.......
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Enron Corp. Backup Undertakings with respect to Enron
Capital Resources, L.P. Preferred Shares(3)........
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Enron Corp. Common Stock............................. 7.5 million shares $28.9375(6) $217,031,250 $ 74,839
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Total........................................ -- -- $430,781,250 $148,546
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</TABLE>
(1) Consists of warrants to purchase up to 7.5 million shares of Enron Corp.
Common Stock registered hereby.
(2) The consideration for the Enron Corp. Depositary Shares is included in that
for the Enron Corp. Second Preferred Stock.
(3) No separate consideration will be received for the Enron Corp. Backup
Undertakings with respect to Enron Capital Resources, L.P. Preferred Shares.
(4) Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to $386,250,000
of securities registered on Form S-3, Registration Nos. 33-43324 and
33-50641. The maximum aggregate offering price of securities covered by such
combined prospectus (in addition to the 7.5 million shares of Enron Corp.
Common Stock being registered hereby) is $600,000,000. Without limitation as
to class of securities, securities of the classes listed in the above table
may be offered pursuant to such combined prospectus at a maximum aggregate
offering price (or, in the case of Warrants to Purchase Debt Securities,
offering price plus warrant exercise price) of $600,000,000.
(5) The proposed maximum offering price per share is equal to (a) 100% of the
principal amount thereof in the case of Enron Corp. Debt Securities and (b)
the proposed maximum aggregate offering price divided by the number of
shares offered in the case of other securities.
(6) The proposed maximum offering price per share of Enron Corp. Common Stock is
based on the average of the high and low prices of the Enron Corp. Common
Stock as reported in the New York Stock Exchange composite transaction
reporting system on May 20, 1994.
(7) Estimated solely for the purposes of calculating the registration fee.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT CONTAINS A COMBINED PROSPECTUS THAT ALSO RELATES TO $100,000,000 OF
SECURITIES REGISTERED ON FORM S-3, REGISTRATION NO. 33-43324, WHICH WAS DECLARED
EFFECTIVE ON FEBRUARY 26, 1992, AND $286,250,000 OF SECURITIES REGISTERED ON
FORM S-3, REGISTRATION NO. 33-50641, WHICH WAS DECLARED EFFECTIVE ON OCTOBER 25,
1993 (THE "PREVIOUSLY REGISTERED SECURITIES"). THIS REGISTRATION STATEMENT
CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION STATEMENT NO.
33-43324 AND POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO.
33-50641, PURSUANT TO WHICH THE TOTAL AMOUNT OF UNSOLD PREVIOUSLY REGISTERED
SECURITIES REGISTERED ON REGISTRATION STATEMENT NOS. 33-43324 AND 33-50641,
WITHOUT LIMITATION AS TO CLASS OF SECURITIES, MAY BE OFFERED AND SOLD AS DEBT
SECURITIES, WARRANTS TO PURCHASE DEBT SECURITIES, WARRANTS TO PURCHASE COMMON
STOCK, ENRON CORP. SECOND PREFERRED STOCK, ENRON CORP. DEPOSITARY SHARES, ENRON
CAPITAL RESOURCES, L.P. PREFERRED SHARES AND ENRON CORP. BACKUP UNDERTAKINGS
WITH RESPECT TO ENRON CAPITAL RESOURCES, L.P. PREFERRED SHARES, TOGETHER WITH
THE SECURITIES REGISTERED HEREUNDER, THROUGH THE USE OF THE COMBINED PROSPECTUS
INCLUDED HEREIN. IN THE EVENT SUCH PREVIOUSLY REGISTERED SECURITIES ARE OFFERED
AND SOLD PRIOR TO THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, THE AMOUNT
OF SUCH PREVIOUSLY REGISTERED SECURITIES SO SOLD WILL NOT BE INCLUDED IN ANY
PROSPECTUS HEREUNDER.
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<PAGE> 2
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* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any State in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* State. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED MAY 27, 1994
PROSPECTUS
DEBT SECURITIES
SECOND PREFERRED STOCK
COMMON STOCK
WARRANTS TO PURCHASE COMMON STOCK
WARRANTS TO PURCHASE DEBT SECURITIES
------------------------
Enron Corp. ("Enron") may offer from time to time (i) secured or unsecured
debt securities ("Debt Securities") consisting of debentures, notes or other
secured or unsecured evidences of indebtedness in one or more series, (ii)
shares of second preferred stock, par value $1.00 per share ("Second Preferred
Stock"), in one or more series, which may be represented by depositary shares
("Depositary Shares") evidenced by depositary receipts, (iii) warrants to
purchase Debt Securities ("Debt Warrants") and Debt Securities issuable upon
exercise of Debt Warrants, or (iv) any combination of the foregoing, at an
aggregate initial public offering price not to exceed $600,000,000, at prices
and on terms to be determined at or prior to the time of sale. In addition,
Enron or certain selling stockholders (the "Selling Stockholders") may offer
from time to time up to 7.5 million shares of Enron common stock, par value $.10
per share ("Common Stock"), at prices and on terms to be determined at or prior
to the time of sale. Enron may offer from time to time warrants to purchase up
to 7.5 million shares of Common Stock ("Stock Warrants") and Common Stock
issuable upon exercise of Stock Warrants, at prices and on terms to be
determined at or prior to the time of sale.
Specific terms of the securities in respect of which this Prospectus is
being delivered ("Offered Securities") will be set forth in an accompanying
Prospectus Supplement ("Prospectus Supplement"), together with the terms of the
offering of the Offered Securities, the initial price thereof and the net
proceeds from the sale thereof. The Prospectus Supplement will set forth with
regard to the particular Offered Securities, without limitation, the following:
(i) in the case of Debt Securities, the specific designation, aggregate
principal amount, authorized denomination, maturity, rate (which may be fixed or
variable) or method of calculation of interest and dates for payment thereof,
and any exchangeability, conversion, redemption, prepayment or sinking fund
provisions and any listing on a securities exchange, (ii) in the case of Second
Preferred Stock, the designation, number of shares or fractional interests
therein, liquidation preference per share, initial public offering price,
dividend rate (or method of calculation thereof), dates on which dividends shall
be payable and dates from which dividends shall accrue, any redemption or
sinking fund provisions and any listing on a securities exchange and (iii) in
the case of Common Stock, whether the seller thereof is Enron or one or more
Selling Stockholders. If shares of Second Preferred Stock are to be represented
by Depositary Shares, the Prospectus Supplement will set forth the fraction of a
share of such Second Preferred Stock represented by one Depositary Share. With
regard to Stock Warrants and Debt Warrants, if any, the Prospectus Supplement
will contain a description of the Common Stock and Debt Securities,
respectively, for which each warrant is exercisable and the offering price, if
any, exercise price, duration, detachability, call provisions, and other
principal terms of the warrants.
As part of the Offered Securities, Enron Capital Resources, L.P. ("Enron
Capital Resources"), a Delaware limited partnership of which Enron is the
general partner, may also offer from time to time its preferred shares
("Preferred Shares"), in one or more series, at an aggregate initial public
offering price not to exceed $600,000,000 at the time of sale. In connection
therewith, Enron may offer back-up undertakings ("Backup Undertakings") with
respect to the Preferred Shares, as described in this Prospectus under "Enron
Capital Resources, L.P.". The term "Offered Securities" as used herein shall
also refer to such Preferred Shares and any related Backup Undertakings. Any
issue of Preferred Shares and related Backup Undertakings shall correspondingly
reduce the amount of other Offered Securities available for offer and sale
hereunder.
Enron and/or Enron Capital Resources may sell the Offered Securities
directly, through agents designated from time to time or through underwriters or
dealers. See "Plan of Distribution". If any agents of Enron and/or Enron Capital
Resources or any underwriters or dealers are involved in the sale of the Offered
Securities, the names of such agents, underwriters or dealers and any applicable
commissions and discounts will be set forth in the related Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is May , 1994.
<PAGE> 3
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR
IN A PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ENRON OR
ENRON CAPITAL RESOURCES. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT
CONSTITUTES AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF OR THEREOF.
AVAILABLE INFORMATION
Enron is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549; and at the following Regional Offices of the Commission: Chicago
Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511; and New York Regional Office, 7 World Trade
Center, New York, New York 10048. Copies of such material can also be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at prescribed rates. Enron's Common Stock and
Cumulative Second Preferred Convertible Stock are listed on the New York and
Midwest Stock Exchanges, and Enron's Common Stock is also listed on the Pacific
Stock Exchange. Reports, proxy statements and other information concerning Enron
can be inspected and copied at the respective offices of these exchanges at 20
Broad Street, New York, New York 10005; 120 South LaSalle Street, Chicago,
Illinois 60603; and 301 Pine Street, San Francisco, California 94014.
This Prospectus constitutes a part of Registration Statements on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statements") filed with the Commission under the Securities Act of 1933 (the
"Securities Act") with respect to the Offered Securities. This Prospectus does
not contain all of the information set forth in such Registration Statements,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Reference is made to such Registration Statements and to the
exhibits relating thereto for further information with respect to Enron and the
Offered Securities. Any statements contained herein concerning the provisions of
any document filed as an exhibit to any of the Registration Statements or
otherwise filed with the Commission or incorporated by reference herein are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed for a more complete description of the matter involved. Each
such statement is qualified in its entirety by such reference.
No separate financial statements of Enron Capital Resources have been
included herein. Enron and Enron Capital Resources do not consider that such
financial statements would be material to holders of Preferred Shares of Enron
Capital Resources because Enron Capital Resources is a newly organized special
purpose entity, has no operating history and no independent operations and is
not engaged in, and does not propose to engage in, any activity other than the
issuance of its shares and the lending of the proceeds thereof to Enron. See
"Enron Capital Resources, L.P.". Enron Capital Resources is a limited
partnership organized under the Delaware Revised Uniform Limited Partnership
Act. Enron is the general partner of Enron Capital Resources, and a wholly owned
subsidiary of Enron is its organizational limited partner. All of the general
and limited partner interests in Enron Capital Resources are beneficially owned
by Enron or its wholly owned subsidiary, and upon sale of Preferred Shares the
wholly owned subsidiary will withdraw as a limited partner so that thereafter
all of such interests will be owned by Enron and holders of Preferred Shares.
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<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Enron (File No.
1-3423) pursuant to Section 13(a) of the Exchange Act are incorporated herein by
reference as of their respective dates:
(a) Annual Report on Form 10-K for the year ended December 31, 1993;
and
(b) Quarterly Report on Form 10-Q for the quarter ended March 31,
1994.
Each document filed by Enron pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Offered Securities pursuant hereto shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such document. Any statement contained herein or in a document
all or a portion of which is incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Enron will provide without charge to each person to whom a copy of this
Prospectus is delivered, on the request of any such person, a copy of any or all
of the foregoing documents incorporated herein by reference other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into the documents that this Prospectus incorporates). Written or
telephone requests for such copies should be directed to Secretary Division,
Enron Corp., at its principal executive offices, 1400 Smith Street, Houston,
Texas 77002 (telephone: 713-853-6161).
3
<PAGE> 5
BUSINESS OF ENRON CORP.
Enron Corp. ("Enron"), a Delaware corporation organized in 1930, is an
integrated natural gas company with headquarters in Houston, Texas. Essentially
all of Enron's operations are conducted through its subsidiaries and affiliates
which are principally engaged in the gathering, transportation and wholesale
marketing of natural gas to markets throughout the United States and
internationally through approximately 44,000 miles of natural gas pipelines; the
exploration for and production of natural gas and crude oil in the United States
and internationally; the production, purchase, transportation and worldwide
marketing of natural gas liquids and refined petroleum products; the independent
(i.e., non-utility) development, promotion, construction and operation of
natural gas-fired power plants in the United States and internationally; and the
non-price regulated purchasing and marketing of long-term energy related
commitments.
INTERSTATE PIPELINES. Enron and its subsidiaries operate domestic
interstate pipelines extending from Texas to the Canadian border and across the
southern United States from Florida to California. Included in Enron's domestic
interstate natural gas pipeline operations are Northern Natural Gas Company
("Northern"), Transwestern Pipeline Company ("Transwestern"), and Florida Gas
Transmission Company ("Florida Gas") (indirectly 50% owned by Enron). Northern,
Transwestern and Florida Gas are interstate pipelines and are subject to the
regulatory jurisdiction of the Federal Energy Regulatory Commission. Each
pipeline serves customers in a specific geographical area: Northern, the upper
Midwest; Florida Gas, the State of Florida; and Transwestern, principally the
California market. In addition, Enron holds a 13% interest in Northern Border
Partners, L.P. and operates the Northern Border Pipeline system, which
transports gas from Western Canada to delivery points in the midwestern United
States. Also, Enron has a 15% interest in Enron Liquids Pipeline, L.P., which is
engaged in pipeline transportation of natural gas liquids, refined petroleum
products and carbon dioxide and is operated by a wholly owned subsidiary of
Enron.
GAS SERVICES. Enron Gas Services Corp. and its affiliated companies ("EGS")
purchase natural gas, gas liquids and power through a variety of contractual
arrangements, including both short and long term contracts, the arrangement of
production payment and other financing transactions, and other contractual
arrangements, and market these energy products to local distribution companies,
electric utilities, cogenerators and both commercial and industrial end-users.
EGS also provides price risk management services in connection with natural gas,
gas liquids and power transactions through both physical delivery and financial
arrangements.
EGS offers a broad range of non-price regulated natural gas merchant
services by tailoring a variety of supply and marketing options to its
customers' specific needs. EGS's strategy is to provide predictable pricing,
reliable delivery and low cost capital to its customers. EGS provides these
services through a variety of financial instruments, including forward
contracts, swap agreements, options and other contractual commitments.
GAS PROCESSING. Certain Enron subsidiaries are engaged domestically in the
extraction of natural gas liquids ("NGLs") (ethane, propane, normal butane and
isobutane and natural gasoline). NGLs are typically extracted from natural gas
in liquid form under low temperature and high pressure conditions. Ethane,
propane, normal butane, isobutane and natural gasoline are used as feedstocks
for petrochemical plants in the production of plastics, synthetic rubber and
other products. Normal butane and natural gasoline are used by refineries in the
blending of motor gasoline. Isobutane is used in the alkylation process to
enhance the octane content of motor gasoline and is also used in the production
of MTBE, which is used to produce cleaner burning motor gasoline. Propane is
used as fuel for home heating and cooking, crop drying and industrial facilities
and as an engine fuel for vehicles, and ethane is used as a feedstock for
synthetic fuels production.
INTERNATIONAL GAS AND POWER SERVICES. Enron's international activities
principally involve the development, acquisition, promotion and operation of
natural gas and power projects and the marketing of natural gas liquids. As is
the case in the United States, Enron's emphasis is on businesses in which
natural gas or its components play a significant role. Development projects are
focused on power plants,
4
<PAGE> 6
gas processing and terminaling facilities and gas pipelines, while marketing
activities center on fuels used by or transported through such facilities.
Enron's international activities include management of ownership interests and
operation of power plants in England, Germany, Guatemala and the Philippines; a
3,800-mile pipeline system in southern Argentina; retail gas and propane sales
in the Caribbean basin; processing of natural gas liquids at Teesside, England;
and marketing of natural gas liquids worldwide.
EXPLORATION AND PRODUCTION. Enron's natural gas and crude oil exploration
and production operations are conducted by its subsidiary, Enron Oil & Gas
Company ("EOG"). Enron currently owns 80% of the outstanding common stock of
EOG. EOG is one of the largest independent (non-integrated) oil and gas
companies in the United States in terms of domestic proved reserves. EOG is
engaged in the exploration for, and development and production of, natural gas
and crude oil reserves primarily in major producing basins in the United States
and, to a lesser extent, in Canada, Trinidad and selected other international
areas. At December 31, 1993, EOG had estimated net proved natural gas reserves
of 1,772 billion cubic feet and estimated net proved crude oil, condensate and
natural gas liquids reserves of 20.9 million barrels, and at such date,
approximately 78% of EOG's proved reserves (on a natural gas equivalent basis)
was located in the United States, 16% in Canada and 6% in Trinidad.
Enron, a Delaware corporation, has its principal executive offices at 1400
Smith Street, Houston, Texas 77002, and its telephone number is 713-853-6161.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities will be added to
Enron's general funds and are expected to be used to retire existing
indebtedness and for general corporate purposes.
RATIOS OF ENRON'S EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
MARCH YEAR ENDED DECEMBER 31,
31, ----------------------------------------
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.......... 3.19 1.98 1.74 1.66 1.58 1.70
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends................. 3.05 1.88 1.64 1.54 1.47 1.57
</TABLE>
The ratios of earnings to fixed charges and earnings to fixed charges and
preferred stock dividends are based on continuing operations. "Earnings"
represent the aggregate of (a) the pre-tax income of Enron and its majority
owned subsidiaries, (b) Enron's share of pre-tax income of its 50% owned
companies, (c) any income actually received from less than 50% owned companies,
and (d) fixed charges, net of interest capitalized. "Fixed Charges" represent
interest (whether expensed or capitalized), amortization of debt discount and
expense and that portion of rentals considered to be representative of the
interest factor. "Fixed Charges and Preferred Stock Dividends" represent fixed
charges (as described above) and preferred stock dividend requirements of Enron.
5
<PAGE> 7
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate (the "Offered Debt Securities"). The particular
terms of the Offered Debt Securities and the extent, if any, to which such
general provisions may apply to the Offered Debt Securities will be described in
the Prospectus Supplement relating to such Offered Debt Securities.
The Offered Debt Securities will be secured or unsecured obligations of
Enron. Any such unsecured obligations will be issued under an Indenture (the
"Indenture") between Enron and Harris Trust and Savings Bank, as Trustee (the
"Trustee"), dated as of November 1, 1985. The following statements are summaries
of certain provisions contained in the Indenture, the form of which is filed as
an exhibit to the Registration Statements of which this Prospectus is a part.
They do not purport to be complete statements of all the terms and provisions of
the Indenture, and reference is hereby made to the Indenture for full and
complete statements of such terms and provisions, including the definitions of
certain terms used herein. Wherever reference is made in the following
statements to a particular section of the Indenture, such section shall be
deemed to be incorporated in such statements as a part thereof, and such
statements are qualified in their entirety by such reference. If Offered Debt
Securities will be secured obligations of Enron, they will be issued under a
separate indenture, which will be described in the Prospectus Supplement
relating to such Offered Debt Securities.
GENERAL
The Indenture does not limit the aggregate principal amount of unsecured
debentures, notes or other evidences of indebtedness of Enron (the "Indenture
Securities") which may be issued thereunder from time to time in one or more
series by Enron, and Enron may in the future issue additional Indenture
Securities (in addition to the Offered Debt Securities) under the Indenture. At
April 30, 1994, an aggregate of $1,043,000,000 principal amount of Indenture
Securities of Enron was issued and outstanding under the Indenture. Reference is
made to the Prospectus Supplement for the following terms of the Offered Debt
Securities: (i) the title of the Offered Debt Securities; (ii) any limit upon
the aggregate principal amount of the Offered Debt Securities; (iii) the date or
dates on which the principal of the Offered Debt Securities is payable; (iv) the
rate or rates (which may be fixed or variable), or the method by which such rate
or rates shall be determined, at which the Offered Debt Securities shall bear
interest, if any, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the interest payment
dates on which such interest shall be payable and the regular record date for
the interest payable on any interest payment date; (v) the place or places where
the principal of (and premium, if any) and interest on Offered Debt Securities
shall be payable; (vi) the period or periods within which, the price or prices
at which and the terms and conditions upon which Offered Debt Securities may be
redeemed, in whole or in part, at the option of Enron, if Enron is to have that
option; (vii) the obligation, if any, and the option, if any, of Enron to
redeem, purchase or repay Offered Debt Securities pursuant to any sinking fund
or analogous provisions or at the option of a holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Offered Debt Securities shall be redeemed, purchased or repaid in
whole or in part, pursuant to such obligation or option; (viii) any trustees,
paying agents, transfer agents or registrars with respect to Offered Debt
Securities; and (ix) any other term of the Offered Debt Securities (which term
shall not be inconsistent with the provisions of the Indenture). (Section 301.)
Enron will maintain in each place specified by it for payment of any series
of Offered Debt Securities an office or agency where Offered Debt Securities of
that series may be presented or surrendered for payment, where Offered Debt
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon Enron in respect of the
Offered Debt Securities of that series and the Indenture may be served.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or
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<PAGE> 8
integral multiples thereof. (Section 302.) No service charge will be made for
any transfer or exchange of such Offered Debt Securities, but Enron may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto. (Section 305.)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
principal amount. Special federal income tax, accounting and other
considerations applicable to any such Original Issue Discount Securities will be
described in any Prospectus Supplement relating thereto. "Original Issue
Discount Security" means any security which provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof as a result of the occurrence of an Event
of Default and the continuation thereof. (Section 101.)
LIMITATIONS ON MORTGAGES AND LIENS
The Indenture provides that so long as any of the Indenture Securities
issued under the Indenture (including the Offered Debt Securities) are
outstanding, Enron will not, and will not permit any Subsidiary (as defined in
the Indenture and herein) to, pledge, mortgage or hypothecate, or permit to
exist, except in favor of Enron or any Subsidiary, any mortgage, pledge or other
lien upon, any Principal Property (as defined in the Indenture and herein) at
any time owned by it, to secure any indebtedness (as defined in the Indenture),
unless effective provision is made whereby outstanding Indenture Securities
(including the Offered Debt Securities) will be equally and ratably secured with
any and all such indebtedness and with any other indebtedness similarly entitled
to be equally and ratably secured. This restriction does not apply to prevent
the creation or existence of: (a) mortgages, pledges, liens or encumbrances on
any property held or used by Enron or a Subsidiary in connection with the
exploration for, development of or production of, oil, gas, natural gas
(including liquified gas and storage gas), other hydrocarbons, helium, coal,
metals, minerals, steam, timber, geothermal or other natural resources or
synthetic fuels, such properties to include, but not be limited to, Enron's or a
Subsidiary's interest in any mineral fee interests, oil, gas or other mineral
leases, royalty, overriding royalty or net profits interests, production
payments and other similar interests, wellhead production equipment, tanks,
field gathering lines, leasehold or field separation and processing facilities,
compression facilities and other similar personal property and fixtures; (b)
mortgages, pledges, liens or encumbrances on oil, gas, natural gas (including
liquified gas and storage gas), other hydrocarbons, helium, coal, metals,
minerals, steam, timber, geothermal or other natural resources or synthetic
fuels produced or recovered from any property, an interest in which is owned or
leased by Enron or a Subsidiary; (c) mortgages, pledges, liens or encumbrances
(or certain extensions, renewals or refundings thereof) upon any property
acquired before or after the date of the Indenture, created at the time of
acquisition or within one year thereafter to secure all or a portion of the
purchase price thereof, or existing thereon at the date of acquisition, whether
or not assumed by Enron or a Subsidiary, provided that every such mortgage,
pledge, lien or encumbrance applies only to the property so acquired and fixed
improvements thereon; (d) mortgages, pledges, liens or encumbrances upon any
property acquired before or after the date of the Indenture by any corporation
that is or becomes a Subsidiary after the date of the Indenture ("Acquired
Entity"), provided that every such mortgage, pledge, lien or encumbrance (1)
shall either (i) exist prior to the time the Acquired Entity becomes a
Subsidiary or (ii) be created at the time the Acquired Entity becomes a
Subsidiary or within one year thereafter to secure all or a portion of the
acquisition price thereof and (2) shall only apply to those properties owned by
the Acquired Entity at the time it becomes a Subsidiary or thereafter acquired
by it from sources other than Enron or any other Subsidiary; (e) pledges of
current assets, in the ordinary course of business, to secure current
liabilities; (f) deposits to secure public or statutory obligations; (g) liens
to secure indebtedness other than Funded Debt (as defined in the Indenture and
herein); (h) mortgages, pledges, liens or encumbrances upon any office, data
processing or transportation equipment; (i) mortgages, pledges, liens or
encumbrances created or assumed by Enron or a Subsidiary in connection with the
issuance of debt securities the interest on which is excludable from gross
income of the holder of such security pursuant to the Internal Revenue Code of
1986, as amended, for the purpose of financing the acquisition or construction
of property to be used by Enron or a Subsidiary; (j) pledges or assignments of
accounts receivable or conditional sales contracts or chattel mortgages
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<PAGE> 9
and evidences of indebtedness secured thereby, received in connection with the
sale by Enron or a Subsidiary of goods or merchandise to customers; or (k)
certain other liens or encumbrances. (Section 1007.)
Notwithstanding the foregoing, Enron or a Subsidiary may issue, assume or
guarantee indebtedness secured by a mortgage which would otherwise be subject to
the foregoing restrictions in an aggregate amount which, together with all other
indebtedness of Enron or a Subsidiary secured by a mortgage which (if originally
issued, assumed or guaranteed at such time) would otherwise be subject to the
foregoing restrictions (not including secured indebtedness permitted under the
foregoing exceptions), does not at the time exceed 10% of the Consolidated Net
Tangible Assets (total assets less (a) total current liabilities, excluding
indebtedness due within 12 months, and (b) goodwill, patents and trademarks) of
Enron, as shown on the audited consolidated financial statements of Enron as of
the end of the fiscal year preceding the date of determination. (Section 1007.)
The holders of at least 50% in principal amount of the outstanding
Indenture Securities under the Indenture (including the Offered Debt Securities)
may waive compliance by Enron with the covenant contained in Section 1007 of the
Indenture (and certain other covenants of Enron). (Section 1009.)
The Indenture defines the term "Subsidiary" to mean a corporation all of
the voting shares (that is, shares entitled to vote for the election of
directors, but excluding shares entitled so to vote only upon the happening of
some contingency unless such contingency shall have occurred) of which shall be
owned by Enron or by one or more Subsidiaries or by Enron and one or more
Subsidiaries. The term "Principal Property" is defined to mean any oil or gas
pipeline, gas processing plant or chemical plant located in the United States,
except any such property, pipeline or plant that in the opinion of the Board of
Directors of Enron is not of material importance to the total business conducted
by Enron and its Subsidiaries. "Principal Property" does not include any oil or
gas property or the production or any proceeds of production from an oil or gas
producing property or the production or any proceeds of production of gas
processing plants or oil or gas or petroleum products in any pipeline. (Section
101.)
The term "indebtedness", as applied to Enron or any Subsidiary, is defined
to mean bonds, debentures, notes and other instruments representing obligations
created or assumed by any such corporation for the repayment of money borrowed
(other than unamortized debt discount or premium). All indebtedness secured by a
lien upon property owned by Enron or any Subsidiary and upon which indebtedness
any such corporation customarily pays interest, even though such corporation has
not assumed or become liable for the payment of such indebtedness, is also
deemed to be indebtedness of any such corporation. All indebtedness for money
borrowed incurred by other persons which is directly guaranteed as to payment of
principal by Enron or any Subsidiary is for all purposes of the Indenture deemed
to be indebtedness of any such corporation, but no other contingent obligation
of any such corporation in respect of indebtedness incurred by other persons is
for any purpose deemed indebtedness of such corporation. Indebtedness of Enron
or any Subsidiary does not include (i) amounts which are payable only out of all
or a portion of the oil, gas, natural gas, helium, coal, metals, minerals,
steam, timber or other natural resources produced, derived or extracted from
properties owned or developed by such corporation; (ii) any amount representing
capitalized lease obligations; (iii) any indebtedness incurred to finance oil,
gas, natural gas, helium, coal, metals, minerals, steam, timber, hydrocarbons or
geothermal or other natural resources or synthetic fuel exploration or
development, payable, with respect to principal and interest, solely out of the
proceeds of oil, gas, natural gas, helium, coal, metals, minerals, steam,
timber, hydrocarbons or geothermal or other natural resources or synthetic fuel
to be produced, sold and/or delivered by Enron or any Subsidiary; (iv) indirect
guarantees or other contingent obligations in connection with the indebtedness
of others, including agreements, contingent or otherwise, with such other
persons or with third persons with respect to, or to permit or ensure the
payment of, obligations of such other persons, including, without limitation,
agreements to purchase or repurchase obligations of such other persons,
agreements to advance or supply funds to or to invest in such other persons or
agreements to pay for property, products or services of such other persons
(whether or not conferred, delivered or rendered) and any demand charge,
throughput, take-or-pay, keep-well, make-whole, cash
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<PAGE> 10
deficiency, maintenance of working capital or earnings or similar agreements;
and (v) any guarantees with respect to lease or other similar periodic payments
to be made by other persons. (Section 101.)
The term "Funded Debt" as applied to any corporation means all indebtedness
incurred, created, assumed or guaranteed by such corporation, or upon which it
customarily pays interest charges, which matures, or is renewable by such
corporation to a date, more than one year after the date as of which Funded Debt
is being determined; provided, however, that the term "Funded Debt" shall not
include (i) indebtedness incurred in the ordinary course of business
representing borrowings, regardless of when payable, of such corporation from
time to time against, but not in excess of the face amount of, its installment
accounts receivable for the sale of appliances and equipment sold in the regular
course of business or (ii) advances for construction and security deposits
received by such corporation in the ordinary course of business. (Section 101.)
The foregoing limitations on mortgages, pledges and liens are intended to
limit other creditors of Enron from obtaining preference or priority over
holders of the Indenture Securities issued under the Indenture, but are not
intended to prevent other creditors from sharing equally and ratably and without
preference ("pari passu") over the holders of such Indenture Securities. While
such limitations on mortgages and liens do provide protection to the holders of
the Indenture Securities, there are a number of exceptions to such restrictions
which could result in certain assets of Enron and its Subsidiaries being
encumbered without equally and ratably securing the Indenture Securities issued
under the Indenture. Specifically, the restrictions apply only to pledges,
mortgages or liens upon "Principal Property" (as defined in the Indenture and
herein) to secure any "indebtedness" (as defined in the Indenture and herein),
unless effective provision is made whereby outstanding Securities will be
equally and ratably secured with any such indebtedness and with any other
indebtedness similarly entitled to be equally and ratably secured. There are
certain exceptions to the definition of "indebtedness," which are enumerated in
the Indenture and herein. In addition, the restrictions do not apply to prevent
the creation or existence of mortgages, pledges, liens or encumbrances on
certain types of properties or pursuant to certain types of transactions, all as
enumerated in the Indenture and above. Also, up to 10% of Consolidated Net
Tangible Assets (as defined in the Indenture and herein) is not subject to the
mortgage and lien limitations contained in the Indenture.
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture provides that, with the consent of
the holders of not less than 50% in principal amount of all outstanding
Indenture Securities (including, where applicable, the Offered Debt Securities)
affected thereby, Enron and the Trustee may enter into a supplemental indenture
for the purpose of adding to, changing or eliminating any of the provisions of
the Indenture or of modifying in any manner the rights of the holders of
Indenture Securities under the Indenture. Notwithstanding the foregoing, the
consent of the holder of each outstanding Indenture Security affected thereby
will be required to: (a) change the Stated Maturity (as defined in the
Indenture) of the principal of, or any installment of principal of or interest
on, any Indenture Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change any Place of Payment (as defined in the Indenture) where, or change the
coin or currency in which, any Indenture Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date, as defined in the Indenture); (b)
reduce the percentage in principal amount of the outstanding Indenture
Securities of any series, the consent of whose holders is required for any
supplemental indenture or for any waiver provided for in the Indenture; or (c)
with certain exceptions, modify any of the provisions of the sections of the
Indenture which concern waivers of past defaults, waivers of certain covenants
or consent to supplemental indentures, except to increase the percentage of
principal amount of Indenture Securities of any series, the holders of which are
required to effect such waiver or consent, or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent of
the holder of each outstanding Indenture Security affected thereby. The
Indenture provides that a supplemental indenture which changes or eliminates any
covenant
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<PAGE> 11
or other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of Indenture Securities, or which
modifies the rights of the holders of Indenture Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under the Indenture of the holders of Indenture Securities of any other
series. (Section 902.)
EVENTS OF DEFAULT AND RIGHTS UPON DEFAULT
Under the Indenture, the term "Event of Default" with respect to any series
of Indenture Securities, means any one of the following events which shall have
occurred and is continuing: (a) default in the payment of any interest upon any
Indenture Security of that series when it becomes due and payable or default in
the payment of any mandatory sinking fund payment provided for by the terms of
any series of Indenture Securities, and continuance of such default for a period
of 30 days; (b) default in the payment of the principal of (or premium, if any,
on) any Indenture Security of that series at its maturity; (c) default in the
performance, or breach, of any covenant or warranty of Enron in the Indenture
(other than a covenant or warranty a default in the performance of which or the
breach of which is otherwise specifically dealt with in the Indenture or which
has been expressly included in the Indenture solely for the benefit of one or
more series of Indenture Securities other than that series), and continuance of
such default or breach for 60 days after there has been given to Enron by the
Trustee, or to Enron and the Trustee by the holders of at least 25% in principal
amount of all outstanding Indenture Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" under the Indenture; or (d) certain events involving
Enron in bankruptcy, receivership or other insolvency proceedings or an
assignment for the benefit of creditors. (Section 501.)
If an Event of Default described in clause (a) or (b) in the foregoing
paragraph has occurred and is continuing with respect to Indenture Securities of
any series, the Indenture provides that the Trustee or the holders of not less
than 25% in principal amount of the outstanding Indenture Securities of that
series may declare the principal amount of all of the Indenture Securities of
that series to be due and payable immediately, and upon any such declaration
such principal amount shall become immediately due and payable. If an Event of
Default described in clause (c) or (d) of the foregoing paragraph occurs and is
continuing, the Trustee or the holders of not less than 25% in principal amount
of all of the Indenture Securities then outstanding may declare the principal
amount of all of the Indenture Securities to be due and payable immediately, and
upon any such declaration such principal amount shall become immediately due and
payable. (Section 502.)
A default under other indebtedness of Enron is not an Event of Default
under the Indenture, and an Event of Default under one series of Indenture
Securities will not necessarily be an Event of Default under another series.
At any time after such a declaration of acceleration with respect to
Indenture Securities of any series (or of all series, as the case may be) has
been made and before judgment or decree for payment of the money due has been
obtained by the Trustee, the holders of a majority in principal amount of the
outstanding Indenture Securities of that series (or of all series, as the case
may be) may rescind and annul such declaration and its consequences, if, subject
to certain conditions, all Events of Default with respect to Indenture
Securities of that series (or of all series, as the case may be), other than the
non-payment of the principal of the Indenture Securities due solely by such
declaration of acceleration, have been cured or waived and all payments due
(other than by acceleration) have been paid or deposited with the Trustee.
(Section 502.) With certain exceptions, the holders of not less than a majority
in principal amount of the outstanding Indenture Securities of any series, on
behalf of the holders of all the Indenture Securities of such series, may waive
any past default described in clause (a) or (b) of the first paragraph of this
heading "Events of Default and Rights Upon Default" (or, in the case of a
default described in clause (c) or (d) of such paragraph, the holders of a
majority in principal amount of all outstanding Indenture Securities may waive
any such past default), and its consequences, except a default (a) in the
payment of the principal of (or premium, if any) or interest on any Indenture
Security, or (b) in respect of a covenant or provision of the Indenture which
under the Indenture cannot be
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modified or amended without the consent of the holder of each outstanding
Indenture Security of such series affected. (Section 513.)
The holders of not less than a majority in principal amount of the
Indenture Securities of any series at the time outstanding are empowered under
the terms of the Indenture, subject to certain limitations, to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. (Section
512.)
The Indenture further provides that no holder of an Indenture Security of
any series may enforce the Indenture except in the case of failure by the
Trustee to act for 60 days after notice of a continuing Event of Default with
respect to the Indenture Securities of that series and after request by the
holders of not less than 25% in principal amount of the outstanding Indenture
Securities of such series and the offer to the Trustee of reasonable indemnity,
but this provision will not prevent a holder of any Indenture Security from
enforcing the payment of the principal of, and interest on, such holder's
Indenture Security. (Sections 507 and 508.)
The Indenture requires that Enron deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officer's Certificate, stating whether to
the best knowledge of the signers thereof Enron is in default in the performance
and observance of certain of the terms of the Indenture and, if so, specifying
each such default and the nature and status thereof of which the signers may
have knowledge. (Section 1008.)
DISCHARGE OF INDENTURE
With certain exceptions, Enron may discharge its obligations under the
Indenture with respect to any series of Indenture Securities by (i) paying or
causing to be paid the principal of (and premium, if any) and interest on all
the Indenture Securities of such series outstanding, as and when the same shall
become due and payable; (ii) delivering to the Trustee all outstanding Indenture
Securities of such series for cancellation; or (iii) entering into an agreement
in form and substance satisfactory to Enron and the Trustee providing for the
creation of an escrow fund and depositing in trust with the Trustee, as escrow
agent of such fund, sufficient funds in cash and/or Eligible Obligations and/or
U.S. Government Obligations, maturing as to principal and interest in such
amounts and at such times as will be sufficient to pay at the Stated Maturity or
Redemption Date all such Indenture Securities of such series not previously
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest to the Stated Maturity or Redemption Date. (Section 401.)
The Indenture defines "Eligible Obligations" to mean interest bearing
obligations as a result of the deposit of which the Indenture Securities are
rated in the highest generic long-term debt rating category assigned to legally
defeased debt by one or more nationally recognized rating agencies. (Section
101.)
For federal income tax purposes, there is a substantial risk that a legal
defeasance of a series of Indenture Securities by the deposit of cash, Eligible
Obligations or U.S. Government Obligations in a trust would be characterized by
the Internal Revenue Service or a court as a taxable exchange by the holders of
the Indenture Securities of that series for either (i) an issue of obligations
of the defeasance trust or (ii) a direct interest in the cash and/or Eligible
Obligations and/or U.S. Government Obligations held in the defeasance trust. If
the defeasance were so characterized, then a holder of an Indenture Security of
the series defeased would be: (i) required to recognize gain or loss (which
would be capital gain or loss if the Indenture Securities were held as a capital
asset) at the time of the defeasance as if the Indenture Security had been sold
at such time for an amount equal to the amount of cash and the fair market value
of the Eligible Obligations and/or U.S. Government Obligations held in the
defeasance trust; (ii) required to include in income in each taxable year the
interest and any original issue discount or gain or loss attributable to either
such defeasance trust obligations or such securities, as the case may be; and
(iii) subject to the market discount provisions of the Internal Revenue Code as
they may pertain to such defeasance trust obligations or such securities. As a
result, a holder of an Indenture Security may be required to pay taxes on any
such gain or income even though such holder may not have received any cash
therefrom. Prospective investors are urged to consult their own advisors as to
the tax consequences
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of an actual or legal defeasance, including the applicability and effect of tax
laws other than federal income tax law.
CONCERNING THE TRUSTEE
Harris Trust and Savings Bank is the Trustee under the Indenture. Such bank
also acts as a depository of funds for, makes loans to, and performs other
services for, Enron in the normal course of business, including acting as
trustee under other indentures of Enron.
The Indenture contains the provisions required by the Trust Indenture Act
of 1939 with reference to the disqualification of the Trustee if it shall have
or acquire any "conflicting interest", as therein defined. (Section 608.) The
Indenture also contains certain limitations on the right of the Trustee, as a
creditor of Enron, to obtain payment of claims in certain cases, or to realize
on certain property received by it in respect of any such claims, as security or
otherwise. (Section 613.)
SELLING STOCKHOLDERS
The following table sets forth the name of the Selling Stockholders, the
number of shares of Common Stock which may be regarded as beneficially owned by
each Selling Stockholder and the maximum number of shares which may be offered
hereby by such Selling Stockholders as of the date hereof.
<TABLE>
<CAPTION>
NUMBER OF
SHARES NUMBER OF
BENEFICIALLY SHARES
SELLING STOCKHOLDER OWNED(1) OFFERED
- ------------------------------------------------------------------- --------- ---------
<S> <C> <C>
Enron Corp. Flexible Equity Trust.................................. 7,500,000 (2)
Enron Corp. Savings Plan........................................... 7,277,011 (2)
</TABLE>
- ---------------
(1) Amounts shown reflect record ownership. The Enron Corp. Flexible Equity
Trust and the Enron Corp. Savings Plan have been established in connection
with Enron's employee benefit programs.
(2) The aggregate number of shares of Common Stock to be offered hereby by the
Selling Stockholders and Enron shall not exceed 7.5 million shares.
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DESCRIPTION OF ENRON CORP. CAPITAL STOCK
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
At May 15, 1994, the authorized capital stock of Enron was 616,500,000
shares, consisting of:
(a) 1,500,000 shares of Preferred Stock, par value $100 per share (the
"Preferred Stock"), of which no shares were outstanding;
(b) 5,000,000 shares of Second Preferred Stock, par value $1 per share
(the "Second Preferred Stock"), of which 1,417,713 shares of Cumulative
Second Preferred Convertible Stock (the "Convertible Preferred Stock") were
outstanding;
(c) 10,000,000 shares of Preference Stock, par value $1 per share (the
"Preference Stock"), of which no shares were outstanding; and
(d) 600,000,000 shares of Common Stock, par value $.10 per share (the
"Common Stock"), of which 250,921,797 shares were outstanding.
In general, the classes of authorized capital stock are afforded
preferences with respect to dividends and liquidation rights in the order listed
above. The Board of Directors of Enron is empowered, without approval of the
stockholders, to cause the Preferred Stock, Second Preferred Stock and
Preference Stock to be issued in one or more series, with the numbers of shares
of each series and the rights, preferences and limitations of each series to be
determined by it. Among the specific matters that may be determined by the Board
of Directors are: the annual rate of dividends; the redemption price, if any;
the terms of a sinking or purchase fund, if any; the amount payable in the event
of any voluntary liquidation, dissolution or winding up of the affairs of Enron;
conversion rights, if any; and voting powers, if any, in addition to those
described below. The descriptions set forth below do not purport to be complete
and are qualified in their entirety by reference to the Restated Certificate of
Incorporation of Enron, as amended (the "Restated Certificate of
Incorporation").
No holders of any class of Enron's capital stock are entitled to preemptive
rights.
SECOND PREFERRED STOCK
The following is a general description of the terms of the Second Preferred
Stock of Enron. The particular terms of any series of Second Preferred Stock
offered hereby ("Offered Second Preferred Stock") will be set forth in the
Prospectus Supplement relating thereto. The rights, preferences, privileges and
restrictions, including dividend rights, voting rights, terms of redemption and
liquidation preferences, of the Offered Second Preferred Stock of each series
will be fixed or designated pursuant to a certificate of designations adopted by
the Board of Directors or a duly authorized committee thereof. The description
of Second Preferred Stock set forth below and the description of the terms of a
particular series of Offered Second Preferred Stock that will be set forth in a
Prospectus Supplement do not purport to be complete and are qualified in their
entirety by reference to the certificate of designations relating to such
series.
The Offered Second Preferred Stock shall rank on a parity with the
Convertible Preferred Stock, but in all respects, regardless of series, the
Offered Second Preferred Stock shall rank in preference to the Common Stock as
to payment of dividends and as to distribution of assets of Enron upon the
liquidation, dissolution or winding up of Enron. Upon issuance against full
payment of the purchase price therefor, shares of Offered Second Preferred Stock
will be fully paid and nonassessable.
DIVIDENDS. Holders of Offered Second Preferred Stock will be entitled to
receive, when, as and if declared by the Board of Directors of Enron out of any
funds legally available for that purpose, dividends in cash at such respective
rates, payable on such dates in each year and in respect of such dividend
periods, as stated in Enron's Restated Certificate of Incorporation or the
certificate of designations for such series of Offered Second Preferred Stock,
before any dividends may be declared or paid or set apart for payment upon the
Common Stock or any other class of stock ranking junior to such series of
Offered
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Second Preferred Stock. No dividend may be declared or paid on any series of
Offered Second Preferred Stock unless at the same time a dividend in like
proportion to the respectively designated dividend amounts shall be declared or
paid on each other series of Preferred Stock then issued and outstanding ranking
prior to or on a parity with such particular series with respect to the payment
of dividends. Dividends on Offered Second Preferred Stock may be either
cumulative or non-cumulative.
The annual rate of dividends payable on shares of the Convertible Preferred
Stock is the greater of $10.50 per share or the dividend amount payable on the
number of shares of Common Stock into which one share of Convertible Preferred
Stock is convertible (currently 13.652 shares). Such dividends are payable
quarterly on the first days of January, April, July and October. These dividend
rights are superior to the dividend rights of the Common Stock and will rank
equally with the dividend rights on the Offered Second Preferred Stock.
LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution or
winding up of Enron, whether voluntary or involuntary, holders of Offered Second
Preferred Stock of each series (if any shares thereof are then issued and
outstanding) will be entitled to payment of the applicable liquidation price or
prices plus accrued dividends, out of the available assets of Enron, in
preference to the holders of the Common Stock or any other class of stock
ranking junior to such series of Offered Second Preferred Stock upon
liquidation, dissolution or winding up. Enron's Restated Certificate of
Incorporation provides that the sale, conveyance, exchange or transfer of all or
a part of the property or assets of Enron or a consolidation or merger of Enron
with one or more corporations shall not be deemed to be a liquidation,
dissolution or winding up of Enron.
The amount payable on shares of the Convertible Preferred Stock in the
event of any involuntary or voluntary liquidation, dissolution or winding up of
the affairs of Enron is $100.00 per share, together with accrued dividends to
the date of distribution or payment. The liquidation rights of the Convertible
Preferred Stock will rank equally with the liquidation rights of Offered Second
Preferred Stock.
REDEMPTION AND CONVERSION. Each series of Offered Second Preferred Stock
will be subject to redemption, if applicable, on such terms, at such prices and
on such dates as may be set forth in the applicable certificate of designations.
The Offered Second Preferred Stock will not be convertible.
The Convertible Preferred Stock is redeemable at the option of Enron at any
time, in whole or in part, at a redemption price of $100.00 per share, together
with accrued dividends to the date of distribution or payment. Each share of
Convertible Preferred Stock is convertible into 13.652 shares of Common Stock at
any time at the option of the holder.
VOTING RIGHTS. The holders of the Second Preferred Stock (including the
Offered Second Preferred Stock) have no voting rights except as specifically
required by statute and except for certain voting rights specifically provided
in Enron's Restated Certificate of Incorporation and the certificates of
designations creating the various series of such stock. Enron's Restated
Certificate of Incorporation provides that the vote or consent of the holders of
at least a majority of the then outstanding shares of Second Preferred Stock
(including the Offered Second Preferred Stock), irrespective of series, is
required to effect (a) any change in the Restated Certificate of Incorporation
or bylaws which affects adversely the voting powers, rights or preferences of
the Second Preferred Stock (if only certain series are affected, separate votes
by the series affected are required); (b) the authorization or creation of, or
increase in the authorized amount of, any stock of any class, or any security
convertible into stock of any class, ranking prior to the Second Preferred
Stock; (c) the voluntary dissolution, liquidation or winding up of the affairs
of Enron, or the sale, lease or conveyance by Enron of all or substantially all
of its property or assets; (d) the purchase or redemption of less than all of
the Second Preferred Stock unless the full dividend on all shares of Second
Preferred Stock has been paid or declared and a sum sufficient for payment
thereof set apart; (e) the increase of the authorized amount of Second Preferred
Stock or the authorization or creation of or the increase in the authorized
amount of any stock of any class, or any security convertible into stock of any
class, ranking on a parity with the Second Preferred Stock; (f) any merger or
consolidation of Enron, except under certain conditions. Further, in the event
dividends payments on the Second Preferred Stock shall be in default in an
amount equivalent to six full quarterly
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dividends, then the holders of Second Preferred Stock, voting separately as a
class, shall be entitled to elect two directors of Enron until such time as such
dividends shall have been paid on funds sufficient therefor deposited in trust.
Holders of Convertible Preferred Stock are entitled to vote together with
the Common Stock on all matters submitted to a vote of Enron stockholders, with
each share of Convertible Preferred Stock having a number of votes equal to the
number of shares of Common Stock into which one share of Convertible Preferred
Stock is convertible (currently 13.652 shares).
Voting rights of the holders of the Convertible Preferred Stock and Common
Stock are, and the voting rights of the Offered Second Preferred Stock will be,
non-cumulative.
OTHER PREFERRED STOCK
The holders of the Preferred Stock and Preference Stock, when and if
issued, will have no voting rights except as specifically required by statute
and except for certain voting rights specifically provided in Enron's Restated
Certificate of Incorporation and the certificates of designations creating the
various series of such classes of stock. In general, a vote of at least
two-thirds of a class, voting as a class, will be required to effect (a) any
change in the Restated Certificate of Incorporation or bylaws which affects
adversely the voting powers, rights or preferences of such class (if only
certain series are affected, separate votes by the series affected are
required); (b) the authorization or creation of, or the increase in the
authorized amount of, any stock of any class, or any security convertible into
stock of any class, ranking prior to such class; (c) the voluntary dissolution,
liquidation or winding up of the affairs of Enron or the sale, lease or
conveyance by Enron of all or substantially all of its property or assets; or
(d) the purchase or redemption of less than all of the shares of such class
unless the full dividend on all such shares has been paid or declared and a sum
sufficient for payment thereof set apart. In addition, the vote of a majority of
a class, voting as a class, is required (i) to increase the authorized amount of
such class, or to authorize or create or to increase the authorized amount of,
any stock of any class, or any security convertible into stock of any class,
ranking on a parity with such class; or (ii) to approve mergers or
consolidations, except under certain conditions. Further, in the event dividends
payable on any such class shall be in default in an amount equivalent to six
full quarterly dividends, then the holders of such class, voting separately as a
class, shall be entitled to elect two directors of Enron until such time as such
dividends shall have been paid or funds sufficient therefor deposited in trust.
COMMON STOCK
So long as any shares of Preferred Stock, Second Preferred Stock or
Preference Stock shall be outstanding, no dividends, whether in cash or
property, shall be paid or declared, nor shall any distribution be made, on the
Common Stock, nor shall any shares of any Common Stock be purchased, redeemed or
otherwise acquired for value by Enron, nor shall Enron permit any distribution
to be made on any Common Stock or shares of Common Stock purchased, redeemed or
otherwise acquired by any subsidiary, unless all dividends on the Preferred
Stock, Second Preferred Stock and Preference Stock of all series for all past
quarterly dividend periods and for the then current quarterly period shall have
been paid or declared and a sum sufficient for the payment thereof set apart,
and unless Enron shall not be in arrears with respect to any sinking fund
requirement for any such shares. The foregoing provisions shall not, however,
apply to a dividend payable in Common Stock or the acquisition of shares of
Common Stock in exchange for or through application of the proceeds of the sale
of shares of Common Stock.
Subject to the prior rights of the Preferred Stock, the Second Preferred
Stock and the Preference Stock, the shares of Common Stock of Enron: (a) are
entitled to such dividends as may be declared by the Board of Directors out of
funds legally available therefor; (b) are entitled to one vote per share; (c)
have no preemptive or conversion rights; (d) are not subject to, or entitled to
the benefits of, any redemption or sinking fund provision; and (e) are entitled
upon liquidation to receive the assets of Enron remaining after the payment of
corporate debts and the satisfaction of the liquidation preferences of the
Preferred Stock, Second Preferred Stock and Preference Stock.
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CERTAIN OTHER PROVISIONS OF ENRON'S RESTATED CERTIFICATE OF INCORPORATION
The Restated Certificate of Incorporation of Enron limits the liability of
directors of Enron (in their capacity as directors but not in their capacity as
officers) to Enron or its stockholders to the fullest extent permitted by
Delaware law. Specifically, directors of Enron will not be personally liable for
monetary damages for breach of a director's fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to Enron or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
Enron's Restated Certificate of Incorporation contains a "fair price"
provision which generally requires that certain mergers, business combinations
and similar transactions with a "Related Person" (generally the beneficial owner
of at least 10 percent of Enron's voting stock) be approved by the holders of at
least 80 percent of Enron's voting stock, unless (a) the transaction is approved
by at least 80 percent of the "Continuing Directors" of Enron, who constitute a
majority of the entire board, (b) the transaction occurs more than five years
after the last acquisition of Enron voting stock by the related person or (c)
certain "fair price" and procedural requirements are satisfied. Enron's Restated
Certificate of Incorporation defines "Business Transaction" as (a) any merger or
consolidation involving Enron or a subsidiary of Enron, (b) any sale, lease,
exchange, transfer or other disposition (in one transaction or a series of
transactions), including without limitation a mortgage or any other security
device, of all or any substantial part of the assets either of Enron or of a
subsidiary of Enron, (c) any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the assets of an entity to Enron
or a subsidiary of Enron, (d) the issuance, sale, exchange, transfer or other
disposition by Enron or a subsidiary of Enron of any securities of Enron or any
subsidiary of Enron, (e) any recapitalization or reclassification of Enron's
securities (including without limitation, any reverse stock split) or other
transaction that would have the effect of increasing the voting power of a
Related Person, (f) any liquidation, spinoff, splitoff, splitup or dissolution
of Enron, and (g) any agreement, contract or other arrangement providing for any
of the transactions described in this definition of Business Transaction.
Continuing Director is defined to mean a director who either was a member of the
Board of Directors of Enron prior to the time such Related Person became a
Related Person or who subsequently became a director of Enron and whose
election, or nomination for election by Enron's stockholders, was approved by a
vote of at least eighty percent (80%) of the Continuing Directors then on the
Board, either by a specific vote or by approval of the proxy statement issued by
Enron on behalf of the Board of Directors in which such person is named as
nominee for director, without an objection to such nomination; provided,
however, that in no event shall a director be considered a "Continuing Director"
if such director is a Related Person and the Business Transaction to be voted
upon is with such Related Person or is one in which such Related Person
otherwise has an interest (except proportionately as a stockholder of Enron).
GENERAL
The foregoing statements are summaries of certain provisions contained in
the Restated Certificate of Incorporation of Enron, the form of which is filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
They do not purport to be complete statements of all the terms and provisions of
the Restated Certificate of Incorporation, and reference is hereby made to the
Restated Certificate of Incorporation for full and complete statements of such
terms and provisions, including the definitions of certain terms used herein.
Whenever reference has been made to the Restated Certificate of Incorporation,
such Restated Certificate of Incorporation shall be deemed to be incorporated in
such statements as a part thereof, and such statements are qualified in their
entirety by such reference.
The transfer agent and registrar of the Convertible Preferred Stock and the
Common Stock is First Chicago Trust Company of New York.
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DESCRIPTION OF DEPOSITARY SHARES
GENERAL
Enron may, at its option, elect to offer fractional interests in the
Offered Second Preferred Stock. In the event such option is exercised, Enron
will offer depositary shares ("Depositary Shares"), each of which will represent
a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Offered Second Preferred Stock) of a share of a particular
series of Offered Second Preferred Stock as described below.
The Offered Second Preferred Stock of any series represented by Depositary
Shares will be deposited under a deposit agreement (the "Deposit Agreement")
between Enron and a bank or trust company selected by Enron having its principal
office in the United States and having, alone or together with its affiliates, a
combined capital and surplus of at least $50,000,000 (the "Depositary"). Subject
to the terms of the Deposit Agreement, each registered holder of a Depositary
Share will be entitled, in proportion to the applicable fraction of a share of
Offered Second Preferred Stock represented by such Depositary Share, to all the
rights and preferences of the Offered Second Preferred Stock represented thereby
(including dividend, voting, redemption and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts ("Depositary
Receipts") issued pursuant to the Deposit Agreement. Depositary Receipts will be
distributed to those persons purchasing the fractional interests in Offered
Second Preferred Stock in accordance with the terms of the offering set forth in
the applicable Prospectus Supplement. A copy of the form of Deposit Agreement is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part, and the following summary is qualified in its entirety by reference to
such exhibit.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all dividends or other cash distributions
received in respect of the Offered Second Preferred Stock to the record holders
of Depositary Shares relating to such Offered Second Preferred Stock in
proportion to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash or rights, preferences or
privileges upon the Offered Second Preferred Stock, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto in proportion to the number of such Depositary Shares owned by
such holders, unless the Depositary determines that such distribution cannot be
made proportionately among such holders or that it is not feasible to make such
distribution, in which case the Depositary may, with the approval of Enron, sell
such securities or property and distribute the net proceeds from such sale to
such holders or adopt such other method as it deems equitable and practicable
for effecting such distribution.
WITHDRAWAL OF THE OFFERED SECOND PREFERRED STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Depositary (unless the related Offered Second Preferred Stock or Depositary
Shares have previously been called for redemption), and upon payment of the
charges provided in the Deposit Agreement and subject to the terms hereof, the
holder of the Depositary Shares evidenced thereby is entitled to delivery at
such office to or upon his order of the number of whole shares of Offered Second
Preferred Stock and any money or other property represented by such Depositary
Shares. If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Offered Second Preferred Stock to be withdrawn, the
Depositary will deliver to such holder at the same time a new Depositary Receipt
evidencing such excess number of Depositary Shares. Holders of Offered Second
Preferred Stock thus withdrawn, and any subsequent holders of those shares, will
not thereafter be entitled to deposit such shares under the Deposit Agreement or
to receive Depositary Shares therefor.
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REDEMPTION OF DEPOSITARY SHARES
Upon redemption of Offered Second Preferred Stock represented by Depositary
Shares, the Depositary will redeem as of the same redemption date the number of
Depositary Shares representing Offered Second Preferred Stock so redeemed,
provided Enron shall have paid in full to the Depositary the redemption price of
the Offered Second Preferred Stock to be redeemed (which redemption price shall
include an amount equal to any accrued and unpaid dividends thereon to the date
fixed for redemption). The redemption price per Depositary Share will be equal
to the applicable fraction of the redemption price and any other amounts per
share payable with respect to the Offered Second Preferred Stock. If fewer than
all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by the Depositary by lot or pro rata or by any other
equitable method, in each case as may be determined by Enron.
VOTING OF THE OFFERED SECOND PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Offered
Second Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares. Each record holder of such Depositary Shares on the record
date (which will be the same date as the record date for the Offered Second
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of Offered Second Preferred Stock
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Offered Second Preferred
Stock represented by such Depositary Shares in accordance with such
instructions, and Enron will agree to take all reasonable action which may be
deemed necessary by the Depositary in order to enable the Depositary to do so.
The Depositary will abstain from voting Offered Second Preferred Stock (but, at
its discretion, not from appearing at any meeting with respect to such Offered
Second Preferred Stock) to the extent it does not receive specific instructions
from the holders of Depositary Shares representing Offered Second Preferred
Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Enron and the Depositary. However, any amendment which materially and
adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding.
The Deposit Agreement may be terminated by Enron upon not less than 60
days' notice, whereupon the Depositary shall deliver or make available to each
holder of Depositary Receipts, upon surrender of the Depositary Receipts held by
such holder, such number of whole or fractional shares of Offered Second
Preferred Stock represented by such Depositary Receipts. The Deposit Agreement
will automatically terminate if (i) all outstanding Depositary Shares have been
redeemed, or (ii) there has been a final distribution in respect of the Offered
Second Preferred Stock in connection with any liquidation, dissolution or
winding up of Enron and such distribution has been made to the holders of
Depositary Receipts.
CHARGES OF DEPOSITARY
Enron will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Depositary arrangements. Enron will pay
the fees and expenses of the Depositary in connection with the performance of
its duties under the Deposit Agreement, to the extent specified in the Deposit
Agreement. Holders of Depositary Receipts will pay transfer and other taxes and
governmental charges.
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MISCELLANEOUS
Enron will forward to holders of Depositary Shares any reports and
communications that it sends to holders of Offered Second Preferred Stock.
Neither the Depositary nor Enron will be liable if it is prevented from or
delayed in, by law or any circumstances beyond its control, performing its
obligations under the Deposit Agreement. The obligations of Enron and the
Depositary under the Deposit Agreement will be limited to performing their
duties thereunder without negligence or willful misconduct, and Enron and the
Depositary will not be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Shares or any Offered Second Preferred Stock unless
satisfactory indemnity is furnished. Enron and the Depositary may rely on advice
of counsel or accountants, on information provided by holders of Depositary
Shares or other persons believed to be authorized or competent and on documents
believed to be genuine.
In the event the Depositary shall receive conflicting claims, requests or
instructions from any holders of Depositary Receipts, on the one hand, and
Enron, on the other hand, the Depositary shall be entitled to act on such
claims, requests or instructions received from Enron.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Enron notice of its
election to do so, and Enron may at any time remove the Depositary, any such
resignation or removal to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having, alone or together with its affiliates, a combined
capital and surplus of at least $50,000,000.
DESCRIPTION OF WARRANTS TO PURCHASE COMMON STOCK
The following statements with respect to the Stock Warrants are summaries
of, and subject to, the detailed provisions of a warrant agreement ("Stock
Warrant Agreement") to be entered into by Enron and a warrant agent to be
selected at the time of issue (the "Stock Warrant Agent"), and having the terms
described in the Prospectus Supplement relating thereto.
GENERAL
The Stock Warrants, evidenced by warrant certificates (the "Stock Warrant
Certificates"), may be issued under the Stock Warrant Agreement independently or
together with any Offered Securities and may be attached to or separate from
such Offered Securities. If Stock Warrants are offered, the Prospectus
Supplement will describe the terms of the warrants, including the following: (1)
the offering price, if any; (2) the number of shares of Common Stock purchasable
upon exercise of one Stock Warrant and the initial price at which such shares
may be purchased upon exercise; (3) the date on which the right to exercise the
Stock Warrants shall commence and the date on which such right shall expire; and
(4) any other terms of the Stock Warrants. The shares of Common Stock issuable
upon exercise of the Stock Warrants will, when issued in accordance with the
Stock Warrant Agreement, be fully paid and nonassessable.
EXERCISE OF STOCK WARRANTS
Stock Warrants may be exercised by surrendering to the Stock Warrant Agent
the Stock Warrant Certificate signed by the warrantholder, or his duly
authorized agent, indicating the warrantholder's election to exercise all or a
portion of the Stock Warrants evidenced by the certificate. Surrendered Stock
Warrant Certificates shall be accompanied by payment of the aggregate exercise
price of the Stock Warrants to be exercised, as set forth in the Prospectus
Supplement, which payment may be made in the form of cash or a check equal to
the exercise price. Certificates evidencing duly exercised Stock Warrants shall
be delivered by the Stock Warrant Agent to the transfer agent for the Common
Stock.
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Upon receipt thereof, the transfer agent shall deliver or cause to be delivered,
to or upon the written order of the exercising warrantholder, a certificate
representing the number of shares of Common Stock purchased. If fewer than all
of the Stock Warrants evidenced by any certificate are exercised, the Stock
Warrant Agent shall deliver to the exercising warrantholder a new Stock Warrant
Certificate representing the unexercised Stock Warrants.
ANTIDILUTION PROVISIONS
The exercise price payable and the number of shares of Common Stock
purchasable upon the exercise of each Stock Warrant will be subject to
adjustment in certain events, including (1) the issuance of a stock dividend to
holders of Common Stock or a combination, subdivision or reclassification of
Common Stock; (2) the issuance of rights, warrants or options to all holders of
Enron's Common Stock entitling the holders thereof to purchase Common Stock for
an aggregate consideration per share less than the current market price per
share of Common Stock; or (3) any distribution by Enron to the holders of its
Common Stock of evidences of indebtedness of Enron or of assets (excluding cash
dividends or distributions payable out of consolidated earnings and earned
surplus and dividends or distributions referred to in (1) above). In lieu of
adjusting the number of shares of Common Stock purchasable upon exercise of each
Stock Warrant, Enron may elect to adjust the number of Stock Warrants. No
adjustment in the number of shares purchasable upon exercise of the Stock
Warrants will be required until cumulative adjustments require an adjustment of
at least 1% thereof. Enron may, at its option, reduce the exercise price at any
time. No fractional shares will be issued upon exercise of Stock Warrants, but
Enron will pay the cash value of any fractional shares otherwise issuable.
Notwithstanding the foregoing, in case of any consolidation, merger or sale or
conveyance of the property of Enron as an entirety or substantially as an
entirety, the holder of each outstanding Stock Warrant upon exercise thereof
shall have the right to the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number of
shares of Common Stock for which such Stock Warrant was exercisable immediately
prior thereto.
NO RIGHTS AS STOCKHOLDERS
Holders of Stock Warrants will not be entitled, by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
directors of Enron or any other matter or to exercise any rights whatsoever as
stockholders of Enron.
DESCRIPTION OF WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the Debt Warrants are summaries
of, and subject to, the detailed provisions of a warrant agreement (the "Debt
Warrant Agreement") to be entered into by Enron and a warrant agent to be
selected at the time of issue (the "Debt Warrant Agent"), and having the terms
described in the Prospectus Supplement relating thereto.
GENERAL
The Debt Warrants, evidenced by warrant certificates (the "Debt Warrant
Certificates"), may be issued under the Debt Warrant Agreement independently or
together with any Offered Debt Securities and may be attached to or separate
from such Offered Debt Securities. If Debt Warrants are offered, the Prospectus
Supplement will describe the terms of the warrants, including the following: (1)
the offering price, if any; (2) the designation, aggregate principal amount and
terms of the Debt Securities purchasable upon exercise of the warrants; (3) if
applicable, the designation and terms of the Debt Securities with which the Debt
Warrants are issued and the number of warrants issued with each such Debt
Security; (4) if applicable, the date on and after which the Debt Warrants and
the related Debt Securities will be separately transferable; (5) the principal
amount of Debt Securities purchasable upon exercise of one Debt Warrant and the
price at which such principal amount of Debt Securities may be
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purchased upon exercise; (6) the date on which the right to exercise the Debt
Warrants shall commence and the date on which such right shall expire; (7)
federal income tax consequences; (8) whether the warrants represented by the
Debt Warrant Certificates will be issued in registered or bearer form; and (9)
any other terms of the Debt Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the Debt
Warrant Agent, which will be listed in the Prospectus Supplement relating
thereto, or at such other office as may be set forth therein. Warrantholders
will not have any of the rights of holders of Debt Securities (except to the
extent that the consent of warrantholders may be required for certain
modifications of the terms of an Indenture and the series of Debt Securities
issuable upon exercise of the Debt Warrants) and will not be entitled to
payments of principal of and interest, if any, on the Debt Securities.
EXERCISE OF DEBT WARRANTS
Debt Warrants may be exercised by surrendering the Debt Warrant Certificate
at the corporate trust office of the Debt Warrant Agent, with the form of
election to purchase on the reverse side of the Debt Warrant Certificate
properly completed and executed, and by payment in full of the exercise price,
as set forth in the Prospectus Supplement relating thereto. Upon the exercise of
Debt Warrants, the Debt Warrant Agent will, as soon as practicable, deliver the
Debt Securities in authorized denominations in accordance with the instructions
of the exercising warrantholder. If less than all of the Debt Warrants evidenced
by the warrant certificate are exercised, a new Debt Warrant Certificate will be
issued for the remaining amount of Debt Warrants.
ENRON CAPITAL RESOURCES, L.P.
GENERAL
Enron Capital Resources is a limited partnership organized under the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act"). Enron is
the general partner of Enron Capital Resources (the "General Partner"), and a
wholly owned subsidiary of Enron is its organizational limited partner. All of
the general and limited partner interests in Enron Capital Resources are
beneficially owned by Enron or its wholly owned subsidiary, and upon sale of
Preferred Shares the wholly owned subsidiary will withdraw as a limited partner
so that thereafter all of such interests will be owned by Enron and holders of
Preferred Shares. Enron Capital Resources' executive offices are located at 1400
Smith Street, Houston, Texas 77002, and its telephone number is (713) 853-6161.
All of the business and affairs of Enron Capital Resources are conducted by
Enron, as General Partner. Enron Capital Resources exists solely for the purpose
of issuing limited partner interests designated as Preferred Shares and lending
the net proceeds thereof to Enron.
PREFERRED SHARES
Enron Capital Resources may from time to time issue limited partner
interests designated as Preferred Shares, in one or more series, having terms
described in the Prospectus Supplement relating thereto. Under Enron Capital
Resources' agreement of limited partnership (the "Partnership Agreement"),
Enron, as General Partner, may establish the terms of each series of Preferred
Shares, including distribution, redemption, voting and liquidation rights and
such other preferred, deferred or other special rights or such restrictions, as
Enron may determine. Upon the first issuance of Preferred Shares, the wholly
owned subsidiary of Enron that serves as organizational limited partner will
withdraw as a limited partner, and thereafter holders of Preferred Shares will
be the only limited partners of Enron Capital Resources. The Preferred Shares of
Enron Capital Resources offered hereby will be guaranteed by Enron to the
limited extent set forth below under "Guarantee" and may also be entitled to the
benefits of certain undertakings of Enron as described below under "Backup
Undertakings". Any special federal income
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tax, accounting and other considerations applicable to any offering of Preferred
Shares and related Backup Undertakings will be described in the Prospectus
Supplement relating thereto.
GUARANTEE
Enron will irrevocably and unconditionally agree (the "Guarantee"), to the
extent set forth herein, to pay in full, to the holders of Preferred Shares of
any series, the Guarantee Payments (as defined below), as and when due,
regardless of any defense, right of set-off or counterclaim which Enron Capital
Resources may have or assert. The Guarantee will constitute a guarantee of
payment and not of collection and may be enforced by holders of Preferred Shares
directly against Enron. The following payments to the extent not paid by Enron
Capital Resources (the "Guarantee Payments") will be subject to the Guarantee
(without duplication): (i) any accumulated arrears and accruals of unpaid
distributions which have been declared on the Preferred Shares of any series out
of moneys legally available therefor, (ii) the redemption price including all
accumulated arrears and accruals of unpaid distributions payable, out of moneys
legally available therefor, with respect to any Preferred Shares of any series
called for redemption, (iii) upon a liquidation of Enron Capital Resources, the
lesser of (a) the aggregate of the liquidation preference and all accumulated
arrears and accruals of unpaid distributions (whether or not declared) on the
Preferred Shares of any series to the date of payment and (b) the amount of
assets of Enron Capital Resources remaining available for distribution in
liquidation to the holders of Preferred Shares of such series, and (iv) any
additional amounts payable by Enron Capital Resources as described in the
accompanying Prospectus Supplement. In addition, the Prospectus Supplement
relating to a series of Preferred Shares will describe the rank of the Guarantee
and any additional covenants or other terms of the Guarantee of Enron with
respect to such series, including any additional amounts payable under the
Guarantee with respect thereto.
BACKUP UNDERTAKINGS
Enron and Enron Capital Resources will enter into an agreement pursuant to
which Enron will agree to guarantee the payment of any liabilities incurred by
Enron Capital Resources (other than obligations to holders of Preferred Shares).
The agreement will expressly provide that such agreement is for the benefit of,
and is enforceable by, third parties to whom Enron Capital Resources owes such
obligations.
In connection with any series of Preferred Shares, Enron may enter into
additional arrangements with Enron Capital Resources, including intercompany
loan agreements and amendments to the Partnership Agreement, that operate
directly or indirectly for the benefit of holders of the Preferred Shares. The
Guarantee described above under "Guarantee", the agreement described in the
previous paragraph and any such other arrangements are herein collectively
referred to as "Backup Undertakings" of Enron and will be described in the
Prospectus Supplement relating to any series of Preferred Shares to which they
apply.
THE PARTNERSHIP AGREEMENT
The following paragraphs are a summary of certain provisions of the
Partnership Agreement. A copy of the Partnership Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part. Any
amendments to the Partnership Agreement, including those that relate to a series
of Preferred Shares, will be described in the Prospectus Supplement relating to
such series of Preferred Shares. Enron Capital Resources will provide to
prospective investors a copy of the form of such agreement and any such
amendment upon request at no charge. The following discussion is qualified in
its entirety by reference to the Partnership Agreement as it may be amended.
PURPOSE. The purpose of Enron Capital Resources under the Partnership
Agreement is limited to issuing one or more series of Preferred Shares and
loaning the net proceeds thereof to Enron. The General Partner is authorized in
general to perform all acts deemed necessary to carry out such purposes and to
conduct the business of Enron Capital Resources.
22
<PAGE> 24
COMPENSATION TO GENERAL PARTNER. The Partnership Agreement provides that
the General Partner is not entitled to receive any compensation for its services
as general partner of Enron Capital Resources.
AMENDMENT OF PARTNERSHIP AGREEMENT. The Partnership Agreement may be
amended by the General Partner, except as otherwise described in a Prospectus
Supplement related to Preferred Shares.
MEETINGS; VOTING. Holders of Preferred Shares who are record holders of
Preferred Shares on the record date set pursuant to the Partnership Agreement
will be entitled to notice of, and to vote at, meetings of holders of Preferred
Shares and to act with respect to matters as to which approvals may be
solicited. The General Partner does not anticipate that any meeting of holders
of Preferred Shares will be called in the foreseeable future.
LIMITED LIABILITY. Assuming that a holder of Preferred Shares does not
participate in the control of the business of Enron Capital Resources, within
the meaning of the Delaware Act, and that he otherwise acts in conformity with
the provisions of the Partnership Agreement, his liability under the Delaware
Act will be limited, subject to certain possible exceptions, generally to the
amount of capital he is obligated to contribute to Enron Capital Resources in
respect of his Preferred Shares plus his share of any undistributed profits and
assets of Enron Capital Resources. However, if it were determined that the right
or exercise of the right by the holders of Preferred Shares as a group to remove
or replace the General Partner, to approve certain amendments to the Partnership
Agreement or to take other action pursuant to the Partnership Agreement
constituted "participation in the control" of Enron Capital Resources' business
for the purposes of the Delaware Act, then the holders of Preferred Shares could
be held personally liable for Enron Capital Resources' obligations under the
laws of the State of Delaware to the same extent as the General Partner. Enron
Capital Resources will operate in such manner as the General Partner deems
reasonable and necessary or appropriate to preserve the limited liability of
holders of Preferred Shares. Under the Delaware Act, a limited partnership may
not make a distribution to a partner to the extent that at the time of the
distribution, after giving effect to the distribution, all liabilities of the
partnership, other than liabilities to partners on account of their partnership
interests and nonrecourse liabilities, exceed the fair value of the assets of
the limited partnership. The Delaware Act provides that a limited partner who
receives such a distribution and knew at the time of the distribution that the
distribution was in violation of the Delaware Act shall be liable to the limited
partnership for the amount of the distribution for three years from the date of
the distribution. Under the Delaware Act, an assignee who becomes a substituted
limited partner of a limited partnership is liable for the obligations of his
assignor to make contributions to the partnership, except the assignee is not
obligated for liabilities unknown to him at the time he became a limited partner
and which could not be ascertained from the partnership agreement.
TERMINATION AND DISSOLUTION. Enron Capital Resources will continue until
December 31, 2084, unless sooner terminated pursuant to the Partnership
Agreement. Enron Capital Resources will be dissolved in certain events,
including upon (i) the election of the General Partner to dissolve Enron Capital
Resources, if approved by the holders of at least a majority of the voting power
of the Preferred Shares, (ii) the bankruptcy or dissolution of the General
Partner or (iii) under certain circumstances, withdrawal or removal of the
General Partner.
23
<PAGE> 25
PLAN OF DISTRIBUTION
Enron, Enron Capital Resources and/or the Selling Stockholders may sell the
Offered Securities (i) through underwriters or dealers; (ii) directly to
purchasers; (iii) through agents; or (iv) from time to time at prevailing market
prices on the New York Stock Exchange, in the case of sales of Common Stock. The
Prospectus Supplement with respect to the Offered Securities will set forth the
terms of the offering of the Offered Securities, including the name or names of
any underwriters or agents, the purchase price of the Offered Securities and the
proceeds to Enron, Enron Capital Resources and/or the Selling Stockholders from
such sale, any delayed delivery arrangements, any underwriting discounts and
commissions and other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
If dealers are utilized in the sale of Offered Securities, Enron, Enron
Capital Resources and/or the Selling Stockholders will sell such Offered
Securities to the dealers as principals. The dealers may then resell such
Offered Securities to the public at varying prices to be determined by such
dealers at the time of resale.
The Offered Securities may be sold directly by Enron, Enron Capital
Resources and/or the Selling Stockholders or through agents designated by Enron,
Enron Capital Resources and/or the Selling Stockholders from time to time. Any
agent involved in the offer or sale of the Offered Securities in respect to
which this Prospectus is delivered will be named, and any commissions payable by
Enron, Enron Capital Resources and or the Selling Stockholders to such agent
will be set forth, in the Prospectus Supplement relating thereto. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment.
The Offered Securities may be sold directly by Enron, Enron Capital
Resources and/or the Selling Stockholders to institutional investors or others,
who may be deemed to be underwriters within the meaning of the Securities Act
with respect to any resale thereof. The terms of any such sales will be
described in the Prospectus Supplement relating thereto.
Common Stock offered by Selling Stockholders may be sold from time to time
on the New York Stock Exchange at prevailing market prices. The terms of any
such sales will be described in the Prospectus Supplement, if any, relating
thereto.
If so indicated in the Prospectus Supplement, Enron, Enron Capital
Resources and/or the Selling Stockholders will authorize agents, underwriters or
dealers to solicit offers from certain types of institutions to purchase Offered
Securities from Enron, Enron Capital Resources and/or the Selling Stockholders
at the public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to those conditions set
forth in the Prospectus Supplement, and the Prospectus Supplement will set forth
the commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements with
Enron, Enron Capital Resources and/or the Selling Stockholders to
indemnification by Enron or Enron Capital Resources
24
<PAGE> 26
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments which such agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may be customers of, engage in transactions with or perform
services for Enron in the ordinary course of business.
The Offered Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be a market for the Offered
Securities.
VALIDITY OF SECURITIES
The validity of the Offered Securities will be passed upon for Enron and
Enron Capital Resources by James V. Derrick, Jr., Esq., Senior Vice President
and General Counsel of Enron. As of May 15, 1994, Mr. Derrick owned no shares of
Common Stock and no shares of Second Preferred Stock of Enron, and had options
to purchase 459,235 shares of Common Stock of Enron, 160,000 of which are
presently exercisable.
EXPERTS
The consolidated financial statements and schedules included in Enron's
Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by
reference in this Prospectus, have been audited by Arthur Andersen & Co.,
independent public accountants, as indicated in their reports with respect
thereto. The consolidated financial statements and schedules referred to above
and such reports have been incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
The letter report of DeGolyer and MacNaughton, independent petroleum
consultants, included as an exhibit to Enron's Annual Report on Form 10-K for
the year ended December 31, 1993, and the estimates from the reports of that
firm appearing in such Annual Report, are incorporated by reference herein on
the authority of said firm as experts in petroleum engineering and in giving
such reports.
25
<PAGE> 27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses to be incurred by Enron in
connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission registration fee,
all amounts shown are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 148,546
Accounting Fees and Expenses..................................... 30,000
Legal Fees and Expenses.......................................... 50,000
Transfer Agent's Fees and Expenses............................... 10,000
Blue Sky Fees and Expenses, Including Counsel Fees............... 25,000
Listing Fees..................................................... 20,000
Printing and Engraving Expenses.................................. 150,000
Miscellaneous.................................................... 16,454
---------
Total.................................................. $ 450,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of Chapter 1 of Title 8 of the Delaware Code provides that
every corporation created under the provisions thereof shall have the power to
indemnify its directors, officers, employees and agents against certain
liabilities.
The Restated Certificate of Incorporation, as amended, of Enron contains
the following provisions relating to indemnification of directors and officers:
"1. A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit.
2. (A) Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person of whom he
or she is the legal representative, is or was a director or officer, of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such
proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such person in
connection therewith, and such indemnification shall continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in paragraph
(B) hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated
by such person only if
II-1
<PAGE> 28
such proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation. The right to indemnification conferred in this Section
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such expenses incurred by
a director or officer in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of the
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under this Section or
otherwise. The Corporation may, by action of its Board of Directors,
provide indemnification to employees and agents of the Corporation with the
same scope and effect as the foregoing indemnification of directors and
officers.
(B) If a claim under paragraph 2(A) of this Article XVI is not paid in
full by the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and,
if successful in whole or in part, the claimant shall be entitled to be
paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation
Law for the Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the Corporation. Neither
the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification
of the claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel, or its stockholders)
that the claimant has not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that the claimant has not
met the applicable standard of conduct.
(C) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in
this Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate
of Incorporation, bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
(D) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law."
Enron has purchased liability insurance policies covering its directors and
officers to provide protection where Enron cannot legally indemnify a director
or officer and where a claim arises under the Employee Retirement Income
Security Act of 1974 against a director or officer based on an alleged breach of
fiduciary duty or other wrongful act.
The Partnership Agreement of Enron Capital Resources, L.P. contains the
following provision relating to indemnification of directors and officers:
"6.04 INDEMNIFICATION. To the fullest extent permitted by law, the
Company shall indemnify the General Partner, its Affiliates and their
respective officers, directors, partners, employees and agents (each, an
"Indemnified Person"), on request by the Indemnified Person, and hold each
of them
II-2
<PAGE> 29
harmless from and against all losses, costs, liabilities, damages and
expenses (including, without limitation, costs of suit and attorney's fees)
any of them may incur as a partner in the Company, in performing the
obligations of the General Partner with respect to the Company or in
exercising the rights of the General Partner, INCLUDING ANY MATTER ARISING
OUT OF OR RESULTING FROM THE INDEMNIFIED PERSON'S OWN SIMPLE, FULL, PARTIAL
OR CONCURRENT NEGLIGENCE, except for any such loss, cost, liability, damage
or expense primarily attributable to the Indemnified Person's gross
negligence, bad faith, fraud or breach of this Agreement."
ITEM 16. EXHIBITS
<TABLE>
<S> <C> <C>
*1 -- Form of Underwriting Agreement -- Debt Securities (Exhibit 1 to
Registration Statement No. 33-43324, filed October 21, 1991).
*4(a) -- Indenture dated as of November 1, 1985, between Enron and Harris Trust
and Savings Bank (Form T-3 Application for Qualification of Indentures
under the Trust Indenture Act of 1939, File No. 22-14390, filed
October 24, 1985).
4(b) -- Agreement of Limited Partnership of Enron Capital Resources, L.P.
*4(c) -- Restated Certificate of Incorporation of Enron, as amended (Exhibit
4(d) to Registration Statement No. 33-50641, filed October 15, 1993).
4(d) -- Certificate of Correction to Enron Restated Certificate of
Incorporation, filed with the Secretary of State of the State of
Delaware on May 27, 1994.
4(e) -- Certificate of Amendment to Enron Restated Certificate of
Incorporation, filed with the Secretary of State of the State of
Delaware on May 27, 1994.
*4(f) -- Bylaws of Enron (Exhibit 3.02 to Enron Form 10-K Annual Report for
1990, File No. 1-3423).
*4(g) -- Form of Deposit Agreement between Enron and the Depositary (Exhibit
4(f) to Registration Statement No. 33-50641, filed October 15, 1993).
5(a) -- Opinion of James V. Derrick, Jr., Esq., Senior Vice President and
General Counsel of Enron as to validity of Debt Securities, Preferred
Stock, Common Stock, Debt Warrants, Stock Warrants and Backup
Undertakings of Enron and Preferred Shares of Enron Capital Resources,
L.P.
12 -- Computations of Ratios of Earnings to Fixed Charges and Preferred
Stock Dividends.
23(a) -- Consent of Arthur Andersen & Co.
23(b) -- Consent of DeGolyer and MacNaughton.
23(c) -- The consent of James V. Derrick, Jr., Esq., is contained in his
opinion filed as Exhibit 5(a) hereto.
24 -- Powers of Attorney.
25 -- Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Harris Trust and Savings Bank.
</TABLE>
- ---------------
* Incorporated by reference as indicated.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to each Registration Statement:
(i) To include any prospectus required in Section 10(a)(3) of the
Securities Act of 1933;
II-3
<PAGE> 30
(ii) To reflect in the prospectus any facts or events arising after
the effective date of each Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statements;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statements
or any material change to such information in the Registration
Statements;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statements;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions described under Item 15 above, or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of such registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, such Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE> 31
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ENRON CERTIFIES
THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS
FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR
AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON AND STATE OF TEXAS, ON THE 27TH DAY OF MAY,
1994.
ENRON CORP.
(Registrant)
By: KURT S. HUNEKE
__________________________________
Kurt S. Huneke
Vice President, Finance and Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ENRON CAPITAL
RESOURCES, L.P. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON AND STATE OF
TEXAS, ON THE 27TH DAY OF MAY, 1994.
ENRON CAPITAL RESOURCES, L.P.
(Registrant)
By: ENRON CORP., as
General Partner
By: KURT S. HUNEKE
__________________________________
Kurt S. Huneke
Vice President, Finance and Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES WITH ENRON CORP. AND THE GENERAL PARTNER INDICATED AND ON THE
27TH DAY OF MAY, 1994.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
KENNETH L. LAY Chairman of the Board, Chief Executive
__________________________________________ Officer and Director (Principal Executive
(Kenneth L. Lay) Officer)
JACK I. TOMPKINS Senior Vice President and Chief Information,
__________________________________________ Administrative and Accounting Officer
(Jack I. Tompkins) (Principal Accounting Officer)
KURT S. HUNEKE Vice President, Finance and Treasurer
__________________________________________ (Principal Financial Officer)
(Kurt S. Huneke)
ROBERT A. BELFER* Director
__________________________________________
(Robert A. Belfer)
NORMAN P. BLAKE, JR.* Director
__________________________________________
(Norman P. Blake, Jr.)
</TABLE>
II-5
<PAGE> 32
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
JOHN H. DUNCAN* Director
_____________________________________________
(John H. Duncan)
JOE H. FOY* Director
_____________________________________________
(Joe H. Foy)
WENDY L. GRAMM* Director
_____________________________________________
(Wendy L. Gramm)
ROBERT K. JAEDICKE* Director
_____________________________________________
(Robert K. Jaedicke)
RICHARD D. KINDER* Director and President and Chief
____________________________________________ Operating Officer
(Richard D. Kinder)
CHARLES A. LEMAISTRE* Director
_____________________________________________
(Charles A. LeMaistre)
JOHN A. URQUHART* Director
_____________________________________________
(John A. Urquhart)
CHARLES E. WALKER* Director
_____________________________________________
(Charles E. Walker)
HERBERT S. WINOKUR, JR.* Director
_____________________________________________
(Herbert . Winokur, Jr.)
*By: PEGGY B. MENCHACA
_________________________________________
Peggy B. Menchaca
(Attorney-in-fact for persons indicated)
</TABLE>
II-6
<PAGE> 33
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
*1 -- Form of Underwriting Agreement -- Debt Securities (Exhibit 1 to
Registration Statement No. 33-43324, filed October 21, 1991).
*4(a) -- Indenture dated as of November 1, 1985, between Enron and Harris Trust
and Savings Bank (Form T-3 Application for Qualification of Indentures
under the Trust Indenture Act of 1939, File No. 22-14390, filed
October 24, 1985).
4(b) -- Agreement of Limited Partnership of Enron Capital Resources, L.P.
*4(c) -- Restated Certificate of Incorporation of Enron, as amended (Exhibit
4(d) to Registration Statement No. 33-50641, filed October 15, 1993).
4(d) -- Certificate of Correction to Enron Restated Certificate of
Incorporation, filed with the Secretary of State of the State of
Delaware on May 27, 1994.
4(e) -- Certificate of Amendment to Enron Restated Certificate of
Incorporation, filed with the Secretary of State of the State of
Delaware on May 27, 1994.
*4(f) -- Bylaws of Enron (Exhibit 3.02 to Enron Form 10-K Annual Report for
1990, File No. 1-3423).
*4(g) -- Form of Deposit Agreement between Enron and the Depositary (Exhibit
4(f) to Registration Statement No. 33-50641, filed October 15, 1993).
5(a) -- Opinion of James V. Derrick, Jr., Esq., Senior Vice President and
General Counsel of Enron as to validity of Debt Securities, Preferred
Stock, Common Stock, Debt Warrants, Stock Warrants and Backup
Undertakings of Enron and Preferred Shares of Enron Capital Resources,
L.P.
12 -- Computations of Ratios of Earnings to Fixed Charges and Preferred
Stock Dividends.
23(a) -- Consent of Arthur Andersen & Co.
23(b) -- Consent of DeGolyer and MacNaughton.
23(c) -- The consent of James V. Derrick, Jr., Esq., is contained in his
opinion filed as Exhibit 5(a) hereto.
24 -- Powers of Attorney.
25 -- Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Harris Trust and Savings Bank.
</TABLE>
- ---------------
* Incorporated by reference as indicated.
<PAGE> 1
EXHIBIT 4(b)
================================================================================
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENRON CAPITAL RESOURCES, L.P
================================================================================
<PAGE> 2
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENRON CAPITAL RESOURCES, L.P.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<S> <C> <C>
1.01 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
``Act'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
``Affiliate'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
``Agreement'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
``Bankrupt Partner'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
``Business Day'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
``Capital Contribution'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Cause'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Certificate'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Code'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Company'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Dispose,'' ``Disposing,'' or ``Disposition'' . . . . . . . . . . . . . . . . . . . . . . 2
``Enron'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Entity'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Event of Withdrawal'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``General Interest Rate'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``General Partner'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Limited Partner'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Organizational Limited Partner'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Partner'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
``Partnership Interest'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Person'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Preferred Share Certificate'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Preferred Shareholder'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Preferred Shares'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Record Holder'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Sharing Ratio'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Transfer Agent'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
``Withdrawal Opinion of Counsel'' . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.02 OTHER DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.03 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
ORGANIZATION
</TABLE>
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<TABLE>
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2.01 FORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02 NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.03 REGISTERED OFFICE; REGISTERED AGENT; OTHER OFFICES . . . . . . . . . . . . . . . . . . . 4
2.04 PURPOSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.05 CERTIFICATE; FOREIGN QUALIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.06 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.07 MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
ISSUANCE AND DISPOSITION OF INTERESTS
3.01 INITIAL PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.02 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.03 ADDITIONAL PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.04 ISSUANCES OF PREFERRED SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.05 NO PREEMPTIVE RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.06 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE . . . . . . . . . . . . . . . . . . 6
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01 CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.03 RETURN OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.04 ADVANCES BY PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.05 CAPITAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01 ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.02 DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VI
MANAGEMENT AND OPERATION
6.01 MANAGEMENT OF COMPANY AFFAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.02 COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.03 STANDARDS AND CONFLICTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.04 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.05 POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII
RIGHTS OF OTHER PARTNERS
</TABLE>
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<TABLE>
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7.01 INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.02 WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.03 CONSENTS AND APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.04 MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII
TAXES
8.01 TAX RETURNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.02 TAX ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.03 TAX MATTERS PARTNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IX
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
9.01 MAINTENANCE OF BOOKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.02 REPORTS AND OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.03 ACCOUNTING PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.04 ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE X
WITHDRAWAL AND REMOVAL
10.01 WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.02 REMOVAL OF GENERAL PARTNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10.03 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER . . . . . . . . . . . . . 14
ARTICLE XI
DISSOLUTION, LIQUIDATION AND TERMINATION
11.01 DISSOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.02 LIQUIDATION AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
11.03 CANCELLATION OF CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XII
GENERAL PROVISIONS
12.01 OFFSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.02 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.03 ENTIRE AGREEMENT; SUPERSEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
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<TABLE>
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12.04 EFFECT OF WAIVER OR CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.05 AMENDMENT OR MODIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.06 BINDING EFFECT; NO THIRD-PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . . . 18
12.07 GOVERNING LAW; SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.08 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.09 WAIVER OF CERTAIN RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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<PAGE> 6
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENRON CAPITAL RESOURCES, L.P.
This AGREEMENT OF LIMITED PARTNERSHIP OF ENRON CAPITAL RESOURCES, L.P.
(this ``Agreement'') is made and entered into as of May 25, 1994, by and among
Enron Corp., a Delaware corporation (``Enron''), as the General Partner, and
Organizational Partner, Inc., a Delaware corporation, as the Organizational
Limited Partner, together with any other Persons who become Partners (as
defined below) in the Company or parties hereto as provided herein.
FOR AND IN CONSIDERATION OF the mutual covenants, rights and
obligations set forth in this Agreement, the benefits to be derived therefrom
and other good and valuable consideration, the receipt and the sufficiency of
which each Partner acknowledges and confesses, the Partners agree as follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
``Act'' means the Delaware Revised Uniform Limited Partnership
Act and any successor statute, as amended from time to time.
``Affiliate'' means, with respect to any Person, any other
Person controlling, controlled by or under common control with that
first Person. As used in this definition, the term ``control''
includes (a) with respect to any corporation or other Entity having
voting shares or the equivalent and elected directors, managers or
Persons performing similar functions, the ownership or power to vote,
directly or indirectly, shares or the equivalent representing 50% or
more of the power to vote in the election of directors, managers or
Persons performing similar functions, (b) ownership of 50% or more of
the equity or beneficial interest in any other Entity and (c) the
ability to direct the business and affairs of any Entity by acting as
a general partner, manager or otherwise.
``Agreement'' has the meaning given that term in the
introductory paragraph hereof.
``Bankrupt Partner'' means any Partner (whether a General
Partner or a Limited Partner) with respect to which an event of the
type described in section 17-402(a)(4) or (5) of the Act has occurred,
subject to the lapsing of any period of time therein specified.
``Business Day'' means any day other than a Saturday, a Sunday
or a holiday on which banks in the State of Texas generally are
closed.
``Capital Contribution'' means any contribution by a Partner
to the capital of the
<PAGE> 7
Company.
``Cause'' means a court of competent jurisdiction has entered
a final, non-appealable judgment finding the General Partner liable
for actual fraud, gross negligence or willful or wanton misconduct in
its capacity as general partner of the Company.
``Certificate'' means the certificate of limited partnership
of the Company, as amended or restated from time to time.
``Code'' means the Internal Revenue Code of 1986 and any
successor statute, as amended from time to time.
``Company'' has the meaning given that term in Section 2.01.
``Dispose,'' ``Disposing,'' or ``Disposition'' means a sale,
assignment, transfer, exchange, mortgage, pledge, grant of a security
interest or other disposition or encumbrance or the acts thereof.
``Enron'' means Enron Corp., a Delaware corporation.
``Entity'' means a corporation, limited liability company,
partnership, limited partnership, venture, trust, estate, governmental
entity or other entity.
``Event of Withdrawal'' has the meaning given that term in
Section 10.01.
``General Interest Rate'' means a rate per annum equal to the
lesser of (a) a varying rate per annum that is equal to the interest
rate publicly quoted by The Chase Manhattan Bank, N.A. from time to
time as its prime commercial or similar reference interest rate, with
adjustments in that varying rate to be made on the same date as any
change in that rate and (b) the maximum rate permitted by applicable
law.
``General Partner'' means Enron or any Person hereafter
admitted to the Company as a general partner as provided in this
Agreement, but does not include any Person who has ceased to be a
general partner in the Company.
``Limited Partner'' means the Organizational Limited Partner
or any Person hereafter admitted to the Company as a limited partner
as provided in this Agreement, but does not include any Person who has
ceased to be a limited partner in the Company.
``Organizational Limited Partner'' means Organizational
Partner, Inc., a Delaware corporation, in its capacity as the
organizational limited partner of the Company pursuant to this
Agreement.
``Partner'' means any General Partner or Limited Partner.
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<PAGE> 8
``Partnership Interest'' means the interest of a Partner in
the Company, including, without limitation, rights to distributions
(liquidating or otherwise), allocations and information and to consent
or approve.
``Person'' has the meaning given that term in section
17-101(12) of the Act.
``Preferred Share Certificate'' means a certificate in such
form as may be adopted by the General Partner in its sole discretion,
issued by the Company evidencing ownership of one or more Preferred
Shares.
``Preferred Shareholder'' means any holder of Preferred Shares.
``Preferred Shares'' means the Partnership Interests of
Limited Partners issued pursuant to Section 3.3; provided, that each
Preferred Share of any series of Preferred Shares at any time
outstanding shall represent the same fractional part of the
Partnership Interests of all Limited Partners holding Preferred Shares
of such series as each other Preferred Share of such series.
``Record Holder'' means the Person in whose name a Preferred
Share is registered on the books of the Transfer Agent as of the
opening of business on a particular Business Day.
``Sharing Ratio'' means 99% with respect to Enron and 1% with
respect to the Organizational Limited Partner, in each case subject to
adjustment on account of Dispositions and issuances of new Partnership
Interests as provided in this Agreement.
``Transfer Agent'' means the General Partner or such bank,
trust company or other Person (including, without limitation, an
Affiliate of the General Partner) as shall be appointed from time to
time by the General Partner to act as registrar and transfer agent for
the Preferred Shares.
``Withdrawal Opinion of Counsel'' has the meaning given that
term in Section 10.01(6).
1.02 OTHER DEFINITIONS. Other terms defined herein have the
meanings so given them.
1.03 REFERENCES. All references herein to one gender shall include
the others and the singular shall include the plural and vice versa as
appropriate. All references to an Entity shall be deemed to include its
successors and assigns, to the extent succession or assignment is not
restricted by this Agreement. Whenever the context requires, the gender of all
words used in this Agreement includes the masculine, feminine and neuter. All
references to ``Articles'' and ``Sections'' refer to articles and sections of
this Agreement.
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ARTICLE II
ORGANIZATION
2.01 FORMATION. Effective with the first proper filing of the
Certificate as described in Section 2.05, the Persons executing this Agreement
as of the date of this Agreement form a limited partnership (the ``Company'')
for the purposes set forth in this Agreement.
2.02 NAME. The name of the Company is ``Enron Capital Resources,
L.P.'' and all Company business must be conducted in that name or such other
names that comply with applicable law as the General Partner may select from
time to time.
2.03 REGISTERED OFFICE; REGISTERED AGENT; OTHER OFFICES. The
registered office of the Company in the State of Delaware shall be at such
place as the General Partner may designate from time to time. The registered
agent for service of process on the Company in the State of Delaware or any
other jurisdiction shall be such Person or Persons as the General Partner may
designate from time to time. The Company may have such other offices as the
General Partner may designate from time to time.
2.04 PURPOSES. The purpose and nature of the business to be
conducted by the Company shall be to issue general partner interests and
Preferred Shares from time to time in accordance with this Agreement and to
lend the net proceeds of the sale thereof to Enron (or any Affiliate of Enron
designated by it) and to engage in any other business or activity that now or
hereafter may be necessary, incidental, proper, advisable or convenient to
accomplish the foregoing purposes and that is not forbidden by the law of the
jurisdiction in which the Company engages in that business.
2.05 CERTIFICATE; FOREIGN QUALIFICATION. Promptly following the
execution of this Agreement, the General Partner shall execute and cause to be
filed with the Secretary of State of the State of Delaware a Certificate
containing information required by the Act and such other information as the
General Partner may deem appropriate. Prior to the Company's conducting
business in any jurisdiction other than Delaware, the General Partner shall
cause the Company to comply, to the extent those matters are reasonably within
the control of the General Partner, with all requirements necessary to qualify
the Company as a foreign limited partnership (or a partnership in which the
Limited Partners have limited liability) in that jurisdiction. At the request
of the General Partner, each Partner shall execute, acknowledge, swear to and
deliver all certificates and other instruments conforming with this Agreement
that are necessary or appropriate to form, qualify, continue and terminate the
Company as a limited partnership under the law of the State of Delaware and to
qualify, continue and terminate the Company as a foreign limited partnership
(or a partnership in which the Limited Partners have limited liability) in all
other jurisdictions in which the Company may conduct business, and to this end
the General Partner may use the power of attorney described in Section 6.05.
2.06 TERM. The Company shall commence on the date the Certificate
first is properly filed with the Secretary of State of the State of Delaware
and shall continue in existence until its business and affairs are wound up
following dissolution automatically at the close of
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<PAGE> 10
Company business on December 31, 2084, or such earlier time as this Agreement
may specify. The Company may not conduct business until the Certificate has
been filed with the Secretary of State of the State of Delaware.
2.07 MERGER OR CONSOLIDATION. The Company may merge or consolidate
with or into another limited partnership or other Entity, or enter into an
agreement to do so, only with the consent of the General Partner and the
holders of a majority of the voting power of Limited Partners.
ARTICLE III
ISSUANCE AND DISPOSITION OF INTERESTS
3.01 INITIAL PARTNERS. The initial general partner and limited
partner of the Company are the Persons executing this Agreement as of the date
of this Agreement as general partner and limited partner, respectively, each of
which is admitted to the Company as a general partner or a limited partner, as
the case may be, effective with the commencement of the Company.
3.02 REPRESENTATIONS AND WARRANTIES. Each Partner represents and
warrants to the Company and each other Partner that (a) if that Partner is a
corporation, it is duly organized, validly existing and in good standing under
the law of the state of its incorporation and is duly qualified and in good
standing as a foreign corporation in the jurisdiction of its principal place of
business (if not incorporated therein), (b) if that Partner is a partnership,
trust or other entity, it is duly formed, validly existing and (if applicable)
in good standing under the law of the state of its formation and if required by
law is duly qualified to do business and (if applicable) in good standing in
the jurisdiction of its principal place of business (if not formed therein),
and the representations and warranties in clause (a) or (b), as applicable, are
true and correct with respect to each partner (other than limited partners),
trustee or other member thereof, (c) that Partner has full corporate,
partnership, trust or other applicable power and authority to enter into this
Agreement and to perform its obligations hereunder, and all necessary actions
by the board of directors, shareholders, partners, trustees, beneficiaries or
other Persons necessary for the due authorization, execution, delivery and
performance of this Agreement by that Partner have been duly taken, (d) that
Partner has duly executed and delivered this Agreement, and (e) that Partner's
authorization, execution, delivery and performance of this Agreement do not
conflict with any other agreement or arrangement to which that Partner is a
party or by which it is bound.
3.03 ADDITIONAL PARTNERS. Additional Persons may be admitted to
the Company and new Partnership Interests issued to existing or new Partners
only with the consent of the General Partner, which consent may be withheld in
its sole discretion. To be effective, any such creation of Partnership
Interests and admissions must be reflected in an amendment to this Agreement
that makes appropriate changes to the Sharing Ratios, the provisions governing
distributions and allocations and other provisions affected.
3.04 ISSUANCES OF PREFERRED SHARES. (a) The General Partner is
hereby authorized to
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<PAGE> 11
cause the Company to issue, in addition to the Partnership Interests issued
pursuant to Section 3.01, Preferred Shares, in one or more series, for any
Company purpose, at any time or from time to time, for such consideration and
on such terms and conditions as shall be established by the General Partner in
its sole discretion, all without the approval of any Limited Partners except as
otherwise provided in the terms of the Preferred Shares or any series thereof.
The General Partner shall have sole discretion, subject to the guidelines set
forth in this Section 3.04 and the requirements of the Act, in determining the
consideration and terms and conditions with respect to any future issuance of
Preferred Shares.
(b) Preferred Shares to be issued by the Company pursuant to this
Section 3.04 shall be issuable from time to time in one or more series, with
such designations, preferences and relative, participating, optional or other
special rights, powers and duties, including, without limitation, rights,
powers and duties senior to existing series of Preferred Shares, all as shall
be fixed by the General Partner in the exercise of its sole discretion and
reflected in an amendment to this Agreement, subject to Delaware law,
including, without limitation, (i) the allocations of items of Company income,
gain, loss, deduction and credit to such series of Preferred Shares; (ii) the
right of such series of Preferred Shares to share in Company distributions;
(iii) the rights of such series of Preferred Shares upon dissolution and
liquidation of the Company; (iv) whether such series of Preferred Shares is
redeemable by the Company and, if so, the price at which, and the terms and
conditions upon which, such series of Preferred Shares may be redeemed by the
Company; (v) whether such series of Preferred Shares is issued with the
privilege of conversion and, if so, the rate at which, and the terms and
conditions upon which, such series of Preferred Shares may be converted into
any other series of Preferred Shares or other property; (vi) the terms and
conditions upon which such series of Preferred Shares will be issued, evidenced
by certificates and assigned or transferred; and (vii) the right, if any, of
such series of Preferred Shares to vote on Company matters, including, without
limitation, matters relating to the relative rights, preferences and privileges
of such series.
3.05 NO PREEMPTIVE RIGHTS. Except as provided in this Section
3.05, no Person shall have any preemptive, preferential or other similar right
with respect to (a) additional capital contributions; (b) issuance or sale of
any class or series of Partnership Interests, whether unissued or hereafter
created; (c) issuance of any obligations, evidences of indebtedness or other
securities of the Company convertible into or exchangeable for, or carrying or
accompanied by any rights to receive, purchase or subscribe to, any such
Partnership Interests; (d) issuance of any right of subscription to or right to
receive, or any warrant or option for the purchase of, any such Partnership
Interests; or (e) issuance or sale of any other securities that may be issued
or sold by the Company. The General Partner shall have the right, which it may
from time to time assign in whole or in part to any of its Affiliates, to
purchase Partnership Interests from the Company whenever, and on the same terms
that, the Company issues Partnership Interests to Persons other than the
General Partner and its Affiliates, to the extent necessary to maintain the
Percentage Interests of the General Partner and its Affiliates equal to that
which existed immediately prior to the issuance of such Partnership Interests.
3.06 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a) The
General Partner shall cause to be kept on behalf of the Company a register in
which, subject to such reasonable regulations as it may prescribe, the General
Partner will provide for the registration and transfer
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of Preferred Shares. The General Partner is hereby appointed registrar and
Transfer Agent for the purpose of registering Preferred Shares and transfers of
such Preferred Shares.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01 CAPITAL CONTRIBUTIONS. Without creating any rights in favor
of any third party, each Partner shall contribute to the Company, in cash, on
or before the date specified by the General Partner that Partner's Sharing
Ratio of all monies that the General Partner determines should be contributed
by the Partners. Except as otherwise provided in this Agreement, a Partner
shall not have a right to make any Capital Contributions to the Company.
4.03 RETURN OF CONTRIBUTIONS. A Partner is not entitled to the
return of any part of its Capital Contributions or to be paid interest in
respect of either its capital account or its Capital Contributions. An
unrepaid Capital Contribution is not a liability of the Company or of any
Partner. A Partner is not required to contribute or to lend any cash or
property to the Company to enable the Company to return any Partner's Capital
Contributions.
4.04 ADVANCES BY PARTNERS. If the Company does not have sufficient
cash to pay its obligations, the General Partner, or any other Partner(s) that
may agree to do so with the General Partner's consent, may advance all or part
of the needed funds to or on behalf of the Company. Payment by the General
Partner on account of liability as a matter of law for Company obligations is
deemed to be an advance under this Section 4.04. An advance described in this
Section 4.04 constitutes a loan from the Partner to the Company, bears interest
at the General Interest Rate from the date of the advance until the date of
payment and is not a Capital Contribution.
4.05 CAPITAL ACCOUNTS. A capital account shall be established and
maintained for each Partner in accordance with all applicable provisions of the
Code and applicable Treasury regulations.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01 ALLOCATIONS. (a) For tax and accounting purposes, the
Company's items of income, gain, loss, deduction and credit shall be allocated
among the Partners in each taxable year (or portion thereof) in accordance with
their respective Sharing Ratios.
(b) All items of income, gain, loss, deduction and credit
allocable to any Partnership Interest that may have been transferred shall be
allocated between the transferor and the transferee based on the portion of the
calendar year during which each was recognized as owning that Partnership
Interest, without regard to the results of Company operations during any
particular portion of that calendar year and without regard to whether cash
distributions were made to the transferor or the transferee during that
calendar year; provided, however, that this
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allocation must be made in accordance with a method permissible under section
706 of the Code and the regulations thereunder.
5.02 DISTRIBUTIONS. From time to time prior to the commencement of
liquidation under Section 11.02, the General Partner shall determine in its
reasonable judgment to what extent (if any) the Company's cash on hand exceeds
its current and anticipated needs. If such an excess exists, the General
Partner shall cause the Company to distribute to the Partners, in accordance
with their Sharing Ratios, an amount in cash equal to that excess.
ARTICLE VI
MANAGEMENT AND OPERATION
6.01 MANAGEMENT OF COMPANY AFFAIRS. (a) Except for situations in
which the approval of other Partners is expressly required by this Agreement or
by nonwaivable provisions of applicable law, the General Partner shall have
full, complete and exclusive authority to manage and control the business,
affairs and properties of the Company, to make all decisions regarding those
matters and to perform any and all other acts or activities customary or
incident to the management of the Company's business. The General Partner may
make all decisions and take all actions for the Company not otherwise provided
for in this Agreement, including, without limitation, the following:
(i) entering into, making and performing contracts,
agreements and other undertakings binding the Company that may be
necessary, appropriate or advisable in furtherance of the purposes of
the Company and making all decisions and waivers thereunder;
(ii) opening and maintaining bank and investment accounts
and arrangements, drawing checks and other orders for the payment of
money and designating individuals with authority to sign or give
instructions with respect to those accounts and arrangements;
(iii) maintaining the assets of the Company in good order;
(iv) collecting sums due the Company;
(v) to the extent that funds of the Company are
available, paying debts and obligations of the Company;
(vi) selecting, removing and changing the authority and
responsibility of lawyers, accountants and other advisers and
consultants;
(vii) determining distributions of Company cash and other
property as provided in Section 5.02; and
(viii) making all decisions and exercising all rights for
the General Partner under
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other provisions of this Agreement.
(b) Notwithstanding the provisions of Section 6.01(a), the General
Partner may not cause the Company to do any of the following without the
consent of the holders of a majority of the voting power of Limited Partners:
(i) engage in any business other than those described in
Section 2.04; and
(ii) merge, consolidate or combine the Company with or
into any other Entity.
(c) No Partner (other than the General Partner) has the authority
or power to act for or on behalf of the Company, to do any act that would be
binding on the Company or to incur any expenditures on behalf of the Company.
(d) Any Person dealing with the Company, other than a Partner, may
rely on the authority of the General Partner in taking any action in the name
of the Company without inquiry into the provisions of this Agreement or
compliance herewith, regardless of whether that action actually is taken in
accordance with the provisions of this Agreement.
6.02 COMPENSATION. The General Partner is not entitled to
compensation for its services as General Partner.
6.03 STANDARDS AND CONFLICTS. (a) Except as provided otherwise in
this Agreement, the General Partner shall conduct the affairs of the Company in
good faith toward the best interests of the Company. The General Partner is
liable for errors or omissions in performing its duties with respect to the
Company only in the case of bad faith, gross negligence, fraud or breach of the
provisions of this Agreement, but not otherwise, IT BEING SPECIFICALLY AGREED
THAT THE GENERAL PARTNER IS NOT LIABLE FOR ITS OWN SIMPLE, FULL, PARTIAL OR
CONCURRENT NEGLIGENCE. The General Partner shall devote such time and effort
to the Company business and operations as is necessary to promote fully the
interests of the Company; however, the General Partner need not devote its full
time to Company business.
(b) Subject to the other provisions of this Agreement, the General
Partner and each other Partner at any time and from time to time may engage in
and possess interests in other business ventures of any and every type and
description, independently or with others, including ones in competition with
the Company, with no obligation to offer to the Company or any other Partner
the right to participate therein.
(c) The Company may transact business with any Partner or
Affiliate of a Partner under any terms or conditions deemed advisable by the
General Partner in its sole discretion.
6.04 INDEMNIFICATION. To the fullest extent permitted by law, the
Company shall indemnify the General Partner, its Affiliates and their
respective officers, directors, partners, employees and agents (each, an
``Indemnified Person''), on request by the Indemnified Person, and hold each of
them harmless from and against all losses, costs, liabilities, damages and
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expenses (including, without limitation, costs of suit and attorney's fees) any
of them may incur as a partner in the Company, in performing the obligations of
the General Partner with respect to the Company or in exercising the rights of
the General Partner, INCLUDING ANY MATTER ARISING OUT OF OR RESULTING FROM THE
INDEMNIFIED PERSON'S OWN SIMPLE, FULL, PARTIAL OR CONCURRENT NEGLIGENCE, except
for any such loss, cost, liability, damage or expense primarily attributable to
the Indemnified Person's gross negligence, bad faith, fraud or breach of this
Agreement.
6.05 POWER OF ATTORNEY. Each Partner appoints the General Partner
(and any liquidator appointed pursuant to Section 11.02) as that Partner's
attorney-in-fact for the purpose of executing, swearing to, acknowledging and
delivering all certificates, documents and other instruments as may be
necessary, appropriate or advisable in the judgment of the General Partner (or
the liquidator) in furtherance of the business of the Company or complying with
applicable law, including, without limitation, filings of the type described in
Section 2.05. This power of attorney is irrevocable and is coupled with an
interest. On request by the General Partner (or the liquidator), a Partner
shall confirm its grant of this power of attorney or any use of it by the
General Partner (or the liquidator) and shall execute, swear to, acknowledge
and deliver any such certificate, document or other instrument.
ARTICLE VII
RIGHTS OF OTHER PARTNERS
7.01 INFORMATION. In addition to the other rights set forth in
this Agreement, each Partner is entitled to all information to which that
Partner is entitled to have access pursuant to applicable law.
7.02 WITHDRAWAL. A Limited Partner does not have the right or
power to withdraw from the Company as a limited partner, except that the
Organizational Limited Partner shall withdraw from the Company as a limited
partner upon issuance of Preferred Shares.
7.03 CONSENTS AND APPROVALS. (a) Subject to the provisions of
Section 6.03(a) with respect to the General Partner in its capacity as such, a
Partner may grant or withhold its consent or vote its interest in its sole
discretion, without regard to the interests of the Company or any other
Partner.
(b) In any request for consent or approval from another Partner,
the General Partner may specify a response period, ending no earlier than the
fifth and no later than the 45th Business Day following the date on which the
Partner whose consent or approval is sought receives the request as described
in Section 12.02. If the receiving Partner does not respond by the end of this
period, it shall be deemed to have consented to or approved the action set
forth in the request.
7.04 MEETINGS. The General Partner at any time may call a meeting
of the Partners to transact business that the Partners may conduct as provided
in this Agreement. The call must
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be made by notice to all other Partners on or before the tenth day prior to the
date of the meeting specifying the location and the time and stating the
business to be transacted at the meeting.
ARTICLE VIII
TAXES
8.01 TAX RETURNS. The General Partner shall cause to be prepared
and filed all necessary federal and state income tax returns for the Company,
including making the elections described in Section 8.02. Each Partner shall
furnish to the General Partner all pertinent information in its possession
relating to Company operations that is necessary to enable the Company's income
tax returns to be prepared and filed.
8.02 TAX ELECTIONS. The Company shall make the following elections
on the appropriate tax returns:
(a) to adopt the calendar year as the Company's fiscal
year;
(b) to adopt the accrual method of accounting and to keep
the Company's books and records on the accrual method;
(c) if a distribution of Company property as described in
section 734 of the Code occurs or if a transfer of a Partnership
Interest as described in section 743 of the Code occurs, on request by
notice from any Partner, to elect, pursuant to section 754 of the
Code, to adjust the basis of Company properties; and
(d) any other election the General Partner may deem
appropriate and in the best interests of the Partners.
Neither the Company nor any Partner may make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 of
subtitle A of the Code or any similar provisions of applicable state law.
8.03 TAX MATTERS PARTNER. The General Partner shall be the ``tax
matters partner'' of the Company pursuant to section 6231(a)(7) of the Code.
The General Partner shall take such action as may be necessary to cause each
other Partner to become a ``notice partner'' within the meaning of section 6223
of the Code. The General Partner shall inform each other Partner of all
significant matters that may come to its attention in its capacity as tax
matters partner. The General Partner may take any action contemplated by
sections 6222 through 6232 of the Code only with the consent of the Limited
Partner, but this sentence does not authorize the General Partner to take any
action left to the determination of an individual Partner under sections 6222
through 6232 of the Code.
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ARTICLE IX
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
9.01 MAINTENANCE OF BOOKS. The books of account for the Company
shall be maintained on an accrual basis in accordance with the terms of this
Agreement, except that the capital accounts of the Partners shall be maintained
in accordance with Section 4.05. The calendar year shall be the accounting
year of the Company.
9.02 REPORTS AND OTHER INFORMATION. The General Partner shall
furnish such reports and other information as the Partners may agree from time
to time.
9.03 ACCOUNTING PRINCIPLES. All accounting of the Company (and all
other accounting done pursuant to this Agreement) shall be done in accordance
with generally accepted accounting principles at the time in effect, to the
extent applicable, except where generally accepted accounting principles are
inconsistent with the requirements of this Agreement.
9.04 ACCOUNTS. The General Partner shall establish and maintain
one or more separate bank and investment accounts and arrangements for Company
funds in the Company name with financial institutions and firms that the
General Partner determines.
ARTICLE X
WITHDRAWAL AND REMOVAL
10.01 WITHDRAWAL. (a) Except as otherwise provided in an amendment
to this Agreement providing for the issuance of Preferred Shares or any series
thereof, the General Partner may in its sole discretion at any time withdraw
from the Company as a general partner within the meaning of section 17-602(a)
of the Act. The General Partner shall be deemed to have withdrawn from the
Company upon the occurrence of any one of the following events (each such event
herein referred to as an ``EVENT OF WITHDRAWAL''):
(i) the General Partner voluntarily withdraws from the
Company by giving written notice to the other Partners;
(ii) the General Partner is removed pursuant to Section
10.02;
(iii) the General Partner (A) makes a general assignment
for the benefit of creditors; (B) files a voluntary bankruptcy
petition; (C) files a petition or answer seeking for itself a
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law; (D) files an answer or
other pleading admitting or failing to contest the material
allegations of a petition filed against the General Partner in a
proceeding of the type described in clauses (A)-(C) of this Section
10.01(a)(iii); or (E) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the General
Partner or of all or any substantial part of its properties;
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(iv) a final and non-appealable judgment is entered by a
court with appropriate jurisdiction ruling that the General Partner is
bankrupt or insolvent or a final and non-appealable order for relief
is entered by a court with appropriate jurisdiction against the
General Partner, in each case under any federal or state bankruptcy or
insolvency laws as now or hereafter in effect; or
(v) a certificate of dissolution or its equivalent is
filed for the General Partner, or 90 days expire after the date of
notice to the General Partner of revocation of its charter without a
reinstatement of its charter, under the laws of its state of
incorporation.
If an Event of Withdrawal specified in Section 10.01(a)(iii), (iv) or (v)
occurs, the withdrawing General Partner shall give notice to the Limited
Partners within 30 days after such occurrence. The Partners hereby agree that
only the Events of Withdrawal described in this Section 10.01 shall result in
the withdrawal of the General Partner from the Company.
(b) Except as otherwise provided in any amendment to this
Agreement providing for the issuance of Preferred Shares or any series thereof,
withdrawal of the General Partner from the Company upon the occurrence of an
Event of Withdrawal shall not constitute a breach of this Agreement, provided,
that, in the case of an Event of Withdrawal referred to in Section 10.01(a)(i),
prior to the effective date of such withdrawal the General Partner delivers to
the Company an opinion of counsel (``WITHDRAWAL OPINION OF COUNSEL'') that such
withdrawal (following the selection of the successor General Partner) would not
result in the loss of the limited liability of any Limited Partner or cause the
Company to be treated as an association taxable as a corporation or otherwise
to be taxed as an entity for federal income tax purposes. If the General
Partner gives a notice of withdrawal pursuant to Section 10.01(a)(i) or an
Event of Withdrawal of the type described in Sections 10.01(a)(iii)-(v) occurs,
holders of at least a majority of the voting power of the Preferred Shares
(excluding for purposes of such determination Preferred Shares owned by the
General Partner and its Affiliates) may, prior to the effective date of such
withdrawal, elect a successor General Partner. If, prior to the effective date
of the General Partner's withdrawal, a successor is not selected by the holders
of Preferred Shares as provided herein or the Company does not receive a
Withdrawal Opinion of Counsel, the Company shall be dissolved in accordance
with Article XI. A successor General Partner approved pursuant to Section
10.01 or 10.02 shall be admitted to the Company as the General Partner,
effective immediately prior to the withdrawal or removal of the General Partner
pursuant to Section 10.01 or 10.02; provided, however, that no such successor
shall be admitted to the Company until such successor has executed and
delivered such other documents or instruments as may be required to effect such
admission. Any such successor shall, subject to the terms hereof, carry on the
business of the Company without dissolution.
(c) A Limited Partner does not have the right or power to withdraw
from the Company as a limited partner, provided that upon issuance of Preferred
Shares the Organizational Limited Partner shall withdraw as a Limited Partner
and, in connection therewith, shall be entitled to the return of its Capital
Contributions, if any.
10.02 REMOVAL OF GENERAL PARTNER. The General Partner may be
removed only if and to the extent provided for in any amendment to this
Agreement providing for the terms of the
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Preferred Shares or any series thereof. Unless otherwise provided in any such
amendment to this Agreement, any such action for removal of the General Partner
must also provide for the election of a successor General Partner by holders of
at least a majority of the voting power of the Preferred Shares (excluding for
purposes of such determination Preferred Shares owned by the General Partner
and its Affiliates). Such removal shall be effective immediately following the
admission of a successor General Partner. The right of the holders of
Preferred Shares to remove the General Partner shall not exist or be exercised
unless the Company has received an opinion as to the matters covered by a
Withdrawal Opinion of Counsel.
10.03 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER.
(a) In the event of (i) withdrawal of the General Partner under circumstances
where such withdrawal does not violate this Agreement or (ii) removal of the
General Partner by the holders of Preferred Shares under circumstances where
Cause does not exist, if a successor General Partner is elected in accordance
with the terms of Section 10.01 or 10.02, the withdrawing or removed General
Partner (the "Departing Partner") shall, at its option exercisable prior to the
effective date of the departure of such Departing Partner, promptly receive
from its successor in exchange for its Partnership Interest as a general
partner in the Company an amount in cash equal to the fair market value of such
Partnership Interest, such amount to be determined and payable as of the
effective date of its departure. If this Agreement is amended to provide that
holders of Preferred Shares may remove the General Partner under circumstances
where Cause exists and the General Partner is so removed or if the General
Partner withdraws under circumstances where such withdrawal violates this
Agreement, and if a successor General Partner is elected in accordance with the
terms of Section 10.01 or 10.02 such successor shall have the option,
exercisable prior to the effective date of the departure of such Departing
Partner, to purchase the Partnership Interest of the Departing Partner for such
fair market value of such Partnership Interest. In either event, the Departing
Partner shall be entitled to receive all reimbursements due such Departing
Partner pursuant to this Agreement. Subject to Section 10.03(b), the Departing
Partner shall, as of the effective date of its departure, cease to share in any
allocations or distributions with respect to its Partnership Interest as a
general partner in the Company and Company income, gain, loss, deduction and
credit will be prorated and allocated as set forth in Section 5.01.
For purposes of this Section 10.03(a), the fair market value of the
Departing Partner's Partnership Interest shall be determined by agreement
between the Departing Partner and its successor or, failing agreement within 30
days after the effective date of such Departing Partner's departure, by an
independent investment banking firm or other independent expert selected by the
Departing Partner and its successor, which, in turn, may rely on other experts
and the determination of which shall be conclusive as to such matter. If such
parties cannot agree upon one independent investment banking firm or other
independent expert within 45 days after the effective date of such departure,
then the Departing Partner shall designate an independent investment banking
firm or other independent expert, the Departing Partner's successor shall
designate an independent investment banking firm or other independent expert,
and such firms or experts shall mutually select a third independent investment
banking firm or independent expert, which shall determine the fair market value
of the Partnership Interest. In making its determination, such independent
investment banking firm or other independent expert shall consider the then
current trading price of Preferred Shares on any national securities
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exchange on which Preferred Shares are then listed, the value of the Company's
assets, the rights and obligations of the General Partner and other factors it
may deem relevant.
(b) If the Partnership Interest is not acquired in the manner set
forth in Section 10.03(a), the Departing Partner shall become a Limited Partner
and the Partnership Interest shall be converted into Preferred Shares pursuant
to a valuation made by an investment banking firm or other independent expert
selected pursuant to Section 10.03(a), without reduction in such Partnership
Interest (but subject to proportionate dilution by reason of the admission of
its successor). Any successor General Partner shall indemnify the Departing
Partner as to all debts and liabilities of the Company arising on or after the
date on which the Departing Partner becomes a Limited Partner. For purposes of
this Agreement, conversion of the General Partner's Partnership Interest to
Preferred Shares will be characterized as if the General Partner contributed
its Partnership Interest to the Company in exchange for the newly-issued
Preferred Shares.
(c) If a successor General Partner is elected in accordance with
the terms of Section 10.01 or 10.02 and the option described in Section
10.03(a) is not exercised by the party entitled to do so, the successor General
Partner shall, at the effective date of its admission to the Company,
contribute to the capital of the Company cash in an amount such that its
Capital Account, after giving effect to such contribution and any adjustments
made to the Capital Accounts of all Partners, shall be equal to that percentage
of the Capital Accounts of all Partners that is equal to its Percentage
Interest as the General Partner.
ARTICLE XI
DISSOLUTION, LIQUIDATION AND TERMINATION
11.01 DISSOLUTION. The Company shall dissolve and its affairs shall
be wound up on the first to occur of the following (each a ``Liquidation
Event''):
(a) the consent of the General Partner and the holders of
a majority of the voting power of the Preferred Shares;
(b) the date set forth in Section 2.06;
(c) the occurrence of a Event of Withdrawal if, prior to
the effective date of the General Partner's withdrawal, a successor is
not selected by the holders of Preferred Shares as provided herein or
the Company does not receive a Withdrawal Opinion of Counsel;
(d) any other event causing dissolution as described in
section 17-801 of the Act; or
(e) any other event specified as a Liquidation Event in
any amendment to this Agreement providing for the issuance of
Preferred Shares or any series thereof.
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11.02 LIQUIDATION AND TERMINATION. On dissolution of the Company,
the General Partner shall act as liquidator or may appoint one or more other
Persons as liquidator; provided, however, that if the Company dissolves on
account of an event of the type described in section 17-402(a)(4)-(10) of the
Act with respect to the General Partner, the liquidator shall be one or more
Persons selected by the holders of a majority of the voting power of the
Limited Partners. The liquidator shall proceed diligently to wind up the
affairs of the Company and make final distributions as provided herein. The
costs of liquidation shall be borne as a Company expense. Until final
distribution, the liquidator shall continue to operate the Company properties
with all of the power and authority of the General Partner. The steps to be
accomplished by the liquidator are as follows:
(a) as promptly as possible after dissolution and again
after final liquidation, the liquidator shall cause a proper
accounting to be made by a recognized firm of certified public
accountants of the Company's assets, liabilities and operations
through the last day of the calendar month in which the dissolution
occurs or the final liquidation is completed, as applicable;
(b) the liquidator shall pay from Company funds all of
the debts and liabilities of the Company (including, without
limitation, all expenses incurred in liquidation and any advances
described in Section 4.04) or otherwise make adequate provision
therefor (including, without limitation, the establishment of a cash
escrow fund for contingent liabilities in such amount and for such
term as the liquidator may reasonably determine); and
(c) all remaining assets of the Company shall be
distributed to the Partners in accordance with their respective
Sharing Ratios.
All distributions in kind to the Partners shall be made subject to the
liability of each distributee for its allocable share of costs, expenses and
liabilities theretofore incurred or for which the Company has committed prior
to the date of termination and those costs, expenses and liabilities shall be
allocated to the distributee pursuant to this Section 11.02. The distribution
of cash and/or property to a Partner in accordance with the provisions of this
Section 11.02 constitutes a complete return to the Partner of its Capital
Contributions and a complete distribution to the Partner of its Partnership
Interest and all the Company's property and constitutes a compromise to which
all Partners have consented within the meaning of section 17-502(b) of the Act.
To the extent that a Partner returns funds to the Company, it has no claim
against any other Partner for those funds.
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11.03 CANCELLATION OF CERTIFICATE. On completion of the
distribution of Company assets as provided herein, the Company is terminated,
and the General Partner (or such other Person or Persons as the Act may require
or permit) shall cause the cancellation of the Certificate and any other
filings made as provided in Section 2.05 and shall take such other actions as
may be necessary to terminate the Company.
ARTICLE XII
GENERAL PROVISIONS
12.01 OFFSET. Whenever the Company is to pay any sum to any
Partner, any amounts that Partner owes the Company may be deducted from that
sum before payment.
12.02 NOTICES. Any notice, demand, request, report or proxy
materials required or permitted to be given or made to a Partner under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first- class United States mail or by other means of
written communication to the Partner at the address described below. Any
notice, payment or report to be given or made to a Partner hereunder shall be
deemed conclusively to have been given or made, and the obligation to give such
notice or report or to make such payment shall be deemed conclusively to have
been fully satisfied, upon sending of such notice, payment or report to the
Record Holder at his address as shown on the records of the Transfer Agent or
as otherwise shown on the records of the Company, regardless of any claim of
any Person who may have an interest in Preferred Shares or the Partnership
Interest of a General Partner by reason of any assignment or otherwise. An
affidavit or certificate of making of any notice, payment or report in
accordance with the provisions of this Section 12.02 executed by the General
Partner, the Transfer Agent or the mailing organization shall be prima facie
evidence of the giving or making of such notice, payment or report. If any
notice, payment or report addressed to a Record Holder at the address of such
Record Holder appearing on the books and records of the Transfer Agent or the
Company is returned by the United States Post Office marked to indicate that
the United States Postal Service is unable to deliver it, such notice, payment
or report and any subsequent notices, payments and reports shall be deemed to
have been duly given or made without further mailing (until such time as such
Record Holder or another Person notifies the Transfer Agent or the Company of a
change in his address) if they are available for the Partner at the principal
office of the Company for a period of one year from the date of the giving or
making of such notice, payment or report to the other Partners. Any notice to
the Company shall be deemed given if received by the General Partner at the
principal office of the Company designated pursuant to Section 2.03. The
General Partner may rely and shall be protected in relying on any notice or
other document from a Partner or other Person if believed by it to be genuine.
12.03 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement constitutes the
entire agreement of the Partners and their Affiliates relating to the Company
and supersedes all prior contracts, understandings, negotiations and agreements
with respect to the Company and the subject matter hereof whether oral or
written.
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12.04 EFFECT OF WAIVER OR CONSENT. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by
that Person of its obligations with respect to the Company is not a consent or
waiver to or of any other breach or default in the performance by that Person
of the same or any other obligations of that Person with respect to the
Company. Failure on the part of a Person to complain of any act of any Person
or to declare any Person in default with respect to the Company, irrespective
of how long that failure continues, does not constitute a waiver by that Person
of its rights with respect to that default until the applicable
statute-of-limitations period has run.
12.05 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time by the General Partner without the vote or consent
of holders of Preferred Shares, except for such vote or consent as may be
required by an amendment to this Agreement providing for the issuance of
Preferred Shares or any series thereof.
12.06 BINDING EFFECT; NO THIRD-PARTY BENEFICIARIES. Subject to the
restrictions on Dispositions set forth in this Agreement, this Agreement is
binding on and inures to the benefit of the Partners and their respective
heirs, legal representatives, successors and assigns. Nothing in this
Agreement shall provide any benefit to any third party or entitle any third
party to any claim, cause of action, remedy or right of any kind, it being the
intent of the parties that this Agreement shall not be construed as a third
party beneficiary contract.
12.07 GOVERNING LAW; SEVERABILITY. THIS AGREEMENT IS GOVERNED BY
AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE,
EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE
GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER
JURISDICTION. If any provision of this Agreement or its application to any
Person or circumstance is held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of that provision to other
Persons or circumstances is not affected and that provision shall be enforced
to the greatest extent permitted by law.
12.08 FURTHER ASSURANCES. In connection with this Agreement and the
transactions contemplated by it, each Partner shall execute and deliver any
additional documents and instruments and perform any additional acts that may
be necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
12.09 WAIVER OF CERTAIN RIGHTS. Each Partner irrevocably waives any
right it may have to maintain any action for dissolution of the Company or for
partition of the property of the Company.
12.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
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EXECUTED as of the date first set forth above.
GENERAL PARTNER: ENRON CORP.
By: /s/ EDMUND P. SEGNER, III
Name: Edmund P. Segner, III
Title: Executive Vice President
and Chief of Staff
LIMITED PARTNER: ORGANIZATIONAL PARTNER, INC.
By: /s/ KURT S. HUNEKE
Name: Kurt S. Huneke
Title: Vice President, Finance and
Treasurer
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EXHIBIT 4(d)
CERTIFICATE OF CORRECTION
filed to correct an error in the
RESTATED CERTIFICATE OF INCORPORATION
OF
ENRON CORP.
filed in the office of
the Secretary of State of Delaware
on October 11, 1988
ENRON CORP., a corporation organized and existing under and by virtue
of the General Corporation Law of Delaware, DOES HEREBY CERTIFY:
1. The name of the corporation is Enron Corp.
2. The Restated Certificate of Incorporation of Enron Corp. (the
"Restated Certificate") was filed in the office of the Secretary of State of
Delaware on October 11, 1988, and the Restated Certificate requires correction
as permitted by Section 103 of the General Corporation Law of Delaware.
3. The Restated Certificate requires correction because it does
not incorporate the Certificate of Designation of InterNorth, Inc. filed in the
office of the Secretary of State of Delaware on July 22, 1983. Under Section
151 (g) of the General Corporation Law of Delaware, that Certificate of
Designation was an amendment to the certificate of incorporation of InterNorth,
Inc. ("InterNorth"). That amendment inadvertently was omitted from the
subsequent restatement of InterNorth's certificate of incorporation and, after
InterNorth's name was changed to Enron Corp., from restatements of Enron
Corp.'s certificate of incorporation.
4. Article IV B. of the Restated Certificate is corrected to read
in its entirety as set forth in Exhibit A attached to this Certificate of
Correction.
IN WITNESS WHEREOF, Enron Corp. has caused this certificate to be
signed by Edmund P. Segner, III, its Executive Vice President and Chief of
Staff, and attested by Rex R. Rogers, its Assistant Secretary, this 26th day of
May, 1994.
ENRON CORP. ATTEST:
By: EDMUND P. SEGNER, III REX R. ROGERS
Edmund P. Segner, III Rex R. Rogers
Executive Vice President Assistant Secretary
and Chief of Staff
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EXHIBIT A
B. (1) The Second Preferred Stock may be issued from time to time
in one or more series. All shares of Second Preferred Stock shall be of equal
rank and shall be identical, except in respect of the particulars that may be
fixed by the Board of Directors as hereinafter provided pursuant to authority
which is hereby expressly vested in the Board of Directors; and each share of
each series shall be identical in all respects with the other shares of such
series, except as to the date from which dividends thereon shall be cumulative.
Before any shares of Second Preferred Stock of any particular series shall be
issued, the Board of Directors shall fix, and is hereby expressly empowered to
fix, in the manner provided by law, the following provisions of the shares of
such series:
(a) The distinctive designation of such series and the
number of shares which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors in creating such series) or decreased (but now below the
number of shares thereof then outstanding) from time to time by like
action of the Board of Directors;
(b) The annual rate of dividends payable on shares of
such series and the date from which dividends shall be cumulative on
all shares of such series;
(c) The redemption price or prices, if any, for shares of
such series;
(d) The terms of a sinking or purchase fund, if any, for
shares of such series;
(e) The amount payable on shares of such series in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation;
(f) The rights, if any, of the holders of shares of such
series to convert such shares into assets of the Corporation or shares
of stock of the Corporation of any class or of any series of any class
and the terms and conditions of such conversion; and
(g) The voting powers, full or limited, if any, of shares
of such series, including, without limitation, any requirements for
the approval or consent of the holders of any prescribed percentage of
the shares of such series with respect to any specific corporate
action (including any such action specified in subdivision (7) of this
Article IV B), in addition to any such requirements appertaining to
the shares of all series specifically provided herein, and any other
preferences, and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof,
so far as not inconsistent with the provisions of this Article IV B applicable
to all series of Second Preferred Stock and to the full extent now or hereafter
permitted by the laws of Delaware. Shares of Second Preferred Stock shall be
issued only as fully paid and non-assessable shares.
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The Preferred Stock shall have preference and priority over the Second
Preferred Stock in the payment of dividends and in the distribution of assets
on any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation.
(2) The holders of the Second Preferred Stock of each series, in
preference to the holders of any junior stock, but subject to the rights and
preferences of the Preferred Stock, shall be entitled to receive, as and when
declared by the Board of Directors out of any funds legally available therefor,
cash dividends, at the rate for such series fixed in accordance with the
provisions of subdivision (1) of this Article IV B, and no more, payable
quarterly on the first days of January, April, July and October, respectively,
in each year, with respect to the quarterly period ending on the day preceding
each such respective payment date, except that the first dividend on the
initial issue of any series of the Second Preferred Stock shall be payable on
the quarterly dividend payment date next succeeding the expiration of thirty
days after the date any shares of such series are issued. Such dividends shall
be cumulative, in the case of shares of each particular series, from the date
fixed from the purpose by the Board of Directors, as provided in subdivision
(1) of this Article IV B.
No dividend shall be paid upon, or declared or set apart for, any
share of Second Preferred Stock for any quarterly dividend period unless at the
same time a like proportionate dividend for the some quarterly dividend period,
ratably in proportion to the respective annual dividend rates fixed therefor,
shall be paid upon, or declared and set apart for, all shares of Second
Preferred Stock of all series then issued and outstanding and entitled to
receive such dividend.
(3) In no event, so long as any shares of Second Preferred Stock
shall be outstanding, shall any dividend, whether in cash or property, be paid
or declared, nor shall any distribution be made, on any junior stock, nor shall
any shares of any junior stock be purchased, redeemed or otherwise acquired for
value by the Corporation, nor shall the Corporation permit any distribution to
be made or shares purchased, redeemed or otherwise acquired by any subsidiary,
unless all dividends on the Second Preferred Stock of all series for all past
quarterly dividend periods and for the then current quarterly period shall have
been paid or declared and a sum sufficient for the payment thereof set apart,
and unless the Corporation shall not be in arrears with respect to any sinking
fund for any series of Second Preferred Stock. The foregoing provisions of this
subdivision (3) shall not, however, apply to a dividend payable in any junior
stock, or the acquisition of shares of any junior stock in exchange for, or
through application of the proceeds of the sale of, shares of any other junior
stock.
Subject to the foregoing and to any further limitations prescribed in
accordance with the provisions of subdivision (1) of this Article IV B, the
Board of Directors may declare, out of any funds legally available therefor,
dividends upon the then outstanding shares of any junior stock, and no holders
of shares of Second Preferred Stock of any series shall be entitled to share
therein.
(4) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, then, before any
distribution or payment shall be made to the holders of any junior stock, the
holders of the Second Preferred Stock shall be entitled to be paid in full the
respective amounts fixed in accordance with the provisions of subdivision (1)
of this Article IV B, together with accrued dividends to such distribution or
payment date whether or not earned or declared. If such payment shall have been
made in full to the holders of the Second
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Preferred Stock, the remaining assets and funds of the Corporation shall be
distributed among the holders of the junior stock, according to their
respective rights and preferences and in each case according to their
respective shares. If, upon any liquidation, dissolution or winding up of the
affairs of the Corporation, the amounts so payable are not paid in full to the
holders of all outstanding shares of Second Preferred Stock, the holders of all
Series of Second Preferred Stock shall share ratably in any distribution of
assets in proportion to the full amounts to which they would otherwise be
respectively entitled. Neither the consolidation or merger of the Corporation,
nor the sale, lease or conveyance of all or a part of its assets, shall be
deemed a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of the foregoing provisions of this subdivision
(4) or of subdivision (7) of this Article IV B.
(5) Subject to the provisions of subdivision (7) of this Article
IV B, the Second Preferred Stock of any series may be redeemed, as a whole or
in part, at the option of the Corporation, by vote of its Board of Directors,
or in the case of any one or more series, for the purpose of any sinking fund
or other requirement for any such series fixed by the Board of Directors
pursuant to the provisions of subdivision (1) of this Article IV B, at any time
or from time to time, at the applicable redemption price for such series fixed
in accordance with the provisions of subdivision (1) of this Article IV B,
together with accrued dividends to the redemption date, whether or not earned
or declared. If less than all the outstanding shares of Second Preferred Stock
of any series are to be redeemed, the shares to be redeemed shall be determined
by lot or pro rata in such manner as the Board of Directors may prescribe.
Notice of every redemption of Second Preferred Stock shall be mailed,
addressed to the holders of record of the shares to be redeemed at their
respective addresses as they shall appear on the stock books of the Corporation
(but no failure to mail such notice or any defect therein or in the mailing
thereof shall affect the validity of the proceedings for such redemption), and,
for all Second Preferred Stock issued prior to May 1, 1984, notice shall also
be published at least once in one daily newspaper printed in the English
language and published and of general circulation in the Borough of Manhattan,
The City of New York, the first publication and such mailing to be at least
thirty days and not more than sixty days prior to the date fixed for
redemption.
If notice of redemption shall have been duly publishned as may be
required herein and if, on or before the redemption date specified in the
notice, the redemption price, together with accrued dividends to the date fixed
for redemption, whether or not earned or declared, shall have been set aside by
the Corporation, separate and apart from its other funds, in trust for the pro
rata benefit of the holders of the shares so called for redemption, so as to be
and continue to be available therefor, then, from and after the date of
redemption so designated, notwithstanding that any certificate for shares of
Second Preferred Stock so called for redemption shall not have been surrendered
for cancellation, the shares represented thereby shall no longer be deemed
outstanding, the dividends thereon shall cease to accumulate, and all rights
with respect to the shares of Second Preferred Stock so called for redemption
shall forthwith on the redemption date cease and terminate, except only the
right of the holders thereof to receive the redemption price of the shares so
redeemed, including accrued dividends to the redemption date, but without
interest.
The Corporation may also, at any time prior to the redemption date,
deposit in trust, for the account of the holders of the Second Preferred Stock
to be redeemed, with a bank or trust company
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in good standing, organized under the laws of the United States of America or
of the State of New York, doing business in the Borough of Manhattan, The City
of New York, having capital, surplus and undivided profits aggregating at least
Five Million Dollars ($5,000,000), designated in the notice of redemption, the
redemption price, together with accrued dividends to the date fixed for
redemption, whether or not earned or declared and, unless the notice of
redemption herein provided for has previously been duly mailed and published,
deliver irrevocable written instructions directing such bank or trust company,
on behalf and at the expense of the Corporation, to cause of redemption
specifying the date of redemption to be duly mailed and publication of the
notice to be made as herein provided promptly upon receipt of such irrevocable
instructions. Upon such deposit in trust, either after due mailing and
publication of the notice of redemption or accompanied by irrevocable
instructions as provided above, notwithstanding that any certificate for shares
of Second Preferred Stock so called for redemption shall not have been
surrendered for cancellation, all shares of Second Preferred Stock with respect
to which the deposit shall have been made shall no longer be deemed to be
outstanding, and all rights with respect to such shares of Second Preferred
Stock shall forthwith cease and terminate except only the right of the holders
thereof to receive from such bank or trust company, at any time after the time
of the deposit, the redemption price, including accrued dividends to the
redemption date, whether or not earned or declared, but without interest, of
the shares so to be redeemed, and the right to exercise, on or before the date
fixed for redemption, privileges of conversion or exchange, if any, not
theretofore expiring.
Any moneys deposited by the Corporation pursuant to this subdivision
(5) which shall not be required for the redemption because of the exercise of
any such right of conversion or exchange subsequent to the date of the deposit
shall be repaid to the Corporation forthwith. Any other moneys deposited by the
Corporation pursuant to this subdivision (5) and unclaimed at the end of six
years from the date fixed for redemption shall be repaid to the Corporation
upon its request expressed in a resolution of its Board of Directors, after
which repayment the holders of the shares so called for redemption shall look
only to the Corporation for the payment thereof.
(6) The holders of Second Preferred Stock shall have no right to
vote except as otherwise herein or by statute specifically provided, except for
such full or limited voting powers as may be fixed by the Board of Directors in
respect of the shares of a particular series in accordance with the provisions
of subdivision (1) of this Article IV B.
If, at any time, dividends payable on the Second Preferred Stock shall
be in default in an amount equivalent to six full quarterly dividends on all
shares of all series of the Second Preferred Stock at the time outstanding,
then, the holders of the Second Preferred Stock of all series, voting
separately as a class, shall be entitled to elect two Directors of the
Corporation. When all such dividends in default shall have been so paid or
funds sufficient therefor deposited in trust (and such dividends in default
shall be so paid as soon as lawful and reasonably practicable out of any assets
of the Corporation available therefor), the holders of the Second Preferred
Stock shall be divested of such voting rights, but subject always to the same
provisions for the vesting of such voting rights in the holders of the Second
Preferred Stock in the case of any future such dividend default or defaults.
The foregoing right of the holders of the Second Preferred Stock with
respect to the election of Directors of the Corporation may be exercised at any
annual meeting of stockholders or, within
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the limitations hereinafter provided, at a special meeting of stockholders held
for such purpose. If the date upon which such right of the holders of the
Second Preferred Stock shall become vested shall be more than ninety days
preceding the date of the next ensuing annual meeting of stockholders as fixed
by the By-Laws of the Corporation, the President of the Corporation shall,
within ten days after delivery to the Corporation at its principal office of a
request to such effect signed by the holders of at least five per cent (5%) of
the Second Preferred Stock then outstanding, call a special meeting of
stockholders to be held within forty days after the delivery of such request
for the purpose of electing a new Board of Directors to serve until the next
annual meeting and until their successors shall be elected and shall qualify.
Notice of such meeting shall be mailed to each stockholder entitled to vote
thereat not less than ten days prior to the date of such meeting. The term of
office of all Directors of the Corporation shall terminate at the time of any
such meeting held for the purpose of electing a new Board of Directors,
notwithstanding that the term for which such Directors had been elected shall
not then have expired. In the event that at any such meeting at which holders
of the Second Preferred Stock shall be entitled to elect two Directors, a
quorum of the holders of such Second Preferred Stock shall not be present in
person or by proxy, the holders of the Common Stock, if a quorum thereof be
present, may temporarily elect the Directors whom the holders of the Second
Preferred Stock were entitled but failed to elect, such Directors to be
designated as having been so elected and their term of office to expire at such
time thereafter as their successors shall be elected by the holders of the
Second Preferred Stock as herein provided.
Whenever the holders of Second Preferred Stock shall be entitled to
elect two Directors, any holder of such Second Preferred Stock shall have the
right, during regular business hours, in person or by duly authorized
representative, to examine and to make transcripts of the stock records of the
Corporation for the Second Preferred Stock for the purpose of communicating
with other holders of such Second Preferred Stock with respect to the exercise
of such right of election.
Whenever the holders of Second Preferred Stock shall be divested of
such voting right, the President of the Corporation shall, within ten days
after delivery to the Corporation at its principal office of a request to such
effect signed by any holder of Common Stock, call a special meeting of the
holders of shares of stock entitled to vote at such meeting to be held within
forty days after the delivery of such request for the purpose of electing a new
Board of Directors to serve until the next annual meeting or until their
respective successors shall be elected and shall qualify. If, at any such
special meeting, any Director shall not be reelected, his term of office shall
terminate upon the election and qualification of his successor, notwithstanding
that the term for which such Director was originally elected shall not then
have expired.
At any annual or special meeting of stockholders held for the purpose
of electing Directors when the holders of the Second Preferred Stock shall be
entitled to elect two Directors, the presence in person or by proxy of the
holders of one-third of the outstanding shares of the Second Preferred Stock
shall be required to constitute a quorum for the election by such class of such
two Directors, and the presence in person or by proxy of the holders of a
majority of the outstanding shares of the Common Stock shall be required to
constitute a quorum for the election by such class of the Directors which that
class is entitled to elect or for the election temporarily by such class as
herein provided of the members of the Board of Directors whom the holders of
the Second Preferred Stock cannot at the time for the want of a quorum elect;
provided, however, that the majority of the holders of either such class of
stock who are present in person or by proxy shall have power to
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adjourn such meeting for the election of Directors by such class from time to
time without notice other than announcement at the meeting. No delay or failure
by the holders of any class of stock to elect the members of the Board of
Directors whom such holders are entitled to elect shall invalidate the election
of the remaining members of the Board of Directors by the holders of any other
class of stock. At any such election of Directors by the holders of shares of
Second Preferred Stock, each such holder shall have one vote for each share of
such stock standing in his name on the books of the Corporation on any record
date fixed for such purpose or, if no such date be fixed, on the date on which
the election is held, subject to the provisions of Article XIII.
If, during any interval between annual meetings of stockholders for
the election of Directors and while the holders of the Second Preferred Stock
shall be entitled to elect two Directors, the number of Directors in office who
have been elected by the holders of shares of any class of stock shall, by
reason of resignation, death or removal, be less than the total number of
Directors subject to election by the holders of shores of such class, (a) the
vacancy or vacancies in the Directors elected by the holders of shares of that
class shall be filled by a majority vote of the remaining Directors then in
office who were elected by such class or succeeded to Directors so elected,
although such majority be less than a quorum, or, if there shall be only one
such remaining Director, shall be filled by the Directors then in office upon
nomination of the remaining Director elected by the holders of the shares of
that class or his successor and (b) if not so filled within forty days after
the creation thereof, the President of the Corporation shall call a special
meeting of the holders of shares of such class and such vacancy or vacancies
shall be filled at such special meeting.
Any director may be removed from office by vote of the holders of a
majority of the shares of the class of stock by which his successor would be
elected. A special meeting of the holders of shares of such class may be called
by a majority vote of the Board of Directors for the purpose of removing a
Director in accordance with the provisions of this paragraph. The President of
the Corporation shall, in any event, within ten days after delivery to the
Corporation at its principal office of a request to such effect signed by the
holders of at least five per cent (5%) of the outstanding shares of such class,
call a special meeting for such purpose to be held within forty days after the
delivery of such request.
Holders of Second Preferred Stock shall not be entitled to receive
notice of any meeting of stockholders at which they are not entitled to vote or
consent.
(7) So longer as any shares of Second Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
herein or by law, the consent of the holders of at least fifty per cent (50%)
of the Second Preferred Stock at the time outstanding, considered as a single
class without regard to series, given in person or by proxy, either in writing
without a meeting (if permitted by law) or by vote at any meeting called for
the purpose, shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the
provisions of the Certificate of Incorporation, or of the By-Laws, of
the Corporation, which affects adversely the voting powers, rights or
preferences of the holders of the Second Preferred Stock or reduces
the time for any notice to which the holders of the Second Preferred
Stock may be entitled; provided, however, that if such amendment
alteration or repeal affects adversely the rights
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or preferences of one or more but not all series of Second Preferred
Stock at the time outstanding, only the consent of the holders of at
least one-half of the shares of the series so affected shall be
required; and provided further, that the amendment of the provisions
of the Certificate of Incorporation so as to authorize or create, or
to increase the authorized amount of any junior stock shall not be
deemed to affect adversely the voting powers, rights or preferences of
the holders of the Second Preferred Stock;
(ii) The authorization or creation of, or the increase in
the authorized amount of, any stock of any class or any security
convertible into stock of any class, ranking prior to the Second
Preferred Stock;
(iii) The voluntary dissolution, liquidation or winding up
of the affairs of the Corporation, or the sale, lease or conveyance by
the Corporation of all or substantially all its property or assets;
(iv) The purchase or redemption (for sinking fund purposes
or otherwise) of less than all of the Second Preferred Stock at the
time outstanding unless the full dividend on all shares of Second
Preferred Stock of all series then outstanding shall have been paid or
declared and a sum sufficient for payment thereof set apart;
(v) The increase of the authorized amount of the Second
Preferred Stock, or the authorization or creation of, or the increase
in the authorized amount of, any stock of any class or any security
convertible into stock of any class, ranking on a parity with the
Second Preferred Stock; or
(vi) The merger or consolidation of the Corporation with
or into any other corporation, unless the corporation resulting from
such merger or consolidation will have after such merger or
consolidation no class of stock and no other securities either
authorized or outstanding ranking prior to or on a parity with the
Second Preferred Stock, except the same number of shares of stock and
the same amount of other securities with the same rights and
preferences as the stock and securities of the Corporation
respectively authorized and outstanding immediately preceding such
merger or consolidation, and each holder of Second Preferred Stock
immediately preceding such merger or consolidation shall receive the
same number of shares, with the same rights and preferences, of the
resulting corporation;
provided, however, that no such consent of the holders of the Second Preferred
Stock shall be required if, at or prior to the time when such amendment,
alteration or repeal is to take effect or when the issuance of any such
additional Second Preferred Stock, prior or parity stock or convertible
security is to be made, or when such consolidation or merger, voluntary
liquidation, dissolution or winding up sale, lease, conveyance, purchase or
redemption is to take effect, as the case may be, provision is to be made for
the redemption of all shares of Second Preferred Stock at the time outstanding,
or, in the case of any such amendment, alteration or repeal as to which the
consent of less than all series of the Second Preferred Stock would otherwise
be required, for the redemption of all shares of the series of Second Preferred
Stock the consent of which would otherwise be required.
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(8) As used herein with respect to the Second Preferred Stock or
in any resolution adopted by the Board of Directors providing for the issue of
any particular series of the Second Preferred Stock as authorized by
subdivision (1) of this Article IV B, the following terms shall have the
following meanings:
(a) The term 'junior stock' shall mean the Common Stock,
the Preference Stock, and any other class of stock of the Corporation
hereafter authorized over which the Second Preferred Stock has
preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up
of the Corporation.
(b) The term 'sinking fund' shall mean any fund or
requirement for the periodic retirement of shares.
(c) The term 'accrued dividends,' with respect to any
share of any series, shall mean an amount computed at the annual
dividend rate for the series of which the particular share is a part,
from the date on which dividends on such share become cumulative to
and including the date to which such dividends are to be accrued, less
the aggregate amount of all dividends theretofore paid thereon.
(9) Pursuant to authority expressly granted to and vested in the
Board of Directors by the provisions of the Certificate of Incorporation, as
amended, the Board of Directors has created a series of 2,400,000 shares of
Second Preferred Stock of the Corporation (such series being hereinafter called
the "Second Preferred Convertible Series"), and has fixed the voting powers,
designation, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof (in addition to the voting powers,
designation, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations or restrictions thereof,
set forth in the Certificate of Incorporation, as amended, which are applicable
to the Second Preferred Stock of all series) as follows:
(A) The distinctive designation of the Second Preferred
Convertible Series shall be "$10.50 Cumulative Second Preferred
Convertible Stock"; the number of shares which shall constitute the
Second Preferred Convertible Series shall be 2,400,000 shares; and
such number shall not be increased.
(B) The annual rate of dividends payable on shares of the
Second Preferred Convertible Series shall be $10.50, and no more, and
the date from which dividends shall be cumulative and shall accrue on
all shares of the Second Preferred Convertible Series shall be the
Effective Time of the Merger, as such terms are defined in the
Agreement and Plan of Merger, dated as of April 12, 1983 among the
Corporation, I N Holdings, Inc. and Belco Petroleum Corporation.
(C) The Second Preferred Convertible Series shall not be
redeemable by the Corporation prior to the tenth anniversary of the
Effective Time, and thereafter, the Corporation shall have the right
to redeem any and all of the Second Preferred Convertible Series at
any time at the redemption price of $100 per share, together with
accrued dividends to the date of distribution or payment, whether or
not earned or declared; provided, however,
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that the Corporation shall not have the right to redeem any shares of
the Second Preferred Convertible Series pursuant to this subdivision
(C) unless the current market price per Common Share (as defined in
subparagraph E(4) below) has been for at least 30 consecutive Trading
days (as defined in subparagraph E(4) below) at least 150% of the
amount calculated by dividing $100 by the number of Common Shares into
which one share of the Second Preferred Convertible Series is then
convertible pursuant to the provisions of subparagraph E below. Any
redemption shall be effected in the manner provided in subdivision (5)
of Article IV-B of the Certificate of Incorporation.
(D) The amount payable on shares of the Second Preferred
Convertible Series in the event of any involuntary or voluntary
liquidation, dissolution, or winding up of the affairs of the
Corporation shall be $100 per share, together with accrued dividends
to the date of distribution or payment, whether or not earned or
declared.
(E) (1) Each share of the Second Preferred
Convertible Series shall be convertible at any time at the option of
the holder thereof into fully paid and non-assessable shares of Common
Stock (the "Common Shares") of the Corporation at the conversion rate,
determined as hereinafter provided, in effect at the time of
conversion. The rate at which Common Shares shall be delivered upon
conversion of shares of the Second Preferred Convertible Series
(herein called the "conversion rate") shall be initially 3.413 Common
Shares for each share of Second Preferred Convertible Series. The
conversion rate shall be subject to adjustment as provided for below.
Upon conversion no allowance or adjustment shall be made for dividends
on either class of stock.
(2) In order to convert shares of the Second Preferred
Convertible Series into Common Shares, the holder thereof shall
surrender at the office of any transfer agent for the Second Preferred
Convertible Series the certificate or certificates therefor, duly
endorsed to the Corporation or in blank or accompanied by appropriate
instruments of transfer to the Corporation or in blank, and give
written notice to the Corporation at said office that he elects to
convert such shares. Shares of the Second Preferred Convertible
Series shall be deemed to have been converted immediately prior to the
close of business on the date of surrender of such shares for
conversion in accordance with the foregoing provisions (the
"Conversion Date"), and the person or persons entitled to receive the
Common Shares issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such Common Shares at such
time. As promptly as practicable after the Conversion Date, the
Corporation shall issue and deliver at said office the certificate or
certificates for the number of full Common Shares issuable upon such
conversion, together with a cash payment in lieu of any fraction of a
Common Share, as hereinafter provided, to the person or persons
entitled to receive the same or to the nominee or nominees of such
person or persons. In case shares of the Second Preferred Convertible
Series are called for redemption pursuant to subdivision (C), the
right to convert such shares shall cease and terminate at the close of
business on the date fixed for redemption unless default shall be made
in the payment of the redemption price.
(3) The conversion rate shall be adjusted from time to
time as follows:
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(a) In case the Corporation shall (i) pay a
dividend on its Common Shares in other Common Shares, (ii)
subdivide its outstanding Common Shares, (iii) combine its
outstanding Common Shares into a smaller number of Common
Shares, or (iv) issue by reclassification of its Common Shares
any other shares of the Corporation (including in connection
with a merger in which the Corporation is a surviving
corporation), the conversion rate in effect at the time of the
record date for such dividend or the effective date of such
subdivision, combination or reclassification shall be
proportionately adjusted so that the holder of each share of
the Second Preferred Convertible Series converted after such
time shall be entitled to receive the aggregate number and
kind of shares which, if such share of the Second Preferred
Convertible Series had been converted immediately prior to
such time, the holder would have owned upon such conversion
and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any of the events listed
above shall occur;
(b) In case the Corporation shall issue rights or
warrants to the holders of its Common Shares as such entitling
them (for a period expiring within 45 days after the record
date for determination of the stockholders entitled to receive
such rights or warrants) to subscribe for or purchase Common
Shares at a price per share less than the current market price
per share (as defined in subparagraph (E)(4) below) on such
record date, then in each such case the conversion rate shall
be adjusted by multiplying the conversion rate in effect
immediately prior to such record date by a fraction, of which
the numerator shall be the number of Common Shares outstanding
on the date of issuance of such rights or warrants plus the
number of additional Common Shares offered for subscription or
purchase, and of which the denominator shall be the number of
Common Shares outstanding on the date of issuance of such
rights or warrants plus the number of Common Shares which the
aggregate offering price of the total number of shares so
offered would purchase at such current market price. For the
purposes of this clause (b), the issuance of rights or
warrants to subscribe for or purchase securities convertible
into Common Shares shall be deemed to be the issuance of
rights or warrants to purchase the Common Shares into which
such securities are convertible at an aggregate offering price
equal to the aggregate offering price of such securities plus
the minimum aggregate amount (if any) payable upon conversion
of such securities into Common Shares. Such adjustment shall
be made whenever any such rights or warrants are issued, and
shall become effective retroactively with respect to
conversions made subsequent to the record date for the
determination of stockholders entitled to receive such rights
or warrants; and
(c) In case the Corporation shall distribute to
holders of its Common Shares (including any such distribution
made pursuant to a merger or consolidation in which the
Corporation is the surviving corporation) any assets
(excluding cash distributions after the Effective Time not
exceeding (a) the aggregate net earning of the Corporation and
its subsidiaries on a consolidated basis after such date
determined in accordance with sound accounting principles less
(b) dividends paid after such date on shares other than Common
Shares), rights to subscribe or warrants (excluding those
referred to in clause (b) above), evidences of its
indebtedness or other securities
10
<PAGE> 12
of the Corporation (other than Common Shares) then in each
such case the conversion rate shall be adjusted by multiplying
the conversion rate in effect immediately prior to the
record date for determination of stockholders entitled to
receive such distribution by a fraction, of which the
numerator shall be the current market price per Common Share
(as defined in subparagraph (E)(4) below) on such record date,
and of which the denominator shall be such current market
price per Common Share less the fair value (as determined by a
resolution of the Board of Directors of the Corporation, after
consultation with its investment bankers, filed with each
transfer agent for the Second Preferred Convertible Series,
which determination shall be conclusive), of the portion of
the assets, rights to subscribe or warrants, evidences of its
indebtedness or other securities so to be distributed
applicable to one Common Share. Such adjustment shall be made
whenever any such distribution is made, and shall become
effective retroactively with respect to conversions made
subsequent to the record date for the determination of
stockholders entitled to receive such distribution.
(4) For the purpose of any computation under subdivision
(3) above, the current market price per Common Share on any date shall
be deemed to be the average of the daily Closing Prices for 30
consecutive Trading Days selected by the Corporation commencing not
more than 45 Trading Days before the date in question. The term
"Closing Price" on any day shall mean the reported last sale price per
Common Share regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked
prices regular way, in each case on the Composite Tape, or, if the
Common Shares are not listed or admitted to trading on the New York
Stock Exchange, on the American Stock Exchange, or, if the Common
Shares are not listed or admitted to trading on the American Stock
Exchange, the principal national securities exchange on which the
Common Shares are listed or admitted to trading, or, if the Common
Shares are not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices
in the over- the-counter market as reported by the National
Association of Securities Dealers' Automated Quotation System, or, if
not so reported, as reported by the National Quotation Bureau,
Incorporated, or any successor thereof, or, if not so reported, the
average of the closing bid and asked prices as furnished by any member
of the National Association of Securities Dealers, Inc. selected from
time to time by the Corporation for that purpose; and the term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common
Shares are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the Borough of Manhattan, City and
State of New York are not authorized or obligated by law or executive
order to close.
(5) No adjustment in the conversion rate shall be
required unless such adjustment (plus any adjustments not previously
made by reason of this subdivision (5)) would require an increase or
decrease of at least 1% in the number of Common Shares into which each
share of the Second Preferred Convertible Series is then convertible;
provided, however, that any adjustments which by reason of this
subdivision (5) are not required to be made shall be
11
<PAGE> 13
carried forward and taken into account in any subsequent adjustment.
All calculations under this subparagraph (E) shall be make to the
nearest one-thousandth of a share.
(6) The Board of Directors may make such adjustments in
the conversion rate, in addition to those required by this
subparagraph (E), as shall be determined by the Board, as evidenced by
a Board resolution, to be advisable in order to avoid taxation so far
as practicable of any dividend of stock or stock rights or any event
treated as such for Federal income tax purposes to the recipients.
The Board shall have the power to resolve any ambiguity or correct any
error in this subparagraph (E) and its action in so doing, as
evidenced by the Board resolution, shall be final and conclusive.
(7) In any case of any reclassification of Common Shares
(other than a reclassification of the Common Shares referred to in
clause (a) of this subparagraph (E)), any consolidation or merger of
the Corporation with or into another corporation or any sale or
conveyance to another corporation (other than a wholly-owned
subsidiary of the Corporation) of all or substantially all of the
property of the Corporation, the holder of a share of the second
Preferred Convertible Series shall have the right thereafter to
convert such share into the kind and amount of shares of stock and
other securities and property receivable upon such consolidation,
merger, sale or conveyance by a holder of the number of Common Shares
into which such share of the Second Preferred Convertible Series might
have been converted immediately prior to such consolidation, merger,
sale or conveyance and shall have no other conversion rights with
regard to such share of Second Preferred Convertible Series. In the
event of such a reclassification, consolidation, merger, sale or
conveyance, effective provision shall be made in the certificate of
incorporation of the resulting or surviving corporation or otherwise
so that the conversion rate applicable to any stock or other
securities or property into which the shares of the Second Preferred
Convertible Series shall then be convertible shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Shares contained in clauses (a) to (c) of subdivision (3) inclusive,
above, and the other provisions of this subparagraph (E) with respect
to the Common Shares shall apply on terms as nearly equivalent as
practicable to any such other shares of stock and other securities and
property deliverable upon conversion of shares of the Second Preferred
Convertible Series.
(8) In the event that any time, as a result of an
adjustment made pursuant to clause (a) of subdivision (3) above, the
holder of any shares of the Second Preferred Convertible Series
thereafter surrendered for conversion shall become entitled to receive
any shares of capital stock of the Corporation other than Common
Shares, thereafter the number of such other shares so receivable upon
conversion of such shares of the Second Preferred Convertible Series
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in clauses (a) to (c) of
subdivision (3) inclusive, above, and the other provisions of this
subparagraph (E) with respect to the Common Shares shall apply on like
terms to any such other shares.
(9) Whenever any adjustment is required in the Common
Shares into which each share of the Second Preferred Convertible
Series is convertible, the Corporation shall
12
<PAGE> 14
forthwith (i) file with each transfer agent of the Second Preferred
Convertible Series a statement describing in reasonable detail the
adjustment and the method of calculation used and (ii) cause a copy of
such statement to be mailed to the holders of record of the Second
Preferred Convertible Series as of the effective date of such
adjustment.
(10) In case:
(a) the Corporation shall declare a division (or
any other distribution) on its Common Shares other than a cash
dividend or distribution not exceeding (i) the aggregate net
earnings of the corporation and its subsidiaries on a
consolidated basis after the Effective Time determined in
accordance with sound accounting principles less (ii)
dividends paid after such date on shares other than Common
Shares; or
(b) the Corporation shall authorize the granting
to the holders of its Common Shares of rights to subscribe for
or purchase any shares of capital stock of any class or of any
other rights; or
(c) of any reclassification of the capital stock
of the Corporation (other than a subdivision or combination of
its outstanding shares of Common Shares), or of any
consolidation or merger to which the Corporation is a party
and for which approval of any stockholders of the Corporation
is required, or of the sale or transfer of all or
substantially all of the assets of the Corporation, or of the
voluntary or involuntary dissolution, liquidation or winding
up of the Corporation; or
(d) the Corporation proposes to take any other
action that would require an adjustment of the conversion
rate;
then the Corporation shall cause to be mailed to each transfer agent
for the Second Preferred Convertible Series and to the holders of
record of the outstanding shares of the Second Preferred Convertible
Series, at least 20 days (or 10 days in any case specified in clause
(a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights, or, if
a record is not to be taken, the date as of which the holders of
Common Shares of record to be entitled to such dividend, distribution
or rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action is expected to become
effective, and the date as of which it is expected that holders of
Common Shares of record shall be entitled to exchange their shares of
Common Shares for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action.
(11) The Corporation shall at all times reserve and keep
available out of its authorized but unissued Common Shares, for the
purpose of issuance upon conversion of the Second Preferred
Convertible Series, the full number of Common Shares then issuable
upon the conversion of all shares of the Second Preferred Convertible
Series then outstanding.
13
<PAGE> 15
(12) The Corporation will pay any and all taxes that may
be payable in respect of the issuance or delivery of Common Shares on
conversion of shares of the Second Preferred Convertible Series
pursuant hereto. The Corporation shall not, however, be required to
pay any tax which may be payable in respect of any transfer involving
issue and delivery of Common Shares in the name other than that in
which the shares of Second Preferred Convertible Series so converted
were registered and no such issue and delivery shall be made unless
and until the person requesting such issue has paid to the Corporation
the amount of any such tax, or has established, to the satisfaction of
the Corporation, that such tax has been paid.
(13) For the purpose of this subparagraph (E), the term
"Common Shares" shall include any shares of the Corporation of any
class or series which has no preference or priority in the payment of
dividends or in the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation
and which is not subject to redemption by the Corporation. However,
Common Shares issuable upon conversion of the Second Preferred
Convertible Series shall include only shares of the class designated
as Common Shares as of the original date of issuance of the Second
Preferred Convertible Series, or shares of the Corporation of any
classes or series resulting from any reclassification or
reclassifications thereof and which have no preference or priority in
the payment of dividends or in the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and which are not subject to redemption by the
Corporation, provided that if at any time there shall be more than one
such resulting class or series, the shares of such class and series
then so issuable shall be substantially in the proportion which the
total number of shares of such class and series resulting from all
such reclassifications bears to the total number of shares of all such
classes and series resulting from all such reclassifications.
(14) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of the Second Preferred
Convertible Series. If any such conversion would otherwise require
the issuance of a fractional share, an amount equal to such fraction
multiplied by the Closing Price (determined as provided in
subparagraph (E)(4) above) of the Common Shares on the day of
conversion shall be paid to the holder in cash by the Corporation. If
on such date there is no Closing Price, the fair value of a Common
Share on such date, as determined by the Board of Directors, shall be
used.
(15) The certificate of any independent firm of public
accountants of recognized standing selected by the Board of Directors
shall be presumptive evidence of the correctness of any computation
made under this subparagraph (E).
(16) All shares of the Second Preferred Convertible
Series, purchased or otherwise acquired by the Corporation (including
shares surrendered for conversion) shall be cancelled and thereupon
restored to the status of authorized but unissued Second Preferred
Shares undesignated as to series.
(F) So long as any shares of Second Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders
required in the Certificate of Incorporation or
14
<PAGE> 16
by law, (i) the consent of the holders of at least two-thirds of the
Second Preferred Stock at the time outstanding, considered as a single
class without regard to series, given in person or by proxy, either in
writing without a meeting (if permitted by law) or by vote at any
meeting called for the purpose, shall be necessary for effecting or
validating:
(1) Any amendment, alteration or repeal of any of
the provisions of the Certificate of Incorporation, or of the
By-Laws, of the Corporation, which affects adversely the
voting powers, rights or preferences of the holders of the
Second Preferred Stock or reduces the time for any notice to
which the holders of the Second Preferred Stock may be
entitled; provided, however, that if such amendment,
alteration or repeal affects adversely the rights or
preferences of one or more but not all series of Second
Preferred Stock at the time outstanding, only the consent of
the holders of at least two-thirds of the shares of the series
so affected shall be required; and provided further, that the
amendment of the provisions of the Certificate of
Incorporation so as to authorize or create, or to increase the
authorized amount of any junior stock shall not be deemed to
affect adversely the voting powers, rights or preferences of
the holders of the Second Preferred Stock;
(2) The authorization or creation of, or the
increase in the authorized amount of, any stock of any class
or any security convertible into stock of any class, ranking
prior to the Second Preferred Stock;
(3) The voluntary dissolution, liquidation or
winding up of the affairs of the Corporation, or the sale,
lease or conveyance by the Corporation of all or substantially
property or assets; or
(4) The purchase or redemption (for sinking fund
purposes or otherwise) of less than all of the Second
Preferred Stock at the time outstanding unless the full
dividend on all shares of Second Preferred Stock of all series
then outstanding shall have been paid or declared and a sum
sufficient for payment thereof set apart;
and (ii) the consent of the holders of at least a majority of the
Second Preferred Stock at the time outstanding, considered as a single
class without regard to series, given in person or or by proxy, either
in writing without a meeting (if permitted by law) or by vote at any
meeting called for the purpose, shall be necessary for effecting or
validating:
(1) The increase of the authorized amount of the
Second Preferred Stock, or the authorization or creation of,
or the increase in the authorized amount of, any stock of any
class or any security convertible into stock of any class,
ranking on a parity with the Second Preferred Stock; or
(2) The merger or consolidation of the
Corporation with or into any other corporation, unless the
corporation resulting from such merger or consolidation will
have after such merger or consolidation no class of stock and
no other securities either authorized or outstanding ranking
prior to or on a parity with the Second Preferred Stock,
except the same number of shares of stock and the same amount
of
15
<PAGE> 17
other securities with the same rights and preferences as the
stock and securities of the Corporation respectively
authorized and outstanding immediately preceding such merger
or consolidation, and each holder of Second Preferred Stock
immediately preceding such merger or consolidation shall
receive the same number of shares, with the same rights and
preferences, of the resulting corporation;
provided, however, that no such consent of the holders of the Second
Preferred Stock shall be required if, at or prior to the time when
such amendment, alteration or repeal is to take effect or when the
issuance of any such additional Second Preferred Stock, prior or
parity stock or convertible security is to be made, or when such
consolidation or merger, voluntary liquidation, dissolution or winding
up, sale, lease, conveyance, purchase or redemption is to take effect,
as the case may be, provision is to be made for the redemption of all
shares of Second Preferred Stock at the time outstanding, or, in the
case of any such amendment, alteration or repeal as to which the
consent of less than all series of the Second Preferred Stock would
otherwise be required, for the redemption of all shares of the series
of Second Preferred Stock the consent of which would otherwise be
required.
(G) In addition to the class voting rights set forth
herein and in the Certificate of Incorporation, the holders of the
shares of Second Preferred Convertible Series shall vote together with
the holders of the Common Shares (and of any other securities which
may similarly be entitled to vote with the holders of the Common
Share) as a single class upon all matters upon which stockholders are
entitled to vote and when so voted shall be entitled to a number of
votes per share equal to the conversion rate in effect on the record
date of the determination of shareholders entitled to notice of, and
to vote at such meeting.
(H) The shares of the Second Preferred Convertible Series
shall not have any relative, participating, optional or other special
rights and powers other than as set forth in the Certificate of
Incorporation of the Corporation, as amended.
16
<PAGE> 1
EXHIBIT 4(e)
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
ENRON CORP.
ENRON CORP., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Company"), DOES
HEREBY CERTIFY:
The amendment to the Company's Restated Certificate of Incorporation
set forth in the following resolution approved by the Company's Board of
Directors and stockholders was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware:
"RESOLVED, that the Restated Certificate of Incorporation of the
Company is hereby amended by amending Paragraph (A) and Paragraph (B) of
Article IV B.(9) thereof to read in their entirety as follows:
(A) The distinctive designation of the Second Preferred
Convertible Series shall be "Cumulative Second Preferred
Convertible Stock"; the number of shares which shall
constitute the Second Preferred Convertible Series shall be
2,400,000 shares; and such number shall not be increased.
(B) The annual rate of dividends payable on shares of the
Second Preferred Convertible Series shall be a variable amount
equal to the higher of $10.50 per share and the equivalent
dividend that would be paid if shares of the Second Preferred
Convertible Series were converted to Common Stock and the date
from which dividends shall be cumulative and shall accrue on
all shares of the Second Preferred Convertible Series shall be
the Effective Time of the Merger, as such terms are defined in
the Agreement and Plan of Merger, dated as of April 12, 1983
among the Corporation, I N Holdings, Inc. and Belco Petroleum
Corporation."
IN WITNESS WHEREOF, the Company has caused this Certificate to be
signed and attested by its duly authorized officers this 27th day of May, 1994.
ENRON CORP.
By: EDMUND P. SEGNER, III
Edmund P. Segner, III
Executive Vice President
and Chief of Staff
ATTEST:
REX R. ROGERS
Rex R. Rogers
Assistant Secretary
<PAGE> 1
EXHIBIT 5(a)
May 27, 1994
Enron Corp.
1400 Smith Street
Houston, Texas 77002
Enron Capital Resources, L.P.
c/o Enron Corp.
1400 Smith Street
Houston, Texas 77002
Gentlemen:
As Senior Vice President and General Counsel of Enron Corp., a
Delaware corporation ("Enron"), I am familiar with the Registration Statement
of Enron and Enron Capital Resources, L.P. ("Enron Capital") on Form S-3,
Post-Effective Amendment No. 2 to Registration Statement No. 33-43324 and
Post-Effective Amendment No. 1 to Registration Statement No. 33-50641
(collectively, the "Registration Statement") relating to the proposed offering
from time to time of (i) up to an aggregate amount of $600 million of Enron
Debt Securities, Enron Debt Warrants, Enron Stock Warrants, Enron Second
Preferred Stock, Preferred Shares of Enron Capital and Enron's related Backup
Undertakings, and (ii) up to 7.5 million shares of Enron Common Stock, par
value $.10 (the Debt Securities, Second Preferred Stock, Debt Warrants,
Stock Warrants, Preferred Shares, Backup Undertakings and Common Stock
collectively referred to herein as the "Securities"). In connection therewith,
I have examined, among other things, a copy of the Restated Certificate of
Incorporation and Bylaws of Enron, the corporate proceedings taken to date with
respect to the authorization, issuance and sale of the Securities, a copy of
the Indenture dated as of November 1, 1985 (the "Indenture") between Enron and
Harris Trust and Savings Bank, Trustee, a copy of the Agreement of Limited
Partnership of Enron Capital (the "Partnership Agreement"), and the forms of
certain other agreements to be entered into by Enron, and I have performed such
other investigations as I have considered appropriate as the basis for the
opinions expressed herein. Capitalized terms used but not defined herein are
used as defined in the Registration Statement.
Based on the foregoing, I am of the opinion that:
(1) Enron is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(2) Enron Capital has been duly formed and is validly existing as
a limited partnership under the Delaware Revised Uniform Limited Partnership
Act.
<PAGE> 2
Enron Corp.
Enron Capital Resources, L.P.
May 27, 1994
Page 2
_______________
(3) When (a) the terms of a series of Preferred Shares and their
issue and sale have been duly established, (b) the Registration Statement has
become effective and any applicable state securities or Blue Sky laws have been
complied with, (c) the shares of such series have been issued, and (d) Enron
Capital has received the purchase price of such shares in accordance with the
terms of their issue and sale, the Preferred Shares will be validly issued,
fully paid and non-assessable, except as such non- assessability may be
affected by the matters set forth in the Registration Statement under the
caption "Enron Capital Resources, L.P. - The Partnership Agreement - Limited
Liability."
(4) The Debt Securities of Enron have been validly authorized for
issuance, and (subject to the Registration Statement becoming effective and any
applicable state securities or Blue Sky laws being complied with), when the
terms thereof and their issue and sale have been duly established, upon
issuance and delivery thereof as set forth in the Registration Statement, and
upon receipt by Enron of the purchase price thereof, the Debt Securities will
be validly issued and will be binding obligations of Enron.
(5) The Debt Warrants have been validly authorized for issuance,
and (subject to the Registration Statement becoming effective and any
applicable state securities or Blue Sky laws being complied with), when the
terms thereof and their issue and sale have been duly established, upon
issuance and delivery thereof as set forth in the Registration Statement, and
upon receipt by Enron of the purchase price thereof, the Debt Warrants will be
validly issued and will be binding obligations of Enron.
(6) When (a) the terms of the series of Second Preferred Stock and
their issue and sale have been duly established, and (if applicable) a deposit
agreement has been duly authorized, executed and delivered by Enron and a
Depositary, in each case in conformity with Enron's Restated Certificate of
Incorporation and Delaware law, (b) a certificate of designations with respect
to such series of the Second Preferred Stock has been duly filed with the
Secretary of State of the State of Delaware, (c) the Registration Statement
has become effective and any applicable state securities or Blue Sky laws have
been complied with, (d) the shares of such series have been issued, and (if
applicable) Depositary Receipts have been delivered as set forth in the
Registration Statement, and (e) Enron has received the purchase price of such
shares in accordance with the terms of their issue and sale, the shares of
such series of Second Preferred Stock and (if applicable) the related
Depositary Shares will be validly issued, fully paid and nonassessable.
(7) When (a) the terms of the Backup Undertakings of Enron
relating to the Preferred Shares of Enron Capital have been duly established in
accordance with applicable law, (b) the instruments relating to the Backup
Undertakings have been duly authorized, executed and delivered, (c) the
Registration Statement has become effective and any applicable state securities
or Blue Sky laws have been complied with, (d) the Preferred Shares of Enron
Capital to which any of the Backup Undertakings relate have been duly issued
and sold and the purchase price therefor has been received
<PAGE> 3
Enron Corp.
Enron Capital Resources, L.P.
May 27, 1994
Page 3
_______________
by Enron Capital, and (e) Enron has received the consideration, if any,
separately payable for such Backup Undertakings, the Backup Undertakings will
constitute valid and legally binding obligations of Enron.
(8) The issuance of the Common Stock to be issued by the Company
has been duly authorized, and (subject to the Registration Statement becoming
effective and applicable Blue sky laws being complied with), when the terms of
their issue and sale have been duly established, upon the issuance and delivery
thereof as set forth in the Registration Statement, and upon the receipt by the
Company of the purchase price thereof, the Common Stock will be validly issued,
fully paid, and nonassessable.
(9) The Stock Warrants have been validly authorized for
issuance, and (subject to the Registration Statement becoming effective and any
applicable state securities or Blue Sky laws being complied with), when the
terms thereof and their issue and sale have been duly established, upon
issuance and delivery thereof as set forth in the Registration Statement, and
upon receipt by Enron of the purchase price thereof, the Stock Warrants
will be validly issued and will be binding obligations of Enron.
(10) The shares of Common Stock to be sold by the Selling
Shareholders are, and upon sale will be, validly issued, fully paid, and
nonassessable.
I am a member of the bar of the State of Texas. The opinion set forth
above is limited in all respect to the laws of the State of Texas, the General
Corporation Law of the State of Delaware and federal law.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to me under the caption "Validity
of Securities" in the Prospectus constituting part of the Registration
Statement and to the filing of this opinion as an exhibit thereto. By giving
such consent I do not admit that I am an expert with respect to any part of the
Registration Statement, including this exhibit, within the meaning of the term
"expert" as used in the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission issued thereunder.
Very truly yours,
/s/ JAMES V. DERRICK, JR.
<PAGE> 1
EXHIBIT 12
ENRON CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES AND PREFERRED DIVIDENDS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended Year Ended December 31,
-------------------------------------------------------------------------------
3/31/94 1993 1992 1991 1990 1989
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings available for fixed charges
Net income $173,063 $332,522 $328,800 $232,146 $202,180 $226,109
Less:
Undistributed earnings and losses
of less than 50% owned affiliates (4,215) (20,232) (32,526) (8,890) (15,468) 5,809
Capitalized interest of nonregulated
companies (2,867) (25,434) (66,401) (36,537) (8,145) (5,107)
Add:
Fixed charges (1) 117,128 471,278 452,014 454,607 425,177 428,579
Minority interest 6,052 27,605 17,632 7,210 7,129 335
Income tax expense 84,448 148,104 88,630 105,859 62,739 71,850
-------------------------------------------------------------------------------
Total $373,609 $933,843 $788,149 $754,395 $673,612 $727,575
===============================================================================
Preferred dividend requirements $ 3,722 $ 16,919 $ 22,109 $ 24,740 $ 24,948 $ 25,359
Ratio of income before provision for
income taxes to net income (2) 1.49 1.45 1.27 1.46 1.31 1.32
Preferred dividend factor on a pretax
basis 5,538 24,455 28,069 36,022 32,690 33,417
Fixed charges
Interest expense (1) 108,052 436,211 430,406 425,945 400,548 405,013
Rental expense representative of
interest factor 9,076 35,067 21,608 28,662 24,629 23,566
-------------------------------------------------------------------------------
Total $122,666 $495,733 $480,083 $490,628 $457,867 $461,996
===============================================================================
Ratio of earnings to fixed charges
and preferred dividends 3.05 1.88 1.64 1.54 1.47 1.57
===============================================================================
</TABLE>
(1) Amounts exclude cost incurred on sales of accounts receivables.
(2) Represents net income before provision for income taxes divided by net
income, which adjusts dividends on preferred stock to a pretax basis.
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorperation by
reference in this Registration Statement of our report dated February 18, 1994
included in Enron Corp.'s Annual Report on Form 10-K for the year ended
December 31, 1993 and to all references to our Firm included in this
Registration Statment.
ARTHUR ANDERSEN & CO.
Houston, Texas
May 24, 1994
<PAGE> 1
EXHIBIT 23(b)
DEGOLYER AND MACNAUGHTON
One Energy Square
Dallas, Texas 75206
May 23, 1994
Enron Corp.
1400 Smith Street
Houston, Texas 77002
Enron Capital Resources, L.P.
1400 Smith Street
Houston, Texas 77002
Gentlemen:
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3, to be filed with the Securities and Exchange Commission
on or about May 25, 1994 (the Registration Statement), of the references to our
firm and to our opinions delivered to Enron Oil & Gas Company (the Company)
relating to our comparison of estimates perpared by us to those furnished to
us by the Company of proved oil, condensate, natural gas liquids, and natural
gas reserves of certain selected properties owned by the Company as expressed
in our letter reports dated January 23, 1992, January 20, 1993, and January 27,
1994, for estimates as of January 1, 1992, January 1, 1993, and January 1, 1994,
respectively, which are included in the section "Oil and Gas Exploration and
Production Properties and Reserves - Reserve Information" in Enron Corp.'s
Annual Report on Form 10-K for the year ended December 31, 1993, and in Note 20
to the Enron Corp. consolidated financial statements included in Enron Corp.'s
Form 10-K for the year ended December 31, 1993. We also consent to the
incorporation by reference in the Registration Statement of our letter report,
dated January 27, 1994, addressed to the Company, which is included as Exhibit
24.03 to Enron Corp.'s Annual Report on Form 10-K for the year ended December
31, 1993. We also consent to the reference to us in the section "Experts" in
the Prospectus that is a part of the Registration Statement.
Very truly yours,
/s/ DEGOLYER AND MACNAUGHTON
DeGOLYER and MacNAUGHTON
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
ROBERT A. BELFER
Robert A. Belfer
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 9th day of May, 1994.
NORMAN P. BLAKE, JR.
Norman P. Blake, Jr.
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
JOHN H. DUNCAN
John H. Duncan
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
JOE H. FOY
Joe H. Foy
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), her true and lawful attorney-in-fact and agent, for her and on her
behalf and in her name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set her hand
this 3rd day of May, 1994.
WENDY L. GRAMM
Wendy L. Gramm
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
ROBERT K. JAEDICKE
Robert K. Jaedicke
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
RICHARD D. KINDER
Richard D. Kinder
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
KENNETH L. LAY
Kenneth L. Lay
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
CHARLES A. LeMAISTRE
Charles A. LeMaistre
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
JOHN A. URQUHART
John A. Urquhart
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
CHARLS E. WALKER
Charls E. Walker
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the
proposed registration by Enron Corp., a Delaware corporation (the "Company"),
of Debt Securities, Second Preferred Stock, Depositary Shares, Preferred
Shares, "Backup Undertakings" with respect to Preferred Shares, and Common
Stock of the Company, the undersigned officer or director of the Company hereby
constitutes and appoints Kenneth L. Lay, Jack I. Tompkins, Kurt S. Huneke and
Peggy B. Menchaca, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file a registration statement on Form S-3 relating to such
securities to be filed with the Securities and Exchange Commission, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereto set his hand
this 3rd day of May, 1994.
HERBERT S. WINOKUR, JR.
Herbert S. Winokur, Jr.
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as
Trustee
Check if an Application to Determine
Eligibility of a Trustee Pursuant to Section
305(b)(2) _______________
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Frank A. Pierson, Harris Trust and Savings Bank,
111 West Monroe Street, Chicago, Illinois, 60603
312-461-2533
(Name, address and telephone number for agent for service)
ENRON CORP.
(Name of obligor)
Delaware 47-0255140
(State of Incorporation) (I.R.S. Employer Identification No.)
1400 Smith Street
Houston, Texas 77002
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of Governors
of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Hillenbrand Industries, Inc., File
No. 33-44086, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 19th day of May, 1994.
HARRIS TRUST AND SAVINGS BANK
By: Frank A. Pierson
----------------------------
Frank A. Pierson
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents
that reports of examinations of said trustee by Federal and State authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
HARRIS TRUST AND SAVINGS BANK
By: Frank A. Pierson
-----------------------------
Frank A. Pierson
Assistant Vice President
2
<PAGE> 4
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of March 31, 1994, as published in accordance with a
call made by the State Banking Authority and by the Federal Reserve Bank of the
Seventh Reserve District.
{LOGO} HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on March 31, 1994, a state banking institution organized and operating
under the banking laws of this State and a member of the Federal Reserve
System. Published in accordance with a call made by the Commissioner of Banks
and Trust Companies of the State of Illinois and by the Federal Reserve Bank of
this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
ASSETS THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................. $917,983
Interest bearing balances............................................ $693,930
Securities:
a. Held-to-maturity securities........................................... $335,627
b. Available-for-sale securities......................................... $1,386,254
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold............................................. $444,750
Securities purchased under agreements to resell................ $148,063
Loans and lease financing receivables:
Loans and leases, net of unearned income............................. $6,011,024
LESS: Allowance for loan and lease losses........................... $99,591
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)............................................ $5,911,433
Assets held in trading accounts............................................ $251,234
Premises and fixed assets (including capitalized leases).................... $137,974
Other real estate owned..................................................... $2,023
Investments in unconsolidated subsidiaries and associated companies......... $565
Customer's liability to this bank on acceptances outstanding................ $66,441
Intangible assets........................................................... $29,864
Other assets................................................................ $370,864
----------------------------
TOTAL ASSETS................................................................ $10,697,005
============================
LIABILITIES
Deposits:
In domestic offices................................................... $4,538,277
Non-interest bearing............................................ $2,415,608
Interest bearing................................................ $2,122,669
In foreign offices, Edge and Agreement subsidiaries, and IBF's........ $2,271,529
Non-interest bearing............................................ $27,115
Interest bearing................................................ $2,244,414
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C>
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and
in IBF's:
Federal funds purchased............................................... $624,510
Securities sold under agreements to repurchase........................ $1,220,539
Trading Liabilities......................................................... $210,412
Other borrowed money:
a. With original maturity of one year or less............................ $491,636
b. With original maturity of more than one year.......................... $41,669
Bank's liability on acceptances executed and outstanding.................... $66,441
Subordinated notes and debentures........................................... $235,000
Other liabilities........................................................... $271,260
----------------------------
TOTAL LIABILITIES........................................................... $9,971,273
============================
EQUITY CAPITAL
Common stock................................................................ $100,000
Surplus..................................................................... $275,000
a. Undivided profits and capital reserves................................ $342,563
b. Net unrealized holding gains (losses) on available-for-sale securities $8,169
-----------------------------
TOTAL EQUITY CAPITAL........................................................ $725,732
============================
Total liabilities, limited-life preferred stock, and equity capital......... $10,697,005
============================
</TABLE>
I, David H. Charney, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Govenors of the Federal Reserve System and
is true to the best of my knowledge and belief.
DAVID H. CHARNEY
4/27/1994
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
ALAN G. McNALLY,
DONALD S. HUNT,
DARYL F. GRISHAM,
Directors.
STATE OF ILLINOIS, COUNTY OF COOK, ss:
Sworn to and subscribed before me this 27th day of April, 1994. My
commission expires April 22, 1996.
DIANALYNN GIRTEN
4
