Service agreements and construction jobs, as well as capital expenditure, obligate Enron and as a result the rules for RAC approval for commitments apply.    Please get Denis or James involved on all appropriate deals.

Thanks.
Rod
	
 -----Original Message-----
From: 	Smith, Sarabeth  
Sent:	Monday, October 22, 2001 6:33 PM
To:	Hayslett, Rod
Subject:	FW: EAMR Transactions

Rod,
Here is the memo I mentioned in the Shared Employees Agreement e-mail.

 -----Original Message-----
From: 	Hawkins, Don  
Sent:	Monday, October 22, 2001 7:54 AM
To:	Teal, Mike; Weatherford, Allan; Mertz, Tom; Jolly, Rich; Gaines, David; Maestas, Gary; Asante, Ben; Kendrick, William; Clark, Scott; LeBeau, Randy; Gilbert, Tom; Odneal, Dave; McGillivray, RR; Gilbert, Tom; Odneal, Dave; Stephens, LD; Gottsponer, Morgan; Bonnstetter, Mike
Cc:	Lowry, Phil; Craig, Rick; Nelson, Mike; Rice, Randy; Pribble, Dan; Martin, Jerry D.; Melton, Richard ; Brassfield, Morris; Harris, Linda C.; Keller, John R.; Shafer, John; Raker, Colleen; Soldano, Louis; Smith, Sarabeth
Subject:	EAMR Transactions


This memo is being forwarded to you to address issues that have developed during recent Enron Asset Management Resources (EAMR) transactions and to establish appropriate procedures for going forward.  EAMR, as you are probably aware, is an affiliate of Enron Transportation Services Company that performs services for third parties as well as other Enron affiliate companies. 

When EAMR enters into a contract with non Enron customers to deliver services, EAMR assumes all of the risk for any losses in the transaction  Additionally, EAMR is not to be supported financially by the affiliated pipelines.  All costs such as employee payroll expenses, travel and other related employee expenses, equipment usage fees, etc  associated with an employee performing services for a customer under an EAMR transaction must be accurately recorded pursuant to prudent accounting procedures. 

Going forward,  to ensure that there are no financial or contractual obligations that are not in the best interest of EAMR, the following process will be used on all transactions.

1) Cost estimates for services through EAMR will be sent to Sarabeth Smith in Houston for review and approval.  Sarabeth will ensure that all costs and appropriate margins are included in the cost structure and then release it through a non-binding agreement for presentation to the customer by appropriate marketing personnel.  Cost estimates, given to customers outside of this step in the process, run the possibility of having to be retracted due to the risk of committing EAMR to a transaction that is not contractually or financially sound.

2) It is the responsibility of every employee performing services for EAMR to be diligent in recording their time and expenses required to perform the services to the appropriately assigned project number.  Monthly reviews of the expenses associated with each project will be conducted to ensure that all costs have been accurately recorded.  Sarabeth will be the point of contact with the transaction originator, contract administration and legal to ensure draft agreements as well as the final agreement have been coordinated through all appropriate groups.   Legal agreements will not be issued without proper sign-off of authorization.

3) All contracts must adhere to fundamental risk parameters set forth by management.  These mandates are very clear concerning contract language and operating parameters for EAMR transactions.  Your cooperation by adhering to the processes described in this memo is critical to  the continued success of EAMR as a revenue generating entity as well as another "marketing tool" for the customer.  

Contact Information for EAMR will Sarabeth Smith at 713-345-5023, sarabeth.smith@enron.com, 1400 Smith 3AC-3147, Houston, TX  77002.

Please pass this memo on to team members or other members of your staff that currently work or may work on EAMR transactions. 

Thanks for your support in this endeavor.